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Category: Investment, Water
Hydrocommerce Corner-Where Water & Money Meet; Infrastructure-Pay now or Pay Later!
Hydrocommerce Corner-Where Water & Money Meet
Brought to Investors by www.investorideas.com and its water investing portal, www.water-stocks.com
April 15, 2010 Edition
By William S. Brennan
Bio and more info: http://www.water-stocks.com/Bill_Brennan/
April 15, 2010 (Investorideas.com water stocks newswire) By now, most people in the U.S. are familiar with our crumbling state of water infrastructure. If not, please do yourself a favor and buy the latest addition of National Geographic which addresses not only the US but the global issues that we are facing. It amazes me that most citizens equate infrastructure with energy, transportation, etc but never connect the dots between infrastructure and water availability and water quality. While much noise has been made about rain deprived areas leading to drought conditions in the West and Southeast before the winter of 2010, every major metropolitan area of the U.S. face significant water capital expenditures that grow more costly every year.
The convergence of climate change (not Al Gore's version…the scientific, quantifiable version minus the email adjustments), increase in usage by agriculture (take a look at how much water it takes to grow a typical western civilization diet), energy (yes energy…and if cap and trade passes, watch our water usage go through the roof!), industry ( ask Merck or Pfizer what their yearly water bill is) and residential ( stop planting foliage that is not indigenous to your geographic area) applications and throw in the last factor…population is expected to increase to 9 billion people globally by 2030 and you have the recipe for disaster if we don't get our water infrastructure rebuilt in the U.S. NOW!
Now that I have your attention, what needs to be done in the short term? Let's look at the list of what should take place in order for us to conserve our most precious resource. Drinking water and waste water systems are old, leaky and quite frankly providing a less than acceptable end product. Pipe leakages continue to climb, water discharged from wastewater plants into our rivers contains more raw sewage than ever before (yes that is where it eventually ends up…and that river could be a source for your municipal drinking water plant!) and municipalities are coming up short on funding for much needed upgrades and repairs to outdated water systems. The concrete jungles we have created and have cut off stormwater from re-entering the aquifers as groundwater with most of it discharged in to oceans or rivers. Our state boundaries have created artificial water boundaries, leaving the notion of basin management hanging in the wind while states sue each other in federal court for the right to drain rivers that are shared resources. Industrial and commercial buildings should move towards flush less urinals and sensors that limit the amount of water wasted…and while they are at it, a rainwater recapture system that creates a dedicated water source is not a bad idea either. Farming techniques, although vastly improved in the U.S., still accounts for 41% of the daily water usage in the States and can account for considerable soil erosion when using outdated techniques. As farmers look to grow less water intensive crops such as almonds the reality is that certain water dependent crops that are grown in California and Florida should be grown in more water rich areas such as South America. Every irrigation system in the U.S. farming or residential (take a drive through Beverly Hills or Palm Beach and count the sprinkler heads) should have a conservation mechanism in the form of a sensor that measures at a minimum water adsorption.
The above recommendations come with a price tag though. One of the most frequently asked questions that I face from investors (besides how do I make money in water) is "Where will the money come from and who is going to pay for it?" While the Federal, state and local governments are awash in a sea of red ink with no end in sight, individuals unfortunately will bear the burden for the immediate future. While I have always believed that our shortsighted water infrastructure under spending would catch up to us at some point (having dealt with these issues 20 years ago as an environmental engineer), the inflection point is upon us now and it is real. Be prepared for usage taxes on everything that water touches or potentially contaminates potable water (tooth paste, toilet paper…you get the idea). Rationing or defined usage based on the size of the property or the size of your family is being analyzed and in some parts of the country, already in place. We are already behind other parts of the world on private public partnerships that would significantly defray the cost but have terms and conditions that are attractive to potential investors.
Someone has to emerge as the voice of reason and present the American citizens with a real, accurate and sobering picture of where we stand regarding our water infrastructure and explain the economic ramifications if we fail to act now. The fact that we are just coming out of our zombie-like state after a recession that most believe is over (maybe globally but unemployment and foreclosures still loom ominously in the U.S.) does not give most politicians any impetus to take the forefront on this matter. Take the time to understand the water issues specific to your town and geographic area. The days of cheap water are over.
By William S. Brennan
Bio and more info: http://www.water-stocks.com/Bill_Brennan/
Brought to Investors by www.investorideas.com and its water investing portal, www.water-stocks.com
Disclaimer:
This column, Hydrocommerce Corner-Where Water & Money Meet with Bill Brennan, is the opinion of William S Brennan.
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