As arid Arizona scrambles to quench the thirst of a rapidly expanding population, officials are eying the Sonoran seaside in Mexico as a potential wellspring for future demand.
But whether the Mexican state and federal governments would be on board with the arrangement – and the hefty infrastructure such a project would require – remains to be seen.
“I am going to defend the interests of Sonorans. That is my responsibility,” Sonora Gov. Alfonso Durazo said at a recent press conference, describing the plans as “utter absurdity.”
At the core of the project, proposed by Israel-based IDE Technologies, would be a $5 billion desalination plant rooted in the resort city of Puerto Peñasco. While some of the treated water would go to Sea of Cortez coastal towns, most of it would be piped 200 miles north to the Phoenix area.
‘It’s a complicated project’
“We’re still very early in this process,” Chuck Podolak, the newly hired director of the Water Infrastructure Finance Authority of Arizona (WIFA), an independent agency established by the state legislature last year, told The Hill. “It’s a complicated project, with complicated politics and permitting on both sides of the border.”
Cross-border tensions began mounting at the end of January, when Durazo denied any involvement in the plans, appearing to backtrack on previous comments. He was fielding criticism from Sonoran businessman Óscar Serrato, who had resurfaced comments made in December about the governor’s meetings with IDE.
At two separate hearings on Dec. 20, representatives from IDE relayed to WIFA board members and Arizona state legislators the warm reception from Durazo that their project had received.
“We had meetings with the state of Sonora. We have received the support both from state and federal,” Erez Hoter-Ishay, manager of an IDE-led consortium called the Arizona Water Project Solution, said at a Joint Legislative Water Committee session that afternoon.
Hoter-Ishay said he met with Durazo in July “to answer all the questions about the environmental issues” and make sure that the governor was comfortable with the plans.
The Sonoran government then “came back with the support,” as well as some asks, which the IDE-led team accounted for in the project’s financial models, Hoter-Ishay explained. State officials see the project as “strategic,” he had said at a public WIFA meeting four days earlier.
Following the consortium’s presentation, board members of WIFA adopted a resolution to engage in formal conservations about the proposed Arizona Water Project Solution.
The resolution calls for WIFA’s professional staff to conduct an analysis of the plans, after which the board can “discuss a non-binding term sheet” for the purchase of imported water.
A century of water from the Sea of Cortez
The project proposal, submitted to WIFA a week prior to the board meeting, outlines an intent to withdraw, desalinate and move water from the Sea of Cortez – with a goal of providing Arizonans with up to 1 million acre-feet annually “for 100 years and more.”
The project’s first phase, which could be online by 2027, would generate up to 300,000 acre-feet of water annually, per the proposal. Only later would the capacity expand to the upper limit of 1 million-acre feet, which would be enough to fulfill the needs of 3 million households.
At the project’s core would be a desalination plant in Puerto Peñasco, about 60 miles southwest of the Arizona border. While this city, as well as Hermosillo, Sonoyta and Nogales, would receive some water, most of it would be piped across the border, according to the plans.
Four pumps located on the Mexican side of the border would bolster the uphill portions of the journey, powered predominantly by solar and battery storage, the consortium explained. This arrangement allows the project to circumvent Arizona’s Organ Pipe Cactus National Monument, according to IDE.
Within a Phoenix-area Arizona Water Distribution Facility, an on-site reservoir would be able to store four days of water for customers and include a tie-in to the Central Arizona Project – a 336-mile aqueduct that diverts Colorado River water across the state.
Buyers would adhere to a fixed price structure, while WIFA would place $750 million in a temporary escrow account to demonstrate the state’s long-term commitment, per the proposal.
Hoter-Ishay had stated at the Dec. 20 meeting that the consortium would be submitting its plans the next day to the Bureau of Land Management for review under the National Environmental Policy Act.
However, The Hill could find no record of such a filing, aside from a draft copy of the document obtained from WIFA, and IDE declined to comment about the submission.
Sonora governor offers support – and then takes it back
Just two days after the WIFA board authorized the resolution permitting continued discussion about the plans, Durazo, the Sonora governor, appeared to be on board with the project.
He discussed “the possibility of selling desalinated water to the United States” at a Dec. 22 press conference, touting the Sea of Cortez’s location just “100 kilometers from the border.”
Stressing that Arizonans “need water,” the governor cited one “condition” for the project’s development: it also must help “solve the water problem” of Sonoran cities.
“If there is consent from our counterpart, I will be willing to add my efforts to help the project materialize,” Durazo said.
Mexican President Andrés Manuel López Obrador also recently expressed support for the plans, which would require federal authorization, as water is considered a national resource in the country.
