California Farms Rush to Sink Wells as Record Drought Escalates

Aug 01, 2014 12:01 am ET

Aug. 1 (Bloomberg) -- Rod Cardella, a Mendota, California, grower of wine grapes, onions and almonds, had to wait a year to have a fourth water well dug on his property as the record drought gripping the most populous U.S. state increased demand for groundwater.

Cardella, 66, who founded Cardella Ranch with his father in 1970 and produces grapes for E&J Gallo Winery, the largest exporter of California wines, paid $500,000 to add the well in June after the federal government said it wouldn’t supply his area with its usual water allocation. The drought forced Cardella to leave half his ranch, including onion and cotton fields, unplanted this year.

“We’re out here just trying to do whatever we can to survive,” Cardella said. “I don’t want to drill wells, not at half a million dollars a pop. There goes all your profit.”

Well drilling has doubled and tripled in two Central Valley counties that are at the core of the nation’s most productive agricultural region after federal and state regulators cut the water they provide to farms as supplies ran low in the drought. If the shortage continues, there is a risk that farmers will deplete the groundwater reserves they are using as a lifeline to survive the dry spell.

“We are running down our bank account,” said Richard Howitt, professor emeritus of agricultural and resource economics with the Center for Watershed Sciences at the University of California at Davis. “The underground water is the reserve account. We think we are so rich that we don’t have to balance our checkbook.”

Water Prices

With 82 percent of California now experiencing extreme drought after three years of record low rainfall, reservoirs are 45 percent below normal and declining. Governor Jerry Brown has called for a statewide voluntary reduction of water use by 20 percent, and residents now face fines of as much as $500 a day for wasting water.

Farmers have left fallow an estimated half-million acres. The dry spell is likely to boost the prices of food nationwide, according to the U.S. Agriculture Department, as farm and shipping interests stand to lose billions in revenue. California produces half of the fruits, vegetables and nuts consumed in the U.S. The price that some farmers pay for water has risen as much as 10 times what it cost before the drought.

Little Sleep

Steve Arthur, vice president of Arthur & Orum Well Drilling Inc. in Fresno, said demand for wells is so high that his company drilled 22 wells in June, double the normal rate.

“We are 12 to 13 months behind and we have seven drill rigs running right now,” Arthur said. “We run crews around the clock and I’m usually in charge of them so I get about three, four hours of sleep a night.”

The company, which drills and constructs wells, maintains a waiting list and gets about seven to 10 calls per day from people who’ve run out of water and are interested in building a well, Arthur said.

The state has suffered the greatest water loss ever seen in California agriculture because of the drought, with river water for farms reduced by roughly one-third, according to a new study by the Center for Watershed Sciences. Groundwater pumping is expected to replace most river water losses, with some areas more than doubling their pumping rate over the previous year, the study said.

Zero Allocation

The Fresno-based Westlands Water District, home to Cardella’s farm, didn’t get any water from the Interior Department’s Bureau of Reclamation this year.

“Because of the zero water allocation, growers are having to scramble to do what they can to locate water,” said Gayle Holman, a spokeswoman for the water district. “It’s a very expensive undertaking and there’s a very long waiting list to have access to a well driller.”

Fresno County, which contains 5,683 farms, issued 414 water-well permits to farms through July 21, more than double the 179 issued through July last year, according to county data.

In neighboring Tulare County, home to 4,931 farms, officials issued 476 permits for irrigation wells through June, triple the 165 issued in the same period last year and more than the 335 issued in all of 2013.

“There is a greater demand for well drilling today than there has been over the last few years,” said Mike Wade, executive director of the California Farm Water Coalition, a Sacramento-based group representing farmers.

Farmers “are struggling to stay in business,” Wade said. “They have a product to produce and market, and water is a critical component in that process.”