Nestlé, Flashpoint In U.S. Water Wars, Is Longtime Partner Of Poconos Water Utility

Nestlé, largest bottler in the world, relies on 10 Northeastern Pennsylvania
 wells, but wants more as it seeks an ever larger market share.

Global giant Nestlé SA is no stranger to controversy, and its unquenchable thirst to dominate the American bottled water market while generating immense profits, frequently at the expense of the small towns where it sinks wells, is drawing fire at a time when water has become a national concern.  But the largest public water utility in the Poconos has had an 18-year relationship with Nestlé, which has purchased at least 110 million gallons of water for bottling from it -- and possibly much more -- at bargain-basement rates.

The relationship is so extensive that the utility, the Brodhead Regional Water Authority (BCRA), permitted Nestlé to pump water on its own property for its exclusive use and has shared a lawyer with Nestlé who specializes in buying and developing land for water-related projects. 

Water is the last substantially undisturbed natural resource in the Poconos, and extracting, buying and selling water has become big business for Nestlé and other commercial interests who are cashing in on an extraordinarily cheap and sometimes free commodity that, according to the Pennsylvania Constitution, belongs to the citizens of the commonwealth and not commercial entities. 

Because of contamination of the public water supplies in Flint, Michigan and elsewhere, there is a growing awareness that while water is a vital  and irreplaceable resource, the supply is finite and will dry up if not carefully regulated and managed.   

Swiss-owned Nestlé, which already is the largest water bottler in the world with an extraordinary 52 brands globally, bottles and sells Perrier, Deer Park and 10 other brands in North America alone.  It is cashing in on water on an epic scale because the epidemic of water contamination has forced people to buy and drink bottled water.  In short, the more lead and other contaminants are found in water and the more people become sick from them, the more bottled water Nestlé sells and the more its profits swell.   

In 1998, the Stroudsburg Municipal Authority (SMA) began doing business with Great American Waters, the predecessor of Nestlé Waters North America.  The relationship grew in the early 2000s and continued in 2005 when the SMA became a water supplier for five eastern Poconos townships and was renamed BCRA.   

The authority is uncertain about how much of its water -- which is to say the water the state Constitution says belongs to you and I -- that Nestlé has purchased, most of it for its Perrier and Deer Park brands, although it stresses that the total, whatever it is, has been less than 1 percent of the water it sells to all of its residential and business customers in a given year.   

At the peak of Nestlé's relationship with the BCRA, a 10-year period from 1998 to 2008, it was buying an average of 11 million gallons a year for a total of about 110 million gallons, including a high of 26 million gallons in 2002.  Those are quantities that are difficult to get one's head around, but 110 million gallons is enough water to fill about 165 Olympic-sized swimming pools or 4.3 million large-sized bottles of Perrier.  Meanwhile, back-of-the-envelope calculations show Nestlé has generated about three dollars in revenue for every dollar it has spent on BCRA water.   

Business relationships between water utilities and water bottlers are not uncommon.  The BCRA's ties to Nestlé have been an open secret although this pubic-private relationship has never been promoted by the BCRA in its literature, on its website or annual reports, while its extent has not been revealed until now. 

The fight against Nestlé in a tiny Pennsylvania township is attracting
 global attention. Al Jazeera assigned its U.S. correspondent to the story. 

In contrast, what has been happening in tiny Eldred Township (population 2,665) at the western edge of the Poconos has been very public and is attracting increasing attention in the national and international media as it has become a flashpoint in the U.S. water wars. 

Nestlé is meeting ferocious opposition in Eldred to its plan to sink two bulk extraction wells on private property and pump a minimum of 200,000 gallons a day for its Deer Park brand from the aquifer under Kunkletown village and the surrounding area for enormous profit.  Because it will not be buying water as it has from the BCRA, its profit could amount to upwards of $3 billion over a 10-year period.   

