"In a time of universal deceit telling the truth is a revolutionary act." -George Orwell

Posts Tagged ‘Water Privatization’

Investors Are Mining For The Next Hot Commodity: Water. Wall Street Smells Profit As California Endures Devastating Drought

In Uncategorized on September 25, 2015 at 7:38 pm

Drip-irrigated lemon orchards at the Cadiz water project in the Mojave Desert.

Oldspeak: “Investing in the water industry is one of the great opportunities for the coming decades, Water is the scarce resource that will define the 21st century, much like plentiful oil defined the last century.” –Matthew J. Diserio ,Water Asset Management

Water has been taken for granted, but reliable access is no longer guaranteed, It will be seen as an asset class that will be allocated in portfolios like health care stocks or energy or real estate. -Disque D. Deane Jr., Water Asset Management

“Business as usual is in effect for Wall St. employed Inverted Corptalitarian Kleptocrats in the water starved and drought-striken American west. Understand how these people think. At least one major Watermongerer, Chairman of Nestle, thinks “human beings have no right to water…. The biggest social responsibility of any CEO, is to maintain and ensure the successful and profitable future of his enterprise.Similarly, observe the deranged and terrifying logic of these Wall St. veterans, uttered quite casually. Their objective is to invest in and profit from water assets to which reliable access is no longer guaranteed. The “asset class” will be added to profitable portfolios established to further enrich their clients. And be sold to others at a premium. No mention of the madness of continuing to drill for water and grow water intensive crops in a fucking desert. No mentions of  the environmental impacts of desalination plants or the pipelines to be built to transport the product and where to store waste. These are nothing more than externalities in the demented calculus of “people” who see the world as something from which to extract market value. An expected view in corporate media outlet like NYT. But the most telling quote from this piece for me was this one  by a long time market analyst Steve Maxwell :”It doesn’t make any difference whether it’s a public agency or a private company that manages your water, the prices are going up, It’s not because of municipal inefficiency or corporate greed. It’s because we’re running out of water.” That’s the bottom-line. The market won’t matter when the water runs out.” –OSJ

Written By  Nelson D. Schwartz @ The New York Times:

Gazing out of a turboprop high above his company’s main asset — 34,000 acres in the Mojave Desert with billions of gallons of fresh water locked deep below the sagebrush-dotted land — Scott Slater paints a lush picture that has enticed a hardy band of investors for a quarter-century.

Yes, Mr. Slater admits, his company, Cadiz, has never earned a dime from water. And he freely concedes it will take at least another $200 million to dig dozens of wells, filter the water and then move it 43 miles across the desert through a new pipeline before thirsty Southern Californians can drink a drop.

But tapping cash, as opposed to actual water, has never been a problem for Cadiz. “I think there’s plenty of money out there,” Mr. Slater said.

Real profits may be nearly as scarce as snow in the High Sierra, but Wall Street, as it is wont to do, smells profit as California endures its worst drought in decades.

“Investing in the water industry is one of the great opportunities for the coming decades,” said Matthew J. Diserio of Water Asset Management, a New York firm that is a major backer of Cadiz. “Water is the scarce resource that will define the 21st century, much like plentiful oil defined the last century.”

So far, though, this veritable Gold Rush has mostly turned up fool’s gold.

Over the last decade, Cadiz has accrued $185 million in losses, and revenue from the lemon groves and vineyards it owns in the Mojave has added up to only a trickle: $7.1 million total since 2005.

To develop the project, the company burns through $10 million to $20 million annually, paying for a never-ending battle in courthouses and conference rooms across California to win make-or-break government permits and to cover the salaries of its 10 full-time employees.

Cadiz has generated that money by borrowing and regularly issuing more shares, prompting skeptics to wonder if it will ever actually deliver any water, much less any profits.

“It’s a tough game,” said John Dickerson, chief executive of Summit Global Management, a 20-year-old San Diego firm that invests in water infrastructure companies, local water suppliers and water rights, both in the United States and overseas.

Scott S. Slater, the chief executive of Cadiz. Monica Almeida/The New York Times

“Cadiz has promoted the dream and for years Wall Street has pumped optimistic paper water for Cadiz,” he added. “But now the hard question for them is, Where is your real water and when can we drink it?”

Other water ventures have also promised more than they have been able to deliver, at least so far. Obstacles abound in the forms of skeptical regulators, wary customers and implacably opposed environmental groups.

But some projects are finally nearing fruition. Near San Diego, the privately held Poseidon Water is getting ready to flip the switch on a new desalination plant that it built after 15 years of battling lawsuits filed by environmental groups and waiting for go-aheads from cautious regulators.

