The Parching of Paso Robles

“Who the hell wants to pump water, anyway?” asks Dana Merrill. “It’s a pain in the butt.”

When it comes to farming California’s Central Coast, it would be hard to find someone more experienced than Merrill. A seventh-generation native of the Santa Ynez Valley in Santa Barbara County, he studied agriculture business at Cal Poly San Luis Obispo in the 1970s and, in 1981, settled in Paso Robles to the north, where he founded Mesa Vineyard Management. Today his company oversees 8,000 acres of grapes in three different counties.

IN 2001, MERRILL ALSO BOUGHT HIS OWN 40-ACRE VINEYARD IN THE EL POMAR AREA SOUTHEAST OF PASO. “This used to be a dryland almond ranch,” he says of the property. “In the 1920s and ‘30s, El Pomar was the almond capital of California—maybe of the United States. At one time, Hershey was gonna build a plant here.” Since grapes have supplanted nuts, Merrill put in another 60 acres of vines and launched the wine brand Pomar Junction. “It’s been interesting for me to sell wine one bottle at a time,” he chuckles. “At Mesa Management, I’m mostly selling to companies like Constellation, Diageo, Justin, and J. Lohr.”

Across the road from Merrill’s vineyard, Justin and J. Lohr vines cover the hills as far as the eye can see. Justin’s 375-acre planting, accompanied by a pair of enormous new reservoirs, went in late last year on a former dryland grain and grazing ranch—a fact that didn’t sit very well with many nearby residents, seeing as how, after a near record-low rainfall season, it occurred almost simultaneously with an emergency ordinance prohibiting the new planting of irrigated crops unless their water consumption could be offset.

In that atmosphere, organizations with acronyms like PRO (Paso Robles Overliers for Water Equity) and PRAAGS (Paso Robles Agricultural Alliance for Groundwater Solutions) sprang up, making recommendations that are sometimes at odds. “I spend more time with the women from PRO than I do with my family,” says Merrill, the vice chairman of PRAAGS. “At meetings, you get the impression that people think [grapegrowers] come home, turn on the pump, and watch the meter run for fun. Not to dishonor their case, but life is not free—if your roof wears out, or your car blows up, it costs money to fix it. With a wet winter, some shallow wells will come back really fast—but if yours doesn’t, you just might have to drill a deeper one.”

From the high point in his vineyard—1,200 feet in elevation, partway between the towns of Templeton and Creston—Merrill looks out over the rapidly changing, increasingly contentious landscape east of Paso Robles. “When I came here in the eighties, Paso was dying,” he says. “It was a dried-up farm town. Now we have a big housing and resort project coming, and tourism is a good clean industry. If it weren’t for grapes, this would be like the San Fernando Valley—there would be much more pressure on water and roads. But when wells go dry, people get desperate. And they blame the wine industry.”
 
IN THE FIRST 14 YEARS OF THE 21ST CENTURY, NO PLACE HAS EXPERIENCED A WINE BOOM LIKE THAT OF PASO ROBLES. In 2000, this once sleepy farming area—a former wheat, barley, almond, walnut and grazing region halfway between San Francisco and Los Angeles—had 100 bonded wineries and 15,000 acres planted to grapes. Today it has 270 wineries, with 32,500 acres of grapes. Much to the benefit of San Luis Obispo County, the wine industry has generated thousands of jobs and millions of dollars in taxes; led by high-profile labels like Justin, J. Lohr, Saxum, Turley, and Tablas Creek, it has also inspired a dramatic upswing in visitation, new hotels and restaurants, a revitalized downtown, and a tripling of the population (over 30 years) to 30,000. The only problem is that the place doesn’t seem to have enough water to support it. Compared with Napa’s annual rainfall of 27 inches (to the north), or Santa Ynez’s 22 inches (to the south), Paso averages only 15 inches per year, exacerbated by summer temperatures that commonly exceed 100 degrees.

Such imbalance is hardly unusual in California; Los Angeles receives the same amount of rain as Paso Robles, so its millions of inhabitants subsist on water imported from hundreds of miles away. But Paso happens to be blessed with an enormous underground aquifer: Covering 790 square miles, it contains at least 30 million acre-feet (acres of water one foot deep), boasting a natural annual recharge rate of 97,700 acre-feet. Until very recently, the town had never imported water from elsewhere, while residents paid a pittance of what other parts of California do for H2O.

