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In-Depth: State of California carrying out biased cost study on Delta Tunnels
By Bob Wright, Senior Counsel
The Delta Water Tunnels are being pushed by
the governor as the central piece of the Bay Delta Conservation Plan (BDCP). The
water exporters, aided and abetted by the California Department of Water
Resources (DWR), lust for the Delta Tunnels. The twin tunnels would be 150 feet underground, over 35 miles long and would take massive
quantities of freshwater out of the Sacramento River by way of new intakes near
Clarksburg south to the pumping plants near Tracy. The maximum capacity of the
tunnels would be 15,000 cubic feet per second (cfs) which is a typical entire
flow of the Sacramento River during the summer. This is a revival of the
“peripheral canal” which the exporters and this same governor attempted to
inflict upon California back in the
1970s. Happily, that effort was defeated by a referendum in June 1982 rejecting
the peripheral canal by a statewide vote
of about 63-27%. Sadly, the attempt to
grab all that water is back.
Friends of the River is a stalwart opponent
of the Delta Tunnels. Indeed, it would be contrary to the very name of the
organization to do anything other than oppose efforts by water exporters aided and abetted
by certain politicians to take massive quantities of water out of California’s
greatest river to run it through underground tunnels.
Presently, the South of
the Delta exporters face some constraints in how much water they can take.
Salinity is increasing in the Delta as result of existing diversions that will
be aggravated in the future by rising sea level resulting from climate change.
Thus the exporters at present must deal with salinity just as Delta water users
and Delta fish must try to deal with
salinity. Changing the point of diversion to a location upstream from the Delta
would free the exporters to take as much water as they want. This would result in unleashing a “Hungry Tiger” on
Northern California rivers. Potential dam projects that presently do not make
sense economically because of limitations on diversions might appear to make
sense economically because existing limits on how much water can be taken would
be eliminated or raised because of the shift in diversion to a site upstream from the Delta.
One critical part of the effort going on
right now to inflict the Delta Tunnels on California is the process by which
DWR is carrying out a biased benefit-cost study attempting to misrepresent the
Delta Tunnels as having a favorable, instead of unfavorable, benefit-cost
outcome. Seven organizations submitted comment letters by the closing date of
February 6, 2013, on the proposed benefit-cost study. Friends of the River was
one of those organizations. C-WIN joined our letter. Other significant comment
letters included the letter from the Environmental Water Caucus which adopted
and incorporated our comment letter, and the letter from Professor Jeffrey
Michael of the University of the Pacific. What follows is an explanation of
what DWR is up to.
Failure to Evaluate Reasonable Alternatives
Professor David Sunding
of the University of California, Berkeley, who is carrying out the benefit-cost
study for DWR announced at the January 23, 2013 meeting of the BDCP Finance
Working Group meeting that only two alternatives would be considered for the
study— with BDCP, and without BDCP. Several of us who were present raised
concerns about that approach and professor Sunding asked Deputy Director Meral
if he could consider other alternatives.
Deputy Director Meral responded “no”. Later in the meeting, professor Jeffrey
Michael, Director of the Business Forecasting Center, University of the Pacific,
stated that assessment of alternatives is a standard part of benefit cost study
and professor Sunding agreed with that.
Analysis of only one
alternative, the no project alternative, is calculated to skew the study. The
most basic issue is whether or not to develop massive new upstream from the
Delta conveyance capacity for the exporters. There are reasonable alternatives to
new upstream conveyance that would include positive features other than just
“no BDCP.” As just one example groups have presented information on
strengthening Delta levees at far less cost than the Delta Tunnels to reduce
seismic risk. Developing and considering positive alternatives minus the Delta
Tunnels would allow eliminating factors that the exporters and DWR are misusing
to skew the analysis. The example here being that including true alternatives,
not just the “no project” alternative, allows the proper and correct
elimination or vast reduction in the claimed benefit of “reduced seismic risks
to state and federal projects” (scope of work document). That is because an
obvious alternative Plan minus the Delta Tunnels could and would include far
less costly levee strengthening as opposed to expensive $14 billion 35 mile long Tunnels as a means to
reduce seismic risks. Moreover, strengthening levees would protect Delta
residents from flooding. Tunnels would
provide area residents no protection at all.
Seismic risk is just
one example of how foreclosing analysis of alternatives skews the study. There
are many other ways in which foreclosing analysis of alternatives skews the
study.
