Nevada moves toward $5 bln Las Vegas water project

The agreement would allow the Southern Nevada Water Authority to proceed

SAN FRANCISCO – Nevada may be near a deal that would clear the way for one of the most ambitious water projects in the arid U.S. Southwest since the Hoover Dam — a $5 billion network of wells and pipelines to bring water to the booming Las Vegas area.

The agreement would allow the Southern Nevada Water Authority to proceed with its plan for a $5 billion water project, including 500 miles of pipelines, to meet the increasing demand for water in the booming Las Vegas area, authority spokesman J.C. Davis said on Tuesday.

An agreement would allow the authority to begin an environmental analysis of the project to bring water to Las Vegas, one of the fastest-growing metropolitan areas of the United States. The desert city and its surroundings in future years will need to draw water from additional sources, and planners at the authority see wells hundreds of miles north providing it.

They envision drilling up to 195 wells and building pump stations, power lines, a reservoir, treatment facilities and up to 500 miles of pipelines to deliver water to Las Vegas, which draws 90 percent of its water from the Colorado River.

The Las Vegas area gains a net 3,000 to 4,000 new residents each month, increasing demand as new communities spread into the desert, according to home builders. “Last year we sold a record 30,000 new homes,” said Monica Caruso of the Southern Nevada Home Builders Association. “We have to continue planning and preparing for growth.”

Home builder KB Home (NYSE:KBH – news) expects Las Vegas to be one of its best markets for the foreseeable future. It builds and sells about 4,000 homes there annually and expects its local production will rise to 4,500 in coming years.

The Las Vegas area’s population is projected to double to 3.6 million by 2035, keeping water among the region’s top concerns, said Keith Schwer, director of the University of Nevada, Las Vegas’ Center for Business and Economic Research.

“I’d go back to Mark Twain, who said, ‘Whiskey is for drinking. Water is for fighting over,”’ Schwer said.

The construction of the Hoover Dam southeast of Las Vegas on the border between Nevada and Arizona during the 1930s transformed the U.S. Southwest, taming the Colorado River and providing electricity that helped the region develop.