Extreme demand took down LA’s water system during the Palisades Fire. Here’s how other U.S. cities can prepare
As thousands of homes started to burn across Los Angeles on Jan. 7, fire hydrants stopped working. The rapid spread of flames in winds up to 100 miles per hour was happening too quickly for water pumps to keep up. It shocked the system and those fleeing the flames.
“This area is known for having fire issues, so you would think that they would be prepared for this,” said Joan Zoloth, 70, who said she first moved to the area when she was 6 years old.
Zoloth’s childhood home burned down in the Palisades Fire. Her own home around the corner and her son’s home nearby were also lost.
“My mother was a teacher,” Zoloth said. “What people don’t realize is how much Malibu is filled with those types of people — not just movie stars.”
The remains of Joan Zoloth’s childhood home in Malibu, California, shown on Jan. 21, 2025, after it burned down in the Palisades Fire.
Andrew Evers
CNBC went to the wreckage of the Palisades Fire to ask officials what happened to the water system in LA, and what other cities can do to be better prepared. As many as 1 in 6 Americans now live in areas with significant wildfire risk.
“A firefight at this size, such an urban conflagration, any system is going to have its challenges in maintaining water pressure,” said State Fire Marshall Daniel Berlant, of the California Department of Forestry and Fire Protection, known as Cal Fire.
Water pressure was the primary problem, rather than a lack of supply, fire officials and water experts told CNBC.
Much of the water in the Palisades is provided by three 1 million gallon tanks that sit up in the hills, using gravity to maintain water pressure in the hydrants and homes they supply below.
Pumps forcibly move water from main lines and surrounding reservoirs to those tanks. The tanks were full when the fires started, but the pumps couldn’t replenish water in the tanks as quickly as firefighters were using it below. As the tanks depleted, so did the water pressure, until some 20% of hydrants ran dry.
“The hydrants would have run dry anywhere in the world with a fire event like this in the topography where this occurred,” said Greg Pierce, director of the UCLA Human Right to Water Lab.
Joan Zoloth lost three family homes in Malibu during the Palisades fire. She’s shown here at a family friend’s house where she’s staying in Venice, California, on January 21, 2025.
Andrew Evers
The closure of a 117 million gallon reservoir nearby complicated matters. Earlier this month, California Gov. Gavin Newsom and LA city council members called for investigations into why the Santa Ynez Reservoir hadn’t yet reopened after being drained almost a year ago to repair a tear in its cover.
“That would have made a difference,” Pierce said. “But even, by all accounts, if that reservoir was full, it wouldn’t have stopped the fire.”
Typically, fires are also fought by aircraft dropping water and fire retardant from above, but high winds kept them grounded for several hours on the first night of the fire.
Firefighters adapted with three tactics. They shuttled water through multiple engines connected to functional hydrants, drove it to locations in large water tenders, and pumped water directly from backyard swimming pools.
The LA Department of Water and Power said it quadrupled the water flow to the area and summoned 15 water tankers to directly refill fire trucks. It wasn’t enough.
The blame game
As immediate danger calmed, misinformation ran wild. The Federal Emergency Management Agency, or FEMA, reactivated its rumor response site, and the LA Fire Department directly responded to inaccurate social media posts.
President Donald Trump, for instance, claimed that water ran out in LA because of policies meant to protect a small endangered fish called the Delta smelt.
“It’s just simply false. It’s nonsense,” said Peter Gleick, co-founder of the Pacific Institute, a global water think tank. Gleick has been researching water issues for four decades.
On his first day back in office, Trump signed an executive order titled “Putting People Over Fish: Stopping Radical Environmentalism to Provide Water to Southern California.” After visiting with Newsom in LA, Trump signed another executive order directing federal officials to find ways to override “disastrous” California water policies.
“There’s lots of conversations about California water policy and how we allocate water to protect fish or ecosystems versus deliver water to different kinds of users, but that had no role whatsoever to play in water availability for firefighting,” Gleick said.
