Abuse of Water Rights

In this op/ed, Kathryn Gray laments the actions of

Royal Gorge LLC, the bay area consortium of developers who purchased Royal Gorge Cross Country Ski Resort... [that] actively opposed an ordinance, and a resolution, now passed by the Sierra Lakes County Water District (SLCWD) to prioritize service, and to set a "basement" level for Serene Lakes' drawdown that they will endeavor not to go below.

[snip]

Royal Gorge LLC, represented by not one, but two law firms, and a water consultant, had flooded SLCWD with arguments, both written and oral, as to why, among other things, SLCWD shouldn't consider environmental and aesthetic concerns when passing ordinances and resolutions. Homeowners, by and large, came away from water board meetings with the feeling that there was no depth too low for Royal Gorge LLC when it came to procuring water to enable them to build up to 1000 units on what is yet still a world class cross country ski resort.

[snip]

Royal Gorge LLC will not contract to provide these Big Bend neighbors water that they now desperately need. Royal Gorge LLC has chosen instead, to sell water to Granite Construction Company [GCC] to be used to dampen down dust on the construction job on HWY 80. Yes, you read that correctly - instead of providing water, at a fee of course, to neighboring cabins who have a pressing need for potable water, they've opted to sell pure, clear spring water to dump on the freeway.

I am sympathetic to this opinion, but I wonder how it is that homeowners cannot outbid GCC for drinking water (given that GCC is willing to use recycled water). Royal Gorge is clearly pushing to maximize revenue from its rights, but its exercise of sovereignty appears to exceed "community standards" -- and perhaps the original intention of those who created the rights.

Bottom Line: Property rights are a two-edged sword -- if they are strong, owners have an incentive to invest in maximizing their value, but maximizing value does not always pass the "smell test" for good water allocation. If they are weak, then the resource can be destroyed in the ensuing fight over appropriation.

This case is probably more complicated than it appears to be at first glance. Or isn't it? Please comment.

Good Money after Bad

The Congress, in its infinite stupidity, has allocated $170 million to salmon fishing communities "ruined" by the closure of salmon fisheries on the West Coast. As I said here, they contributed to their own downfall (silly dams, etc. did as well), and this payment makes no sense. If the $170 million is not used to permanently retire those fishermen, the Congress will find itself to have created a new entitlement.

People versus Tigers (or Loggers)

This story fits the familiar framework of Baptists and Bootleggers. Conservationist forces (Baptists) in India are pushing to remove people from "natural reserves" to allow endangered tiger populations to recover. The evictions, however, have given local politicians and their logging buddies (Bootleggers) the opportunity to plant commercial varieties of trees for harvest -- tigers be damned.

While the alleged purpose of the evictions was wildlife conservation, teak and eucalyptus plantations eventually replaced more than 40 of the evacuated hamlets.

[snip]

No cultivation of any kind was allowed, despite the fact that local Adivasi farming practices never cut down trees, plowed land or used pesticides or fertilizers. All hunting was banned and no livestock or pets were allowed. The gathering of tubers, mushrooms and wild vegetables was forbidden, and most sacred sites and burial grounds were placed off limits. However, these limitations did not seem to satisfy all conservation NGOs.

[big snip]

Gujjars and tigers have coexisted in Sariska for thousands of years. The decline in tiger population is a consequence of development —- large dams, iron mines and the shifting appetites of distant elites -— not the lifeways of forest dwellers whose habitats have likewise been threatened by the same phenomena. “Why then punish one victim to save the other?” asks Indian historian Ramachandra Guha.

[snip]

“Conservationists who believe that wildlife can be protected in such circumstances are living in a fool’s paradise,” according to Ashish Kothari. “Even while the rest of the world moves toward environmental policies that reconcile wildlife conservation with human rights and justice, India is headed in completely the opposite direction.”

[snip]

Kothari is part of a global network of pioneers, many of them prophets-without-honor in their own countries, pushing for community-based co-management of conservation, and community-conserved areas where local communities decide on their own to conserve local biodiversity for political, cultural, spiritual or ethical reasons.

Bottom Line: Local people can solve local resource problems if they are given the power to do so. Outsiders and elites are more likely to create problems or extract wealth (respectively) than a community that is given the responsibility of managing its resources. After all, local poor people will live in the area long after the latte-swigging aid workers and rich jet back to their urban enclaves.

