Study touting economic boon of Delta water tunnels draws criticism

Published: Tuesday, Aug. 6, 2013 - 12:00 am | Page 3A
Last Modified: Tuesday, Aug. 6, 2013 - 7:59 am

An economic study of Gov. Jerry Brown's proposal to build two giant water tunnels in the Delta estimates the project will generate a net $5 billion benefit to the state, along with 1 million new jobs.

The draft study on the Bay Delta Conservation Plan was released Monday. The tunnel plan itself is expected to be released for public comment by Oct. 1 and approved next year.

"The numbers more than pencil out," said John Laird, secretary of the California Natural Resources Agency. "This is an unprecedented restoration with benefits for many generations in the future."

Critics swiftly attacked the study, claiming it relies on rosy water delivery scenarios that may not prove feasible in the fragile Sacramento-San Joaquin Delta. Water from the estuary currently serves 25 million Californians and 3 million acres of farmland.

To obtain permits under state and federal endangered species laws, the project must demonstrate that it not only protects imperiled fish species but restores them. This may require reduced water diversions and more natural outflow to the ocean.

In addition, the project's actual ability to deliver water will not be known until after it is built, because the Brown administration intends to use a "decision-tree" process to determine safe diversion levels later. As a result, many assumptions in the study may prove to be wrong, said Bill Jennings, director of the California Sportfishing Protection Alliance.

"The whole thing falls apart if BDCP doesn't deliver any more water," Jennings said.

The Bay Delta Conservation Plan is estimated to cost $25 billion. It proposes two tunnels to divert Sacramento River water from three new intakes proposed near Courtland in Sacramento County to existing state and federal water canals near Tracy.

Water customers that benefit, mainly in the San Joaquin Valley and the Los Angeles metropolis, would pay for it via increased water bills.

One of the key project goals is to protect endangered fish from current diversion pumps near Tracy, which lack modern fish screens.

The project seeks a 50-year permit from state and federal agencies under habitat conservation plan regulations.

Supporters said the long-term permit would stabilize water diversions from the Delta, which are now volatile due to annual protections of salmon, smelt and other fish.

The economic study was done by a consultant, The Brattle Group, led by David Sunding, an economist and professor at UC Berkeley.

The 1 million new jobs identified in the study would occur over the 50-year term of the permits issued for the project, driven by presumed employment increases triggered by more reliable water deliveries.

Sunding said the project's intent is to stabilize water deliveries at levels similar to those in the past two decades and avoid cuts that might occur in the future without the project.

But he acknowledged he cannot be sure how much water will be delivered.

"There is uncertainty at present about what exactly will be the controlling regulations on the project in a decade," he said.

Barbara Barrigan-Parrilla, director of Restore the Delta, which opposes the project, said the projections are unreliable. One reason is that climate change is likely to cut future water supplies.

"This whole idea of reliability is predicated on water that we do not believe will be in the system," she said. "The 'facts' that are presented in this document are really fantasy."

The project also calls for 100,000 acres of habitat restoration in the Delta, and the economic study calculates many benefits from this work.

That restoration is not guaranteed because it depends on $4 billion that state voters would be asked to approve in two future bond measures.

Laird said that isn't a concern because if voters reject those bonds, other money could be found. "I think we would just figure out another way to do it," he said.

The study anticipates economic benefits for the Delta as well, even though it would lose 100,000 acres of farmland, suffer a decade of disruptions during construction, and lose some rural scenery to new plumbing hardware.

Much of the benefit, according to the study, would come from an estimated 110,500 construction jobs during the project's first decade, followed by 11,300 permanent jobs to operate the project over the subsequent 40 years.

Interestingly, increased water bills paid by beneficiaries are expected to cost the state 103,000 jobs, nearly offsetting new jobs from construction.

But supporters emphasized the 1 million new jobs resulting from a more reliable water supply. This would give farmers and business owners confidence to invest in new projects without fear of losing water, said Allan Zaremberg, president of the California Chamber of Commerce.

"What the business community looks to is certainty – a certainty they're going to a have reliable and affordable water supply over the next century," he said.

Barrigan-Parrilla said there is no guarantee that new jobs will offset long-term harm to the Delta's own farm economy. "I believe this project will literally wipe out the vast majority of agriculture in the Delta," she said.

• The Bay Delta Conservation Plan Draft Statewide Economic Impact Report can be found online at: http://ht.ly/nEobp.

Contact The Bee's Matt Weiser at (916) 321-1264. Follow him on Twitter @matt_weiser.

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