Southern California reservoirs are at above-average levels for this time of year because of two plentiful rainy seasons, he added.
“Misinformation about how if we just had more water from Northern California in Southern California, that would have made the difference, that’s not true,” UCLA’s Pierce said. “Even if you have water stored fairly close by in the region, you can’t just move it quickly up to an area like the Palisades.”
That’s why billionaires Lynda and Stewart Resnick are also not to blame for the Palisades Fire, the water experts who spoke with CNBC said.
The Resnicks own the Wonderful Company, which includes brands such as Pom and Fiji Water, and have sprawling farmlands in the San Joaquin Valley that grow pistachios, oranges and pomegranates. They’ve been the subject of attacks on social media, some of which are antisemitic, that blame them for the water pressure problems in LA because of their investment in a public-private water bank that’s 100 miles north of LA and that has no ability to impact water pressure in the Palisades.
“There’s absolutely no connection between the two. This is a localized problem,” said Felicia Marcus, former chair of the California State Water Resources Control Board.
The fires also resurfaced criticism around state and local water decisions, from taking down dams to not building enough reservoirs.
The real culprit is extremely dry conditions, experts told CNBC. Before the fires, LA saw close to zero rain since May, and 2024 was the hottest year on record for the planet, Gleick said.
“Higher temperatures means more demand for water by soils and vegetation and people and agriculture,” he said. “Climate change is in many ways a water problem. It’s being manifested by drought and floods and wildfires.”
More resilient water systems
This is not the first time hydrants ran dry in a major firefight. They’re designed to handle one or two structure fires, not hundreds burning at the same time.
Similar water pressure problems plagued the 1991 Oakland Hills Fire, which destroyed more than 3,000 homes, and two Ventura County fires that each burned more than 1,000 homes in 2017 and 2018.
The problem extends beyond California. Texas saw the largest fire in its history last February. As population booms, more people are moving to areas at high risk of fires between dense developments and wildland.
California is home to the top six cities at highest wildfire risk in the U.S., but Texas, Colorado and Oregon also have cities in the top 15.
A firefighting helicopter draws water from the first-ever installed Heli-Hydrant to quickly stop the Blue Ridge Fire in Yorba Linda, California, on October 28, 2020.
Yorba Linda Water District
There are three key components to making water systems more resilient, Pierce said: increasing water supply, improving local infrastructure, and bolstering power.
After a 2008 fire that destroyed 280 homes, Yorba Linda Water District in California addressed all three. It added backup generators at water pump stations that had failed during the fire, added a long-planned underground reservoir, and installed a first-of-its-kind water tank called a Heli-Hydrant.
That $70,000 tank can automatically refill itself and is reserved for helicopters to dip from, reducing the length of flight times between water pickups and drops. It was used to quickly stop the Blue Ridge Fire in 2020.
“Cal Fire was able to jump on it and use our Heli-Hydrant, trigger it and keep the fire to five acres,” said John DeCriscio, who was operations manager at the Yorba Linda Water District at the time. “That was a huge success.”
San Francisco implemented a comprehensive solution after the city was almost completely destroyed in the 1906 earthquake and resulting fire, which also caused most hydrants to run dry.
In 1913, the city developed a unique fire-suppression water system separate from the rest of the city’s water. Seawater enters the system from 52 suction connections along the waterfront, and it’s pumped in from fireboats and two high-pressure pumping stations. There are more than 200 underground cisterns to store backup water. A high-elevation reservoir and two large-capacity tanks use gravity, not pumps, to feed special high-pressure emergency hydrants that can be seen around the city with black, red and blue tops.
There are other solutions that cities can implement.
A company called Rain is working on autonomous, unmanned aircraft for dropping water on fires. In Japan, an autonomous system of water cannons protects a cultural heritage site with 200-year-old thatched roof houses.
Cost is the main reason these solutions haven’t been implemented widely.
“There’s always this delicate balance of being afraid to go to your customers and raise their rates, but if you don’t raise their rates, you can’t do these extra things,” said Marcus, the former state water board chair. “It’s the kind of thing that keeps you up at night when you manage one of these agencies.”
