Nestle is closing in on privatized water in Oregon

Nestle is in the final stages of a deal that would allow them to purchase Oregon’s public water supplies from the Columbia River Gorge. Similar to Chris Christie’s recent fast-tracking of WIPA (a deal which allows NJ municipalities to sell their public water supplies to international corporations without public consent), the deal with Nestle is another water privatization plan that is bad for consumers and communities.

The proposal would allow the food conglomerate to extract over 118 million gallons of publicly owned water from the Columbia River Gorge on an annual basis, and then sell it for exponential profits. Nestle’s target — Oxbow Springs — is a public water supply that is currently being used to water an endangered salmon hatchery.

Nestle has had its eye on Oxbow since 2008, but its business plans have been largely held up by public interest groups and community protest. Now, after nearly 7 years of negotiations, Nestle is finally closing in on its goal.

Cascade Locks, the low-income community in which Oxbow is located, has been promised “approximately 50 jobs” in exchange for letting Nestle build their $50 million bottling plant in the city. Oxbow is owned by the Oregon Department of Fish and Wildlife (ODFW), which is a state organization and not technically owned by the city. Thus, the deal allows for a “water rights transfer,” which means the Cascade Locks will trade its local well water for the Oxbow springs water–which will then be sold to Nestle and bottled at the plant. Again, after all this is done, Nestle will get to sell the water for dollars on the penny.

A bad deal for Oregon

Put simply, this is a terrible deal for Oregonians. In terms of financial gain, Nestle is basically stealing the water from Cascade Locks. Food and Water Watch reports that Nestle would only “be charged the standard municipal water rate…$2.25 per 1,000 gallons of water, or roughly $0.00225 per gallon.” The corporation will then resell the water for up to $2.63 per gallon. This means that Nestle will pay Cascade Locks roughly $18,000 a month for their water, only to turn around and sell it for $26 million in Oxbow-related revenue. Every month. In case you didn’t do the math already, that’s more than a 99 percent profit margin.

In addition to being charged nowhere near what the water is worth, Nestle also expects the infrastructure surrounding their water transfer project to be paid for by the public. In a 2009 economic report on the proposed water transfer, professors Kristen A. Sheeran Ph.D. and Feng Zhou projected that Nestle’s plant will require “200 semi-truck trips through town every day” on highways that can’t sustain that kind of wear and tear. Nestle has said in advance that they have no intention of paying for this upkeep, which will likely run into the millions of dollars.

The plant will also be a huge polluter. Sheeran and Zhou estimate that it will create “an additional 64-122 million kg of CO2 annually” in a state that has prided itself on its lowering of carbon emissions. Most troubling, however, Sheeran and Zhou fear that — given the increasingly unpredictable nature of the weather — the Columbia River Gorge’s water supply may not even last that long. Per their report [emphasis added]:

The U.S. Geological Survey (USGS) conducted a regional assessment of groundwater levels during spring 2009 based on an inventory of 1,752 wells in the Columbia Plateau of Washington, Oregon, and Idaho. Results indicate trends toward water level declines in many areas since 1984. Of the wells measured in 1984 and 2009, water levels declined in 83 percent of the wells. Declines greater than 100 ft and as great as 300 ft were measured in many wells and the groundwater-level changes were greatest in the deeper hydrogeologic units. These declines are in areas known to rely heavily on groundwater for irrigation, pumping, and other uses. The uncertainty of how climate change may impact the hydrological cycle and groundwater supplies in the region adds additional risks to the city from Nestlé’s proposal. Water, though it seems plentiful in the Gorge, may not always be so plentiful.

In other words, given the recent accusations that Nestle’s water bottling plants have been exacerbating California’s drought, and considering the fact that the nation is undergoing a water crisis that will only get worse in the next decade, it doesn’t make any sense for Cascade Locks and ODFW to sell water worth hundreds of millions of dollars for 50 jobs and an insultingly low sum of money.

An unpopular deal for Oregon

The Nestle deal seems viable to a small number of legislators and state officials, but the vast majority of Oregonians hate the idea. The proposal has “generated more than 80,000 letters in opposition” over the course of negotiations. Recently, local groups and demonstrators have staged a number of sit-ins, protests and rallies objecting to the water transfer. Earlier this year, a petition against the resolution garnered over 15,000 signatures, and a similar page on Reddit exploded with complaints. Meanwhile, public interest groups such as Bark and Food and Water Watch have been fighting the plan for over five years. 

Says Bark spokesman Alex P. Brown:

We currently have five counties in the State of Oregon under a state of emergency for the upcoming drought and our neighbor California is in a state of emergency with major water restrictions being placed…Nestle would be setting a precedent in the State of Oregon to give away existing public water resources to support a bottling water facility in the state.

Numerous Oregonian legislators have also protested the deal, saying that it “gives the public’s water to a multinational corporation for free.” Several of those politicians also penned a letter to new Oregonian Governor Kate Brown, warning her that, “As water becomes increasingly scarce and sought-after in the West, we should not enter lightly into a deal to extract it.”

