Best of the Week
Most Popular
1.Gold Price Trend Forecast, Where are the Gold Traders? - Bob_Loukas
2.Stocks Bear Market of 2017 Begins? Shorting the Dow At its Peak! - Nadeem_Walayat
3.Betting on President Trump Leaving Office Early, Presidency End Date - Betfair Market - Nadeem_Walayat
4.Why Stock Market Analysts Will be Wrong About 2017 - Clif_Droke
5.Is This The Best Way For Investors To Play The Electric Car Boom - OilPrice_Com
6.Silver Price 2017 Trend Forecast Update - Video - Nadeem_Walayat
7.Gold Price Set For Very Bullish 2017, Trend Forecast - Austin_Galt
8.10 Things I learned From Meetings With Trump’s Transition Team - - John_Mauldin
9.How Investors Can Profit From Trumps Military Ambitions - OilPrice_Com
10.Channel 4 War on 'Fake News', Forgets Own Alt Reality Propaganda Broadcasting - Nadeem_Walayat
Last 7 days
The Mother of All Financial Bubbles will be Unimaginably Destructive when it Bursts - 19th Feb 17
Gold’s Fundamentals Strengthen - 18th Feb 17
The Flynn Fiascom, the Trump Revolution Ends in a Whimper - 18th Feb 17
Not Nearly Enough Economic Growth To Keep Growing - 18th Feb 17
SPX Stocks Bull Market Continues to make New Highs - 18th Feb 17
China Disaster to Trigger Gold Run, Trump to Appoint 5 of 7 Fed Governors - 18th Feb 17
Gold Stock Volume Divergence - 17th Feb 17
Gold, Silver, US Dollar Cycles - 17th Feb 17
Inflation Spikes in 2017, Supporting Gold Prices Despite Increased Odds of March Rate Hike - 17th Feb 17
Roses Are Red... and So's Been EURUSD's Trend - 17th Feb 17
Gold Trade Note Sighted - 17th Feb 17
Gold Is Undervalued Say Leading Fund Managers - 17th Feb 17
NSA, CIA, FBI, Media Establishment 'Deep State' War Against Emerging 'Trump State' - 16th Feb 17
Silver, Gold Stocks and Remembering the Genius of Hunter S. Thompson - 16th Feb 17
Maps That Show The US’ Strategy In Asia-Pacific - 15th Feb 17
The Trump Stock Market Rally Is Just Getting Started! - 15th Feb 17
Tesco Crisis - Fake Prices, Brexit Inflation Tsunami to Send Food Prices Soaring 10% 2017 - 15th Feb 17
Stock Market Indexes Appear Ready to Roll Over - 15th Feb 17
Gold Bull Market? Or was 2016 Just a Gold Bug Mirage? - 15th Feb 17
Here’s How Germany Buys Time From China - 15th Feb 17
The Stock Trader’s Actionable Guide to Trump - 15th Feb 17
Trump A New Jacksonian Era? The Fourth Turning (2) - 14th Feb 17
Stock Market Yet Another Wall Street 'Witch's Brew' - 14th Feb 17
This Is Why You Don’t Own A Lot Of Stocks - 14th Feb 17
Proposed Tax Reforms Face Enormous Headwinds - 14th Feb 17
BBC Inside Out Tesco Rip off Offers - Determined to Lose Big Spend Customers! - 13th Feb 17
Is the UK An Economy Built on Debt? - 13th Feb 17
Stock Market VIX Cycles set to Explode in March/April 2017 – Part 2 - 13th Feb 17
Stocks At Record Highs - Will Uptrend Accelerate? - 13th Feb 17
US Dollar: 'Rumors of My Death are Greatly Exaggerated' - 13th Feb 17
Is This The Top Commodity Play For 2017? - 13th Feb 17
Trump a New Jacksonian Era? - 13th Feb 17
Stock Market at High Tide - 13th Feb 17
Channel 4 War on 'Fake News' Ends - The New News Age - 12th Feb 17

Market Oracle FREE Newsletter

State of Global Markets 2017 - Report

Doomsday for 30 Million Americans, Who Will Have to Move by 2013

Companies / Water Sector Oct 03, 2010 - 06:12 AM GMT

By: Investment_U

Companies

Best Financial Markets Analysis ArticleDavid Fessler writes: Earlier this week, the rain hammered down for two days straight here in Pennsylvania. But remarkably, rivers, streams and lakes haven’t risen one iota.

And my son, Noah, hasn’t had to mow the lawn in over a month (something he’s not entirely unhappy about.)


Why? We’ve had a bone-dry summer up in the Northeast. But the drought that the Northeast has experienced over the past few months is nothing compared to the situation out west. In a word: desperate…

A River Runs Through It

If you live in any of these seven western states – Colorado, Arizona, Nevada, California, Utah, Wyoming or New Mexico – chances are, you’re dependent on one thing to survive…

The Colorado River.

In fact, there are 30 millions Americans who rely on the great river for their water. It’s the lifeblood of these states. Without the Colorado’s steady flow, life there would cease to exist.

All seven states would struggle to generate power, grow food and people wouldn’t have water for everyday use.

Ah, but the Colorado River has plenty of water, right?

Think again…

After an 11-Year Drought, a “Day of Reckoning” Looms for the Southwest

You see, much of the water is all used up before it gets anywhere near the Gulf of California, its historical entrance into the Pacific Ocean.

