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Schwarzenegger's Peripheral Canal Proposal to "Save the Delta": Has common sense been thrown out the window?

 

by Joseph Gray

July 24, 2009 -- Few would disagree with the following statement from Governor's Schwarznegger's Delta Vision plan (deltavision.ca.gov):
The Delta is a regional, state, and national treasure. Its unique combination of estuary, water supply, recreation and tourism, aesthetics, lifestyle, and rural character make it a special place that we must recognize and protect.

 
-Delta Vision Final Report


The Delta Vision plan also states that the Delta is on the verge of ecological collapse, in large part due to fresh water being pumped out of the Delta for export to agricultural and municipal users in the southern part of the State. Recent biological opinions released by the US Fish and Wildlife Service and the National Marine Fisheries Service have reinforced this conclusion. As a result, pumping water out of the delta has been decreased over the last two years in an attempt to avoid a complete ecosystem collapse.


The plan also warns that the Delta's levees are likely to fail within the next 40 years if they are not reinforced to withstand earthquakes, floods and rising sea levels. Multiple simultaneous levee failures, as experienced by New Orleans, would not only destroy the Delta's ecosystem, but would seriously disrupt water exports.


The Peripheral Canal Conundrum


This is where Schwarzenegger's Delta Vision plan ceases to make sense. Delta Vision claims the cheapest and best plan to save the Delta's ecosystem and protect water supplies is to build a Peripheral canal similar to the one soundly defeated as an expensive boondoggle 25 years ago. The canal's purpose is to pump fresh water out of the Sacramento River before it reaches the delta, rather than let it flow through the delta as it does now. Estimates for the canal's cost range from a low of $4 billion to over $40 billion.


One wonders how taking more fresh water out of the delta could possibly help the Delta's health? One also wonders how building something roughly the size of the Panama Canal could possibly be the cheapest way of protecting water supplies? It just doesn't make sense.


Check the spreadsheet


As a retired Silicon Valley CEO, I learned early to be skeptical of business plans that run against common sense. If a plan doesn't make sense, then one needs to ask why. Often a faulty model or spreadsheet is to blame. When examined closely, critical factors have been ignored, numbers have been inflated, or underlying assumptions are wrong. Fancy spreadsheet results are only as good as what goes into them. In other words, if the results don't make sense, then look to the spreadsheet.


The Delta Vision peripheral canal plan doesn't say why the canal is the best alternative, neither does the Bay Delta Conservation Plan (BDCP), which the Delta Vision references, say why. Instead a recent study conducted by the Public Policy Institute of California (PPIC) is cited to say why the canal is the best alternative (www.ppic.org). Not surprisingly, the heart of the PPIC study is a spreadsheet.


The PPIC study


The scientists and economists at PPIC were tasked to look at the economic and ecological costs of four options proposed for saving the Delta: 1) Stop pumping altogether; 2) Continue pumping through the Delta; 3) Build a peripheral canal around the Delta; and 4) A hybrid "dual conveyance system" of continuing through-Delta pumping along side of a peripheral canal.
The PPIC team brought together an array of scientists and economists to work on the study, and the result is a spreadsheet model that predicts the costs associated with the four options.


The model includes all of the relevant factors such as costs of levee failures, costs of reduced water deliveries, water quality costs, construction costs and others. It also looks at the predicted chances of fish survival for each option.


So, why don't the results make sense?


The answer is in the assumptions that feed the spreadsheet inputs. Two assumptions in particular, one dealing with seismic factors, and the other dealing with how much water can be exported, do not make sense, and because of them, the results don't make sense.

 
Critical levees will be seismically reinforced


Delta Vision stipulates that critical Delta levees should be reinforced as part of its Delta restoration goals, and that those levees that are the most critical to urban areas, infrastructure and protecting the Delta's water supply, should be strengthened to seismic standards (Table 2-2 of the Delta Vision Strategic Plan).


