Using the Silicon Valley as a backdrop, the Brown Administration held a press conference and media call on May 30th to discuss the release of the final chapters of the draft Bay Delta Conservation Plan, which include the highly anticipated information on the costs and the benefits of the Plan, as well as the details on how it would be funded.
On hand were John Laird, Secretary for Natural Resources; Letty Belin, Counselor to the Deputy Secretary at Department of the Interior; Mark Cowin, Director of the Department of Water Resources, and Dr. David Sunding, an economist with UC Berkeley’s College of Natural Resources who contributed to much of the work that has just been released.
The press conference was held on the campus of LifeScan, a division of Johnson & Johnson, one of the winners of the 2013 Silicon Valley Water Conservation Award. Beau Goldie, Chief Executive Officer of the Santa Clara Valley Water District, acknowledged the LifeScan for their water conservation efforts. “And yet with these efforts and these strategies, we are still pursuing the remaining future, largely dependent on imported water supplies,” said Mr. Goldie. “Today, 55% of the water supply for the Silicon Valley comes from the Sierras, and 40% of that flows through the Delta itself. Santa Clara Valley depends on this from both the state and federal water contract projects.”
“It is critical that these imported water supplies be maintained, not only to meet the annual drinking water, but also to sustain the County’s groundwater basin, which prevents the reoccurrence of subsidence and salt water intrusion,” he said. “We must manage also the water supply for our local habitat and wildlife and fisheries resources that we have.”
“The Santa Clara Valley Water District provides supplies to 1.8 million people, as well as companies like Apple Computer, Google, eBay, Cisco, Applied Materials, and a host of other companies that help drive the economic engine of the state. We are regional innovators, known for the creativity and the ability to make things happen. That ability is to think outside the box, to make new paths and foster new approaches to problem solving.”
“It’s sorely needed to solve the water supply problems of the state, and the BDCP is a big step forward. This plan moves away from a species-by-species approach and takes a holistic approach towards innovating the overall health of the ecosystem through habitat restoration and reducing multiple stressors; this is combined with conveyance improvements and operational constraints that improve the reliability of the water supplies that is an important resource provided to this region,” Mr. Goldie said. “We have supported the development of the BDCP, a plan that aims to achieve coequal goals of restoring and protecting both water supplies and habitat restoration.”
JOHN LAIRD, SECRETARY OF NATURAL RESOURCES
“We’ve worked hard the last two years to be transparent in water planning and put all information on the table for everyone at the same time. Today with the release of the final chapters of the BDCP, the entire draft of the BDCP and EIR are out on the street before the public process formally begins and the comment period beings later on this year,” began John Laird, Secretary for Natural Resources. “It’s all the information out in front of everyone to help make decisions.”
[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]“I think it is not well-understood. People think that state water is about some farmers in the valley and just Southern California, but the Silicon Valley relies overwhelmingly on Delta water, and the economy of the Silicon Valley is tied to whatever the direction is the State Water Project.” –John Laird[/pullquote]“The BDCP is but one effort among many that are addressing California’s overall water needs. Many actions that will help solve California’s water problems, both in and beyond the Delta, are actually outside the scope and reach of the BDCP,” he explained. “Key integrated watershed management elements that help support achievement of the coequal goals of the BDCP, the coequal goals that were given to us by the legislature in 2009, but are not within the BDCP’s specific scope include increased water use efficiency and conservation, increased water supplies from storage, desal, water recycling and groundwater management, improved operational efficiency through other water conveyance projects, increased CVP and SWP operational efficiencies, and voluntary water transfers and exchanges.”
“As important as investments in additional water strategies such as the ones that I just listed are, they cannot entirely replace Delta supplies,” said Mr. Laird. “The Delta is the source of 30 to 75% of the water used in some big economically robust regions of our state, including the Silicon Valley. … Santa Clara County’s water depends 50% on the Delta during normal times, and much higher, 80 to 90% in severely dry times.”
