Although I'm at the Solar Power 2007 conference in Long Beach, California, I thought I'd take a few moments to provide some updates on what's been happening in the water industry.

You see, breakout sessions for the solar conference don't start until tomorrow, with only a few choice pre-conference workshops going on today. After I compile all the information I receive here, rest assured, I will pass it along.

But on to water, where a real-world crisis is unfolding right before our very eyes. Often, when talking about water, we look to the future. We're used to saying things like, "in the next ten years" or "by 2025."

However, there are severe and pressing issues developing at this very moment that will not only serve as a catalyst for innovation, but also as huge profit makers. With that in mind, let's take a look at some of the happenings of the past few months, as relayed by an industry journal for the water and wastewater industry.

Florida Drinking Dirty Water

The lack of water in Central Florida, though less talked about, is nearly as acute as in the American Southwest. Counties and municipalities have been struggling to find a solution to dwindling supplies of freshwater coupled with a booming population.

In Orange County, Florida, a 26-month study has just been completed that evaluated membrane treatment of reclaimed water to meet increasing demand. The goal of the study was to assess which membrane technologies could clarify water to the standards needed for reintroduction to the main water supply.

The test facility used for the study has been in operation since February 2004, and tested three types of membrane technology: ultrafiltration (UF), nanofiltration (NF) and ultraviolet filtration (UV).

Originally, the test was designed to evaluate the treated water according to the US Environmental Protection Agency's (EPA) enforceable standards for health and aesthetics. But after discovering that some membranes could remove bacteria, viruses, protozoans and hormones, the study was expanded to include them.

When the study finished earlier this year, it was concluded that the tested system, which utilized all three membranes, could successfully meet the highest reclaimed water standards as defined by the Florida Department of Environmental Protection and the EPA.

While the manufacturers of the membranes were not disclosed, I can certainly venture a few guesses and highlight a few companies that operate in this sector.

Through its Fluid Technology segment, ITT Corporation (NYSE: ITT) is one of the premier purification systems manufacturers in the world. Their most recent system, the Leopold Clari-DAF, is revolutionizing the industry.

It removes nearly all insoluble metals, taste and color imperfections, algae and other pathogens, leaving only clean drinkable water. And it does it with equipment only 15% the size of traditional systems. The Clari-DAF approach also uses less energy, reduces disposal costs of removed solids, and requires less frequent filter changes.

In the past year, ITT's stock has risen, at times, over 53%. Now, being such a diversified company, it isn't clear whether this significant rise in stock price is directly attributable to the new system. But with heavy operations in the water sector as a whole, ITT is certainly benefiting from the water shortage that is plaguing the entire world. And it will continue to do so.

In My Back Yard

Also of increasing importance is the water quality of the Chesapeake Bay, which is right here in Baltimore's backyard and home to our famous Blue Crabs.

In Maryland, and states to the north that serve as hosts to the Chesapeake's tributaries, agriculture is a heavy industry. And fertilizer and waste run-off have been serious issues. Many wastewater facilities cannot keep up with the ever-increasing standards for water discharged into the Bay, or are simply too old to keep up with the sheer volume of water they are being asked to handle.

And, as is normally the case, money in the public sector is tight, restricting the construction of new updated facilities. But one company is striving to alleviate some of those financial issues while providing turnkey solutions for wastewater treatment.

Basin Water Inc. (NASDAQ: BWTR) sells and markets modular purification systems that can be integrated into a facility's existing structure. Basin's approach uses ion-exchange systems that are completely enclosed in freight containers. The containers can be deployed to any location and installed along the supply line of a treatment facility.

Their systems purify over 75 million gallons of water a day, and they've contracted with some of the nation's largest utilities.

In the past year the stock has almost doubled and it shows no signs of slowing down. Take a look:

Of course, purification isn't the only play in the water arena. There are a variety of needs, including water rights, desalination, infrastructure and transportation. And all those segments need pipes, valves and all the other parts we take for granted as end-users of water.

The Green Chip Water Index is currently tracking the performance of companies in all sectors of the water market, including Basin Water. At Green Chip, we're also paying more in-depth attention to worldwide problems and profit-making solutions associated with a global lack of freshwater.

To become one of the informed members of Green Chip Stocks, click here.

Until next time,

Nick

P.S. Don't forget to check back next week. I'll have the full details from the Solar Power 2007 conference. I've already heard some good things.