In 1979, Paso’s subterranean supply was thought sufficient to last 250 years. Over the past 15, however, the water table has dropped an average of 75 feet—and last summer, after a rainy season amounting to only 4.67 inches, residential wells—most between 200 and 300 feet deep—started drying up. Many rural homes had to pay for water to be trucked in while confronting the prospect of drilling deeper at costs upward of $25,000. Those who considered selling and moving were faced with plunging property values, rendering them economically—and ironically—underwater.

Since two-thirds of Paso Robles’ water is used for agriculture, and grapes are the biggest crop (even though they’re acknowledged to use less water than almost any other irrigated product, with an average rate of one acre-foot per acre), the mushrooming wine industry has caught a considerable amount of the flak. “In the last two years, there have been record production numbers over the basin,” says Sue Harvey, president of North County Watch, a nonprofit devoted to sustainable development. “The only way that can happen is with much more water than an acre-foot. It might be driving the desperate situation of wells going dry near vineyards.”

Gary Eberle has his own view of that opinion. “It’s bogus,” he says. “During the droughts of the seventies, we had wells failing all over. We just didn’t have people crying about it, because they knew what was going on. There’s a huge amount of water [underneath Paso Robles], but it’s not at 250 feet. It’s at 1,000 feet.”

Eberle might reasonably be referred to as the padrone of Paso Robles vino. He first came here in the early 1970s as a U.C. Davis graduate student, helping his legendary advisor Harold Olmo do soil analyses. After getting his PhD, Eberle signed on with Estrella River, a winery that (along with Hoffman Mountain Ranch, on the site of present-day Adelaida Cellars) first put Paso on the wine map. Among its distinctions was the fact that it was the first in the U.S. to plant syrah.

“Grapes saved Paso Robles,” Eberle confirms. “When I came here in 1973, a third of the businesses were boarded up. The cattlemen and grain elevators were struggling to survive because they couldn’t compete with Kansas and Nebraska, and the San Joaquin Valley took the nut crops away because here they had to be harvested by hand on hillsides. The three main irrigated crops were alfalfa, sugar beets and pasture; there were five or six hundred acres of grapes, and I put in another seven hundred. Everybody was using overhead sprinklers, but even then, grapes were using the least amount of water at three acre-feet per acre.

“Since 1979, with deficit irrigation, pressure bombs and soil probes, we’ve learned to use as little as possible,” Eberle says. “Today we use eight-tenths of an acre-foot, but the single most expensive part of growing grapes is still water. Even if the water is free, you have to pay to lift it out of the ground. When I turn my pump on, the only people who smile are PGE shareholders.”

In that light, Eberle places blame for the recent shortage not on grapes but homeowners. “I can show you two 160-acre blocks of land near here where there didn’t used to be a single house,” he says. “Now each one has about 75 homes on it, and they all have wells dipping in at 200 or 300 feet—the shallowest, most transitory water there is. But without even trying, you can count dozens of swimming pools and a whole bunch of irrigated lawns and horse corrals.

“If I still owned vineyards [around the houses],” Eberle says, “I would say, ‘Hey, you’re stealing my water! I was here first!’ In reality, they’re stealing each other’s water.”

A POPULAR TERM FOR THE DEVELOPMENTS THAT EBERLE DESCRIBES IS “ANTIQUATED SUBDIVISIONS.” The result of real-estate speculation dating back to the 1920s, they’re located a few miles outside town; less suburban than semi-rural, they consist of one- or two-acre lots, each occupied by an independent ranch house separated by a fence from its neighbors. “They cost as much as a tract home, but you can have a horse,” Dana Merrill explains. “Originally, there was a house in front and a chicken coop in back. There are about 6,000 of them interspersed with agricultural land.”

The haphazard proximity of such properties makes for jarring juxtapositions. “A typical Paso Robles situation is a high-end hilltop home next to Deliverance country with a pit bull in the front yard,” Merrill says. One such subdivision on Jardine Road is flanked by a vineyard on one side and a (bankrupt) golf course on another. The latter is inside the city limits, but the houses aren’t; in other words, they’re beyond the reach of municipal pipelines.

