Governance and the Animas River mine waste mess

The pictures out of Durango today of mine waste in the Animas River are horrifying, and the federal Environmental Protection Agency is rightly taking a beating for the catastrophic mine waste leak:

The overall message from federal regulators was “we’re very sorry.”

“This is a huge tragedy and it’s hard being on the other side of this in terms of being the ones that caused this incident at this particular time,” Ostrander said. “We typically respond to emergencies, we don’t cause them.”

But as the blame game unfolds, it’s worth remembering that this failure of government, while avoidable, is only an issue at all because of a colossal failure of the private sector. Mine waste, a problem throughout the Rocky Mountain West and the culprit in this particular case, is the result of miners extracting resources, making their money, and then abandoning the remaining mess for government to deal with. It’s fair and proper to criticize government when it fails at that task, but let us not forget that that mine waste was only the EPA’s responsibility in the first place because the mine’s owners have abandoned them.

Our mine waste problem is a textbook example of what economists mean when they talk about “externalities”. A market failure of staggering proportions has left the government with a horrendous job.

Great background here from Stephanie Paige Ogburn about the particulars how messes like this happen.

What does El Niño mean for the Colorado River Basin?

What does the growing El Niño oceanic pattern mean for the Colorado River Basin? Best to just shrug, and say the statistics are too small to say much of anything conclusive. In the nine El Niño years since the 1960s, three have been wet, three have been in the middle, and three have been dry. Here’s a graph from the agenda packet for Thursday’s meeting of the Central Arizona Water Conservation District board (“GLDA3” is jargon for natural flow at Glen Canyon):

El Niño on the Colorado River

El Niño on the Colorado River

When you think about the geography, this makes sense. El Niño’s strongest effect is the southern tier of states, but most of the Colorado River’s flow comes from mountains to the north, which is in the no-man’s land between wet and dry during El Niño years. Eyeballing the chart, it looks like stronger El Niño’s tip the odds slightly in the direction of wet, and this is a strong El Niño. But now the statistics are so small as to be meaningless.

We love to talk about “the big El Niño year of 1983 when we nearly lost Glen Canyon Dam,” but as you can see our little oceanic friend is no guarantee.

Imperial Valley, circa 1903: “an unlimited amount of water”

I would say “warm climate” is a fair description of the Imperial Valley in California’s southeastern corner. It’s 109 degrees there this afternoon (43C).

Below is a great addition to my collection of adverts as the real estate boosters tried to lure folks to the desert during that oddly magical time when waves of immigrants were first imagining what to do with this place. This is from an Aug. 9, 1903 display ad in the Los Angeles Times by the California Development Company, hustling for investors in the “California Development Company.” This is the outfit, run by Charles Rockwood, that first brought water to the Imperial Valley. Rockwood was always hustling money, and never quite had enough to make a go of it. It was one of the most spectacular early failures of the private irrigation movement, and eventually it took government to make it work. Bill deBuys’ Salt Dreams, one of my favorite Colorado River books, is a great account of that crazy time.

Imperial Valley advertising, 1903

Imperial Valley advertising, 1903

New Mexico’s 2015 San Juan-Chama Project allocation goes up

Our remarkably rainy spring and summer in New Mexico and southern Colorado has increased the allocation of San Juan-Chama Project water, which brings some of New Mexico’s Colorado River Basin water to the central part of the state. After a bad start to the year, flows have been above average basically continuously since the first of May:

San Juan-Chama Project flows

San Juan-Chama Project flows

The mid-June allocation was just half of a normal year supply, but that’s been steadily rising, and now is up to 85 percent, according to the Bureau of Reclamation. And that’s based on what we’ve got now. With the rainy season underway, that could continue rising, with 90 to 95 percent looking like a real possibility. That’s still a shortfall, for only the second time in the project’s 40 years history. But less of a shortfall, but by a significant margin, than water managers had feared.

The water provides supply to Santa Fe and Albuquerque. Both cities have buffers so a shortfall in any one year doesn’t have an immediate effect.

For context for those in other parts of the “greater” Colorado River Basin (those places that use Colorado River water, whether they’re in the actual physical basin or not), the total San Juan-Chama Project allocation is less than 1 percent of the basin’s human water use. It’s one of those crazy-sounding projects we did back in the day to move water long distances from where the rivers are to where the people live, with three dams in San Juan Mountain headwaters in Colorado diverting water through 27 miles of concrete-lined tunnels beneath the continental divide.

