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Is water the next oil?

Posted at 3:29 PM on January 3, 2011 by Bob Collins (4 Comments)
Filed under: Economy

The price of a gallon of gasoline nationwide pushed to $3.10 today. We've seen this before. A combination of increased economic activity and commodity traders betting on the price of gasoline makes it a hot commodity.

Now, there may be another one that could get bid up to high levels: Water.

People keep moving into areas where there's no (or little) water: Texas, Arizona, California. They're going to need water and, as with gasoline, you can probably get it if you want to pay for it. That means trading in it in the commodity markets and establishing a benchmark price, similar to oil.

Last summer, Nestle exec Peter Brabeck-Letmathe argued that it's time to treat water as the finite resource it is While it is a basic human right to have access to subsidised water for hydration and hygiene, why should washing your car, filling a swimming pool or watering a garden be priced in the same way? Full cost recovery for these activities will not only ensure that we are more judicious in our use, but will also, crucially, help repair our leaking infrastructure. In the poorest areas, it will also help to extend pipes so that water reaches more homes.
On CNBC today, a couple of experts speculated that there's money to be made in water, a commodity that currently doesn't have a price.

Comments (4)

Perhaps California, Texas and Arizona will have to buy their water from us some day...

Posted by Bob Moffitt | January 3, 2011 3:38 PM

It always amazes me that Detroit, a city with plenty of fresh water on one of the greatest transportation nexuses in the US has declined so much. As water becomes more scarce and efficiency of transportation (hint: not jets or trucks) becomes more important, Detroit is poised for a rebound. Atlanta, Phoenix, and LA will probably contract..

Posted by Justin | January 3, 2011 4:26 PM

I have always thought that the 21st Century will see conflicts and wars over Water, as the 20th Century have had conflicts revolving around Oil.

Posted by Paul (@princejvstin) | January 3, 2011 6:06 PM

Ever since a child I was amazed how people wasted water, as with most everything else on Earth they squander, defile, exterminate within a selfish bubble of instant gratification.

As ground water sources deplete or become contaminated humans stare into their iphones blind. Not worthy of pity.

Posted by Patrick | January 4, 2011 1:20 AM