The prolonged California drought is generating a huge boom for well drilling service companies and prompting some farmers to invest in expensive drilling rigs that can cost $1 million.
The Sacramento Bee reported with California in its 3rd year of drought, Bob Smittcamp, a farmer in the Central Valley, has bought a water drilling rig as an “insurance policy” to protect his thousands of acres of fruit and vegetable crops. “You have to do something to protect your investment,” he insists. Smittcamp put $150,000 down and will pay off the rest when the rig is delivered. The price to dig a well can cost a farmer anywhere from $50,000 to $500,000 before installing the pumps.
It costs Smittcamp about $4,000 an acre to tend to his peaches and grapes, so if the government can’t provide the water he needs, he’s going to pump the water himself. If he doesn’t do it, he stands to lose his whole harvest and face financial ruin.
Unfortunately for Smittcamp, the expansive government-controlled systems of canals and reservoirs throughout the state are providing a fraction of what he expected three years ago. Smittcamp can recapture some of his costs by leasing the drill to other farmers in the area.
According to The Bee, Smittcamp is not the only one doing his own drilling. In the first three months of the year, Fresno County, the leading farming region in the nation, issued 256 permits to dig new wells. Tulare County tripled the number of rig permits to 245.
Matt Rottman, president of Rottman Drilling in Lancaster, CA, claims that his three rigs are rented out for the next fifteen months. Farmers tell Rottman that they are not expecting any water from the state or the federal projects and as result there is a premium on buying water elsewhere. Prices, as a result, have tripled and quadrupled for water on the open market. “They’re shut off,” Rottman says. “They’ll be looking at crop damage if they don’t get wells in.”