An L.A. company hopes that its scaled-down proposal for a water storage project in the Mojave Desert is small enough that environmentalists and politicians won't kill it as dead as they did last time.

But so far, there's little indication that may happen.

In fact, soon after Cadiz Inc. announced plans to store and pump water at a desert underground reservoir, U.S. Sen. Dianne Feinstein who played a key role in defeating a much larger version of the project in 2002 told the Business Journal that if the proposal by Cadiz risks environmental harm to the aquifer, she will use all her power to block it.

"I am deeply concerned," Feinstein said in a statement issued in response to a Business Journal inquiry. "Although I have not yet seen any formal proposal, I will be looking into this very carefully.

"If Cadiz intends to drain the water from under the desert, destroying the Mojave ecosystem, I will do everything I can to stop it," she said.

Her concern was spurred by the recent announcement by Cadiz that it was launching a smaller-scale version of a controversial desert water storage plan that collapsed seven years ago.

The recently announced $200 million plan, which if approved could begin in 2013, would have Cadiz storing water from the Colorado River in an aquifer underneath the company's land holdings in a remote portion of the Mojave. Cadiz would then release and sell the water as needed to four municipal water agencies and a private water supplier serving portions of four Southern California counties.

The announcement of the plan's revival sent Cadiz's stock soaring 45 percent to $12.50 per share.

Cadiz has several things going for it. For one thing, the project's backers point out that the state has a dwindling supply of water.

Also, the company is touting potential environmental benefits of its new plan. It would transfer significantly less water than under the previous proposal. And the company claims the project would reduce the need to pump water from the ecologically stressed San Francisco Bay-Sacramento River Delta region to Southern California.

What's more, Cadiz and its politically connected founder and chief executive, Keith Brackpool, have won support from Gov. Arnold Schwarzenegger and many Democratic elected officials.

"When it comes to water in California, it's all about politics," said Neil Berlant, portfolio manager of PFW Water Fund, who has tracked Cadiz for several years as an independent analyst. "Whether this project succeeds will depend on how effective Cadiz is at playing the political game."

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