Stemming the Tide by Investing in Water

From Drought to Flood:
Stemming the Tide by Investing in Water
A Daily Reckoning Special Report
by Kate “Short Fuse” Incontrera

Las Vegas, one of the nation’s fastest growing cities, is feeling the effects of a multi-year Western drought. The population of America’s adult playground is up 50% since 1999 – and shows no signs of waning.

“Las Vegas is growing too fast for its water resources, not, unfortunately, unlike many other Western cities,” said Peter Gleick, co-founder of the Pacific Institute for Studies in Development, Environment, and Security in Oakland, California.

“Las Vegas is a special case for two reasons: it is growing very rapidly and the second is they are really constrained on water supply.”

Another booming desert city that is in a similar pickle is Phoenix, Arizona. Phoenix and Vegas are neck-and-neck in the race for America’s fastest growing city (in terms of population) and limited water resources is obviously a big issue here, as well.

“The key source of water out west is the Colorado River,” Chris Mayer tells us. “The Colorado River Compact governs how the Western U.S. shares the river. The way I understand it, if there is some sort of crisis, Arizona is at the back of the line. In olden days, when cities sprung up around strategically useful locations along riverbanks or ports or spread in fertile valleys, it would be inconceivable that a city of Phoenix’s size would sprout in the desert.

“But modern technology makes these things possible, for good or ill. A city like Phoenix survives by importing water.”

And in Vegas, the water crunch is being managed by attempting to use available water supplies more conservatively; and a $2.5 to $3 billion dollar pipeline is in the works to bring aquifer water from a remote part of Nevada by 2015.

From Potential Drought to Actual Drought

The Rude Awakening’s Joel Bowman has found himself in Istanbul, Turkey…a long way from Laguna Beach. While the whole country is experiencing an extreme drought, Joel reports that in Turkey’s capital of Ankara, the situation is very serious: they only have enough water left in their reserves for 78 more days.

“Some will undoubtedly fob this off as just another foreign crisis, a catastrophe restricted to the plight of second- or third-world countries and far off deserts,” writes Joel in today’s guest essay.

“This is simply not the case. Rainfall does not discriminate on grounds of a region’s economic prosperity. It takes account of no race, GDP or, despite enthusiastic prayers from millions of people here in Turkey, of religion. But rainfall is only one part of the problem. What to do with the water once it has descended from the heavens is at least equally important. Gross mismanagement (as has been seen here in Turkey) and insufficient infrastructure is also to blame.”

…And from Drought to Flood

While the Middle East is getting little to no rain, the U.S. Midwest has gotten more than enough in the past couple of weeks…

Powerful storms rolling through the upper Midwest have left 25 dead, destroyed countless homes and have hundreds of thousands without power. This week the cleanup begins, although parts of Wisconsin are still getting hammered by heavy winds and rains.

As with any major disaster, after the cleanup, comes the rebuild, the cost of which will be astronomical.

“Almost two years after Hurricane Katrina battered the Gulf Coast, the government, private enterprise and charities continue to pour billions into cleanup efforts,” Bulletin Board Elite’s Greg “Gunner” Guenthner tells us. “As of last summer, the federal government alone shelled out $3.6 billion to cart off nearly 100 million cubic yards of debris from the area. And cleanup efforts continue to this very day.

“Of course, there is even more work to be done after the debris is swept under the rug. Hazardous and toxic wastes from mining operations, industry and the like are routinely leaked onto agricultural land, city streets and residential neighborhoods during flooding. In fact, this type of cleanup is almost always necessary whenever flooding occurs.”

Gunner tells us that disaster cleanup is big business – and one miniscule company has the wherewithal to tackle any difficult cleanup. Its subsidiaries employ the scientists and technicians that can handle everything from mold to asbestos and hazardous waste removal.

Kate “Short Fuse” Incontrera
The Daily Reckoning

Related Articles on Peak Water and other water issues:

Bottoms Up! – 01/05/2006
By Dan Denning “A ‘watershed moment’ has arrived!…Literally. One of the most dynamic and profitable themes for the rest of this decade will be investing in water.”

Blue Gold – 01/03/2006
By Chris Mayer “A gallon of crude oil costs $1.45. A gallon of Evian costs $11.91. This simple observation led one successful investor to assert that oil is undervalued. We see things a little differently…”

Got Gold? – 01/09/2006
By The Mogambo Guru “The Mogambo smiles as he says, ‘Harken to me, my darling dudes and dudettes. Gold! Got gold? Get gold!'”

Related Links on Peak Water and other water issues:

Gillespie Research – John is one of the country’s foremost experts on water investing.

Water-Stocks.com – InvestorIdeas.com – Big ideas for the small cap investor, where smart investors and industry leaders meet to track trends.

BusinessWire.com –  Water is a booming business, according to an English publication Global Water Intelligence.

Yahoo! Finance – Get stock quotes, market news, mortgage rates …At Yahoo! Finance, you get free stock quotes, up to date news, portfolio management resources, international market data, message boards, and mortgage rates.

NASDAQ Trader – NASDAQ Ten most active share volume. Latest trading halts.

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