Rationing in NorCal

EBMUD has announced mandatory cutbacks:

The proposal requires water users to cut the number of gallons they use from 5 to 30 percent, depending on the type of user. For instance, a family of four would be required to use 19 percent less water; a golf course 30 percent; a refinery 5 percent. In addition, the proposal would ban the use of water to clean off sidewalks and patios; irrigating on consecutive days; and washing cars with hoses lacking shutoff nozzles.

Along with restrictions on use, the board is expected to discuss proposals for incentives and enforcement measures, which include a temporary 10 percent hike in water rates across the board, fines for those whose use exceeds benchmarks set by the district and, in cases of severe violations, reducing water flows or disconnecting water service. A separate vote on pricing will take place in early July after a period for public comment.

You can see from the article that EBMUD believes that threats of fines and cut-offs are a necessary addition to its wimpy 10 percent increase in prices. As you can also see, EBMUD is requiring the smallest cut from one of its biggest users (the refinery) and the biggest cuts from golf courses. Although I see the economic rationale behind these cuts, I fail to see why anyone should get special treatment on cuts.

I would prefer to see far higher price increases (start at 50% and then move up to 200-300% increases for high volumes -- while leaving "base rates" unchanged to protect/reward watermisers) and no rationing at all. Since rationing is based on past use, it's also based on past waste -- more waste in the past makes it easier to cut by 5-30 percent now.

Bottom Line: EBMUD, like you and I, has no idea of where water savings can be made at lowest cost. It should set higher prices and then let its customers figure out whether it's a good idea to water the sidewalks (or refine more gasoline).

Global Water

Water water everywhere... not a drop to drink...
[click on the image two times to see it at full resolution]

Nestle Blinks

In this update to the Nestle-McCloud story (see here), Nestle is backing away from its current contract for exporting 500 million gallons (1,540AF or 1,900GL) from the area (at a price of about $0.70/1,000 gallons). Claiming that high fuel costs are changing the economics of the deal, Nestle is now saying they want to export mine 200 million gallons/year from a smaller facility -- probably for less money.

Critics of the new plan say that the agreement should be renegotiated and expire sooner than the 100 years currently on the table. They are right.

Bottom Line: Given that bottled spring water costs about $0.70/liter ($2.66/gallon) and Nestle is paying $0.70/1,000 gallons, I figure that McCloud can get more than its 0.026 percent share of the the retail price. Five percent of the retail price would mean that McCloud would make about $27 million per year (instead of $130,000/year) for its water. Now that's real money. Oh, and the agreement should also run for no more than 20 years. Water is only going to get more valuable.

Price and Efficiency

Fixed Carbon asks me to

comment on increasing efficiency of water use in both ag and the urban sector, which would (might, could?) also come with a true water market.

Economists generally say that an increase in the cost of an input will lead to innovation to reduce the quantity of that input in the productive process. For example, when water is "free", farmers use flood irrigation. When it gets more expensive, they switch to methods that use less water per unit of output (e.g, drip irrigation). Besides this increase in "intensive" technological adoption, higher prices make innovation more cost effective -- leading to adoption of "extensive" technologies invented just for the purpose of saving resources.

Technology is not the only answer, of course. When water becomes more expensive, institutions of abundance (e.g., unmetered water supply to residential and agricultural customers) are no longer cost-efficient ("too cheap to meter"), and new institutions -- paying per unit -- are necessary. I discuss these forces at length in Chapter 3 of my dissertation, where we see how MWD ran into big problems when it applied rules of abundance in situations where water supplies were tight (and they still are today, sadly).

It's also possible that efficiency can drive price, i.e., innovations can lower costs. Although we can imagine a selfless inventor pushing out innovations that lower costs, much innovation is driven by the desire to make increase profits (even holding the price of inputs constant). Back again to price driving efficiency.

Overall, I'd say that "prices" (costs, profits) drive efficiency 80 percent of the time, and that efficiency drives prices 20 percent of the time.

Bottom Line: Prices are useful as a means of indicating where to put our innovative effort. When prices are set by cost of delivery or political means (not scarcity), we have a hard time knowing where to put our scarcest resource (human innovation) and waste our natural ones.

Offshoring Food

A reader says:

I do think that marketizing water will inevitably fallow land, because us farmers can't pay the way the cities can. That might be okay if there was not an externality involved - i.e., re-orienting water from ag to urban does not make things more "efficient"; what it does is send ag offshore to places where it can be done more cheaply, which also (usually) means without the framework of environmental protections that California-grown crops live with. In other words, we run the risk of standing up monoculture in third-world nations where there ain't no ESA, there ain't no water quality laws, there ain't no instream flows to worry about.

