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Barry Nelson’s Blog

The BDCP Blog and the $11 Billion Question

Barry Nelson

Posted October 5, 2012 in Saving Wildlife and Wild Places, U.S. Law and Policy

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Last week, the Bay Delta Conservation Plan unveiled a new blog.  The first post highlights an important message that BDCP decision-makers have repeatedly emphasized for the past six months – “No one can say exactly how much water would be diverted under any of the nine BDCP alternative projects now being studied.“   To me, it’s quite clear that EPA, the State of the Estuary Report, the State Water Board and many other analyses have clearly shown that restoring the Bay-Delta and its fisheries, including California’s salmon jobs, will require more water to flow through the Delta.  Nevertheless, this statement from BDCP is important. 

For years, water exporters have hoped that BDCP would deliver a 50 year guarantee regarding the amount of water that they will be able to pump from the Delta.  That’s always been more of a dream than a realistic expectation.  After all, the Bay-Delta is an extraordinarily complex and dynamic system, subject to sea level rise, climate change-driven changes in runoff, earthquake risk, invasive species, water quality problems and more.   In addition, scientists are still learning more about the flow needs of the largest estuary on the West Coast.  It’s difficult to imagine how regulatory agencies could accurately determine the flow needs of the Bay-Delta for the coming half century.  Even so, ESA “assurances” have been one of many contentious issues in the BDCP. 

The first BDCP blog post is significant because it clearly states that this effort will not provide ESA assurances or export guarantees.  This is not the first time BDCP agencies have made this point.  For example, on July 26, Deputy Interior Secretary David Hayes was quoted in the New York Times stating that “water contractors had been insisting that there be a guarantee of a specific” amount of water deliveries. “The regulatory agencies said: ‘We can’t guarantee that.’ And they” — the contractors — “stepped back and agreed to that.”

Here’s where it gets interesting.  At the June BDCP public meeting, a consultant presented a brief powerpoint that summarizes potential economic benefits from BDCP.  (This is one of very few BDCP documents discussing the economics of the project.)  To be clear, this was only a brief, initial analysis, and the BDCP project is still evolving.   But it’s noteworthy that this analysis assigns an $11.6 billion benefit to “regulatory certainty.”    The problem, of course, is that BDCP has now admitted that it cannot provide any such formal certainty – suggesting that the $11 billion potential benefit included in the June presentation is an illusion. 

The June analysis finds $3-$7.8 billion in additional economic benefits from increased water supply for urban and agricultural water users.   Again, the BDCP blog clearly indicates that these anticipated increases in water supplies are also an open question.  (As discussed above, it’s far more likely that future Delta diversions will be lower than today.)  Again, these billions in potential benefits appear to be based on unrealistic assumptions.

The take home message is simple but critical.  BDCP would cost water users many billions of dollars.   Understandably, those water agencies and their customers want to know what they would get from this multi-billion dollar investment.  Therefore, given the aggressive BDCP schedule, including the release of a draft environmental document and plan this fall, it is critical that BDCP make progress immediately to define scientifically-based likely (but not guaranteed) future export levels and to complete a cost-benefit analysis based on assumptions that are more realistic than those in the powerpoint released in June.  

This information is central to determining if the current BDCP plan can be permitted as well as whether it can be financed.   A decade ago, the CALFED Bay-Delta Program floundered as a result of its failure to address economics and financing.  The stakes in the Delta are too high for this to happen again.   After all, the key to success for BDCP lies in developing a plan that is both biologically and economically sound.   BDCP has struggled to generate credible biological analysis, but it is barely out of the starting gate on issues related to economics and financing. 

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Comments

Chris GulickOct 6 2012 12:16 PM

"BDCP has struggled to generate credible biological analysis, but it is barely out of the starting gate on issues related to economics and financing."

There's an understatement. ;)

So here we are.
Years of effort, millions spent and not a hell of a lot to show for it.

Now we have a cool new BDCP blog swearing , cross their hearts and hope to die, that if they build a conveyance it won't be operated in a manner destructive to the Delta.

