In the coming decades, expect to see nations pour billions more dollars into water infrastructure than oil infrastructure. While oil will remain a vital resource in many nations’ economies, the growth of water infrastructure and technologies is poised to outpace that of oil.

At the Singapore International Water Week last month, CLSA Asia Pacific Markets–a giant equity broker–estimated that annual global water demand would reach 6.9 trillion cubic meters by 2030. That’s 53 percent more than is used today.

The U.S. Energy Information Administration estimates that global oil consumption will reach 107 million barrels per day by 2030 (growth of 24 percent). The equivalent amount of water would be 119 billion barrels per day, making the market for water about 1,000 times larger if measured by volume.

Current infrastructure will not be able to support such an increase in demand. Many developing countries have begun massive infrastructure projects to prepare for future needs. In China, where water use is expected to jump 64 percent over the next two decades, its massive South-to-North Water Diversion Project made headlines recently for displacing over 300,000 citizens. The project will draw water from four rivers in the south and deliver over 44.8 billion cubic meters of water annually to the arid north. If completed in 2050 as scheduled, the water venture would be the largest of its kind.

Though the problem of water scarcity typically garners most of the public’s attention, it is the water industry’s infrastructure that will determine whether clean water gets where it’s needed. Huge investments will be required to build new water pipelines, reservoirs, and treatment plants, and still more will be needed to overhaul aging infrastructure in the United States and elsewhere.

The New York Times cited an Environmental Protection Agency (EPA) study that estimated the U.S. would need to spend $335 billion in the next 20 years just to maintain the existing water system. In New York, the maintenance tab could be $36 billion just for its municipal wastewater systems.

The public rarely concerns itself with the condition of the nation’s aging water system, but these days, a vital water pipe breaks somewhere in the country an average of every two minutes. Despite the looming infrastructure crisis, most of us take for granted, and pay mere pennies for, the water-to-tap system that delivers clean, drinkable water to so many (those with natural gas in their water not included).

The importance of water in the economy, like oil, is undisputable. With so many nations in need of supply and/or infrastructure, companies the world over are rushing to solve the problems. From desalination to water recycling technologies, sewage treatment facilities, and pipelines, the water industry has plenty of room for growth. Just as small oil service firms sprung up in the 20^th century to cater to niche demands and infrastructure efforts, so too will the companies of today flock to new water projects. If the 20^th century was the era of black gold, the 21^st may just be the era of blue gold.

photo credit: Zero-X / Flickr

Earlier this decade, beverage bottlers Coca-Cola Co. and PepsiCo were hit with harsh criticism from locals in India who claimed the companies were using up all the groundwater­–leaving locals high and dry. This not only damaged both companies’ reputations, but it also forced them to review how water, or the lack of it, would affect their businesses. Both companies have made dramatic advances, and Pepsi recently announced that it has achieved positive water balance in India. In other words, Pepsi would recycle and conserve water to ensure there was more water available than it took from the fresh water system.

If you ask an Indian citizen about the country’s water problems, you may be in for a lengthy conversation. Most people in India are acutely aware of how little water is available. Current Pepsi CEO Indra Nooyi recalls growing up in an Indian city where life was planned around water scarcity. She told Bloomberg BusinessWeek in 2007 that her middle class family had to wake up each morning as early as 3AM to get water for the day. That was the only time local officials turned on the water valves. Nooyi’s family would get up, fill all the buckets in the house with water, and then carefully manage its use. Two buckets were set aside for cooking, and two more were reserved for each of the children.

“You had to think about whether to take a bath,” Nooyi told the magazine. “You learned to live your life off those two buckets.”

Though water is scarce in India, it holds special significance for many of the country’s citizens. Some consider bathing a sacred act; others believe death is not properly marked until the person’s ashes are scattered in the Ganges River. However, despite water’s importance in Indian culture, the country suffers from some of the dirtiest, most-polluted water in the world. Pesticides, industrial pollution, and poor sewage treatment are just some of the reasons for the poor water quality.

Inadequate water management and over-pumping severely limit the availability of the precious resource. With much of the water heavily polluted and good water  either scarce or inaccessible, citizens have accused high-profile companies such as Pepsi of excessive water use. It doesn’t matter that (according to Nooyi) bottled water and soft drinks account for only 0.04 percent of industrial water use in India–making Pepsi a small part of the problem.

Broad-based boycotts of Pepsi products in India caused the company’s sales to drop by double digits. The company responded by focusing on conserving water, and helping to bring water to villages in need. Now, the Indian arm of Pepsi says it has achieved positive water balance. The company says it used 5.17 billion liters of water in 2009, but “recharged” or replaced in some manner 6 billion liters, a positive contribution of 836 million liters.

Pepsi achieved its positive water balance via conservation efforts, community programs, rain harvesting, and the building of check-dams (small dams that can be used to control the flow and level of water).