This perspective combines two opinions: Farmers cannot afford to pay city prices, and (because of this), they will be displaced in the market by cheaper, foreign, less-"earthy" competition.

Let's take these opinions in order. Will "marketizing" water fallow land? Probably yes -- the worst (marginal) land will be fallowed/turned into conservation areas or parking lots when it makes more sense to sell water to cities than grow low-value crops. If farmers have water rights (a likely scenario) and are selling them, this is no bad thing for either side.

Is re-orienting water from ag to urban "less efficient"? No, not if you equate market outcomes (willingness to pay) with efficiency on the domestic side or if food can be grown more cheaply in foreign countries.

Is foreign ag cheaper because of lax environmental safeguards? (Not according to this.) What if locals are willing to bear the environmental costs of growing food for gringos? That will not keep US farmers from claiming that it's wrong to buy goods from producers who are willing to employ kids/pollute land and water/work in "unsafe" conditions in exchange for the economic benefits they receive. Although this moral argument is appealing (as well as self-serving), it is also patronizing. After all, who are we (who am I?) to say that such and such a job is "undignified, unsafe, un-whatever"? I, for one, cannot understand why people sit commute for hours in their cars, but I do not have the right to condemn their judgment or humanity in pursuing their choice.

Bottom Line: Environmental considerations are a matter for those who are suffering fromenvironemntal damages (thus, global warming is a global problem). They should not be used as a means of preventing willing sellers from contracting with willing buyers. After all, the alternative ("picaresque poverty") is hardly a laudable outcome.

Socio-politics of Water

Tim asks

I'd be interested in your thoughts on how you deal with the broader cultural/society impediments to dealing with changing water use patterns.

For example, in Queensland Australia, there is a cotton farm with a water allocation that is literally bigger than Sydney Harbour that the government has long wanted to buy out. Here the issue is not property rights (as the govt is happy to stump up the cash to buy the property out) but the impact of such a decision on the surrounding community. A town of 10,000 people relies on the presence of the dam as the farm is the major employer in the region.

See for eg: http://www.melaleucamedia.com.au/01_cms/details.asp?ID=35

What are your thoughts for dealing with these socio-political factors ?

I read the article referenced above. Cubbie Station reminds me of the Westlands Water District, a entity known more for its astute manipulation of legal rights than its ability to grow crops to feed the humans who subsidize its existence. Take this example:

The genius behind Cubbie is gritty general manager John Grabbe, a former Water Resources Commission officer who went from being an advisor “on irrigation layouts for farmers” to being responsible for the largest privately owned irrigation layout in Australia, possibly the entire Southern Hemisphere.

The statistics are now becoming familiar – enough storage to swallow Sydney Harbour and around 12,000 hectares of merrily evaporating water. Up to half a million megalitres of water a year for the grand total of $3700 a year when farmers up the river pay up to $30,000 for just 1000 megalitres.

So, besides this impression, what are my comments on water transfers and community? First of all, the water-bandits that build dams or stake claims have almost no impact on community. Although silly government policies allow them to stake claims to vast quantities of water, there are few "communities" in the areas where that water is supposed to land: It's no fun living in the middle of a desert -- no matter what your water rights are. (Imperial county has a population of 150,000 people but controls 70 percent of California's rights to water from the Colorado River.) Second, real communities can suffer when water is sold to outsiders, but sales have to be big -- selling only 30 percent of water has not led to a negative impact on life for farmers in Palo Verde Irrigation District.

Bottom Line: Although some communities may be adversely affected by water transfers, it seems that more communities use water transfer rules as an excuse to get fat "compensation" checks for reallocating water that they never wanted, needed or used. The state could counter this by reallocating water rights every 5-10 years among users. Valuable access would mean that those who had the best uses of water would pay for it -- and get it -- and communities would grow in the best palces -- not places that legislatures "befriended" with water.

California Bay-Delta Authority RIP?

The California Senate has voted to end funding, claiming that $5 billion spent to date was wasted on programs that have done nothing to improve the condition of the Sacramento-San Joaquin River Delta.

I know nothing about the Authority. Did it do any good? for the Delta? Please comment.

IID Survives

Last month, I mentioned that Imperial Irrigation District (IID) was facing partition into separate power and water companies (something that would end cross-subsides from power to water and from Coachella to Imperial Valley), but it appears that IID management has managed to negotiate a cease-and-desist from Rep Garcia.

