October 25, 2011 1:59 pm
By Leslie Hook
Water has become a critical issue for China, as the world’s second-largest economy copes with falling water tables and increasingly severe shortages.
The country has 20 per cent of the world’s population but only 7 per cent of its fresh water supply. It is one of the most water-poor economies in the world.
The problem has become more apparent as China grows. In the latest water squeeze, the city of Kunming – a provincial capital of 5m in the south – is to ration urban consumption for the next eight months.
Car washing, public baths and gardens will all see their supplies limited, and city residents will be encouraged to conserve.
Kunming’s woes are a small drop in the pond relative to the wider problem.
“The shortage of fresh water will be the main constraint on economic growth,” says Limin Wang, WWF’s China programme leader for the HSBC Climate Partnership.
President Hu Jintao has drawn attention to the issue, saying in a recent speech that water shortages have had an impact on “China’s economic security, ecological security and national security”.
In addition to the floods and droughts that have made headlines this year, water tables in the arid north have been falling because of overuse, a trend that is difficult to reverse.
The government has been trying to combat the problem with a string of policies that will boost spending on water infrastructure, tighten pollution standards and lower consumption.
This year, the symbolic “number one” policy document of the year was about rural water infrastructure, and the state council’s directives have been coming thick and fast.
Beijing has budgeted a colossal Rmb4,000bn for water projects over the next 10 years, including for rural irrigation, flood control, water supply and conservation.
But most of this year’s polices are simply bigger versions of the same measures that have been tried before, and have left analysts wondering when – not if – China’s water crisis will reach the point at which it begins to hobble the economy.
Politics is partly to blame, because no single ministry can directly control the numerous water systems.
In Chinese, the water-related ministries are known as the “nine dragons,” after the nine groups that are involved – including the ministry of water resources, the ministry of environmental protection, and the ministry of agriculture.
Agriculture consumes most of China’s water, as crop irrigation has spread to help meet growing demand for food. “[China’s] social and ecological development has been seriously affected by water,” says Jiang Liping of the World Bank. “Water is really short, which has a big impact on food security.”
Rising food prices and China’s increasing reliance on imports of soya beans and corn have pushed food security further up the political agenda, providing further impetus for water reform.
Industries such as coal washing, textile dyeing or pulp mills are also water-intensive, and industrial use counts for about one-fifth of demand.
If the government has its way, water scarcity will play a role in reorienting the economy, as water-consuming manufacturers of textiles or paper are slowly forced to make their production more efficient.
Water pricing will be crucial to making those changes happen.
“China’s water tariff in big cities has risen 67.8 per cent, to 2.68 yuan per cubic metres from 2002 to this June,” explains Zhong Lijin, water specialist at the World Resources Institute in Beijing.
“But the current tariff is still very low, considering pollution treatment costs. The ratio between the water tariff and disposables income is lower than that of other countries.”
One bright spot is that many of China’s industrial and agricultural practices are inefficient relative to global peers, so there is enormous scope for improvements in efficiency.
Beijing has recognised this by announcing a Herculean-sounding goal: halving water consumption per unit of gross domestic product from 2008 levels by 2020.
The journey so far has not been easy. On the banks of beautiful Lake Tai, a persistent cyanobacteria algae bloom bears testament to the difficulties of managing China’s water sector.
Despite years of work and millions of dollars spent trying to clean up the lake, it still has a toxic algae bloom every year.
People involved in the clean-up efforts say the situation is improving. But like other water-management projects in China, progress is slow.
Copyright The Financial Times Limited 2011.
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Updated: 2011-10-21 07:54
By Wang Qian and Li Jing
BEIJING – More than half of the groundwater monitored in the country’s major cities failed to meet standards for drinking, a report by the country’s land watchdog said.
Groundwater at 57.2 percent of the 4,110 monitoring stations in 182 cities was classified as bad, meaning people’s health could be harmed, according to a Ministry of Land and Resources report released on Wednesday.
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The quality of groundwater in most northern and eastern parts of China was worse last year than in 2009, the report said, without stating locations. The level of groundwater had also dropped as a result of overexploitation.
Household sewage, industrial pollution and overuse of fertilizers and pesticides had led to further deterioration of groundwater, Ma Chaode, former director of the World Wide Fund For Nature’s freshwater program in China, told China Daily.
Pollution of groundwater and water in rivers and lakes had reached a serious level, he said.
Zhang Zhaoji, a researcher with the Chinese Academy of Geological Sciences, agreed. He said protecting groundwater in the northern parts of China was more challenging than in the south.
“In the northern parts, pollution of groundwater is widespread and the situation is getting worse,” Zhang told the 21st Century Business Herald.
Earlier statistics released by the State Council, the country’s Cabinet, showed the North China may be more affected by deteriorating groundwater quality because there are fewer rivers and lakes in the north.
In North China, about 65 percent of water supplies for residential use comes from groundwater.
More than 400 out of the country’s 657 cities use groundwater as major source of drinking water.
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This article by Russell Sticklor appeared originally in the Fall 2010 issue of the Izaak Walton League’s Outdoor America magazine.
For many Americans, India — home to more than 1.1 billion people — seems like a world away. Its staggering population growth in recent years might earn an occasional newspaper headline, but otherwise, the massive demographic shift taking place on our planet is out of sight, out of mind. Yet within 20 years, India is expected to eclipse China as the world’s most populous nation; by mid-century, it may be home to 1.6 billion people.
So what?
