But What About Fracking, Governor Brown?

That much water gets you half a glass of oil (image source)

by Gaius Publius

As regular readers know, I've been on about California water lately — in particular, the drought, the rationing and the so-called "free" market way of dealing with it. In general, we're in favor of government-mandated rationing here at La Maison chez nous, but rationing for all, not just for the plebs. With that in mind, note this (my emphasis throughout):

What About Fracking, Governor Brown?

When Californian Governor Jerry Brown announced wide ranging water restrictions for California last week, the news went global.

The headlines reported how this was the first time in California’s history that such drastic measures had been introduced. And here was a Governor who was prepared to tackle the devastating four-year drought head on. ...

It was all very choreographed. Brown’s press conference took place on a barren, brown slope in the Sierra Nevada mountains, where snow fall is a record low levels.

And it is not just the snow which has gone. The whole state is in the middle of its worst drought for centuries. There is no end in sight, with scientists warning the region may be entering a “mega-drought” which could last for decades.

“Today, we are standing on dry grass where there should be five feet (1.5 meters) of snow,” Brown said. “This historic drought demands unprecedented action …  As Californians, we must pull together and save water in every way possible.”

What Brown proposed was unprecedented, in that he was attempting to reduce water usage across urban California by twenty five per cent.

That was the good news, the emergency-recognizing mandate. But what about saving water "in every way possible"? Not so much:

But his plan is flawed in that it does not “save water in every way possible”. The main focus of Brown’s water reduction plan is to reduce urban water usage. He did not mention the state’s guzzling fracking industry and the even more water-hungry agricultural sector.

"Did not mention" means "put no restrictions on." Common Dreams: "Brown’s mandate, announced Wednesday, directs cities and communities to cut down their water consumption by 25 percent, but does not make any requirements of the state’s numerous oil companies, including those which practice the water-heavy fracking method of extraction, nor of large-scale farming operations."

Fracking means Big Oil, like Occidental Petroleum and the like. Agriculture means millionaire growers and, increasingly, billionaire bankers. Let's look at them one by one.

Is Brown Transferring Urban Water to Millionaire Bankers and Growers?

As we noted earlier, agriculture consumes "80 percent of California’s developed water but account[s] for only 2 percent of the state’s GDP." Why do growers consume so much water? Because money. Because, for example, wealthy almond growers are making a killing exporting the state's water (via almond shipments) so they can be even more wealthy. And wealth tends to own the political process, even in California.

That's Nuts: Almond Boom Strains California Water Supply

Asia’s love of nuts is draining California dry.

Amid one of the worst droughts in the state’s history, farmers are scrambling to find enough water to irrigate lucrative almond trees they planted after abandoning other, less thirsty crops.

Why’s there such a market for California nuts? As incomes in countries such as China, South Korea, and India have risen, so has demand for nuts that formerly were out of reach for many Asians. Added to the mix are Wall Street firms who, smelling a quick buck, are paying top dollar for vegetable farms and converting them to orchards....

In 2011, almonds surpassed grapes as California’s second largest agricultural product, and the crop “now attracts more money per acre than any other type of parcel in California's Central Valley," Heather Davis, the senior managing director for global private markets at financial services firm TIAA-CREF, explained in an August 2013 investment note.

The firm, which has $569 billion under management, did not own a single farm before 2007. Today it owns more than 500, including 35,000 acres in California as of 2012, and is one of the top five almond producers in the world. The nuts, Davis wrote, are an "attractive long-term investment theme."

So to my question above, Is Brown transferring urban water to millionaire bankers and growers? — the answer, of course, is yes. The LA Times:

Standing in a brown field that would normally be smothered in several feet of snow, Gov. Jerry Brown on Wednesday ordered cities and towns across California to cut water use by 25% as part of a sweeping set of mandatory drought restrictions, the first in state history. ...

The order focused on urban life even though agriculture accounts for roughly three quarters of Californians' water usage. Cities have to stop watering the median strips that run down the middle of roads. The state will partner with local agencies to remove 50 million square feet of grass — the equivalent of about 1,150 football fields — and replace it with drought-tolerant landscaping.

