LeakBird

(Dec. 29, 2008, Sustainable Industries)

Unlike the price of oil, another natural resource on which the global economy depends, the price of water does not value the water itself. Instead its price is determined by the cost of the infrastructure and transportation used to move water from one place to another. The average cost per 1,000 gallons of water in the United States is just $1.50, according to the American Water Works Association, a non-profit that works to improve drinking water around the world.

“They measure the stuff in acre-feet, not in barrels,” says Neal Dikeman, a partner at Jane Capital. “If energy is a commodity price that is exceedingly low, water is a small fraction of that.”

That’s all likely to change according to Jon Roberts, director of building science at CTG Energetics. “Water has been highly undervalued, but that is changing,” he said in an e-mail. “Several water utilities in Southern California are talking about 20 percent to 30 percent annual rate increases for the next five years. Moreover, the potential for water curtailments and mandatory reductions is very likely,” Roberts says.

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