Mark Twain once said, “Whiskey is for drinking; water is for fighting over.” The convergence of factors leading to water scarcity suggests that we may indeed face a century fraught with conflicts over this vital resource.
A serious water crisis looms on the horizon. Once abundant, fresh water supplies are dwindling due to human mismanagement, leading to widespread scarcity. Rivers, lakes, reservoirs, and underground aquifers are depleting rapidly, and many that remain are so contaminated that treating the water would be prohibitively expensive.
Access to fresh, potable water is essential for human survival. Even a brief disruption in supply could lead to catastrophic repercussions for the economy. Consider the potential fallout if your city’s water supply were abruptly cut off.
Within just a week, the situation could spiral into disaster. The sewage crisis alone would be overwhelming, and the cessation of water to the extensive irrigation systems that nourish agricultural fields would lead to a catastrophic decline in food production, triggering chaos.
Yet, this pressing issue is not being widely discussed…
Water Scarcity in the United States
As annual water resources shrink, drought conditions become increasingly prevalent. The frequency and intensity of wildfires and dust storms are rising, arable land is facing desertification, and usable agricultural land is diminishing. In the near future, water shortages may lead to significant population migrations and conflicts.
Take Lake Mead, for example, which provides around 85 percent of Las Vegas’s water. Unfortunately, since 1998, water levels in Lake Mead have plummeted by over 50 percent. If current trends continue, projections indicate that Lake Mead may run completely dry by 2021, leaving Las Vegas desperately seeking water.
Another example is the Ogallala Aquifer, an extensive underground water source that stretches from South Dakota to Texas. It is being depleted at an alarming rate of about 800 gallons per minute. Previously, the aquifer averaged a depth of 240 feet; today, that figure has dropped to just 80 feet. If this trend continues, the Great Plains could transform into a desert, with many areas relying on the Ogallala set to run out of usable water by 2030, as noted by Dr. Kevin Mulligan from Texas Tech.
In the Los Angeles Basin, the risk of disaster is palpable; the area is merely one earthquake away from significant fallout. Should a major earthquake occur, the sprawling network of aqueducts and pipelines supplying water to Southern California could sustain major damage, cutting off water to nearly half of the state’s population. Even without a catastrophic event, California is left with only a 20-year supply of fresh water remaining. What then?
Unfortunately, these water scarcity issues are not confined to the western states; the southern U.S. is grappling with its own challenges. States like Alabama, Florida, and Georgia have long been embroiled in disputes over water rights related to Lake Lanier. Several years ago, a federal verdict declared that Georgia had limited legal rights to this water resource—the main supply for Atlanta. After a prolonged drought and stringent water restrictions in 2007, Georgia’s state government seemingly ran out of solutions, resorting to holding hands for prayer on the steps of the Capitol to ask for rain. Miraculously, it worked at that time, but now Atlanta faces drought conditions once again. Perhaps this time, the heavens will be less accommodating.
Even states rich in water resources, like those surrounding the Great Lakes, are feeling pressures of scarcity. In 2007, Lake Superior, the largest freshwater lake on Earth, recorded its lowest levels in 80 years. To safeguard their invaluable resource, the eight states in the Great Lakes region have agreed on a pact to restrict water exports to outsiders, including residents of other U.S. states.
However, the water scarcity issues faced by the United States may be minimal compared to challenges in other nations…
The Next Crisis No One Is Talking About
In India, for instance, it is estimated that a shocking 75 percent of surface water is contaminated with human and agricultural waste. Approximately 100,000 tons of human waste are irresponsibly deposited daily by around 665 million people who lack proper sanitation facilities, often on fields used for growing food or alongside rivers meant for drinking and bathing.
This situation is not isolated to India. In underdeveloped nations, a staggering 90 percent of wastewater generated is discharged untreated into local water bodies. The consequences for health and sanitation are dire. According to the World Health Organization, 80 percent of all illnesses worldwide can be traced back to contaminated water.
China faces its own significant challenges, suffering from severe water pollution and scarcity. Shockingly, over 80 percent of its major rivers are so polluted that aquatic life cannot survive. Additionally, 90 percent of groundwater systems beneath major cities are contaminated, resulting in water shortages affecting more than two-thirds of Chinese cities.
The problem extends globally, with Africa, the Middle East, Latin America, Australia, and even Europe experiencing water scarcity issues. Currently, about one-third of the global population resides in water-stressed countries. By 2025, this number is predicted to rise to two-thirds, while areas suffering from extreme drought are expected to quintuple in size. This troubling trend is evident as the land area subjected to significant drought more than doubled between 1970 and 2005.
Clearly, a massive water crisis is rapidly taking shape. Unfortunately, this critical issue is receiving little attention at present. However, it is expected that discussions will intensify as the problem becomes impossible to overlook. With crises often come opportunities. Here at the Economic Prism, we are diligently exploring the water resource sector for investment prospects arising from the growing global challenges of water scarcity.
Rest assured, we will keep you informed about our findings.
Sincerely,
MN Gordon
for Economic Prism
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