1. Message in a Bottle Capturing Economic Rent from Excess Revenue

2. Business as un-usual Lower interest rates in the hope we… will consume more Lower interest rates in the hope we… will consume more Offer rebates in the hope we will… consume more Offer rebates in the hope we will… consume more OR OR Lower the cost of doing business Lower the cost of doing business Utilize pre-existing infrastructure and re- structure its allocation process Utilize pre-existing infrastructure and re- structure its allocation process

3. Ground Water in Vermont: Current Revenue: Vermont has no structure in place to glean economic rent for this asset, so it goes without saying that Vermont’s rent payment on groundwater equals zero at the present time. Vermont has no structure in place to glean economic rent for this asset, so it goes without saying that Vermont’s rent payment on groundwater equals zero at the present time. Current Management Structure: Unlike the majority of states in the country, Vermont does not have an overall water use program that addresses withdrawals of surface water, groundwater, and water from springs. [1] We have adopted the Correlative Rights “Doctrine” [Statute] Unlike the majority of states in the country, Vermont does not have an overall water use program that addresses withdrawals of surface water, groundwater, and water from springs. [1] We have adopted the Correlative Rights “Doctrine” [Statute][1] http://www.vjel.org/journal/VJEL10046.html http://www.vjel.org/journal/VJEL10046.html [1] VNRC Memorandum, Groundwater Study Committee: Overview of GW Issue in VT, 12/07/07, Jon Groveman pg 2 [1] VNRC Memorandum, Groundwater Study Committee: Overview of GW Issue in VT, 12/07/07, Jon Groveman pg 2 [1]

4. Something for nothing? Four strategies for gleaning Economic Rent: Legal/legislative Legal/legislative Economic Economic Energy Energy Public Health Public Health

5. Legal: Can we Torque the Tort? Tort is the law of civil wrongs. Tort law is broken down into various distinct types of "torts", so that a person may sue in negligence, when somebody has unreasonably breached a “duty of care” for others' interests Tort is the law of civil wrongs. Tort law is broken down into various distinct types of "torts", so that a person may sue in negligence, when somebody has unreasonably breached a “duty of care” for others' interests Tort law usually provides people with the rights to compensation when another person*** harms their legally protected interests. Tort law usually provides people with the rights to compensation when another person*** harms their legally protected interests. Negligence is a tort which depends on the existence of a breach of duty of care owed by one person* to another. One well-known case is Donoghue v. Stevenson Negligence is a tort which depends on the existence of a breach of duty of care owed by one person* to another. One well-known case is Donoghue v. Stevensonduty of careDonoghue v. Stevensonduty of careDonoghue v. Stevenson

6. Donoghue v. Stevenson: Donoghue v. Stevenson: Donoghue v. Stevenson Donoghue v. Stevenson The majority of the members of the House of Lords agreed (3-2) that House of LordsHouse of Lords Mrs. Donoghue had a valid claim, but disagreed as to why such a claim should exist. Lord MacMillan, thought this should be treated as Lord MacMillanLord MacMillan a new product liability case. Lord Atkin argued that the law should Lord AtkinLord Atkin recognize a unifying principle that we owe a duty of reasonable care to our neighbors *** Historical note - In the same year they extended the 14th Amendment to corporations, the Supreme Court overturned a major civil rights act. Throughout the U.S., the civil rights of African- Americans were being scaled back in other courts, paving the way for segregation. In 1938, Justice Hugo Black remarked that of the cases in which the Supreme Court applied the 14th Amendment during the first 50 years after Santa Clara vs. Southern Pacific, “less that one-half of 1% invoked it in protection of the Negro race, and more than 50% asked that its benefits be extended to corporations.” *** Historical note - In the same year they extended the 14th Amendment to corporations, the Supreme Court overturned a major civil rights act. Throughout the U.S., the civil rights of African- Americans were being scaled back in other courts, paving the way for segregation. In 1938, Justice Hugo Black remarked that of the cases in which the Supreme Court applied the 14th Amendment during the first 50 years after Santa Clara vs. Southern Pacific, “less that one-half of 1% invoked it in protection of the Negro race, and more than 50% asked that its benefits be extended to corporations.” http://www.ecologycenter.org/tfs/lesson.php?id=13480 http://www.ecologycenter.org/tfs/lesson.php?id=13480