The drought, however, hasn’t softened local opposition to private players like Cadiz or Poseidon entering California’s water market. A main reason is money.

After Poseidon’s new plant begins producing desalinated water late this year, the monthly water bill for a typical consumer in the San Diego area will rise by about $5, to $80, according to the San Diego County Water Authority.

Drip-irrigated lemon trees and vineyards are so far producing the project’s only revenue. Monica Almeida/The New York Times

Located on the grounds of a power plant in Carlsbad facing the Pacific Ocean, the facility should produce as much as 50 million gallons of drinking water a day, if not more, expanding the region’s water supply nearly 10 percent.

Nonetheless, for Adam Scow, California director of Food and Water Watch, a nonprofit environmental group that opposes the desalination project, any private control over the water supply is too much.

“Water is a public trust, and it shouldn’t be privatized,” Mr. Scow said. “It can’t be managed for the benefit of a few people like Poseidon’s investors. The rates are unjustified.”

Poseidon officials reject arguments from critics like Mr. Scow that they are taking advantage of consumers.

“The Carlsbad desalination project is a true public-private partnership,” said Andrew Kingman, executive vice president at Poseidon Water. “Poseidon’s role in the project is that of a service provider. The Water Authority doesn’t have any payment obligations for the water until it is converted and delivered, and thereafter has full control over its use.”

Cadiz plans to construct a 43-mile pipeline along the railroad tracks to carry water from the eastern edge of San Bernardino County to thirsty cities to the west. Monica Almeida/The New York Times

Indeed, despite fears that Wall Street is making money off the drought, so far it has mainly been Poseidon’s investors who have been on the losing end. The company’s first return on its investment is not expected until next year, after years on the drawing board. A similar Poseidon project up the coast in Huntington Beach is still mired in the permitting process.

“It took more than a decade of struggle to get the Poseidon project permitted, not the kind of experience to make for happy investors,” Mr. Dickerson said. “This may well discourage potential investors in future desalination projects in California.”

But for those with a long enough time horizon, water may ultimately prove to be a good investment.

“Water has been taken for granted, but reliable access is no longer guaranteed,” said Disque D. Deane Jr., a Wall Street veteran who runs Water Asset Management with Mr. Diserio. “It will be seen as an asset class that will be allocated in portfolios like health care stocks or energy or real estate.”

Their firm now oversees more than $500 million for pension plans, sovereign funds and wealthy families, and their flagship fund has generally outperformed global stock market benchmarks since inception in 2006. Assets at Impax Asset Management, a London-based firm that also focuses on water, have doubled to $1.8 billion over the last two years.

While some projects may be more far-fetched than others, experts involved in the business insist there’s nothing wrong with making a profit selling water.

“It takes money to process, treat and move water, but now water itself is becoming increasingly valuable in the West,” said Steve Maxwell, a veteran industry consultant who is based in Boulder, Colo.

“It doesn’t make any difference whether it’s a public agency or a private company that manages your water, the prices are going up,” he added. “It’s not because of municipal inefficiency or corporate greed. It’s because we’re running out of water.”

Many investors are looking for less risky ways to make money in the water business. Rather than wade into bruising battles over water rights or developing new supplies only to face accusations of trying to profit off the drought, investors like Simon Gottelier of Impax are focusing on companies that supply infrastructure to water utilities and industrial users, not the water itself.

“As long-term investors focused on managing a ‘sleep at night’ fund, we are reticent about water rights companies because of how emotive the issue can be,” Mr. Gottelier said. “We don’t want to make investments in companies that become a subject of ire from farmers or generate headlines.”

Disque Deane Jr., sitting, and Matthew J. Diserio are major backers of Cadiz. Sasha Maslov for The New York Times

For Impax, that means there is appeal in stocks like Xylem, a maker of pumps, filtration equipment, and water treatment and testing supplies. Other Impax holdings might include makers of reverse osmosis membranes, like those at the heart of Poseidon’s new desalination plant, which Mr. Gottelier visited in June.

He sees California’s water shortage not just as a driver of demand for the individual companies in his portfolio, but also as a spur to individuals and institutions wanting in on the water trade but not ready for moonshots like Cadiz.

“There has been a dramatic increase in real and potential investor appetite,” Mr. Gottelier said. Much of the cash flowing into Impax is from institutional clients in Europe, where for-profit water systems have a long history, in contrast to the United States.

