The wolf of the West

May 03, 2022 View in browser   By Ry Rivard and Debra Kahn THE BIG IDEA The banks of the Colorado River near Willow Beach, Ariz. | Julie Jacobson, File/ AP Photo DROUGHT 'LOOKING GRIM' — Far from Washington, the unfolding water crisis in the west can be hard to follow. It's one similarly dire projection after another for Southern California's two major water sources: the Colorado River, which serves 40 million people in the U.S. and Mexico, and the rivers flowing from the Sierra Nevada mountains that have been diverted toward Los Angeles. Climate change has sapped them both. But for the Metropolitan Water District of Southern California, the nation's largest water supplier, the time for crying wolf is over. Last week, the agency ordered 6 million of the 19 million people it serves to quickly cut their use to keep demand from exceeding supply in the next few months. Metropolitan was created to bring water to L.A. from rivers hundreds of miles away. Now those supplies are dwindling to emergency levels as the Sierra faces dry year after dry year and decades of overuse and drought chip away at the Colorado. "At first glance, Met looks like it has the most diversified water supply of any water supply in the world," said Brad Udall, a water and climate scientist at Colorado State University. "What we're finding out is that climate change is affecting broad swaths of the globe, and the American southwest is one of these places where we're seeing lots of aridification." Metropolitan's response has created another potential problem in that the cuts don't affect everyone equally, which could further test its image as a regional water supplier and bedrock of stability. Some areas are being spared for now because they don't depend on water from the Sierras. Instead, they continue to depend largely on Colorado River water, which is also dwindling but doesn't face the same immediate shortages. Metropolitan's general manager, Adel Hagekhalil, said it's his "No. 1 priority" to be able to get Colorado River water to more parts of his system that depend on Sierra water. But that's not sustainable, either. "I wouldn't feel like I won the lottery if I had Colorado River water," said Felicia Marcus, who led the State Water Resources Control Board during Gov. Jerry Brown's administration. "They've been in a 20-year drought, and it's just looking grim." On the other side are those who think California can build its way out of drought and are worried about the political fallout from supply cuts. "I think you're going to see a lot of that discord in areas where you have elected water directors," said Brett Barbre, a former member of the Metropolitan board who represented Orange County and supports more water infrastructure, including tunnels that would have brought more water south from the Sierra or dams that could store water. A big but: State politicians have been warning of the system's problems — and trying to build more infrastructure — for decades. During both his stints as governor, Brown tried to build projects that would send more Sierra water south, but he couldn't get them over the finish line. Gov. Gavin Newsom isn't crazy about the idea, so while such a project remains theoretically alive, it's also realistically dead. The supply cuts could help the case for desalination. San Diego has already built a desalination plant, and Orange County is looking to build one as well. And several cities, including San Diego and Los Angeles, are looking at recycling projects that could turn wastewater into drinking water. YOU TELL US GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability. A personal note from Catherine: After two wild and rewarding years helping spearhead the Long Game and a new sustainability beat at POLITICO, my time here is coming to an end. Friday will be my last day. I'm grateful to all our devoted readers who helped make this experiment a success, and to my talented colleagues, editor Greg Mott, deputy editor Debra Kahn, reporter Lorraine Woellert and digital producer Jordan Wolman who made the job way more fun. I'll be cheering them on! Reach Catherine at cboudreau@politico.com before she leaves, and the rest of the team at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com and jwolman@politico.com. Want more? Don't we all. Sign up for the Long Game. Four days a week and still free! SHAREHOLDER SCOREBOARD Amazon has reached a voluntary agreement with environmental activists. | Mark Lennihan/AP Photo LESS DRAMA, MORE FILLING — Activists' bids to pressure banks into halting investments in new fossil fuel projects fell flat at corporate shareholder meetings last week. But the push is bearing fruit behind the scenes, as Avery Ellfeldt reports for POLITICO's E&E News. Environmentalists are reaching voluntary agreements with companies to achieve their goals on deforestation and climate lobbying without a shareholder vote. One example: Shareholders filed resolutions at 21 companies asking them to produce reports describing whether their lobbying activities align with the goals of the Paris Agreement to limit warming to 1.5 degrees Celsius or less. Sixteen of the companies — including Amazon.com Inc., Exxon Mobil Corp. and JPMorgan Chase & Co. — have so far committed to producing the reports. "I have never seen in 22 years this high level of companies … coming to the table at least willing to talk to see if there's an agreement to be reached," said Tracey Rembert , an associate program director at the Interfaith Center on Corporate Responsibility, a shareholder advocacy coalition. Read more from Avery here. CORPORATE PROMISES OIL OFFSETS — Oil companies are using carbon offsets that they helped create the rules for, Mike Lee and Corbin Hiar report for POLITICO's E&E News. The environmental trading platform Xpansiv came up last year with a novel approach to cut emissions from oil and gas drilling: It provides detailed environmental data about each cubic foot of natural gas and barrel of crude, enabling more efficient drillers to market their products as "responsibly sourced gas" or "carbon-neutral oil." Producers of oil and gas with leak rates below a certain threshold can also sell carbon offsets for their so-called avoided methane emissions. But BP PLC and Occidental Petroleum Corp. aren't just users of the platform — they're also Xpansiv investors. That means they have interests in both the success of the platform, and some of the transactions that occur on it. Occidental used the platform to enable the sale of its first shipment of "carbon neutral oil" in January. It offset the emissions linked to all 2 million barrels of crude — from extraction to combustion. Some don't like it, for the same reasons blamed for skepticism of the rest of the voluntary carbon market: There's little oversight, the offsets could be bogus and they could help companies avoid more-aggressive climate policies. "Without the right policy to ensure the quality of the offset, it will eventually become a money-generating tool for investors," said Yvonne Lam, head of carbon-capture research at the data firm Rystad Energy. Still: "It's better than the alternative, right?" said Henrik Hasselknippe, who runs Xpansiv's exchange operations and services. "The alternative is to have our current production." More from Mike and Corbin here.   INTRODUCING DIGITAL FUTURE DAILY - OUR TECHNOLOGY NEWSLETTER, RE-IMAGINED:  Technology is always evolving, and our new tech-obsessed newsletter is too! Digital Future Daily unlocks the most important stories determining the future of technology, from Washington to Silicon Valley and innovation power centers around the world. Readers get an in-depth look at how the next wave of tech will reshape civic and political life, including activism, fundraising, lobbying and legislating. Go inside the minds of the biggest tech players, policymakers and regulators to learn how their decisions affect our lives. Don't miss out, subscribe today.     WHAT WE'RE CLICKING — Sierra Club is blaming banks' expansive framing of environmentalists' shareholder resolutions for their failure last week. — A deeper look at that eye-popping moment last month when California hit 97 percent renewable generation — and it did it again on Saturday. — Two large crude oil refineries in the San Francisco Bay area want to switch to producing biofuels. — Here's a primer on the civil rights audits that are gaining steam at big companies.   STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.       Follow us on Twitter Catherine Boudreau @ceboudreau Debra Kahn @debra_kahn Greg Mott @gwmott Lorraine Woellert @Woellert Jordan Wolman @jordanwolman   Follow us

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