Nestlé, which has about 10 wells in northeastern Pennsylvania and about 50 nationwide, is said to be trying to make inroads in 50 or so communities similar to Eldred, but is meeting with mixed success. 

The company was handed an overwhelming defeat in Cascade Locks, Oregon (population 1,148) earlier this month after a six-year effort to locate its first bulk extraction well and bottling plant in the Northwest, while its plans to sink a well in Fryeburg, Maine (population 3,449) were upheld by the Maine Supreme Court.

Jane Lazgin, a Nestlé Waters North America spokeswoman, told the Wall Street Journal that the company is dismayed by the pushback in Cascade Locks and elsewhere.   "We use water just as others in industry use water to make foods, drinks and manufactured products," she said.   

Nestlé and other bottlers fear that bans like the one in Cascade Locks will spread, and Lazgin warns in a curtsy to Chicken Little that the Cascade Locks ban "sets a precedent for other bans on industrial or argiculture use of water." 

A key to Nestlé's success nationally is its ability to hot wire the political establishments in smaller communities that are anxious, if not desperate, to attract major corporations although bulk water extraction operations generate very few jobs.  There is a rumor that Nestlé will open a bottling plant in the Poconos if the Eldred wells are approved, but that is wishful thinking on the part of Nestlé proponents.  The company already has a massive bottling complex in Breinigsville in the Lehigh Valley only 30 miles from Kunkletown.  It could not justify another plant in the region, has stated that water from Eldred would be trucked to the Lehigh Valley, while the traffic-impact studies it attached to its application for the wells show just that.   

Winning over politicians to do their bidding was a piece of cake for Nestlé in the Stroudsburg area, but it has encountered unexpected obstacles in Eldred, which it cavalierly assumed was populated by country bumpkins whom it could push around.   

The actions of the Eldred Planning Commission secretary helped give Nestlé the legal cover to extract massive quantities of water in an area of the township where it would have been prohibited. The secretary's daughter was an Eldred township supervisor and girlfriend of the owner of the property where Nestlé has a tentative lease agreement to sink wells.  

Those maneuvers are the subject of a property owners' lawsuit, while candidates for township supervisor believed to be pro-Nestlé were defeated in the 2015 elections and several pro-Nestlé township officials have resigned or been forced out as anti-Nestlé forces have gained momentum, if not the upper hand.  

Nestlé designed, funded and built a facility with BCRA approval 
for its exclusive use on the authority's property.

Nestlé's unanticipated obstacles in Eldred are more of a nuisance than a setback for a company with a bottomless well of cash.   

Having failed to buy the political establishment in Eldred, if only figuratively, Nestlé can prolong the public hearings on its application -- now into their fourth month with no end remotely in sight -- and in the process bankrupt the opposition, which it already is well on its way to doing although the citizens' case is powerful.   

That case, in a word (okay, about 80 words) is that Nestlé's plans are inconsistent with the goals of the township's comprehensive plan, substantial tanker truck traffic would create noise and safety problems, there would be no long-term public benefit while property values and tax revenues would plummet, no jobs would be created, there are toxic dumps on the site that could leech into the water table and . . . the township might eventually be wrung dry because Nestlé would pump from an area considerably beyond what it would lease although it has repeatedly and disingenuously claimed otherwise.   

The housing market already is collapsing in Kunkletown and realtors say home prices have plummeted an average of 33 percent there although Nestlé has yet to pump a drop of water.   

Back in 1998, when Nestlé approached officials of the old Stroudsburg Water Authority about pumping water from the Brodhead Creek aquifer to be trucked to Breinigsville, local officials saw dollar signs, although not as many as did Nestlé.   

In an unusual move, Nestlé was given free rein to design and build, at a cost of $750,000, a temporary well, pipeline and adjacent structures at the SMA's headquarters off Mill Creek Road in Stroud Township.  (Officials say the well was never used and Nestlé ended up tapping directly into one of the authority's wells through the temporary pipeline.)  After the temporary arrangement ended, Nestlé filled tanker trucks at an average rate of about 140 trucks a month from January 2001 to near the end of 2008 at the SMA/BCRA headquarters facility for shipment to Breinigsville. 

