Will Lake Mead Dry Up?
It appears that falling real estate prices in Las Vegas could be the least of our worries according to two researchers from the Scripps Institution of Oceanography. In the latest news release, some very disturbing statistics were released including a 10% chance that Lake Mead could dry up by the year 2014 and a 50% chance that Lake Mead could dry up by 2021.
And while we are at it, let's throw in the 50% chance that the levels for Lake Mead will be too low to generate hydroelectric power generation by 2017.
Is this a worst case doomsday report? Not according to this statement:
"Barnett said that the researchers chose to go with conservative estimates of the situation in their analysis, though the water shortage is likely to be more dire in reality."
My interpretation of that report is the chances are actually higher then what is being predicted.
As you can see from the chart on the right, the low levels of snow in recent years have had quite an impact and I thought my Las Vegas Real Estate Snow Report with all of the snow that Colorado has been getting this year would help out. (The Chart to the right is for 2007 but you can see the big impact that the low snow levels of 2000 through 2004 had on Lake Mead.)
So, what is being done about it?
Obviously, water levels for Lake Mead have gone down significantly and steps have already been taken to cut down on the use of water but they may not be aggressive enough according to the latest report.
You can read about all of the conservation efforts at the Southern Nevada Water Authority site. In addition, you can read about this proposed project to bring water to Las Vegas which in my opinion only appears to be a simple patch and somewhere in there you can read that the project is not anticipated to be completed by 2014. In addition, the proposed amount of water that it will bring hardly comes close to matching this statement from the latest report:
"Barnett and Pierce concluded that human demand, natural forces like evaporation, and human-induced climate change are creating a net deficit of nearly 1 million acre-feet of water per year from the Colorado River system that includes Lake Mead and Lake Powell."
An acre foot of water equals approximately 325,851 gallons so we are going to need to go out and buy 325,851,000 gallons of water from Arrowhead to dump into Lake Mead to make up for this.
Ok, not a good solution but the CNET Green Blog was kind enough to consider some stocks for you to consider in their Lake Mead Report.
There is quite a bit of money invested into several Multi-Billion dollar projects in Las Vegas and something tells me that the latest report is going to make some headlines considering all of the people it has an impact on.
In addition, I'm wondering how seriously this report will be taken and the effect it will have on all of that land owned by Focus Property Group for future development. It was just recently announced that Focus Property Group stopped making interest payments on land secured loans and is attempting to negotiate with the lenders.
It will certainly be interesting.
*Update -- Another report on Fox News with other opinions.
"Larry Dozier, deputy general manager at the Central Arizona Project, which supplies Colorado River water to the Phoenix and Tucson areas, called the Scripps study "absurd."
Paul Francis, ABR,CRS | Coldwell Banker Premier | Las Vegas Real Estate | 702.592.3058
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Below is a chart showing the historical water levels of Lake Mead. The correlations between snow and the water levels are more then obvious.