7. WaterGate: Pulling the plug on this dam privatization Support (Senate Bill 304) – and/or future bills like it - which would give citizens of Vermont a “public trust” designation. Such a designation is a crucial step [2] in the eventual direction of creating an infrastructure for economic rent Support (Senate Bill 304) – and/or future bills like it - which would give citizens of Vermont a “public trust” designation. Such a designation is a crucial step [2] in the eventual direction of creating an infrastructure for economic rent[2] Under such law: Not only could bottle water companies afford the aforementioned rent payment of a penny on any gallon beyond the Vermont residential use, since they are still producing (at least in the example from Maine in the last slide) approximately 89% net profit. A withdrawal cap placed in addition to a standard percentage of 2% (known as a Preservation Fee) could be collected from surplus profits (“rent”) and it would have little to no effect on the cost of their operation Under such law: Not only could bottle water companies afford the aforementioned rent payment of a penny on any gallon beyond the Vermont residential use, since they are still producing (at least in the example from Maine in the last slide) approximately 89% net profit. A withdrawal cap placed in addition to a standard percentage of 2% (known as a Preservation Fee) could be collected from surplus profits (“rent”) and it would have little to no effect on the cost of their operation [2][2] “The state’s water quantity laws are much weaker than its regulations regarding water quality.” Jon Groveman (the chief architect of S. 304) as quoted by Mike Ives in Seven Days Journal article “Groundwater Rising”, Feb. 27-March 05, 2008 edition [2]

8. Ecology and Economy?: The economic argument By their own admission some water bottlers concede [concerning groundwater], “there’s more than anyone in Vermont would ever need or be able to use anyway. [3] By their own admission some water bottlers concede [concerning groundwater], “there’s more than anyone in Vermont would ever need or be able to use anyway. [3] [3] Such a concession of surplus by for-profit companies is the crucial component necessary to create opportunity for an open dialogue on the subject of economic rent… Such a concession of surplus by for-profit companies is the crucial component necessary to create opportunity for an open dialogue on the subject of economic rent… [3][3] Quoting Ron Colton, president of Pristine Mountain Springs in Stockbridge (who currently has contracts to sell a [3] minimum of 333,000 gallons of groundwater a day to area bottlers) in Seven Days, “Groundwater Rising”, Mike Ives, Feb. 27-March 05, 2008 edition.

9. It’s like Oil and Water…but these two can mix … Especially when extremely low overhead costs exist in comparison to similar successful institutionalized distribution models http://waterdividendtrust.com/documents/education.pdfhttp://waterdividendtrust.com/documents/education.pdf (page 9)

10. A Clear Source of revenue Aggregate totals for 2007: Only one company, Clear Source, had data for the entire year (CSS-B): 28,233,905 2,352,825 gallons on average per month[4] [4] [4] 1.5 million (50,000 gallons a day X 30) is the maximum one can withdrawal without a permit - No.144 of the Acts of the 2005 Adj. Sess. (2006). Hence such companies need a permit yet could conceivably divide their subsidiaries (Vermont Pure* and a spring in Stockbridge, VT, conveniently the home of Pristine Mountain Springs*) so that each could collect near capacity amounts yet remain - by ANR standards - as “not active”. [4] 1.5 million (50,000 gallons a day X 30) is the maximum one can withdrawal without a permit - No.144 of the Acts of the 2005 Adj. Sess. (2006). Hence such companies need a permit yet could conceivably divide their subsidiaries (Vermont Pure* and a spring in Stockbridge, VT, conveniently the home of Pristine Mountain Springs*) so that each could collect near capacity amounts yet remain - by ANR standards - as “not active”. [4] * http://64.233.169.104/search?q=cache:sObwLUbF__0J:www.mass.gov/Eeohhs2/docs/dph/environmental/foodsafety /permlist_draft.rtf+Vermont+Bottle+water+permit+holders&hl=en&ct=clnk&cd=1&gl=us&client=firefox-a http://64.233.169.104/search?q=cache:sObwLUbF__0J:www.mass.gov/Eeohhs2/docs/dph/environmental/foodsafety /permlist_draft.rtf+Vermont+Bottle+water+permit+holders&hl=en&ct=clnk&cd=1&gl=us&client=firefox-a http://64.233.169.104/search?q=cache:sObwLUbF__0J:www.mass.gov/Eeohhs2/docs/dph/environmental/foodsafety /permlist_draft.rtf+Vermont+Bottle+water+permit+holders&hl=en&ct=clnk&cd=1&gl=us&client=firefox-a