Garcia faced the tricky task of reconciling the interests of the people of Coachella and the business interests of Imperial -- two groups she represents -- and she managed to do so by punting: Her "solution" is a typical mix of meetings, committees, agendas and other non-actions that will produce a lot of paperwork and press-releases (see press releases in the article) without disturbing the fundamental balances of power and payments. A pity.

Bottom Line: IID is still far from 21st 20th century business practices. As a result it will continue to squander its natural resources and impede proper economic decisionmaking in the region.

Wastewater

Anonymous asks me to comment on:

Greywater (methods, options, funding, laws)

Impacts of funding for small stormwater catchment versus upgrading city-wide systems ie would rain gardens make a realistic impact if funded and supported?

city-wide drug test by testing the effluent (research up in seattle or portland I think)

Lots of interesting topics here. Let me begin by linking to earlier posts on graywater, the legality of cachements and drugs in water.

Gray-water* (alt. grey-water -- I can't spell) is the runoff from kitchens, showers, etc. Some people want to re-use that water in their gardens so as reduce their use of fresh/clean tapwater. I am all in favor of the idea, but others are not. A public-health worker told me that graywater can contain fecal matter and other nasties that wash off your body and/or hands in the shower or sink. I tend to think that these fears are overblown. Those impurities are no doubt in the water (and detectable in tests), but they are probably "familiar" impurities that people are not worried about. Just as you may reuse the same cup or bottle many times between washings, many people are not upset about walking on lawns (or eating food) that is irrigated with runoff from their own households. OTOH, industrial-level runoff (or worse -- sewage-spreading), can spread heavy metals, hormones (see drugs in water), etc. from people that you are not happy to share germs with. The difference is not just an irrational taboo -- we are immune (or acclimated) to our own germs but do not play well with the germs of others. (Do you want to wipe your nose with someone else's handkerchief?)

Second, should cities spend more money on local cachement systems and less money on city-wide systems? I think yes, if only because one size does not fit all (in runoff and many other systems). Perhaps a hilly area produces more runoff than a flat area and should have more cachement infrastructure in the area. The way to reconcile this idea with political districts is by allocating a fixed $x to every area and then let them spend that money to maximize local conservation according to the local geography. (Alternative -- allocate $x/unit conserved.) Note that I am not favoring rain gardens over some other "technology" -- there is no best solution for all places.

Third, city-wide drug tests are an interesting idea. Besides their interest to sociologists (i.e., how drugged-up is a city?), there is little benefit in using them for policy. That's not to say that politicians wouldn't like to use them for policy (punish Seattle for pot-smokers but ignore sex hormones in San Francisco?), but I think that they are a political minefield. (A lot of drug abuse involves prescription drugs, and many interest groups like it that way.)

Bottom Lines: Public authorities should make it easier (permits, etc.) for people to install domestic graywater systems. Run-off programs should be centrally-funded and locally managed. Testing for drugs in the water is fun, but useless. Address the supply and demand for drugs instead.

* Not to be confused with black-water (sewage), blue-water (navies), white-water (rafting or Clintonian scandals), Gold-water (politicians), etc...

Freshwater Ecosystems

[via YubaNet.com] A comprehensive map and database of the world's freshwater ecosystems.

"Freshwater ecosystems are the least studied parts of our natural world - they are like vast unexplored libraries, brimming with information," said World Wildlife Fund's Robin Abell, who headed the study. "Freshwater Ecoregions of the World allows scientists and non-scientists alike to gain a better understanding of this world and help guide efforts to save these systems and species before they are lost."

[snip]

- Excessive water use for agriculture, industry, drinking and livestock are placing freshwater ecosystems in 55 ecoregions [of 486 total] under high stress, threatening the species and habitats.

- In another 59 ecoregions more than 50 percent of their area has already been converted from natural habitats to cropland and urban areas.

Baikal Warms

Today is Mother's Day, and Mother Nature is not very happy to see Lake Baikal warming up. Why should we care?

Lake Baikal is the grand dame of lakes. In 1996, the United Nations Educational, Scientific and Cultural Organization (UNESCO) declared it a "World Heritage Site" because of its staggering biological diversity. It boasts more than 2,500 plant and animal species, most found nowhere else, including the world's only exclusively freshwater seal.

The lake actually contains 20 percent of the world's fresh water and could hold all of the water in the United States' Great Lakes combined. It is the world's deepest, most voluminous and oldest lake, at 25 million years old, which predates the emergence of humans.

