Cadiz Inc has announced a transformative acquisition of 180 miles of steel pipeline originally intended for the Keystone XL Pipeline Project, marking a significant shift from fossil fuel infrastructure to water transportation. This strategic purchase will enhance the company's existing 220-mile pipeline network, positioning Cadiz to create the Southwest's largest groundwater banking system.
The repurposed 36-inch steel pipeline, currently stored in North Dakota, will become an integral part of Cadiz's ambitious Mojave Groundwater Bank project. After thorough technical evaluation, the company determined that the Keystone pipeline specifications perfectly aligned with their water transportation requirements. The construction of this expanded network is scheduled to commence in 2025, connecting the company's Mojave Desert groundwater bank to major water networks across the Southwestern United States.
This innovative repurposing project has garnered support from notable tribal leaders, including Dave Archambault II, Former Tribal Chairman of the Standing Rock Sioux Tribe, who praised the initiative as a harmonious alignment of hope and history. The transformation of oil infrastructure into water transportation systems represents a significant shift in resource management priorities, particularly benefiting underserved communities in the region.
The financial framework for this ambitious project has been carefully structured, with Cadiz securing substantial backing from various sources. In October, the company announced a letter of intent with a non-profit investment fund for up to $150 million in funding. The total project, estimated at $800 million, will be supported by up to $401 million in equity capital from non-profit and public sector investors, including federally recognized Native American Tribes.
Cadiz's comprehensive water solutions portfolio includes 45,000 acres of land in California, 2.5 million acre-feet of water supply, and state-of-the-art water treatment filtration technology. The company's CEO, Susan Kennedy, emphasized that this acquisition aligns perfectly with their mission to deliver clean water to underserved communities while demonstrating environmental responsibility.
The project represents a remarkable transformation of the Keystone XL Pipeline infrastructure, which was originally terminated in 2021 following the Biden Administration's revocation of its presidential permit. David Sickey, former Senior Advisor to the U.S. Department of Energy and former Chairman of the Coushatta Tribe of Louisiana, highlighted the project's significance in environmental justice, noting the powerful symbolism of converting oil infrastructure to serve water transportation needs.
The initiative demonstrates Cadiz's commitment to addressing climate change impacts on clean water access while providing practical solutions to water scarcity issues in the Southwest. The company's approach combines water supply, storage, pipeline, and treatment solutions in a unique model that promises to enhance water security for communities across the region. With this acquisition, Cadiz strengthens its position as a leading water solutions provider in California and the broader Southwestern United States.