At a bottling facility in Palakkad, India, Pepsi was able to make significant reductions in its water use. A company spokesman told the Economic Times that the Palakkad facility is one of the company’s most efficient, saving an estimated 200 million liters of water–a 60 percent reduction in the last four years.

Sanjeev Chadha, the chairman and CEO of PepsiCo India, wrote in a blog post that Pepsi building check-dams for villages would be the best way to “rejuvenate the water supply.” While the company has built 13 check-dams, helped educate villagers on better water management techniques, and erected rain-harvesting units, some believe the company could do more.

Sunita Narain of the Centre for Science and Environment told the Economic Times, “It would be ideal if PepsiCo was replenishing all the water it consumes in areas where its plants are located. The scarcity and problem lies in those areas.”

Pepsi’s positive water balance in India is an accomplishment. Cutting water use at bottling facilities and assisting villagers with water resources are good steps toward repairing Pepsi’s reputation and tackling water scarcity. To be fair, there is only so much that Pepsi can do. The company’s soda business relies on water, and Pepsi sells bottled water as well.

Without water, however, Pepsi, Coca-Cola, and other bottling companies have no business. At its current consumption rates, some believe India will exhaust its water resources by 2050. And public outcry, as seen in India, can sway governments to support citizens over corporations and contracts.

The larger point here is not that Pepsi is doing the right thing for some villagers in India, or that it’s reducing water use at bottling facilities–though those are commendable steps. The point is that the company HAS to take those steps. The realities of the world’s water resources demand it. Companies are no longer free to take resources without thinking through the ramifications. In today’s water-scarce reality, Pepsi has to build check-dams for villagers in order to sell cola: that’s the point.

photo credit: Getting Water in India–Rupert Taylor-Price on Flickr, Check Dam–PepsiCo India

The Aral Sea is “one of the worst environmental disasters in the world,” according to Ban Ki-Moon, United Nations (U.N.) Secretary General. On a recent visit to Central Asia, Ban visited what is left of the Aral Sea, and flew over the basin to see for himself the arid salt flats left behind by the receding waters. The U.N. Secretary General suggested regional leaders need to cooperate solve the crisis.

The Aral Sea, once the world’s fourth-largest lake, has been disappearing since the 1960s, when planners from the former Soviet Union began siphoning water to grow cotton in what is now Uzbekistan. Now 70 percent smaller, the Aral Sea is incredibly salty, containing six grams of salt per liter–three times the safe limit for human consumption. No plants or crops can grow in such salty water. As the evaporation continues, the remnants of agricultural and industrial pollution are left behind.

When the wind blows in Uzbekistan, a mixture of dust, salt, sand, and chemical pesticides threatens the health of plants, animals, and humans. Because the dust clouds are filled with contaminants like heavy metals and DDT, villagers say everyone is ill. Many people have respiratory diseases, and the surrounding areas have the world’s highest instances of tuberculosis. In some places, infant mortality is higher, and people are developing liver and kidney diseases.

While news outlets like Reuters, UPI, and the Huffington Post have reported on Ban’s April visit and the environmental devastation, none went into detail about the real cause of the disaster: cotton farming.

Let us first say that we don’t have a problem with cotton. It is a global staple, and a vital commodity. Even so, cotton is an extremely thirsty crop, requiring over 700 gallons of water to grow enough cotton for a single shirt. And while growing cotton is necessary, in times of increasing water scarcity it is difficult to justify cotton farms in the middle of a desert.

It’s also important to keep in mind that after the Aral Sea began to dry up, the Soviets had to use more and more chemicals and fertilizers to grow the cotton. These additional chemicals have been left behind as the waters have receded, and in the span of 40 years, a former fishing and resort town has turned to a desolate village full of sick children.

Unfortunately, those errors aren’t limited to the former Soviet Union. Here in the United States, we are growing cotton in the deserts of California, Texas, and Arizona. It might seem strange that a nation would grow such a thirsty crop as cotton in the middle of a desert. However, these states represent the main cotton growing regions in the U.S., and all three states have suffered major droughts in the last five years.

The world will continue to grow cotton, and we will most likely continue to do so in these water-scarce regions. However, the lesson we should take away from the Aral Sea is that water resources can and do disappear. This “environmental disaster,” as Ban calls it, is not an beyond our control, rather the result of deliberate actions. Without discussing the causes of a disappearing lake, how can we prevent the same thing from happening in someplace like, say, Lake Mead?

With the gluttonous feast that is Thanksgiving now behind us, many have turned their thoughts to the December holidays. Few have considered next year’s Thanksgiving or the ones after that. The holiday could ultimately be stripped of its traditional bounty, however, if water scarcity and climate change continue unchecked.

