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Page added on November 21, 2014

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Getting in on the Water Rush

Getting in on the Water Rush thumbnail
Scramble for groundwater lures driller back into business

Among critics of our society’s reliance on petrochemicals, there’s long been talk that we are nearing “peak oil” — the beginning of the end of oil reserves. Then came the fracking bonanza, and — bam! — U.S. oil supplies gained a new lease on life. The peak oil buzz died down.

Maybe the critics should be talking about “peak water” in the San Joaquin Valley instead. Growers pumped out huge amounts this past summer to keep their productivity up amid drought, and they’re likely to do so again in 2015 — if they can afford it.

Everybody paying attention to the situation senses that the game will be up for the Valley’s powerhouse agricultural machine if extreme drought continues, but few know it as clearly as Hanford resident Robert Carvalho.

The wily 75-year-old businessman has worn a lot of entrepreneurial hats in his day — most recently as an owner of apartment complexes in Lemoore. Four months ago, he reached up and put on an old cap that he mothballed in the late 1990s — well driller.

The reason can be illustrated with a simple little comparison. Back then, a well cost 50 cents-a-foot to drill. Now it’s $200 a foot or more.

Forget fracking the Monterey Shale for oil. There’s a well drilling frenzy out there as agriculture tries to maintain its huge irrigation footprint.

“They’re all just going like mad,” Carvalho said. “Everything with water and well drilling, it’s just going crazy right now.”

Well drilling companies are coming from Nevada, Arizona, even Texas to get in on the action, but nobody can keep up with the frenetic pace. Wait times are reportedly as long as two years for a new irrigation well.

Carvalho and a few business partners formed Central Valley Drilling LLC for the express purpose of getting to customers faster.

Already, he’s contracted to drill six wells.

Former customers who had 500-feet-deep wells drilled in the 1980s and ’90s are seeing Carvalho again, this time to bore a new hole 800-1,000 feet into the earth.

The hope is to find enough water that isn’t so salty or chemical-laden that it will poison hundreds of thousands of almond trees, pistachio trees, grape vines and other stressed-out crops that received a zero percent surface water allocation last year. They’ll come up zeros again if the 2014-15 winter is a repeat of dry 2013-14.

“It’s kind of a panic out there right now,” Carvalho said. “People don’t realize what’s going on.”

Many drillers require 100 percent of the full cost up-front — hundreds of thousands of dollars for a well in the 1,000-ft. range. Carvalho said he’s lowering the requirement to 50 percent up-front for some clients, with the rest financed.

Financing the whole job is a tough sell. If a customer reneges, Carvalho said he’s stuck with the bill for hundreds of feet of steel casing, which is the single most expensive ingredient for a driller.

“What are you going to do, pull the casing back out of the ground?” Carvalho said.

In such an environment, it’s conceivable that some drillers are at least tempted to price-gouge. Carvalho said he’s heard rumors of fees up to $350 a foot, but he said he said the pressure might be the other way around: farmers begging for faster service — and offering to pay a premium for it.

Carvalho already has two smaller drilling rigs in his Hanford yard ready to go. He and his partners recently found a larger rig formerly used to dig 4,000-feet-deep natural gas wells in Canada. He said it’ll arrive soon in pieces on two semi-truck loads.

He saved the smaller rigs from his operation in the 1980s and ’90s in case the industry heated up again.

With the larger rig, he can core out a 28-inch diameter hole to 1,200 feet. The smaller rigs are mainly for shallower, smaller-diameter wells.

“I’ve always liked drilling,” he said. “I guess I’ll just drill until I drop.”

The drilling rush means a rush on steel pipe casing to send down the drilled holes. Carvalho was on the phone Monday, trying to nail down a supply in Bakersfield.

With unemployment in the double digits in many local communities, there’s no lack of applicants to work the rigs.

Whether they can handle the danger and long hours is another matter. The drilling runs 24/7, with three shifts, until it’s done. Aside from the promise of overtime pay, Carvahlo throws in a per-foot incentive for his workers. He thinks of it as a profit-sharing arrangement.