Until recently this wasn’t cause for worry. California is one of only two states (Texas is the other) that allow landowners, farmers included, unlimited access to groundwater under their property. In accordance with this “doctrine of reasonable and beneficial use,” the wells aren’t metered—so nobody really knows who, winegrowers or homeowners, is pumping how much out of the aquifer. Some people who bought pre-existing houses didn’t even know they had wells until their faucets quit running.

“Most people don’t know the level of water in their well until they can’t get it out,” Sue Luft confirms. “My husband and I are both engineers, so we’re very technical in how we farm. We have a weather station, soil moisture probes and pressure bombs, and we installed a water-level monitor in our well. Last year, with a managed regulated deficit, we applied only a quarter of an acre-foot per acre. In summer, when neighborhoods were trucking water in, we turned ours off entirely.”

In some ways, the Lufts would seem to be typical 21st-century wine arrivistes. In 2000, nearing retirement from an environmental consulting business in Bakersfield, 90 miles to the east, they bought ten acres southeast of Paso Robles, moved there in 2004, and planted four acres of grapes. But when their well plunged 118 feet, rather than lock arms with the wine community, Sue assumed presidency of the Paso Robles Overliers (PRO) coalition, “advocating for the stabilization and sustainability of the Paso Robles groundwater basin.”

“This has been an impending crisis for a long time,” she says of the current brouhaha. Luft confirms Eberle’s claim that, “in 1981, there was more water used than there is now. The area was in overdraft, but few homes were impacted. Most of the agriculture was in alluvium, and most of the land that’s now in grapes used to be dryland grain or grazing, with virtually no water use.

“In the ‘90s and 2000s, tremendous rural residential and agricultural growth changed the picture,” Luft goes on. “A 2002 report, which was updated in 2006, found that the basin was at or exceeding safe yield.” In that context, Luft acknowledges, “We shouldn’t have allowed this kind of rural residential growth. But [the homes] are here now, and the most recent growth has been entirely in vineyards. It’s been astronomical, when everybody already knew the basin was in trouble.”

Like Merrill, Luft is in the El Pomar district east of Templeton, the focus of so much recent “angst” (her word). The Sturm und Drang surrounding Justin Vineyards—the high-end label that gained fame in the ‘90s for its Isosceles blend, boosting Paso’s vinous fortunes—is largely attributable to the fact that it was bought four years ago by Fiji Water, a subsidiary of Roll Global, a Los Angeles–based corporation that also includes agribusiness giants POM Wonderful and Paramount Farms.

“Granted, we shouldn’t have allowed this kind of rural residential growth. But [the homes] are here now, and the most recent growth has been entirely in vineyards. It’s been astronomical, when everybody already knew the basin was in trouble.”

—Sue Luft, President of PRO (Paso Robles Overliers)

“Paramount is progressive,” Dana Merrill insists. “In the agricultural world, they’re not exactly known as the scourge of the earth. But here they’re considered axe murderers.” That may be due to the fact that Roll Global—which is owned by Beverly Hills billionaire philanthropists Stewart and Lynda Resnick—is eminently experienced in the business of utilizing, maximizing and manipulating water from the South Pacific to the San Joaquin Valley. In the latter, the Kern Water Bank Authority—a quasi-governmental agency controlled by Paramount, which, thanks to its enormous San Joaquin Valley land holdings, has a lock on more than a million acre feet of water—was sued in 2011 by another local district, which claimed that this stockpiling had lowered the aquifer and was depriving nearby farmers of water.

“Their background is what scared people,” Luft says. “I actually [consulted] for the Kern Water Bank Authority, so I understand their operations. They’re amazing—they really know how to make money, and I’m sure they’re going to farm very efficiently. But they moved into a dryland grain area, which already had declining water levels, and put in two giant reservoirs with big equipment, very much in everybody’s face. “People were asking, ‘My god, what is this?’ They claim they found water, and yeah, they have—but it’s going to impact all of us. They can go deeper than any of us, and they’ll outlast us.”

IT SHOULD BE POINTED OUT THAT, AT LEAST SO FAR, PASO ROBLES’ WATER PROBLEMS ARE MAINLY ON THE EAST SIDE OF TOWN. That’s where the main aquifer is located—in the rainshadow of the hillier, wetter, limestone-riddled “west side,” where many of the appellation’s glamour names are located.

