Water Wars April 16, 2008, 3:00PM EST

A Town Torn Apart by Nestlé

(page 5 of 5)

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Alberto Mena

Dragseth was highly impressed with a Nestlé operation near Palm Springs Sian Kennedy

Palais is one of 11 people at Nestlé Waters who find new sources for bottled water Sian Kennedy

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A couple of years ago he recalls not being able to sleep, getting up and heading to his Greenwich study to write down the 10 things Nestlé was doing to reduce its carbon footprint. One of those things was designing the lightest-weight water bottle currently on the market. Jeffery also notes, correctly, that water bottlers use less H2O than makers of soda or beer. "It's a spit in the ocean," he says.

But soda and beer makers typically don't mine pristine springs; they use tap water. So, for that matter, do Nestlé Waters' main rivals, Coca-Cola's (KO) Dasani and PepsiCo's (PEP) Aquafina. It's instructive that Nestlé Waters was the only company asked to attend Congress's first-ever hearings on the bottled water industry in December. "I had my trepidations about what to expect," says Nestlé Waters' corporate affairs chief Heidi Paul. She was right to be nervous; the hearings didn't go so well. Paul testified that there is no scientific proof that Nestlé's bottled water operations cause harm. But the panel of assembled experts pretty much drowned her out.

Congress continues to investigate the situation in McCloud as part of an overall probe into regulations governing groundwater. Meanwhile, McFarland and his allies vow they will keep making life hell for Jeffery & Co. So far they have won some concessions from Nestlé. The company has agreed to do more studies to understand McCloud's local hydrology better and to extract less water than originally planned. It also says it will redo its environmental permit draft with the county. That will slow construction for at least an additional two years.

In the end, Jeffery will likely get his plant in McCloud. But the battle in Northern California—and the growing antipathy to bottled water—will only make it more difficult the next time the Nestlé Waters boss dispatches one of his water hunters to find a new spring.

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Off the Bottle?

Many people drink bottled water because they deem it superior to the stuff that comes out of the faucet. Wrong, argues Food & Water Watch, a Washington (D.C.)-based nonprofit dedicated to consumer rights. In a report last year, the group blasted bottled water, declaring that Americans "think it is somehow safer or better than tap water...but it is generally no cleaner, or safer, or healthier than tap water. In fact, the federal government requires far more rigorous and frequent safety testing and monitoring of municipal drinking water."

Americans drank 31.2 billion liters of bottled water last year. And the Pacific Institute, an Oakland (Calif.)-based sustainability think tank, estimates that it takes approximately 17 million barrels of oil to produce the bottles all that water comes in. That, says the institute, is enough to fuel more than 1 million cars and light trucks for a year.

Conlin is the editor of the Working Life Dept. at BusinessWeek .