Cadiz shares slump as California lawmakers eye Mojave Desert water project

Reuters News
Posted: Sep 01, 2017 3:19 PM

By Noel Randewich

SAN FRANCISCO (Reuters) - Shares of water resource developer Cadiz Inc lost nearly a fifth of their value on Friday as California lawmakers considered a bill that could put the brakes on the company's plan to pump water from the Mojave Desert.

California's Senate Appropriations Committee was scheduled to meet and either approve or reject Bill AB 1000, known as the California Desert Protection Act, according to Allison Ruff, spokeswoman for Assembly member Laura Friedman, who introduced it.

The bill would require additional state government certifications that could stop plans by Cadiz to capture groundwater that it says would otherwise evaporate under 34,000 acres of land it owns in the eastern Mojave Desert.

Aimed at supplying water for 400,000 people, the Cadiz Water Project has already been approved by two California public agencies and withstood court challenges.

Under President Donald Trump, the Bureau of Land Management in March undid two Obama-era directives preventing Cadiz from using a federal railroad right-of-way to build a water pipeline.

California Governor Jerry Brown on Thursday sent a letter to legislative leaders urging them to pass the bill. On Friday, California Lieutenant Governor Gavin Newsom sent a similar missive.

"At a time when the Trump administration is threatening to roll back environmental protections, and the future of our nation's protected national monuments - including the Mojave Trails National Monument - are under threat, the proposed Cadiz project to pump Mojave Desert groundwater merits additional scrutiny," Newsom wrote.

Cadiz did not immediately respond to a request for comment, but in a July statement it said, "AB 1000 would overrule the judgment of local agencies even where California's courts have already reviewed and approved their decisions."

If the Senate Appropriations Committee approves the bill, it would face additional legislative hurdles before Brown could sign it.

Cadiz's stock was down 18.2 percent at $9.98.

(Reporting by Noel Randewich; Editing by Steve Orlofsky)