“There’s no such thing as ‘Paso Robles,’” protests Daniel Daou, who has a high-density (2,500 vines per acre) Bordeaux-varietal vineyard on Adelaida Road, nine miles west of Eberle. Bristling at the belief that the entire region is undergoing a crisis, Daou points out that the Paso Robles appellation—which is “bigger than Napa and Sonoma put together”—contains many different microclimates, soils and topographies.

“We get three to four times as much precipitation as the east side,” Daou says. “I usually don’t irrigate until August, and in many years I don’t water at all. We don’t come close to maximizing our wells. I measure them weekly, and they haven’t dropped since 2007.” Nearby Tablas Creek has a similar situation: the ability to irrigate, but an oft—exercised option not to.

Some experts caution that this appearance of security is deceptive. “In some dry years in the past, wineries have had to truck in water on the west side, too,” says Mark Battany, the U.C. Extension viticulture advisor for San Luis Obispo and Santa Barbara Counties. “It has more rainfall, but less natural storage. It’s not really well understood.”

PRAAGS chairman Jerry Reagh is more blunt. “The west side has a crisis coming,” he warns. “They just don’t know it yet.” A little to the south, in a less rainy spot (14” average rainfall) west of Templeton, Turley Cellars—the Napa Valley zinfandel pacesetter that purchased Paso’s 90-year-old Pesenti vineyard in 2000—has no irrigation at all, relying on wide (10’ x 10’) vine spacing, cover crops and sponge-like calcareous soil to retain moisture throughout the growing season. Still, conventional wisdom dictates that dry farming on the east side is (in Dana Merrill’s opinion, uttered while drawing a finger across his throat) a “nonstarter.”

“Where soils hold water, you can dry farm to a limited extent,” Gary Eberle acknowledges. “But here [on the east side], you can’t keep vines alive. A zinfandel vineyard next door to me used to be irrigated, but it was sold two years ago and now only about six vines are still living.”

Stephanie Terrizzi has an analogy for that: “If you give kids sugar regularly and then suddenly stop, they’re going to freak out.”

Terrizzi is manager of Luna Matta Vineyard and, with her husband Brian, co-owner of the Giornata winery in Templeton. A resolute organic practitioner, she considers dry farming more feasible than do most of her peers—many of whom, she says, “are still stuck on long hang time,” which requires irrigation to prolong ripening. “If you start from the first day with water conservation in mind, the vines will be trained that way. You have to encourage the roots to grow down rather than out.

“In my own vineyard, which is two months old, I have irrigation lines; next year I’ll probably give them two gallons every ten days, but the third year I probably won’t have to water at all. The key is looking at the soil structure.

“Vines are very adaptive and forgiving,” Terrizzi says. “I think dry farming is possible in most places, but you have to put complete trust in the soil and Mother Nature, and not every place in Paso Robles can do that. “But,” she adds, “there’s a guy on Airport Road”—in the Estrella subappellation northeast of town, one of Paso’s driest sectors—“who’s dry farming watermelons. Don’t you think that means you could dry farm grapes, at least in some years?”

“There’s a guy on Airport Road [northeast of town, in one of Paso’s driest sectors] who’s dry farming watermelons. Don’t you think that means you could dry farm grapes, at least in some years?”

—Stephanie Terrizzi, Luna Matta Vineyard

I MET TERRIZZI AT THE HOME OF PHILLIP AND MARY HART—PROPRIETORS OF AMBYTH, ANOTHER YOUNG WINERY IN THE EL POMAR AREA. A native of north Wales (am byth means “forever” in Welsh), by way of Australia and South Africa, Phillip—proprietor of a lucrative Orange County rugimport company—became enamored of Paso Robles a couple of decades ago, driving up on weekends to go climbing and wine-tasting with his sons. In 1996 he started buying Paso grapes for home winemaking, and after he got together with Mary, started looking for property in the area.

“First we looked at the west side, because everybody always said, ‘The west side, the west side,’” he relates. “Then we came here and saw that it’s nothing like the east side along Highway 46.” Indeed, the hilly area between Creston and Templeton has recently been discovered to share some prized attributes with the west side—specifically clay and limestone soils, plus ocean breezes courtesy of the Templeton Gap.