State agencies will create a temporary rebate program to encourage homeowners to replace water-guzzling appliances with high-efficiency ones. Golf courses, campuses and cemeteries must cut their water use. New developments will have to install drip or microspray systems if they irrigate with drinking water. Water agencies will discourage water waste with higher rates and fees.

The order aims to reduce the amount of water used statewide in urban areas in 2013 by 25%.

You don't have to care that agriculture is drinking up urban water savings. California residents will do that for you; they will care, and care increasingly. This is what happens when the rich break the social contract. It breaks for everyone else as well.

What About Fracking, Governor Brown?

Fracking, like almond-growing, is also notoriously thirsty. Just one example:

“At the height of California oil production in 1985, oil companies in Kern County pumped 1.1 billion barrels of water underground to extract 256 million barrels of oil—a ratio of roughly four and a half barrels of water for every barrel of oil,” according to Miller. “In 2008, Kern producers injected nearly 1.3 billion barrels of water to extract 162 million barrels of oil—a ratio of nearly eight barrels of water for every barrel of oil produced.”

Again, by that measure, the ratio is eight to one — eight barrels of water produces one barrel of oil. Whom does fracking benefit? The owners of Big Oil:

Clean Water Action has the scoop on which companies have the biggest stakes in the Monterey [California] Shale [oil fields]:

Occidental Corporation (Oxy) is the largest holder of land/mineral rights in California, holding rights to drill over 1.6 million acres of land in the Monterey Shale. In a presentation to shareholders in 2010, Oxy officials stated that “in 10 years, California shale could become Oxy’s largest business unit.”

Venoco Inc. has one of the largest stakes in the Monterey Shale with rights to drill in over 300,000 acres. There are more than 10 billion barrels of oil available for extraction at its current sites. In its 2011 report to shareholders, the company stated that it continues to expand its onshore Monterey acreage lease holdings across three basins: Santa Maria, Salinas Valley, and San Joaquin (which includes the Sevier discovery). ...

And so on. Why does fracking, like big agriculture, get a pass? Maybe this is the reason:

The oil and gas industry gives millions of dollars to California’s elected officials to ensure their interests are served in Sacramento. Governor Brown is one of these recipients, having accepted at least $2,014,570.22 [$2 million] from fossil fuel interests since his race for Attorney General in 2006.

As the public awakens to the dangers of fracking in California, the fossil fuel industry is spending as much money as it takes to protect their dirty interests. Billions of barrels of untapped oil are sitting in the Monterey Shale and Big Oil is pushing to make sure it all stays on the table.

State campaign finance laws prohibit any company or individual from contributing more than $27,200 per candidate, per election — but many of these companies have found loopholes that let them flood the system with their petro-dollars, making sure our elected leaders, and Governor Brown in particular, protect their interests.

The fossil fuel corporations and associated industries at the top of the dirty money pile include: Chevron, Occidental Petroleum, Southern California Edison, Valero Energy, Tesoro Corp, Plains Exploration and Production, Venoco, Conoco Phillips, and Aera Energy (owned jointly by Shell and ExxonMobil). 

So the opening question comes back at the bottom: So what about fracking, Governor Brown? And what about agriculture as well? It's not just us asking, we in the nation waiting our turn. It's your own residents, on whom you're putting the squeeze so ... it has to be said this way ... wealth can be served. The tighter the squeeze, the more urgently the question will be asked. The Social Contract, the glue that holds a society cooperatively together, can be bent, but only so far. At some point it breaks.

When the Social Contract Breaks from Above, It Breaks from Below As Well

This has been a theme of mine for years, but it's never not true. When the wealthy strip-mine a nation this thoroughly, the residents rebel, and they don't always rebel "pretty." In fact, rebellion is pretty ugly stuff. No one, certainly not I, wants to live through this:

When the Social Contract breaks from above,
it breaks from below as well

But it's not my choice to stop the predation; it's someone else's. Governor Brown could start the ball rolling in the other direction — the populist one — by recognizing the needs of all the people, not just those with money. After all, constantly bowing to money is almost trite these days, isn't it?

GP