Water Heist: How Corporations Are Cashing In On California’s Water — Public Citizen California Office — 2003

This report argues that powerful agribusiness and development corporations reshaped California water policy through privatization, insider agreements, and “paper water” trading, transforming public water infrastructure into profit-generating systems that undermine environmental sustainability, democratic accountability, and equitable access.

1. Corporate interests captured and reshaped California water governance

2. Public water infrastructure was transformed into a privatized profit system

3. “Paper water” systems enabled unsustainable growth and speculation

4. Environmental protections were bypassed or manipulated to maintain exports and profits

5. Industrial agriculture and large developers disproportionately benefit from California’s water system

6. The report advocates restoring water as a democratic public trust

⭐ Star Facts

• The State Water Project contracted for roughly 4.2 million acre-feet of water even though it historically averaged only about 2 million acre-feet in actual deliveries, creating the foundation for “paper water” trading.
• California spent approximately $74 million purchasing and developing the Kern Water Bank before transferring control through the Monterey process.
• The Kern Water Bank can reportedly store about 1 million acre-feet of water and extract roughly 200,000–240,000 acre-feet annually, making it one of the largest groundwater banking systems in the world.
• Westside Mutual Water Company, linked to Paramount Farming, reportedly controlled about 48% ownership of the Kern Water Bank Authority.
• Paramount Farming doubled its cultivated acreage in Kern County from roughly 41,000 acres in 1994 to nearly 81,000 acres by 2003, even while California overall was losing farms and farmland.
• Almonds generated roughly $700 million in California crop value in 2001 and over $1 billion in 2002, helping explain the enormous economic incentives behind water-intensive permanent crops.
• The report claims Kern County water agencies generated over $100 million through water sales to cities and state programs.
• In one cited transaction, the Kern County Water Agency reportedly purchased water for about $161 per acre-foot and resold it to the Environmental Water Account for around $250 per acre-foot, generating about $29 million.
• The report cites one water sale where 10,000 acre-feet were sold for approximately $4.6 million, or about $460 per acre-foot.
• Newhall Land and Farming planned a “new city” project involving over 20,000 housing units and 3.58 million square feet of commercial space in northwestern Los Angeles County, relying partly on purchased water entitlements.
• California was projected to grow by roughly 20 million people over 20 years, increasing pressure on already strained water systems.