The Cumulative “Double Whammy” on the Delta resulting from Sea Level
Rise plus Massive New Diversions Upstream for the Exporters Renders the Scope
of Work Outdated
The draft Delta Plan was issued November 30,
2012 by the Delta Stewardship Council. A portion of the Delta Plan admits that
“A portion of the water flowing into the Delta is specifically allocated to
Delta outflow to help repel salinity intrusion from the San Francisco Bay and
to maintain low salinity water near the western edge of the Delta. This means
that water that might otherwise be used for exports must be released from
upstream reservoirs to help control salinity (NRC 2012).” (Delta Plan, 91).
(All number references are to page numbers unless otherwise indicated). The
Delta Plan admits that as a result of climate change “Sea level rise, as much
as 55” by 2100 (OPC 2011), will result in high salinity levels in the Delta interior,
which will impair water quality for agricultural and municipal uses and change
habitat for fish species. Maintaining freshwater conditions in the Delta could
require unanticipated releases of water from storage, which will reduce
available water supplies for fish.” (Delta Plan, 80)(Emphasis added). The
combination of sea level rise plus massive new diversions whether 15,000 cfs or
9000 cfs upstream from the Delta would amount to a “double whammy” on the
Delta.
The scope of work
subject “increased salinity and urban water treatment in the west Delta” is out
of date in noting that “salinity levels may increase in Suisun Marsh and the west
Delta.” According to the Delta Plan, there will be high salinity levels in the Delta
interior. The Delta Tunnels would multiply that effect by diverting
massive quantities of water upstream from the Delta.
Increasing salinity is
not the only adverse impact on the Delta that would result from massive new
diversions upstream for the exporters. The Delta Plan admits that there have
been adverse impacts resulting from reducing the flushing of San Francisco Bay
by Delta outflows. (Delta Plan, 84). Studies show that with increasing diversions,
“the historical flushing of the Delta with freshwater is no longer occurring.
This lack of flushing can also allow waste from urban and agricultural
development upstream of and within the Delta to accumulate. Contaminants and
toxics have been identified as factors in the decline of the Delta ecosystem.
(Baxter, et al. 2007).” (Historical Fresh Water and Salinity Conditions in the
Western Sacramento-San Joaquin Delta and/Suisun Bay, Water Resources
Department, 41, Contra Costa Water
District, February 2010, technical memorandum WR 10-001). New upstream
diversions for the exporters will further lessen the already declining flushing
of the Delta and Bay.
DWR’s biased study is designed to conceal the long-range
costs of virtually complete degradation of Delta water quality by way of
increasing salinity and pollution and further reduction or elimination of
already seriously endangered fish species.
Skewing the Benefit Cost Analysis
(a) Habitat Values
One scope of work
document refers to “habitat values and bio diversity”, while another refers to “public
benefits of Delta conservation and restoration.” All that the exporters would
pay for would be the Delta Tunnels and the intakes. Virtually everything else
would be paid for by the public through a bond measure that was pulled from the
ballot by the Legislature in 2010 and 2012 because of fears it would not pass,
and is now proposed to be on the ballot in 2014. The proposed analysis is
designed to confuse the fact that only some would benefit from the new conveyance
and increased exports while many of the costs would be borne by the general
public. Increases in habitat can be provided without the Delta Tunnels. This
issue is related to the failure to evaluate reasonable alternatives discussed
above. There is no legitimate reason to include an increase in Delta habitat or
species resulting from expenditures for environmental restoration as being a
favorable benefit of the Delta Tunnels project. Habitat can be increased
through other positive alternatives that simply leave out the Delta Tunnels.
Again, this is a transparent effort driven by the exporters and DWR to skew the
analysis to falsely show a favorable benefit cost result for the Delta Tunnels.
(b) Greenhouse gas benefits
The amended scope of work document refers to
“greenhouse gas benefits” from taking Delta lands out of production and this subject
was also discussed at the meeting. In response to questioning, it was stated at
the meeting that the benefits of taking exporter agricultural lands out of
production including those in Westlands would not be considered. This
omission will skew the study because on the one hand it will look at the
greenhouse gas benefit of retiring agricultural land when analyzing the
conservation measures but will ignore the same benefit that would occur if
exporters retired a portion of their agricultural land. In addition to
greenhouse gas benefits resulting from taking certain exporter agricultural
lands out of production, there would also be a great benefit to the Delta
because certain of the exporter agricultural lands result in extensive selenium
pollution that is carried downstream. Moreover, taking those lands out of
production would reduce exporter demands for water.
