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Dawn Bennett, Host of Radio Show "Financial Myth Busting," Interviews Tony François, Senior Staff Attorney at the Pacific Legal Foundation's National Litigation Center


Wasington, D.C. -- (ReleaseWire) -- 04/22/2015 --DAWN BENNETT: Tony François is a Senior Staff Attorney at the Pacific Legal Foundation's National Litigation Center. He previously worked at KP Public Affairs, California's largest contract lobbying firm, where his government relations practice included water policy, greenhouse gas regulation, energy policy, and environmental regulation. It's been a bad year for California, whose drought is rapidly approaching historic proportions. The LA Times cites California state climatologist Michael Anderson as saying, "You're looking on numbers that are right on par with what was the Dust Bowl." It's about to even get worse. It's about to get even worse, as West-wide snowpack is melting earlier than usual, according to data from the fourth 2015 forecast by the United States Department of Agriculture's Natural Resources Conservation Service. This means a coordinated drought response and a lot of taxpayer money. Tony, welcome to Financial Myth Busting.

TONY FRANÇOIS: Good morning, Dawn. It's a pleasure to be here. Thank you.

BENNETT: What do we do when a resource is scarce? Of course I'm talking in particular about California and the scarcity of water.

FRANÇOIS: Well, fundamentally you want to save things against, I guess the normal expression would be save something for a rainy day, but with water in the West, you'll want to save it for a dry day. California is entering its fourth year of rather severe drought. The problem that we are experiencing here has exacerbated by federal mismanagement of how to save water we do have, which should be used to mitigate the effect of drought. Unfortunately, the federal government is using these very scarce saved water resources to actually exacerbate the effects of the drought.

BENNETT: From what I've heard, it's really the reservoirs we created in the 1800s just aren't big enough, and they're old. Is this part of the problem?

FRANÇOIS: Well, California has got a fairly large fleet of reservoirs that have been built over a lengthy period of time, some are much newer than that. But what's occurred in the last twenty years as the Federal Endangered Species Act has been fully implemented in California, is that these stored water supplies have been increasingly redirected for wildlife protection and endangered species programs rather than the purpose for which they were built for, which was urban and agricultural water supply. When water supplies have been strong in the state there has always been enough to go around, even though there's always been some conflict over it. In the current drought, the federal government is providing no water in agricultural districts and only 25 percent of the normal allocations to the municipalities, the cities. And yet, they are putting endangered species protections at the front of the line by using stored water for very questionable resource protection purposes.

BENNETT: I've read that the Feds ordered the California farm district to use 9 billion gallons of water to save just 29 fish. Is that correct?

FRANÇOIS: Yes. I mean the numbers may be plus or minus here, or there a little bit, but—this sounds baffling, and I will try to explain it. The endangered species protection regime that works in the California reservoirs requires occasional releases of large amounts of water to simulate a big rain storm, in the sense of a flood. That's a trigger for fish to migrate up and down the river. Most of the fish in this case in the Stanislaus River have already migrated out and there were a few still in the higher parts of the river. And the Federal Bureau of Reclamation together with the Wild Life Agency decided we're going to flush several thousand acre feet of water down the river just for the purpose of encouraging those very few fish that were left to migrate out. This is an example of prioritizing very marginal environmental benefits with water that could have done enormous help for farms or cities.

BENNETT: Isn't that insane? They could catch those 30 or so fish with harmless nets and transport them to where they need to be without having to waste 4 billion gallons of water to save them. Who's making these strange decisions?

FRANÇOIS: I think that's one of the problems. Officially, it's the Federal Bureau of Reclamation which operates the reservoirs. But they are in my view, taking orders or direction from the federal wildlife agencies, the National Marine Fisheries Service and the Fish and Wildlife Service, who are not sponsors of these projects, constituents have not paid for them, and yet they have got themselves into the position where they've got the first call on resources that are supposed to be saved for human needs, agriculture and city life.

BENNETT: Has California fought back against the damage these rules are causing?

