At 11:58 p.m. in a crowded public hospital in Manila, Camille Galura made history.
At five pounds, five ounces, the beautiful, wrinkled child became the seven billionth human occupant on planet earth.
And with her arrival came both excitement and concern.
While baby Camille’s family likely celebrated her birth with laughs and tears, researchers tripped a silent alarm.
As Dr. Eric Tayag of the Philippines’ Health Department pointed out, with our global population now exceeding 7 billion…
Will there be enough clean water for all these new arrivals?
If you’re a regular reader of these pages, you know we’ve been writing about the water issue for years.
After all, much like energy shortages, water scarcity creates both crises and opportunities.
Now the crisis is obvious, although too often invisible to those of us who are fortunate enough to turn on our faucets and get clean water.
This morning, I boiled some water to make a cup of tea. No big deal… I didn’t think twice about it.
Meanwhile, half way around the world, 8-year-old Indian children in Mumbai sniffed out leaks in massive pipes that run through the slums on their way to deliver fresh water to more affluent neighborhoods.
In Sudan, a couple of twelve-year-old kids slurped water through specially-fitted plastic tubes that guard against water-borne larvae that cause Guinea worm disease.
I don’t bring this stuff up to upset you, but rather to serve as a reminder that when we talk about water scarcity, we’re not talking about lawn watering regulations or the high price of bottled water…
We’re talking about life and death.
We’re talking about full-blown crises that offer investors an opportunity to help the world’s most vulnerable populations while making a few bucks in the process.
And if this sounds crass, so be it. I make no apologies. Because one thing is certain: It will be technological advancements and a free market that come to the rescue — not candlelight vigils and letter-writing campaigns to your senator.
There are a number of ways to play the water angle.
Perhaps the most obvious is desalination.
Today, 300 million people in 150 countries rely on desalinated water. And that number is expected to more than double over the next ten years, due mostly to the rapid decrease in construction and production costs.
Energy usage is also being decreased dramatically, thanks to hybrid systems, energy efficiency measures, and the integration of alternative energy sources. In fact, most desalination plants in Australia are now powered by wind.
Saudi Arabia, the largest producer of desalinated water, is developing new solar programs. The most recent is a plant that will supply water to about 100,000 people using only solar-powered electricity. This plant will use new technologies developed by a Saudi research group and IBM (NYSE: IBM).
Our top play on desalination, however, is Energy Recovery, Inc. (NASDAQ: ERII), which manufactures pumps for desalination plants.
Africa is Thirsty
Another way to play the water angle is to do so indirectly by investing in energy production that doesn’t require huge amounts of water.
A typical 500-megawatt coal-fired power plant, for instance, requires 2.2 billion gallons of water each year. And nuclear power plants are typically built next to lakes, rivers, and oceans because they need the water to absorb the waste heat produced by the plants.
Just as it might not make much sense to rely exclusively on solar in places like Seattle or London, it also doesn’t make much sense to rely on water-intensive energy production in regions where water is scarce.
The fact is by 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world’s population could be living in water-stressed conditions. It is also estimated that almost half the world’s population will be living in areas of high water stress by 2030, including between 75 million and 250 million people in Africa.
This is not a region that can sustain the operations of coal-fired or nuclear power plants…
Same with India, where nearly 88 percent of the nation’s water is already consumed by thermal power plants.
So it’s no coincidence that in one year, investments in renewable energy in India and Africa have grown by 25 percent and 104 percent respectively.
It’s also no coincidence that some of the world’s largest corporations — like ABB (NYSE: ABB), Siemens (NYSE: SI) and GE (NYSE: GE) — are spending billions to lay the groundwork for renewable energy development in Africa.
Yes, China will continue to build nuclear power plants and feed off our massive bounty of coal…
Here in the United States, natural gas will eventually become our primary source of power generation…
But in water-scare regions all over the world — particularly where populations continue to explode — it will be wind and solar that take the lion’s share.
You can read more about renewable energy development in Africa here.
To a new way of life and a new generation of wealth…
Editor, Energy and Capital