Friday, October 14, 2011

Success at the Great Basin Water Forum

I witnessed a beautiful moment today. I witnessed the metamorphosis of an idea into a movement. I won't claim it is my idea. Many people should have figured this one out by now. But I have been promoting this idea for a couple of years now. It felt good to see it accepted. Today I saw an idea become everyone's idea. Within hours, we came to an informal unanimous consensus that desalinating water for California in exchange for more water from the Colorado River is a far better goal than the SNWA Groundwater Development (desertification) Project.

We now have an agenda.

We have a better idea... an idea that will get us all more water.

One of the speakers, Mike Dunbar, made it perfectly clear to everyone. Sometimes the best answer is not the simplest. Sometimes the best answer is not stealing water from your neighbors. Sometimes the best answer is to create more – and live in abundance. Mike Dunbar is the General Manager of The South Coast Water District – who provides water to Dana Point and Laguna Beach, in Southern California. During his presentation, he practically asked us to build them a desalination plant. Of course, what he was actually asking us to do was to press SNWA to buy them a desalination plant. And he made sense. He told us that 70 to 80% of his community realizes the need for desalination. Many Southern Californians live in dread that if an earthquake were to damage the levies on the Sacramento Delta, their community could be out of reliable water for up to six months – when there's an ocean of water right there.

He even sounded like he already had a desalination plant sight in mind.

Someone else in the crowd stood up and said power shouldn't be a problem either. SNWA could build solar power facilities in Nevada to send to (or trade for) power for the desalination facility. This would mean jobs in Southern Nevada. Jobs saving rural Nevada.

There is a win/win option. Of course, the organization formerly known as SNWA will end up owning some desalination and solar energy facilities. But in the long run, my guess is that they will be more profitable than drilling for water in the desert.

It appears that everyone at the forum all agreed. All we have to do now is get the message out.

And finally, with this many of us clamoring for a response, SNWA can no longer ignore the better idea.

To the speculators:
Instead of just maximizing your profits, let's maximize everyone's profits. All I'm saying is that we could all live happier. All I'm saying is let's get together and decide together what the best course of action should be. Let's vote on it.

Monday, October 10, 2011

Organized Crime - In Power

There are a number of psychologists who have compared the captains of industry and the richest investors on Wall Street to criminals and psychotics. Their results are alarming. Not only do the greediest among the criminals and the most dangerous among the psychotics share traits with some of the richest Americans, they also share traits with our corporate and government systems. These traits are so powerful that they have become the dominant traits of our culture.

We love money.
We covet it.
And some people are more than willing to bend the rules, accept some collateral damage, and not even care about anyone or anything else to get it.
and get all of it, if they can.

There are some among us who treat capitalism like it's war. And of course, all is fair in war. There will be blood. But there also will be the spoils of war – the exploitations gained from the exploits of war.

There are those who believe that this is just the best way to win at this game.

Which is the fatal flaw in their thinking.

They treat life like it's a game.

We have been trained to think inside of the box. We've been trained to think that life is like the game of Monopoly. We've been trained to think that money buys happiness. We've been trained to think that it's patriotic to go shopping. We've even been trained to think we can buy our way out of any crisis. 

Our culture ignores the real world.

Moreover, our oligarchy controlled mass media omits the information that might offend their advertisers (or them). Our free news isn't free. It has cost us a part of the truth. Our perception of reality has been tampered with.

All I ask of you is that to try to think outside of the box.

We can create a better future.
We can make better decisions.
We can fix our systems.
We can create a more functional democracy.

But we can't do it by letting the craziest among us run amok!

Consider the Watergrab (the Southern Nevada Water Authority Groundwater Development Project). If someone could get $5,000 an acre foot for the “delivery” of the estimated 200,000 acre feet per year SNWA wants to cannibalize from its neighbors, that would amount to one billion dollars a year! ...And SNWA has already paid as much as $10,000 an acre foot for water from the Mesquite area. This is a sign. Someone may be hoping to get as much as $10,000 an acre foot from Southern Nevadans soon. That would be two billion dollars a year.

But is this what is best for the people of Southern Nevada?
They'll be the one's paying for this.
We already know that this isn't what is best for all of the people of Nevada. We already know that the Watergrab is exactly what ecocide looks like. And we already know that offshore desalination is cheaper, far less financially risky, and far less environmentally destructive.

The Watergrab should only be a last resort for a civilized people. Draining our reserves is an act of desperation. Or at least it should be. Especially when there are less expensive alternatives. Especially when there are alternatives that will provide more water. Especially when there are alternatives that won't turn rural Nevada into a giant dust bowl.