[snip]

The data on Lake Baikal reveal "significant warming of surface waters and long-term changes in the basal food web of the world's largest, most ancient lake," according to the researchers. "Increases in water temperature (1.2°C since 1946), chlorophyll a (300% since 1979) and an influential group of zooplankton grazers (335% since 1946) have important implications for nutrient cycling and food web dynamics."

The scientists conclude that the lake now joins other large lakes, including Superior, Tanganyika and Tahoe, for which contemporary warming trends also exist.

"But temperature changes in Lake Baikal are particularly significant as an integrated signal of long-term regional warming, because this lake is expected to be among those most resistant to climate change due to its tremendous volume and unique water circulation," they note.

Bottom Line: Climate change has not only been happening for a long time, but its effects are being felt in the most diverse places. If we do nothing, we will lose our most vulnerable resources (biodiversity hot spots). If we are able to respond effectively to global warming, we will be lucky to get away with only minor (but irrevocable) damage.

Golf in the Desert

This story discusses a "solution" to water supply problems -- a $70 million pipeline to bring Colorado River water to the golf courses and reduce demand on groundwater. What was the problem?

In the past, the district had been unable to supply golf courses with all the recycled water they needed for irrigation, especially in the summer.

[snip]

When there's not enough recycled water available, golf courses have to use groundwater - the valley's drinking water - for irrigation

Assuming the golf courses paid the $70 million (!), this pipeline will increase "permanent supply," which will also increase demand. How? Before the pipeline, pumping would rise and fall with the season (and gas prices); with the pipeline, a fixed amount of water can be had at a low cost (besides the $70 million) that is unlikely to rise and fall with local conditions. If, for example, water supplies are tight, water authorities will not be able to increase pumping prices (via taxes) to reduce the quantity demanded.

Bottom Line: This project -- by reducing the options for responding to changing conditions of supply and demand -- will not only fail to "fix" supply problems but will also make a crisis more-likely: When a supply shock does eventually hit, demand will be higher than now and stressed supplies will not not be able to respond (at all/fast enough) to mitigate damage. (But those golfers will sure have a good time!)

Special Interests

Fixed Carbon asks:

What is the distinction between the "people" and the subset of them that form a "special interest." It seems that this discussion could benefit from some serious discussion of ethics. Rhetoric?

When I use those words, I refer to the literature of collective action, which examines how easy it is for a small group to coordinate itself against a larger group. If, for example, corn farmers want to get a law passed that helps them (e.g., ethanol), they can lobby/bribe the Congress for a subsidy that costs the average citizen $5/year more but delivers concentrated benefits to the corn farmers (the corn industry, actually) of $50,000/person/year. In this case the special interests (farmers) take advantage of everyone else (the people).
Note these additional features: Most collective actions reduce overall welfare (the size of the pie) in the course of delivering a bigger chunk of the pie to the smaller group. Second, collective action is much easier when special interests need only convince a single authority (i.e., politicians) to change the distribution of goodies. Lobbying market participants (e.g., grocery stores to raise the price of corn to consumers) is far harder than politicians because there are too many stores to convince and competition gives the stores an incentive to defect from any agreements to raise prices to consumers. (The defecting store can increase market share by dropping the price.)

Bottom Line: Special interests have existed forever. The only "solution" to them is to transfer decision-making from small groups (e.g., politicians) susceptible to special interest lobbying to disaggregated groups that are harder to lobby (e.g., market participants).

Who Needs Bottled Water?

Very Funny. WARNING -- over the top voices!



See this one too. Funnier, but has some swearing -- and 400 babies...

Desalination -- OUCH!

This harsh editorial says that desalination has no clothes:

The 7-page-letter, dated June 27, 2007, was a “Notice of Incomplete Application” for a Coastal Development permit and cited numerous instances where Poseidon had given incomplete information or made dubious claims about permits, environmental effects, environmentally friendly alternatives and costs related to the project in response to a similar request for information a year earlier. Nearly 2-years later, the information is still not forthcoming, according to the CCC’s Environmental Scientist, Tom Luster, who wrote the letter.

Poseidon’s desalination plant would take publicly owned ocean water, convert it to tap water, and sell it back to the public for a profit. Organized opponents to the project criticized the company for ignoring key environmental impact issues and questioned whether the plant would ever be built, considering rising costs of fossil fuel and electricity needed to operate it, and a lack of buyers for the expensive water-as high as $2,000 per acre-foot-it would produce.

