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Cadiz Inc. Statement on Center for Biological Diversity Lawsuit Against the Bureau of Land Management Regarding 2017 Cadiz Project Evaluation

Category : News

11.28.17  |  Today, as expected, the Center for Biological Diversity (CBD) filed a lawsuit against the US Department of the Interior and US Bureau of Land Management (BLM) challenging BLM’s recent review of the Cadiz Water Project’s proposed use of an active railroad right-of-way for its water conveyance pipeline and appurtenant improvements that provide critical railroad benefits to the host railroad. CBD previously sued the Santa Margarita Water District, the County of San Bernardino and Cadiz in California’s State Court system, challenging the adequacy of environmental review under the California Environmental Quality Act (CEQA) and the County’s approval of a groundwater management plan for the Project. All California Superior and Appellate Court opinions issued over four years from 2012 – 2016 have denied CBD’s claims and validated the Project’s approvals and environmental review in their entirety. The Company issued the following statement upon learning of CBD’s new case against the federal government:

“The Cadiz Water Project is a California environmentally-reviewed, approved and judicially-validated project that will safely and sustainably provide new water for 400,000 people and bring jobs and economic opportunity to local labor, veteran and disadvantaged communities without harm to the environment.

The Center for Biological Diversity and its co-litigants have lost every case they have previously brought challenging this safe and sustainable project, and have now put themselves in the incredible and untenable position of opposing the safest, most environmentally sensitive route for our pipeline – a disturbed existing active railroad corridor – in their naked attempt to delay water and jobs for Southern California.

The action of the Interior Department last month rescinded a controversial 2015 evaluation of the Project’s proposed use of a railroad right-of-way for its pipeline by the previous administration. The flawed 2015 evaluation was widely opposed by Democrat and Republican members of Congress, railroads, labor, agriculture and infrastructure companies, because it failed to apply the law and broke with long-standing federal policy encouraging less impactful co-location of infrastructure in railroad right of ways.

The new evaluation issued by the US Bureau of Land Management in October 2017 correctly applied applicable law, returned to long-established federal policy and was widely supported. Rather than challenging this new determination – one which actually protects federal lands – CBD could be working with Project proponents to provide needed water and aquifer storage in Southern California and a host of environmental benefits. Instead, CBD is pursuing a flawed legal strategy that appears to only benefit its fundraising efforts.

We are not a party to this lawsuit and will not comment directly on the merits. Rather, we note that for nearly a decade CBD and its allies have made multiple factually unsupported claims about the Project that have been rejected by every public agency and Court of Law that has ever considered them. We expect the same outcome in this instance.”

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News: Valley Voice: Cadiz Water Project has followed rules, process

Category : News

Our state’s landmark California Environmental Quality Act (CEQA) is one of the most rigorous environmental laws in the nation. Unlike federal environmental regulations, CEQA goes beyond identifying environmental impacts, requiring that they be mitigated to a level of insignificance. By utilizing a process that must consider all opinions, CEQA ensures that certified projects are actually safe for the environment and worthy of moving forward.

That’s why a recent Desert Sun editorial, “California officials must maintain pressure on Cadiz aquifer project” was disappointing. Its call for state officials to target the project didn’t detail the CEQA process we completed and the safeguards and enforcement provisions imposed during the process and upheld by the courts.

The Cadiz Water Project will create a new water supply for 400,000 Californians by conserving groundwater before it is lost to evaporation in the eastern Mojave Desert. The watershed that brings groundwater to the project area is twice the size of the entire Coachella Valley and contains more water underground than Lake Mead, America’s largest reservoir. The project would capture less than one-half of one percent of this groundwater annually before it evaporates, to safely provide a new water supply.

