Saudi firm has pumped Arizona groundwater for years without paying. Time to pony up

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The Butler Valley is an empty stretch of desert west of Phoenix, worthy of note for two reasons.

  • It holds more than 6 million acre-feet of groundwater, strategically located near the Central Arizona Project canal.
  • And more than 99% of Butler Valley is owned by the state of Arizona in trust for the support of public schools.

In 1982 as the Central Arizona Project canal neared completion, Wes Steiner, the renowned director of the Department of Water Resources, proposed that the state set aside Butler Valley as a groundwater reserve for future use in connection with the CAP.

Acting on his advice, we worked with the federal Bureau of Land Management to transfer the Valley into state ownership to be managed by the State Land Department.

How much water has Fodomonte pumped?

In June, The Arizona Republic uncovered the story of how the State Land Department had recently handed over thousands of acres to a Saudi corporation called Fondomonte, giving it permission to pump unlimited amounts of groundwater to grow alfalfa hay for export to Saudi Arabia.

This tale of official misfeasance began in 2015 when the State Land Department began leasing land to Fondomonte at an annual rental of just $25 per acre.

However, the 2015 lease in addition allowed Fondomonte to pump unlimited amounts of groundwater at no cost whatever.

How much is Fondomonte pumping? The company refuses to disclose how much water it uses each year, and the State Land Department has never bothered to demand reports. That Fondomonte is growing alfalfa year round on approximately 3,500 acres can be verified from aerial photos.

And according to U.S. Geological Survey studies, alfalfa in Butler Valley requires 6.4 acre-feet of water per acre. That means the company has likely been pumping 22,400 acre-feet of water each year for the last 7 years.

Void its lease, charge for past rent

How much should the state be charging for this water? The Arizona Constitution, Article 10, Section 4, requires that land leases and “products of land” … “shall be appraised at their true value.”

The appropriate method for determining true value is hiding in plain sight. The Central Arizona Project sells water to customers throughout Maricopa County for $242 per acre foot delivered through the project canal that passes just south of Butler Valley.

Add these figures, and Fondomonte should have been paying $5.42 million per year for each of the last seven years.

What should be done to clean up this scandal? First, Gov. Doug Ducey should instruct the State Land Department to void the lease and restore Butler Valley to its intended use as a groundwater reserve for the future.

Second, Gov. Ducey should instruct the attorney general to collect past due rentals of about $38 million to be held in trust for the benefit of Arizona school children.

This article originally appeared on Arizona Republic: Ducey, AG must get Saudi firm to pay for groundwater use

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