Nestle, via Creative Commons

Nestle, via Creative Commons

That doesn’t mean the deal is without supporters. As Kelly House of The Oregonian has pointed out, there are already over 31 water bottler companies in Oregon. Yet what House leaves out is that many of these bottler companies are small businesses whose profits are reinvested in the local economy. Nestle is different; it’s an international corporation, and profits from Oxbow will be taken out of Cascade Locks and spread throughout a network of shareholders around the world.

Furthermore, Nestle has a long history of bad behavior vis a vis small, rural communities. As Tara Lohan of Alternet noted in 2007, at the height of the initial “bottled water boom,” the company has made a habit of acquiring rights to small communities’ water supplies for peanuts and making out like bandits. From Michigan to Maine to California, the stories are pretty much the same: Nestle “takes water from U.S. communities for cheap, bottles and sells it — for billions of dollars in profit — and then dumps the environmental and other costs onto society.”

A Deal Worth Questioning 

Oregon’s decision to privatize water at Oxbow Springs is part of a growing trend. Water privatization is becoming more prevalent across the country, with large corporations getting far more than their money’s worth for the rights to rural communities’ most basic natural resource. Local governments, lured by the carrot of short term budgetary gain, will likely continue to sell regardless of the long term costs, or how badly they’re getting hosed.

If this trend is to continue, governments that wish to sell their communities’ resources should at least stop pretending they’re governments and conduct these deals like actual businesses. It’s both nonsensical and unfair for corporations to buy rights to natural resources at socialized rates and sell them at privatized ones.

If Oregon is going to act like a business instead of a government and sell its water, the state should at the very least demand to be paid market value for it.

Lucas Ropek is a journalist based in Massachusetts. He worked for the Working Families Party in NYC on issues of income inequality and worker rights. His interests include U.S. foreign policy, pop-culture, and freedom fries.

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32 Responses to “Nestle is closing in on privatized water in Oregon”

  1. I don’t blame the corporations. Like lions and sharks , they are essentially eating machines. It’s what they do. Who I blame are the politicians whom we pay to represent us. Instead of representing us they act like bribed, treasonous whores looking to sell us out to the highest bidder. Our politicians don’t even pretend to represent us anymore. Since we never hold them accountable why should they? Why is Washington DC so hell bent to pass a trade bill that gives corporations the power to trash all our laws? Bribes must be the answer there can be no other.

  2. joe mama says:

    It’s been true forever.. “Follow the money”. A bunch of Oregon legislators must have been well hydrated by Nestle, who has long supported privatizing the world’s water supply.

  3. Chris Bowen says:

    No, it actually is not. you are mistaking markup for percentage. If you look at the price 2.25, the cost is ~1% of the price, it is actually much lower than 1% but best to just keep it there because it is not 0.

  4. BitterReality4U says:

    Yet if people woke up the end would be near for the bottling plant.

  5. BitterReality4U says:

    Convincing stupid ignorant people of reality is always difficult. Next time you see some drooling cretin drinking bottled water look at them. They have an IQ lower than the bottle.

  6. BitterReality4U says:

    Plus the usual payment to their whores on the payroll.

  7. BitterReality4U says:

    What else could be expected from ignorant corporate whores. The scumbag corporation tells their pimps to demand their whores get in line and they all line up. The people as always get screwed over.

  8. Crud Bonemeal says:

    As a native Oregonian, I find it baffling that our state government, which is normally a surprisingly effective legislative body, can find no way to enforce the will of the overwhelming majority in getting this deal shut down permanently. I guess I don’t know as much about state water usage law as I should, but it seems to me that such shared public resources ought to be overseen and regulated at the state level as a matter of reason and practicality. I can understand specific management at a more local level, to a point, but the final say on broad decisions ought to run back up the chain to representatives of the entire state.

    I wonder if this hole in oversight exists because our state legislators are often afraid to take a strong stance on recurring water-use issues in the Klamath Basin (farm use versus wetlands preservation), deferring to the federal government instead… maybe by allowing the feds to play the villain to our Klamath-area farmers, we’ve effectively said we won’t manage water rights as a state? It’s a foolish choice, if so, because when a local usage issue doesn’t run up against federal interests, we’re left powerless to act on behalf of the state’s interests as a whole. Whatever the case, I’m frustrated, and I wish I knew how to do more.

  9. Tom says:

    Actully the profit margin is out of how much gross profit how much of it is net. So I made $100 but it cost me 50 it would be a 50% profit margin because 50% of that gross is actually profit.

  10. mrsleep says:

    Whatever, you people keep buying their products. It will keep happening. The only way to stop this crap is with your wallet.

  11. sithishs says:

    Wow…they sold out for 50 whole jobs?

  12. Sam Oldman says:

    From the article : “In case you didn’t do the math already, that’s more than a 99 percent profit margin.”