This isn't that difficult of a problem. SNWA cold just desalinate water off the West Coast for California in exchange for more water from the Colorado River. Problem solved. No pipeline necessary.

But then they wouldn't be able to charge $10,000 an acre foot for water. We already know that desalination costs far less than $2,000 an acre foot. They can only charge so much more for desalinated water before they're accused of overcharging. ...But if it's the last of the desert's water, they can charge whatever the market will bear.

In short, creating an artificial shortage is good for business. If you're in the business of destroying our economy, our government, our civilization, and most of life on Earth.

We do love money, don't we...

Since no one could accomplish this scam on their own, our hypothetical “someone” would have to share the wealth. Which is what makes this scam so common. Municipalities all across the country have been getting themselves deeply into debt with boondoggle projects. This leads to the same scam that brought down Greece. The construction companies make exorbitant profits with cost overruns. And the banks make exorbitant profits from predatory loans.

On top of that, since the municipalities will consequently lose the faith of the community, they are vulnerable to privatization – and subsequent price gouging.

Scarcity favors of those who control what is left.

As we all know; we the consumers want abundance. Of course we want abundance. It's only natural. It's only healthy. More water is good. And no matter how one looks at it, desalination means more water. Desalination means more water for the people of Southern Nevada and Rural Nevada. Desalination means more water for future generations. Desalination means more water for the environment. And desalination also means more water for California.

But the same scam is also going on in California. The oligarchs of California have already conned the people of California to pay for water projects to make the oligarchs even richer.

Here's the scheme:
  • The speculators and developers cash in because they con the people into paying for developments for somebody else.
  • The big construction companies cash in on the project and the inevitable cost overruns.
  • The banks cash in on the loans, the many fees, and high interest loans for the cost overruns - on a project that has extraordinary commitment (to be finished or it's worthless).
  • The water “providers” cash in when they privatize and charge what the market will bear. (They'll find a way around Nevada Water Law. If they can't, they'll find a way to change it.)
  • Smaller construction companies cash in when even more people move into Southern Nevada – no matter how unsustainable the population becomes.
  • Local retailers expect to cash in when more people move into Southern Nevada. (But these new people will probably move into new communities with new stores. So most likely, the retailers will be disappointed).
  • And some construction workers will cash in when they get jobs – jobs to devastate the environment (which ultimately will cost them more than the money they earn).
  • While the unsuspecting populous get stuck with the bill.
  • And the hotel/casinos get stuck with the image of Evil Empire destroyers of the Environment. (Which can't be good for their tourism business.)

This super-project boondoggle scheme is so profitable for so many people, that gradually the scheme has become the system. And the system that was created to function for the people has been transformed into the system that feeds off the people. Our democracy is becoming a cleptocracy.

And what was once a democratic republic becomes a nation of debt slaves and oligarchs.

Our government system has reached a stage where it can't make the right decisions.

SNWA could offer a trade with California for more water than they are presently getting from the Colorado River – and financially help the negatively effected farmers. This is a win/win arrangement. California's coastal cities could get more water. And SNWA could help California farmers with investments in water conservation technologies such as:

...If there were the will to do it, we could all end up with more water and more food.

But the executives at SNWA don't want to do the right thing. They know the cost of desalination has dropped drastically. But they would look like fools for wasting hundreds of millions of dollars on an unfinished boondoggle. They fear that they might lose their high paying jobs if they admitted that desalination is cheaper now. They might even lose the opportunity at those even higher paying jobs they might have been offered when the revolving door swings their way – as they step out of public “service.”

And where are the regulators and bureaucrats who are supposed to see that things like this don't happen? Most likely, some of them are looking forward to the high paying jobs they might get when the revolving door swings their way too.

But even if they're not; most of the time, the regulators' hands are tied. In the case of this Watergrab EIS; the BLM is only able to decide on whether the pipeline is a bad idea – not on whether taking out a river of water from a place that has no rivers is a bad idea. The pipeline is only a tool. The pipeline is like a knife. It doesn't really do that much damage – unless it drains the life blood from something. But, of course, draining the water is not to be considered in the EIS.

If those at the BLM can't consider the water, they're not really considering the Watergrab. This just looks good on paper. In reality, the EIS is just an exercise in distraction and whitewashing.

But it doesn't have to be. If those within the BLM were to deny the Watergrab pipeline, it would be a serious setback on a ridiculous effort that could end up being highly disruptive to Nevada's economy and the world's future. Sure, SNWA could go to court and probably win in the long run. But what would they win if public sentiment were solidly and enthusiastically against them.