Dwindling water supplies and ongoing climate shifts could bring about worldwide food shortages or dramatic increases in food prices. The latter is far more likely, but the result could be the same: An end to cheap, readily available food at a time of explosive growth in the world’s population.

The U.S. Drought Monitor has found that one third of the continental U.S. is suffering from abnormally dry, or drought conditions. Drought conditions are the most acute in the Western U.S., according to the report, produced jointly by the federal Department of Agriculture and the National Oceanographic and Atmospheric Administration. The nation’s groundwater, which provides 50 percent of the water used for drinking, irrigation of crops, and industry, is diminishing .

“Basically the groundwater is being depleted of its resource,” said Kevin Dennehy, project coordinator for the U.S. Geological Survey’s groundwater program. “It’s been happening for quite some time and it’s going to continue to happen. The removal of water from the aquifer is at a greater rate than water is being re-charged in the aquifer naturally,” Dennehy said in a story published by CircleOfBlue.org.

Scientists and resource specialists have warned that freshwater scarcity is hurting farm productivity. Farmers may see their crop yields decrease because there is not enough water, or because conditions limit the amount of water a farmer is allowed to use.

Even amid diminishing water resources, paradoxically, flooding is on the rise.

“We know that that’s already a problem,” Melanie Fitzpatrick, a climate expert at the Union of Concerned Scientists, told Circleofblue.org, “Spring flooding is a problem in agriculture in terms of farmers getting into their fields to sow their crops, and we’ve seen some really significant flooding.”

Climate change, food production, and water scarcity are inextricably linked. At the United Nations’ World Summit on Food Security, Secretary-General Ban Ki-moon declared, “There can be no food security without climate security.”

Even as climate change and water scarcity are making it difficult for farmers to increase yields, the world’s population is set to explode. The U.S. Census Bureau estimates that by 2050, the world population will reach over nine billion. Representatives of nations participating in the World Summit on Food Security have agreed that agricultural output must increase 70 percent by 2050. Yet, threats remain.

The U.N. Secretary-General told the summit gathering:

Weather is becoming more extreme and unpredictable. In many parts of the world, water supplies are declining, agricultural land is drying out. Food security and climate change are deeply interconnected. If the glaciers of the Himalaya melt, it would affect the livelihood and survival of 300 million people in India and China and up to one billion people throughout Asia. Africa’s small farmers, who depend primarily on rain to produce most of the continent’s food, could see harvests drop by 50 percent by 2020.

Now let’s get back to Thanksgiving. It’s my favorite holiday, and I am not prepared to have my future Thanksgivings jeopardized by solvable problems. If we’re not going to solve the water and climate problems because it is the right thing to do, we might as well consider solving them for reasons we care about – the turkey, ham, stuffing, cranberries, yams, potatoes, gravy, and various pies.

So don’t forget about the Thanksgivings of the future. One day, the thing we are most thankful for on Thanksgiving may be the food itself.

Photo credit: donkey in the drought stricken maize field by Ray Weil.

Do you like beer? If you enjoy a cold one from time to time, you should know that water scarcity is a potent threat to your future supply.  It takes nearly 20 gallons of water to produce a single pint of beer. Fortunately, many beer producers either already have a water conservation strategy, or are working on one.

MillerCoors (a partnership of the U.S. operations of SABMiller and MolsonCoors) launched a website that does the predictable by touting its water conservation efforts and the company’s corporate social responsibility (CSR) initiatives. But unlike many other online efforts, MillerCoors’ new site also was designed to draw consumers into the conservation movement. Great Beer Great Responsibility, allows visitors to “participate in three areas of focus–environmental sustainability, alcohol responsibility, and people and communities.”

“The new website gives us a unique opportunity to connect with consumers who enjoy our great beers, and would like to learn more about the responsibility behind those brands,” said Cornell Boggs, chief responsibility and ethics officer for MillerCoors, in the press release announcing the new site. “In addition, the site invites consumers to share in our action, by pledging to conserve water, plan ahead for a safe ride and contribute ideas that represent how big change starts with small steps.”

Of particular interest to us is the fact that MillerCoors is encouraging visitors to pledge to conserve water, and is tracking the water saved.

The average American uses more than 100 gallons of water each day.  Can you try to use less?  We hope so.  After all, water is the most important ingredient in beer, and at MillerCoors, we’re always trying to make more beer by using less water.  Please join us…. Together, we can make a difference.

It’s easy for visitors to pledge to save water by choosing from a list of easy things to do, such as:

• Turn off the water while brushing your teeth
• Turn off the hose between rinses  when washing your car
• Shorten showers by a minute or two
• Run the washing machine only when it’s full

Every American can adopt those small changes and others to conserve water. We are pleased MillerCoors is encouraging its consumers to take action, discuss water consumption, and share their personal conservation efforts. We all have a stake in ensuring that there is plenty of water for generations to come.

After all, if there is no water, there can be no beer.

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