Economic Impacts

OVERLY STRICT STANDARDS WOULD CREATE UNNECESSARILY HIGH COSTS TO CONSUMERS, SOCIETY

Study on Economic Impacts of Alternative Drinking Water Standards for California - This study was commissioned and funded by Aerojet and Lockheed Martin, who are also members of the Perchlorate Study Group.

In February 2005, the U.S. Environmental Protection Agency (EPA) established its official reference dose of perchlorate at 0.0007 milligrams per kilogram per day, and translated that number to a Drinking Water Equivalent Level (DWEL) of 24.5 parts per billion (ppb). This level is consistent with the recommended reference dose included in the National Academy of Sciences' January 2005 report on the health implications of perchlorate.

Federal regulators will now need to determine whether to proceed with a national drinking water standard for perchlorate. California is already engaged in the process of developing its own enforceable drinking water standard, also known as a maximum contaminant level (MCL). The MCL is required under California law to be set as close as is economically and technologically feasible to the final PHG. U.S. EPA would follow a similar process if it determines an MCL is necessary.

Costs could be staggering

Taxpayers, industry, agriculture, and local, State and Federal government will face staggering costs to meet requirements of an overly strict standard that could be set by California or the U.S. EPA. California, Nevada and Arizona would likely be the western states most impacted.

These costs would include a range of new treatment and remediation programs, including:

  • Building new treatment plants
  • Retrofitting existing treatment plants
  • Buying additional water supplies
  • Lowering reservoir levels
  • Pumping more groundwater from existing sources
OVERLY STRICT STANDARDS FOR PERCHLORATE ALSO WOULD UNNECESSARILY FORCE THE CLOSURE OF SOME WATER SUPPLIES, WHICH WILL CAUSE WATER SHORTAGES, PARTICULARLY IN DROUGHT SEASONS.

Overly strict standards for perchlorate also would unnecessarily force the closure of some water supplies, which will cause water shortages, particularly in drought seasons. This response would impact local economies and job markets, as plans for new housing areas and business centers are postponed or cancelled due to lack of available water. Likewise, current residential areas and businesses would suffer as water shortages would force water rationing, rate hikes, and other consequences.

A case in point is Rialto, California, where perchlorate in the water prompted the city to shut down five of its 15 wells. The City's public works director said, "We get 50 calls a week from people who want to build homes, offices or warehouses that will create jobs, and right now we're worried we can't accommodate them because we're going to run out of water."

Economic impacts in Southern California

Very low levels of perchlorate (about 4 ppb to 9 ppb) have been detected in the Colorado River, which is a main source of water for drinking and agricultural uses in Southern California. Most California counties which rely on this source, such as San Diego, Imperial, Riverside, San Bernardino and eastern Los Angeles, will have only two options if they must meet an overly strict drinking water standard: costly treatment, or purchasing additional water supplies. To supply Southern California with water that meets overly strict standards, water may have to be diverted from the Northern California Delta and other sources in the north if not available or affordable from other sources.

Impacts to California agriculture

OVERLY RESTRICTIVE STANDARDS WOULD HURT FARMERS BY MAKING THEIR IRRIGATION WATER SCARCER AND MORE EXPENSIVE.

In the Imperial Valley and other agriculturally rich areas of California, where water with low amounts of perchlorate is used to water crops, overly restrictive standards not required to protect public health would hurt farmers by making their irrigation water scarcer and more expensive. Even more alarming, worried consumers across the country and abroad might avoid buying the crops these farmers grow, causing loss of farming jobs, harm to family farmers, loss of jobs to foreign countries, devastation to commodity markets, and closure of local agricultural businesses.

If farmers are hard hit, taxpayers may have to provide additional federal financial support and the U.S. Department of Agriculture could face adverse impacts on farm exports.

Costs to government and taxpayers

"THE RESULT [OF EXTREMELY RESTRICTIVE RISK ASSESSMENT PRACTICES THAT RESULT IN VERY COSTLY TREATMENT AND REMEDIATION ACTIVITIES] IS THE DIVERSION OF PUBLIC AND PRIVATE DOLLARS INTO UNNECESSARY RISK MANAGEMENT EFFORTS AND AWAY FROM MORE IMMEDIATE, REAL.HEALTH-RELATED PROGRAMS." — LA DONNA WHITE, PRESIDENT, CAPITOL MEDICAL SOCIETY, SACRAMENTO, CALIFORNIA.

The costs associated with an overly strict regulatory standard would be significant at the federal level. For example, NASA and the Department of Defense are already working to clean up perchlorate at some sites. An overly strict standard could potentially double NASA's cleanup costs and add significant costs to the Department of Defense's cleanup efforts. Worse, an overly strict standard could contribute to additional military base closures in California, as bases become unusable for rocket and missile testing, combat training with live fire, etc.

FUNDS DIVERTED FROM GENUINE PUBLIC HEALTH NEEDS

As local taxpayers, governments and industry shoulder some of the cost of perchlorate removal there will be less money available for genuine public health needs. Programs to help people with diabetes, cancer, and other real health concerns may face funding cuts as public dollars are moved into perchlorate removal projects that provide no real public health benefit.