While we’ve discussed the thriving market for sustainable water solutions before, a recent article from Reuters further promotes the idea that when it comes to water resource management, economic opportunities abound. As Bill Brennan, portfolio manager for Summit Global Management, explains, “The water business is an ideal investment for endowments, family offices, and people that have a long-term horizon and understand the underlying growth metrics in the business and are looking for those expected returns of 6, 8, or 10 percent a year.”
According to the article, titled “Looking for gold in water investments,” the water resource management industry is “a niche corner of the investment world worth about $6 billion in assets.” And while that $6 billion may be a “drop in the bucket” in relation the overall commodities market, Summit Global Management sees the sector as rife with opportunity—particularly in light of growing water scarcity and population growth.
Some particular areas of vitality highlighted by the firm include:
* Infrastructure repair and replacement—over $500 billion will be needed in the next 20 years to reclaim our crumbling systems of pipes and pumps.
* Water rights—while some investors believe these assets are hard to value or trade, Global Summit has amassed over $250 million in water rights, entitlements and access in the arid, agricultural regions across the US and Australia—banking on the acute water scarcity in those regions.
* Desalination technologies—particularly energy-efficient alternatives
Although there is some skepticism of the advisability of investing in water resource management technologies, it appears that the big players are not afraid of a little risk. For example, Texas billionaire T. Boone Pickens is the largest individual water owner in the US, including ownership of the Ogallala Aquifer in Texas—the third-largest underground aquifer in the world, which, incidentally, supplies 27% of all irrigation in the US and between 70–90% of irrigation water in Kansas, Texas, and Nebraska, three states that are “three of the most important grain producers in the country.”
So what do you think? Does water scarcity come with a silver lining in the form of untapped economic benefits? Can improvements to water conveyance systems be incentivized so that infusions of Wall Street cash can spur improvement and rehabilitation? And can water really be given a hard valuation that can be estimated, traded, bought, and sold for profit and prosperity at stock exchanges and hedge funds around the globe?
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Upcomimg Forester University Webinars:
January 12th, 2012
Planning & Executing an Effective Pavement Preservation Program
As roadway networks and commercial vehicle loading continue to increase and Municipality taxation power remains limited, the need to effectively maintain and improve our pavement infrastructure is paramount. Join David Hein, V.P. of Transportation for ARA, to explore the key concepts of an effective pavement preservation program, program implementation needs and guidelines, and common roadblocks to successful implementation.
January 26th, 2012
5 Steps to Creating a Successful Public Outreach Campaign
Change starts with people. Whether your focus is stormwater pollution, energy conservation, pavement restoration, or recycling, a successful public outreach campaign resonates with your target audience and leads to long-lasting behavior change. Join Erica Hooper of SGA to explore a proven 5-step approach to crafting a successful outreach campaign based on real-world examples of the good, the bad, and the ugly.
February 2nd, 2012
Advanced Stormwater Treatment: Dissolved Pollutants
How effective are your stormwater treatments in capturing dissolved loads? With an average of 45% of the phosphorus load and up to 50% of the metal load transported through treatment practices to receiving waters in dissolved form, advanced treatment is imperative. Join Andrew Erickson to explore cost-effective, field-tested methods to capture stormwater dissolved pollutants and optimize stormwater treatment performance. We’ll explore several field applications and data demonstrating significant improvements in dissolved pollutant fraction capture.
February 9th, 2012
Differentiating & Monitoring Groundwater Plumes
Threatened by various plumes of mobile contaminants, urban potable groundwater resources require groundwater professionals to not only determine the source of individual plumes, but apportion the contributions of multiple sources within a composite plume. Join William G. Soukup, P.G. of Cornerstone Environmental Group LLC to discuss the analytical and interpretive techniques for differentiating plumes and their sources, as well as tips to improve long-term plume monitoring and management.