In counties with ordinances restricting exports, those wishing to engage in the restricted activity must obtain a county permit, which invokes review under CEQA. The permit-granting authority—in this case, the county—determines the extent of CEQA review. CEQA obligations can be met with a relatively simple environmental assessment,
if the county is satisfied that the permitted activity is likely to have little or no negative effect, or if adequate provision is made for mitigation.
The county can also require a full-scale environmental impact review (EIR), in addition to preliminary studies. Moving from an
environmental assessment to an EIR easily increases costs for the applicant by a factor of ten or more, with EIRs typically costing
$300,000 or more.
In the years since counties introduced a review process for water exports, there have been few requests for permits and even fewer permits granted. Among the 22 counties with export ordinances, a total of 16 export permit applications have been tendered in four counties: Inyo (12), Mono (2), Tehama (1), and San Joaquin (1).1 Of the 16 applications, only one has been granted, in Tehama, and four remain actively on file, in Inyo.
Most of the applications from Inyo and Mono have concerned private sector transfers to Los Angeles. The permit granted in Tehama was for the movement of a small quantity of groundwater to land owned by the same farmer in another county. The application in San Joaquin was for the reexport of imported banked groundwater by the East-Bay Municipal Utilities District in 1997.2 After a protracted review process, the permit was denied in response to concerns about granting a
noncounty entity access to the aquifer. A permit for groundwater banking was nearly filed in Madera by a private water firm, Azurix, a partial subsidiary of the Enron Corporation, which intended to pursue the Madera Ranch project that was at the origin of that county’s
ordinance. Whether Azurix’s sale of the property in 2001 without filing ____________
1As noted in Chapter 3, three counties in this group have actively required permitting for some in-county water movements. In San Benito, there were five applications for small residential subdivisions, of which three were approved and two withdrawn. In Sierra County, one permit was granted for a transfer of treated wastewater from an industrial property to adjacent property in agricultural use. In Imperial County, 19 conditional use permits have been granted since 1994 under the well-permitting process instituted in 1972. Recently, Imperial County’s Board of Supervisors rejected a groundwater use petition that had been pending for eight years for use on a farm near the San Diego County border. Among reasons for the rejection were apparent concerns that the applicants might subsequently transfer some of the water to the Borrego Water District in the neighboring county (Mitchell, 2003).
2For a detailed case study, see Thomas (2001).
was more a result of its own financial problems or the continued local controversy remains a matter of speculation. A broad local coalition of interests was against both the project and the involvement of an outside firm, and popular sentiment was prominently displayed on billboards along Route 99 admonishing Enron/Azurix to stay out of the valley.
In two other counties, those interviewed indicated that permit applications might be on the horizon. In Calaveras, where the ordinance is quite recent, the Calaveras County Water District is investigating a potential conjunctive use project and intends to launch an application if the study confirms the project’s viability. In Sacramento, officials anticipate that a groundwater export being considered as part of a water quality mitigation program may trigger a permitting requirement.
The limited permitting experience in counties with export restrictions stands in stark contrast to that of counties whose
groundwater protection ordinances were put in place to regulate within-county uses. In San Diego, Napa, and Mendocino, the review process has been active, with numerous approvals granted.3
When asked to account for the relative dearth of permitting activity in counties with export restrictions, observers offer three explanations.
The first holds that there is little local interest in transferring water outside the county anyway; the ordinance is merely an expression of the popular consensus. The second explanation is that the ordinance may be ineffectual in screening exports that continue to occur. This could arise either through lack of public awareness of the permitting requirement or lack of good surveillance to ensure compliance of those inclined to avoid permitting. The third and most common view holds that the permitting process itself discourages transfers. Up-front costs of environmental review, the likelihood of rejection in places hostile to transfers, and the limited length of time for permits once granted are all cited as deterrents.
In a number of counties, officials admit that this “discouragement factor”
is at least partially intentional. Legally, counties cannot prohibit exports, but they can make it difficult for potential sellers to obtain approval.
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3San Bernardino’s ordinance was approved late in 2002, too recently to have established a record on permitting. We were unable to obtain information on the implementation of Monterey’s ordinance.
In principle, the information requirements and up-front study costs depend on the hydrological characteristics of the basin and the extent to which a knowledge base has already been established through prior studies. In practice, another consideration is the degree of public confidence in the process. In places where prior experiences have engendered a distrust of water transfers, the up-front requirements are bound to be higher than where there is no particular local history.
A case in point is Butte County, where water officials would like to see a permitting process that effectively screens transfers for third-party effects without blocking the possibility of water marketing. In light of the heated controversy surrounding the adoption of the ordinance, however, it is likely that the first test case would need to go through a full-scale environmental impact review. The cost might be worth it for a long-term transfer program, but it virtually precludes anyone wishing to engage in short-term transfers from applying. Faced with the
opportunity to sell water under DWR’s dry-year purchase program in 2001, farmers in the Western Canal Water District elected to generate surface water through land fallowing rather than applying for a permit to engage in groundwater substitution. As it happened, rice prices were sufficiently low that year that some farmers found it worthwhile to forgo crop revenues. More generally, it might have been better for all parties to consider groundwater substitution, but the district was effectively
prohibited from pursuing that option.