They sold land rights to the Saudis who then siphoned off the water (now revoked said rights).
"[The Saudis] used sprinklers to grow alfalfa in La Paz County and exports it to feed dairy cattle in Saudi Arabia. The company did not pay for the water it used under the old agreement."
Water rights in the western US are mercenary. There's a healthy market in prior appropriation rights.
Just because people don't like what the water is used for doesn't mean the water isn't priced appropriately. You'll still get farmers growing thirsty / pricey crops in the desert if it covers the cost of irrigation.
in capitalism, prices are literally how rationing happens. the theory is that it distributes the resources to those who can make them most productive. here, theoretically the water will be used more productively by chipmakers than by farmers, so the chipmakers will be able to out-bid the farmers and the water will be allocated to them. this is the "invisible hand" of the free market.
We aren't talking about drinking-water quantities of water here but about irrigation quantities. Poor people in Arizona are not in danger of dying from thirst. Think Milagro Beanfield War, not Dune. Poor people in Phoenix get their water from the water utility, which gives you 3740+ gallons of potable water per month for US$4.64: https://www.phoenix.gov/waterservicessite/Documents/Rates_Ef...
That works out to 0.032¢ per liter. A quarter (25¢) will buy you 760 liters of water, enough to survive for three months. That's about 1000× lower than a price at which even Phoenix's homeless might start dying of thirst due to the cost of water. (Homeless people don't pay the water utility, but they get water from people who do.)
Poor people in the country get their water from wells, which cost money to drill but basically nothing to pump more water from.
Rationing might be a reasonable thing to do to keep the aquifer from being depleted, but it would be likely to hit poor people much harder than rich people, because poor people don't have the political influence to prevent the enactment of regulations that would hurt them badly, such as a requirement for an environmental review before drilling a new drinking-water well.
Rationing could cause poor people to die from lack of access to water. Markets won't, unless you're talking about something like a Mars colony.
A bunch of entities have perpetual promises for specific amounts of water, and sometimes the promises are too big and can't be fulfilled, or a city needs some water and can't get it allocated, or stuff like that. So, shortages.
Add in some market mechanics and that problem disappears. The only entities left without water are the ones unwilling to pay a small fraction of a cent.
If you're trying to water a cornfield big enough to feed your family, a fraction of a cent per liter might still be too much, though (and again we would predict that rationing measures would favor politically powerful agribusinesses and perhaps the Indian reservations over most small farmers). But it's not about dying of thirst.
A fifth of an acre of higher-water corn will provide more than 10k calories per day for a year. So about 5 acre inches, about half a million liters, if the price spikes up to 0.1 cents per liter that's $500 of water.
I'm not particularly concerned with the viability of people farming their own food but that seems plenty cheap.
Even desalinated water would be under a thousand dollars, and we could 10x the water supply at that point.
> and again we would predict that rationing measures would favor politically powerful agribusinesses and perhaps the Indian reservations over most small farmers
If the system allocates free water which can then be easily resold, the end result is basically the same as everyone paying but some entities get free money. Anyone expecting to buy their water should be no worse off.