Stepping Into a Water-Stressed Future
From Africa’s Nile Basin and the deserts of the Middle East to the arid reaches of northern China, water resources are being burdened as never before in human history. There may be more or less the same amount of water held in the earth’s atmosphere, oceans, surface waters, soils, and ice caps as there was 50 — or even 50 million — years ago, but demand on that finite supply is soaring.
Consider that since 1900, the world population has skyrocketed from one billion to the cusp of seven billion today, with mid-range projections placing the global total at roughly 9.5 billion by mid-century. And it only took 12 years to add the last billion.
Unlike the United States — which is a water-abundant country by global standards — India is growing weaker with each passing year in its ability to withstand drought or other water-related climate shocks. India’s water outlook is cause for alarm not just because of population growth but also because of climate change-induced shifts in the region’s water supply. Depletion of groundwater stocks in the country’s key agricultural breadbaskets has raised water worries even further. Water scarcity is not some abstract threat in India. As Ashok Jaitly, director of the water resources division at New Delhi’s Energy and Resources Institute, told me this past spring, “we are already in a crisis.”
How the country manages its water scarcity challenges over the coming decades will have repercussions on food prices, energy supplies, and security the world over — impacts that will be felt here in the United States. And India is not the only country wrestling with the intertwined challenges of population growth and water scarcity.
Transboundary Tensions
Several of the world’s most strategically important aquifers and river systems cross one or more major international boundaries. Disputes over dwindling surface- and groundwater supplies have remained local and have rarely boiled over into physical conflict thus far. But given the challenges faced by countries like India, small-scale water disputes may move beyond national borders before the end of this century.
Looming global water shortages, warns a recent World Economic Forum report, will “tear into various parts of the global economic system” and “start to emerge as a headline geopolitical issue” in the coming decades.
This has become a national security issue for the United States. Any country that cannot meet population-linked water demands runs the risk of becoming a failed state and potentially providing fertile ground for international terrorist networks. For that reason, the United States is keeping close track of how water relations evolve in countries like Yemen, Syria, Somalia, Pakistan, and Afghanistan. It is also one of the reasons water security is a key goal of U.S. development initiatives overseas. For instance, between 2007 and 2008, the U.S. Agency for International Development (USAID) invested nearly $500 million across more than 70 countries to boost water efficiency, improve water treatment, and promote more sustainable water management.
More Mouths to Feed, Limited Land to Farm
Water is a critical component of industrial processes the world over — from manufacturing and mining to generating energy — and shapes the everyday lives of the people who rely on it for drinking, cooking, and cleaning. But the aspect of modern society most affected by decreasing water availability is food production. According to the United Nations, agriculture accounts for roughly 70 percent of total worldwide water usage.
Global population growth translates into tens of millions of new mouths to feed with each passing year, straining the world’s ability to meet basic food needs. Given the finite amount of land on which crops can be productively and reliably grown and the constant pressure on farms to meet the needs of a growing population, the 20th and early 21st centuries have been marked by periodic regional food crises that were often induced by drought, poor stewardship of soil resources, or a combination of the two. As demographic change continues to rapidly unfold throughout much of Asia and sub-Saharan Africa, the ability of farmers and agribusinesses to keep pace with surging food demands will be continually challenged. Food shortages could very well emerge as a staple of 21st century life, particularly in the developing world.
Mirroring the growing burden on farmland will be a growing demand for water resources for agricultural use — and the outlook is not promising. According to a report from the International Water Management Institute in Sri Lanka, “Current estimates indicate that we will not have enough water to feed ourselves in 25 years’ time.”
As one of the world’s largest agricultural producers, the United States will be affected by this food crisis in multiple ways. Decreased food security abroad will increase demand for food products originating from American breadbaskets in California and the Midwest, possibly resulting in more intensive (and less sustainable) use of U.S. farmland. It may also drive up prices at the grocery store. Booming populations in east and south Asia could affect patterns of global food production, particularly if severe droughts spark downturns in food production in key Chinese or Indian agricultural centers. Such an outcome would push those countries to import huge quantities of grain and other food staples to avert widespread hunger — a move that would drive up food prices on the global market, possibly with little advance warning. Running out of arable land in the developing world could produce a similar outcome, Upmanu Lall, director of the Columbia Water Center at Columbia University, said via email.
Changing Tastes of the Developing World
Economic modernization and population growth in the developing world could affect global food production in other ways. In many developing countries, rising living standards are prompting changes in dietary preferences: More people are moving from traditional rice- and wheat-based diets to diets heavier in meat. Accommodating this shift at the global level results in greater demand on “virtual water” — the amount of water required to bring an agricultural or livestock product to market. According to the World Water Council, 264 gallons of water are needed to produce 2.2 pounds of wheat (370 gallons for 2.2 pounds rice), while producing an equivalent amount of beef requires a whopping 3,434 gallons of water.
In that way, the growing appeal of Western-style, meat-intensive diets for the developing world’s emerging middle classes may further strain global water resources. Frédéric Lasserre, a professor at Quebec’s Laval University who specializes in water issues, said in an interview about his book Eaux et Territories, that at the end of the day, it simply takes far more water to produce the food an average Westerner eats than it does to produce the traditional food staples of much of Africa or Asia.
There is far greater potential, however, in harnessing the water supply of the world’s oceans. Perhaps more than any other technological breakthrough, desalination offers the best chance to ease our population-driven water crunch, because it can bolster supply. Although current desalination technology is not perfect, Eric Hoke, an associate professor of environmental engineering at the University of California-Los Angeles, told me via email, it is already capable of converting practically any water source into water that is acceptable for use in households, agriculture, or industrial production. Distances between supply and demand would be relatively short, considering that 40 percent of the world’s population — some 2.7 billion people — live within 60 miles of a coastline.
