California Water Supply: a Debate Between Scott Slater and Michael Hiltzik

March 14, 2022
Scott Slater is the President and CEO of Cadiz (CDZI)

Scott Slater, President and CEO, Cadiz (CDZI)

Scott Slater is the President and Chief Executive Officer of Cadiz Inc., appointed to the role of President in April 2011 and Chief Executive Officer effective February 1, 2013 with the purposed of fulfilling the company’s California water supply project plans.

Mr. Slater has been a member of the company’s board of directors since February 2012. Mr. Slater is an accomplished water rights transactional attorney and litigator and, in addition to his role at the company, is a shareholder in Brownstein Hyatt Farber Schreck LLP, the nation’s leading water law firm.

For nearly 40 years, Mr. Slater has focused on negotiation of agreements and enacting policy related to the acquisition, distribution, and treatment of water.

He has served as lead negotiator on a number of important water transactions, including the negotiation of the largest conservation-based water transfer in U.S. history on behalf of the San Diego County Water Authority and is recognized as one of the leading water law and policy lawyers in the United States.

Mr. Slater serves on the Limoneira Company board of directors (NASDAQ:LMNR) and sits on its Executive and Risk Committees.

Mr. Slater also has an extensive background in state, federal and international water policy and is the author of California Water Law and Policy, the state’s leading treatise on the subject.

He has taught water law and policy courses at University of California, Santa Barbara, Pepperdine University, and the University of Western Australia, (China) among others. He is presently advising the nation of Tunisia on water policy.

In this exclusive 5,399 word interview with the Wall Street Transcript, Scott Slater details his company’s quest to develop a water supply project in California.

“…The entirety of my professional life has been in the water space.

I am a practicing lawyer. I’ve got 37 years now — it’s hard for me to believe, but 37 years in the water space.

And in addition to practicing law and negotiating and litigating some of the most high-profile and sticky issues in California, I also wrote a book called California Water Law and Policy, which is a well-known treatise, and taught water law in law schools and graduate schools in the U.S. and internationally.

I’ve worked around the globe in the water area, in Australia, Tunisia, China, and I became aware of Cadiz in my early days of working on the Colorado River in the late 1990s.”

Scott Slater has a wealth of knowledge on the water supply issues and concerns for Los Angeles.

“The project was approved by California in California. So the history of the project was that a former, more impactful form of the project, involving a federal right-of-way permit, was approved by the federal government in 2002.

That project did not get to go ahead in California because the project partner did not want to go forward in 2002, and that was the Metropolitan Water District.

The principal reason that was identified for not going forward was the absence of answers to questions about the ability of the project to operate without causing harm to the environment.

When I came on in 2009, we decided to do something that they hadn’t done in 2002, which was to go to the host county, San Bernardino County, where the water was going to be taken and go through their permitting process.

We re-routed our proposed pipeline and consequently there was no federal involvement; no federal land, no federal issue of any kind involved in 2009 when we started. The County of San Bernardino, in 2012, fully permitted the groundwater use, and at the local level, they permitted the land-use plan, the transportation plan, all of that.

It also went through an environmental review process that was hosted by the principal entity that received the water, Santa Margarita Water District, also in 2012.

So what happened was, the environmental review concluded that, as I said, there were no, not a single adverse environmental impact that was associated with the project — none, not one.

Then, the County of San Bernardino, even with all due respect to what the Santa Margarita Water District did on the environmental review, it then also conditioned the project.

Now both of those entities were sued. They were sued nine times. Six went to trial, and all six in California were validated at trial.

All of the arguments that project owners had were rejected. And then it went to the Court of Appeal. And once again, the Court of Appeal ruled six separate times that all of the approvals issued to the project in California by California entities were proper.

So the Trump administration never gave — there wasn’t even a glimmer of thought in 2012 when it was originally approved in California, and there was no element involving the federal government at that time.

So how does the federal government get involved? We wanted to begin converting a natural gas pipeline to convey water. So in 2011, while President Obama was still serving — in fact, in his first term — we executed an agreement with El Paso Natural Gas to acquire a portion of their 220-mile pipeline and that acquisition was conditioned at closing on the federal government approving the assignment of that pipeline to us.

And the way the bureaucratic world works, that process continued through the end of the Obama administration, and occupied most of the Trump administration, while they were renewing a 1,300-mile pipeline of which we were going to buy a 220-mile segment.

In short, it was processed and the federal government’s approval was for a segment of that 1,300-mile pipeline, a 57-mile stretch over federal land.

We sought the federal approval of a right of way for us to substitute water for natural gas without any surface disturbance and enter the conveyance business.

The federal government approved a right of way for that stretch — not the whole 220, but for that stretch. And that happened under a process which basically took many years to complete — the environmental review of the whole 1,300-mile pipeline — but we had to have the whole review before we could do our segment. And that’s what the Trump Administration approved; it did not approve the use of any water sources of any kind.

When we say administration, that was the sitting president, but it was the BLM office in Needles, California, who approved it. And that’s what happened.

So we don’t view that as the Trump administration had anything to do with the project. It’s pretty much bedrock BLM policy that if there’s no surface disturbance, there are no environmental impacts to study for something that’s happening and many miles away and not in the federal right of way.”

The contrary opinion is espoused by Michael Hiltzik of the LA Times, who shared a Pulitzer Prize with Chuck Phillips in 1999:

“As proposed by Cadiz Inc., the idea was to store surplus Colorado River water under a desert tract owned by the company, pump it out during dry spells and transport it by pipeline or canal to Southern California urban users.

Among the problems is that there isn’t any surplus water in the Colorado. The basin is in a long-term drought, and for the foreseeable future California will be lucky to get its full statutory apportionment of river water. A single extra drop? Forget it.

Furthermore, there’s considerable disagreement over how much groundwater really underlies the Cadiz land, not to mention how much the company is legally permitted to pump out and how much could be pumped before neighboring aquifers become contaminated with carcinogenic minerals.”

Get both sides to this complex topic by reading the complete interview with Scott Slater in his exclusive 5,399 word interview with the Wall Street Transcript.

Scott Slater, President & CEO

Cadiz Inc.