Private companies are buying water rights and betting on scarcity in US West
· 6 min read
The western United States is in a critical moment to determine water management. Much of the western United States (including Arizona, California, Colorado, Nevada, New Mexico, Utah, and Wyoming) sources its water from the Colorado River basin. The river system, including the 1,450-mile-long river, its tributaries, dams, and reservoirs, spans these seven states in addition to thirty tribal reservations, providing water to roughly 40 million residents.[1] The region's residential, industrial, and agricultural activities have put great stress on the water supply. Since 2000 the river basin has been in a drought, culminating in state and federal governments needing to address water access and cutting usage.[2] This political and environmental challenge has made headlines in the U.S. since last summer when the federal government began demanding the seven states come to a new agreement and cut their usage, but other quiet actors have come on the scene to have their hands in water management.
Water Asset Management (WAM) is a New-York based firm that “is focused on growth and success as a leading investor in identifying the best companies and assets ensuring and delivering water quality and supply globally”.[3] One of the assets it has acquired in recent years is $20 million worth of land in western Colorado, neighboring farmers who have expressed cautious optimism as well as outright anxiety about a private organization from outside the community taking hold of lands along the Colorado River Basin.[4] WAM isn’t the only firm that has been purchasing water access rights. In 2013 a company owned by Greenstone purchased land in Cibola, Arizona. Cibola is a small agricultural community on the border with California, and in 2019, the company sold the water rights to their land to Queen Creek, a Phoenix suburb about 200 miles away. The La Paz County Board of Supervisors opposed the recommendation of the Arizona Department of Water Resources to transfer the rights.[5] Still, the deal was sent on to the federal government nonetheless. The Department of Water Resources stated that they could only make the recommendation based on the laws and policies, not what they believe to be the most beneficial use of the water.[6] In Washington state, the Crown Columbia Water Resources has been investing millions along the Columbia River system and in Nevada, WAM has been purchasing property in the Humbolt River Basin.[7, 8]
Across these cases, the investment companies state that there is enough water to support urban growth and continued rural agriculture while local residents express concern about the ability to continue their ways of life in the years to come. As climate change increases the frequency and intensity of droughts and heatwaves in this region, water is predicted to become more scarce, and rural residents believe that their taps will be the first to run dry. Rural residents are rightly concerned that these companies prioritize profits over equitable, sustainable solutions, and that water will be pushed to wealthy urban and suburban communities, as evidenced by part of Cibola’s water being sold to Queen Creek.
The companies purchasing the water rights assert that they use their expertise to develop and manage water assets, creating more access than the current state-managed infrastructure. However, numerous attempts at water privatization within the U.S. have proven that when private companies take control of this public resource, water and sewage services become more expensive, system maintenance is neglected, and water quality declines.[9, 10] Furthermore, private companies are less transparent, restrict public input, and require heavy governmental oversight to prevent corner-cutting.[11]
Water privatization is not an issue exclusive to the U.S. of course. In England, some have been calling for the renationalization of their water system because of the raw sewage being purposely dumped into the waterways.[12] In Chile, water was privatized under the Pinochet regime, and for regions like the Petorca province, this inequitable system exacerbates the impact of their own megadrought, restricting water access for most households. However, with the new constitution being drawn up, there’s optimism to affirm water as a right in the new political era.[13]
To be clear, these companies purchasing land along the Colorado River Basin aren’t at the point where they are bidding to take over local water systems, but they’re taking advantage of vulnerable water rights systems to take regions piece by piece. We can look at these examples of water privatization in the U.S. and around the world not only as cautionary tales, but also for means of prevention and solutions.
This discussion leaves us with the question: what are some ways that communities can prevent water privatization? Communities can ask their local and state agencies to review their water rights tracking systems in order to increase transparency around water rights ownership. If one’s local government is pressed to cut spending and is inching towards privatization, show up to meetings and show how detrimental it can be for the community and campaign for alternative solutions, including public-public partnerships. Citizens can also pursue Water Rights and Local Self-Government Ordinances, which are “rights-based laws [that] prohibit corporate water withdrawals, remove the rights of water corporations when they come into conflict with community rights, and assert the right of the community and its residents to local self-governance” according to Community Environmental Legal Defense Fund (CELDF).[14] Of course, wherever one is, a great deal can be impacted at the local level through knowing the issue, organizing for change, and even asking for help. There are numerous organizations worldwide that focus on humanity’s right to access clean water, so no one has to push for change alone.
Future Thought Leaders is a democratic space presenting the thoughts and opinions of rising Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.
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