The Lure of Desalination
Although desalination plants are already up and running from Florida to Australia, the jury is still out on the role desalination can play in mitigating the world’s fresh water crisis. Concerns persist over the environmental impact seawater-intake pipes have on marine life and delicate coastal ecosystems. Another question is cost: Desalination plants consume enormous amounts of electricity, which makes them prohibitively expensive in most parts of the world. Desalination technology may not be able to produce water in sufficient scale — or cheaply enough — to accommodate the growing need for agricultural water. “Desalination is more and more effective [in producing] large quantities of water,” notes Laval University Professor Frédéric Lasserre in an interview. “But the capital needed is huge, and the water cost, now about 75 cents per cubic meter, is far too expensive for agriculture.” Although desalination might be “a good solution for cities and industries that can afford such water,” Lasserre predicts it “will never be a solution for agricultural uses.”
Nevertheless, desalination’s promise of easing future water crunches in populous coastal regions gives the technology game-changing potential at the global level. “Desalination technology,” Columbia University’s Upmanu Lall told said in an email, “will improve to the point that [water scarcity] will not be an issue for coastal areas.”
A Glass Half Full
With world population projected to grow by at least 2 billion during the next 40 years, water will likely remain a chief source of global anxiety deep into the 21st century. Because water plays such a fundamental role in everyday life across every society on earth, its shared stewardship may become an absolute necessity.
Take India and Pakistan’s landmark Indus Waters Treaty of 1960, which is still in effect today. The agreement — signed by two countries that otherwise can’t stand each other — shows that when crafted appropriately and with enough patience, international water-sharing pacts can help defuse tensions over water access before those tensions escalate into violence. Similar collaboration on managing shared waters in other areas of the world — a process that can be a bit bumpy at times — has proven successful to date.
Meanwhile, more widespread distribution of reliable family planning tools and services across Latin America, sub-Saharan Africa, and Asia will also be needed if the international community hopes to meaningfully address water scarcity concerns. Better access to healthcare and family planning tools would empower women to take greater control over their reproductive health and potentially elevate living standards in crowded parts of the developing world. Smaller family sizes would help decelerate population growth over time, easing the burden on water and soil resources in many areas. The key is ensuring such efforts have adequate funding. The United States recently pledged $63 billion over the next six years through its Global Health Initiative to help partner countries improve health outcomes through strengthened health systems, with a particular focus on improving the health of women and children.
Putting a dent in the global population growth rate will be important, but it must be accompanied by a sustained push for conservation — nowhere more so than in agriculture. Investing in the repair of a leaky irrigation infrastructure could help save water that might otherwise literally slip through the cracks. Attention to maintaining healthy soil quality — by practicing regular crop rotation, for example — could also help boost the efficiency of irrigation water.
Setting a Fair Price
The most enduring changes to current water-use practices may have to come in the form of pricing. In most parts of the world, including parts of the United States, groundwater removal is conducted with virtually zero oversight, allowing farmers to withdraw water as if sitting atop a bottomless resource. But as groundwater tables approach exhaustion, the equation changes; as Ben Franklin famously pointed out, “when the well’s dry, we know the worth of water.”
The key, then, is to establish the worth of water before this comes to pass. Smart pricing could encourage conservation by making it less economical to grow water-intensive crops, particularly those ill-suited to a particular climate. “Some crops being grown should not be grown . . . once the true cost of water is factored in,” Nirvikar Singh, a University of California-Santa Cruz economics professor who focuses on water issues, told me via email. Pricing would also provide a revenue stream for modernizing irrigation infrastructures and maintaining sewage systems and water treatment centers, further bolstering water efficiency and quality both in the United States and around the globe.
To be sure, implementing a pricing scheme for water resources — which have been essentially free throughout history — will be unpopular in many parts of the world. It’s natural to expect some pushback from the public as water managers and governments take steps to address the 21st century water crunch. But given the resource’s undeniable and universal value on an ever-more crowded planet, few options exist aside from using the power of the purse to push for more efficient water use.
In the end, however, water pricing must be combined with greater public value on water conservation — we must not flush water down our drains before using it to its full potential. Whether that involves improving the water transportation infrastructure, recycling wastewater, taking shorter showers, or turning to less water-intensive plants and crops, steps big and small need to be taken to better conserve and more equitably divide the world’s water to irrigate our farms, grow our economies, and sustain future generations.
Sources: Columbia Water Center, National Geographic, Population Reference Bureau, White House.
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29 September 2010 Last updated at 17:01 GMT
By Richard Black Environment correspondent, BBC News

The study maps water availability and quality down to the regional level
About 80% of the world’s population lives in areas where the fresh water supply is not secure, according to a new global analysis.
Researchers compiled a composite index of “water threats” that includes issues such as scarcity and pollution.
The most severe threat category encompasses 3.4 billion people.
Writing in the journal Nature, they say that in western countries, conserving water for people through reservoirs and dams works for people, but not nature.
They urge developing countries not to follow the same path.
Instead, they say governments should to invest in water management strategies that combine infrastructure with “natural” options such as safeguarding watersheds, wetlands and flood plains.
The analysis is a global snapshot, and the research team suggests more people are likely to encounter more severe stress on their water supply in the coming decades, as the climate changes and the human population continues to grow.
They have taken data on a variety of different threats, used models of threats where data is scarce, and used expert assessment to combine the various individual threats into a composite index.