Nestlé ended regular water purchases in late 2008 after -- but not necessarily because of -- regulatory agencies raising concerns that a BCRA well off of McMichael Creek at Glenbrook known as Well No. 3 could adversely impact the level of the creek, as well as the level of wells on adjacent properties, including the Glenbrook Golf Club.  Nestlé continued water purchases on an intermittent basis through to 2014 under a series of five-year agreements with the BCRA, the most recent one of which remains in effect.  

The BCRA is relying on its Well No. 3 (black arrow) 
on McMichael Creek at Glenbrook to help meet its growing needs.

While Kenneth R. Brown's title is assistant secretary/treasurer of the Brodhead Creek Regional Authority, he is the authority and its de facto operating officer and manager.   

In the course of two interviews, Brown described the BCRA's relationship with Nestlé in casual, Nothing To See Here-Move Along terms that belie its extensive history.   

"We haven't been doing business with them for the last couple of years," he said during our initial interview, noting that the Breinigsville plant "is kind of far away."   

"And we charge them more than they want to pay," he added with a wink-wink, nod-nod, alluding to Nestlé's reputation for buying low and selling high.  

The BCRA is staking much of its short-term expansion needs on Well No. 3, but there may be long-term problems with meeting demands on its system.  The authority currently is pumping to about 22,000 customers from Brodhead Creek and its adjacent Wells No. 1 and 2.  The Brodhead, like McMichael Creek, is a trout fishery, and the Brodhead is considered to be the most historic and one of the oldest trout fisheries in America.   

The BCRA is pumping at only 46 percent of the maximum rate permitted by the Delaware River Basin Commission (DRBC), which is the authority regulating major water users in Pennsylvania, New Jersey, New York and Delaware with water facilities that are in the Delaware River watershed.   

Among the BCRA's most water thirsty customers is the Kalahari Resort, which opened its huge 100,000 square foot indoor water park in Tobyhanna, Coolbaugh Township, in July 2015, and already is making plans to expand.   

Kalahari had wanted to sink its own well to meet its substantial water needs, but it was found that a well would draw down the water table on the fragile Pocono Plateau to dangerously low levels. Bowing to pressure from the Brodhead Watershed Association, a conservation group, the resort abandoned its well plan and turned to the BCRA.  And so the BCRA now pumps water to Kalahari through a pipeline running along Route 611.   

Hospitals are especially water thirsty because of their many water-related needs, including powerful fire suppression systems, and the BCRA will be adding two major hospital campuses to its burgeoning customer base in coming years.   

The Route 611 pipeline will serve the campus of St. Luke's University Health Network when it opens a hospital near Bartonsville in the fall that will include a large emergency room to cash in on the carnage that reliably occurs on adjacent Interstate 80. 

And the BCRA has pledged to supply the campus of Pocono Medical Center West, which is scheduled to open in 2018 at the site of the defunct Summit Resort property on Route 715 near the Tannersville interchange of Interstate 80.  Because of the possibility that PennDOT will not permit the BCRA to extend its Route 611 pipeline under the interstate, the authority may have to truck enormous quantities of water to the new hospital.   

Think of all those massive tankers decelerating and accelerating outside the hospital as you recuperate after childbirth.  Perhaps your child's earliest memory will be the sound of revving water trucks.  

Regulators have expressed concern about how much water
 can be pumped from McMichael Creek as BCRA's needs grow.

These and additional future needs will rely to a great extent on the BCRA's Well No. 3 on McMichael Creek, which in the post-9/11 world has taken on additional importance because of its relatively remote location and use as a backup should the BCRA's main wells come under terrorist attack or otherwise go down. 