Why does this not reassure me ?

I understand that BDCP is now saying no assurances of quantity will be offered yet I am reminded that some water contractors have previously pulled support for this project if they are not given that very assurance.
What's to stop them from doing it again ?
And when they do who will wind up footing the entire bill for this pipe dream/corporate welfare ?

There's a good reason virtually every water contractor in the state adamantly opposed legislation requiring a cost/benefit analysis be a part of the BDCP process.

Similarly, there is a good reason Dr. Pyke's WDIC proposal is not recieving serious consideration.

While the status quo is unacceptable, the solutions offerred so far by BDCP are not the answer.


Tom StokelyOct 6 2012 12:42 PM

Well said Barry!

It's now pretty clear that BDCP won't provide any more water, regulatory assurances or significant (if any) economic benefits. Let us not forget University of the Pacific's cost/benefit analysis which was .4, meaning that for every $2.50 spent, there would be $1 in benefits!

The environmental benefits are certainly not clear either. However, the BDCP folks are apparently not quite ready to fess up that there aren't any environmental benefits from taking fresh water from upstream of the San Francisco-San Joaquin Bay-Delta estuary. They appear to be ignoring the fishery agencies' "Red Flag" document stating that impacts to several listed species may result in significant population impacts or even extinction.

BDCP also doesn't appear ready to admit that the so-called "habitat restoration" could trigger massive mercury methylization and bioaccumulation in the Delta's food chain. The National Research Council has clearly identified mercury as a having high certainty for toxicity to the Delta's biota. The mercury from gold dredging in the 1800's lies buried in the Delta's sediments that would be exposed by the proposed habitat restoration projects.

Besides that, investing in Delta levee upgrades, water conservation, recycling, stormwater capture and other locally-based technologies is clearly a better investment than the Peripheral Tunnels.

So the real question is why bother to spend billions on a project that will not provide environmental and economic benefits, especially when there are solid cost-effective alternatives? Is there something else that we are missing here?

The whole concept of the Peripheral Tunnels is one of the biggest boondoggle projects of this century. As the layers of the onion unravel in the BDCP blogs, the news and in the courts, there is less and less justification to continue with this ridiculous project.

Tom Stokely
California Water Impact Network
http://www.c-win.org

Roland SheppardOct 6 2012 01:46 PM

I do not understand, that people do not even mention, when they write or talk about the Delta’s water, they do not even mention that the biggest user of the Delta’s water are the oil companies and Chevron in the South San Joaquin Valley. FYI: Read My essay, Why Oil Companies Want California’s Water All Fracked Up! Big Oil Fracking Our Environment Fracking: Oil Shale Oil, Water and Politicians Do Mix, @ http://rolandsheppard.com/Site/Why_Oil_Companies_Want_CA_Water.html.

Carolee KriegerOct 6 2012 06:01 PM

Good points Barry.

And then there are the costs!! Can we ever believe anything DWR says about
the cost of a project? Not if you consider what happened to us here in
Santa Barbara. Voters in Santa Barbara were told before they voted in 1991
that the total costs of the Coastal Branch would be $270 million...by the
time we will have finished paying for the Coastal Branch ratepayers in Santa
Barbara will have paid $1.76 Billion.

That is a 6 ½ times more than the estimate for the Coastal Branch completed in
1998...the last large project that DWR built. Whatever they tell us the
costs are going to be, it will be hugely underestimated on
purpose because that is the only way they will get any agreement from those
who will have to pay for it.

There really is no clearly defined project, they have no clear idea of how
much it will cost, who will pay for it, or if there even is any water to put
in it. According to Federico Barajas, Program Manager for the BDCP from the
Bureau, there is no new water being considered at all...just a new
"configuration", a way to get the same water to the pumps. Why would any
responsible water agency in southern California, saddle their ratepayers
with such HUGE debt and not get anything for it!!

Carolee Krieger
California Water Impact Network (C-WIN), President
http://www.c-win.org

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