Water: Not the Next Oil?

A couple of years ago, articles with titles such as this one by Rohini Nilekani in Yale Global were fairly common: "Is Water the Next Oil?". Today, the pseudonymous author of the blog The Learning Diary of an Israeli Water Engineer suggests otherwise ("Worldwide water sector devalued"):

I continue thinking that the expansion of the water sector is an illusion, it is not happening and will never [...]. The water crisis is more a media event, or an eternal United Nations issue for travelling to exotic places, than a real investment opportunity. People who "bought" the concept of water as the golden investment opportunity - lost [their] money.

In previous correspondence with this water engineer/blogger, I had asked him what investment opportunities he saw in the sector. His response, in a nutshell, was that most countries that could afford water infrastructure already had it, and most of those that didn't, didn't have the money to pay for it.

The photo above accompanied the Yale Global article.

A Tall, Cool Drink of... Sewage?

Tomorrow's NY Times Magazine has a general interest article by Elizabeth Royte on the processing of sewage into drinking water, "A Tall, Cool Drink of... Sewage?". The article notes that the reprocessed water is purer (as measured by "T.D.S.", "total dissolved solids") than reservoir water (or even bottled spring water), and yet then Orange County, California treatment plant she profiles pumps the treated water into a reservoir where it filters through sand and gravel for a few months before being pumped into taps by utilities:

In other words, nature messes up the expensively reclaimed water. So why stick it back into the ground? “We do it for psychological reasons,” says Adam Hutchinson, director of recharge operations for the water district. “In the future, people will laugh at us for putting it back in, instead of just drinking it.”

Some have said that the scarcity of potable water in many parts of the world represents a macro trend from which investors can profit, perhaps by investing in the companies that build wastewater treatment plants, or some of the equipment those plants use. I haven't done much homework in this, but I plan to look into it at some point.

Update: Today's NY Times Business Section includes a related article, The Feed: "Can Israel Find the Water it Needs?". The article mentions an Israeli multinational, Netafim, that's active in drip irrigation as well as wastewater treatment and other water resources areas, but it isn't publicly traded.

Also, reader SL directed my attention to this article in the current Barron's, about American Water Works (NYSE: AWK), "The Spigot Reopens at American Water Works".