The Scarcity of Water
“How inappropriate to call this planet Earth, when clearly it is Ocean.”
~Arthur C. Clarke
Most people think of water in terms of drinking, cooking, and cleaning. And why shouldn’t they?
But water is also the major source of renewable energy in the form of geothermal and hydroelectric power (the kind of stuff we want more of) and is critical in pretty much every industrial manufacturing process.
Water headlines are starting to pop up in some unconventional places.
Of course, we already know that the American West is drying up.
Water scarcity is intrinsically linked to climate change yet is a hard to understand risk for companies and investors alike.
Prompted by some news headlines, and a recent connection I’ve made through this newsletter, I thought this week I take a little look at water.
The Bad News
+Chile announces unprecedented plan to ration water as drought enters 13 year - The Guardian
+Iceland cuts power to industry, turns away new bitcoin miners - BNN
+The promise and pitfalls of desalination - The Economist
+The top 39 water startups to watch out for in 2021 - Startup Pill
Chile, Water, and the Energy Transition
The world will continue to become more familiar with Chile and its politics since it is one of the countries set to become a huge winner from the energy transition.
Chile is the world’s largest producer of copper and is the second largest producer of lithium.
But all of these mining and industrial processes are water intensive.
+Lithium’s water problem - Mining Technology
As the linked story on Chile above notes,
“The government estimates that the country’s water availability has dropped 10% to 37% over the last 30 years and could drop another 50% in northern and central Chile by 2060.”
The Solutions
Efficiency Anyone?
Here we go again with the efficiency talk, but it’s time we started treating our precious resources as precious.
The thing with efficiency is that we often don’t need any crazy new technologies, government policy, wild business models, or even Web3 to bring these solutions to market.
“These efficiency measures include fixing leaks in water pipes, replacing inefficient washing machines and toilets, and replacing lawns with plants suited to California’s dry climate, among other things.”
+California could shrink water use in cities by 30% or more, study finds - Los Angeles Times
Desalination - Expensive and Energy Intensive
It’s easy to think that we can just infinitely pull water from the ocean, but that sounds a lot like how we have historically treated fish.
In the end, the bottomless sea has turned out to not be so bottomless.
“Utilities have to think about the fact that this water is too good to be flushed down toilets and used for watering lawns,” says Newsha Ajami, a water expert at the Lawrence Berkeley National Laboratory.”
+The promise and pitfalls of desalination - The Economist
Wave Energy and Desalination For Smaller Economies
While wave energy hasn’t been harnessed at a scale large enough to dent the power demands of any large economies, it might be a good fit for smaller island nations that are dependent on imported diesel for running power generators.
Mixed with desalination at a smaller scale, these systems are a rapidly deployable solution to some hard-to-reach locales.
“Renewable, wave energy-powered systems could supply clean water to water-scarce, remote, or island communities that are already particularly vulnerable to the effects of climate change. These easily shipped desalination systems may also prove to be a crucial lifeline to support resilience and recovery in the face of worsening natural disasters,”
+Instant drinking water: just add wave energy and solar panels - CleanTechnica
Investing in Water
From an investor’s point of view, water is more of a risk than an asset.
While people talk about land and water rights, there is plenty of opportunity for a government to come and change the rules related to such a critical asset.
However, understanding where water risk lies in a given investment or portfolio is yet another factor investors are beginning to measure.
I had the opportunity to connect with Nikola Lei Ravello who has decided to use his research skills to focus on water.
He recently did a podcast interview about investing in water assets that I highly recommend taking a listen to if you're interested in the impact water risk is having in your investments.
Podcast: Water Asset Advising
Additionally there are some links to Nickolas website, research, and resources that he mentions in the podcast below:
+White Stag Investing Research
+Water investment opportunity through funds solutions - Swiss Water Partnership
Because, Bacon…
Okay, aside from being seaweed-based this doesn't have much to do with water, but bacon.
+Seaweed based bacon start up lands $3mil funding - The Fish Site
I’m traveling next week, and will leave the laptop at home and skip the newsletter. The image at the top of the page will give you a clue as to what I’m up to.
Thanks for reading.
Best,
Doug