July 13, 2007 Features & Images » Feature Story

Watershed moment 

A former California timber town becomes ground zero in the battle over bottled water

click to enlarge Nestle Representative. Dave Palais speaks to a small group at the site of a planned bottled water plant in McCloud, California. Photo by Lucas Mobley.
  • Nestle Representative. Dave Palais speaks to a small group at the site of a planned bottled water plant in McCloud, California. Photo by Lucas Mobley.

By Christina Ammon

High Country News

McCLOUD, CALIFORNIA – It’s already late morning, but the wide streets are empty. Patty Ballard pulls her ’88 Chevy van into the parking lot of the Shasta Sunset Dinner Train, where she lugs bus tubs for a scant living. Back in the days when McCloud was a booming timber town, the train was laden with logs. Now it’s a mainstay of the local tourism economy, winding diners around the flanks of Northern California’s imposing Mount Shasta.

When the ailing timber industry toppled in 2002, McCloud turned to tourism. But the economic statistics remain as bleak as an empty sawmill: Since the 1960s timber heyday, the town’s population has dropped by half. Per capita income is less than $16,000. Last year, the graduating class at McCloud High School totaled one. Despite the hopeful sheen of espresso shops and bed and breakfasts, McCloud sometimes feels like an emptied-out museum. But things could be different.

In September 2003, the unincorporated town’s governing body — the McCloud Community Service District — signed a contract with Nestlé Corp. allowing it to build a million-square-foot plant and bottle up to a half-billion gallons of local spring water per year for its Arrowhead brand. The plant, which would sit on the old mill site, would employ 240 people, and Nestlé’s fees and payments of $300,000 per year would increase the town’s operating budget by one-third.

In a place where water is so abundant that residents hose their driveways in winter to melt snow and ice, cashing in on what was going to waste seemed like getting something for nothing. Ballard was enthusiastic: “I’ll be first in line for a job,” she said.

But four years later, Ballard still works on the dinner train, and the bottling plant remains no more than a blueprint. Soon after the contract was signed, a group of local citizens questioned the plant’s potential effects on their community — its water supply, its quiet character and its world-class fishing streams. And they were outraged at the terms of the contract, which bound them for the next 100 years. The group won a lawsuit in Siskiyou County Court, and the contract was nullified because it was signed prior to the completion of an environmental review and therefore violated the California Environmental Quality Act. But Nestlé appealed, and won. In May, the California Supreme Court refused to hear the case. But the controversy refuses to die. Now the opponents are attacking the proposal from other fronts. And this little town in Northern California, still traumatized by the timber squabbles of the past, has become the opening battleground in a West-wide war over bottled water.

Americans drink more than 8 billion gallons of bottled water every year, spending more than $11 billion annually on Dasani, Aquafina, Evian and other brands. With a growth rate of 10 percent per year, bottled water is the fastest-growing segment of the beverage industry, surpassing milk and likely to outpace soda in the near future. Bottling plants are popping up everywhere, many in rural areas that boast of pristine spring water.

Though often heralded as a clean industry, water bottlers have not been welcomed in some communities. In Mecosta, Mich., citizens won a lawsuit against Nestlé after proving its operations harmed nearby streams and wetlands. Similar battles have erupted in Florida, Texas and Maine. Activists routinely attack the industry as a whole because of its contribution to landfill overflow and because it commercializes what many see as an essential human right. Still, the fight has been slow to ignite in the West, where communities, often reeling from the loss of one extractive industry or another, have generally welcomed the economic promise of bottlers with wide-open arms.

California is now home to more water-bottling facilities than any other state in the nation. Some suck water directly out of springs; others filter the municipal water supply. Nestlé alone has plants scattered from Calistoga, in Napa County, to the Morongo Indian Reservation on the fringes of Los Angeles. In the northern part of the state, Crystal Geyser, Mt. Shasta Spring Water and Dannon are already in operation.

So, when Nestlé’s natural resource manager Dave Palais first arrived in McCloud four years ago, the stage seemed set. His affable nature and casual dress went over well with locals. But when the five-member district board unanimously signed the contract without public review, the love affair abruptly ended. The town was split down the middle like firewood.

Though bottling was nothing new to Northern California, a confluence of factors had merged in McCloud to galvanize opposition to the Arrowhead plant. In addition to the sheer size of the facility and length of the contract, McCloud is the gateway to Mount Shasta and to celebrated fishing streams, making it a charismatic destination for tourists along the I-5 corridor. Over time, many of its blue-collar residents have been replaced by urbanites attracted to the scenery and the prospect of a quieter and cleaner life. Janet Connaughton, who moved here from Marin, fits that profile. She’s in shock over the contract.

