Farmland meets the desert, separated by an irrigation canal, near Fruita, Colo. Credit…Nick Cote for The New York Times
- Jan. 3, 2021
There is a myth about water in the Western United States, which is that there is not enough of it. But those who deal closely with water will tell you this is false. There is plenty. It is just in the wrong places.
Cibola, Ariz., is one of the wrong places. Home to about 300 people, depending on what time of year you’re counting, the town sits on the California border, in a stretch of the Sonoran Desert encircled by fanglike mountains and seemingly dead rocky terrain. Driving across the expanse, where the temperature often hovers near 115 degrees, I found myself comforted by the sight of an oncoming eighteen-wheeler carrying bales of hay, which at least implied the existence of something living where I was headed.
Thanks to the Colorado River, which meanders through town, Cibola is a verdant oasis that chatters at dusk with swooping birds. Along both banks, a few hundred acres produce lush alfalfa and cotton, amid one of the more arid and menacing environments in North America.
This scene is unlikely to last, though. A few years ago a firm called Greenstone, a subsidiary of a subsidiary of the financial-services conglomerate MassMutual, quietly bought the rights to most of Cibola’s water. Greenstone then moved to sell the water to one of the right places: Queen Creek, a fast-growing suburb of Phoenix 175 miles away, full of tract houses and backyard pools.
Transferring water from agricultural communities to cities, though often contentious, is not a new practice. Much of the West, including Los Angeles and Las Vegas, was made by moving water. What is new is for private investors — in this case an investment fund in Phoenix, with owners on the East Coast — to exert that power.
When I reached Holly Irwin, a county supervisor who lives in Cibola, by phone a couple of weeks after my visit, she was angry.
“They’re going to make big bucks off the water, and who’s going to suffer?” she said. “It’s the rural counties going up against big money.”
Grady Gammage Jr., a spokesman for Greenstone, said, “In my view there is enough water both to sustain a significant agricultural economy on the river and to support urban growth in central Arizona.”
In the West, few issues carry the political charge of water. Access to it can make or break both cities and rural communities. It can decide the fate of every part of the economy, from almond orchards to ski resorts to semiconductor factories. And with the worst drought in 1,500 years parching the region, water anxiety is at an all-time high.
In the last few years, a new force has emerged: From the Western Slope of the Rockies to Southern California, a proliferation of private investors like Greenstone have descended upon isolated communities, scouring the driest terrain in the United States to buy coveted water rights.
The most valuable of these rights were grandfathered in decades before the population explosion in desert cities like Phoenix and Las Vegas, and privilege water access to small, often family-owned farms in stressed communities. Rechanneling water from rural areas to thirsty growth spots like Queen Creek has long been handled by municipal water managers and utilities, but investors adept at sniffing out undervalued assets sense an opportunity.
As investor interest mounts, leaders of Southwestern states are gathering this month to decide the future of the Colorado River. The negotiations have the potential to redefine rules that for the last century have governed one of the most valuable economic resources in the United States.
The Law of the River
Of all the accomplishments of moving and storing water in the West — from Hoover Dam to the mammoth Colorado-Big Thompson reservoir network — none may be more impressive than a yellowing, sparsely worded 13-page document called the Colorado River Compact. Drafted in 1922, it allocates the river’s annual flow, dividing the water among seven states desperate for their share.
Today, the river provides water to 40 million people and 5.5 million acres of farmland — not just in Colorado, Wyoming, Utah, New Mexico, Nevada, Arizona and California but also to 29 Native American tribes and the Mexican states of Sonora and Baja California.
“Back in the 1920s, they knew that if they didn’t reach agreement, there were going to be winners and losers, so with a lot of wrangling and quarreling, they eventually agreed to agree,” said Russell George, a former state representative from western Colorado who founded the Interbasin Compact Committee, a statewide governmental body devoted to seeking consensus on water issues.
“Everybody gave a little. Everybody got a little,” he added. “And it had to be a pretty good process, because it lasted 100 years.”THE GREAT READ: Every weekday, we recommend one piece of exceptional writing from The Times — a narrative or essay that takes you someplace you might not expect to go.Sign Up
Increasingly, the river is threatened by drought, with flows down 20 percent over the last 20 years. As a result, the talks starting in January will be a vehicle for urgent attempts to manage the water, including replenishing downstream reservoirs. By design, the five-year process is ponderous and built to be consensus-driven, with an eye toward shared sacrifice.
Most of the water in the 1,450-mile-long river comes from Colorado, and as that state’s top water official from 2013 to 2017, James Eklund directed the creation of a comprehensive long-term plan to address climate change, the first by a state in the West. He believes that the last best hope against the drought is a market-based solution, one that allows private investors seeking a profit a significant hand in redrawing the map of water distribution in the West.
“I have seen time and again the wisdom of using incentives that attract private sector investment and innovation,” Mr. Eklund said. “Dealing with the threat of climate change to our water requires all sectors, public and private, working together.”
To proponents of open markets, water is underpriced and consequently overused. In theory, a market-based approach discourages wasteful low-value water uses, especially in agriculture, which consumes more than 70 percent of the water in the Southwest, and creates incentives for private enterprise to become involved. Investors and the environment may benefit, but water will almost certainly be more expensive.
“The whole history of the American West is about moving water,” Mr. Gammage of Greenstone said. “One of the things I think we’ve learned over time is that a resource like water is best allocated through kind of a combination of market forces and regulatory oversight.”