Our Water Matters

Arizona’s lax water regulations a boon for Saudi-owned company 

The Butler Valley is a groundwater basin in western Arizona about 120 miles west of Phoenix. Although groundwater use in urban areas is tightly controlled under Arizona’s Groundwater Management Act of 1980, rural areas like the Butler Valley are largely unregulated. According to an investigative report in the Washington Post titled “How a Saudi firm tapped a gusher of water in drought-stricken Arizona,” the basin is conservatively estimated to hold about 6.5 million acre-feet of groundwater, which is “enough to supply all single-family homes in the Phoenix area for about 14 years.” The Butler Valley is also considered critical to meeting future water needs “because it’s one of the few basins from which water can be transported to growing urban areas. And … most of the land there is government-owned.”

The valley has been in the news a lot lately because of a Saudi-owned company called Fondamonte that is leasing land from the state of Arizona for about $25 per acre, or about $86,000 annually, to pump as much groundwater as it wants. This water is being used to irrigate alfalfa which is then shipped to the parched Arabian Peninsula as feed for cattle there. The value of the water alone has been estimated at several million dollars a year. And this doesn’t even account for how old the water is. According to Rob O’Dell, a reporter for the Arizona Republic, “This is ground water that was laid down probably 70,000 to 80,000 years ago.” With little natural recharge and scarce precipitation, any groundwater pumped from the Butler Valley is essentially mined and never replaced.

Oddly, Arizona never required Fondamonte to report how much it was pumping until very recently. Based on interviews and documents obtained through public-records requests, the Washington Post found that state planners had repeatedly attempted to institute a requirement that leaseholders report their annual pumping volumes. But time and again, these efforts “ran headlong into a view, deeply held in the rural West, that water is private property that comes with access to land, rather than a public resource.” This all-too-common conflict –– between safeguarding groundwater resources for growing population centers and the conviction that groundwater is the property of individual landowners that should be dedicated to livestock and crops –– is not unique to Arizona. But it will ultimately have to be resolved there or Arizonans could likely suffer the very fate that brought the Saudis to their state in the first place. 

According to reporting by the Quincy Institute for Responsible Statecraft, “Saudi Arabia has almost completely exhausted its own groundwater through unrestricted pumping.” A 2004 investigation revealed “that the kingdom’s water sources were nearly depleted because ‘wealthy farmers had been allowed to drain the aquifers unchecked for three decades.’” The kingdom was ultimately forced to prohibit alfalfa production in 2016 and Fondamonte’s expansion into Arizona is viewed as part of a “strategy for conservation of the kingdom’s water resources.” 

The picture that emerges, according to the Post, is that “Arizona’s lax regulatory environment and sophisticated lobbying by the Saudi-owned company allowed a scarce American resource to flow unchecked to a foreign corporation.” As news of the sweetheart deal made headlines and the drought throughout the region intensified, Fondamonte’s leases became a flashpoint in Arizona’s 2022 midterm elections. Holly Irwin, a local county supervisor, alleged that “foreign companies have come to take our water because they don’t have any left back home.” Newly elected Governor Katie Hobbs, a Democrat, has taken a harder line by canceling two of Fondamonte’s leases. But the company still controls 32 drilling permits in the state and is estimated to pump about 18,000 acre-feet of water per year.

Kathy Ferris, a water attorney and former director of the Arizona Department of Water Resources, has asserted that Arizona’s water issues are bigger than just one company. “The real issue is allowing big industrial agriculture … not just foreign corporations … but American corporations, to move into these unregulated areas and pump as much groundwater as they want.” As the state struggles to find a commonsense solution, Arizona Attorney General Kris Mayes has urged all parties to consider the obvious: “We cannot afford to give our water away frankly to anyone.”

Trey Gerfers is a San Antonio native and serves as general manager of the Presidio County Underground Water Conservation District. He is also chairman of the Presidio County Water Infrastructure Steering Committee and president of the Marfa Parks and Recreation Board. Trey has lived in Marfa since 2013. He can be reached at [email protected]