“I think it is not well-understood,” said Mr. Laird. “People think that state water is about some farmers in the valley and just Southern California, but the Silicon Valley relies overwhelmingly on Delta water, and the economy of the Silicon Valley is tied to whatever the direction is the State Water Project.”
“Conservation is important but shoring up the reliability of Delta supplies and continued investment in smart water management will enable California to meet the future demands. And with conservation also comes the obligation that when you conserve, what is still there in the water portfolio must be reliable, and that is what this project is about,” he said.
“Lastly, I just want to emphasize that California’s water supply system is clearly vulnerable to many threats, and the cost of its failure would be enormous. We have seen what happened with Hurricane Sandy on the East Coast, where the cost for cleaning up and dealing with the infrastructure after the fact is four times what it would have been if the investment had been made prior to the incident,” he said.
“That concept is exactly in play here. So as public officials, we are duty-bound to address those threats. This conservation plan provides the most comprehensive, well-conceived approach to ensuring a reliable water supply for 25 million people and restoring the Delta ecosystem.”
LETTY BELIN, DEPARTMENT OF THE INTERIOR
“The Obama Administration is arm and arm with you all. We very much agree with the state about the urgency of the problems relating to the state water supply as it goes through the Delta and the problems that the Bay Delta ecosystem is facing,” said Letty Belin from the Department of the Interior.
[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]“I want to emphasize the fact that the cornerstone of the plan has to be and will be good, independently-verified science. We can’t settle for anything less. The Obama Administration has been about good science, and this undertaking is perhaps one of the most important actuations of that commitment.” –Letty Belin, DOI[/pullquote]“There’s a great urgency on proceeding with a solution. We strongly believe that inaction is the worst option. And we also agree with the state about the promise that BDCP holds to address these problems.”
“We’ve been particularly pleased with the close partnership we have had with the state and how much progress we’ve been making together, especially in the months since the late July announcement that Governor Brown and Secretary Salazar made about the proposed project. Certainly the issuance today of the last chapters of the draft of the last chapters of the plan is a major milestone.”
“I’m with the Interior Department; the Bureau of Reclamation and the Fish and Wildlife Service are part of the Interior Department, and all of us all working closely with NOAA out of the Commerce Department, and I’m speaking on behalf of all of those agencies today,” said Ms. Belin. “We are very focused on the work we will be doing with the state in close collaboration with them on both the BDCP, the plan itself, and the EIR/EIS over the next few months leading up to the October release of those documents.”
“I want to emphasize the fact that the cornerstone of the plan has to be and will be good, independently-verified science,” said Ms. Belin. “We can’t settle for anything less. The Obama Administration has been about good science, and this undertaking is perhaps one of the most important actuations of that commitment. So that science is going to provide the foundation for the plan, submitted in support of the permit application and for the collaborative science program that will also be a key element of the plan itself into the future.”
“With the October release of the public draft EIR/EIS, the public will then have lots of time and opportunity to review and comment on these documents,” said Ms. Belin, adding “I want to emphasize that I’ve been working in the NEPA-CEQA area for over 30 years, and I have never seen anything close to as much transparency and public availability of documents before they are even to the public review stage, so … you’re seeing the work as it is in process, and I think it is appropriate and a good thing for everyone.”
MARK COWIN, DIRECTOR, DEPARTMENT OF WATER RESOURCES
Mark Cowin, Director of the Department of Water Resources, began by noting that the release of the final chapters is a major milestone in the seven-year planning effort, and he acknowledged the work and thanked the many people involved.
“In developing the plan, we’ve analyzed more than a dozen alternatives all aimed at accomplished those coequal goals of restoring the ecosystem and improving our water supply reliability. The goals are inextricably linked and recognition of that linkage is an underpinning principle of the BDCP, and I think that’s something to recognize,” said Mr. Cowin. “It’s the first time we’ve taken on a major planning approach in California that has put these to coequal goals to the test and developed a plan around the recognition of the linkage between those two coequal goals.”
