PRESS RELEASE: The Delta Tunnel: California’s Biggest Stranded Asset in the Making
Unplanned Obsolescence Is Not Sound Water Policy
The $20+ billion Delta Tunnel pushed by the Newsom administration will not only burden ratepayers and taxpayers with tremendous debt, say water policy analysts – it will end up as a massive “stranded asset” that will never fulfill its promise of reliable water deliveries.
“It will be obsolete before it’s even built,” said California Water Impact Network board member and policy expert Max Gomberg. “A Delta conveyance project was a poor idea when it was first proposed more than forty years ago, and it was soundly defeated at the ballot box. Today, the concept is economically absurd and even more out of touch with what California needs for a vibrant and sustainable water future.”
Gomberg observed the Newsom administration is “greenwashing” the Tunnel to make it seem economically equitable and environmentally sustainable when it is really just a huge subsidy for wasteful water use.
“Urban Southern California has been making great strides in conservation and alternative water supplies, such as recycled water, said Gomberg, “so the idea that the tunnel is necessary due to climate change is demonstrably false.”
Gomberg also said Newsom administration claims the tunnel is needed to mitigate earthquake risks to Delta water deliveries belie the actual goal of tunnel proponents: subsidizing unsustainable agricultural production and inefficient urban use.
“If seismic safety was the paramount concern, the state would have been investing in existing solutions, such as levee strengthening,” he stated.
Gomberg explained that both of Southern California's imported supplies – the Delta via the State Water Project and the Colorado River – are facing reductions due to climate change, and that any cuts during dry years should be borne by agriculture.
“Corporate agriculture uses huge volumes of water to grow crops like almonds and alfalfa, which are often exported,” Gomberg said. “They are not essential to food security, and they create environmental harm and unnecessary upward pressure on urban water rates. Urban ratepayers from Los Angeles to San Diego would pay mostly or exclusively for the tunnel, and the primary benefits would go to corporate growers in the form of massive volumes of subsidized water.”
C-WIN policy analyst Tom Stokely said the Delta Tunnel conforms perfectly to the definition of a “stranded asset” – a property or project that loses its value before the end of its projected economic life. Other notorious stranded assets include coal-fired power plants and oil drilling infrastructure.
“In the case of the Tunnel, it’s even worse,” Stokely said. “Its value will have evaporated before ground is even broken. Even Jerry Meral, a former Assistant Resources Secretary, said that sea level rise would make the proposed north Delta Tunnel intake obsolete and eventually require moving the intake from the Delta to the mouth of the Feather River.”
Further, said Stokely, the cost of the Tunnel will put an unconscionable financial burden on generations of ratepayers and taxpayers.
“California’s cost of living is already the highest in the country, and people are stressed about it,” Stokely observed. “Servicing the necessary debt for the Delta Tunnel will take decades and fall on already beleaguered ratepayers and taxpayers.”
Stokely said Newsom is essentially asking for a blank check from California residents.
“While the administration’s cost estimate is $20 billion, we should expect that to double or triple at a minimum,” he said. “That’s in line with other major state-funded infrastructure projects. The Coastal Branch extension of the State Water Project, for example, was first estimated at $270 million. The final cost was $670 million. Even more egregious was the new Bay Bridge span. It was originally projected at $250 million. It ended up costing $6.5 billion – a 2,500% increase.”
Gomberg noted that the Metropolitan Water District of Southern California (MWD) – the nation’s largest wholesale provider of municipal water – is implementing major recycled water projects as part of its climate resilience plans, and has yet to endorse the Delta Tunnel.
“Many of Metropolitan’s board members have serious misgivings about financing the tunnel,” he said, “and if Metropolitan doesn’t support it, the whole deal is probably dead on arrival.”
Citing the growing tension at MWD, Gomberg noted the agency’s embattled general manager, Adel Hagekhalil, has not expressed unconditional support for the proposed tunnel, putting him at odds with Governor Gavin Newsom and his allies at MWD.
Stokely said MWD approval of the tunnel would be highly unpopular with property owners served by the agency.
“MWD would pay for the tunnel by raising property taxes without voter approval through their pre- Proposition 13 ad valorem tax,” Stokely said. “That would be a clear case of taxation without representation – something Americans have reflexively resisted since the Revolutionary War.”
Contact
Max Gomberg
maxgombergca@gmail.com