The water mystery unfolding in the western U.S.

Summary

Summary of "The Water Mystery Unfolding in the Western U.S."

The Indicator from Planet Money delves into the escalating water tensions in rural Arizona, spotlighting the intricate interplay between agricultural practices, foreign investments, and outdated water regulations. Hosted by Darren Woods and featuring insights from NPR’s Zach Ziegler and local official Holly Irwin, the episode unpacks the multifaceted crisis threatening La Paz County's water supply.

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1. Introduction to the Water Crisis

The episode opens with Arizona Attorney General Chris Mays announcing a lawsuit against Fondomonte, a company accused of excessively pumping underground water for alfalfa farming. This action sets the stage for exploring the broader water scarcity issues in the Western United States.

Key Quote:

"Excessive is dewatering nearby wells. Excessive is causing subsidence in a way that potentially damages infrastructure. Excessive is pumping so much water that it damages the quality of the water that remains."
— Holly Irwin [00:28]

2. Fondomonte’s Controversial Practices

Fondomonte, a company with significant ties to the Saudi royal family, has been cultivating alfalfa in Arizona’s arid lands. Despite the presence of massive groundwater basins, local residents face dwindling water supplies, compelling them to either invest heavily in deeper wells or relocate.

Key Points:

• Location and Impact: La Paz County, characterized by its rural landscape with fewer than five people per square mile, relies heavily on groundwater.
• Community Struggles: Residents experience well depletion, leading to substantial personal costs for securing water or moving away.

Key Quote:

"Residents there have been complaining about their wells going dry for some time now. That is leaving them with the choice to spend tens of thousands to dig deeper for their water or find a new home."
— Zach Ziegler [01:20]

3. Foreign Ownership and Agricultural Export

Fondomonte exports most of its alfalfa harvest back to Saudi Arabia to feed dairy cows, exacerbating local water shortages. The company's operations are not limited to owned land but also extend to state-leased areas, intensifying the strain on Arizona’s water resources.

Key Points:

• Export Dynamics: Alfalfa grown in Arizona serves international markets, primarily Saudi Arabia.
• Land Leasing: Fondomonte initially leased approximately 6,500 acres from the state, with over half the leases recently expired or canceled by Governor Katie Hobbs.

Key Quote:

"They're growing hay because they can do it all year long here. They can ship it. You know, they're shipping it back to their country."
— Holly Irwin [04:23]

4. Regulatory Loopholes and Water Extraction

Despite Arizona’s long-standing relationship with water-intensive agriculture, existing laws have not kept pace with current demands. Sharon Megdahl from the University of Arizona highlights that outside major cities, water regulations are lax, allowing extensive groundwater pumping under the guise of "reasonable use."

Key Points:

• Regulation Gaps: Current laws, last updated over four decades ago, fail to adequately manage groundwater extraction in rural areas.
• Reasonable Use Standard: Although agriculture is considered a reasonable use, locals contest the heavy water usage for export-oriented crops.

Key Quote:

"There's basically no regulation on how much you can pump, provided that it's being put to reasonable use."
— Sharon Megdahl [05:09]

5. The Role of Private Equity and Future Threats

The plot thickens with the entry of Water Asset Management, a New York-based private equity firm that acquired a significant swath of farmland previously leased to a UAE company. Local fears suggest that such acquisitions could pave the way for large-scale water extraction to supply burgeoning urban centers like Phoenix and Tucson.

Key Points:

• Acquisition Details: Water Asset Management purchased 13,000 acres for approximately $100 million.
• Local Concerns: Residents worry that the firm might prioritize water extraction for city use over agricultural needs, reminiscent of past attempts by cities to procure water farms.

Key Quote:

"They fear the private equity firm plans to pump their underground water, then sell it to growing cities like Phoenix and Tucson."
— Zach Ziegler [06:49]

6. Legislative Responses and Challenges

Efforts to modernize Arizona’s water laws have faced significant hurdles. Recent legislative attempts to address these issues, including bills supported by local supervisors like Holly Irwin, have stalled, highlighting the complexity of balancing agricultural demands with sustainable water management.

Key Points:

• Failed Legislation: A proposed bill aimed at regulating groundwater extraction did not advance beyond committee stages.
• Call for Reform: Local officials advocate for updated laws that reflect current environmental and economic realities.

