On its website, Greenstone describes itself as “a water company” and as “a developer and owner of reliable and sustainable water supplies.” Its CEO, Mike Schlehuber, previously worked for Vidler Water Company, another company that essentially brokers water supply, as well as Summit Global Management, a company that invests in water providers and water rights. Greenstone Managing Director and Vice President Mike Malano, a former Phoenix-based real estate broker who remains “active in the Arizona development community,” according to his company biography, was elected to the irrigation district’s board of directors. and Cibola Valley Drainage, a quasi-governmental organization that oversees the distribution of water for agriculture in the region.
Irwin was horrified. He felt that a company with ties to big banks and real estate developers, posing as a farm, had infiltrated his small town and sold his most precious resource.
The agreement will have no immediate impact on Cibola residents. It does not affect the municipal water supply. But he worries the transfer will be the first of many. And if more and more farms are left fallow to supply water to cities, what will become of the rural towns along the river?
“It’s going to be like Owens Valley,” he said, referring to the water grab that inspired the movie Chinatown. In the early 20th century, agents working for the city of Los Angeles, posing as farmers or ranchers, purchased land in the valley and diverted water to sustain their metropolis, leaving behind a bowl of dust.
By allowing the Greenstone deal to go through, “I’m afraid we’ve opened Pandora’s box,” he said.
The Colorado River, which runs from the Rocky Mountains to Mexico, has declined about 20 percent since the beginning of the century, amid the most severe drought the West has seen in 1,200 years. In a painfully negotiated agreement, Arizona, Nevada and California agreed to reduce the amount of water they withdraw from the river by 13 percent through 2026. Experts warned that even deeper cuts would be necessary in the next decade, but states are currently deadlocked on a longer-term conservation plan.
“With the current shortages in the river, driven by climate change, Colorado River water will become very valuable,” said Rhett Larson, a water law professor at Arizona State University. “Anyone who understands this dynamic thinks, ‘Well, if I could buy Colorado River water rights, that would be more valuable than owning oil in this country at this stage.'”
Although the price Queen Creek paid for the water was notable (more than $11,500 per acre-foot), Arizona lawyers and water experts told The Guardian that it would likely sell for even more today.
However, the process of selling and transferring water can be bureaucratic and complicated. In most cases, a company like Greenstone would first have to convince other landowners in its local irrigation district to allow the sale, and then get approval from the state department of water resources and the Bureau of Reclamation. USA, the federal agency that manages water in the West.
What Irwin and many of Cibola’s residents didn’t know was that in their sleepy river town, a select group of farmers and landowners had been working for years to facilitate those deals.
‘His dream was to sell this water’
Irrigation districts, as their name suggests, are designed to distribute water for irrigation throughout the western United States. These districts were formed in the 19th and 20th centuries as cooperatives, allowing farmers to pool resources to develop water infrastructure. In the Colorado River Basin, districts contract with the Bureau of Reclamation to deliver water flowing through federal infrastructure to farms and ranches.
Farmers tend to be possessive of their precious water, explained Susanna Eden of the University of Arizona’s Water Resources Research Center. Most irrigation districts are established to conserve water for agriculture and keep it within their jurisdictions.