The PPIC study includes $3B to $5B for seismic upgrades to the levees critical to the water supply, enough to strengthen them to "class 7- seismic no-fail" standards (from Table 2-2 of the Delta Vision Strategic plan). This contrasts with the lower Delta Vision estimates for the same upgrades of $1.9B to $3.4B.


The main problem with the seismic assumptions in the PPIC study, however, in its inputs for the probability of extensive levee failure. Despite adding the costs to seismically upgrade key levees, PPIC uses the probability of failure rates appropriate for unreinforced levees. So, instead of zero, or close to zero, probabilities of extensive failure (defined as when 2 or more critical islands simultaneously flood), the PPIC study uses 34% to 95% probabilities. In other words, they assumed the levees would fail.


They then stipulated that the cost of failure would be $8B to $16B, mostly because their model assumed that once the levees failed one would be forced to build a peripheral canal anyway.


The bottom line is that PPIC inflated the seismic costs by essentially double booking them. They should have either included the cost to prevent seismic failure, or the cost of seismic failure, but not both.


One can also argue that, since Delta Vision's goal is to strengthen the levees anyway, the seismic upgrade cost should either be added to all of the options, or left out of all the options. In either case, the probability of levee failure once they have been upgraded should drop to zero, or close to zero.


Less water will be exported in the future


Both Delta Vision (Recommendations 4 and 7) and the PPIC study state that even with the peripheral canal, water exports from the Delta must be reduced compared to historical levels. The assumed amount of reduction ranges from none during a wet year, to higher amounts during a drought and during critical times of the year. The yearly cost of this reduction, both due to increased water costs and any lost economic opportunities, is included in the PPIC model. On the other hand, the reduction's effects upon water quality and fish survival are not.


Water quality due to salinity will improve with reduced exports.


The PPIC model assumes that there will be added costs required to filter drinking water as salinity in the Delta increases due to rises in sea level. This obviously assumes that salinity in the Delta is allowed to increase, which runs counter to the Delta Vision goal of protecting the Delta's ecosystem and water quality. In fact, the PPIC study says that the salinity issue would be solved if around 0.5 million acre-feet (MAF) more water is allowed to flow through the Delta to the Bay. Over 26 MAF flows into the Delta in a typical year. Only 2% of this flow is needed to keep the Delta water fresh and to eliminate the added filtering costs altogether, or at least keep them at today's level of $40M to $120M per year.


Delta Vision says flows need to be reduced, and since only a slight reduction is needed to keep the water fresh, the extra filtering costs should not have been included in the PPIC model.


Fishery health will improve with reduced pumping


The PPIC scientists were asked what would the probability of achieving a viable fish population be for each of the Delta options. They came to the obvious conclusions that the highest chance of survival would be to end water pumping altogether, and the lowest chance of survival would be to continue to pump at historical levels. The peripheral canal and the dual conveyance options came somewhere in the middle.


In a curious oversight, the scientists were not asked what the probabilities would be if exports were reduced. The scientists did say, however, when asked, that survival chances would go up if either the pumping rate is decreased, or if more fresh water is allowed to flow through the Delta (see appendix E). As both of these will happen if exports are reduced, one would assume that the reduced exports option would be at least as good for fishery health, if not better, than the peripheral canal options.


The peripheral canal doesn't make sense


If one uses lower levee failure probabilities and lower water purification costs in the PPIC model, the results dramatically show that spending $5B to $40B on a peripheral canal is not the lowest cost option, nor is it the best solution for the Delta's health. Instead the PPIC model says that the through-Delta option is the least costly and the best for the Delta.


The best Solution for the future


Once one accepts the Delta Vision conclusion that less water must be exported in the future, with or without the peripheral canal, then one finds that the best plan is simply to fix critical levees, continue to channel water through the delta, and manage the water flow through the Delta to preserve its health.


Various bills are currently in the State Capital aimed at funding the Delta Vision recommendations which include the peripheral canal. One can only hope that legislators will use their common sense, will look hard at the faults in the PPIC study, and will recognize that the peripheral canal is still an expensive boondoggle, and will vote to simply fix the levees.