Best of the Week
Most Popular
1.Gold Price Crash Through Key Support, Crude Oil in Freefall - Clive_Maund
2.Marc Faber Warns Japan's Bond-Buying Program is a Ponzi Scheme - Bloomberg
3.Silver Price and Powerful Forces - DeviantInvestor
4.Stocks Bear Market Catastrophe as Stocks Flash Crash to New All Time Highs - Nadeem_Walayat
5.Marc Faber Warns Not to Hold Any Gold in the U.S. - GoldCore
6.U.S. Housing Market San Francisco at Critical Mass - Harry_Dent
7.Global Scramble For Silver - Coins “Hard To Get,” “Premiums Likely To Jump” - GoldCore
8.Major World Stock Market Indices Analysis: SPY, QQQ, DAX, FTSE, CAC, HSI - Michael_Noonan
9.Japan's kaput?! - Axel_Merk
10.Tesco Empire Strikes Back, £5 off £40 Discount Voucher Spend Explained, Exclusions Warning! - Nadeem_Walayat
Last 5 days
Manipulated Stock Market Short Squeezes to Another All Time High - The China Syndrome - 23rd Nov 14
Gold Price 2015 - 22nd Nov 14
Stock Market Medium Term Top? - 22nd Nov 14
Is the Gold And Silver Golden Rule Broken? - 22nd Nov 14
Malaysia's Subsidy and Budget Deficit Conundrum - 22nd Nov 14
Investors Hated Gold at Precisely the Wrong Time: What About Now? - 22nd Nov 14
Gold and GLD ETF Selloff - 22nd Nov 14
Currency Wars, the Ruble and Keynes - 21st Nov 14
Stock Market Investor Sentiment in The Balance - 21st Nov 14
Two Biotech Stocks Set to Double on One Powerful Catalyst - 21st Nov 14
Swiss Gold Poll Likely Tighter Than Polls Suggest - 21st Nov 14
Gold's Volatility and Other Things to Watch - 21st Nov 14
Australia Stock Market and AUD Dollar Analysis (ASX200 and AUDUSD) - 21st Nov 14
New Algae Research May Have Uncovered an “Energy Forest” Under the Sea - 21st Nov 14
The Cultural and Political Consequences of Fiat Money - 20th Nov 14
United States Social Crisis - No One Told You When to Run, You Missed the Starting Gun! - 20th Nov 14
Euro-Zone Tooth Fairy Economics, Spain Needs to leave the Euro - 20th Nov 14
Ebola Threat Remains a Risk - New Deaths in Nebraska and New York - 20th Nov 14
Stock Market and the Jaws of Life or Death? - 20th Nov 14
Putin’s World: Why Russia’s Showdown with the West Will Worsen - 20th Nov 14
Making Money While The World Burns - 20th Nov 14
Why This "Quiet Zone" Is Now Tech Stocks Biggest Profit Sector - 20th Nov 14
My Favorite Stock McDonalds Just Got Kicked Off My “Buy” List - 19th Nov 14
European Economies in Perpetual State of Shock, What's Scarier Than Deflation? - 19th Nov 14
Breakfast with a Lord of War and Nuclear Weapons - 19th Nov 14
The U.S. Economy’s Ebb and Flow - 19th Nov 14
What You Need to Know Before Investing in Alibaba - 19th Nov 14
Forget About Crude Oil Price Testing 2009 Low - 19th Nov 14
What Blows Up First? Part 5: Shale Oil Junk Bonds - 19th Nov 14
Bitcoin Price Did We Just See an Important Slump? - 18th Nov 14
How to Profit From Oversold Crude Oil Price - 18th Nov 14
Stock Valuations Outrunning Profits Growth - And the Band Played On - 18th Nov 14
ECB Buy Gold Bullion? Japan's Monetary Policy Dubbed "Ponzi Scheme" - 18th Nov 14
Gold, Silver, Crude and S&P Ending Wedge Patterns - 18th Nov 14
How High Could USD/JPY Go? - 18th Nov 14
On Obama and the Nature of Failed Presidencies - 18th Nov 14
Globalism Free Trade Immigration Connection - 18th Nov 14
An Epiphany From Hell - Buy Gold and Silver - 18th Nov 14
Too Difficult to Get a U.S. Home Loan - 18th Nov 14
Has the Gold Bear Trap Been Set - 18th Nov 14
Gold Price and Miners Soar on Huge Volume - 17th Nov 14
Cameron Says Second Global Economic Crash is Loomin, Japan in Recession - 17th Nov 14
How to Play the Stock Market 2014 Year-End Rally - 17th Nov 14
What The Fed Has Wrought, Who Needs Wage Earners Anyway? - 17th Nov 14
Stock Market Indexes Fluctuate Along Record Levels - Will Uptrend Continue? - 17th Nov 14
Stock Market Trend Deceleration Tends To Precede Corrections - 17th Nov 14
Stocks Bull Market Set to Continue After Consolidation - 17th Nov 14
The World Is Run By Fools, And We Let Them - 17th Nov 14
Gold Price Golden Bottom? - 17th Nov 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Gold Report 2015

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