article continued......
Now, forget the nuances of California's problem for a second. Push aside the Delta Smelt, the bobbled policies, and the angry farmers.
What we have here — and around the globe — is a problem that requires serious solutions... and trillions of dollars of capital.
To solve his state's problems, the Governator has floated a multi-billion-dollar plan. Legislation passed last month will put an $11 billion bond on next year's ballot that would "pay for new dams to increase the state's ability to store water."
But that only accounts for a quarter of the $40 billion project the governor wants; his full plan includes a new canal that would be larger than the project in Panama.
And the cost, it seems, is worth it... not just because all residents need water to survive, but because the state's $36 billion per year agriculture industry depends on it, as well.
Huge Scale & Implications
What is often overlooked on the rare occasions that water makes it into the mainstream is the massive scale of these problems.
Yes, California is facing water shortages.
But so are 18 other states, according to the most recent U.S. Drought Monitor published by the University of Nebraska-Lincoln — including Minnesota, Wisconsin, and Michigan, which border the Great Lakes.
What's a potential $40 billion times 18?
And that's without considering other areas of the world most notoriously known for dry conditions, like Africa and the Middle East, as Stahl referred to in her opening.
Reports have cited a $40 billion desalination market just in the Middle East by 2025.
Pakistan has officially announced Vision 2025, a $33 billion plan that will develop its water resources.
In Africa, a recent study conducted by 24 countries forecast infrastructure needs in excess of $90 billion over the next decade.
What's that, another $160 billion right there?
The scale is huge. Only the oil industry compares.
And water is even more vital than oil, which brings me to my last point about the water industry...
Only demand rises. Supply remains the same... and the potential market includes over 6 billion people.
No other market has these dynamics — not oil; not gas; not gold.
Capital is guaranteed to flow to this sector as the squeeze is put on populations and industries in developed countries. The Third World is already in this state, with millions still hauling water in buckets.
It's why large corporations are slowly digging into the water industry. GE (NYSE: GE), Dow Chemical (NYSE: DOW), Siemens (NYSE: SI), United Technologies (NYSE: UTX)... They all have departments dedicated to water and are actively seeking contracts and projects around the globe.
But it's the smaller water companies that will really pay off for investors. The environmental engineering firms. The company that makes specialized parts for desalination plants all over the globe.
The companies that will either be bought out by the GEs of the world, or whose revenue will absolutely soar as countries scramble to secure their water supplies.
I've already taken numerous profits in the water sector... and the crisis hasn't even hit a crescendo.
AI
