CALIPATRIA, Calif. -- With 360 days a year of pure, unclouded sun, California's Imperial Valley has the potential to become the Silicon Valley of renewable energy. Assuming, for example, that a technology based on extracting oil from algae proves itself on a commercial scale, this place has much of the right stuff.
It has an overabundance of labor. The arid region bordering Mexico has a 24.5 percent unemployment rate. Of those who are employed, 15 percent work in the agriculture industry, which exists thanks to 1,500 miles of canals and enormous, historic allotments of river water. The main crops are feedstocks like alfalfa and hay and vegetables for human consumption, like lettuce, onions and sweet corn.
"Imperial ranks dead last in terms of economic vitality," Brian Brady, general manager of the Imperial Irrigation District, told potential investors and researchers from China, India, Australia, Spain, France and the United States last week. "We are totally motivated to bring in industry, particularly green industry."
But the key question mark is water. Can the Imperial Valley achieve its goal of becoming the renewable energy capital of the United States while maintaining its farmland?
The challenge for county officials lies in balancing the existing agriculture industry and its defense of entrenched water rights with the desire to draw new jobs in potentially water-heavy industries.
Farmers are leery of their new neighbors
A number of algae companies sprouting up in the area 100 miles east of San Diego are trying to scale up their operations to produce biofuels in mass quantities. While they say they plan to move to wastewater, salt water and other brackish sources, like the nearby Salton Sea, most demonstration and pilot projects are using fresh water, to better identify the hardiest, most oil-rich algae strains. Open-pond operations like Biolight Harvesting also must contend with evaporation rates of up to 5 millimeters per day, or 7 acre-feet a year.
Imperial County is willing to put its water where its mouth is. The Imperial Irrigation District recently approved an allotment of 25,000 acre-feet per year for renewable energy installations over the next five to 10 years, with an additional 75,000 acre-feet possible after five years. That's out of 3 million acre-feet total in water deliveries from the Colorado River -- water rights secured almost a century ago, of which agriculture currently uses 97 percent.
Brady said water was a top concern for foreign investors and businesses. "When we go to China, one of the first questions is, 'Are you sure there's water?'" he said. "We're really fortunate this allotment off the Colorado was secured way back in the '20s. We're committed to it not changing."
The irrigation district conducted workshops with farmers to gain support. But some are still leery of renewables' effect on land and water.
"Water flows where the money is," said Heidi Kuhn, a cattle and dairy farmer who joined researchers, investors and algae growers on a tour of the valley last week. "If algae farming produces more money than commercial farming, you will see water go to algae farmers."
Tough economic decisions ahead
Kuhn warned that farmers might be prickly neighbors. "Stick to the marginal land," she said. "Use our manure; help us deal with the salt.
"If we could look to you as partners in reclaiming dairy runoff, we'd welcome you."
One of the industry's leading scientists, Scripps Research Institute biologist Stephen Mayfield, espoused the same free-market attitude with respect to land-use policy.
"Although it's great for us to sit here and say we're not going to compete with water or food, at $30,000 an acre, that's an economic decision farmers are going to have to decide on their own," he said at last week's Algae Biomass Summit in San Diego, citing estimates from the University of California, Berkeley's Energy Biosciences Institute. "This is America, it's called capitalism, and these decisions are going to be made by someone other than you and I."
In addition to its burgeoning algae farms, Imperial Valley has 17 geothermal plants currently operating and at least 30 other renewable projects in the pipeline. Investor-owned utility San Diego Gas & Electric is building a 500-kilovolt transmission line, known as the Sunrise Powerlink, to the area and expects to use it to meet a state renewable energy target of 33 percent by 2020.
Stirling Energy Systems, which is planning to start construction next year on a 750-megawatt concentrated solar thermal plant in the Imperial Valley, skirted the water issue by using treated wastewater from the town of Seeley. It agreed to pay for an upgrade of the town's wastewater treatment plant in exchange for the water. Overall, the plant will use 33 acre-feet of water annually, low by solar thermal standards, a company spokesman said.
"This isn't agricultural land, and we're using 1,000 times less water than some of our competitors," said Sean Gallagher.