QVM Group

Water Investments: Staying on Land - For Now

Stuart,

Good points about water shortage issues.

The World Bank warns of "catastrophic consequences" if water use and supply are not brought into balance.

They say that worldwide we are "mining water" by pumping more water out of the ground than is being replenished -- and that once our pumping depletes the aquifers our pumping will be limited to the recharge rate (no statement about ability of desalinization to make up the difference, I suspect it can't keep up).

The impact of a future physical limits reducing water pumping rates would have direct impact on food production levels and related social unrest.

Apparently, even fossil aquifers (water trapped in geologic formations for which there is no replenishment) are being pumped in some cases.

Rivers are being diverted upstream to various uses, which causes conflicts with downstream users. Water wars are local now, but could enlarge to be between countries in the future.

About 70% of world water use is for irrigation, about 20% for industry and about 10% for residential use.

The world needs more efficient methods (such as drip irrigation instead of surface water irrigation, and recycling of industrial waste water for industrial reuse). The world also needs more desalinization capabilities.

As water shortages become more evident, there should be an increasing number of investment opportunities to benefit financially from those companies that will help solve the problem.

Utilities may not be the best option, but those technology companies that create solutions for greater water efficiency or the creation of more water supply from the oceans may be good opportunities.

Richard