“You keep them happy, is what you do,” he said.

Carvalho said drillers contract to bore the hole but can’t “guarantee water quality or quantity.” He figures there’s “no end” to how long business will last.

“We’re not going to replace the water in the aquifer that we had before,” he said. “Most people don’t realize how serious it is.”

Of all the hats he’s worn, with the timing being as good as it is right now, this might be the lowest-risk enterprise he’s ever launched.

“It’s probably one of the better contracting businesses going right now,” Carvalho said. “It’s not an easy business, but I’m pretty sure we’re going to be successful, because there’s a need out there.”

Hanford Sentinal



5 Comments on "Getting in on the Water Rush"

  1. ghung on Fri, 21st Nov 2014 9:56 am 

    Drill, Baby, Drill! Suck it dry……

  2. westexas on Fri, 21st Nov 2014 10:58 am 

    60 Minutes had a segment, available on line, on what the satellite data indicate in regard to global groundwater depletion, with a special emphasis on California sucking their aquifers dry.

  3. Lawfish on Fri, 21st Nov 2014 11:38 am 

    Growing crops in a desert. Only in Amerika. Glad I live where water falls out of the sky regularly.

  4. paulo1 on Fri, 21st Nov 2014 12:07 pm 

    We drilled a well, here on Vancouver Island. We live on a river and had a well dug into the river bed, but when the salmon spawn out and die, or the salt blows in on high tide, not too good for drinking. The dug well would dry up in the summer. Most upsetting when the garden needs watering.

    Our cost for 6″ steel cased drilled well was $40.00 per foot plus LOA for the crew. Since they finished in two hours there was no LOA but we did have to pay positioning and set up fee. They started setting up at 8:00am, and were driving away at 11:30am. Drilled 71 ft and welded up 20′ sections. Capped and tagged, a good well log was provided as was a quick water sample assesment. Supply is unlimited as we are in a 50′ gravel water lense and probably 30′ below the river bottom.

    I don’t know if you can simply extrapolate the costs as per well casing size, but $200/ft works out similar when compared to what we paid.

    Best money we ever spent. I dicked around with cisterns and river pumping for years, and when we went two months without rain this summer and when my friend’s dug wells dried up and the river turned brackish…well, you gotta have water.

    I can see Dustin Hoffman, now.

    Mr. McGuire: I just want to say one word to you. Just one word.

    Benjamin: Yes, sir.

    Mr. McGuire: Are you listening?

    Benjamin: Yes, I am.

    Mr. McGuire: Water.

    Benjamin: Exactly how do you mean?

    Mr. McGuire: I just want to say one word to you. Just one word.

    Benjamin: Yes, sir.

    Paulo

  5. bobinget on Sun, 23rd Nov 2014 9:12 am 

    In Southern Oregon, we rely entirely on snow-melt for summer irrigation, even domestic drinking water.

    So far, because of El Nino it’s expected to be a lower then average snow pack for the region.

    Normally, At this time we have at least five of six inches cover on Mt. Ashland. Often there is talk of Thanksgiving Opening Day. This year, with a single inch it’s doubtful Mt. A will open for the 2014/15
    ski season. Because of financial obligations, if the resort fails once again to open, it will need to close
    permanently.

    (in the Alps, ski resorts have simply moved higher up. Mt. Ashland @ 7,500 feet.

    “Mt. Ashland has the second highest base elevation in the state of Oregon at 6,338 feet and our higher elevation means we receive snow when other lower lying ski areas might receive rain or a rain-snow mix. Our elevation at the top of the mountain is 7,533 feet. Mt. Ashland’s ski runs were constructed on the north side of the mountain, which allows the ski area to hold onto the snow that does fall.

    Mt. Ashland averages approximately 280 accumulative inches of snowfall a year. Last season our snowpack peaked on February 26th with 98 inches at the lodge and 133 inches at the base of the bowl”.

    For this poster, and thousands of other farmers in the area, a meager snow-pack will spell economic disaster… Unless we steal from the future, dig deeper wells to keep our crops producing.

    What would you do?

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