The result is a map that plots the composite threat to human water security and to biodiversity in squares 50km by 50km (30 miles by 30 miles) across the world.
Changing pictures
“What we’ve done is to take a very dispassionate look at the facts on the ground – what is going on with respect to humanity’s water security and what the infrastructure that’s been thrown at this problem does to the natural world,” said study leader Charles Vorosmarty from the City College of New York.
“What we’re able to outline is a planet-wide pattern of threat, despite the trillions of dollars worth of engineering palliatives that have totally reconfigured the threat landscape.”
Those “trillions of dollars” are represented by the dams, canals, aqueducts, and pipelines that have been used throughout the developed world to safeguard drinking water supplies.
Their impact on the global picture is striking.

Looking at the “raw threats” to people’s water security – the “natural” picture – much of western Europe and North America appears to be under high stress.
However, when the impact of the infrastructure that distributes and conserves water is added in – the “managed” picture – most of the serious threat disappears from these regions.
Africa, however, moves in the opposite direction.
“The problem is, we know that a large proportion of the world’s population cannot afford these investments,” said Peter McIntyre from the University of Wisconsin, another of the researchers involved.
“In fact we show them benefiting less than a billion people, so we’re already excluding a large majority of the world’s population,” he told BBC News.
“But even in rich parts of the world, it’s not a sensible way to proceed. We could continue to build more dams and exploit deeper and deeper aquifers; but even if you can afford it, it’s not a cost-effective way of doing things.”
According to this analysis, and others, the way water has been managed in the west has left a significant legacy of issues for nature.
Whereas Western Europe and the US emerge from this analysis with good scores on water stress facing their citizens, wildlife there that depends on water is much less secure, it concludes.
Concrete realities
One concept advocated by development organisations nowadays is integrated water management, where the needs of all users are taken into account and where natural features are integrated with human engineering.
One widely-cited example concerns the watersheds that supply New York, in the Catskill Mountains and elsewhere around the city.
Water from these areas historically needed no filtering.
That threatened to change in the 1990s, due to agricultural pollution and other issues.
The city invested in a programme of land protection and conservation; this has maintained quality, and is calculated to have been cheaper than the alternative of building treatment works.
Mark Smith, head of the water programme at the International Union for the Conservation of Nature (IUCN) who was not involved in the current study, said this sort of approach was beginning to take hold in the developing world, though “the concrete and steel model remains the default”.
“One example is the Barotse Floodplain in Zambia, where there was a proposal for draining the wetland and developing an irrigation scheme to replace the wetlands,” he related.
“Some analysis was then done that showed the economic benefits of the irrigation scheme would have been less than the benefits currently delivered by the wetland in terms of fisheries, agriculture around the flood plain, water supply, water quality and so on.
“So it’s not a question of saying ‘No we don’t need any concrete infrastructure’ – what we need are portfolios of built infrastructure and natural environment that can address the needs of development, and the ecosystem needs of people and biodiversity.”
Dollars short
This analysis is likely to come in for some scrutiny, not least because it does contain an element of subjectivity in terms of how the various threats to water security are weighted and combined.

Developing countries are urged to think carefully about “concrete and steel” solutions
Nevertheless, Mark Smith hailed it as a “potentially powerful synthesis” of existing knowledge; while Gary Jones, chief executive of the eWater Co-operative Research Centre in Canberra, commented: “It’s a very important and timely global analysis of the joint threats of declining water security for humans and biodiversity loss for rivers.
“This study, for the first time, brings all our knowledge together under one global model of water security and aquatic biodiversity loss.”
For the team itself, it is a first attempt – a “placeholder”, or baseline – and they anticipate improvements as more accurate data emerges, not least from regions such as Africa that are traditionally data-scarce.
Already, they say, it provides a powerful indicator that governments and international institutions need to take water issues more seriously.
For developed countries and the Bric group – Brazil, Russia, India and China – alone, “$800bn per year will be required by 2015 to cover investments in water infrastructure, a target likely to go unmet,” they conclude.
For poorer countries, the outlook is considerably more bleak, they say.
“In reality this is a snapshot of the world about five or 10 years ago, because that’s the data that’s coming on line now,” said Dr McIntyre.
“It’s not about the future, but we would argue people should be even more worried if you start to account for climate change and population growth.
“Climate change is going to affect the amount of water that comes in as precipitation; and if you overlay that on an already stressed population, we’re rolling the dice.”
Richard.Black-INTERNET@bbc.co.uk
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September 8, 2010
Well-defined water rights, increasing demand and projections of scarcity are attracting investment funds from abroad.
Foreign investors have bought hundreds of millions of dollars worth of permanent water rights in Australia, according to a series of reports published this week by the Sydney Morning Herald.
Purchasing water rights represents a shift in investment strategy for water funds, which to this point have focused primarily on water utilities, water infrastructure and water-related technologies. Though formal water rights trading exists in Chile, the western United States, South Africa and China, no country matches the size of Australia’s market, worth AU$30 billion.
Australia’s water rights system has two tiers: entitlements and allocations. Entitlements are a permanent right to a share of the total water available. Allocations are a right to a specific, seasonal volume of water granted to an entitlement holder; they are for temporary use when traded.
Investment funds see big earnings from leasing annual allocations to farmers and cities. Since they hold entitlement, these allocations can be sold every year. Ten years ago one million liters traded for AU$2 in Australia. Last year at the peak of the market, the same volume sold for AU$1,300 to $2,400, the Herald reports.
But profits from sales can be volatile, while nearly AU$3 billion in rights was traded in 2009, but prices have dropped 40 percent in some cases due to more rain and changes in the government’s purchasing system this year.
