Although a commodity, water is a vital resource. But because of easy access in our developed nation—one turn of the knob or flip of the handle is usually all it takes—it is an afterthought for most. In reality, a lot of work is necessary before water can become consumable.
Infrastructure and equipment (dams, reservoirs, water plants, pipes, etc.) must be built, installed and maintained, and the water has to be purified. After consumption, it’s necessary to remove contaminants before wastewater is released into the environment. For the importance of proper water treatment, look no further than to the hundreds of thousands of deaths each year from waterborne diseases in countries with inadequate water-sanitation systems.
At one time, America’s water infrastructure was the most advanced in the world. Unfortunately, that was a long time ago. Our water infrastructure is aging, under-funded, and in need of upgrades, rated a woeful ‘D-’ by the American Society of Civil Engineers.
According to the Environmental Protection Agency’s 2007 study, there is a $335 billion gap between budgeted spending and what will need to be spent between 2007 and 2027 in the public water systems to ensure continued safe drinking water and wastewater, replace aging infrastructure and meet regulatory requirements.
So far, we have only talked about drinking needs. Water is also an important component in many forms of industrial processes. For example, it is a crucial ingredient for hydraulic fracturing, or “fracking,” which has revolutionized gas production in the U.S. It takes one to eight million gallons of water to frack one well. And while some companies are experimenting with technologies that’ll enable recycling the water used, at this time, most of the contaminated fracking wastewater were disposed of, in some cases contaminating the local water supply. Given the shale gas boom in recent years, that’s massive demand for water, and particularly in arid areas rich in shale formations—such as Texas—scarcity is a concern.
So the case for water is clear. But who will benefit?
Water utilities will find state agencies more open to rate increases in order to encourage infrastructure upgrades. Non-regulated water services companies—which do not have their rates capped by regulators—should also see growing demand. Desalination—the removal of salt from sea water to make it potable fresh water—is one particular area we find very interesting, though costs are quite expensive at this time and the technology remains a speculative investment at this time.