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Pico Holdings/Vidler Water Co.

Mining the West’s water for golf and profit

 April 25, 2003

Vidler Water Co., the water brokerage subsidiary of Pico Holdings, Inc., is a self-described “leading participant in the water industry in the southwestern United States.” The company boasts ownership or acquisition rights to more than 50,000 acre-feet of saleable water rights in Arizona and Nevada, as well as more than 1 million acre-feet of water storage capacity in Arizona and California.   Pico, the parent corporation, also has remnant holdings in the insurance industry and international investments in oil, financial services and railroads. Vidler’s sister company, Nevada Land & Resource Co., is the largest private landowner in Nevada.

Vidler’s strategy is simple: the West is dry, so buy up as much water as possible, sit back, and see just how high the price will go. The more water Vidler sells, the more money it makes, which is to say Vidler’s business plan is in direct contradiction to water-wise development and conservation progress. Increased consolidation and control of Western water by Vidler and other companies will accelerate aquifer mining, foster unwise water-wasting development and hasten the transformation of arid ecosystems into barren dust bowls. And as Vidler and other private companies acquire market power over Western water, they will be in a position to gouge consumers. If Westerners like what manipulative greed-driven corporations have done with electricity, they’ll love what Vidler and its ilk will do with water.

Pico executives, well aware of public opposition to water profiteering, argue Western water is being allocated inefficiently and vow that their activities promote “beneficial” developmentsthat will direct water to its “highest and best use.”

But “beneficial” for who? And what is “highest and best use.”

Westerners increasingly reeling from the impacts of a severely over-allocated Colorado River might reasonably assume that “beneficial” developments putting water to its “highest and best use” would be those that acknowledge water’s scarcity, and that reflect a long-term philosophy wherein water is managed wisely in the broadest possible public interest.

Pico/Vidler, on the other hand, is in business to make money. According to the corporation’s financial statements, Vidler’s biggest single transaction in 2002, accounting for $5.2 million and 43 percent of Vidler’s total revenues, was the sale of groundwater and land to a golf course development near Scottsdale, Ariz.

In 2001, the company’s biggest single transaction, accounting for $9.4 million and 62 percent of Vidler’s total revenues, involved the sale of water rights to an energy company in Arizona. Vidler gushes to its shareholders that it purchased the “assets” for only $4.4 million, “resulting in a $5 million cash surplus.”

That is exactly the kind of needless middleman water profiteering that should alarm consumers—particularly as Vidler expresses fond hopes of eventually developing substantial water contracts with municipalities. The more control that Vidler and other private speculators get over water, the more water is going to cost.

Most people, when they hear about water being privatized for profit, tend to think it’s wrong. Most people tend to think of water as a necessity for life and a shared resource that should be managed in the long-term public interest. A resolution drafted by the United Nations Committee on Economic, Social and Cultural Rights declares water a human right.

Pico/Vidler takes a radically different view. As Pico CEO John Hart helpfully explains on the company’s website, water—far from a human right—is, rather, an “undervalued asset” with “the potential for long-term superior rates of return.” In other words, to Pico, water isn’t a scarce resource that must be carefully managed in the public interest, but a commodity to be speculated on and sold for the highest possible profit.

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