Arizona Cancels Saudi Land Deal After "Unchecked Amounts Of Groundwater" Siphoned For Alfalfa

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by Tyler Durden
Wednesday, Oct 04, 2023 - 11:20 PM

Arizona is finally cracking down on foreign companies drinking their milkshake, after Gov. Katie Hobbs (D) canceled a deal which would give a subsidiary of a Saudi Arabian company free groundwater.

To review; Over the past several years we've noted that as the American southwest has suffered under severe drought conditions (last winter notwithstanding), foreign-owned farms have been siphoning water from underground aquifers to grow water-thirsty crops like alfalfa, which ultimately end up overseas in order to feed cattle and other foreign livestock. Saudi Arabian companies swooped in following a 2018 ban on the growing of alfalfa due to the strain on the water supply.

One such company, Fondomonte, grows alfalfa in Arizona for export to the Middle East. While there is no firm data on exactly how much water the company uses, a State Land Department report revealed that Fondomonte is estimated to be using as much as 18,000 acre-feet (22 million cubic metres) each year - enough water to supply 54,000 single-family homes.

In April, Fondomonte agreed to rescind two new drilling applications after Attorney General Kris Mayes highlighted 'inconsistencies' in the company's applications.

According to La Paz County supervisor Holly Irwin (speaking to CNN earlier this year), Middle East agriculture companies "have depleted their [water], that’s why they are here," adding "That’s what angers people the most. We should be taking care of our own, and we just allow them to come in, purchase property and continue to punch holes in the ground."

In fact, 80% of Arizona has no laws governing how much water can be drained by corporate megafarms, nor is there any way to track it.

In September, Arizona state lawmaker Ruben Gallego (D) put forth a bill to stop the practice, called the Domestic Water Protection Act of 2023. The law would impose a 300% tax on the sale of water-intensive crops grown by foreign companies in the state.

"The well guys and I have never seen anything like this before," said longtime resident of Wenden, Arizona, Gary Saiter, who said a UAE-based company, Al Dahra, had been tapping into an underground reservoir which stores water built up over thousands of years.

[R]ural communities in La Paz County know the water is disappearing beneath their feet.

Shallow, residential wells in the county started drying up in 2015, local officials say, and deeper municipal well levels have steadily declined. In Salome, local water utility owner Bill Farr told CNN his well – which supplies water to more than 200 customers, including the local schools – is “nearing the end of its useful life.” -CNN

According to Saiter, water in the town well has been plummeting - with the depth-to-water level dropping from around 100 feet below the surface in the 1950s to around 540 feet in 2022 - far beyond what an average residential well can reach.

Hobbs cancels lease

On Monday, the governor's office announced that an investigation in La Paz county found that Fondomite has been in violation of its lease since 2016.

"It's unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease," said Hobbs.

According to Mayes, the AG, "This decision to protect Arizona's precious groundwater resources and uphold the integrity of our state land trust is a good step in the right direction for the future of Arizona," adding "However, we must take additional steps to urgently protect Arizona's water resources – especially in rural Arizona."

Hobbs now says she won't renew Fondomonte's three other leases in the state which expire next year, saying that the contracts were "not in the best interest of the Trust’s beneficiaries due to excessive amounts of water being pumped from the land—free of charge."