Well No. 3 has caught the attention of the Safe Water Program of the Pennsylvania Department of Environmental Protection (DEP), which issues permits for and inspects larger wells, as well as the DRBC.     

In a "Hydrogeology Internal Review" dated June 6, 2005, the DEP wrote that "the site's [overall] environmental sensitivity precludes a large-scale groundwater withdrawal at the location," and states that nearby shallow wells were adversely impacted. 

The BCRA's Brown responded that he was unaware of the review and, in the same breath cast doubt on its accuracy, asserting that the DEP had "let go a hydrogeologist" who got his facts wrong.  He said the nearby well issue, which affected the clubhouse at Glenbrook Golf Club, has been addressed by tying the properties into the BCRA's water system.   

The DRBC, in reviewing the BCRA's plans for Well No. 3, noted in a document dated December 7, 2005, that the well "had the potential to impact McMichael Creek and the surrounding wetlands." 

Brown said he was unfamiliar with the document,   

Well No. 3 is scheduled to come fully online in September 2018, according to another DEP document dated November 25, 2013, but the agency cautioned that "the source capacity is not adequate to meet the future [long-term] water supply needs."   

Brown said he was unfamiliar with that document, as well, but noted that recent tests by the BCRA on Well No. 3 had found what he called its "sweet spot" -- a satisfactory level of daily withdrawals -- and noted the authority is actively looking for a location for a future Well No. 4, possibly north of East Stroudsburg.   

Nestlé's dynamic duo in the Poconos:
attorney Weston (left) and civil engineer Davis 

Nestlé refused to comment about its relationship with the Brodhead Creek Regional Authority.   

Janet Lazgin, the Nestlé corporate spokeswoman, turned an innocuous request for comment into a series of push backs that confirm Nestlé is on the defensive, if not over the battle in Eldred, then the small but mounting number of negative press accounts about its scorched earth business tactics. 

Nestlé's reluctance to comment may also have something to do with the cast of leading characters in Stroudsburg and Eldred.  Two of them are the same people, and that might be making Nestlé a trifle uncomfortable.   

Ed Davis is a civil engineer who has testified during the Eldred zoning board hearings that he was involved in a Nestlé well complex for the SMA/BCRA.   

Davis is having difficulty maintaining his credibility as an expert witness for Nestlé in Eldred.  He has come under fire as opponents of the wells cross-examine him at the ongoing hearings.  Davis testified earlier in response to softball questions lobbed by Timothy R. Weston, Nestlé's lead lawyer in the Eldred fight, that he took into consideration the community surrounding the well site and the zoning guidelines that Eldred shares with four neighboring townships in designing the Eldred well complex, but had to admit under cross-examination that he had not even bothered to read the guidelines.   

Timothy R. Weston happens to have been the BCRA's counsel in land acquisition deals.  He is an experienced hand in pushing Nestlé's agenda in northeastern Pennsylvania, but has come up against a team of experienced environmental lawyers in Eldred who have national reputations and are methodically making mincemeat of Nestlé's arguments.

An abandoned house on the Delaware from the first Poconos water war.
The second war is being fought against Nestlé.

If you have read this far, thank you.  That may mean you are one of the many Americans who are weary of mega corporations big-footing into their lives with impunity.    

As I noted earlier, business relationships between water utilities and water bottlers are not uncommon, while the Brodhead Creek Water Authority says that the total of all the water it has sold to Nestlé is less than 1 percent of its overall water sales in a given year.  And the BCRA has not broken any laws, at least none that I know of.   

But you also may have concluded that the BCRA's relationship with Nestlé is problematic.  You may wonder if selling water at bargain-basement rates to an immense corporation with obscene profit margins and a long history of scandals, let alone thirsty water parks like the Kalahari Resort, is the most appropriate use of its resources, which is to say our water.  You may wonder what the heck the BCRA is doing when those resources are finite, the demand for water in the Poconos will soar in coming years, and there already are troubling signs that the authority may not be able to meet its obligations.   