(c)
Salinity
The
study includes the value of salinity reductions to the exporters’ urban water
consumers. In other words, the exporters would gain the benefit of diverting
massive quantities of freshwater upstream from the Delta so as to no longer
share in the burden of increasing salinity in the Delta while those same diversions
would further exacerbate the already worsening salinity intrusion into the
Delta. The exporters are junior water rights holders who would create a
situation in which the senior water rights holders in the Delta would have
their water quality degraded as a result of actions by the junior exporters. At
minimum, the study needs to value the cost of increased salinity to consumers
in the Delta at least as highly as it is valuing the benefit of decreased
salinity to consumers under the “model developed by MWD and the Bureau of
Reclamation (Reclamation).” (Scope of Work).
(d) Water quality
Of course wetlands provide water quality
improvements from filtering and purification. The Delta Tunnels, however, are
not necessary to increase the amount of wetlands in the Delta.
Professor Michael explained in the meeting
that the focus of the benefit cost study should be on the water supply system
and that there is no valid reason to include—“bundle”-- such other matters as
reduction of seismic risk, habitat values, greenhouse gas reductions and so
forth, because these actions can all be accomplished by way of alternatives
that do not include the Delta Tunnels. The only thing bundling accomplishes is
to misrepresent the Delta Tunnels alternative as having a more favorable
benefit cost outcome than it actually does.
It appears that all the scope of work is attempting to accomplish is to
produce a skewed study to challenge the conclusions of Professor Michael’s Eberhardt
School of Business Forecasting Center, University of the Pacific, Benefit Cost Analysis of Delta Water
Conveyance Tunnels (July 12, 2012). That study concluded that the costs of
the Delta Tunnels would be 2.5 times higher than the benefits, so that the
project does not make economic or financial sense.
Failure to Evaluate Adverse Aesthetic Impacts of the Massive Intake
structures
Professor Michael
established that the study is not going to consider the adverse aesthetic
impacts of the massive intake structures. That is an astonishing omission. The river
and the levee roads along the river are already used by motorists, bicyclists,
and boaters to enjoy the scenic beauty of the River. The intakes would be
massive eyesores in what is presently a beautiful, serene, pastoral region. The
adverse aesthetic impacts of destroying the scenic beauty of the area must be
part of any legitimate benefit cost study.
Intakes will Run at High Levels
In response to a
stated presumption by a person at the meeting that there would not be significant diversions when water levels are
low, professor Sunding stated that from the modeling he has seen, the intakes
will be operating at very high levels. Professor Sunding’s candor on this point
is appreciated. It appears, however, that in the BDCP environmental analysis,
the diversions have been characterized as operating at much lower levels.
Accordingly, it is critically important that the modeling professor Sunding has
seen be disclosed now to the public in terms that the general public can
interpret and understand. In keeping this information from the public, the BDCP
process is violating the environmental full disclosure purposes of NEPA and
CEQA. There is a very real potential for carrying out what amounts to a fraud
upon the public in terms of the environmental analysis claim as reflected in
the Delta Plan proposed Regulations “to optimize diversions in wet years when
more water is available and conflicts with the ecosystem less likely, and limit
diversions in dry years when conflicts with the ecosystem are more likely.”
(Proposed Regulations § 5001(e)(1)(C). It sounds like there is on the one hand
modeling for purposes of the benefit cost analysis showing that the intakes
will take a lot of water, thus constituting a benefit for the exporters, while
on the other hand the amount of water to be taken is minimized for purposes of
the environmental analysis.
The Delta Tunnels Concept is Outdated and the Project may Become an
Infamous White Elephant for Several Different reasons
(a) Changing Technology and Conservation Efforts
make the Delta Tunnels Concept Outdated
The Delta Tunnels project is a product of 1950s,
1960s and 1970s thinking. The project is a resurrection of the “peripheral
canal” that the State was going ahead with until stopped by the successful
referendum against it in June 1982. A lot has changed in the 30 years since then and there will be
more changes over the next 30 years. Innovative thinkers know better than to
embrace a “build now, think later” approach. A modern concept of reducing
exports instead of developing new conveyance is Environmental Water Caucus
Alternative 2 in the Delta Plan process supported by Friends of the River. As
another example, a group of conservation and business organizations including
the Natural Resources Defense Council, with the written support of San Diego,
the San Diego County Water Authority and other urban water agencies proposed an
alternative of a much smaller conveyance facility on January 16, 2013.