11. Future Economic Rent Revenue: Currently an average household consumes about 200 gallons of water per day. [5] [5] For example, Clear Source is (on average) withdrawing 78,427 gallons per day. This withdrawal amount is approximately 28,427.50 over the limit of the Vermont resident usage At a penny a gallon over the 50,000 G residential limit, the difference would be 284 dollars and 27 cents a day paid to the state or distributed to residents of Vermont for the use of their water. 240 (approximate week days per yr.) X 284.27 = 240 (approximate week days per yr.) X 284.27 = $ 68,224.80 a year from Clear Source alone [5][5] http://www.uvm.edu/~gflomenh/GRN-TAX-VT-PA395/ (Power Point Presentations: Air, Water, Chemicals) http://www.uvm.edu/~gflomenh/GRN-TAX-VT-PA395/ [5]http://www.uvm.edu/~gflomenh/GRN-TAX-VT-PA395/

12. Not only could bottle water companies afford the above mentioned rent payment (pennies on a gallon ecological cap) they still would be receiving (at least in this example from Maine) 89% net profit. Such an outrageously high margin of economic rent certainly would allow such a company to allocate, in addition to its cap, a preservation Fee between 2 to 3 % on the economic rent gained 24-Ounce Bottle Water Calculator 24-Ounce Bottle Water Calculator Cost of one acre foot of water (An acre foot of water is 43,560 cubic feet or roughly 326,000 gallons) = $1,630.00 Cost of one acre foot of water (An acre foot of water is 43,560 cubic feet or roughly 326,000 gallons) = $1,630.00 Cost of Bottling $0.10 Selling Price of 1 Bottle $0.85 GROSS PROFIT: ONE ACRE FOOT SOLD $1,300,875.50 http://waterdividendtrust.com/info rmation/waterprofit.php http://waterdividendtrust.com/info rmation/waterprofit.php http://waterdividendtrust.com/info rmation/waterprofit.php http://waterdividendtrust.com/info rmation/waterprofit.php http://waterdividendtrust.com/doc uments/education.pdf http://waterdividendtrust.com/doc uments/education.pdf Ecology…good for business

13. Net Rent Fee Increases, Ecological Caps & Preservation Ω Allocation: Any amount over 70,000 a day (with a cap placed at 100,000 G or whatever amount is determined ecologically safe for that particular site) will cost two cents per gallon to be extracted 8,427 G X.02 = $ 168.00 a day X 240 working days = An additional $ 40,449.60 yearly $ 40,449.60 yearly from Clear Source Alone Enough to pay one hydro-geologist to study the health of that ecosystem each year and present findings

14. Energy: Water, The New Oil? A scarcity index Ω Energy: Water, The New Oil? A scarcity index By 2030 global energy consumption is expected to grow by 50 %. New England’s projected growth in this period is 15% [6]. By 2030 global energy consumption is expected to grow by 50 %. New England’s projected growth in this period is 15% [6].[6] Water resources play a crucial part in energy (especially nuclear, hydro- electric and biofuels) Water resources play a crucial part in energy (especially nuclear, hydro- electric and biofuels) “Even though 70% of Earth is covered with water, only 3% is fit for human consumption, of which two-thirds is frozen and largely uninhabited ice caps and glaciers, leaving 1% available for consumption (7) “Even though 70% of Earth is covered with water, only 3% is fit for human consumption, of which two-thirds is frozen and largely uninhabited ice caps and glaciers, leaving 1% available for consumption (7) The remaining 97% is salt water, which cannot be used for drinking or agriculture. The remaining 97% is salt water, which cannot be used for drinking or agriculture. If all the earth's water fit in a gallon jug, available fresh water would equal just over a tablespoon (7) If all the earth's water fit in a gallon jug, available fresh water would equal just over a tablespoon (7) [6] Nature: March 2008, Vol.452/20, “The Energy Challenge” (7) http://seekingalpha.com/article/17769-water-is-the-new-oil Note: The omega symbol chosen above due to its use by the resistance movement against the Vietnam-era draft