The federal government has been the biggest player in the market, pledging to spend AU$3 billion to buy back water rights to restore rivers in the Murray-Darling Basin. Some farmers allege that the government’s buying flurry last year caused prices to spike and then fall when trading has been lighter in 2010.
The argument for water markets is that tradable rights apportion water to its highest valued use, creating a more efficient economy. According to Australia’s National Water Commission, water trading increased economic productivity in the country by $220 million between 2008 and 2009.
Critics counter that without better regulations, such as limitations on holdings, water rights can become consolidated in the hands of a few.
“We don’t have a problem with investment, or indeed, speculation in the water market,” said Andrew Gregson of the New South Wales Irrigators Council to the Herald. “We are concerned about market dominance. It’s a recently developed, relatively fragile market.”
Small farmers are worried about the strings that might come attached to water allocations purchased from a foreign owner.
Gregson told the Herald that a foreign rights holder could “buy a truckload of water and decide: ‘I’m going to lease it to somebody, but as part of that lease I’m going to tell them what to grow, when to grow it, who to sell it to and at what price’. We’re opening the door to potentially becoming the old feudal system of peasant farmers—on an enormous commercial scale, obviously.”
Those fears recall the recent trend of parched Persian Gulf countries and state-owned sovereign wealth funds buying farmland abroad – what some have called a land grab.
Both farmland acquisitions and water rights purchases are in their infancy, but are projected to grow. The Herald mentions Richard Lourey, the head of the Causeway Water Fund, trawling global financial capitals for AU$100 million to invest in Murray-Darling water.
Another investor Graham Dooley, the chair of Summit Water Holdings, would not say how much the company will invest in Australia, but he did tell the Herald that the thinking is long-term: “We have no upper limit [for acquisition]. We have a buy and hold strategy. We are in the build phase.”
Source: Sydney Morning Herald: Water Rights, Sydney Morning Herald: Liquid Gold, Sydney Morning Herald: Farmers
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‘Water has to come to the people,’ president of S2C Global tells Circle of Blue.
By Brett Walton
Circle of Blue
S2C Global—one of two companies in a partnership to export water from Sitka, Alaska to India—envisions water hubs in the Arabian Sea, East China Sea and Caribbean Sea, according to its 2010 second quarter U.S. Securities and Exchange Commission report.
In July, S2C announced a water hub in India for distributing water from Sitka, a town of 8,600 people on Baranof Island in the Alaskan panhandle. S2C’s president Rod Bartlett, who had previously restricted his comments to press releases, spoke with Circle of Blue on Wednesday about the company’s business plans.
While the East China and Caribbean hubs are planned expansions, S2C is concentrating on its Arabian Sea hub on the west coast of India to prove the feasibility of a regular bulk water trade. The company expects to complete its first shipment by the end of 2010.
Bartlett’s Bulk Water Vision
Bartlett sees bulk water as a logistics exercise. Pricing, supply and demand, transport costs and infrastructure must square. Only in the last 18 months has it become viable for large-volume water shipments, he said. The global economic crisis left a glut of tanker ships in its wake, pushing down the cost of chartering a vessel. Even cheaper are water bags, but the technology is still viewed as a promising curiosity.
The economy will eventually recover and charter prices will rise, but Bartlett expects the shipping trade will find a new equilibrium that offers bulk water purveyors entry into the market.
Distance, Desalination Issues May Stand in the Way
As befits the president of a company, Bartlett is bullish about his trade, but other people familiar with the bulk water industry are skeptical about the viability of an Alaska-to-India water business. Two concerns that came up most often in discussions were the price S2C is paying for the water and the transport distance between markets.
“They’re getting killed at dockside with a penny a gallon,” said Terry Spragg, designer of the Spragg Bag water delivery system, about S2C’s contract price with Sitka. “I could desalinate water for less than a penny a gallon right off my coast if you’re talking municipal and industrial purposes. If you’re talking bottled water, you could get water from Fiji cheaper. Fiji Water already has a market. I just don’t see how Alaska can compete shipping water at the dockside price they are trying to negotiate.”
“The premium market is the only way they could go and there are closer export markets with premium supplies: New Zealand and Tasmania,” Spragg added.
New Zealand is roughly 4,000 km closer to the Persian Gulf than Sitka: a considerable advantage because shipping costs are largely a function of distance.
Bartlett contends that distance is less a consideration than infrastructure. Sitka’s deep water port and dockside supply pipeline mean scale efficiencies for the amount of water that they can move.
“The direct competition is desalination,” Bartlett said. “But with desalination, the real costs are not reported. Many countries do not attach a market cost to the electricity used. They don’t factor the amortized cost of the plants into the per unit water cost, and they don’t account for the environmental costs.”
Strict environmental standards in Australia have driven up the cost of desalinated water to nearly $0.07 per gallon on average, according to an article in The New York Times. Bartlett says S2C can buy water from the city of Sitka, load it, ship it to India and unload it for the same price. Meanwhile water shipments can be turned on and off in response to demand, thereby avoiding the capital burden of a multi-billion dollar desalination plant mothballed during a rainy period.
Not a Money Mecca
Besides pricing and location considerations, potential deals in the bulk water business as a whole have been undermined by past chicanery, according to John Anderson of CWE, Inc., a New Jersey-based company involved in bulk water logistics and consulting.
“I think some of the greed in the shipped water trade is adversely affecting any sale taking place,” Anderson said. “People think it’s a money Mecca, but it’s not.”