 

Nine Colorado River Basin counties that use water for golf

For grins, here’s some data on golf water use for selected Colorado River Basin counties:

 

Percentage of water used on golf

Some notes:

  • Data source: USGS Water Use in the United States
  • People who fly into desert cities often look down out of the airplane on approach and comment on golf courses. I have nothing against golf. If I had swimming pool data, that would make a fun post too.
  • Counties are a super troublesome geographic unit of measure for water, because they lack uniformity. Like Jefferson County, Colorado, for example. That’s a weird county.
  • Percentages are a super troublesome measurement, because if you’ve got farming in your county (like, say, Maricopa and Bernalillo) that throws off the calculation by making golf look, in comparison, small.
  • I’ve got some reservations about the data. I left Clark County, NV (Las Vegas) off the chart because the numbers there just didn’t seem to jive with other data I have.
  • This is in no way comprehensive. I just picked some counties here that I’m interested in because I’ve always wanted to experiment with one of those “Ten BLANKS that BLANK” clickbait headlines.

Regulatory arbitrage and Arizona’s growing nuts

“Regulatory arbitrage” is the business practice of shifting one’s operations to exploit differences in regulatory regimes. This often involves a geographical change, such as moving a factory to a place where environmental regulations are less stringent.

That seems to be what’s going on in southeastern Arizona, where California nut farmers are moving into the San Simon Valley, planting pistachios and pecans, and pumping groundwater. From a great Tony Davis story discussing the trend:

Chima and Barton Heuler are California transplants who sit on opposite sides of the issue. They both moved their farming operations here because they were tired of seeing water transferred away from crops due to the drought. Chima says he was tired of excessive regulation in his former state.

Coase’s reservoirs: how transaction costs are emptying Lake Mead

Updating my Colorado River reservoir storage spreadsheet today to make a graph for a friend was a pretty discouraging exercise. Lake Mead and Lake Powell, the system’s two massive reservoirs on which 9 states and a gazillion people and farm acres depend, are at their lowest combined level since 1967, when they were filling Powell for the first time:

Colorado River storage

Colorado River storage

I style myself as the optimist in the room. Staring dimly into the future, I think I can see what solutions to the West’s water problems might look like. My optimism comes from things like this, which appears on the agenda of tomorrow’s meeting of the Imperial Irrigation District board of directors. It’s an information item about an Arizona plan to conserve close to 100,000 acre feet of water this year, primarily by fallowing agricultural land in central Arizona:

 

This is water that will sit in Lake Mead, unused. It’s the kind of step that encourages me, but the details of what’s needed to carry it out help explain why Lake Mead is dropping faster than my optimism can keep it propped up.

It’s encouraging because it shows flexibility in the water use system. To slow or stop Lake Mead’s fall, we need to use less water by doing things like this. Central Arizona’s got an agricultural buffer to work with, imported Colorado River water pumped uphill via the Central Arizona Project. This agreement calls on some of that buffer.

But the friction here is discouraging. This is not as simple as just saving water. Dustin Garrick’s fascinating new book, Water Allocation in Rivers Under Pressure, goes a long way toward articulating what I’ve only been seeing dimly as I watch this process. Garrick’s work takes a deep look at the “transaction costs” of moving water around and, more importantly, in making the institutional changes (the changes in governance structures and rules) needed to change the way we move water around. (The “Coase” of the headline is economist Ronald Coase, whose work on transaction costs is incredibly important here if you wanna go full wonk on this stuff.) One of the key takeaways from Garrick’s book is that it’s not enough to point to how the rules are all messed up and Lake Mead is dropping as a result. We’ve got to really understand why the rules are hard to change. Those are transaction costs.

We’ve got a mechanism here that’s relatively straightforward on the water conservation side – fallow land in Arizona, leave water in Lake Mead. But the bureaucratic side is a nightmare of transaction costs. Load up the full document linked above and scroll down, and you’ll see that in order for Arizona to get credit for this arrangement under the Colorado River’s formal water accounting system, the agreement needs 16 signatures.

Sixteen signatures is a lot of transaction costs.

Imperial Valley, 1938: “a million parched acres awaiting for irrigation”

From the newly released archive of British Movietone newsreels, U.S. Secretary of the Interior Harold Ickes in October 1938 hits the button to open the gates on Imperial Dam, diverting the first Colorado River water into the All-American Canal and on its way to irrigate the farms of the Imperial Valley:

 

The newsreel makes it sound as though the parched desert had never before seen water, but that is untrue. The dam and canal simplified delivery of water the Imperial Valley, but irrigation had been underway there for decades. In 1934, there were 245,117 acres of farmland in Imperial County, according to the Census of Agriculture. In 1939, that had risen to 274,808. Alfalfa was a dominant crop, with 114,164 acres yielding 2.99 tons per acre. (2012 production was 7.4 tons per acre, according to latest ag census data. Like much of agriculture, productivity has risen.)

Even then, this was vegetable and melon farming country. In 1939, 56,728 acres were reported in various vegetable and related crops, nearly half of that in carrots, cantaloupes, muskmelons, and the like.