Water cost will rise, but West won't dry up

The Economy

August 05, 1996|By Jay Hancock

ARIZONA'S Mexican Highlands rise red, hard and dry from the Sonoran Desert. Even the sky there is desiccated. What few raindrops trickle forth are often boiled off, before they touch Earth, by parched, 120-degree updrafts.

The Lord did not intend for humans to walk and work on this blasted spot. Nor did they, in any great number, for thousands of years. But perhaps the Lord did not plan on the Army Corps of Engineers.

Phoenix, Ariz., now sprawls on the Highlands' flanks. Home to 2.3 million, wellspring of foodstuffs and factory goods, it is a monument to human ambition, public works and federal spending.

The Central Arizona Project, Phoenix's latest concrete lifeline to the moist North, cost $4 billion -- thrice its original budget.

You paid for it.

Your federal tax dollars turned this land with the climate of the planet Venus into one of the fastest-growing economies in the country.

Your tax dollars enabled the rerouting of the Cardinals pro football team from Baltimore to Phoenix eight years ago.

Your tax dollars let Sumitomo Sitix put a $400 million, water-hungry, silicon-wafer factory, the kind Maryland wants but can't get, in north Phoenix.

Your tax dollars have subsidized and nourished a Southwest economy that is now sucking life from the old, industrial Northeast.

4( So it is with satisfaction, perhaps,

that Easterners read the frequent reports of imminent Western water shortages.

"The Rust Belt is going to come back," a Baltimore businessman told me last year. "The West is going to run out of water, its economy will go bust, and manufacturers will come back East."

It's hard to blame him for wishing.

More than 90,000 federal employees get paid to work on water issues, says author Peter Rogers. The federal government has spent half a trillion dollars just on dams, spillways, aqueducts and other Western water infrastructure.

It spends many billions more on operating subsidies that deliver the water at a tiny fraction of its real cost. The General Accounting Office reported last week that Western irrigators have paid less than $1 billion of $7 billion of their share of costs on 133 water projects. Colorado farmers can buy water that costs the government 54 cents per acre-foot for 7 cents.

The current of water planning may be changing, however.

Fiscal concerns in Washington, combined with environmental ones in the West, may dry the federal well. The massive Ogallala Aquifer beneath the Midwest has already been depleted by half. Parts of California's San Joaquin Valley have sunk 30 feet because of water-table depletion.

"At a time when Congress has told farmers in other parts of the country to prepare to give up their heavy diet of federal subsidies, water subsidies that benefit farmers only in the West remain untouched," Rep. George Miller, a California Democrat, said last week.

"Water markets" is the remedial buzz-term in policy journals and think tanks like the International Monetary Fund. It means charging water users a price that approaches the cost of delivering the liquid.

The idea cheers the West's commercial enemies.

Perched on the once-desolate Mexican Highlands, Phoenix residents pay water charges not much higher than Marylanders' and "among the lowest in the country for water and sewer charges combined," says Phoenix spokesman Bing Brown.

If prices rise substantially, as they would in a free water market, and if doubts continue about the West's reserve of water -- at any price -- businesses and home-dwellers there might seek a cheaper, surer source.

Easterners envision the headline from a future president: "Gore to West: Dry Up."

California, which is making it harder for new suburbs to siphon off scarce water, offers a view of the possibilities.

"I've been told that if you want to build houses, you have to build sewer plants, you have to build interchanges, you have to build schools," one frustrated builder told the San Francisco Chronicle a few years ago. "I'd never been told you have to go buy water."

With water marketing, he does.

But however much the East might wish it, the West is not about to wither and blow away.

The region has plenty of water, say experts on both sides of the political spectrum. It's just being poured, inefficiently, in the wrong places.

Some 85 percent of all Western water is sold to farmers. Much of it irrigates marginal land that would be barren if water cost what ++ it should. Much nurtures low-value crops. Much is lost through leaks that aren't worth fixing until water is worth more.

Applying the simple economics of supply, demand and price to the water market could reduce agricultural profligacy while freeing up trillions of gallons for residential and manufacturing use, experts say.

It has been estimated that if all Arizona's water were shunted to businesses and houses, Phoenix could support a population of 25 million. A 7 percent reduction in farm water use in the West would yield enough extra water to double the serving for all other applications, writes Frank Welsh in "How to Create a Water Crisis."

That shouldn't be too hard, some experts think, given the prevalence of water waste.

"I think you'll see a gradual increase in the price" of water, said Hal Candee, senior attorney with the Environmental Defense Fund in San Francisco.

"You'll see a move to higher-value crops. You'll see some land retirement. There is enough water to provide for the population, but it requires more efficient management of resources."

Guess Maryland will have to think of some other way to bring back the factories.

Pub Date: 8/05/96

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