Ultimately Hart bought 22 acres, later acquiring an adjacent hilltop when it came up for sale. Envisioning a vineyard of Rhône varieties, he planned to use trellises and irrigation. “I was going to have sensors so I’d be able to turn the water on from my house in Costa Mesa,” he says. Then he and Mary had an epiphany: a sangiovese from the nearby Bella Luna vineyard.

“I said, ‘What is this?’” he remembers. “They told me the vines were dry farmed and head trained, which were completely new thoughts for me.” At Hart’s request, Bella Luna’s co-owner and vineyardist Kevin Healey came to visit their property the next day. “I asked him, ‘Can I dry farm here?’” Hart says. “He said, ‘Look at those weeds. If they can grow, grapes can grow.’”

Today the Harts have 7,000 dry-farmed, head-trained vines of ten different varieties (a third on their own roots), planted by Phillip on weekends and hand-watered as seedlings. Though he always intended to farm organically, Hart has since evolved into an acolyte of “natural” wine: AmByth’s offerings are biodynamic, contain no sulfites, and are fermented partly in amphorae. “I’ve drunk wine around the world,” Phillip explains. “I wanted to see what this property could do. I didn’t want to make commercial wine or metoo wine. I wanted to make interesting wine.”

Fulfilling this goal, AmByth isn’t par for the Paso course. All of its wines occupy the 13% alcohol range, and the results are surprisingly light in weight, characterized more by redfruit finesse than inky ripeness. His 23 (!) different blends and bottlings exhibit various nuances, which Hart says arise from the property’s idiosyncrasies. “This 20-acre vineyard has so many different microclimates. Imagine if everybody in Paso Robles grew and made wine naturally. With all the different, unique properties, you’d have 270 wildly different wines.”

It’s a nice thought—but AmByth makes only 1,000 cases, as Hart’s young vines struggle to produce a ton of grapes per acre. While he says the winery is close to turning a profit, Hart—courtesy of his rug business—doesn’t need to make a living from it. By way of comparison, Turley’s venerable Pesenti vineyard produces one and a half to two tons per acre, but as its winemaker Karl Wicka points out, “We have a high bottle price and mostly direct-to-consumer sales.”

“Some vineyards can survive economically with low yields [which result from dry farming],” U.C. advisor Mark Battany observes. “But for somebody who’s selling fruit on the open market, one and a half tons per acre might not work commercially.”

Indeed, half of Paso Robles’ growers don’t have wineries; they make their living by selling fruit to producers, usually big ones. “Half our grapes leave the county,” Dana Merrill says. “The more processing [of our own grapes] we can do, the better; but if you’re borrowing money from the bank, the sad reality is that you have to pay it back.”

“For big business it’s the bottom line,” Stephanie Terrizzi acknowledges. “[Even as a small grower], you can’t afford to lose your life savings on vines. The question is, which big guy is going to be the first to step up and try [dry farming]?”

Most of Paso Robles’ biggest vineyard companies—Red Cedar, Sunview, French Camp, Grapevine Land Management, each of which farms at least 1,000 acres—are in the driest, eastern reaches of the county. Sue Harvey of North County Watch reports that production for the top six growers averages about five tons per acre and ranges up to eight, generating gross revenues (based on the average price of grapes) of $54 million. Much of this product is indeed geared toward “value” wine, not the type that has recently elevated Paso’s reputation. The area where Justin and J. Lohr (Paso’s second biggest grower, with over 2,000 acres) have their new plantings enjoys somewhat more cachet, which may or may not be furthered by sprawling, high-density vineyard development.

Advocates of reduced irrigation argue that, if lower crop yields result in better wine quality, a drop in production per acre can be balanced by higher grape prices. J. Lohr’s chairman and CEO, Steve Lohr, says this is the plan for the company’s new El Pomar vineyard—in this case, aiming for yields of 3.75 to four tons per acre, with grapes divided between the Hilltop ($35) and Seven Oaks ($17) cabernet sauvignon bottlings.

“The question for all these guys is, Can you just grow the high-end stuff here?” says Sue Luft. “We can’t compete with ten-dollar bottles. We need to get back to quality—not destroy [our aquifer] just so we can have large expanses of corporate grapes that could be grown in Lodi.”

