One of the most active parts of my portfolio last year was water, which is an important if contentious issue in Colorado. As I was getting started, my LA warned me to be very careful because it is very easy to mess up water issues in the West. Often it is better to do nothing than to do the wrong thing. As I learned more about the specifics of water supply, I ran into several glaring and unexpected contradictions which appear counter to all logic but make sense upon further examination.
In the Middle East, a history of water scarcity has taught all the people to be very careful with the water that they use. In the Middle East, farmers use drip irrigation, which delivers water directly to the root of a plant and minimizes waste. In contrast, Americans have had the benefit of numerous federally-funded projects to move water from one place to another, often providing the resource at well below the real cost. An aerial view of the Midwest and West in the US reveals circles of green created by the center-pivot irrigation systems that spray water up into the air, wasting much of it through evaporation. Logically, it seemed to me that if American farmers adopted the more efficient irrigation systems of the Middle East, it would result in saving water, right?
Actually no, providing help for American farmers to adopt less wasteful irrigation systems tends to keep the water use the same. I couldn’t fathom how that would work until it was explained to me that the more efficient irrigation allows farmers to grow more water-intensive crops such as berries and nuts that return much higher profits than less water-intensive crops such as grains. All those good intentions may not produce the planned results.
The West has experienced a number of extremely severe droughts in the recent past; Colorado was in severe drought during 2012 and 2013, and now it is California who is looking at severely depleted reservoirs. I figured those experiences would encourage farmers to conserve and to use less water so there would be enough water for everyone. Here again, there were other factors at work which make the reduction in water use less favorable. Farmers rarely have the opportunity to build up any kind of retirement savings or 401(k) accounts. Many of them feel that the one option they have to create a nest egg is to sell their water rights when they decide to stop farming. Thus to maximize the value of that asset, they need to continue to pump their full allocation of water, regardless of the drought issue. That is completely understandable and logical, but it certainly limits the ability to make progress in the area of water conservation.
When I’ve traveled in the Southwest, I’ve cringed every time I drove by a golf course or green lawn because they represented to me a non-native environment and a waste of water. I gained a different perspective on those structures recently when I read, A Ditch in Time, which is the story of the development and evolution of Denver Water, the company that provides water to Colorado’s capital and some of the surrounding communities. For Denver Water, those expanses of green represent a reservoir. If all the water that the company supplies is being used efficiently for agriculture, industry, and domestic applications, then they can obviously support more users. The challenge occurs in times of drought. If all the normal water is being used efficiently, then there is no place to conserve water. Denver Water can require residents to limit the frequency of watering that green lawn, and although there is complaining, there are no dire consequences. If all of the water is going to vital uses, there is little flexibility for reducing consumption when resources dwindle. I’m not sure I’ll ever be really happy to see those green lawns, but now that I know that they serve some purpose, perhaps I’ll grumble less.