The Cadiz Valley is an unlikely spot for an agricultural empire. A windswept Mojave Desert outpost best known for its spectacular sand dunes and dry lake beds, the valley receives only about 4 inches of rain a year and is seared by 120-degree temperatures during the summer. The nearby hamlet of Bagdad qualifies as one of the continent's driest spots, having once gone without recorded rainfall for 767 days. Left to its own devices, the landscape around Cadiz would support only such hardy vegetation as creosote bush and cactus. Instead, the Cadiz Valley sprouts luxuriant rows of oranges, lemons and table grapes. The combination of corporate muscle and geological accident that made this botanical peculiarity possible also may open a new era in California water development, one that holds either great promise or environmental peril, depending on which set of experts you believe. Located roughly midway between Mojave National Preserve to the north and Joshua Tree National Park to the south, Cadiz lies just off historic Route 66. It once served as a stop on the Atchison, Topeka and Santa Fe Railroad's main line between Arizona and Los Angeles. The rail stop also gives its name to Cadiz Inc., a publicly held company established in 1983 that owns about 37,000 acres in the remote Cadiz and Fenner valleys of eastern San Bernardino County. The company also has 21,000 acres of prime farmland in the San Joaquin and Coachella valleys. Through its wholly owned subsidiary, Sun World International, Cadiz is one of California's leading agribusiness companies and one of the nation's largest growers and marketers of table grapes, stone fruit and specialty crops. However, the company's most valuable asset may be neither crops nor land, but the resource hidden beneath them. The Mojave was not always the dry, forbidding place it seems today. As recently as 15,000 years ago, it was cooler and wetter, its lush valleys dotted by lakes fed by meltwater from glaciers of the most recent ice age. As the climate grew warmer and drier, the lakes evaporated and the rivers either dried up or changed course. Not all that water disappeared, however. Vast quantities had percolated underground and remain trapped there today. Cadiz Inc.'s Mojave land lies atop one such aquifer, an underground oasis the company estimates may hold 20 million acre-feet of water (an acre-foot, 325,900 gallons, is about what two Southern California families consume in a year). Conveniently, the aquifer lies only 35 miles from the Metropolitan Water District's (MWD) Colorado River aqueduct, a 242-mile-long channel that delivers more than half the water the agency wholesales to 26 member districts serving 17 million residents of coastal Southern California. The aqueduct these days is filled to its capacity of 1.3 million acre-feet annually. It will not be long, however, before the aqueduct carries about half that much. For decades, California has been taking more than its legal entitlement of Colorado River water, with MWD the primary beneficiary of the state's diversion of "surplus" flows unclaimed by Nevada and Arizona. But under an agreement brokered earlier this year by the federal government among users of the river, MWD has until 2015 to figure out how to cope with the loss of about 600,000 acre-feet of Colorado water annually. Underground storage is a critical component of MWD's strategy. It delivers Colorado River water for storage in aquifers belonging to the Coachella Valley Water District and Desert Water agency in return for their State Water Project entitlements. The Met also has an agreement with the Central Arizona Water Conservation District to store surplus water from Lake Mead in groundwater basins during wet years. In dry times, Arizona will pump the groundwater while MWD uses a portion of Arizona's Colorado River entitlement to keep the aqueduct to Southern California full. At first glance, the 50-year agreement signed earlier this year between MWD and Cadiz Inc. seems similar to the MWD strategies outlined above. The contract allows MWD to store up 1 million acre-feet of Colorado River water at any one time in the aquifer beneath Cadiz's desert property, and to withdraw up to 150,000 acre-feet a year. The agency can undertake this store-and-pump scenario as often as it wants. The MWD also has the right to buy 1.5 million acre-feet of "indigenous water" — water that has been deposited in the aquifer by natural means — over the life of the contract. The motivation for Cadiz is clear — the company is not making money from farming, having reported net losses of $22.5 million last year and $8.6 million in 1999. It could make as much as $500 million from the deal with MWD. The Met's motivation also is clear, given projected population increases in its service area and the impending reduction of Colorado River water. Environmental groups, however, fear that the quest for profit and the intensity of urban demand will produce irresistible pressure to maximize pumping regardless of its impacts on the Mojave's fragile ecosystem. By arranging to withdraw more than they have deposited, MWD and Cadiz have raised the possibility of widespread harm in an arid environment where groundwater-fed springs and seeps are crucial to rare plants and wildlife, such as bighorn sheep and desert tortoises. A drop in the water table — certain to occur unless natural recharge from rain and snow equals the "indigenous water" withdrawal — could dry up those critical sources, some of them inside federally protected wilderness areas in Mojave National Preserve. The Sierra Club, the National Parks Conservation Association (NPCA) and other groups have threatened litigation. Experts hired by Cadiz and MWD say the natural recharge rate is sufficient in the aquifer's 1,300-square-mile watershed to offset the proposed pumping. Scientists for the U.S. Geological Survey disagree, estimating that Cadiz and MWD will pump up to 25 times as much as can be replaced by precipitation each year. If the USGS experts are right, pumping could produce another unhappy side effect. Two "dry" lake beds nearby are actually kept damp by water rising to the surface from underground. If the water table falls, the lakes truly will dry out, producing vast dust storms of the kind experienced at Owens Lake on the eastern side of the Sierra (see CP&DR Environment Watch, September 2000). Cadiz and MWD have pledged to construct an elaborate monitoring system with sensors and wells to track groundwater levels, providing what their experts say will be ample warning if the project begins depleting the aquifer. What is not clear, however, is what would happen if those warning bells ring. Once Cadiz and MWD have invested hundreds of millions of dollars in pipelines, pumps and wells, and have committed thousands of Southern California households to water from the Cadiz aquifer, it seems unlikely that a few thirsty sheep and tortoises will shut down the water delivery. Contacts: Fiona Hutton, Cadiz Inc., (310) 899-4700. Jack Safely, MWD, (213) 217-6981. Steven Krefting, NPCA, (510) 839-9922. Elden Hughes, Sierra Club, (562) 941-5306.