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Cadiz on the Fast Track?

Presented by:Amy Steinfeld, Shareholder

June 21, 2018

About Cadiz

☀ California NR company

founded in 1983.

☀ Founders identified

aquifer in Mojave Desert

using NASA data.

☀ 45,000 acres & water

rights.

☀ 20 years of organic

farming

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Cadiz Location: 200 Miles Northeast of Los Angeles

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Los Angeles

San Diego

Las Vegas

Barstow

Fresno

Bakersfield

San Bernardino

SantaBarbara

Yuma

Kingman

Needles

Laughlin

El Centro

Cadiz Project Site

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Colorado RiverAqueduct

Phase 1: Conservation & Supply

✷ Intercept 32,500 AFY before evaporates.

✷ Conserve 1.6 MAF of water that would otherwise evaporate.

✷ Create new 50-year supply for 400,000 people throughout So. Cal. via Public Water Providers

✷ In-lieu storage up to 150,000 AF in wet yrs.

Permitted Infrastructure

✷ Complete construction of well-field (20+ wells), natural gas power source and ancillary facilities.

✷ Construct 43-mile pipeline within existing active railroad to avoid adverse impacts.

✷ Connect to existing Colorado River Aqueduct to bring water to So. Cal.

Put water that otherwise would evaporate to beneficial use throughout

Southern California:

Facilities & Location

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Wellfield Area

Colorado River

Aqueduct Tie-In

RR ROW

Pipeline Route

Fenner Gap

New York and

Providence Mountains

(Source of Rainwater)

Bonanza Spring

11 miles

1,000 ft.You Are

Here

Dry Lakes

☀ Import surplus water for storage in the aquifer system when available

and return to agencies when needed.

Phase 2 – Imported Water Storage

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☀ Total storage capacity = 1 million

acre-feet.

☀ Programmatic EIR approved;

additional permitting necessary.

☀ 220 miles of existing natural gas

pipeline to be re-purposed.

☀ Construction of recharge basins

GEOLOGY & HYDROLOGY

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Overview of Watershed

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☀ 1,300 sq. mile

watershed area, size of

Rhode Island.

☀ 17-34 MAF of water in

aquifer (in alluvium),

comparable to Lake

Mead.

☀ Excellent water quality,

low TDS (avg. 300).

☀ Natural recharge =

32,000 AF/year.

☀ 1 MAF storage capacity.

Cadiz Area Hydrology

☀ Closed basin watershed system, not connected to Colorado River.

☀ Precipitation in 7,000-ft. mnts. percolates down through porous soils, moves downhill to aquifer.

☀Water flows through alluvial, carbonate, and fractured granitic rock.

☀Water table deep below ground surface; 700 ft bfs at wellfield.

☀ Groundwater moves very slowly down mountains to aquifer then on to dry lakes where turns saline.

☀ Finally, it evaporates at dry lakes, forever wasted.

Conserving Water for Beneficial Use

☀ Dry lakes act as

pump, moving

water from

ground to air

(evaporation) …

☀ Project will shift

pumping from dry

lakes to Project

wellfield and put

that water to

beneficial use.

☀ Used USGS hydrology model to determine

aquifer’s scale, productivity, recharge rate.

☀ Examined topography, precip./temp., soils,

geology, and vegetation.

☀ New technical studies:

✦ Groundwater Modeling & Impact Analysis

✦ Springs Studies

✦ Effects on Cadiz & Bristol Playas

✦ Biological Resource Assessment

✦ Estimated Evaporation Study

☀ 10 new wells at Project site drilled to depths of

up to 2,000 ft. bgs.

Extensive Study

Modeling to Determine Effects of Pumping

☀ To determine potential effects of

pumping on the aquifer and desert

ecosystem, models were run using three

scenarios, assuming three recharge rates:

✦ 32,000 AFY (expected)

✦ 16,000 AFY

✦ 5,000 AFY

☀ For ALL scenarios, NO NEGATIVE IMPACT

on aquifer, flora, fauna, springs, or desert

ecosystem.

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CADIZ Inc. Agricultural Fields

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Legend

Cadiz Study Area

Interstates

Highways

Roads

Rail Roads

Figure 2-1Overall Cadiz and Fenner Valleys Location Map

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Las Vegas

Palm Springs

Twentynine PalmsLos Angeles

San Diego

Arizona

California

NevadaUtah

112°0'0"W

112°0'0"W

116°0'0"W

116°0'0"W

120°0'0"W

120°0'0"W

36°0'0"N 36°0'0"N

34°0'0"N 34°0'0"N

32°0'0"N 32°0'0"N

Projected Coordinate System:

NAD 1983 UTM Zone 11N meters

0 4 82 Miles

0 5 102.5 Kilometers

\\cheron\Projec ts \BrownsteinHyattFarbe\386303Cadiz\GIS\ArcMap\TMFigures\Fig2-1_CADIZ_TM_StudyArea_V3_MR.mxd

LEGAL FRAMEWORK, PERMITTING & NEXT STEPS

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Legal Framework

• Project’s proposed extraction and export of water is consistent with all legal principles applicable to water management in California.

• The California Constitution requires maximum reasonable and beneficial use of available groundwater. Article X, Section 2.

• Water Code Section 106 provides a legislative declaration that domestic use is the highest use of water in the State.