“There isn’t room in the high end for everyone,” Dana Merrill contends. “People from PRO say, ‘We like the little guys, not corporations like Justin.’ Well, God bless the little guys, but they don’t use many grapes. Justin is big enough to make a difference; they buy fruit from local growers, they pay more for it per ton, and their success raises the demand for Paso Robles wine. Plus, they own the land, so they have a right to the water.”

Sue Luft says that, under current law, she doesn’t know how to resolve that last fact. “Maybe that’s where governance comes in,” she suggests.

GOVERNANCE CAME IN LAST OCTOBER WHEN THE SAN LUIS OBISPO COUNTY BOARD OF SUPERVISORS VOTED TO EXTEND ITS WATER-RESTRICTING EMERGENCY ORDINANCE TO TWO YEARS. Small farms, wells, reservoirs, the city of Paso Robles, and “vested” projects already underway are exempt, though the county also intended to amend its groundwater management plan to expand its authority over monitoring, metering and reporting. While many large farmers and small residential dwellers agreed on the need to establish a local water district, they disagreed on how it should be organized; not surprisingly, the larger farmers wanted voting power to correspond to number of acres owned—a proposition that smaller landowners, equally unsurprisingly, opposed.

Nor did small landowners want to pay for the importation of water from nearby Lake Nacimiento. (“We’re the aggrieved party!” Sue Harvey protests. “Our water is being drawn down by multinational corporations!”) Paso Robles has heretofore unexercised rights to 15,000 annual acre-feet from the California State Water Project—subject to what’s available, that is, which in recent years has amounted to a pathetic trickle. “If you study water throughout the state, [relying on supplemental supplies] is not something you’re going to be able to do,” says Sue Luft.

In December, PRO and PRAAGS compromised on a water district proposal with a board of directors that would include both large and small landowners. In that cooperative spirit, they seemed irritated by a new pair of lawsuits from previously unknown (but creatively acronymed) interest groups—PR-WIN (Paso Robles Water Integrity Network) and POWR (Protect Our Water Rights)—which sued San Luis Obispo County in an effort to overturn the ordinance and “affirm” property owners’ rights to their groundwater. This seemed to portend a fate like that of 22 other groundwater basins in California: the collision course of courtroom adjudication, summed up by Mark Battany as “every user of water suing everybody else until a judge determines who gets how much.”

“Everybody has to take some responsibility for what’s going on here,” says Sue Harvey, though she quickly adds that “if vineyards can’t supply enough water to grow grapes in a semi-arid region, they’ll have to implement the most efficiencies and cutbacks.”
“The west side has a crisis coming. They just don’t know it yet.”

—Jerry Reagh, chairman of PRAAGS (Paso Robles Agricultural Alliance for Groundwater Solutions)

In that light, it’s valid to ask whether grapes should be grown at all in such waterdeprived places—although that question can as logically be posed to the entire San Joaquin Valley, the so-called breadbasket of America, whose endless acres of crops wouldn’t exist without irrigation. Since Paso’s vineyards, like its antiquated subdivisions, are already in place, U.C. Extension advisor Battany has compiled a list of water-saving recommendations for growers, from salt-and drought-resistant rootstocks to managing the size and timing of cover crops (which consume soil moisture) to mulching, shallow tillage and subsurface irrigation (which reduce evaporation) to wind machines, directional sprinklers and taller vine training (as alternatives to overhead sprinkling for frost protection). As for storage ponds, Battany notes, “The evaporation losses from large surface water storage reservoirs are a significant source of inefficiency in water management systems throughout the West.”

Meanwhile, Dana Merrill surmises that, as water gets more and more expensive, “simple economics” may end up granting Sue Luft’s wish: that the entire Paso Robles appellation adhere to the high end of the market.

“Wine is an amazing cash cow for local and state governments,” observes Glenn McGourty, Mendocino County’s U.C. Extension advisor (whose family also grows grapes in Paso Robles). “People get excited about going to wine country. They don’t get excited about going to alfalfa country.”

“We don’t want to lose that,” Luft acknowledges. “It’s brought great things here, but it can kill itself. If we lose our water, it will.”

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This story appears in the print issue of February 2014.
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