Meet the California Couple Who Uses More Water Than Every Home in Los Angeles Combined

Mother Jones
August 9th, 2016
By: Josh Harksinson

It's true that the Golden State's vast network of dams, reservoirs, and canals has served the state so well over the past 80 years that Californians have come to take it for granted. Assumed or forgotten is that some 8.7 trillion gallons of water will flow each day into the massive Sacramento-­San Joaquin River Delta, and that 20 percent of it will get sucked by huge pumps into two giant, concrete-lined canal systems and sent hundreds of miles to Southern California's cities and farms. Delta water has transformed the arid Southland into the state's population center and the nation's produce aisle. But it has done so at the cost of pushing the West Coast's largest estuary to the brink of collapse; last year the drought finally prompted regulators to eliminate most Central Valley water deliveries.

"These last four years with this drought, nobody was looking until it affected them. And now that people have to cut back on their water, all of a sudden it has become important."

Something would have to change, and fast. The Central Valley is in some respects the ideal place to grow fruit and nut trees, with its Mediterranean combination of cool winters and hot summers perfectly promoting flowering, fruit setting, and ripening. But there's a reason why few trees of any sort grow naturally in the Valley: It averages only 5 to 16 inches of annual rainfall, or what farmers call "God water"—just 20 percent of what's required for a productive almond or pistachio harvest. One season without water piped in from the Delta can kill an orchard that took five years to mature. Few farmers are more at risk from the cutbacks than the Resnicks, whose 140 square miles of orchards use about 117 billion gallons of water a year, despite employing cutting-edge conservation technologies.

So like other farmers, the Resnicks have turned to the state's dwindling reserve of groundwater, sinking wells hundreds of feet deep on their land. Farmers are the main reason that California now pumps nearly seven cubic kilometers of groundwater a year, or about as much total water as what's used by all the homes in Texas. Sucking water from deep underground has caused the surrounding land to settle as the pockets of air between layers of soil collapse, wreaking havoc with bridges and even gravity-fed canals. Though California passed its first-ever groundwater regulations in 2014, water districts won't be required to limit pumping for at least another four years.

Historically, farmers pumped just enough groundwater to survive, but in the middle of California's now five-year drought, nut growers have also used it to expand. Over the last decade, California's almond acreage has increased by 47 percent and its pistachio acreage has doubled, fueled in the latter case by the Resnicks' advertising genius. Pistachios are now among the top 10 best-selling salty snack items in the United States, and the Resnicks' Lost Hills pistachio factory is the world's largest. To meet robust demand from Europe and Asia, Stewart Resnick last year announced that he wanted to expand nut acreage another 40 percent by 2020. With pistachios netting an astounding $3,519 per acre—4 times more than tomatoes and 18 times more than cotton—he seemed confident the water would flow uphill to the money.

If you've watched Chinatown or read Cadillac Desert, you know something about California's complicated and often corrupt 100-year-old fight over water rights. The state's laws were designed to settle the frontier, and under the "first in time, first in right" rule, the most "senior" water claims are the last to be restricted in times of drought. This means some farmers are still able to flood their fields to grow cattle feed, even as residents of towns such as Okieville and East Porterville have to truck in water and shower using buckets.

But the Resnicks' water rights, by and large, are not senior. To expand their agricultural empire, they had to find another way to tap into the flow from north to south. And to understand how they were able to do that, you have to start with a two-inch-long minnow that smells like cucumbers.

Once an abundant food source for Northern California's dwindling salmon population, the Delta smelt has been nearly eradicated by those enormous pumps capturing the flow of water from the Sierras. In 1993, the US Fish and Wildlife Service listed the smelt as "threatened" under the Endangered Species Act, setting the stage for pumping limits. Worried about getting short shrift on water deliveries, the Resnicks and other farmers in five local water districts threatened legal action. So in 1995, state officials agreed to a deal or, as it has been suggested, a staggering giveaway. The farmers had to relinquish 14 billion gallons of "paper water"—junior water rights that exist only de jure, since there simply isn't enough rainfall most years to fulfill them. In exchange, they got ownership of the Kern Water Bank, a naturally occurring underground reservoir that lies beneath 32 square miles of Kern County, which sits toward the southern end of the Central Valley. The bank held up to 488 billion gallons of water, and because it sat beneath a floodplain it could be easily recharged in wet years with rainfall and surplus water piped in from the Delta. The Resnicks, who'd given up the most paper water rights, came to hold a majority vote on the bank's board and the majority of its water.

Over the next 15 years, a series of wet winters left the bank flush with water: Court documents obtained by the Associated Press showed that in 2007 the Resnicks' share of the bank amounted to 246 billion gallons, enough to supply all the residents of San Francisco for 16 years. The Resnicks invested in their asset, building canals to connect the bank to the state and federal water systems, thousands of acres of recharge ponds capable of sucking imported water underground, and scores of wells. According to the Wonderful vice president who chairs the Kern Water Bank Authority, the water bank "enabled us to plant permanent crops" such as fruit and nut trees.

