Shares of Cadiz Inc. received a boost from news that its planned water storage and conveyance project in the Mojave Desert was included on an infrastructure investment priority list compiled by the presidential transition team.
Cadiz’s project was ranked No. 15 out of 50 priority projects on the list, which was obtained by McClatchy News Service and published in the Kansas City Star and other publications last month.
Cadiz shares jumped 15 percent to $14.60 on Jan. 25 and closed at $14.53 on Feb. 8. They have nearly doubled since President Donald Trump’s election on the hope that the new administration and Congress will prioritize infrastructure projects.
“We are appreciative of the inclusion on any list of priority infrastructure projects,” Cadiz Chief Executive Scott Slater said in a statement. “We are ready to bring reliable water to Southern California and put people to work.”
Slater said by email that he hopes the project’s priority listing would boost the chances that the federal Bureau of Land Management will reverse a decision that at least temporarily blocked the project and potentially opened it up to lawsuits.
He said he was a bit puzzled about how the project ended up on the priority list, since there is no planned federal funding component. The first phase of the project is expected to cost roughly $250 million, to be financed through private construction loans that would be repaid through contracts with water agencies.
Cadiz, based downtown, has been trying for 25 years to develop a water storage and sales project for an aquifer under its 45,000-acre holdings in the Cadiz Valley east of the Marine Corps Air Ground Combat Center Twentynine Palms.
An initial plan to store more than 1 million acre-feet of water in the aquifer was rejected in 2002 by the Metropolitan Water District of Southern California. The company came back in 2009 with a scaled-back plan and has signed agreements with six water agencies to pump up to 50,000 acre-feet of water a year out of the aquifer and send it via pipeline to the MWD-operated Colorado River Aqueduct.
That plan received environmental approvals four years ago and survived numerous legal challenges from environmental groups, which said pumping out groundwater would impact the desert ecosystem. The last of those challenges was exhausted last year when the state Supreme Court denied an appeal.
Environmental groups saw a new chance to challenge the project, however, when the Bureau of Land Management in October 2015 unexpectedly blocked Cadiz from receiving a ministerial approval for its pipeline, thus requiring another complete environmental review and several more years of waiting for a final BLM determination.
Cadiz has been trying for the past 15 months to overturn that decision, rallying support from members of Congress.
It’s unclear just how much weight this priority list will be given now that Trump is in office. Many other lists of priority infrastructure projects have been offered up in recent weeks, including one last week from California.
That list does not contain the Cadiz project, though it does contain another desert project being spearheaded by an L.A.-area company: Eagle Crest Energy’s $2 billion energy storage project at an abandoned mine near Joshua Tree National Park.
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