The Economic Asylum: California's "Drought"

Has anyone heard of California's "drought"?

Bob Poole, a spokesman for Santa Maria Energy, a small oil producer in Santa Barbara County, said that oil companies must navigate the politics of drought in California. Santa Maria is planning to build an eight-mile pipeline to bring treated wastewater to its oil fields, where it injects steam and gas into rock to push out the oil in a process known as cyclic steaming.

The company chose to use treated wastewater, which is cheaper than freshwater, Mr. Poole said, adding, “We also felt that it was very important politically.”

In Kern County, oil producers and farmers have coexisted peacefully for decades, but that balance has changed in recent years. Advances in drilling technology have led oil companies to move into agricultural areas. In Shafter, just north of here, dozens of new oil fields are next to almond orchards and other crops. The possible eventual exploitation of a huge untapped oil reserve called the Monterey Shale, which lies under Kern County’s prime farmland, could mean the kind of intense fracking carried out in Texas and North Dakota.

http://www.nytimes.com/2014/07/08/us/california-drought-chevron-oil-field-water-irrigation.html?_r=0

Water is now a speculative commodity. Couldn't be possible without TARP and Quantitative Easing 0% margins--- Gray Davis's energy scandal is a petty minor issue compared to this.

Started by the Aussies, who export raw goods to CHina- and are not known to be the sharpest tools in the shed.

"Waterfind’s service works much like any other electronic futures exchange, with a few twists. The firm does not have a formal clearinghouse, as U.S. exchanges do, but one of its units acts in that capacity. The wide variety of custom delivery dates, locations, and prices on the contracts recall what’s known on Wall Street as a “bespoke, over-the-counter” derivatives market, where banks design financial contracts to specific requirements of the buyers or sellers. Unlike those markets, however, Waterfind displays quotes to all parties—one of the defining traits of an exchange. Waterfind also acts as a broker on some of the trades, though the majority of its clients now trade on their own."