According to Fortune, the answer is a definite yes if you are wondering if water will be the 21st Century new gold. The United Nations estimates that global population will grow from the present 7 Billion to 10 Billion by 2050, with over 1 Billion most likely not having adequate access to clean and potable water.
In 2010, global water companies raked in $508 Billion in revenues.
Most consumers do not think of how much water is actually utilized to produce consumer products when the water usage is calculated from the production of the crop to the final product.
Some sample statistics:
- 71 gallons to produce a single cup of coffee
- 70 gallons for 50 cents worth of milk
- 2.906 gallons for one pair of jeans, accounted for mostly by growing cotton
- 1.857 gallons for 1 pound of prime steak
- 467 gallons for that finger licking good chicken lunch
- 160 gallons for 1 pound of shredded wheat for your breakfast
- 104,000 gallons for a car, mostly from rubber
And the list goes on….
The water consumed by people is not by a long shot the big culprit. Agriculture accounts for 71% of water consumption, whereas industry accounts for another 16%.
The recent drought is only serving to compound the problem, but is also serving as a wakeup call, as oil companies scramble for water sources for their vast operations, where fracking require enormous amounts of water to crack the rocks and bring oil up to the surface.
American farmers also planted a record corn crop this year due to escalating commodity prices and the drought turned corn fields into wastelands. This means that further down the food chain, less developed countries may be facing a global food crisis similar to the one experienced in the 2007-2008 period.
The globe is mostly covered with water; however, the major problem is how to purify the water and make it suitable for consumption. As water shortages spread to an increasing number of locations around the globe, the costs of purification are certain to escalate.
- A few ideas about how to profit from the 21st Century new gold:
- Veolia Environment is a global leader in environmental services
- GDF Suez Energy North America has customers in 12 states
- ITT is a major competitor in water treatment technology
- PowerShares Water Resources
- First Trust ISE Water Index
The truly alarming fact about the growing water shortage is how nations will react to this situation. Egypt has been embroiled in political uncertainty ever since former President Mubarak was toppled from power, and stepping into the breach are countries such as Ethiopia and Burundi, which are seeking to secure their share of the life giving Nile river. Can military turmoil follow?
So far, no nation has offered any long term solution for the unthinkable. At least, money can be made of their collective inaction and indifference.