During Cadiz’s public CEQA process, all comments and studies, including those brought forward by opponents, were evaluated and incorporated into the Project’s Environmental Impact Report. After two public agencies approved the EIR and the Project, the approvals were challenged, but upheld in Superior Court and then sustained by the California Court of Appeal against every claim. No further studies were ordered, or approvals changed. Still, the Desert Sun editorial again raises environmentalists’ claims that the project could “severely compromise” desert ecosystems, even though the CEQA approvals and the Court opinions concluded that the project, as designed and managed, would not harm the desert environment. The editorial also omits that San Bernardino County separately reviewed the Project and will regulate operations to prevent adverse impacts under a court-approved plan.

The Desert Sun editorial also misses the mark on the recent federal certification regarding the project’s use of a railroad right-of-way. It’s true that the government withdrew an evaluation crafted during the Obama administration, but that assessment was already under investigation by Obama’s own Interior inspector general and the pre-Trump Congress, and criticized by lawmakers from both sides of the aisle.

Our proposal to co-locate water infrastructure in a railroad right-of-way is consistent with 100 years of federal practice. It complies with the policy of past administrations, including President Obama, who allowed infrastructure to be installed along railroad tracks without secondary permitting. Such co-location doesn’t avoid environmental review; it avoids environmental impacts to open federal lands — a virtue, not a vice.

California has rightly taken a stand against federal policies and decisions that threaten our environmental laws. But that’s not the case here. Instead, the federal government is supporting local infrastructure permitting and control of resources, which is better for California.

Sadly, opponents of the Cadiz Project, buttressed by one U.S. senator, have continually distorted the public record and moved the goal posts, dissatisfied by the outcome at every point along the way. But, the truth remains: The Cadiz Project has always followed the law and policy at the local, state and federal level, and we will continue to do so as we deliver a new, environmentally sustainable water supply for Southern California.

Courtney Degener, whose family has lived in the Coachella Valley for more than 25 years, is a vice president at Cadiz Inc. overseeing the company’s external affairs. Email her at cdegener@cadizinc.com

http://www.desertsun.com/story/opinion/contributors/valley-voice/2017/10/27/valley-voice-cadiz-water-project-has-followed-rules-process/807391001/

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Cadiz Inc. Announces US Bureau of Land Management Has Concluded Cadiz Water Project Is Within Scope of Railroad Right-Of-Way 

Category : News

BLM ALSO WITHDRAWS CONTROVERSIAL 2015 CADIZ EVALUATION

(LOS ANGELES, CA) – Today, Cadiz Inc. [NASDAQ:CDZI] (“Cadiz”, the “Company”)  announced that the United States Bureau of Land Management (“BLM”) has issued a letter (“BLM Letter”) to the Company, the Santa Margarita Water District (“SMWD”) and the Arizona & California Railroad (“ARZC”) finding that the Cadiz Water Project’s proposed use of the existing ARZC right-of-way to construct a pipeline and related railroad improvements “furthers railroad purposes” and concluding that the Project is within the scope of the original right-of-way grant.  The BLM Letter also formally rescinds the agency’s controversial and widely criticized October 2015 evaluation of the Project’s proposed ARZC right-of-way use, an evaluation that sought to keep the Project from utilizing this sensible corridor. As a result, no further federal permits or authorizations are required for Project construction within the ARZC railroad right-of-way.

“The company is very pleased to receive this letter from the BLM regarding the Project’s proposed use of the railroad right-of-way,” said Scott Slater, Cadiz President and CEO. “We have long maintained that the 2015 evaluation by BLM was wrong on the law, wrong on the facts and inconsistent with the policy driving co-location of infrastructure in existing rights-of-way to minimize project footprints and environmental harm.” Slater continued “We are grateful for the determined bi-partisan Congressional effort that sought a deeper, fair and unbiased review of the Project’s proposed use of the right-of-way by BLM and are tremendously satisfied to finally have this matter resolved.”

The BLM Letter follows multiple requests from bi-partisan congressional representatives and a broad coalition of national labor organizations, water districts, railroads, rural communities, farmers and numerous stakeholders that have urged congressional action to clarify the scope of railroad rights-of-way over federal lands and criticized BLM’s October 2015 evaluation of the Cadiz Water Project for its lack of consistency with historic policy encouraging co-location of infrastructure in railroad rights-of-way.  The October 2015 evaluation not only impeded the Cadiz Water Project, but also set a troubling precedent for thousands of miles of existing uses of railroad rights-of-way in the West.

