Can Water Hauling Save California?

Neeley Keeny stops his tanker truck in Clovis, California. He fills up 2,500 gallons of water for about a fifth of a cent a gallon. He drives it northwest about one hundred miles and sells the payload for about $350. Minus the five dollars he spends to fill the tanker, a round trip nets Neeley an average of $1.725 per mile.

This story may seem crazy, but it is actually a story from 2015 when California had its last drought. Since then, California has seen its share of torrential flooding, but the dry weather has returned, approximately back to what it was back then. Could water hauling gain momentum in the state to combat the drought?

Water Hauling

The idea of selling life-giving water for one hundred times the cost of fueling may seem like a cruel exploitation of the capitalist system, but its biggest customers are vacation spots and their customers, making it more of a business-to-business model for the time being.

The price of the water due to arbitrage would have to be much larger than it was in 2015, as every state west of Colorado is experiencing some level of complete drought. For the business to be viable and most economical, drivers of water tankers may have to haul double tankers of potable water for over a thousand miles. Even then, a savvy trucker would not find the driving rates feasible: why haul water for anything less than three dollars per gallon when that is the average going rate for shipping goods? A shipment of 500 gallons from Colorado would cost $6 per gallon, and is not feasible for most customers.

Conclusion

The best the state of California can do is build more water storage should the state have another series of downpours, or create more waterways for water to travel via gravity, rather than by hauling it via diesel.

With approximately 50% of the state’s surface area experiencing what is referred to as Exceptional Drought, things are going to need to change soon for the state to keep its top industries running. Unfortunately, trucking does not seem to be a cost-effective part of that equation.

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