Poseidon told the city of Huntington Beach that the project would cost (Poseidon) about $150 million in capital to build and promised it would produce water for sale at around $800 per acre-foot, but that amount was based on government subsidies that might not materialize.

Bottom Line: I am sympathetic with desalination pilot projects, but big projects should wait. The subsidies that make any of those projects "feasible" also make their economic questionable. Poseidon should set up the project with its own money and then see what price it can charge in competition with local water supplies -- without subsidies. Assuming no environmental harm (big assumption), they will either succeed or fail, but public money should not keep them from failing.

Biofuels

Cellulosic ethanol here and algae here

On the first blog, I said "we would be closer to cellulosic if the congress had not decided (after appropriate bribe giving) on corn as the input of choice. The best energy policy is one that is technology neutral. Tax carbon and then let the inventors find the cheapest way to solve the problem."

China -- Danger and Opportunity

The Economist warns that the government may get more than it bargained for from nationalist protests. As Chinese citizens learn how to organize and protest against foreign criticism (e.g., Tibet), they are also learning skills that can be turned against their own government's incompetence and corruption. The most touchy subjects are property (illegal seizures) and the environment (pollution from "friends of the State):

Last year nature appeared to vindicate Mr Wu. Soon after his arrest, the lake was choked by toxic algae fed by the phosphates from the human and industrial waste that had been poured into the water and its tributaries. For more than a week, the stinking growth disrupted the water supply of 2m people living on its shores. It was one of China's biggest environmental scandals since the Communist Party came to power. In Wuxi, the city closest to Mr Wu's home in Fenshui village, residents queued to buy bottled water. The Yangzi River was diverted to flush the algae out.

Amid an internet-fuelled uproar, officials promised to close down polluting factories and clean up an area once legendary for its beauty. But in late March blue-green blooms were again found along the southern shore. Such growths are rare so early in the year. Officials admit that despite their clean-up efforts the water remains at the lowest grade in China's water-quality scale, unfit for human contact, and that another “big bloom” is possible this year.

[snip]

For all the central government's green talk, a complex web of local interests sometimes linked with powerful figures in Beijing often frustrates efforts to deal with the problems that lead to such unrest. Wu Lihong's campaigning around Tai Lake threatened factories, the governments that depend on them for revenues and the jobs the factories provide.

The benefit of democracy is that it forces leaders to deal with problems of citizens. (Mr. Wu, btw, should get the Nobel Peace Prize.) As China grows wealthy, citizens with rice in their belly and children to consider are asking the right question, "How is our government serving us?" Often, they are finding a government Party that serves itself. And they are getting pissed off.

Bottom Line: Governments everywhere should work for citizens, not special interests. Although the problems in China indicate a government that is not serving its people, we (people in "developed" countries) also suffer from incompetent and/or corrupt government. Keep voting.

Radioactive Water

Uranium mining at the Grand Canyon (nice view!) will probably lead to pollution in the Colorado River (glowing tap water for Southern California)

On public lands within five miles of Grand Canyon National Park, there are now more than 1,100 uranium claims, compared with just 10 in January 2003, according to data from the Department of the Interior.

In recent months, the uranium rush has spawned a clash as epic as the canyon's 18-mile chasm, with both sides claiming to be working for the good of the planet.

Environmental organizations have appealed to federal courts and Congress to halt any drilling on the grounds that mining so close to such a rare piece of the nation's patrimony could prove ruinous for the canyon's visitors and wildlife alike.

Mining companies say the raw material they seek is important to the environment, too: The uranium would feed nuclear reactors that could -- unlike coal and natural gas -- produce electricity without contributing to global warming.

And uranium is in short supply. In recent years, mines closed in Canada and West Africa, yet the United States as well as France and other European countries have announced intentions to expand nuclear power. Predictably, the price of uranium has soared -- to $65 a pound as of last week, from $9.70 a pound in 2002.

In the five Western states where uranium is mined in the U.S., 4,333 new claims were filed in 2004, according to the Interior Department; last year the number had swelled to 43,153.

I hope that the Bureau of Land ManagementLivestock and Mining gets top dollar from miners. Pollution should be expensive.

Bottom Line: Scarce resources attract conflict over allocation. Allocation to "special" groups or through administrative procedures means misallocation. Allocation should be frequent (as in annual allocations of water), cautious (as in mines) and competitive (as in markets or auctions). Fail to do this, and you can get long-term and harmful misallocations to special interests. Nature loses, the Public loses.