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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