If the battle against Nestlé is a war, and that is an appropriate way of looking at it since a way of life is at stake in Eldred Township, then it is not the first water war in the Poconos.  The first water war was over the Tocks Island Dam in the 1970s.   

For all the fury it unleashed, Tocks Island isn't much to look at -- a negligible spit of sand covered with a few oaks and sycamores and some scrub in the Delaware River about three miles above the Water Gap.  But the war over a plan by the Army Corps of Engineers -- a government Nestlé, if you will --  to dam the river at Tocks, creating an immense reservoir that would submerge hundreds of homes and farms, was a lightning rod for the nascent American environmental movement, destroyed the careers of local and national politicians, resulted in suicides, arsons and violence, and expose deep tears in the social fabric of the Poconos that still have not mended. 

The dam plan was beaten back by a citizens group not unlike the Concerned Citizens of Eldred after years of public meetings and lawsuits, but not before the residents of those homes and farms were evicted and their way of life, dating back generations as also is the case in Eldred, was utterly and inalterably destroyed.  

Ironically, water has actually helped keep the Poconos' economy afloat in recent years.   

The housing market crapped out in the mid-2000s long before the rest of the nation, and for a while Monroe County led all counties in the U.S. in home foreclosures per capita.  This is because politicians, not content to try to continue to build the tourist industry and brand the Poconos as a one-of-a-kind destination with beautiful woodlands chockablock with trails, waterfalls, creeks and rivers, as well as golf courses, ski slopes and family-friendly resorts, climbed into bed with rapacious developers and usurious financial institutions after the 9/11 attacks to sell the Poconos as a safe haven from a world gone crazy.  In the process, they made a once special place like practically every other place with the same big-box stores, strip malls and fast-food restaurants, not to mention the same gridlocked traffic.   

People flocked to the Poconos from the Bronx, Queens and northern New Jersey by the thousands after 9/11, but the gauzy illusion that the area was a paradise soon gave way to a harsh reality of which wise locals already are all too aware: There was a somnambulant political establishment resistant to reform, most roads were more typical of those in Third World countries, many bridges were in atrocious condition, social services were overwhelmed, schools ranged from mediocre to poor, crime rates were well above Pennsylvania county-by-county averages for telling indicators such as adult major crime, drunk driving and vehicular fatalities, there was an increasingly degraded environment and stratospherically high local tax rates for which citizens got little in return that have been crushing to all but the affluent.   

If there has been a bright spot amid this sick economy, it is water.  There has been a proliferation of water parks, including Kalahari, that are supplanting ski slopes as the region's largest tourist draw. Five water parks have opened in recent years with more planned, which is not surprising when you consider that the parks' biggest expense -- the enormous amount of water needed for their gigantic pools and slides -- flow into the parks essentially free of charge because the taking and distribution of water is largely unnoticed, underregulated and sometimes the result of secret deals between politicians and developers who are given tax breaks, zoning easements and handshakes for creating jobs, virtually all of which are unskilled and minimum wage. 

Does Nestlé have a magic number?  If so, it might be $750,000. 

That's the amount Nestlé spent to build that temporary well facility way back in 1998 at the outset of its long and largely unnoticed relationship with the largest public water utility in the Poconos.  That's the amount it says it will sprinkle on Eldred Township in the form of a community development fund in exchange for those $3 billion in profits if gets its way.  That's also the cost of a shiny new pumper for the Kunkletown Volunteer Fire Company that might end up not having any water to fight fires by the time Nestlé is done. 

You are welcome to leave a comment about this post in the comments section below, and may do so anonymously. If you have further information on Nestlé’s activities in the Poconos, email the writer at kikokimba@gmail.com. Click HERE for a related post.

Weston-Davis photographs © 2016 Alyssa Meadows

Tocks photograph by Jeffs4653 via Flickr