BLM revisited the October 2015 evaluation relying on a recently issued Memorandum Opinion by the US Department of the Interior Solicitor’s Office and recent case law and concluded that  “authorizing the proposed activity falls within the scope of rights granted to the Arizona and California Railroad (ARZC) under the General Railroad Right-of-Way Act of March 3, 1875 (1875 Act), and therefore does not require authorization by BLM.”

The BLM Letter also separately finds that the Project furthers railroad purposes, following a factual review of the railroad benefits of the Project: “As the railroad itself describes, these component elements of the Cadiz project all provide critical benefits to the railroad that facilitate elements of its operations. Accordingly, consistent with the incidental use doctrine, the benefits associated with the Cadiz Project further a railroad purpose.”

To view a copy of the letter, click HERE.

With the receipt of this definitive determination by the BLM, the Company will now turn its attention to final engineering design, contract arrangements with its participating agencies and a conveyance agreement with the Metropolitan Water District of Southern California in accordance with applicable law.

Background

The BLM Letter arrives following interaction over nearly a decade with the US Department of the Interior (“DOI”) regarding the proposed use of the ARZC to co-locate the Project’s conveyance pipeline while constructing necessary and related improvements for the railroad. In 2008, Cadiz entered a 99-year lease with the ARZC to utilize the right-of-way for the Project’s water pipeline and also agreed to provide necessary railroad improvements. In January 2009, DOI determined that the Project could proceed within the right-of-way without additional federal permits and was within the scope of the ARZC right-of-way.  BLM policies and appropriations language authored by Sen. Dianne Feinstein (D-CA) subsequently created a unique requirement for the Project to demonstrate that it “further railroad purposes, at least in part,” and was therefore within the scope of the right-of-way.

In response to submittals offered by Cadiz, SMWD and ARZC over several years, the former Director of the BLM California office mailed a letter to Cadiz in October 2015, which reversed DOI’s January 2009 opinion, rejected the judgement of the railroad as to critical railroad benefits, and concluded that the Project was outside the scope of the right-of-way.  BLM California reached this conclusion even though elements of the Project furthered railroad purposes. To reach its conclusions, the October 2015 evaluation applied a new standard that the pipeline and railroad benefits must “originate” from a railroad purpose. This new standard, however, was inconsistent with then applicable M-Opinion, controlling law, and evaluations for existing infrastructure within the thousands of miles of railroad rights of way throughout the West.  Consequently, the 2015 evaluation clouded thousands of third party rights and railroad uses within railroad rights-of-way in the Western United States.  If the 2015 evaluation were universally applied, other third party uses could require retroactive and future supplemental permitting from the federal government, despite more than 100 years of historic practice to the contrary in the West.

Almost immediately following BLM’s controversial 2015 evaluation it was subject to bi-partisan criticism and heightened scrutiny by lawmakers. Subsequent responses by the BLM to Freedom of Information Act (“FOIA”) requests revealed that BLM officials who reviewed the Project may have been biased in their analysis and communicated details on the timing and outcome of the review to people with ties to the Wall Street investment community.  In 2016, the US Department of the Interior Inspector General and the US House Oversight Committee launched investigations into the activities of third parties and conduct of the BLM, but have not yet issued their findings. We continue to look forward to the conclusion of those investigations.

About the Cadiz Water Project

The Cadiz Valley Water Conservation, Recovery and Storage Project is an innovative, California water project that will create a new water supply for approximately 400,000 people by conserving renewable groundwater presently lost to evaporation at the base of a vast Mojave Desert watershed. The Project is a public–private partnership between Cadiz Inc., the largest private landowner in the area, and public water providers in Southern California to provide a new, reliable water supply of 50,000 acre-feet per year for 50 years across the region without harm to the environment. Operations will be governed by an extensive, state-of-the-art groundwater management plan imposed and enforced by San Bernardino County. The Project has been extensively studied, publicly-reviewed and approved under California’s stringent environmental laws and the Project’s permits have been upheld in California’s court system. In addition to adding a new reliable water supply in Southern California, Project construction is expected to create and support thousands of jobs and generate close to $1 Billion in economic activity. Over the long-term, the Project will create $6 billion in savings for water users throughout Southern California.

