Scarce Fresh Water Supplies
is running this ad right now that discusses the long term implications
for lack of fresh water. Desalination plants are mentioned in the
video….One stock that comes to mind, though it has performed poorly, is Energy Recovery (Symbol :ERII), which makes parts that help desalination plants deliver more
fresh water at a lower cost of energy use.
ERII is about the best pure play I can find to fit the global water supply theme,
unless one is interested in bottled water companies, but bottled water
has limited uses, basically as refreshment. But fresh water is used for
many things much beyond drinking water….to cleanse, bathe, wash, mix,
boil and so on with so many things in life–it has many industrial uses.
companies like GE and Fluor can build desalination plants, but these
businesses are not pure plays on fresh water. You could make a big bet
on these industrial conglomerates and be right about the price that
fresh water will eventually command….and still lose or make little
money because these two companies are involved in many other businesses
and projects that would dilute your returns.
ERII is a long term
investment….and dirt cheap right now because the economics of
desalination still do not make sense….but as oil, coal and nat gas
rise in price, which are the chief energy sources of industry as well as
a major input cost into desalination, the cost-benefit analysis of
de-salinaton will eventually make sense….