A no action decision would be a serious blow to the legitimacy of the Watergrab. It would be an opportunity for the public to pay more attention to the implications of this boondoggle project.

This “robing Peter to pay Paul” project will ultimately drive us closer to a more serious shortage in the long run.

The Watergrab may as well have been designed for maximum exploitation.

A no action decision would not hurt Southern Nevada. It would help them take a more sustainable path.

Wednesday, October 05, 2011

The Watergrab Has Become A Multi-Billion Dollar Predatory Loan Scam

Want to know what the next big bank predatory lending scandals will be?
Hint, they'll have help from local insiders – pushing boondoggle municipal projects.

The Southern Nevada Water Authority (SNWA) Groundwater Development Project (Watergrab) is an excellent example. Even though water deliveries in Southern Nevada have gone down for the past three years, and no one is going without water, SNWA wants to start construction on the Watergrab next year!

This isn't about water, it's about money.

SNWA's Ability to Finance Report (page 36) estimates that the Watergrab will only cost Las Vegas households about $57.91 a month – until the year 2078 (page 35) – projected worst case scenario. That's eventually $700 per year, or a total of $35,869.73 per household! (With corrections made for lower payments initially and payments towards other projects removed.) Sounds bad enough, but... we're being low-balled again. And bait and switched.

I won't go into how many times we've been lied to by SNWA here. But I will say that I personally expect more lies than truth from them. The half-truth list is very long. And the price just keeps on rising.

Will it continue to rise? Absolutely.

All the while being less than forthcoming about the cost of construction of the watergrab pipelines and pumps, SNWA has never given us a price tag on the cost of power to pump all that water south. Pumping water takes enormous amounts of power. And the price of power just keeps on rising.

For example: The California Energy Commission reported (in the report; California's Water-Energy Relationship) in 2005 that “California's water related energy use consumes 19 percent of the state's electricity, 30 percent of its natural gas, and 88 billion gallons of diesel fuel every year.”

That's a mighty big chunk of change to omit.

The cost of power to operate the SNWA watergrab pumps will be huge. But no one knows how huge, because we can't predict the cost of power.

Since SNWA hasn't shared accurate numbers for the consumption of power to commit the watergrab, I'll have to consider a likely scenario – SNWA power bills will likely be comparable to California's. Using California's statistics, we can estimate what Southern Nevadans might be expected to pay. I'll be conservative and ignore the natural gas and diesel consumption. That leaves 19 percent of Southern Nevada's electricity bill.

So, for a quick and dirty estimation; Las Vegans will be called upon to pay an even higher water bill to pay the watergrab power bill – maybe about 19 percent of their total power bill. The average Las Vegas power bill in Las Vegas is about $135. That calculates to about $30 a month more residents of Las Vegas could pay in water bill. (Remember your algebra. Thats 19% of the new higher power bill. Not 19% of what they're paying now. $135/81% = x/19%)

Which brings the subtotal household water bill increase up to $88 a month more – to pay for power and to pay off multiple loans for the next 50 to 66 years. (That's over $53,000 dollars per household.)

But that's not all.

No construction cost overruns were predicted. No cost overruns? Sure, there could be a miracle; and no cost overruns. But that isn't anywhere near an accurate prediction when you look at past SNWA projects. They've all had cost overruns.

(1990s) The second intake and Lake Mead had a 31% cost overrun.
($83 million - $63 million) / $63 million = 0.317
(2000) The River Mountains water treatment facility had a 27% cost overrun.
$31.3 million / ($146.6 million - $31.3 million) = 0.271
(2007) The Springs Preserve had a 30% cost overrun.
($235 million - $180 million) / $180 million = 0.305
And the cost overruns for the third water intake are still mounting. They already have a 10% cost overrun with only a third of the project completed.

Stuff happens. Cost overruns happen. We have to be prepared for that. But it looks like SNWA doesn't want us to think about that possibility.

We've been consistently lied to about the cost of the project. For years, we've been told 3.5 billion dollars. But that's not what they told the State Engineer. They told him 7.3 billion dollars. I guess you could call that extra 3 billion dollars a cost overrun. (I see it more as a cover-up.) But the next big question is; is this the last cost overrun? ...SNWA haven't even gotten started yet. Not a chance.

It wouldn't be out of line to expect at least a 20 percent cost overrun. That would amount to at least another $12 more per month, or $144 per year – for the rest of most Las Vegan's lives. But it could be worse. Cost overruns are a huge financial risk (read higher interest rates) and potentially a huge burden on Las Vegas' economy. Someday, in order for ratepayers to continue to pay at the same level on these loans and cost overrun loans, SNWA might be forced to refinance some of their 30 year loans for a longer period. The fees for that can be very high. That's part of the scam. (Just add another decade of payments to the bill.)