“In carrying out that planning, we’ve looked at any number of different variations on types of conveyance, including through Delta conveyance using existing channels, new canals, new tunnels, different alignments of those facilities, different operating rules for those facilities, and of course, different combinations of types of habitat restoration and goals for acreages of habitat restoration,” he said. “In selecting the preferred approach, we have to consider how to best management risk in light of considerable future uncertainty, and that’s another new fact in California water planning. How do we manage risk, and how do we consider an uncertain future for California?”
[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]“So the obvious question today is, is this plan affordable? The analysis by Dr. Sunding shows about a $5 billion net benefit to water agencies when you add together the benefits of water quality, water supply reliability and reduced seismic risk to the water delivery system. When you consider current trends in the Delta, I think the real question is, can we afford not to implement the Bay Delta Conservation Plan.” –Mark Cowin, DWR[/pullquote]“We think our proposed plan to put in a new Delta conveyance facility with a maximum capacity of 9000 cfs and 145,000 acres of restored or protected habitat strikes that best balance, and the draft chapters that were released today, you can see for yourself how the experts think those various alternatives will achieve those goals compared to a variety of other alternatives,” he said.
“In the coming months, we will continue to study alternatives, including those that call for a smaller intake, but please remember that the documents we are sharing today as well as the ones we’ve released in the previous weeks are all very preliminary,” said Mr. Cowin. “We are essentially showing our work in progress. We are going to work to refine our proposal in the coming months, to improve the performance of the project as well as to reduce the impacts of the project on Delta communities, working towards the public official release of this material in October of this year.”
“The new chapters today, including the finance chapter, shows an overall cost of $24.5 billion for this conservation plan in undiscounted 2012 dollars. Of that, the capital costs of the new conveyance facilities are about $14.5 billion. The remaining costs are the capital costs of the new habitat, as well as the other actions included in the plan, as well as the operations and maintenance costs over the life of the project,” he said.
“I want to caution you. There are a lot of different ways of describing the costs in this plan. This particular look at the costs describes undiscounted 2012 dollars. That simply means dollars that we spend over time without consideration of discount rate or interest. For other purposes in the plan, we use discount rates and apply different economic principles comparing costs so when you see different numbers, consider what the purpose is and ask an expert to explain what the appropriate comparison is,” he said.
“These costs would be spread over 50 years, with those costs, we would retrofit the hub of the water delivery system for 25 million people in California, and we’ve helped 57 species of plants and animals recover in the Delta,” said Mr. Cowin. “It bears mentioning that 75% of these costs would be paid by the water agencies that actually receive water from the SWP and the CVP.”
“So the obvious question today is, is this plan affordable? The analysis by Dr. Sunding shows about a $5 billion net benefit to water agencies when you add together the benefits of water quality, water supply reliability and reduced seismic risk to the water delivery system,” said Mr. Cowin. “When you consider current trends in the Delta, I think the real question is, can we afford not to implement the Bay Delta Conservation Plan.”
“I think it’s important that we recognize that we are not promoting the BDCP as the answer to all of California’s water issues. Whether we implement this conservation plan or not, we’re going to need more water use efficiency, stormwater capture, recycling and other smart management choices to help meet future demand,” he said. “We understand this essential for California, and California has responded. We’ve invested billions of dollars to implement these smart practices across the state and we’re going to continue this quest.”
“But that integrated approach cannot compensate entirely for erratic Delta supplies. If all of our work towards stretching supplies at the regional and local levels goes towards compensating towards continuously declining Delta supplies, we as the state will be poorly positioned to satisfy growing population and to deal with the risks as climate change as we approach the next decades,” said Mr. Cowin.
“We have an obligation to plan for future generations and that is why we put seven years of hard work into developing this BDCP, and we’re going to keep refining the plan based on public input.”
