By John Wasik
CHICAGO, July 30 I have a pretty good idea of
what drought looks like after recently traveling more than 1,400
miles from Chicago to Utah: Vast patches of brown where there
should be green. Cornstalks that look like desiccated
scarecrows. Wilted soybeans. Forested Colorado canyons
devastated by wildfires and pine beetles.
Whether this is the brutal impact of climate change or a
short-term cycle, I can't say. Regardless of your scientific or
political persuasion, though, what is certain is that water is
going to be an increasingly valuable commodity and a worthwhile
The short-term nightmare is that the United States is
experiencing its hottest year on record. States from Ohio to
California -- 53 percent of the contiguous United States -- are
in drought, according to the National Weather Service. Many
breadbasket states that have traditionally been blessed with
summer rains in the Midwest are parched.
As a result, 45 percent of the corn crop and 35 percent of
soybeans are rated "poor to very poor," according to the U.S.
Department of Agriculture. The produce manager at my local
supermarket heard that farmers are close to plowing under their
fields and seeking crop-insurance payments as drought is
expected to intensify across America's heartland. More than
1,200 counties have been declared disaster areas. Futures prices
on corn have already hit a record high.
As a result, look for higher prices on everything from bread
Globally, the long-term picture is worse. Rising water
demand due to population increases, industrialization and higher
standards of living in developing countries is exceeding supply.
According to the United Nations (UNESCO), not only is water
being wasted around the world, the infrastructure for producing
and recycling it lags the demand. Nearly 1 billion people do not
have access to clean water while another 3 billion are expected
to join the world's population in the next 40 years. China alone
is planning to add some 500 new cities, each housing 100,000 or
more people. Also consider the big industries that are major
water consumers: electric power, metals, petroleum and food
production. Some 70 percent of all fresh water is used by
Where will the water come from to quench the thirst and feed
some 10 billion souls? The ocean is one answer, since it covers
most of the planet as freshwater sources are being rapidly
depleted. Yet that calls for quantum leaps in technology since
desalination requires tremendous amounts of energy to take the
salt out of seawater. Currently there are more than 7,500
desalination plants in use globally -- a number that is
expected to double by 2025, estimates the United Nations.
Conservation and treatment technologies are also a partial
answer, which means better filtration, conservation and
water-treatment systems -- infrastructure that costs trillions.
If growing countries are committed to supporting their
burgeoning populations, they will need to make these
A handful of global conglomerates already have these
concerns in their sights. General Electric Co, for
example, has a water and process technologies unit. Dow Chemical
Co, Siemens AG and DuPont also have
If you are looking for more specialized leaders in the water
industry, consider Modern Water Plc, which has pioneered
a new "forward osmosis" desalination technology, or the Korean
company Doosan Heavy Industries, which makes water
treatment and desalination systems. The French company Veolia
Environnement VE SA provides drinking and wastewater
More diversified baskets of water-related companies can be
found in exchange-traded funds (ETFs), which are the preferred
approach for most investors. PowerShares Water Resources ETF
invests in an index of water companies as does the
Guggenheim S&P Global Water Index.
Water has often been called the new gold or oil. That is
not an appropriate comparison, though, because our bodies are
mostly water and we cannot live without it. Still, water demand
will create new business and technological challenges to
produce, store and recycle it. Conservation will become even
more important to protect run-off and topsoil. Agricultural
productivity will also need to improve. We will probably see
even more "vertical farms" that employ skyscrapers and solar
power to grow food in cities.
What is needed is something akin to the "green revolution"
that took place in the mid-20th century that vastly boosted
agricultural productivity. A new "blue" revolution will employ
more efficient use of water resources and re-use water so that
billions may thrive. It will take a universal global commitment
that will reshape everything from soft-drink manufacturing to
taking a shower. It is long overdue and an essential technology
investment. After all, you can't drink a smartphone or