15. Public Health Unless a valid argument for public health can be shaped a unifying rallying cry to mobilize the many disparate Vermonter factions seems daunting Unless a valid argument for public health can be shaped a unifying rallying cry to mobilize the many disparate Vermonter factions seems daunting Groundwater is a mobile resource that is necessarily shared among all users [8]” Groundwater is a mobile resource that is necessarily shared among all users [8]”[8] Groundwater as a “Mobile Resource” means it cannot be viewed in the same way as property or other mineral rights** Groundwater as a “Mobile Resource” means it cannot be viewed in the same way as property or other mineral rights** [8][8] Quoted from Legislative Study Committee of Groundwater regulation and Funding Final Report 01/08 quoting Handbook for Groundwater Engineering (1999), Jacques N. Delleur [8]

16. **Citing the U.S. Geological Survey, a Vermont Journal of Environmental Law article notes that most of Vermont’s groundwater lives in “crystalline rock aquifers” – impermeable formations of gneiss and schist. Eighty percent of privately drilled well water flows from these crystalline formations. The other twenty percent flows from sand and gravel-based “stratified drift” aquifers. While the latter “are under more direct influence by surface water” than crystalline ones, “practically all surface waters interact with the groundwater in some way.”[9] **Citing the U.S. Geological Survey, a Vermont Journal of Environmental Law article notes that most of Vermont’s groundwater lives in “crystalline rock aquifers” – impermeable formations of gneiss and schist. Eighty percent of privately drilled well water flows from these crystalline formations. The other twenty percent flows from sand and gravel-based “stratified drift” aquifers. While the latter “are under more direct influence by surface water” than crystalline ones, “practically all surface waters interact with the groundwater in some way.”[9][9] [9] Seven Days Journal article “Groundwater Rising”, Mike Ives, Feb. 27-March 05, 2008 edition, pg 26A [9]

17. ** “University of Vermont professor Donna Rizzo, a civil and environmental engineer who did her PhD dissertation on groundwater conflicts has stated ‘From a scientific point of view, there is no difference between groundwater and surface water. [10] ’ “ [10] 10] 10] Seven Days Journal article “Groundwater Rising”, Mike Ives, Feb. 27-March 05, 2008 edition, pg 26A

18. “Associated Press investigation shows, a vast array of pharmaceuticals — including antibiotics, anti- convulsants, mood stabilizers and sex hormones have been found in the drinking water supplies of at least 41 million Americans.[11]” [11] [11] “AP probe finds drugs in drinking water” by Jeff Donn, Martha Mendoza and Justin Pritchard, Associated Press Writers Mon Mar 10, 12:08 PM ET “AP probe finds drugs in drinking water” by Jeff Donn, Martha Mendoza and Justin Pritchard, Associated Press Writers Mon Mar 10, 12:08 PM ET [11]“AP probe finds drugs in drinking water” by Jeff Donn, Martha Mendoza and Justin Pritchard, Associated Press Writers Mon Mar 10, 12:08 PM ET http://news.yahoo.com/s/ap/20080310/ap_on_re_us/pharmawater_i http://news.yahoo.com/s/ap/20080310/ap_on_re_us/pharmawater_i

19. Groundwater is a Tort Issue… In an economy of scale, reasonable use may not be distinguished from reasonable collection since what you are collecting is to be used [presumably and by law] “reasonably” In an economy of scale, reasonable use may not be distinguished from reasonable collection since what you are collecting is to be used [presumably and by law] “reasonably” Full Circle…