Monday, February 27, 2012

Water, water everywhere...

...and plenty left to sell, apparently.

Quietly, two separate bills that would weaken conservation of Minnesota drinking water are percolating at the Capitol. One would permit the Minnesota Legislature to approve the sale of water across state lines, the other would repeal a 2008 requirement that cities adopt conservation pricing for water use.

Introduced last week, SF 2004/ HF 2434 would allow the Legislature to approve the sale of Minnesota water across state lines. All three of the sponsors (Sen. Gretchen Hoffman, Rep. Bud Nornes and Rep. Mark Murdock) represent the same territory in northwestern Minnesota. Of course, just days before this bill was introduced, Hoffman announced that she would challenge US Rep. Collin Peterson instead of running for re-election to her state Senate seat.

There are many curious things about this bill.

It would strike a provision that discourages diversion of water from Minnesota to another state or Canada, and allow the sale of water across state lines. This would be a first step toward privatizing Minnesota's water resources.

Who would be buying our water? One potential customer could be North Dakota, whose burgeoning oil patch consumes massive quantities of water for hydraulic fracturing. A University of Minnesota study estimates that each well requires 1 million gallons of water, and notes that groundwater in the region is insufficient to handle demand. With 1,000 new wells being drilled annually, the amount of water needed is tremendous. Existing ground and surface water sources are insufficient, according to an analysis by the University of North Dakota. Oil and gas companies are already looking to Minnesota for frac sand, will they also turn to Minnesota for the water they need?

While there's been no specific proposal to divert or sell Minnesota water (to my knowledge), this only adds to the intrigue. Why sell Minnesota water? To whom? Does North Dakota fracking have anything to do with this bill? Does Senator Hoffman's financial interest in her family's North Dakota PVC pipe business GPK Products have anything to do with this bill?

The water conservation pricing provision has been inserted into SF 1567, the Senate's version of a Chamber of Commerce supported environmental permitting bill. It repeals a section of Minnesota statute that mandate that water systems charge rates that increase depending on the amount of water used. Under this approach to pricing, the largest users of water pay higher rates, which provides an incentive for the biggest users to adopt conservation strategies. Metro-area water systems were required to adopt conservation pricing by the end of 2010, and water systems in greater Minnesota have until the end of 2013 to change their pricing.

These provisions work. Rochester has adopted conservation pricing and estimates that the reduced cost for new wells and other infrastructure will exceed the drop in revenue from reduced use. There is a robust economic literature on the question of water pricing, but the bottom line is that higher prices for large users generates the largest savings as they cut their usage. The largest water users in Minnesota are industrial users, and that's where the greatest potential for water conservation lies. These large users have had five years of lead time to change their water use practices since the passage of this provision.

Both of these bills are terrible. Minnesota's water is our greatest natural resource. We should be conserving our drinking water, not selling it to other states.

Follow me on Twitter @aaronklemz

No comments: