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Solutions to the Water Shortage

Officially Out of Water

Written by Nick Hodge
Posted November 5, 2007 at 7:44PM

He's at it again. But this time, instead of picking on kids' healthcare or limited funding for the war, Bush has set his crosshairs on a bill that would provide $23 billion to fund much-needed water projects and other solutions to the water shortage.

Congress, however, is well on its way to overriding the veto. If successful, it will be the first time Congress has stood up (and won) against Bush in his entire time as president. And it looks like it's actually going to happen.

Unlike the other bills that Bush has ridden the veto train through lately, this one has less of a partisan theme to it. It's about conserving and cleaning water and preventing water-related damage. Of course, war spending contingent on proven progress and tobacco-tax funded children's' healthcare are beneficial too--but even those issues can be (and have been) engulfed in political rhetoric.

This time, however, with water as the focus, it's hard for anyone to say no. That's why even the remaining Bush-supporting Republicans are blowing the whistle on this one.

The Water Resources Development Act of 2007

In the roll call vote that sent this bill, the Water Resources Development Act of 2007, to the president, only twelve senators voted in opposition. Simply put, the bill was just too good not to pass. It had something for nearly every state and congressional district, and wasn't extravagantly expensive. It would cost about $24 per American for the period spanning 2008-2012.

Pretty much the only Congressman publicly decrying this bill is House Minority Leader John A. Boehner (R-Ohio), whose reason for not wanting to pass it was, "I'm going to stand with the president." Well, at least he's honest.

But even he knows the bill is destined to pass, saying, "But at the end of the day, Congress is going to pass it. The Democrat Congress and some Republicans are going to stand up and override the president's veto."

After all, the bill would authorize more than 900 projects, aiding in everything from Florida Everglades restoration to improved river navigation in the Midwest to strengthening levees in Louisiana and California.

The bill's good substance, coupled with the invaluable resource it protects, has left many of Bush's allies with no other choice but to defy him. The most notable of these is Sen. James M. Inhofe (R-Okla.), who appealed to Vice President Dick Cheney to urge the president not to veto the bill.

Of course, this only further demonstrates the problem we're facing in the coming years when it comes to our water and infrastructure. Robert L. Bixby, leader of a budget watchdog group, said it best: "Nothing seems as dear to members of Congress as their water projects." A statement equally true of many Wall Street insiders as well.

Solutions to the Water Crisis

If the evidence I've been giving isn't enough--including the report of a Massachusetts town whose water supply was down to a mere 32 days--then maybe this next story will convince you.

First, in a town 40 miles west of Chattanooga, the water has officially run out. In Orme, TN, the water crisis affecting the southeastern US has caused the worst-feared consequence: a complete lack of water.

Since August, the Tennessee town has had access to water for only three hours per day. And even that little bit of water has to be hauled, three days a week, from a nearby Alabama town. So far, the town's mayor, Tony Reames (who also hauls the water from Alabama) has spent over 60% of the town's annual budget on providing water to its thirsty citizens.

Residents get water every day from 6 to 9 p.m. In that short time, they have to cook, take showers, and store as much as they can before the main valve from the town's water tank is shut off.

If the southeast is in the middle of a years-long drought, what is the solution to the town's problem?

Investments in the Water Sector

The solution has come in a $377,590 emergency grant from the US Department of Agriculture. The grant is to pay for the installation of a 2.5 mile pipe to connect Orme to the water supply of the town of Bridgeport, Al.

And this is just a small example of what's going on all over the nation.

Back in August, I wrote an article for Wealth Daily about the coming investment in the water sector via in our nation's water infrastructure. It concluded that by mid century, over $110 billion will have to be spent to overhaul all of our aging pipes and install new ones. With that kind of capital being spent, there are going to be more than a few related investments.

Some of the beneficiaries of that kind of investment will be pipe manufacturers. And one of those companies is Northwest Pipe Company (NASDAQ: NWPX), which recently announced two major supply deals.

The first was with S.J. Louis Construction to build part of Colorado's Prairie Waters Project. Northwest Pipe will supply 45,000 feet of steel pipe valued at $12 million. The second, with W.W. Clyde of Springville, Utah, is for $11 million worth of steel pipe.

And that was in one week. Just imagine how much will be needed to replace the millions of miles of aging and leaking pipes around the world.

All that pipe is going to need to be installed too! One of the major water infrastructure construction companies is Layne Christensen Company (NASDAQ: LAYN).

water infrastructure company (nasdaq: layn) Layne Christensen

The company has been on a 40% run since May, and shows no signs of slowing down. Profits are up about 17% every quarter this year and are destroying the numbers from the same periods one year ago.

Of course, there are plenty more ways to play this bull market in the water sector. Too many, in fact, to get into here.

But at Green Chip Stocks, I have a complete water index, of which Layne, along with plenty of other winners, is certainly a member.

Plus, the Green Chip portfolio, in addition to huge winners in the clean energy industry, has other water-related companies in it as well. The money is pouring in.

You don't want to miss another minute of this action. Click here to become a member today.

Until next time,

nick hodge



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