Water Most Precious Commodity of 21st Century

As we’ve mentioned in these pages before, there is a commodity that is often overlooked by investors: water. Well, we’re willing to bet that those days are coming to an end, as crumbling water infrastructure opens up opportunities for water companies worldwide to step up to the plate.

In the United States alone, there are 70,000 miles of ageing pipeline and pumping stations – all of which are in dire need of updates and repairs.

And this isn’t just affecting the United States anymore…the world population has tripled over the last century, and world water use is up six-fold. And since the water infrastructure has not kept up with demand, water shortages have been plaguing cities in China, Saudi Arabia and Algeria.

In fact, an article in today’s LA Times points out that “‘Western Algeria had running water only one day out of every 18 at the peak of the crisis, in 2002. The rationing also affected Algiers,’ said Christopher Gasson, publisher of Global Water Intelligence. ‘At that point, water became a political priority, and the government is now investing heavily in desalination,’ he said.”

“The emerging water crisis gets more and more attention with each passing month,” says our resident ‘blue gold’ expert, Chris Mayer. “It is hard to ignore the billions of dollars needed to fix the world’s water infrastructure – things like replacing leaking water and wastewater pipes.

Plus, there are major health consequences. Millions get sick or die from waterborne illnesses. This affects the U.S., too. Last year, for example, was the worst year for sewage spills in U.S. history. The cause: old leaking pipes. Expect things to get worse before they get better.
“For investors, though, there are several ways to play it.”

Fortune magazine recently said, “Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations.”

Kate Incontrera
Markets and Money

Kate Incontrera
Kate Incontrera is the managing editor of Markets and Money. She is also the author of Markets and Money's Weekend Edition, a weekly wrap-up of contrarian investment analysis.

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