Anderson, who has worked in the industry since 1993, told Circle of Blue that tanker owners are the ultimate arbiters in the business since they control the means of transport. He knows tanker operators who have soured on the trade because prices were changed at the last minute by water depot owners looking for a better deal.
“Tanker owners are adverse to risk,” Anderson said. “They are not going to take a tanker out of rotation and not have all the pieces in place.”
Though Anderson said the bulk water trade is territorial with insiders protecting proprietary information that gives them an edge, Spragg said that openness is essential for companies trying to kickstart a business.
“They should be as transparent as possible,” Spragg said. “That’s the only way to get this thing off the ground.”
Much of the business hinges on relationships with tanker owners, Anderson said, and an ability to manage often overlooked micro-details: things such as import permits and code regulations. Anderson said he knew of one transaction that was scuttled when the water importer failed to notify health inspectors and the ship was unable to unload.
Because it is a small company, S2C does not have the strength to develop the water hub alone. However, the company does have the strength to bring in an Indian partner in a joint venture to build the infrastructure, Bartlett stressed, adding that S2C is looking to incorporate an Indian subsidiary.
Bringing Water to the People
Bartlett said permits on both ends of the route are being finalized and construction for the India hub is in place. The tank farm to store the water is pre-fabricated while the pipeline at the Indian port is being fast-tracked by port officials.
“It can all be done very quickly,” he said, “once we say ‘go’.”
“There is plenty of water in the world,” he added, “but people don’t live where the water is and they aren’t all going to move north. Water has to come to the people, be it through pipelines or ships.”
Brett Walton is a Seattle-based reporter for Circle of Blue. Reach Walton at brett@circleofblue.org. Read more about bulk water exports on Circle of Blue.
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by Lisa Song – Sep 4th, 2010

Imagine an oil tanker plowing through the ocean, hauling valuable cargo from resource-rich nations of the world to the countries that need it: but instead of oil, the tanker holds millions of gallons of fresh water.
It’s not a vision from some futuristic film or doomsday novel, but the present-day intention of companies trying to launch the bulk water export business. The idea has been around since the 1990’s, yet no one has succeeded in making it a practical reality.
But last July, the US company S2C Global Systems, Inc. became the latest bulk water wanna-be by announcing it would begin shipping water from Alaska to India within the next six to eight months. Using large class vessels that can hold 50 million gallons at a time, S2C plans to sell the water for both manufacturing and drinking purposes to countries around the Arabian Sea.
“I think it’s a dream,” said Peter Gleick, a scientist and international water expert, in an interview with SolveClimate News. Gleick is President of the Pacific Institute for Studies in Development, Environment, and Security. “I don’t think bulk water transfers of any significant volume are ever going to happen, because the cost of moving water, especially across the ocean, is so high.”
Rod Bartlett, managing partner of Alaska Resource Management (a partnership between S2C and True Alaska Bottling), told SolveClimate News that S2C is finalizing legal issues and logistics for a “World Water Hub” on the western coast of India. Once it’s built, the hub will be a distribution point from which the company plans to deliver water to target destinations in the Middle East and northern Africa.
“Every nation within a four-day target of the hub is a potential customer or client that will need fresh water,” said Bartlett. Without revealing specific details, Bartlett added that S2C has received both spoken and “written expressions of interest.”
The water S2C plans to export will come from Alaska’s Blue Lake near the city of Sitka, about 90 miles southwest of Juneau. Since 1999, Sitka has promoted itself as a source for bulk water exports; True Alaska Bottling owns the water rights to 8 million gallons per day from Blue Lake.
As to why humans would want to move water around the world, Bartlett explained: “(You move the water) because you can’t move the population.” Most of the world’s freshwater is found near the Poles, while most people live closer to the equator.
Population growth, urbanization and irrigation place are creating increasing demand for water. But climate change is exacerbating the problem of supply, most notably in the Himalayan region, often referred to as Asia’s water tower.
According to a report from King’s College in London, about two-thirds of the Himalayan glaciers are shrinking, and decreased runoff will affect water levels in ten major rivers. All together, the rivers’ drainage basins are home to 1.3 billion people—close to one-fifth of the world’s population.
Many of them live in India. S2C originally chose to build their hub there because they couldn’t find an appropriate port in the Middle East. But now, said Bartlett, “as you continue to look at the potential in India, it’s going to be a natural place to sell water soon, no question about it.”
Desalinated Water 18 Times Cheaper
The idea of moving vast quantities of water is hardly new. The Romans did it with aqueducts; today, California pipes the Colorado River’s water hundreds of miles into its cities and farms. But when you ship water more than 1000 or 1500 miles, said Gleick, “the diesel costs kill you.”
International water shipments do occur on small geographic scales. In 1997, Greece began shipping water to the island of Aegina, 13 miles from the Greek coast. Singapore currently imports freshwater from Malaysia but vowed to build desalination plants for increased water security. A plan for Turkey to sell water to Israel was recently suspended due to political tension between the two nations.
What S2C has proposed—moving water halfway around the world, 50 million gallons at a time—is on a scale that dwarfs existing bulk water transfer efforts.
The biggest problem, said Gleick, is that S2C will be competing with desalination plants, which are very popular in the Middle East. “Saudi Arabia and Kuwait are almost completely dependent on desalinated (sea)water.”
Water from desalination plants costs about $1/cubic meter (this price includes the cost of building and running the plant), said Gleick. According to Bartlett, it will cost S2C $18/cubic meter to move the water from Alaska to India.
