Unlimited Groundwater In the Desert Pads Pockets of Saudi Corporation
How much does unlimited pumping of groundwater in the Butler Valley, a desert west of Phoenix, Ariz, cost?
Nothing, at least for Saudi corporation, Fondomonte, who has been growing alfalfa for export to Saudi Arabia over the last seven years.
The Butler Valley Groundwater
The Butler Valley holds more than 6 million acre-feet of groundwater, located near the Central Arizona Project canal, is mostly owned by the state of Arizona in a trust for the support of public schools.
In the early 1980s, the Butler Valley was given to the state of Arizona to be managed by the State Land Department for a groundwater reserve in connection with the canal.
Recent findings by The Arizona Republic determined the State Land Department has leased thousands of production acres to Fondomonte, with permission to pump unlimited amounts of groundwater, for an annual rental of just $25 per acre.
Though Fondomonte refuses to disclose the amount of water it has used over the past seven years, the company has been growing alfalfa year-round on approximately 3,500 acres, verified from aerial photos, says a recent news article.
“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 seven years,” reports The Arizona Republic.
What is the value of these groundwater rights?
The Central Arizona Project sells water to customers in a neighboring county for $242 per acre-foot.
Considering these figures, Fondomonte would owe approximately $5.42 million per year for their water rights, totaling nearly $38 million.