Why? The Southwest is in the middle of an 11-year drought. And that’s just the bad news. The really bad news?

There’s no end in sight – and there’s no real solution to the problem.

Just this week, The New York Times outlined the scale of the problem in an excellent article, entitled: “Water Use in the Southwest Heads for a Day of Reckoning.”

And that title is an understatement.

Think of it as a freight train headed full-speed towards a mountain… except there’s no tunnel. The West is headed for a trainwreck… water-style.

Let’s take a look at the heart of the problem…

Reservoirs Running Low… Prices Running High

Two key reservoirs – Lake Mead and Lake Powell – are responsible for 80% of the storage for the entire Colorado River Basin. That’s a hefty burden, even at the best of times. And this certainly isn’t the best of times. There are two problems…

•Both reservoirs are near record low levels. Lake Mead is only at 39% of capacity, while Lake Powell is at 63%.

•These low water levels are made worse by an even bigger problem: The Colorado River is already oversubscribed. That is, more water is leaving the Colorado than it can supply in an average year. And there hasn’t been one of those in over 11 years.
The bottom line is this: If you live in any of the seven states that I mentioned above, you’re going to be paying ever-higher prices for your water. Gasoline will seem cheap by comparison.

But that’s only the tip of the iceberg…

Limited Access to the Most Critical Resource on Earth

If the grim prospect of mandatory water rationing occurs, it could trigger two problems…

1.Housing starts in those states will be all but prohibited via costly water rights “permits.”

2.People will be forced to move to more water-rich states in order to escape the shortages. Water “rustling” will make the cattle rustlers of yore seem lame by comparison.
But it’s not just about green lawns, pretty flowers and clean drinking water. It’s about the other lifeblood of the area’s economic engine: electricity.

No Water = No Power

You see, the power generating stations at Hoover Dam (Lake Mead) and Glen Canyon Dam (Lake Powell) produce a combined 10,000 Gigawatts of electricity for the seven states mentioned above.

And it’s not a stretch to imagine that when a lack of water means these stations can no longer produce enough electricity for the region, it will bring about very expensive alternative solutions.

Natural gas peaking plants will be online 24/7 and diesel generators will be brought into neighborhoods to keep the lights on. Even individual homeowners will start producing their own power. If this sounds a little Orwellian, I apologize. But The New York Times article is closer to the truth than most folks realize.

It just reiterates a problem that Western states have known about for years. Their solution? They’re hoping for an end to the drought. Good luck with that one.

The Western States’ Doomsday Scenario

In 2007, a National Academy of Sciences study highlighted “future potential problems with availability of water in the region.”

But in typical government fashion, it offered no clear timeline, no magnitude of the problem and it proposed no solution. (That’s your tax dollars hard at work.)

But in January 2008, Tim Barnett and David Pierce of the Scripps Institution of Oceanography published a much more worthwhile – and ominous – study in the Water Resources Research journal. Not only did they determine the severity of the water problem, but actually when the you-know-what might hit the fan.

And get this for clarity:

•When the Colorado River’s long-term outflow exceeds inflows, the system is doomed to run dry.

•Current water loss due to evaporation and runoff has already pushed the Colorado River into a negative net inflow regime. And even periods of positive water inflow won’t make much difference when you include several years of drought. Throw in global warming and current depletions aren’t sustainable.

The authors’ conclusion: Water levels at Lake Mead and Lake Powell will continue to drop. And in their opinion, levels would be so low that the seven western states could experience severe water shortages and power outages as soon as 2013. That would result in personal consumption and hydroelectric power demands not being met.

While the authors’ analysis shows a 10% chance of this scenario occurring by 2013, by 2017, there’s a greater than 50% chance.

That’s awful news for the 30 million people who depend on the Colorado River for their water. But there is some hope – for residents and investors alike…

The Companies Aiming to Solve the West’s Impending Water Crisis

I’ve highlighted three companies whose equipment and operations will be critical in helping the West maximize its water supplies:

•Veolia Environnement (NYSE: VE): As one of the biggest water services companies in the world, it should see additional demand for its water services business, as Western states struggle to use every drop of water efficiently.

•Caterpillar, Inc. (NYSE: CAT): The infrastructure giant will provide huge numbers of diesel generators to thousands of Western communities. Given the nature of the problem, sales should surge.

•Kinder Morgan Energy Partners LP (NYSE: KMP): This company and other gas pipeline companies will be shipping huge quantities of natural gas out West in order to keep the peaking plants running. The only thing is, they’ll no longer be called “peaking plants” at that point, as they’ll be needed 24 hours a day.
If you think this Western water doomsday scenario can’t happen, the figures say it already is happening! And if you live in an area that relies on the Colorado River, Lake Mead and Lake Powell for water supplies, you probably know it’s coming, too.

The question is, can we do anything about it before catastrophe hits?

Good investing,

Dave Fessler

P.S. One of the fastest-growing water pipeline inspection companies is part of my Peak Energy Strategist portfolio. We’re up on the play and the scenario above is money in the bank to this company.

Not withstanding the Western water crisis, the firm is already expecting double-digit growth rates. You can find out the name of this company – plus all the other stocks in our portfolio – consider joining the Peak Energy Strategist team.

Source: http://www.investmentu.com/2010/October/western-states-impending-water-crisis.html

http://www.investmentu.com

Copyright © 1999 - 2008 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife