Best of the Week
Most Popular
1.U.S. Inner City Turmoil and Other Crises: Ron Pauls Predictions for 2015 - Dr_Ron_Paul
2. What’s In Store For Gold Price in 2015? - Ben Kramer-Miller
3.Crude Oil Price Ten Year Forecast to 2025: Importers Set to Receive a $600 Billion Refund - Andrew_Butter
4.Je ne suis pas Charlie - I am not Charlie - Nadeem_Walayat
5.The New Normal for Oil? - Marin_Katusa
6.Will Collapse in Oil Price Cause a Stock Market Crash? - OilPrice.com
7.UK CPI Inflation Smoke and Mirrors Deflation Warning, Inflation Mega-trend is Exponential - Nadeem_Walayat
8.Winter Storms Snow and Wind Tree Damage Dangers, DIY Pruning - Nadeem_Walayat
9.Oil Price Crash and SNP Independent Scotland Economic Collapse Bankruptcy - Nadeem_Walayat
10.U.S. Housing Market Bubble 2.0 Meet the Pin - James_Quinn
Last 5 days
Saudi Arabia Changes Kings, But Not its Oil Policy - 29th Jan 15
Crude Oil Price Bulls vs. Resistance Zone - 28th Jan 15
Acceleration Of Events With Rising Chaos – US Dollar Death Foretold - 28th Jan 15
The Fed and ECB Take the West back to when the Rich Owned Everything - 28th Jan 15
Washington's War on Russia - 28th Jan 15
Cyber War Poses Risks To Banks and Deposits - 28th Jan 15
Lies And Deception In Ukraine's Energy Sector - 28th Jan 15
EUR, AUD, GBP USD – Invalidation of Breakdown - 28th Jan 15
“Backup-Camera Envy” Is Driving This Unstoppaple Investment Trend - 28th Jan 15
The Great "inflated" Expectations for Gold, Oil, Commodities -- and Now Stocks - 28th Jan 15
How to Find the Best Offshore Banks - 28th Jan 15
There’s More to the Gold Price Rally Than European Market Fears - 28th Jan 15
Bitcoin Price Tense Days Ahead - 27th Jan 15
The Most Overlooked “Buy” Signal in the Stock Market - 27th Jan 15
Gold's Time Has Come - 27th Jan 15
France America And Religious Terror War - 27th Jan 15
The New Drivers of Europe's Geopolitics - 27th Jan 15
Gold And Silver - Around The FX World In Charts - 27th Jan 15
It’s Not The Greeks Who Failed, It’s The EU - 27th Jan 15
Gold and Silver Stocks Investing Basics - 27th Jan 15
Stock Market Test of Strength - 26th Jan 15
Is the Gold Price Rally Over? - 26th Jan 15
ECB QE Action - Canary’s Alive & Well - 26th Jan 15
Possible Stock Market Pop-n-drop in Store For SPX - 26th Jan 15
Risk of New Debt Crisis After Syriza Victory In Greece - 26th Jan 15
How Eurozone QE Works: A Guide to Draghi's News - 26th Jan 15
Comprehensive Silver Price Chart Analysis - 26th Jan 15
Stock Market More Retracement Expected - 26th Jan 15
Decoding the Gold COTs: Myth vs Reality - 26th Jan 15
Greece Votes for Syriza Hyperinflation - Threatening Euro-zone Collapse or Perpetual Free Lunch - 26th Jan 15
Draghi's "No-growth" QE Money for Stocks, Zilch for the Economy - 25th Jan 15
Unjust and Undeclared Wars - 25th Jan 15
The European Central Bank Commits Monetary Suicide - 25th Jan 15
Stock Market ECB EQE week - 25th Jan 15
Gold And Silver Timing Is Most Important Element - 25th Jan 15
The Best Way to Invest in the Next Alibaba Internet Stock IPO - 25th Jan 15
The Outpatient Surgery Business Rains Cash into Healthcare Stocks - 25th Jan 15
Stock Traders Flock to Gold GLD ETF - 24th Jan 15
10 Reasons Why You Need an Offshore Bank Account - 24th Jan 15
Goldman Sachs Blankfein - Regulation is Like Background Noise - 24th Jan 15
Gold in Euros Surges As ECB To Print Trillion Euros and Greek Election This Sunday - 24th Jan 15
Gold Bear Market Rally or New Bull ? - 24th Jan 15
Euro-zone 'QE already Working' Says IMF Lagarde - 23rd Jan 15
ECB and EU LTRO and QE for Dummies: Or, Make These Trades - 23rd Jan 15
Debt and Deflation: Three Financial Forecasts - There's More Than Falling Prices - 23rd Jan 15
Market Should Not Doubt' Mario Draghi ECB QE - 23rd Jan 15
Francs, Bonds, Barrels, and Bail-Ins - 23rd Jan 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

State of US Markets 2015 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

© 2005-2014 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

Free Report - Financial Markets 2014