• Groundwater may be extracted for off-site appropriative uses so long as there is available groundwater supply that is surplus to the present cumulative needs of overlying owners.

• The Project will not harm any other legal user of water and will not compromise the “No Injury Rule”

☀ Groundwater Stewardship Council: A 13-member unpaid peer

review panel found project can be operated without significant

impacts, May 2011.

☀ CEQA/Environmental Impact Report: 18-month public process,

100 day public comment, multiple public meetings, EIR

certified by Santa Margarita Water District in July 2012.

☀ County Groundwater Ordinance: San Bernardino County Board

of Supervisors approved independent groundwater

management plan. October 2012.

Permitting & Third Party Peer Review

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Groundwater Management PlanApproved & Enforced by San Bernardino County

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☀ GMMMP protects Mojave Desert flora, fauna, springs, and aquifer.

☀ 40 monitoring features, action criteria, and corrective actions.

☀ Water Quality

☀ Springs

☀ Vegetation

☀ Subsidence

☀ Saline Water Migration

☀ Air Quality (for dust)

☀ Drawdown Maximum = 80 Feet at Wellfield

☀ GMMMP includes action triggers designed to identify potential

impacts before they take effect, and before they are irreversible.

☀ Enforcement by County and SMWD.

☀ Primary Project opponents: the Center for Biological Diversity and Tetra

Technologies Inc. (mining company)

☀ Key environmental concerns: (a) impact on desert flora and fauna; (b)

impact on springs in mountains; and (c) impact on air quality.

☀ Tetra was concerned about impacts on its dry lake salt mining ops.

☀ They brought numerous legal cases challenging the Project’s CEQA

approval and its underlying science. Six of these case went to court,

and in 2014, the Superior Court Judge ruled against all petitions,

finding no scientific deficiencies in the Cadiz GMMMP and EIR.

☀ Opponents appealed. In 2016, the California Court of Appeal ruled for

Cadiz in all 6 cases, found environmental review sound.

Claims by Opponents

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BENEFITS

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Cost Comparison

Supplemental Water Supply Alternatives

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Project Annual Yield Unit Cost ($/AF)

Long‐term Annual Supply

Cadiz Valley Water Conservation Project 50,000 $875 ‐ 1270

OCWD Groundwater Replenishment System  70,000  $900 

West Basin Seawater Desalter 22,000 to 112,000  $1,366 to $1,835 

MWDOC ‐ Dana Point Desalter 16,500  $1,403 

Carlsbad Seawater Desalination  48,000 to 56,000 $ 2,014 to $2,257 

Huntington Beach Seawater Desalination  56,000 $1,768 to $1,812 

Camp Pendleton Seawater Desalination  56,000 $1,900 to $2,340 

Elsinore Valley Repurified Water (Wildomar) 3,000 $1,312 

Central Basin Repurified Water (Southeast) 15,000 $1,672 

MWD Untreated/Treated Tier 2 Rate ‐ $735 ‐ $1,032

Short‐term/Dry‐year Supply

Buena Vista Water Storage District  12,000 $1,135

Madera County Farmers 3,200 $2,190

Riverdale Farmers  600 $1,800Source: all numbers from 2014 public information

Benefits – Water Reliability & Environment

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☀ Broad Service Area. Cadiz water to serve

inland and coastal southern California.

☀ High Quality Water. Cadiz water in CRA =

lower TDS in CRA.

☀ Groundwater Storage. 1 MAF underground

storage capacity for imported water =

reliability for water providers.

☀ Water Conservation. Conserves 1.5 MAF of water over 50 yrs.

☀ Enhanced Water Supply. Increases area’s long-term water supply reliability

with a source not dependent on Colorado River or State Water Project.

☀ Protects Environment. No harm to flora, fauna, aquifer, springs, or desert

ecosystem.

Benefits – Economy and Jobs

☀ $800 million total economic benefit from construction.

☀ 5,900 jobs created – 1,500/year during construction.

☀ 10% of jobs reserved for Veterans.

☀ $19.6 million in new state and local tax revenues in Phase 1

construction.

☀ $6 million/year in local

tax revenue once Project

is operational.

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✸ Support DCP. Enable 150,000 AF of in-lieu storage capacity in Phase 1;

850,000 AF of imported storage capacity in Phase 2.

✸ Repurposing Existing Infrastructure. Use 226 miles of existing natural gas

pipelines for conveyance of water.

✸ Desert Tortoise Preservation and Enhancement. Partnership with San Diego

Zoo Global for creation of 7,400 acres for desert tortoise conservation bank.

Desert tortoise rearing and protection is underway.

✸ Water Quality. CR6 technology.

✸ Helping Disadvantaged Communities. Water for economically disadvantaged

communities within Project Participant service areas.

✸ Green Storage. Dedication of storage capacity for environmental benefit.

✸ Green Power. In-pipe hydropower generation.

Innovations

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Steps to Breaking Ground

✓ Environmental Review with extensive public comment.

✓ Approval of Environmental Review by Lead Agency.

✓ Approval of groundwater management plan by San Bernardino

County.

✓ Resolution of CEQA lawsuits and appeals.

✓ BLM decision permitting use of railroad ROW.

Resolve new litigation re ROW.

CRA tie-in and terms with Metropolitan Water District.

Final design and final construction financing.

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For more information:www.cadizinc.com www.cadizwaterproject.com

Contact:asteinfeld@bhfs.com 805.882.1409

Questions?