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Seeking Alpha: Positioning for when water runs out

Posted by: Maven on June 26, 2009 at 6:42 am

From Seeking Alpha, Joseph L. Shaefer discusses the worldwide water situation and some possible investment opportunities:

… whether you are producing grain, meat, fruits or vegetables, you are using water – lots of water. Fully 50% of America’s fresh water goes to irrigate our crops and provide us with food. Do you like whole grain bread? I do. According to Kansas State University, which might know a thing or two about wheat, it takes 151 gallons of water to produce one pound of wheat.

Concerned about world overpopulation devouring every bit of remaining food like locusts? Then you are really concerned about the amount of available-for-use water. The earth is comprised of 70.8% water and 29.2% land, but salt water comprises 97.5% of all the water on earth, fresh water just 2.5% — and roughly 2/3 of that is locked in polar and glacial ice! Humans will die if we consume salt water. More on this in Part II. Let’s look today at the world situation for fresh water.

I have cautioned here and here that the headlong rush to buy emerging markets based upon their well-ballyhooed prospects, without conducting due diligence as to the problems they face in realizing those prospects, is folly. Restricting my comments only to water…

Mr. Shafer than takes a look worldwide of areas with water scarcity and those with water stress, and which companies stand to benefit in Part 1 of this series – click here.

In Part 2, Mr. Shaefer focuses on desalination:

Man is a wily creature and every now and again uses his brain for something besides figuring out how to destroy his nation’s economic system or finding new ways to destroy other inhabitants of the planet.

Desalination using reverse osmosis membrane technology has become a viable option for the development of new water supplies. You may be surprised at the number of countries – and nations – staking their future on desalination.

The largest seawater reverse osmosis plant in the world is at Ashkelon, on Israel’s southern coast. It provides over 100 million cubic meters of desalinated water per year at a cost of about $0.60 U.S. per cubic meter. Since one cubic meter equals just over 264 US gallons, and since the average price of water in the U.S. is about $1.50 per 1000 gallons, it costs you and I, living in the states, about $0.40 for a cubic meter.

He then gives a rundown of public companies working in desalination, and also some picks in irrigation technology. Check out Part 2 by clicking here.

June 26, 2009 · Filed Under Investing in water

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