U.S. President Donald Trump talks to the media, next to Tesla CEO Elon Musk with his son X Æ A-12, at the White House in Washington, D.C., U.S., March 11, 2025.
Kevin Lamarque | Reuters
Elon Musk said on Tuesday that he doesn’t like high or unpredictable tariffs, but any decision on what happens with them “is entirely up to the president of the United States.”
Speaking on his company’s first-quarter earnings call, with tariff-related uncertainty swirling across the economy, Musk said Tesla is in a relatively good position, compared to other U.S. automakers, because it has “localized supply chains” in North America, Europe and China.
Musk said Tesla is the “least-affected car company with respect to tariffs at least in most respects.”
Tesla reported troubling quarterly earnings and sales on Tuesday, including a 20% year-over-year drop in automotive revenue and a 71% plunge in net income. The company also said that it wasn’t providing any guidance for 2025 at least until its second-quarter update.
While Musk is one of President Donald Trump’s closest advisers, tariffs are the one issue where he’s partially broken with the administration. He recently called Peter Navarro, Trump’s top trade adviser, a “moron” and “dumber than a sack of bricks.”
On Tuesday’s call, however, Musk said, “If some country is doing something predatory with tariffs,” or “if a government is providing extreme financial support for a particular industry, then you have to do something to counteract that.”
Tesla’s stock price has been hammered since the president floated his plan for widespread tariffs earlier this month, and that was after the shares plunged 36% in the first quarter, their worst performance for any period since 2022.
Because Tesla manufactures cars that it sells in the U.S. domestically, the company isn’t subject to Trump’s 25% tariff on imported cars. But Tesla counts on materials and supplies from China, Mexico, Canada and elsewhere for manufacturing equipment, automotive glass, printed circuit boards, battery cells and other products.
Musk said he offers his advice to the president on tariffs.
“He will listen to my advice. But then it’s up to him, of course, to make his decision,” Musk said. “I’ve been on the record many times saying that I believe lower tariffs are generally a good idea.”
He added that he’s an advocate for “predictable tariff structures,” as well as “free trade and lower tariffs.”
Musk said Tesla’s energy business faces an “outsized” impact from tariffs because it sources lithium iron phosphate battery cells, used in his company’s cars, from China.
“We’re in the process of commissioning equipment for the local manufacturing of LFP battery cells in the U.S.,” he said. But he said the company can “only serve a fraction of our total installed capacity” with its local equipment.
“We’ve also been working on securing additional supply chain from non-china based suppliers, but it will take time,” he said.
Musk called Tesla the most “vertically integrated car company” but said that there are still plenty of parts and materials that come from other countries. Even though it’s built a lithium refinery in Texas, “we’re not growing rubber trees and mining iron yet,” he said.
WATCH: Tariffs on batteries out of China can end up being really costly
Elon Musk, CEO of Tesla Inc., in the Oval Office of the White House in Washington, D.C., on Feb. 11, 2025.
Aaron Schwartz | Bloomberg | Getty Images
Tesla CEO Elon Musk began his company’s earnings call on Tuesday by saying that his time spent running President Donald Trump’s Department of Government Efficiency will drop “significantly” starting in May.
Musk, who has watched Tesla’s stock tumble by more than 40% this year, said he’ll continue to support the president with DOGE “to make sure that the waste and fraud that we stop does not come roaring back.”
After spending almost $300 million in the 2024 campaign to help return Trump to the White House, Musk created DOGE and joined the administration with a mission to drastically reduce the size and capability of the federal government.
He said he’ll continue to spend a “day or two per week” on government issues “for as long as the president would like me to do so.”
Musk’s commentary came after his company reported disappointing first-quarter results, including a 20% year-over-year slump in automotive revenue and 71% plunge in net income.
In addition to challenges the company already faced, such as competition out of China and an aging fleet of electric vehicles, Tesla has recently been hit with protests in the U.S. and Europe and brand damage due to Musk’s ties to Trump and his support of Germany’s far-right AfD party.
