Water Economist Skewers McCloud/Nestle Deal
By Tom Chandler on Apr 10, 2008 in Nestle
The Aguanomics blog is a water-issues blog written by an honest-to-goodness economist, and frankly, the Underground’s sizable Nestle-research staff had a good laugh at his comments regarding the folks in McCloud who originally signed this absolute hummer of a contract:
Bottom Line: They should fire/tar and feather the fools who signed the original contract and start again, or, better yet — cut out the middleman, bottle "McCloud water," and sell a lot less of it for a lot more.
Sadly, selling McCloud Water is a cool idea, though the problem lies with a distribution channel dominated by a small handful of mega-corporations; they prevent new players form entering the marketing by tying up/buying up/monopolizing the retail shelf space (can anyone say anti-trust?).
Our economist hits it smack on the head with:
Nestle is really running a mining operation, and the natives — as usual — are not getting a very big piece of the pie. Instead of thinking "wow, Nestle is going to build a 1,000,000 sq foot plant and run 600 trucks/day through our town of 1,350 people — we’d better give them a good price," they should get a BIG share of the pie — more like $5,000/AF, since that’s still only about 1.5 cents/gallon.
More as it happens, Undergrounders.
Smellslikefish | Apr 10, 2008 | Reply
So… just for my own clarity, are you for or against the Nestle deal? Kinda hard to tell sometimes.
Tom Chandler | Apr 10, 2008 | Reply
Generally, I’m opposed to the idea of signing contracts with the Corporate Minions of the Cloven Hooved Deceiver Himself.
I’d take a good deal for McCloud…
Kentucky Jim | Apr 11, 2008 | Reply
Tom, you raise an interesting point. What would a good deal for McCloud look like?
Regards,
Kentucky Jim
Remember, only 22 days to Derby Day!
Tom Chandler | Apr 11, 2008 | Reply
They’ve fouled the waters so often with their misstatements, lies, and legal intimidation tactics that you’d have reasonable questions about entering into any contract with them.
That said, my short list is that McCloud should renegotiate for more money for the water, a smaller footprint (reduced plant size and fewer truck trips), mitigation for any potential damages to flows in Squaw Creek and tourist industry (due to removals and truck trips), force Nestle to assume responsiblity for infrastructure costs (roads and pipelines, which are currently McCloud’s responsibility), and a mechanism by which Nestle’s impact on the aquifer is evaluated and extraction controlled (especially in times of drought or loss of flows due to climate change).
Then there are the extra-contractual issues like whether the McCloud Services District even has the right to all the water coming from the spring in question; should the project go forward, it’s likely lawsuits will be filed by Squaw Creek landowners challenging the removal of the water.
And those questions exist independent of the larger questions about the impacts of bottled water on local environments, landfills (80+% of bottles end up in landfills), carbon footprint (trucking water from source to store is energy-intensive), and a few other questions surrounding the public trust doctrine.
I’m not wholly against the plant (I’m not in love with it either), but this deal is so bad for McCloud — and the questions about flows in Squaw Creek are so unclear — I simply can’t support it without a lot of changes.