In order to make a profit, the company would then have to mark up the price before selling to customers. Some of the water will be sold in bulk to pharmaceuticals and manufacturers; the rest will be bottled for drinking. And after days in storage on board the ship, the water will need further processing before it’s clean enough to sell, further adding to the company’s costs.
Despite the abundance of cheap desalinated water, Bartlett believes that desalination has its drawbacks. In an email to SolveClimate News, he wrote that the process of purifying seawater has environmental impacts (such as pollution from the fossil fuels that power the plant). He also said that the desalinated water can leach minerals out of pipes, making the water less palatable.
Gleick acknowledged that the price of desalinated water doesn’t take into account the environmental costs. However, he said that the mineral-leaching problem comes from overly purified water and can be easily solved. Plant operators will either add minerals back into the desalinated water or mix it with existing tapwater. “This is routine (at) desalination plants.”
“(The process of) reverse osmosis can turn seawater into potable water,” said Gleick. After that, “you basically tune the system to the kind of water you want.”
Nevertheless, Bartlett was optimistic about his company’s future. In his opinion, S2C overcame a major hurdle by finding a deepwater port in India that can accommodate the large class vessels. It also helps that the ports at either end are quipped to load and unload the water quickly. Every day that a ship sits in port costs the company $50,000-$60,000.
But all those problems, said Gleick, are insignificant compared to the cost of transport. At the end of the day, S2C’s water is more than 18 times more expensive than existing sources.
Move to Ban Water Exports
Logistics and pricing aside, the mere idea of turning water into another internationally traded commodity has drawn mixed reactions.
Canada, which owns more freshwater resources than any other country, is moving to ban bulk exports. Greenland, Iceland and New Zealand are searching for investors.
Bartlett argued that bulk water trade would hardly make a difference in the grand scheme of things. For context, S2C’s maximum potential allocation from Blue Lake is 12 billion gallons per year (37,000 acre-feet), less than one percent of California’s yearly allotment (4.4 million acre-feet) from the Colorado River.
Bartlett said that S2C hopes to build two more Water Hubs, one in the Caribbean and another near eastern China.
Gleick remained doubtful about the success of the India venture: “I would be hugely surprised if this passed any economic or practical test…until I see a contract and an actual shipment, I’m going to remain skeptical.”
(Photo of Sitka Sound:David Baron)
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Minister Cannon Tables the Transboundary Waters Protection Act to Protect Canadian Waters
June 28, 2010 by mickiegirlca
(May 13, 2010 – 11:45 a.m. ET) The Honourable Lawrence Cannon, Minister of Foreign Affairs, today tabled a new bill, the Transboundary Waters Protection Act, which protects Canadian water by strengthening prohibitions on bulk removal of Canada’s water outside the country.
“This government is protecting Canadian waters for Canadians,” said Minister Cannon. “The protections in this new bill will preserve our drinking water and our natural heritage for generations to come.”
“Protection of our freshwater resources is a key priority under the government’s Action Plan for Clean Water. We are working to make sure that our water is accessible, clean and safe for Canadians today and in the future,” said the Honourable Jim Prentice, Minister of the Environment. “This important legislation makes it clear that we are not in the business of exporting our water. Canadian water is not a commodity. It is not for sale.”
The new act strengthens existing protections by bringing waters within federal jurisdiction under a more comprehensive prohibition against bulk water removals. Rivers and streams that cross international borders will now receive the same protection already in place for waters, such as the Great Lakes, that straddle them.
The Act gives the federal government new powers of inspection and enforcement and introduces tough new penalties for violations, including fines of up to $6 million for corporate violations. The bill offers unprecedented federal protection against bulk water exports while respecting provincial constitutional jurisdiction.
“The federal government will continue to work with provincial and territorial governments to ensure that Canadian water is protected,” said Minister Cannon.
For further information, media representatives may contact:
Ève Cardinal
Press Secretary
Office of the Minister of Foreign Affairs
613-995-1851
Foreign Affairs Media Relations Office
Foreign Affairs and International Trade Canada
613-995-1874
Media Relations
Environment Canada
819-934-8008
1-888-908-8008
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Terry Trapp is proposing an innovative bulk water transfer from Alaska to parched areas of the world like the Middle East. He currently has a bottling company for Alaska water – True Alaska Bottling Company – but is also involved with S2C Global Systems to explore ways to transfer large quantities of fresh water to other areas.
Not Without Controversy
The export of fresh water from areas abundant in it to parched areas has been around for a long time. At one time it was proposed to lasso wayward icebergs and tow them to the Middle East.
Canada has faced the question of water export at least since the ’90s. Canada holds about 20% of the drinkable water in the world and as climates change, water is rapidly becoming a very valuable commodity. Various schemes, sometimes backed by politicians have eyed the abundant waters and seen dollar signs.
There are many companies already bottling drinkable water and exporting it. This sometimes has a deleterious effect on nearby aquifers and drawing down water tables.
Environmental effects of harvesting large amounts of fresh water from lakes changes the salinity in river estuaries and changes the kind of plants and animals that survive there.
“But Garry White, executive director of the Sitka Economic Development Association, argues that removing 8 percent of the watershed flow every year will not harm the environment because much of it is already being lost to the ocean.”National Geographic Daily News
NAFTA Doesn’t Apply
If the town politicians of Sitka choose to export bulk water from their area to the Middle East or the lower American States, the NAFTA agreement does not apply, meaning they could stop water sales if they find they want to stop exporting water.