So, add another $12 a month to that water bill increase. Which leads to a probable worst case scenario increase in household water bills by at least $100 a month – $1,200 a year – for at least 50 years ... which adds up to at least $60,000.00 per household!

SNWA's argument is that this isn't as bad as it looks; because new people will move to Southern Nevada and help pay this massive bill. But don't expect rates to drop that much – especially if there are cost overruns and unexpected bank fees to cancel out any new source of revenue. In fact, the increase in Southern Nevadan's water bills will be so much that they might even chase many Las Vegans away. There is no provision in the SNWA plan to deal with a contracting Las Vegas population – except to raise the rates on those who are left.

The banks will insist on being paid – no matter what condition Las Vegas' economy is in, whether the pipeline delivers water or not, or even whether the project gets canceled half way through construction.

Of course, bankers have to make a profit too. And for every feature, you would expect a charge. But sometimes bankers just get out of hand. They can charge higher interest rates for financing the cost overruns. They can charge extra fees. They can get SNWA to refinance for longer terms – with more fees... etc. etc.

This watergrab smells fishy.

This project is risky, expensive, and unnecessary. Which makes it a candidate for being a massive con job... Follow the money.

A likely outcome that needs to be seriously considered is that Las Vegas could drown in debt for water they could get for much cheaper. This isn't just happening here. It's happening all over the country. Municipalities are getting themselves in way over their heads on boondoggle projects all across the Country.

There is a pattern of corrupt local officials working hand in hand with predatory lenders that has driven many U.S. communities to the verge of bankruptcy... And the ball is already in motion in Southern Nevada. Follow the money. It's leaving Las Vegans.

Here's an example of what a likely (real life) worst case scenario might end up looking like; Jefferson County, Alabama. A Jefferson County sewer project, that was originally estimated as low as 250 million dollars ended up putting their community over 5 billion dollars in debt! That's 20 times the original estimate! SNWA has been throwing around a cost estimate of 3 billion dollars for a few years now. Imagine, 20 times the original estimate. That would be 60 billion dollars! Preposterous, you say? Maybe, but I'm sure that's what the people of Jefferson County, Alabama once thought too.

Nonetheless, this Jefferson County scenario does beg the question; how much is too much? 20 billion? 30 billion? 40 billion? For the executives at SNWA, there is no price too high. They have already committed hundreds of millions of dollars. The project is worthless until it is finished. And no matter how much cheaper desalination gets, they don't intend to quit now. It would be an admission of their poor management skills. And besides, they don't really care how much this project costs. It's not their money.

Now is the time to be on guard for a massive scam.

Big municipal projects have the perfect storm potential for multi-billion dollar cons. They're expensive, which means there's plenty of money to go around. One can spread the con over thousands, if not millions of ratepayers, thus maximizing windfall profits. And municipal representatives, not ratepayers, make the spending decisions. (Remember, representatives can be “influenced.” The revolving door swings wide when there's big money involved. Just ask the former State Water Engineers who later worked for SNWA.)

Not surprisingly though, some Southern Nevada “representatives” won't have to be influenced. They already expect windfall profits from growth towards their own land “investments.” This is how local politicians have been getting rich in Southern Nevada for decades. They buy some cheap remote land, develop around it, and sell high.

It sure would be interesting to know who among the SNWA board, Clark County Commissioners, and City Councilmen has property alongside I-15 out to the California border (or in Pahrump, Coyote Springs, or out along the Tonopah highway). This seems to me like it would be a conflict of interest.

...But of course, this is all just the tip of the iceberg in this scam.

All of this debt that Las Vegans will be burdened with – all of this financial risk – all of this responsibility for so much environmental damage – will be to pay for water for somebody else.

The people of Las Vegas already have enough water. In fact, consumption has dropped for three consecutive years.

Even if water rationing restrictions were imposed, and the people of Las Vegas had to use 15% less water, they could comfortably handle it. So, what's the big panic? There isn't one.

The watergrab is a back door maneuver to get the people of Las Vegas to pay billions for development, so greedy developers don't have to.

This is how old communities end up subsidizing new ones.
This is how the poor end up subsidizing the rich.
This is how the workers end up in debt to the bankers.
This is how the environment ends up ruined for us all.

Nevada is not a wasteland.
Let's be certain it never becomes one.

The Watergrab is not an act of a healthy democracy.
Obviously, even the people of Las Vegas would vote against this.