About Cadiz

Founded in 1983, Cadiz Inc. is a publicly-held renewable resources company that owns 70 square miles of property with significant water resources in Southern California. The Company maintains an organic agricultural development in the Cadiz Valley of eastern San Bernardino County, California and is partnering with public water agencies to implement the Cadiz Water Project, which over two phases will create a new water supply for approximately 400,000 people and make available up to 1 million acre-feet of new groundwater storage capacity for the region.  Cadiz abides by a wide-ranging “Green Compact” focused on environmental conservation and sustainable practices to manage its land, water and agricultural resources. For more information, please visit www.cadizinc.com

FORWARD LOOKING STATEMENT: This release contains forward-looking statements that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of the Company and the financing activities of the Company.  Although the Company believes that the expectations reflected in our forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.  Factors that could cause actual results or events to differ materially from those reflected in the Company’s forward-looking statements include the Company’s ability to maximize value for Cadiz land and water resources, the Company’s ability to obtain new financing as needed, the receipt of additional permits for the water project and other factors and considerations detailed in the Company’s Securities and Exchange Commission filings.

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Company Update on California State Lands Commission Letter Regarding Old Project

Category : News

Last week, the Company received a letter from the California State Lands Commission (“State Lands”) regarding the Cadiz Groundwater Storage and Dry-Year Supply Program (“2002 Cadiz Program”), a project we pursued in partnership with the Metropolitan Water District of Southern California from 1997-2002. The letter informs the Company that the State of California owns property that would have been crossed by the 2002 Cadiz Program’s pipeline route. On Sunday evening, the Los Angeles Times reported on the letter after having received it from unidentified sources. The letter communicates that a lease would be required to cross property owned by the State of California.  According to the letter, such a lease would be subject to the approval of the Commission and such approval may require additional environmental review in accordance with CEQA.

The State Lands letter does not discuss the current Cadiz Valley Water Conservation, Recovery & Storage Project (“Cadiz Water Project”), which plans to construct its pipeline within an existing railroad right-of-way and was fully reviewed in accordance with the California Environmental Quality Act (CEQA) starting in 2011.  It refers to the 2002 Project even though State Lands was notified of the 2011 Cadiz Water Project’s CEQA process, as were over 100 state, federal, local and regional agencies, yet, unlike countless agencies that did comment, State Lands did not.  Moreover, they did not assert any role as a responsible agency over the Cadiz Water Project, nor participate in the numerous workshops that were open to the public and all agencies. The CEQA review for the Cadiz Water Project was fully certified and then upheld by the California Court of Appeal in 2016. The EIR is final and conclusive on all parties properly notified. The Statute of Limitations to challenge the EIR has passed.

The State Lands letter notes that a parcel, which is approximately 200 feet wide and one-mile long and may have been crossed by the 2002 Cadiz Program, is owned by the State and may require a lease to be crossed.   The State Lands in question are not material to our ability to complete the Cadiz Water Project.

As we have stated, the Company’s attention is focused on securing a withdrawal of the controversial evaluation by the BLM California office in 2015 of our planned use of the railroad right-of-way.  The 2015 BLM evaluation was contrary to law and policy and has been under investigation since 2016 when it was revealed that the BLM’s review was potentially tainted by the disclosure of communications between BLM employees and people that might profit from trading of the Company’s securities. Various stakeholders, a bi-partisan group of Congressional members and the Company have supported a reversal of the 2015 BLM evaluation on the merits since its issuance.

The Company is confident we will ultimately receive validation of our position that the Project is within the scope of the right-of-way.   We look forward to providing clean and reliable water to 400,000 Californians as soon as possible.

A copy of the letter from State Lands is available here.

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