The Value of Water on the West Coast — And Why California Is So Screwed

From the parched rivers of California to the brown lawns and raging wildfires of British Columbia, the value of water along the West Coast has become hard to ignore. Record-breaking dry spells have sparked conservation edicts from authorities on both sides of the border, and set neighbor against neighbor in "drought shaming" battles.

But precious as it is, there's long been resistance to assigning the resource a monetary value. With drinking water a UN-recognized human right, many are apprehensive about treating it like oil, minerals or any other commodity. Consumers pay for the pipes and treatment plants that get clean drinking water to their taps, but brute water is virtually free for municipalities, industry and farmers, who are subject to modest extraction permit fees.

Keeping water literally priceless has been a boon for corporations, who use significantly more water than the 15 percent that goes to North American households. And now, water-starved residents are growing increasingly concerned that their governments are practically giving millions of liters away.

On the West Coast, Nestlé's bottled water operations have attracted the most attention. Controversy broke out back in 2013, when media first reported that the company was drawing over 250-million liters of groundwater in British Columbia — without paying a dime. Similar outrage spilled out onto the streets in California this spring, when residents learned that Nestlé was paying fractions of a cent on each bottle it sold, even as everyone else was being asked to cut back on consumption. And an online petition campaign is opposing a looming water rights deal with the company in Oregon, which is also grappling with drought.

British Columbia's government announced in February new water rates that will put a price on groundwater for the very first time: $2.25 per million liters for bottlers, and significantly less for farmers and energy utilities. Under that scheme — which the province backed away from this week — Nestlé would pay about $600 per year ($460 US) for its annual water intake, on top of a one-time licensing charge and an annual reporting fee.

According to a Nestlé Waters Canada representative, the company is only drawing about 1 percent of available groundwater from the Kawkawa Lake watershed, and its own water monitoring shows that its operations are sustainable.

Others agree that the backlash is unfair. David Zetland, a professor specializing in water policy at Leiden University College in the Netherlands, says Nestlé is only a "tiny fraction" of water use in BC. Energy companies use billions of liters of the province's surface water for fracking natural gas, and only paid slightly more than a dollar per million liters. With the new rates, those prices will double.

Higher prices don't mean that water has now become a commodity, though. Revenues from the new rates are only meant to fund administration and enforcement costs for water resource monitoring, not to provide royalties to the government. BC has explicitly rejected treating water like oil or gas, with the environment minister telling a radio show that they will "never sell that right of ownership."

Savannah Carr-Wilson of the POLIS Water Sustainability Project, which lobbied the BC government on the new pricing scheme, sees the rate increases as "a step in the right direction." But she worries that the fees are far below what's needed to incentivize more efficient water use. The new prices are still the lowest in Canada, she says, far below what's charged for a million liters of water in Saskatchewan ($46), Quebec ($70) or Nova Scotia ($140).

"We need to be sure that the way we are pricing water encourages people to conserve water, because we are in a drought right now," she told VICE News.

But even as drought threatens certain habitats and wreaks havoc on lawn care, water scarcity isn't exactly an apocalyptic issue in BC. Carr-Wilson points to some ecosystems that have been impacted by low water levels, but the province still has about a third of Canada's surface water reserves. According to a World Wildlife Fund report, none of the province's watersheds are threatened by overuse, though many are polluted by runoff from pipelines and industry.

California has much more dire problems with water scarcity, and reform is desperately needed to ration supplies and encourage conservation, according to Zetland. He considers the state to be "the worst case" of water management in the US.

Related: The Marijuana 'Green Rush' Is Worsening California's Water Wars

California's water board issues permits, but can only charge fees to offset the cost of administering the permit system. Law prohibits public utilities from charging more than they need to recover costs. A recent judgment struck down the city of San Juan Capistrano's tiered water system, which charged higher rates to heavy users.

The oldest claims don't even require permits, so some users get away without paying even the modest fees that exist, and groundwater is pretty much entirely outside the system. That means there's no way to monitor how much is actually being diverted overall. According to the University of California - Davis, the state has allocated five times more in water rights than it actually has in available water.

"This is why California is so screwed right now," Zetland told VICE News. "They don't know how much is being used. It's comically bad in terms of accounting."

Last September, Governor Jerry Brown signed the Sustainable Groundwater Management Act into law, calling on local authorities to set up oversight bodies to monitor groundwater usage. But it will take as long as 20 years before the act is fully implemented.

"Yes, it will be better in 20 years," says Zetland, "but that's a long wait."

Back in BC, conservationists have been mobilizing for even higher prices. After a petition attacking Nestlé garnered over 200,000 signatures, Premier Christy Clark announced Monday that the government will take another look at rates. Liz McDowell, who helped organize the petition campaign, is worried that the current fees won't bring in enough money to fund the more robust monitoring system the government wants to build.

But that doesn't mean she thinks governments should profit by charging royalties on their water resources.

"I think we'll get a into a dangerous place if we start to commodify water and sell it for profit, because you get into a situation where it could be sold to the highest bidder," she told VICE News. "Industry can pay more, and they'll be able to access more water than municipalities."

Instead, she wants corporations to pay their fair share to support an ambitious water management system, where river and groundwater levels are closely monitored. When flows start to get low, the province would step in to cut back or cancel permits.

That might work in BC, where resources are still fairly abundant overall. But as the world gets dryer, climate change might make more arid regions consider turning to market mechanisms to encourage conservation.

Follow Arthur White on Twitter: @jjjarthur