Developments cited in support of the proposed alternative include dramatically
increasing local water recycling and conservation, reinforcing Delta levees,
improving cooperation among water agencies to maximize the benefits of water
recycling and groundwater management to provide new water supplies and lower
costs, and developing new water storage south of the Delta. One of the
statements in the official Release for the alternative is “The many potential
benefits of these investments include more water at a lower cost in comparison
with the current draft BDCP plan, a healthier environment, thousands of new
jobs in the communities that would pay the majority of costs, greater
likelihood of permitting from regulators, greater potential to attract funding
partners and reduce pressure for public funding, faster water supply benefits;
more local control of water supply, and less reliance on imported water.”
(Natural Resources Defense Council release January 16, 2013).
Thus a number of urban
water agencies have determined that other alternatives including dramatic
increases in local water recycling and conservation are preferable, can be
instituted sooner, and cost less than the massive Delta Tunnels. The scope of
study needs to be expanded to include analysis to ensure it does not promote a White
Elephant that will be obsolete by or before the time it would even become
operational—2026 at the earliest. The scope of study also needs to be expanded
to consider the benefits and costs resulting from the massive Delta Tunnels reducing
the incentive to make dramatic increases in local water recycling and
conservation, whereas alternatives not including the massive Delta Tunnels
would increase the incentive to make dramatic increases in local
water recycling and conservation. The scope of study needs to include the
“opportunity cost” to account for the fact that ratepayer funds expended for
higher rates to pay for the Delta Tunnels would not be available to pay for
alternative and less environmentally destructive water supplies such as
increases in water recycling and conservation.
(b) Climate Change and the
Endangered Species Act also Raise the Prospect of the Delta Tunnels project Being
a classic White Elephant
There is no discretion under the Endangered
Species Act to authorize a project that would jeopardize survival of listed
fish or adversely modify critical habitat.
Center for Biological Diversity v. United States Bureau of Land Management
(Ruby Pipeline Case), 698 F.3d 1101 (9th Cir. 2012). Pumping has
already been restricted below capacity from the Delta by federal district court
orders under the Endangered Species Act. The Recirculated Programmatic Draft
EIR (RDEIR) for the Delta Plan admits that the “Revised Project”— anticipated
upstream diversions for the exporters under the BDCP plan—would have
significant and unavoidable environmental impacts including violation of water
quality standards and adverse effects on special status species and habitat.
(RDEIR, 24-10). The admitted impacts on biological resources include
“substantial adverse effects on sensitive natural communities, including wetlands;
substantial adverse effects on special-status species; substantial adverse
effects on fish or wildlife species habitat; interfere substantially with the
movement of any native resident or migratory fish or wildlife species or with
established natural resident or migratory wildlife corridors.” (RDEIR, 24-10).
The situation will
worsen because of climate change. The Delta Plan establishes that “Warmer
temperatures throughout the state will cause higher evaporation rates,
particularly during the hot summer and early fall months, contributing to
reduced stream flows, drier soils, reduced groundwater infiltration, higher
losses of water from surface reservoirs, increased urban and agricultural
demand for irrigation water, and more water needed for ecosystem protection
(California Natural Resources Agency 2008).” (Delta Plan, 80). Moreover, recent
studies sponsored by the California Climate Change Center, released in support
of the 2012 and 2009 California Climate Change Assessments demonstrate that
there will be a significant increase in dry and critically dry years by the
latter half of this century with a corresponding decrease in wet and above
normal years.
The scope of study
needs to be expanded to include the possibility that future developments including
climate change and regulatory activities or court actions under the Endangered
Species Act might either prohibit the Delta Tunnels from operating at all, or
severely reduce under some or all conditions the amount of water allowed to be
transported through the Tunnels. The parties paying for the Delta Tunnels might
end up having paid for and continuing to pay for a project of little or no
economic value. That would be a project that would have great costs but little
or no benefits. The benefit cost study also needs to fairly and candidly
discuss and disclose the risks of the exporters attempting to transfer the
burdens of paying for what would prove to be an unnecessary or little used
project--a classic White Elephant-- to the public.
(c) Future State Water
Resources Control Board (SWRCB) Proceedings may also Result in the Delta
Tunnels project being a White Elephant
The Statement of Reasons filed by the Delta
Stewardship Council in support of the proposed Delta Plan Regulations includes
statements that “The best available science suggests that the currently
required flow objectives within and out of the Delta are insufficient to
protect the Delta ecosystem. Additionally, uncertainty regarding future flow
objectives for the Delta impairs the reliability of water supplies that depend
on the Delta or its watershed. The predictability of water exports cannot be
improved and the Bay Delta Conservation Plan cannot be implemented without
timely State Water Resources Control Board (SWRCB) action to update flow objectives.”
