At first sight, the scrubby land around Lost Hills in California’s Central Valley looks like the worst place in the world to grow anything. The climate is unrelentingly hot, dry and smoggy. The soil frequently leaches toxic white selenium salts. And the area is dotted with oil wells – the tail end of a century-long oil boom that has sucked away precious water resources, brought benzene and other toxins to the surface and each year generates tens of billions of gallons of chemical-laden wastewater, some of which has been found to be stored in unlined pits threatening the integrity of the desperately depleted local groundwater supply.

Yet Lost Hills is the centre of an extraordinary almond and pistachio empire – crops now nicknamed “the devil’s nut” in some quarters, because they require more water than seems decent in the midst of an epochal drought. Stands of trees stretch out for miles in every direction along the interstate highway and the California Aqueduct, and right up to the property line separating the holdings of Paramount Farming, the local agribusiness powerhouse, from Chevron, Seneca, Aera and other companies prospecting for what’s left of the region’s heavy, sludgy oil.

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More fields are being planted all the time. Stewart Resnick, perhaps the most powerful agricultural entrepreneur in California who owns Paramount, expects US pistachio production alone to reach one billion pounds around the end of the decade – double where it was five years ago. In the 1980s, the Lost Hills area had no nuts at all.

Nothing, not even a continuing drought, seems likely to stop him because he has direct access to a vast, supposedly public water resource pumped in from northern California and is lobbying for more via his extensive network of political contacts that include, notably, the state’s senior senator, Dianne Feinstein.



It’s a situation that, in many ways, defies the laws of nature. While the rest of the Central Valley is gagging for water, Resnick’s irrigation canals are full, the pumps on his land are humming and his trucks can hardly move the crop fast enough to processing plants and thence to the booming Chinese export market.

Conservation and environmentalist groups are incensed – and growing more concerned now that California’s governor, Jerry Brown, has proposed a multibillion-dollar tunnel project to bring more water from the Sacramento river delta down to Resnick’s empire in Kern County and over the Tehachapi mountains to Los Angeles.

They are calling it a boondoggle and an outrage that will feed the insatiable thirst of Paramount’s nut trees, disturb vital ecosystems in the San Joaquin Sacramento delta and, they fear, leave taxpayers footing the bill for the construction costs, estimated at anywhere between $15bn and more than $60bn.

Facebook Twitter Pinterest A sign in the Lost Hills. Photograph: Andrew Gumbel

“Like the oil barons of old, now it’s the water barons that rule the San Joaquin Valley,” said Conner Everts, executive director of the Southern California Watershed Alliance, who has campaigned on water issues for 40 years.

At a protest this week outside the Los Angeles offices of Paramount’s $4bn parent company, Wonderful – whose holdings also include Fiji Water, Teleflora and the Pom Wonderful range of pomegranate juices and other products – activists dressed up in almond masks and held signs that read: “More Resnick Almonds = less H2O for CA.” “Who are they wonderful for?” protester Ann Shabtay said of the proposed tunnels. “Not for us, not for the taxpayers.”

Everts and other campaigning environmentalists hope they can lobby powerful regional politicians including the Los Angeles mayor, Eric Garcetti, to tell Governor Brown they don’t need the extra water because they are working hard to conserve and save locally. Los Angeles cut consumption by more than 15% over the past year, and the state as a whole reduced urban usage by 27%. But the tunnels are popular in Kern County, where farmers and residents are so desperate for water they don’t mind where it comes from or who pays for it.

“Is Growing Food Wasting Water?” read one sign dotted around Lost Hills. Another said: “No water = no jobs.” With the public comment period on the tunnels project now extended to the end of October, a major battle is in the offing.

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A coalition of environmental activists recently proposed spending a fraction of the cost of the tunnels – no more than $1bn – to take all the land in the western San Joaquin Valley including Resnick’s land out of agricultural production, for which it is unsuitable in the first place. They estimate that alone would save California about 455,000 acre-feet, or about 150bn US gallons of water a year – not much less than Los Angeles consumes.

“The western valley is one of the most inappropriate places to farm,” said Adam Scow, California director of the group Food and Water Watch. “Not only is it the hottest, driest part, the selenium contamination requires extra water to flush it out. Much of that land should be retired.”

However logical that might sound in terms of public management of a dwindling resource, Scow and his partners know they are shooting for the moon. A famous book about water wars in the American west put it perhaps most succinctly: “Water flows uphill towards money.”

Resnick and his wife Lynda do not just have money. They are reaping the benefits of a closed-door deal struck in 1994 that has proved to be the very foundation of their agricultural empire and has endured despite legal challenges. The state’s department of water resources gave them de facto control of the Kern Water Bank, a large groundwater storage facility, fed in part by publicly subsidized northern Californian sources, that was originally intended as a fallback in times of drought and also a powerful political instrument with which to control agribusiness and property development.

The Resnicks have not just been able to draw on the Water Bank to build their nut-tree empire. They are also empowered to sell any surplus from the bank to public water agencies for profit.

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A tiny handful of elected politicians have protested about this over the years, but many more have benefited from the Resnicks’ largesse – nearly $5m in campaign contributions to state and federal office-holders over the last 20 years.

Gray Davis, who ended up being recalled as governor in 2003, in part because he was viewed as being in hock to a number of special interests, was a particularly loyal political contact who appointed Resnick to head his agriculture and water transition team. Senator Feinstein, who faced only token opposition, received just under $10,000 from the Resnicks for her 2012 re-election.

The effect on the region’s groundwater supply is difficult to gauge exactly, because California passed its first law regulating groundwater usage only last year and that won’t go into full effect until the 2040s. However, the state already regarded Kern County’s groundwater to be in a state of “critical overdraft” in 1980 and the situation has grown far worse since.

The latest data from an ongoing study by Nasa this week showed that California’s Central Valley is sinking by as much as two inches a month because of groundwater pumping that has only grown more frenetic as the drought, now in its fourth year, has persisted. One of the worst affected areas is just 35 miles north of Lost Hills.

Everts, the Southern California Watershed Alliance director, said the problem was much bigger than just the Resnicks. He blamed the dysfunctional allocation of water and the enthusiasm for building another vast infrastructure project to pump water from north to south on what he called the “hydrological brotherhood” – a confluence of interests that includes politicians looking for signature projects, engineers, builders and financiers as well as big Central Valley growers. At its simplest, he said, the problem was that California’s water agencies were in the impossible position of being responsible for selling water while at the same time somehow being expected to save it.

“It’s not a surprise they haven’t figured out how to make money out of using less water,” Everts said. “They need incentives, not tunnels.”