Responding on Jan. 24 to a question about the desalination facility, López Obrador said that if there is no opposition and if assessments show that the plans pose no problem to the environment, then “we are authorizing everything.”
But when Serrato, the Sonoran businessman, resurfaced IDE’s claims at the end of January, Durazo denied his participation in the plans. Acknowledging that he had met with IDE, he stressed that “at no moment” did they discuss the supply of water to Arizona.
“I received the representatives of an Israeli company that came to sell technology for the desalination of water, in view of the eventual necessity that the state of Sonora might have,” Durazo said.
He stressed that water in Mexico “is a federal issue” and that any exchange would need to occur through a binational agreement. Such action would be a “matter of national security,” his office added in an accompanying Twitter thread.
“Given the lack of ethics of the company that tried to turn the courtesy with which it was received into a negotiation for the sale of desalinated water, the Government of Sonora will never deal with it again,” Paulina Ocaña, a spokeswoman for Durazo, said in a statement.
“This was a project between the former governor of Arizona and the former governor of Sonora,” Ocaña added.
Slamming both Sonoran and Arizonan leaders for “a total lack of transparency,” Serrato argued that Durazo “should have sat down and listened to the people of Sonora.”
“I don’t believe him and obviously he knows I don’t believe him,” Serrato said, noting that the day after Durazo’s Jan. 31 press conference, he saw the governor at a business roundtable.
“And he went and said and told me, ‘I answered you,'” Serrato added.
Across the border, things are also unclear
Arizona’s handling of the plans has been equally opaque, according to Serrato. The businessman described his surprise that a Republican-led governorship and legislature would “push for a project of this size and this controversial in the last days of their administration” before current Gov. Katie Hobbs (D) took over.
During the Dec. 20 WIFA board meeting, Hoter-Ishay said that his presentation comes “after more than three years of working, surveying and planning on both sides of the border.”
Among those with whom he recalled meeting, in addition to Durazo, were former Arizona Gov. Doug Ducey (R), Sens. Mark Kelly (D-Ariz.) and Kyrsten Sinema (I-Ariz.), former Sen. Jon Kyl (R-Ariz.), former Arizona Speaker of the House Rusty Bowers (R), and other leaders of relevant state agencies.
At the WIFA board meeting, Bowers confirmed that he had signed a non-disclosure agreement (NDA) about the project. Bowers said that when he was asked about it on the Arizona House floor, he responded, “I’m under an NDA, and I can’t talk about it or any other as yet.”
“But I knew it was exactly what we all know right now. There’s all the work that was done,” Bowers said at the WIFA session. “We need the water. And we need it as fast as we can get it.”
At the Joint Legislative Water Committee meeting later that afternoon, former state Sen. Lisa Otondo (D) questioned this specific NDA, noting that Bowers was serving on the WIFA board, although in a non-voting capacity.
“For a legislator to sign an NDA with a company that is going to benefit from that piece of legislation stinks of collusion,” Serrato said. “In Mexico, that will be a crime.”
The Hill has reached out to Bowers for comment.
Regarding the consortium’s interactions across the border, Hoter-Ishay said that the group has yet to request any official resolution from Mexico but stressed that it does intend to do so.
“The reason is to have everything in parallel, both in Arizona and in Mexico,” he said at the legislative session.
Although WIFA’s voting board members granted unanimous approval on Dec. 20 to the resolution to begin discussions on the project, participants raised many objections over the course of the three-and-a-half-hour meeting.
Non-voting board member and former State Senate President Karen Fann (R), who was instrumental in passing the legislation that led to WIFA’s creation, expressed concern that the process has not been “open to anybody and everybody” and that it “is a little rushed.”
“Our legislators wanted to make absolutely sure that everything was transparent, that it was vetted properly, that it was done above board and out front,” Fann said.
Otondo, who also took part in the joint legislative session, told WIFA board members that she questioned the “speed and lack of transparency” in a process that “reeks of backroom deals.”
She said she was worried about the board moving forward with considering such a project before WIFA – a new agency – has even completed its own procurement rules.
At a last-minute public meeting just four days before, WIFA Chairman David Beckham had cited similar concerns, even thanking members “for gathering on such short and unexpected notice.”
Beckham attributed the “exigent timing” to a call he had received from the Arizona Commerce Authority indicating that “there was urgency involved” – even though he had only received the consortium’s 50-page proposal a few days prior.
“That was the first time I have heard any type of urgency to act this promptly,” Beckham said at the time.
Asked for further comment on behalf of the consortium, a spokeswoman for IDE Technologies told The Hill that “IDE isn’t able to discuss the project at this time,” and that “when the timing is better, we hope to revisit this conversation.”
