asia, economy, international, research, technology, water privitization, water trade

Singapore’s International Water Week 2008

Singapore is hosting International Water Week from June 23rd to June 27th of 2008. This first-annual event is to be held as a forum for “government officials, industry leaders and water specialists” to discuss policy, business, and water technology. Festivities of the week encompass a Water Trade Show, a Water Summit, and presentation of the Lee Kuan Yew Water Prize to an innovator in the field of water technology.

In 2006, Singapore began wide-spread governmental investments in water technologies to accelerate economic growth in the water sector. No doubt hosting two-hundred exhibitors of water technologies will be great way for the country to stay abreast of additional investment opportunities.

However, several main sponsors of International Water Week include multinational corporations with questionable environmental and water management track records including:

Enterprising steps in the field of water technology are fundamental to ensure available water supplies now and into the future.

Does sponsorship of International Water Week by the above organizations make this event any less important? Not necessarily, but maybe it does mean that we should pay closer attention to these companies and their water management standards.

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climate change, drinking water, drought, groundwater, international, water desalination, water trade

Cyprus and Water Imports from Greece, Egypt, and Lebanon

The small island country of Cyprus may soon be shipping water on tankers from Greece, Egypt and Lebanon to supplement current dwindling water supplies.

Cyprus has been facing drier than normal conditions for four consecutive years. Winter in Cyprus, November through March, usually serves to fill reservoirs for the coming season. But this winter has been practically rainless, and estimates leave reservoirs at two-months of capacity.

Cyprus typically provides water to citizens through several reservoirs and two water desalination plants. Because of the current water crisis, a third desalination plant is being constructed and emergency groundwater reserves may be rationed. Additionally, the country is contemplating the exorbitantly expensive shipment of additional water supplies.

Importing water, however, is nothing new to the country of Cyprus. As stated in this grotesquely entitled article, How to profit from the world’s water crisis, Cyprus had previously imported water from Turkey via large inflatable floating balloons holding up to five million gallons a piece. Obviously not the most efficient or cheap method for obtaining water, but neither is desalination (for now).

In the late 1990s, Aquarius Water Transportation became the first company to tow bags of fresh water for export, delivering commercial bulk quantities to the Greek Islands. In 2000, another company, Nordic Water Supply, began using 5 million gallon bags 10 times as big as the original Aquarius containers – to float water from Turkey to northern Cyprus.

– From an article in The Christian Science Monitor.

Cyprus

Update: (1/25/08)
Cyprus to extract water from underground reserves through bore holes.

drinking water, water trade

Like Oil, Like Water

Just this week, oil prices have reached a record high, exceeding $98.00 a barrel for crude oil on the world market.

But, how does this increase of the price of crude oil measure-up to the price of water on the global market?

A price comparison of water and crude oil is challenging because of the variability of water pricing around the globe. Water is primarily supplied in the following venues:

  • water sold in the commercial marketplace (bottled water)
  • water sold as a market commodity (privatized water)
  • municipalities (public) serve water to the general population, private entities, and public entities
  • water rights are sold and traded through water markets in various parts of the world (virtual water)

Of these four water services, the cost of bottled water has already surpassed the current cost of oil, while the prices of the others are rising steadily.

  •  Oil $2.33 per gallon (11/22/07)

There are 42 gallons in one barrel of crude oil. If we divide the recent price per barrel of oil by 42 gallons, this equates the price of oil at roughly $2.33 cents a gallon on the world market.

  • Bottled Water $16.00 per gallon (estimate)

Consumers often pay exorbitant prices in upwards of $2.00 for just over 16 ounces of bottled water. This would equal approximately $16.00 per gallon for so-called designer water, by a conservative estimate. Of course, prices will vary in the commercial water trade, but generally exceed the global price of oil.

  • Privatized WaterVaries

The cost of privatized water varies greatly depending on water availability, timing, and the cost of transport. Individuals in locations without access with municipal water often have to purchase water from private vendors in large quantities.

Municipal water falls behind world oil prices, primarily because of subsidization of these water water supplies ranging from .66 in the US to $2.50 in Denmark for a cubic meter of water as indicated in a recent study of 14 countries (Earth Policy Institute). There are approximately 264 gallons in one cubic meter of water, so this would amount to approximately ¼ cent to one cent per gallon of water.