(Statement of Reasons, 5-6).
The Delta Plan, citing National Audubon Society v. Superior Court
(Mono Lake case), 33 Cal.3d 419 (1983), explains that the State “has an
affirmative duty to take the public trust into account in the planning and
allocation of water resources and to protect public trust uses whenever
feasible.” (Delta Plan, 82). The Delta Plan explains that “the state’s
navigable lakes and streams are resources that are held in trust for the public
and are to be protected for navigation, commerce, fishing, recreational,
ecological, and other public values.” (Delta Plan, 82).
The Delta Plan admits
that the original SWP and CVP contracts assumed greater water export quantities
than consistently can be delivered. (Delta Plan, 91). A recent workshop
conducted by the SWRCB has shown that legitimate claims to water flowing into
the Bay Delta exceed the available water supply by more than five times in most
years. In the words of the California Supreme Court “[B]ecause the State Water
Project had never been fully constructed there is a huge gap between what is
promised and what can be delivered, rendering State Water Project entitlements
nothing more than hopes, expectations, water futures or as the parties refer to
them, paper water. . .” Vineyard Area
Citizens for Responsible Growth, Inc. v. City of Rancho Cordova, 40 Cal.4th
412, 430 (2007). Moreover, “these project rights are junior in priority to the
rights held by water users in the Delta and within the Delta watershed.” (Delta
Plan, 82).
The scope of the
benefit cost study must also consider and evaluate the possibility that future
SWRCB proceedings determining how much water is actually available, and
protecting the Delta under the public trust doctrine, may also sharply reduce
or eliminate water available for transport through the Delta Tunnels. Moreover,
there is the prospect of water rights adjudications and the exporters are last
in line in terms of water rights. That also raises a real prospect of
prohibition or curtailment of diversions through the Delta Tunnels. Again, such actions are real possibilities
that could render the Delta Tunnels project a White Elephant having great cost
but little or no benefit.
The Statement that “the Proposed Study takes a Statewide Perspective”
is Not True as there is no Consideration of Upstream Costs
The first paragraph in
the amendment describing the scope of work states that “The proposed study
takes a statewide perspective, and analyzes impacts to various groups whose
welfare may be impacted by the Plan.” That statement is simply not true at
present. Attempting to maintain freshwater conditions in the Delta in the wake
of the massive new diversions upstream for the exporters will likely require
releases of water from storage reducing available water supplies for fish.
(Delta Plan, 80, 91). The massive new diversions for the Delta Tunnels would
thus cause change in storage and releases from upstream reservoirs such as
Shasta, Trinity, Oroville, and Folsom, and affect and imperil all provisions already
in place designed to maintain cold water storage and minimum flows upstream for
fishery and other purposes. Consequently, the Delta Tunnels would affect water
availability, environmental conditions, and fisheries throughout the Sacramento
River and San Joaquin River watersheds upstream from the Delta. There is no
mention of these upstream impacts in the draft scope of work. The costs of
these upstream impacts must be considered in a “statewide” study.
Possible Explosion of Costs
The costs for the replacement span of the San
Francisco-Oakland Bay Bridge between Oakland and Yerba Buena Island exploded
from the original projection of under $1 billion to over $6 billion. Massive
government public works projects tend to cost far more than what the government
claims when trying to sell the public on the project. The scope of the benefit
cost study must be expanded to include analysis of possible increase or explosion
in projected costs of the Delta Tunnels, intakes, and mitigation measures, who
would get stuck with the bill, and how payment of the bill could be guaranteed.
Draft Technical Report Must be made Available to the Public
The Scope of Work document in section 2
recites that the Draft Technical Report will be submitted for review by DWR,
Reclamation, “and the water contractors involved in the BDCP.”
The Draft Technical Report needs to be submitted to the public at the
same time it goes to the exporters. Surely, public agencies in Northern
California, Delta and Sacramento Valley water users, along with the public
including California taxpayers and ratepayers have the same right to see the
Draft as the exporters. The BDCP is a public project.
CONCLUSION
Past
California environmental and benefit cost disasters have ranged from
endangering Mono Lake to drying up a 60 mile stretch of the once mighty San
Joaquin River to the explosion of costs for the San Francisco-Oakland Bay
Bridge structure replacement project. All “friends of the river”, the public,
taxpayers, and ratepayers must become active to prevent the exporters and DWR from
inflicting another massive and costly prospective environmental and benefit
cost disaster on the public, taxpayers, ratepayers and our environment.
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Transitions: Katy Cotter
hired as FOR's Legal Counsel
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