    In case ***you*** didn’t do the math already, it’s actually a 145,000 percent profit margin.

  13. MoonDragon says:

    I’ve seen them. I really wish they were there instead of the bottled water, no just as well as the bottles. Maybe inside closer to the bottles to remind people that it’s an option.

  14. JKill says:

    What do you think the water machines are for out in the front of grocery stores? This has been around for decades.

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  17. Skye Winspur says:

    Thanks for alerting me to this, Lucas. It appears to be the sort of evil only sit-ins and other nonviolent forms of mass protest can stop. I doubt that any number of written appeals to the governor will really help.

  18. wmforr says:

    Penn and Teller did a show on this some years back. My favorite from the show was “Glacial” bottled water, which was unfiltered Galveston tap water. From one of Texas’s many glaciers, I presume.

  19. Atleastmydog Likesme says:

    A friend of mine has tried (in vain) to explain to his kids that the water that comes out of his well is just as good as the stuff that gets taken out of the ground and put in bottles at the plant down the road.

  20. MoonDragon says:

    I understand that stores make money selling units, but I would genuinely love to see stores offer the option of bringing one’s own container and filling it from a filtered fountain/tap for a fee in lieu of selling bottled water. Even if the fee was more than the vendor’s profit per unit, it would still probably be less than the cost of the bottled option. This is a carrot that should be offered before the need to apply the stick of banning the bottle, which would be almost impossible to impose (at a minimum it would be fought tooth and claw before the results were bought outright.)

  21. Indigo says:

    Here in Florida, Zephyr Hills has been draining our endangered aquifer for a couple of decades. No problem so far, except for the rise in saline content. We’re on a peninsula, you know, and draining the aquifer leaves room for Atlantic water to seep in. It’s saltier than the Pacific, they say.

  22. Indigo says:

    Oregon allows it. That’s the part l don’t understand. I know Nestle is a greed-machine, that’s self-evident, but Oregon’s self-marketing is all about how cool and kewl all those white yuppie kid computer nerds on groovy bicycles . . . oh, never mind. [ / snark ]

  23. The_Fixer says:

    This bottled water thing is the biggest fraud in the world, and people have been falling for it en masse for the last 25 years or so.

    It comes in shitty little plastic bottles that create a disposal problem, and the water itself is nothing more than municipal water. It may have a nature-y sounding name, like “Nature’s Mountain Stream” or something like that, but it’s most often ordinary municipal well water. Filling up a reusable bottle with water from the tap is just as good, and likely tastes the same.

    The only legitimate reason for the existence of bottled water is in the event that tap water is undrinkable. This could be due to contaminated wells, or because of natural disasters. Other than that, there’s really no reason for it existing.

    I don’t buy it, and wish people would just stop buying it. It appears as though people are willing to be deluded into thinking that paying a premium for ordinary tap water is sensible and that they’re getting some kind of superior product. It isn’t – stop buying it.

  24. Knottwhole says:

    Greed is great.
    Greed is good.
    Screw the salmon. Who needs food.

  25. heather anderson says:

    118,000,000 gallons of water to be pumped yearly is equivalent to almost 1 billion plastic bottles. (1 gal = 8 0.5 liter bottles, which is standard). Also paying the city $18,000 a month as an insult being that is how much rent is for 10 crappy apartments in my neighborhood in Portland. Nestlé has a huge criminal background, and is still sucking Californians dry while they’re forced to take cutbacks in their home. This is a huge mistake, privatizing a natural and vital resource for survival.. the end is near my friends.

  26. MoonDragon says:

    Killing babies in third world countries wasn’t enough for these bastards? What would Farfel say?

  27. Rough Acres says:

    Kick Nestlé to the curb.

  28. Badgerite says:

    Wasn’t it an attempt by Bechtel to engage in a deal for water privatization and the attendant outrage of an impoverished populace that would be required to absorb the costs that brought Evo Morales to power?

  29. Houndentenor says:

    This has been going on in the third world for quite some time. We allowed it there. Now it’s happening in the US. But then we’re almost a third world country (maybe already there, didn’t check the last couple of days). Water should be a public resource, but no. Nothing is a public resource. I wouldn’t be surprised if Nestle or some other corporation didn’t try to claim that we have to pay them for breathing the air.

  30. bluevistas says:

    very short-sighted.

  31. 2karmanot says:

    Same with Gyser

  32. nicho says:

    Several companies are already doing this in drought-stricken California. However, they’re doing it on reservation land, which means the government has absolutely no control. Just down the road from me, Arrowhead is sucking water from our aquifer on the Morongo reservation. They pay the tribe a few pennies and sell the water at a humongous markup, while we homeowners are told to cut our water usage by 36 percent.

    Domestic use of water in CA makes up only 10 percent of the total. Giant corporations use the rest. However, they’re exempt from water restrictions.

    Ain’t it great living in a corporate dictatorship?

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