Investing in Infrastructure to Lower the Cost of Living

California’s civil infrastructure was once the envy of the nation. During the 1950’s and 1960’s the state wisely invested in transportation, water and power infrastructure, delivering capacity well in excess of the needs of the state’s population at the time. Even today, the scale of California’s network of aqueducts and pumping stations to transfer water from north to south, east to west, is one of the largest in the world, and California’s vast network of interstate freeways has few rivals.

Moreover, Californians in that era had planned to continue to expand these infrastructure assets to accommodate a growing population, but that all came to a halt in the 1970’s. During the 1970’s not only were the plans for additional water storage and distribution assets abandoned, but state-owned right-of-ways and land acquisitions both for water and transportation were sold to private interests. California now has a population of 40 million people living in a state with civil infrastructure designed to accommodate 20 million people.

The new political alternative to infrastructure development is conservation. By zoning ultra-high density infill in urban areas, transit villages, light rail, by mandating energy efficiency and subsidizing decentralized renewable energy sources such as rooftop photovoltaics, by mandating water conservation and subsidizing retrofits such as low-flow faucets and toilets, California’s political leadership hopes to avoid massive new investments in civil infrastructure.

There is a problem with this thinking, however. The deliberate imposition of scarcity on Californians has artificially elevated the cost-of-living, harming the state’s most economically vulnerable citizens. Restrictions on land development, elevated prices for water and electricity, and monstrous commutes on congested freeways take an inordinate toll on those who can least afford it. And that’s not all – it isn’t clear that these restrictions are having any significant impact.

The threat posed to farmland and open space by land development, for example, does not necessarily withstand rational analysis. According to the American Farmland Trust, of California’s 163,000 square miles, there are 25,000 square miles of grazing land and 42,000 square miles of agricultural land; of that, 14,000 square miles are prime agricultural land (ref. “California Agricultural Land: The Basic Facts“). This means that if 10 million new residents, four per household, moved into new homes situated on half-acre lots, it would only consume 1,953 square miles. If these homes were built on the best prime agricultural land California’s got, it would only use up 14% of it. If they were scattered among all of California’s farmland and grazing land – which is far more likely – it would only use up 3% of it.

Another area where restrictions on urban consumption clearly don’t make a significant impact regards water use. According to statistics compiled primarily by the California Dept. of Water Resources, in a dry year, around 150 million acre feet (MAF) fall onto California’s watersheds in the form of rain or snow, in a wet year, we get about twice that much (ref. SEI-US.org “Western Water,” page 17). Most of that precipitation either evaporates, percolates, or eventually runs into the ocean. In terms of net water withdrawals, each year around 31 MAF are diverted for the environment, such as to guarantee fresh water inflow into the delta, 27 MAF are diverted for agriculture, and 6.6 MAF are diverted for urban use (ref. “California Water Today,” Table 2.2). Of the 6.6 MAF that is diverted for urban use, 3.7 MAF is used by residential customers, and the rest is used by industrial, commercial and government customers (ref. “California Urban Water Use by Sector,” 2010 Urban Water Management Plan Data – Tables; Download spreadsheet “DOST Tables 3, 4, 5, 6, 7a, 7b, & 7c: Water Deliveries – Actual and Projected, 2005-2035”).

Put another way, 65 million acre feet of water is diverted each year in California for environmental, agricultural and urban uses, and a 25% reduction in water usage by residential customers will save exactly 0.9 million acre feet – 1.4% of our total statewide water diversions.

Consumption of electricity is an area where considerable progress has been made towards conservation over the past few decades. But this progress, while impressive, puts an economic burden on low income families, small businesses, and energy-intensive large businesses. And the ambitious goals set forth in the Scoping Plan issued pursuant to the 2006 Global Warming Solutions Act cannot be achieved without imposing even greater economic burdens on Californians.

There is an alternative. A tremendous political will currently exists in California to spend approximately $150 billion on two mega-projects of dubious value – about $100 billion for high speed rail, and about $50 billion for tunnels to allow more efficient transfer of water under the Sacramento delta. A coalition of environmentalists, construction unions, and business interests all favor completion of these two projects. And notwithstanding the possibility that “hyper-loop” technology may render HSR obsolete before it’s even built, there is an alternative use for all this money. What if it was used to fund massive new investment in California’s infrastructure in the areas of energy, water, and transportation?

Here’s what $150 billion could buy:

(1) Reservoirs to harvest storm runoff and to store power. 

When reservoirs are built in tandem, with an upper and lower portion, they not only can store runoff, but they can be used to store intermittent renewable energy by pumping water from the lower reservoir to the upper reservoir when there is a surplus of renewable energy, and releasing it through generating turbines when renewable sources are offline. San Luis Reservoir in Merced County is an example of this. At a drop of 100 feet, it only takes 10,124 acre feet to generate a gigawatt hour of power. At a drop of 500 feet, it only takes 2,025 acre feet to generate a gigawatt hour of power.

(2) Aquifer development to harvest storm runoff.

The rocky, porous foothills of the Sierra Nevada’s western slopes are ideal places to divert runoff to recharge California’s stressed Central Valley aquifers. This is a relatively inexpensive solution to water storage that ought to be a priority for infrastructure investment.

(3)  Sewage treatment plant upgrades to recharge aquifers with potable water.

This solution is only in widespread use in Orange County – currently only about 5% of California’s urban sewage is totally reused. If 100% implemented it would replace about 50% of California’s urban water consumption, at least 3.0 million acre feet per year.

Sewage Treatment Plant in Fountain Valley in Orange County

(4) Desalination plants.

These facilities can be co-located with existing coastal electricity generating plants which are already collecting the seawater – one of these is already proposed in Huntington Beach, where the desalinated water could be directly injected into the local aquifers, providing efficient storage and preventing salt water intrusion.

California’s only significant operating desalination plant, in Carlsbad in San Diego County

(5) An Oil Pipeline.

Currently we rely on antiquated tank cars to transport Bakken crude through dense urban areas on their way to coastal refineries.

(6) Conventional Railroad Upgrades.

Upgrades to our existing freight rail network so our ports can efficiently move imported goods inland, making them able to better compete with gulf ports once the Panama Canal is widened in 2017.

These are some of the worthy projects that may lay the foundation for a prosperous 21st century in the Golden State by creating jobs and lowering the cost of living. Proponents of high speed rail – all of them, from construction unions to practical environmentalists – are invited to offer balance to the discussion of California’s future by surveying these alternative civil infrastructure projects that actually create abundance. While this challenges the conventional political wisdom, it is nonetheless consistent with the spirit of innovation that has made California great and continues to define its culture. Perhaps designing policies to create abundance instead of scarcity is an idea whose time has come.

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Ed Ring is the President of the California Policy Center.