Opinion
If Wall Street wanted to have more control over Nevada’s water supply what would it do: Look no further than AB354 and AB356.
If I were thirsty and deep-pocketed, I would limit the due process rights of Nevadans, bar access to the courts, and make a mockery of things like public comment. I would legitimize dangerous and speculative water plays (currently illegal) and throw out the fundamentals that have guided our water law for more than a century.
Lastly, I would create a loose framework for a marketplace that allows those with the most money and power to buy, sell, and export our water resources with as little oversight as possible. I would let regulators have unfettered discretion to pick winners and losers. Then I would let me –– the Wall Street power broker –– manage the water. Lastly –– and most importantly –– I would let entities with water rights sit on their water without putting it to use.
Guess what? AB354 and AB356 do all the above in grotesque fashion. The beguiling thing about the bills is that they are dolled up with piggish lipstick, painted with terms like conservation and transparency. Those catch-all terms are nice ways to give unsuspecting lawmakers warm and fuzzy feelings. But they are unbecoming provisions designed to do one thing: Ship rural water to urban areas.
AB354 and AB356, proposals crafted and being pushed by the state’s top water regulators, are meant to work in tandem.
AB354 creates a framework for water markets, referred to in the bill as banks. But these are not like checking accounts for water. Water banking is a diffuse term in the West. In the case of this bill, the bank is a transactional marketplace where water can be commoditized with little oversight or concern for the public interest. Indeed, the bill allows for large-scale, inter-basin transfers of water i.e. massive pipeline projects. But it also allows for fancy accounting mechanisms where paper water can be traded and moved around despite physical limitations on the ground. AB356 aids in this effort by allowing entities to acquire water and not put it to use. That is speculation masquerading as conservation.
So where does Wall Street come into play in all of this? Look no further than Water Asset Management (WAM). It’s a New York hedge fund that operates a massive potato farm in Winnemucca. WAM isn’t merely interested in farming. It’s unabashedly interested in shipping water from places like Winnemucca to cities further west. For WAM, current laws are a bit of a nuisance. Statutory provisions that protect the public interest, property rights, and due process foil exportation goals.
In the name of conservation, AB354 and AB356 could allow an entity to fallow its fields, sit on the water, and create a marketplace for selling, leasing, or trading that water across a vast swath of the state.
Right now, there’s nothing stopping WAM or another entity from doing that. The problem for WAM is the existing laws. These bills allow entities to sidestep the safeguards while attempting to convince the public that they are safeguards.
To give you another example, let’s go with Blockchains – the tech company that wants its own government system and, basically, its own county. It also wants its own water. Blockchains –– notwithstanding their promises of innovation –– bought land without much water in the desert east of Reno. Bills like AB354 and AB356 are the cornerstones to fixing their water issues. Right now, Blockchains is in the farming business south of Gerlach – having purchased more than 2.9 billion gallons of water for annual use. With these bills, they will be able to fallow their fields, create a so-called “marketplace” and figure out some fancy ways to move water around the desert.
Lastly, let’s look at our neighbors in California. They have a long-established system of water banking aided by millions of acre-feet running off the western Sierra Nevada mountains, billions of dollars worth of conveyance infrastructure like the State Water Project, and the gall to test the limits of Mother Nature. Nevada only has the latter.
Over the years, entities with the most money and power seem to get the most of water banks. Government entities in metro areas and private entities cut deals. Small farmers get pushed out, big operations take over, rural water gets exported, and rural communities suffer along with the environment.
Additionally, consider the recent headlines about Wall Street’s California water play via the Nasdaq California Water Index, a marketplace for trading water futures. This is not an index that moves physical water – it’s all cash-settled – but it is a way to legitimately hedge and speculate on water.
What’s the next step. One of the masterminds of the Index was pretty clear. Lance Coogan, the CEO of Veles Water Limited, said in a recent interview that he hopes the index will expand into other investment vehicles: options, bonds, mutual funds, swaps, and physical trades of water.
In theory, water markets could save water. But the implication is that greed won’t get in the way of that utopic vision. Conservation is only conservation when water currently used goes unused. Putting ag water in banks for big-city use isn’t conservation. It’s more of the same.
Don’t fall for the charade. Tell lawmakers to oppose these bills.
Editor’s note: The Sierra Nevada Ally invites local writers to pen approved opinion columns for the publication. We invited Kyle Roerink to write columns on natural resource issues throughout Nevada and the West. Kyle is the executive director of the Great Basin Water Network. He lives in Reno. Support his writing.
The opinions expressed above are not necessarily those of the Sierra Nevada Ally. Our newsroom remains entirely independent of our opinion page. Published opinions further public conversation to fulfill our civic responsibility to challenge authority, act independently of corporate or political influence, and invite dissent.