But a legal cloud has long shadowed the Resnicks' water deal. The Kern County Water Bank was originally acquired in 1988 by the state to serve as an emergency water supply for the Los Angeles area—at a cost to taxpayers of $148 million in today's dollars. In 2014, a judge ruled that the Department of Water Resources had turned the water bank over to the farmers without properly analyzing environmental impacts. A new environmental review is due next month, and a coalition of environmental groups and water agencies is suing to return the water bank to public ownership. Adam Keats, senior attorney at the Center for Food Safety, describes the transfer of the water bank to the Resnicks and other farmers as "an unconstitutional rip-off."

And here's a key fact to consider against this backdrop: The Resnicks aren't just pumping to irrigate their fruit and nut trees—they're also in the business of farming water itself. Their land came with decades-old contracts with the state and federal government that allow them to purchase water piped south by state canals. The Kern Water Bank gave them the ability to store this water and sell it back to the state at a premium in times of drought. According to an investigation by the Contra Costa Times, between 2000 and 2007 the Resnicks bought water for potentially as little as $28 per acre-foot (the amount needed to cover one acre in one foot of water) and then sold it for as much as $196 per acre-foot to the state, which used it to supply other farmers whose Delta supply had been previously curtailed. The couple pocketed more than $30 million in the process. If winter storms replenish the Kern Water Bank this year, they could again find themselves with a bumper crop of H2O.

Meanwhile, the fight between farmers and smelt has plodded on, with the Resnicks becoming prominent advocates for pumping even more water south to farms. In 2007, a group called the Coalition for a Sustainable Delta began using lawsuits of its own to assign blame for the estuary's decline to just about everything except farming: housing development in Delta floodplains, pesticide use by Delta farms, dredging, power plants, sport fishing, and pollution from mothballed ships. The coalition's website doesn't mention the Resnicks, but it originally listed a Paramount Farms fax number, and three of the four officers on its early tax documents were Resnick employees.

"We have no influence politically—I swear to you," she told me. "Nobody has political influence in this. Nor would we use it."

Two years later, with a federal judge now restricting Delta pumping for the sake of the smelt, the Resnicks began raising their concerns with friends in Washington. At the top of that list was California's senior senator, Dianne Feinstein. (The Resnicks threw a cocktail party for Feinstein when the Democratic Convention came to Los Angeles in 2000; Feinstein and Arianna Huffington once spent New Year's with the Resnicks at their home in Aspen, Colorado.) Feinstein, who chairs the Senate Appropriations Committee's powerful energy and water panel, typically serves as the key negotiator on California-related water bills.

Responding to prodding from Stewart Resnick, Feinstein sent a letter to the secretaries of the interior and commerce urging their agencies to reexamine the science behind the Delta environmental protection plan. The agencies spent some $750,000 studying the issue anew—only to have researchers again conclude the 2007 restrictions on Delta pumping were warranted.

Lynda Resnick rejects the idea that the couple wields any political power on matters of water policy. "We have no influence politically—I swear to you," she told me. "Nobody has political influence in this. Nor would we use it."

Yet that's hard to square against the Resnicks' approach to state politics. They've given six-figure sums to every California governor since Republican Pete Wilson. They donated $734,000 to Gray Davis, including $91,000 to oppose his recall. Then they gave $221,000 to his replacement, Arnold Schwarzenegger, who has called them "some of my dearest, dearest friends." The $150,000 they've sprinkled on Jerry Brown since 2010 might not seem like a lot by comparison, but no other individual donor has given more. The Resnicks also have chipped in another $250,000 to support Brown's pet ballot measure to fund education.

Now, in a throwback to the sort of massive public-works projects built during his father's governorship, Brown envisions a bold, silver-bullet solution to the state's water crisis. He recently unveiled a $15 billion plan to construct two 40-foot-wide tunnels that could carry 67,000 gallons of water per second from the Sacramento River to the Central Valley. The tunnels would completely bypass the ecologically sensitive Delta, eliminating much of the smelt-endangering pumping—and, by extension, many of the restrictions on Delta water diversions that have crimped the Resnicks' supply.

A win for fish and a win for farmers? Not so fast. Environmentalists fear that removing so much freshwater from the Delta will make it too salty. "You could effectively divert just about every single drop of water before it gets to the estuary in dry years," says Doug Obegi, a staff attorney with the Natural Resources Defense Council's water program. There are laws on the books to prevent that from happening, but Central Valley farmers are working diligently to overturn those laws. In June 2015, Rep. David Valadao, a Republican from the Valley, introduced a bill that would force federal regulators to release more Delta water for agriculture. (The Resnicks have given more than $18,000 to Valadao's campaigns since 2011.) "They really are trying to sacrifice one region for another," says Restore the Delta's Barrigan-Parrilla, who will testify against the plan this fall in hearings before the State Water Resources Control Board. "If these plans come to pass, [the tunnels] are a complete existential threat to our communities, our people, and to the environment."

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