  • Water Marketsup to ¼ cent per gallon

In this description by the Earth Policy Institute, water traded in “water markets” has been known exchange for a high of .75 cents a cubic meter in Australia. This equates to approximately ¼ cent per gallon of water. Obviously, well below the current price per gallon of oil.


Photo courtesy, Fábio Pinheiro on flickr.

Although most water prices (besides bottled water) have not yet exceeded world oil prices, according to many, it is thought to be imminent. And, many more tout the promise of water investments. This recent article highlights Norway’s 5-fold increase in bottled water exports over the past seven years and states:

A study on global water import and export trade by the Political Economy Research Center of the Hoover Institution said water has shifted from being a political commodity to a market commodity, by providing innovative solutions to water shortages in different parts of the world. The study said while the water business may not fetch profits as high as oil trading does, more water crises will boost the business in the coming years.

international, technology, water trade

Israel’s Stance and Expanding Water-Technology Markets

If you pay attention to international water issues, you will soon realize the small country of Israel is slowly attempting to make a name for itself in the field of water technology. In fact, Israel recently hosted an international water technology conference, WATEC, from October 30 to November 1 of 2007.

Israel, though lacking in natural water resources, is exporting its water technology across the globe, billing itself as the “Silicon Valley of water technology,” in the words of Infrastructures Minister Binyamin Ben Eliezer.

Israel hopes to increase export revenues from water technologies to 2 billion US dollars by 2010. The Israeli government has just launched a program to maximize technical knowledge of desalination, water purification, irrigation systems, water treatment, reclaimed water, water security, and water infrastructure.

Given the increase in global water scarcity, Israel is one of many entities ready to step into an open-economic playing field to double their dollar in the field of water technologies.

This report, Growing Markets for Water and Wastewater Technologies, issued by BCC Research, likely explains markets available for growth in the water technology sector, but specifics of the report are not known because I could not afford to pay the $4850.00 to purchase a copy (yes, the water technology industry must be growing…). However, one of the report highlights states:

The expenditures for municipal water and wastewater applications were $8,066 million in 2005, $9,575 million in 2006, and $11,290 million in 2007. They are expected to grow at compound annual growth rate (CAGR) of 22.2% and reach $39,709 million by 2012.

We can apply the economic model of supply and demand very clearly to the water scenario. As demand for water increases, the price of water (water technologies, etc.) on the world market will also increase. Consequently, there will be an accrual of entities hoping to profit on the commodity of water, alas we are seeing such happening presently.

Author’s Postscript: This post highlights global water technology markets and Israel’s current standing in such world markets. However, there are many critical water issues relating to Israels continued occupation of Palestinian territories in areas of the region with greater access to water.

Additionally, Israel maintains water technology, yet continuously fails to supply Palestinians with assistance for development of water infrastructure or access to reliable water supplies.  In the near future, I will attempt to address these issues.

economy, water privitization

New Water Financier Scopes Markets in Gulf, India, and China

A large Saudi Company, among others, is staking it’s claim in the burgeoning enterprise of water investments. According to Arabian Business On-line, the joint venture is formed of two companies from Bahrain and Saudi Arabia. Starting with a minimal sum of $50 million dollars, the company has plans to finance water projects in arid areas such as the Gulf region, India, and China. The choice of these areas, where water is in great demand, could provide a surplus of business ventures for the new company, Moya. Nahed Taher, CEO of Moya, states:

“The demand for water in emerging markets is growing rapidly and the Gulf, India, and China are among the major markets that I want to be in,” said Taher.

“The demand elasticity for water is minimal hence no matter what the cost of water becomes, the demand level is always stable which makes water projects good ones to finance,” added Taher.

As parasitic as the above-quote does sound, capitalising on water has become commonplace, and, seemingly, is proving to make for a profitable endeavor.

It is not clear whether Moya intends on privatizing operating entities for water purveyors (British Model) or financing construction of such facilities (French Model).

However, privatization as a model for managing water supplies has been consistently problematic in the past. Examples of such problems include degraded water quality, unstable supply systems, excessive prices for water, and extensive public debt.

In summary, it is difficult to understand the commercialism of basic needs, and why a public resource such as water is not a guaranteed basic human right.