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California Bottling Plant Water Logged By Bureaucracy


Does Golden State have thirst for too-strict regulation?

You remember "Governor Moonbeam," right? You know, California's Jerry Brown.

Well, he's back.

After a thigh-slapping tenure in Sacramento noted for nothing much except perhaps what may or may not have been a relationship with singer Linda Ronstadt, Brown knocked around for a while, served as mayor of Oakland and is now California's attorney general. There's chatter that he wants to be governor again.

His latest project: Blocking a proposed water-bottling plant in Northern California unless its impact on "global warming" is reevaulated.

Nestle (NSRGY) wants to pump about 200 million gallons of water a year from three natural springs about 280 miles north of San Francisco. Bottled water is a business with high margins and it creates a lot of jobs.

McCloud, located in Siskiyou County, is a former lumber town in need of jobs. Environmentalists opposed the plan to bottle water in a 350,000-squre-foot plant on the outskirts of town and Nestle cut the amount of water it planned to pump by half.

Brown's concern: The 3.1 billion 8-ounce plastic water bottles that would be used to get the spring water to market each year. Then there's the electricity needed to run the pumps, not to mention the fuel needed to transport the bottled water to market.

Well, yes, and somewhere a polar bear or penguin shudders.

Of course it's important to get things right, but endless delays increases the cost of doing business and may drive jobs out of the state. After all, there's plenty of water just north in Oregon and Washington state. If transportation costs weren't the killer, here's betting bottled water from Alaska would be a big seller.

A study conducted for the California Business Roundtable found that about 60% of the state's business leaders planned to limit future growth or move jobs to another state. The reasons: Strict regulations in California drive up costs and make companies uncompetitive.

This isn't news. The survey was completed in 2004 and little has changed.

But California is still an enticing place to do business as evidenced by the Silicon Valley, home to some of the world's top companies, including Google (GOOG), Apple (AAPL), Intel (INTC) and eBay (EBAY).

But the premium for living in California is becoming increasingly steep and more people are leaving the state than moving in. In 2007, demographers estimated that the state's 1.1% growth came mostly from births to people already living there - not from people headed to the Golden State in search of a new and better life. This is light years away from the post World War II boom.

It's easy to predict California's doom and many have done so. Curt Gentry, author of Last Days of the Late, Great State of California, envisioned an apocalyptic end.

Endless environmental review is death by a thousand cuts. Few would argue that's Brown's intent, but it may be the result for the bottled water plant and other projects.
No positions in stocks mentioned.
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