Arizona's Hobbs cancels Saudi land deal allowing outsized water use

Arizona Gov. Katie Hobbs has canceled a deal giving a subsidiary of a Saudi Arabian company free groundwater to grow cattle feed and send it back to the Middle East amid prolonged drought in the Southwest.

The lease in question was a State Land Department deal in La Paz County signed before Hobbs was in office that didn't reflect unlimited rights to the water under the surface. The company used the state land to grow alfalfa, a water-intensive crop, and ship it back to the Middle East to feed cattle. Saudi Arabia mostly banned the growing of alfalfa in 2018 due to the water necessary to raise the crop.

The governor's office said Monday that an investigation found the company to have been in violation of its lease at the plot in question since 2016.

"It's unacceptable that Fondomonte has continued to pump unchecked amounts of groundwater out of our state while in clear default on their lease," Hobbs said.

The company agreed to rescind two new drilling applications in April after Attorney General Kris Mayes brought to light what her office referred to as inconsistencies in the company's applications.

"This decision to protect Arizona's precious groundwater resources and uphold the integrity of our state land trust is a good step in the right direction for the future of Arizona," Mayes said Monday. "However, we must take additional steps to urgently protect Arizona's water resources – especially in rural Arizona."

Hobbs said she would not renew Fondomonte's three other leases in Arizona, stating that the contracts were "not in the best interest of the Trust’s beneficiaries due to excessive amounts of water being pumped from the land—free of charge." Those will expire in 2024.