DR DAVID SUNDING
Mr. Cowin then introduced Dr. David Sunding, who is the Thomas J. Graff Professor in the College of Natural Resources at UC Berkeley, where he is also the Co-Director of the Berkeley Water Center. Dr. Sunding has been analyzing the economic costs and benefits of the BDCP and has contributed to Chapter 9.
“Let me begin by giving you a walk-though of the material that’s been released today. I want to focus primarily on Chapters 8 and 9,” began Dr. Sunding.
“Chapter 8 lays out the projected costs of the BDCP construction costs, operations costs, habitat restoration costs, the whole package, and also gives information on the financing plan as it has been developed to date,” he said. “Chapter 9 is an analysis of take alternatives – alternative ways that BDCP could have been put together, combinations of conveyance facilities, habitat restoration and operating rules. So it’s really a way of explaining why the plan looks the way it does. Why, for example, was the 9000 cfs facility the one that was chosen to be the proposed action? It’s essentially a chance for us to show our work.”
“With respect to the economic analysis, which has been a big part of the public discourse around BDCP, let me explain what has been released and what is still to come. In Chapter 9, we take a look at the economic benefits and costs of the BDCP to the state and federal contractors that are going to pay for over 2/3rds of the cost of the BDCP. So it’s a very detailed cost-benefit assessment of the BDCP and a wide variety of alternatives from the perspectives of the agencies that will bear the majority of the costs,” he said.
[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]“It is not proper to portray this as a question of do you do BDCP or alternatives; it’s BDCP and alternatives and our economic analysis reflects that.” –Dr. David Sunding[/pullquote]“Now those are not all of the economic impacts that will result from the BDCP. There are economic impacts to groups that are not participating directly in the plan, such as Delta agriculture. There are economic implications that are felt in California’s macro economy as a result of reduced water shortages,” Dr. Sunding explained. “So later in the summer, in the July time period, we’ll have a statewide economic impact study of the BDCP to be released. There again, we’re looking at the economic impacts of the Plan, not just on the agencies who are responsible for the majority of the costs, but to the public at large, so look for that over the summer.”
“With respect to the analysis that’s in Chapter 9, there are three categories of economic benefits that we’ve considered from the perspective of the state and federal contractors: Increased water supply reliability, increased water quality as a result of heavier reliance on north Delta diversions, and reduced seismic risks from having new conveyance facilities constructed in the Delta,” he said. “In all cases, for the BDCP and all of the take alternatives, we’re comparing the implementation of that alternative versus doing nothing, so the economics of doing nothing is embedded in every part of the analysis we looked at.”
“The chapter 9 analysis, a regulatory requirement, has to look at the BDCP as well as the whole range of alternative configurations, so we look at larger and smaller conveyance, more or less habitat restoration, tighter operating criteria, and then under each alternative, look at what would be the costs of doing that and then what would be the economic benefits of doing that to the water agencies that are paying the majority of the BDCP’s costs,” said Dr. Sunding. “If it turns out under a take alternative that the benefits are less than the costs, then that alternative is not economically feasible and it’s not something that can be pursued.”
“With respect to the conclusions, what the analysis shows in the first instance is that the BDCP is expensive and it’s worth the investment by state and federal contractors. The combination of water supply, water quality, and reduced seismic risks produces benefits that are 35 to 40% in excess of the costs, so that they are a reasonable rate of return on a water investment,” said Dr. Sunding.
“Second, the BDCP is only part of an overall water management strategy for the state and federal contractors that will bear these BDCP costs. Even with BDCP, to deal with projected growth, climate change, and natural variations in precipitation from year to year, there is still a need for very large investments in conservation, recycling, potentially desalination, stormwater capture – really all of the above.”
“So it is not proper to portray this as a question of do you do BDCP or alternatives; it’s BDCP and alternatives and our economic analysis reflects that.”
FOR MORE INFORMATION:
- Click here for the press release from the California Natural Resources Agency.
- Click here for the Bay Delta Conservation Plan website.
- Click here for the BDCP Road Map to Chapter 8 and Chapter 9, or click here for the entry page for the BDCP Road Map.