Key Quote:

"The laws that were created in 1980 just frankly don't work anymore and we need an alternative."
— Holly Irwin [09:11]

7. Community Impact and Future Directions

The persistent water shortages have left lasting scars on La Paz County’s infrastructure and quality of life. With continued legal battles and potential regulatory reforms on the horizon, the community remains vigilant, striving to secure its water future against both foreign and domestic pressures.

Key Points:

• Infrastructure Damage: Excessive water pumping has led to subsidence, threatening local infrastructure.
• Ongoing Legal Actions: Fondomonte maintains its stance, asserting compliance with state laws and challenging the Attorney General’s allegations.

Key Quote:

"We find the allegations of the Attorney General totally unfounded and we will defend any potential action against Fondomonte and our rights vigorously before the competent authorities."
— Fondomonte Spokesperson [08:33]

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Conclusion

The episode of The Indicator from Planet Money deftly outlines the intricate water crisis in rural Arizona, illustrating how foreign investments, outdated regulations, and agricultural demands converge to threaten local communities. As La Paz County navigates these challenges, the broader implications for water management in the Western United States become increasingly evident, calling for timely and effective legislative action.

For listeners seeking a more comprehensive exploration, NPR recommends tuning into Tapped AZPM's dedicated podcast series on Southwest water issues, which traces the problem's roots back to the pre-Civil War era.

Key Quote:

"It's definitely been an eye opener. I wasn't aware of it, but, you know, like this job, you learn something new every day."
— Holly Irwin [07:54]

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Produced by Cooper Katz McKim with engineering by Gilly Moon and Neil Tivolt. Fact-checked by Sierra Juarez. Edited by Kate Kincannon. The Indicator is a production of NPR.

Transcript

[NPR]

Npr.

[Darren Woods]

This is the Indicator from Planet Money. I'm Darren Woods. In December, Arizona's attorney General, Chris Mays held a press conference announcing a lawsuit against Fondimonte, a company that grows alfalfa in the state. She called its pumping of underground water excessive.

[Holly Irwin]

Excessive is dewatering nearby wells. Excessive is causing subsidence in a way that potentially damages infrastructure. Excessive is pumping so much water that it damages the quality of the water that remains.

[Darren Woods]

And where this lawsuit may stand out is Fondomonte's ties to the royal family of Saudi Arabia. Zach Ziegler has been following the story for NPR member station AZPM in Tucson and water in general in the Southwest for the podcast Tapped. Welcome, Zach.

[Zach Ziegler]

Hey, thanks for having me, Darian. As you know, this is all playing out in La Paz County. It's a rural area, like fewer than five people per square mile rural, with massive groundwater basins underneath it.

[Darren Woods]

Right. So given that, you'd think the community would be flush with water. But residents there have been complaining about their wells going dry for some time now. That is leaving them with the choice to spend tens of thousands to dig deeper for their water or find a new home.

[Zach Ziegler]

Yeah, and the issue goes deeper than alfalfa farming. A New York based private equity firm may also be part of it.

[Darren Woods]

So today on the indicator, what is behind these water tensions in rural Arizona? We've got foreign farms, we have New York private equity firms. Or could the problem be something else? That's after the break.

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[Zach Ziegler]

Holly Irwin is the longest tenured member of the La Paz County Board of Supervisors, and she's been worried about water for almost a decade. It's around that time that a news article tied Saudi Arabia to her community.

[Holly Irwin]

There was a reporter down and he broke the story about the foreign companies and, you know, coming and purchasing land for water resources and stuff.

[Darren Woods]

That reporter Holly's talking about was from the center for Investigative Reporting. That outlet was the first to tell the story of Fondimonte, a company with major ties to the Saudi royal family.

[Zach Ziegler]

Fondomonte has been growing a kind of hay called alfalfa in this area for years, and most of what it grows gets shipped back to Saudi Arabia to feed its dairy cows.

[Darren Woods]

The company started farming in the Arizona desert because the kingdom was burning through its own underground water supply at an unsustainable rate.

[Holly Irwin]

They're growing hay because they can do it all year long here. They can ship it. You know, they're shipping it back to their country. And not only were they doing it on the land that they own, but they were also doing it on land, land that was leased by the state Land Department, for crying out loud.

[Darren Woods]

Yeah. Until late 2023, Fondomonte was leasing around 6,500 acres from the state. More than half of those leases have gone away, either because they expired or were canceled by the state's governor, Katie Hobbs.

