Imagine that you had a bunch of Colorado River water.
Water with some of the most senior rights in the state. The river would have to be virtually dry before your supply was cut.
Now imagine that by fallowing some land and installing more efficient irrigation, you think you can free up a decent chunk of this highly coveted water to lease to others who are in desperate need of more renewable supplies.
Water is joining gold, oil and other commodities traded on Wall Street, highlighting worries that the life-sustaining natural resource may become scarce across more of the world.
Farmers, hedge funds and municipalities alike will be able to hedge against — or bet on — potential water scarcity starting this week, when CME Group Inc. launches contracts linked to the $1.1 billion California spot water market. According to Chicago-based CME, the futures will help water users manage risk and better align supply and demand.
The contracts, a first of their kind in the U.S., were announced in September as heat and wildfires ravaged the U.S. West Coast. They are meant to serve both as a hedge for California’s biggest water consumers against skyrocketing prices and a scarcity gauge for investors worldwide.
Yes, California will have another multi-year drought. California has immense hydrologic variability, with more droughts and floods per average year than any other part of the country. California’s water users, managers, and regulators should always be prepared for droughts (and floods). Eventually, California will have a multi-year drought worse than any we have ever seen.
On a warm, sunny afternoon in late November, Roger Cornwell stopped his pickup near the edge of a harvested rice field to avoid spooking a great blue heron standing still as a statute, alert for prey. He pointed to a dozen or so great egrets at the opposite end of the field as a chorus of killdeer sang a high lonesome tune in the distance.
Normally, sitting on the California Wildlife Conservation Board is a feel-good job, mostly consisting of unanimously approving millions in state dollars to protect natural habitats, from mountain meadows in Lassen County to lagoons in Newport Beach.
Most Californians, it’s safe to say, can’t wait for 2020 to end. But the year is getting in a few parting shots on its way out the door.
After a summer of record heat and California’s worst fire season in history, Santa Ana winds have repeatedly buffeted the Southland during a critically dry autumn. Will this warm, dry weather pattern finally come to an end, or will it continue through the winter?
The California Water Commission is holding public workshops as part of its efforts to assess a potential state role in financing conveyance projects that could help meet needs in a changing climate. A workshop in Southern California is scheduled for December 10 on Zoom.
The Commission’s goal with the workshops is to hear from diverse voices across the state. Participants from the region are encouraged to share their perspective on conveyance projects, conveyance infrastructure needs and priorities.
The rainy season is still young, but that’s about the only consolation to be found in California’s initial estimate this week that farmers who get water from the State Water Project will only get 10 percent of their requested allocations next year. This marks the third consecutive year the initial estimate has been that low.
It’s been four years since a protracted drought had Southern Californians taking four-minute showers and turning off the tap during tooth brushing.
Now, with no rain forecast for the foreseeable future and fires once again raging in the southland, the prospect of another drought is looming large, along with its implications.
