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The Arctic Cold War Looming
The Uranium Merger Mania Pending
The Paradigm Behind Global Trade Protectionism
The Stealth Rally in Mining Mergers
Special Memorial Day Weekend Report
Special Report
The Paradigm Shift of Sky-High Oil
Water: The Looming Commodity Crisis (Part II)
By George Bell
As we covered in Part I of this series, access to safe and affordable water could be the single largest problem, both socially and economically, in the coming century - due to rising population, global warming and increased farming/manufacturing globally.
(To read Part I of this series, click here. Part II continues below.)
One important point to note when discussing looming shortages of water is how that potential crisis is related to global warming, which is clearly also one of the greatest threats to the economic stability of the entire planet. Case in point: On April 8, the IMF Global Economic Outlook Update conceded that for every one degree Celsius the world increases in temperature, global GDP losses ensue by a like percentage. Over the next century, if the world's average temperative increases roughly 3 to 5 degrees, global GDP could decline about 3 to 6%. Clearly, global warming is a threat.
However, the problem becomes even more complicated when we look at the solutions to curtailing global warming. Specifically addressing biofuels, while substances like corn-based ethanol tout lower carbon emissions to the atmosphere, the "green-friendly" fuel removes food from peoples' mouths, while also sucking down vast quantities of water.
In the middle of America's farming heartland, the Des Moines Register wrote: "Plant operators say they have reduced the amount of water needed to produce ethanol, but the facilities still need abundant local water supplies. A single plant producing 100 million gallons of ethanol a year - a capacity quickly becoming the norm - uses as much water as a town of approximately 10,000 people, the Iowa Department of Natural Resources reports."
CleanTech.com also stated, "RNCOS, which publishes Biofuel Market Worldwide (2007-2010), cites a study conducted by the Sri Lankan International Water-Management Institute that found, at a global average, 1,000-4,000 liters of water is consumed by the biomass needed to produce one liter of biofuel."
Beyond the massive water consumption required to produce biofuels, there is another culprit gulping massive quantities of water each day: coal. According to The Sierra Club, 260 million gallons of water are used - every day - globally in coal mining. What's more, burning coal for energy contributes 40% of America's carbon emissions, via carbon dioxide, each year. So not only does burning coal for electricity further aggravate the global warming problem, it also consumes massive quantities of water every day in the mining process.
Interestingly, Virginia Tech recently released a study "examining the water-use requirements for 11 different energy sources, ranking them in terms of efficiency," according to United Press International. Within the study, the researchers rank nuclear as the most water-inefficient power source.
When examining the results, one has to consider the impact of efforts to reduce global warming on future water resources. When contacting the researchers directly as to the impact of global warming on future water supply, the response was, "The major goal of our research is to show dependency of conventional energy and power on water availability. We did not consider the carbon footprint or other environmental impacts." Clearly, studies of this type fail to take into consideration the larger problem at hand, that of global warming, which will only make water scarcity issues even worse in the future. The team at Virginia Tech is top notch; thus I am not trying discredit the study. However, given the present threats of global warming, carbon footprints need to be taken into consideration whenever considering energy.
What all of this means is that to preserve water in the future, researchers and market participants must reconsider any energy and/or fuel source that heavily saturates the atmosphere with even more carbon emissions. Fact is, hydro, solar and nuclear are clearly the energy sources of choice to prevent future carbon emissions, thus preventing even more water shortages in the years to come.
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