South's ill-timed drought may further crimp U.S. economy

The region's booming growth has counterbalanced trouble elsewhere. But the long dry spell is taking a toll.

Johnny Whitt, a soft-spoken skateboarder, grinned just thinking about his summertime ritual of going to the pool with his friend, Rowan O'Halloran, to hang out and cool off. But when informed that Georgia may be closing swimming pools at the height of "the sticky season," Johnny's happy face soured.

"That's a bad idea," he says. "It's too hot around here in the summer to go without the pool."

Bad idea or not, the possibility of widespread pool closings this summer shows that the southeast's drought – a dry spell of historic note making worldwide headlines – is disrupting everything from kids' comfort to some of the region's key industries.

Moreover, how the South responds to the improbably dry weather may affect the broader US economy, since the region's booming metro areas and job growth have so far fended off a national recession.

"The coincidence of having [potential] recession plus drought is a tough one for the economy," says Jeff Humphreys, an economist at the University of Georgia in Athens. "It's coming on top of the housing recession and the oil price shock, making our economy more vulnerable than would otherwise be the case. I don't think the drought alone is able to produce a recession, but it adds to negative forces that are already out there."

And on it drags, as recent rains have failed to refresh exhausted reservoirs. As an unusual bank of fronts in the West channeled the South's usual rains into deluges in Texas and the Midwest, the drought interfered with rural baptisms and put landscapers out of work, with losses in that industry totaling nearly $1 billion. A pool ban alone would wreck Georgia's $150 million pool-maintenance industry, experts say.

"The economic impact of long-term water shortages could be profound because water is so central to daily living, power generation, and manufacturing," noted a recent report from the Federal Reserve Bank of Atlanta.

Some nuclear power plants in the Southeast, which require huge amounts of water to operate, could be forced to throttle back or temporarily shut down later this year because drought is drying up the rivers and lakes used to cool the reactors, the Associated Press reported last month. Such shutdowns probably wouldn't cause blackouts, utility officials say. But they could lead to shockingly higher electric bills for millions of Southerners, because the region's utilities could be forced to buy expensive replacement power from other energy companies.

As governors prayed for rain, North Carolina horse breeders began shipping hay in from Canada, because hay prices in the United States have doubled, even tripled in some places. From soybean farms facing irrigation bans to car-wash joints hawking "guiltless" waterless washes, the drought is on everybody's mind.

"The country was founded on the theme of superabundance," says Andy Harper, an environmental historian at the University of Mississippi in Oxford. "We haven't changed our approaches and consumption patterns ... [so] it's time to pay the price of that willful ignorance."

So far, Southerners are adjusting in small, sometimes meaningful, ways to weeks of little to no rain. In the silver lining department, Chris, a Decatur skateboarder, points out that empty pools make excellent skateboarding ramps.

Cities and towns are adjusting, too, as the drought begins to have political implications. One Atlanta suburb recently enacted a moratorium on rezoning land for commercial or residential use to try to lessen its impact on the state's two main reservoirs, Lakes Lanier and Allatoona. In Raleigh, N.C., some politicians say a water impact fee should be charged to discourage runaway development – which many blame, along with the weather, for the drought.

Such ideas could undermine the South's economic vitality, says Philip Isley (R), a Raleigh city councilor. He points to a recent Brookings Institution report that calls fast-growing metro areas, especially in the Sunbelt, the last remaining stallions of the US economy. "I'm concerned that these so-called water policies are really stalking horses for growth moratoriums," says Mr. Isley.

Other critics claim that measures such as pool bans could work against conservation efforts by alienating residents at a time when their cooperation is needed most.

"You have to make a rational decision about what is a good policy and what is a bad policy," says Georgia state Rep. Chip Rogers (R), who has introduced a bill that would stop the state from closing the pools. "To take such a drastic measure and cancel every swim team and prevent every parent from having a weekend at the pool with the kids is a little too much."

Water issues are likely to dog the Southeast well into the future, says Robin Craig, an environmental law professor at Florida State University in Tallahassee. "A lot of communities are telling themselves that this will all go away when the drought goes away, but I don't think it will," says Professor Craig. "Until you get the message across at a gut level that this isn't a resource you can take for granted ... yeah, changes are going to be hard politically."