[Zach Ziegler]

But the bigger concern is what's going on on the 45,000 acres Fondamante owns. Arizona's water laws get really lax when you get outside of the big cities and a few other areas. Sharon Megdahl is the director of the Water Resources Research center at the University of Arizona.

[Sharon Megdahl]

There's basically no regulation on how much you can pump, provided that it's being put to reasonable use. And most of it is. I mean, agriculture is a reasonable use. Industry is a reasonable use. Municipalities are reasonable use.

[Darren Woods]

But while farming alfalfa meets that reasonable use standard, as regulators see it, many locals would disagree. They take issue with a foreign owned company using their water to grow a crop that's mainly for export. Enfondamante has about 30 wells. The biggest can pump about 3,000 gallons of water a minute.

[Zach Ziegler]

And Hawley says Pumping all of that water is causing issues for plenty of people who rely on their own wells because there's no water utility in their area.

[Holly Irwin]

I started getting phone calls from residents that were having issues with their wells, and one specifically was right up the road from where Fonda Monte's at a little church. They've been out of water now for about four or five years.

[Zach Ziegler]

Saudi Arabia is not the only country that's doing this either. Local water utility managers told me that a United Arab Emirates company leases land to the northeast of Fondimonte to grow alfalfa as well.

[Darren Woods]

Interestingly, though, Zach, when you were reporting this story, you were told by the local water district manager that those operations have been slowing lately and you might have found out why.

[Zach Ziegler]

Yeah, it's a twist that could be the future of water issues in La Paz County. In early July, that farmland leased by the UAE was sold to a New York based private equity firm called Water Asset Management. The firm paid about $100 million for 13,000 acres of farmland.

[Darren Woods]

Okay, this is a twist. And what are the locals making of this development?

[Zach Ziegler]

Well, they're saying it as a sign that nearby big cities in Arizona are thirsty for water, too. They fear the private equity firm plans to p their underground water, then sell it to growing cities like Phoenix and Tucson. Sharon says that's not a new idea. Back in the 1980s, Arizona's big cities were trying to do something similar.

[Sharon Megdahl]

Cities were buying what some would call water farms. They were buying land in rural Arizona with the intention or expectation at some time in the future they would pump groundwater from those areas and pump that water into the cities.

[Darren Woods]

State lawmakers did outlaw that practice, though, before it happened. But they left some loopholes in the law that exempted certain rural basins, including much of La Paz County.

[Zach Ziegler]

Either way, all of this minutiae about water regulation and basins being set aside for transfer in rural Arizona has left Holly Irwin's head spinning.

[Holly Irwin]

It's definitely been an eye opener. I wasn't aware of it, but, you know, like this job, you learn something new every day. And once I found that out, it made me me sick. I really thought, who on earth would ever. What were the lawmakers thinking at that time?

[Darren Woods]

Holly and other lawmakers have pushed for new laws, but a bill they backed in last year's legislature didn't make it out of committee.

[Zach Ziegler]

And by the way, we reached out to Fondamante and Water Asset Management several times over the span of four months of reporting on this for an interview or comment, and we didn't receive a reply from either until the lawsuit we heard about. At the start of the show, Fondomonte.

[Darren Woods]

Issued a statement through a spokesperson saying Fondimonte remains committed to progressive, efficient agricultural practices on all its operations. It added that Fondimonte is not in violation of any state law. It then ended with we find the allegations of the Attorney General totally unfounded and we will defend any potential action against Fondomonte and our rights vigorously before the competent authorities.

[Zach Ziegler]

That note about not violating state law is something that bothers Hawley, who was the other speaker at the Arizona Attorney General's press conference. She says the fact that the state's water laws haven't been updated in more than 40 years is a big part of the issue.

[Holly Irwin]

You know, the laws that were created in 1980 just frankly don't work anymore and we need an alternative. But we need the legislature to work with us and allow us to create something for the betterment of the people that we all serve.

[Darren Woods]

If you want a deeper dive into this topic, Check out tapped AZPM's podcast about water in the Southwest. They did four episodes on this, going all the way back to before the US Civil War. Thank you, Zach.

[Zach Ziegler]

Hey, thanks for having me, Darian. This episode was produced by Cooper Katz McKim with engineering by Gilly Moon and Neil Tivolt. It was fact checked by Sierra Juarez. Kate Kincannon edits the show and the indicator is a production of npr.

[NPR]

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