FRANÇOIS: Well, we've made several efforts here at the Pacific Legal Foundation. Of course, we've been litigating for decades for the reasonable implementation of the Endangered Species Act and we recently had a challenge to some of the endangered species regulations going through the Ninth Circuit Court of Appeals, but which earlier this year were unfortunately denied by the Supreme Court of the United States. We will continue bringing challenges to these kinds of regulations. One of the fundamental flaws in the legal application of the Endangered Species Act that we are trying to challenge is a principle that was, we think, inadvertently established by the United States Supreme Court several years ago in a case in which they said that the Endangered Species Act and wildlife protection is the Federal government's highest priority no matter the cost. This statement was made in the decision about Tellico Dam and the Tennessee Valley Authority, which was shut down because of the presence of a small fish just down the spring from dam. Congress went back after that decision in which the Supreme Court said "endangered species protection no matter the cost" and they amended the Endangered Species Act to require the protections to be "reasonable and prudent" and they also exempted Tellico Dam. So in decades it's been very difficult to get the agencies to implement this law in a reasonable and prudent way and we think it's important to continue bringing challenges to these types of oppressive regulations until the Supreme Court retakes this issue and says, "No, no, no, the Endangered Species Act is one among many federal priorities and it is not a trump card. It is not the overriding concern and we're not going to continue dedicating precious resources for marginal endangered species benefits no matter the cost for human beings."

BENNETT: Last year President Obama visited California as the drought was starting to take a toll on farmers, and he said in the press that the drought was a result of climate change. What do you make of that comment, and what do you think about how to combat that?

FRANÇOIS: Well, that's an interesting observation. Certainly the current drought is a result of variation in the climate in California. We are actually no stranger to drought. There's been periodic drought probably once a decade, sometimes a little more frequent. And there have been periods of significant flooding as well. That's the nature of California's climate and weather and that's why these stored reservoir systems were built so that in the wet years we can be storing adequate water for particularly dry years. I have to respectfully disagree with the President. If you can come out and look at the degree to which federal regulation has rendered the water supplies useless, I can't agree that this entire disaster being suffered by California's economy, people, and farming community is simply an unavoidable result of climate change. What it really is, is the failure of the federal government to carry out its responsibilities with the resources that it has and then pass the buck by saying, "Well, this is just a climate issue." As many would say it's an Act of God. We've prepared for days like this and now instead of using what we've prepared, we are wasting it.

BENNETT: There's been a lot of controversy over California Governor Jerry Brown's decision to let farmers continue using the water they need, while at the same time mandating strict limits on how much the average Californian can use. I believe the frequently quoted statistic is that it takes one gallon of water to farm a single almond. What do you think of Brown's water regulations?

FRANÇOIS: Well, I think it's a fair question. I think that the public benefits from getting as much information as possible. The situation that Governor Brown is observing and talking about here is that for years now agricultural districts have been getting shorter on water supplies. For the second year in a row, the federal water project in California is delivering no water to the agricultural districts. The message that Governor Brown is basically trying to convey is that there is actually already been a lot of conservation in agricultural districts and that's been going on well before these types of severe measures have been implemented in urban communities. However, a lot of California urban communities have made a significant rise in water conservation and it's easy to understand how a community does it. You can't wash your car, water your lawn, you know, except for a day a two each week. He is trying to find out whether there are other people using water and wasting it. I think what Governor Brown is essentially trying to convey is that most of California is irrigated agricultural districts that are already implementing state of the art conservation and people have to understand that they have already given up a lot.

BENNETT: The realities of the 21st century, especially when it comes to water and resources, are going to require a lot of hard choices. If we face a world shortage of water in the future, do you have an opinion of who is going to control the world's water— will it be governments or will it be corporations?

FRANÇOIS: That's an interesting question. There are a couple of very cutting edge projects that different companies have been trying to launch in California for desalination of ocean water. That is an enormous resource that is right here, and there is a certainly the technical know-how to do it. It's an expensive process. They have found that it's next to impossible to get these facilities the necessary permits, within California's regulatory environment. For the immediate future, even with high tech processes such as desalination, in California it's clearly the government which is going to control whether those resources are developed and how. Other efforts to, as some people have described it, privatize the water supplies have not gone over very well in California. There have been a couple of cities that have contracted with private companies to manage and operate their water systems. I think that has come and gone. I mean there may be a little that's been going good but that's not developing as a trend. I think in general people in California who want some kind of accountability, even when they don't always get backed, but they want the availability of government accountability with water supplies.

BENNETT: Regardless of anyone's view on the efficiency of government, I think it's fairly clear that the world is entering into a new era where water is now fair game as an economic resource, and the attendant risks and opportunities are going to be interesting to watch. I want to thank you so much, Tony, for coming on Financial Myth Busting. Tony François is the Senior Staff Attorney at the Pacific Legal Foundation.

All data sourced through Bloomberg

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About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting

She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.

She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or