Moving forward could take time
Despite the urgency with which the board vote took place, Podolak, WIFA’s director, said that his professional review of the IDE proposal – required by the resolution before the board can entertain a non-binding term sheet – could take some time, as he is still building his staff.
Podolak began his role as the agency’s director at the beginning of January, and he is in the process of hiring additional staff.
“There’s a lot of focus on what the project proponents brought, but that’s really not what the board approved,” he said. “The board approved a thorough due diligence, and then a chance – if that meets all the criteria – to begin discussions.”
The state legislature last year established both WIFA and an accompanying $1 billion Long-Term Water Augmentation Fund, with the vision of “using state dollars to invest in projects that bring new water supplies to Arizona,” according to Podolak.
The law requires WIFA – whose appointed board was seated only in November – to develop rules and processes before proceeding with any project, Podolak explained.
Asked whether there would be a bidding process for the desalination project, he said that WIFA has been “getting a lot of informal outreach” and has an application available online.
“It’s formal to the extent that we have a place for people to outreach to us, to collect those, to have a record of all those documents and ideas,” Podolak said.
Noting that IDE’s presentation occurred following “a very defined and specific request of the board,” Podolak acknowledged that “there was some discussion by the board members about not having a full process in place.”
He said he characterizes the board’s decision to sign the resolution, however, as “a direction to us to do the due diligence on the process.”
“I do not see this as a first come, first serve,” Podolak said. “I think we will look at the IDE proposal along with any other good proposals that we get and bring the recommendations to the board about which ones they should fund.”
Desalination up for debate
Before any water departs from the Sea of Cortez – let alone travels 200 miles to Phoenix – this expansive cross-border project would need to overcome a long list of bureaucratic hurdles in multiple states and countries.
And it’s not the only desalination project under consideration in the region.
The International Boundary & Water Commission, a U.S.-Mexican partnership that administers binational water resources, began studying the possibility of binational desalination on the Sea of Cortez in April 2020.
The main difference, however, is that the water generated by such a facility – likely financed by a U.S. state – would go directly to Mexican farmers in the region, in exchange for some of Mexico’s Colorado River entitlement.
These binational desalination talks are ongoing, Tom Buschatzke, director of the Arizona Department of Water Resources and a U.S. negotiator in the process, confirmed to The Hill.
Buschatzke, who is also a non-voting WIFA board member, raised several environmental issues to IDE at the Dec. 20 meeting, including questions as to how the brine – the residual salt solution left from the desalination process – would be dispersed into the sea.
Serrato, who was not present at the meeting, expressed similar concerns, noting that the currents capable of dispersing that brine are not as strong in the Sea of Cortez as they are in the Pacific Ocean, where IDE also runs multiple desalination plants.
“The Sea of Cortez is a very ecologically fragile environment,” Serrato said.
Meanwhile, because about 70 percent of Mexico’s gross fishing production comes from this sea, Serrato said such activity could be disruptive to the industry and the region’s food chain.
“I’m not opposed to desalination when that technology evolves to be environmentally feasible and economically feasible,” he said.
Jennifer Martin, a programs manager at the Sierra Club, warned WIFA board members about the habitat fragmentation that can occur following pipeline construction.
The project, she argued, would “shift the ecological burden for Arizona’s unwillingness to confront our water limits to our neighbors to the south.”
But other members of the public argued in favor of the plans – such as Terri Sue Rossi, of the Arizona Water Company, who described a need for “a diverse water supply portfolio.”
“It is not the panacea – it is a piece of the puzzle, and it is a piece of the puzzle that is worthy of exploration,” Rossi said.
Craig MacFarland, mayor of Casa Grande, said that his region’s agricultural industry is feeling a “sense of urgency,” while Tony Smith of Pinal County said that a lack of water is forcing farmers to fallow their fields.
Acknowledging that “Arizona needs water,” Serrato told The Hill that the state’s “best shot” would be to “build a desalination plant on the Pacific side of Mexico and then transport the waters.”
“They’re trying to balance whatever sources of water they have with their predicted growth, and they do not have enough water for growth,” Serrato added, noting that desalination will be necessary, but that it’s the last option officials should consider.
Podolak, meanwhile, reiterated the complicated nature of the project and the fact that it will necessitate getting a variety of permits on both sides of the border.
He emphasized the importance, however, of continuing to engage in negotiations and discussions in Mexico – both in Sonora and with the federal government in Mexico City.
And while Podolak expressed his support for Arizona’s continued investment in conservation, stormwater recovery, water reuse and other “lower-hanging fruits,” he stressed that it’s not an “either-or” situation.
“Just because we’re doing those, I don’t think that means that we can’t plan for the future,” he added.
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This story was originally published February 20, 2023, 6:00 AM.