Water Privatization

What's Happening to Our Water?

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Due to decades of mismanagement and rising global temperatures, water availability has become an important issue in even the richest country in the world.The solution, according to corporations and some economists: privatize it.Across the country, corporations, along with Wall Street investors, are moving to privatize various aspects of our water supply.

Explore the map to learn how privitization is affecting areas across the country.

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As long as the politicians who accept their donations and lobbying remain in power, nothing will change. It is critically important that the next generation is involved and active in politics in order to fight for climate reforms and protect the planet.

Mismanagement and underinvestment for decades has led to crises across the country, including Flint, and has forced state and local governments to turn to private companies. These companies are easily able to take advantage of local governments and shape the political landscape through massive donations, even as they remain deeply unpopular among the public.

Ultimately, this debate underscores the importance of a more robust federal government that is willing to invest in better infrastructure and to reign in the unchecked power of multinational corporations like Nestle and Wall Street investment firms.

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Nestle in San Bernardino

Nestle has also been found to have massively overdrawn the allocated amounts of water it could validly claim, even in drought-stricken states like California. In 2020 the company drew 58 million gallons of water from the San Bernardino Forest, almost 25x the 2.3 million gallons a year they could validly claim (Singh).

Nestle and Water Rights

Water rights are the legal rights of property owners to access and use water on the lands that they own. In some states it is possible to acquire new water rights from the state water department or by acquiring a permit to pump water. These permits are often surprisingly cheap, ranging from $115 dollars for a one-time fee to $2100 per year

For years bottling companies like Blue Triton, formerly known as Nestle Waters North America, have abused this system to reap huge profits. In 2018 for example, Nestle sold $5.4 billion worth of bottled water through brands across the US. Essentially, Nestle is renting publicly owned water, bottling it, and then reselling it back to the public at massive markups.

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Pennsylvania

Nestle often uses its massive lobbying fund to influence local and federal officials and escape any serious repercussions for clearly illegal or illicit actions

Fryeburg residents have been attempting to dislodge Nestlé since the early 2000s. Several rounds of fights have played out at the ballot box and state court system – Nestlé won most. In a recent legal challenge that went to the Maine supreme court, justices upheld a deal allowing Nestlé to pull between 75m and 220m gallons annually from a Fryeburg well for 45 years.Nestle spent almost $634,000 between 2001 and 2012 lobbying politicians in order to continue siphoning water from a well in Fryeburg.

Fyreburg, Maine

In Pennsylvania, local officials resigned following revelations they and Nestlé worked in secret to attempt to push through unpopular water deals.Nestle funneled $105,000 into a local political action committee ahead of the elections.

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Cibola, Arizona

It's not only a transfer of water, but a transfer of wealth,” said Lingenfelter “This is like a reverse Robin Hood scenario where they are taking from the poor and giving to the rich. We already don’t have water to spare. It’s still like the wild, wild west out here and the Legislature has done a terrible job of protecting rural people,”

By buying up massive plots of land, companies can acquire the rights to the water located on the land.Greenstone Management Partners, a Phoenix-based investment firm, raised eyebrows when they purchased almost 500 acres of land in the small rural town of Cibola. Shortly thereafter, Greenstone sold $27 million of water from the Colorado River to Queen Creek, a growing suburb of Phoenix

Mohave County Supervisor Travis Lingenfelter filed a lawsuit along with two other counties to block the deal

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Investor Jim Rogers, known as the ‘commodities king,’ argues that water needs to become more expensive:

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The Chicago Mercantile Exchange (CME)

The increased investment into water over the past decade eventually led the largest futures exchange in the world to start the first ever futures market for water.A futures contract is a legal agreement to buy or sell a particular commodity asset at a predetermined price at a specified time in the futureAdvocates for water trading argue that it would help better align supply and demand in the market and allow big water consumers to hedge their costs.

Chicago, Illinois

"When something's free people use it. When it is priced to market rates people use less of it, and people find more of it and bring it to market. This is simple economics since the beginning of time,”

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“Large contract holders would have a strong incentive to manipulate the water futures market for profit. Too much concentration in water markets by massive passive investors could also lead to physical water hoarding and price increases”

After the CME’s announcement, Sen. Elizabeth Warrern and Rep. Ro Khanna drafted a bill, known as the Future of Water Act, prohibiting the trading of water and water rights from commodity futures contracts. They expressed concern about what this means for water prices and water access for the poorer, less developed areas.

Washington, D.C.

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Water banking is often used by farmers selling to other farmers or conservation groups looking to protect vital waterways. However, Rachel Osborne a longtime water lawyer in Washington says,

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In 2022 a company called Crown Columbia Water Resources, part of a Wall Street investment firm, attempted to acquire private water rights throughout the Columbia River in Washington.Part of the contract gave Crown Columbia the ability to bank and then sell or lease water.Water banking allows owners to bank their water rights with the state and not relinquish ownership. This program, which exists in Washington and several other states, is what allows for the selling, trading, and buying of water.

Columbia River, Washington

“I think we are ripe for the picking in terms of speculation and people coming in and trying to get their hands on these water rights... It is really unfortunate that we have gotten to this point, where people think they can make a lot of money off water."

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Jeneen Interlandi, writer for the New York Times:

Across the country, cities have been privatizing their water utilities, a trend beginning in the late 2000s. This trend began in part due to the complete failure of the US government to provide proper funding for water infrastructure upgrades.The most famous example of this was the 2015 lead contamination crisis in Flint, MichiganAs of 2016 more than 2,000 water facilities operate under some sort of public-private partnership, including large cities like Milwaukee and Tampa.

Flint, Michigan

"On its face, the move makes obvious sense: elected officials can use the profits from water sales to balance city budgets, while simultaneously offloading the huge cost of repairing and expanding infrastructure--not to mention the politically unpopular necessity of raising water rates to do so--to companies that promise both jobs and economy-stimulating profits.

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Works Cited