NAFTA Does Apply
If water is exported in bulk(not bottles), then it is considered a ‘good’ like other trade goods and is subject to the regulations of the Free Trade Agreement. This means that if the Alaska town exports water to Mexico, for example, they cannot stop selling that ‘good’ to Mexico even if they find they run short of that ‘good’.
There is a great deal of money to be made by a few enterprising people who want to treat water as a commodity and export it, but it is not without pitfalls.
(Why not try getting the water from New Zealand? No politics and geographically closer to the Middle East. Paterson)
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June 2, 2010
As demand for freshwater increases globally, a few companies and water-rich countries envision water shipped in large tankers designed for oil as the next big supply-side solution.
Two American companies and a small Alaska city are drawing closer to an export agreement that ships fresh water from North America to a bulk bottling plant in India in order to supply the thirsty Middle East, according to Terry Trapp, the chief executive of True Alaska Bottling, one of the companies in the partnership.
Trapp’s company holds the rights, at a penny a gallon, to export 2.9 billion gallons (10.9 billion liters) per year from the Blue Lake reservoir owned by the city of Sitka, Alaska. Meanwhile the company’s partner in the venture, San Antonio-based S2C Global Systems, is negotiating with developers in India to build facilities at a deepwater port south of Mumbai.
Sitka and Alaska Resource Management LLC, the partnership formed by the two companies, are seeking to be the first to introduce bulk supplies of freshwater, transported in huge tanker ships, as a new commodity in global trade. The concept is straightforward. Where local supplies cannot meet demand, a small group of wildcatter companies and water-rich countries are positioning themselves to provide large shipments of water via 80-million-gallon capacity tanker ships and floating polythene bags–bulk water, in the industry parlance.
“The concept we have with our partner is constructing a water depot in India or the Middle East where water is unloaded and stored with an adjacent bottling tank,” Trapp told Circle of Blue. “The water would then be distributed to countries in two-and-a-half liter or five liter containers.”
The consequences of bulk water exports are not nearly as clear cut. Proposals to export water supplies out of their natural basins has sparked fierce political resistance in some parts of the globe. The Great Lakes region of the U.S. Midwest established laws and regulations over the last decade that sought to ban the practice. Moreover, reliance on imports could perpetuate water-wasting practices in dry regions. And the capacity of wealthier regions to afford their water in five-liter containers could widen the economic and quality of life gulf between rich and poor countries.
Bulk Water’s Past and Present
Bulk water transfers are not new. Diversions out of river basins both within and between countries have occurred for decades: Singapore imports water from neighboring Malaysia; Lesotho sends water to South Africa via the Highlands Project; Southern California exists as we know it today because of water channeled from the Sierra Nevada hundreds of miles to the north. Historically, engineers have moved water through pipelines, canals or rivers under government control and oversight.
Water is also exported by bottling companies. But the volumes sold from a single source are much smaller than the volumes available in bulk. Danone, the world’s second largest bottled water producer, sold 18 billion liters (4.8 billion gallons) in 2009 from all its bottling plants combined, a sales volume that is roughly half of the water available from Sitka.
What is new is the idea of shipping water in tankers across oceans. It differs in scale and the notion that big commercial advantages exist when a scarce commodity is supplied to eager communities willing to pay the price. Accompanying the shift in supply also is a shift in perspective, said George Paterson, chief executive of Aquazeal, a New Zealand company with water rights for export.
“Long-term I see that municipalities will import pure water for human consumption and use desalinated water for lesser uses (e.g. irrigation),” Paterson wrote in an email. “I think what will happen is that there will be a recognition that all water is not the same and that pure water should be reserved for human consumption.”
The Export Plan
In its bid to pioneer the global bulk water trade Alaska Resource Management LLC is focused on sales to water-stressed areas of the Middle East, northern China, southern India and parts of Africa as potential export markets, several sources told Circle of Blue. Though Sitka has made public infrastructure investments to make it easier to load water tankers in Alaska, Alaska Resources Management, LLC has not yet found a place to unload. A potential deal to secure off-loading facilities in Fujairah, United Arab Emirates fell through earlier this year because the company could not get the real estate next to a bottling plant.
Currently, S2C Global is discussing a site near Mumbai, according to Trapp. Those discussions will go on for several more weeks, Trapp told Circle of Blue. Representatives from S2C Global did not return phone calls or email messages for this article.
The site in India would be used as a regional hub to supply the Indian market and as a supply depot for the Middle East, Trapp said. Water could be offloaded to smaller vessels for the final leg to the Middle East, or it could be transported in bottles.
“What’s missing is infrastructure on the receiving side,” Trapp said.
Once negotiations in India are concluded, ARM plans to focus attention on loading facilities in Sitka and lease contracts for tanker ships, he added.
If ARM breaks through the impediments, it could set off a run on Sitka’s 6.2 billion gallons per year of unallocated water rights. Two companies in the last six months have sent letters of inquiry about the city’s water supply for export to the Sitka Economic Development Association – American Water Company and Aqueous International, a subsidiary of a Luxemburg-based company.
Although no significant volumes of bulk water have been sold, A phrase on Aqueous International’s stationary perhaps captures best the prevailing mood in an industry that sees big profits in moving water by tanker. “Not a dream – inevitable!”
Sitka’s mayor, Scott McAdams, has similar sentiments. “I think the idea of selling bulk water to a thirsty planet has merit but it’s time has not yet arrived,” McAdams said. “Watersheds around the planet are under assault. The value of a commodity like water is only going to go up over time.”
Brett Walton is a Seattle-based reporter for Circle of Blue, and can be reached at brett@circleofblue.org. Read more about Sitka’s bulk water sales on Circle of Blue
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