“The protests that you’ll see out there, they’re very organized,” Musk said on Tuesday’s call. He claimed, without evidence, that some people are likely protesting “because they’re receiving fraudulent money” or are “recipients of wasteful largesse.”
On its website, which was last updated on Sunday, DOGE says its cuts have led to an estimated $160 billion in savings. However, Musk’s estimates of savings have been challenged, and DOGE has deleted some of the largest purported savings.
Over that same stretch, Tesla has lost roughly $600 billion in market cap.
DOGE has also made cuts at agencies charged with oversight of his companies. They include the SEC, Federal Aviation Administration and National Highway Traffic Safety Administration.
The White House said in early February that Musk was serving as a “special government employee,” a designation with fewer requirements when it comes to conflict-of-interest disclosures and ethics policies.
The Department of Justice says the title is for anyone expected to work for the government for 130 days or less in a year. The Trump administration will hit its 130th day at the end of May.
Job cuts from DOGE’s work have come from across the government, at agencies including the Internal Revenue Service, National Park Service, Consumer Financial Protection Bureau, and the departments of Agriculture, Education, Energy, Health and Human Services, Homeland Security, and Veterans Affairs, according to the Associated Press.
As of February, staffers from DOGE had pushed top-ranking officials at the Department of Education out of their offices, rearranged the furniture and set up white noise machines to muffle their voices, according to employees at the agency. U.S. senators expressed concern that DOGE had possibly gained access to federal student loan data on tens of millions of borrowers.
Also in February, the Trump administration said that USAID would shut down as an independent agency and be moved under the State Department.
This photo illustration created on Jan. 7, 2025, in Washington, D.C., shows an image of Mark Zuckerberg, CEO of Meta, and an image of the Meta logo.
Drew Angerer | AFP | Getty Images
Meta’s core online advertising business could take a $7 billion hit this year due to President Donald Trump’s tough China tariffs impacting retailers in the country.
That’s according to a MoffettNathanson research note published Tuesday that analyzes the potential impact of China-linked retailers like Temu and Shien slashing their Facebook and Instagram advertising budgets amid the U.S. and China trade dispute.
The MoffettNathanson analysts pointed to Meta’s latest annual report in which the company revealed that its China revenue was $18.35 billion in 2024, equating to a little over 11% of total its total sales. Like other analysts, MoffettNathanson believe Temu and Shien comprise the bulk of Meta’s China business, and if those online retailers cut back on their ad campaigns this year, the social networking giant’s 2025 ad sales could be impacted by $7 billion.
Meta did not immediately respond for a request for comment.
There are already signs of a pullback, the analysts wrote, citing a CNBC report about Temu reducing its U.S. advertising spending and seeing a big drop in its Apple App Store rankings following Trump’s China tariffs.
“China’s importance to Meta’s business cannot be overstated,” the analysts wrote in the note. “While Meta does not provide a country-level breakdown of revenue within Europe, we logically can presume that China is Meta’s second-largest revenue source after the United States — a remarkable position for a country where Meta has no users or active platforms.”
Meta could be in even more trouble if the broader markets heads into a recession this year, as some analysts and corporate financial chiefs have predicted. A “truly prolonged economic downturn” combined with the U.S. and China trade dispute “could wipe $23 billion in 2025 advertising revenues off Meta’s books and crush our 2025 earnings by -25%,” the analysts said.
“As noted earlier, we believe Meta is particularly exposed to a pullback in ad spend from Chinese advertisers,” the analysts said. “In a scenario where a recession is triggered or exacerbated by escalating trade tensions, Meta would face a dual headwind: cyclical advertising weakness and a targeted decline in Chinese ad spend.”
The MoffettNathanson analysts still maintain a Buy rating on Meta, said they have but decreased their target price by $185 to $525.
Meta shares have dropped about 19% to $499.36 since Trump was officially sworn in as U.S. president for the second time.
The company reports its first-quarter earnings next Wednesday.
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