“How did two loggers, two housewives, and a retired insurance salesman get to sell water that belongs to us all?” Connaughton asks, referring to the service district board. She runs a small bookstore, knits in her spare time, and enjoys the town with its mild-mannered residents who wave to each other in passing. Though her first impulse was to flee to a new town, she resisted, and has instead become the leader of the local opposition.

She and her allies are haunted by the thought of a massive facility sitting on the town’s historic mill site, its fluorescent glow intruding on McCloud’s starry nights, and an endless barrage of delivery trucks devastating the mountain silence. Worse, she wonders what the water mining will do to the water table. Nestlé would withdraw 1,600 acre-feet of spring water per year, an amount about equal to the town’s yearly use. Measurements over the past two years indicate that there’s plenty of water to go around — at least 9,000 acre-feet per year flow from the spring. But Steve Bachmann, a local Forest Service hydrologist, says that the unique volcanic hydrology of Mount Shasta, with its lava tubes and springs that can appear and disappear from one year to the next, is poorly understood. No one really knows what effect a severe drought or global warming might have, he says. This uncertainty has drawn California Trout and Trout Unlimited into the fray; the springs feed an important tributary to the McCloud River, a renowned fishing stream and the mainstay of the local tourism economy.

Though the contract requires that Nestlé be treated like any other member of the water district, paying the same rate and subject to the same cutbacks in times of drought, the terms are unsettling. Nestlé can draw up to 1,800,000 gallons of water every day at a cost of just 8 cents for 1,000 gallons. That’s 8 cents for enough water to fill 3,780 Arrowhead 1-liter bottles, each of which can sell for $1.50 or more down at the local convenience store. It’s potentially a huge profit margin, though Palais won’t release an exact figure; it’s protected, he says, “like the Coke formula.” And, for the next 100 years, as the value of water inevitably rises, McCloud will have no chance to look for a better deal: Nestlé’s contract forbids the town from selling water to any potential competitors.

For environmental groups campaigning against bottled water, McCloud makes the perfect poster child. Poised at the headwaters of the Sacramento River, the area sits at a critical juncture for California’s water supply. “Mount Shasta is a symbol of Northern California,” says Ruth Caplan, organizer of the Sierra Club’s Water Privatization Task Force, which fights corporate control of water. The organization uses McCloud as a cautionary tale: Communities should take a closer look at water bottling, activists say, and pass ordinances preventing the bulk export of surface and groundwater. “This is just the beginning,” says Caplan. For her, the war is not over until all communities are granted democratic control of their water.

Still at work on the dinner train, Patty Ballard is worried more about paying the rent for her subsidized apartment and raising her son than about drying wetlands and global warming. “It’s like worrying about Armageddon. I don’t want to think about it. You’ve got all this stuff going through your brain. Is there going to be a big flood? Is the volcano going to blow?” She characterizes the plant’s opponents as urban refugees who want McCloud to be a meditative retreat. Her friend, Sheri Burris, agrees: “McCloud wasn’t meant to be quiet.” Burris has deep roots here; her father worked as the head oiler for the mill powerhouse back when McCloud was a timber town. The big wheel that turned the generator sits inert on the lawn behind the town’s timber museum.

The two friends have formed the McCloud Grassroots Committee; they host meetings with Nestlé supporters that fill Burris’ house. They’ll agree that the contract with Nestlé is a bit long. They’ll admit to some fear of big corporations. But the bottled water is just too good an opportunity to pass up. Burris fears that without it, the town she grew up in will die.

But the opposition won’t go away either, despite the recent blow from the state Supreme Court. Opponents have attacked the draft environmental review, which doesn’t address impacts on fish and aquatic life and leaves a number of other questions unanswered. The county is expected to either hand down a final review and decision, or start the review process over this summer. In the meantime, the “antis” plan to keep fighting, here and elsewhere. They see McCloud as a precedent-setting case that could affect watersheds across the West. “There is nowhere to run,” says Connaughton. “This battle is going to be everywhere.”

The author writes from Ashland, Oregon, where citizens just rejected a city charter revision that contained loopholes allowing for the sale of water for bottling from Ashland Creek.

This article was first published in High Country News. It was made possible with support from the William C. Kenney Watershed Protection Foundation and the Jay Kenney Foundation.

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