Back in the Mojave, in a trailer alongside a sun-baked airstrip built by Cadiz, Mr. Slater likes to show visitors a video of what appears to be an underground river 400 feet below the sand and sagebrush. As the temperature hovers at 95 degrees outside, the sight of all that crystalline, cool water conjures up visions of an imaginary oasis shimmering in the distance, drawing wanderers ever deeper into the desert.

But Mr. Slater insists it is within reach.

“Our expectation is that we’re going to turn dirt next year,” he promised. “We’ve never said before that this is the year. We’re saying it now.”

Correction: September 24, 2015 Because of an editing error, an earlier version of this article misspelled the surname of an executive at Water Asset Management. He is Disque D. Deane Jr., not Dean. The error was repeated in an earlier version of a picture caption.

Nestlé Chairman Calls World’s Water Scarcity ‘more urgent’ Than Climate Change– As It Sells Bottled Water From Drought-Ridden California

In Uncategorized on July 17, 2014 at 9:23 pm

A discarded tire is seen stuck in the exposed lake bed of the Almaden Reservoir which is experiencing extremely low water levels due to the ongoing drought, in San Jose. Photo: Michael Short, The Chronicle

Oldspeak: “Only after the last tree has been cut down. Only after the last river has been poisoned. Only after the last fish has been caught. Only then will you find that money cannot be eaten-Cree Proverb

Peter Brabeck-Letmanthe, the chairman and former chief executive of Nestlé, told the Financial Times that the world is “running out of water” and that it needs to become a bigger priority to world leaders.

“Today, you cannot have a political discussion anywhere without talking about climate change,” he said. “Nobody talks about the water situation in this sense. And this water problem is much more urgent.”

Climate change is still an important issue, he argued, but even without it “we are running out of water and I think this has to become the first priority,” he said.

Nestlé’s 383,000 square-foot water bottling plant is located on the Morongo Band of Mission Indians’ reservation in California.

The state declared a drought state of emergency in January this year, in preparation for coming water shortages – especially during the summer months, but Nestlé is reportedly not required to comply with the emergency measures as its plant sits on a Native American reservation.” –Loulla-Mae Eleftheriou-Smith

“Woah. Breathtaking Orwellian irony and hypocrisy here. These gems are coming from the same man, who said less than a year ago that basic human rights to water is “an extreme solution”, and “The biggest social responsibility of any CEO, is to maintain and ensure the successful and profitable future of his enterprise. ” How else could one explain how in his mind, the water scarcity that his corporation is helping to create is more important than the ecology upon which his business depends? Once again the land of Native Americans is being raped and pillaged for its most precious lifeblood so this man can maintain the profitable future of his enterprise. He cares nothing about water scarcity. if he did his company would get out of the water selling business, because bottling and selling water requires staggering amounts of water to be wasted and poisoned to be profitable. This is why industrial civilization will inevitably collapse. People like this are running things.  Sociopath, Pathological anthropocentrists. Profit trumps extinction.” -OSJ

By Loulla-Mae Eleftheriou-Smith @ The Independent:

But his comments come as his company is slammed for drawing water from drought-ridden areas in California to sell under its Arrowhead and Pure Life bottled water brands.

Peter Brabeck-Letmanthe, the chairman and former chief executive of Nestlé, told the Financial Times that the world is “running out of water” and that it needs to become a bigger priority to world leaders.

“Today, you cannot have a political discussion anywhere without talking about climate change,” he said. “Nobody talks about the water situation in this sense. And this water problem is much more urgent.”

Climate change is still an important issue, he argued, but even without it “we are running out of water and I think this has to become the first priority,” he said.

Mr Brabeck-Lemanthe’s comments may appear confusing to his company’s critics, as Nestlé, one of the world’s largest food companies, faces harsh criticism for its water bottling activities in California as the area suffers one of its toughest droughts on record.

Nestlé’s 383,000 square-foot water bottling plant is located on the Morongo Band of Mission Indians’ reservation in California.

The state declared a drought state of emergency in January this year, in preparation for coming water shortages – especially during the summer months, but Nestlé is reportedly not required to comply with the emergency measures as its plant sits on a Native American reservation.

But local residents are concerned about the amount of water Nestlé is drawing from the area to bottle and export for profit, and how ethical this action is during a drought.

“Why is it possible to take water from a drought area, bottle it and sell it? Linda Ivey, a Palm Desert real estate appraiser, asked The Desert Sun. “It’s hard to know how much water is being taken – we’ve got to protect what little water supply we have.”

The Desert Sun reported that up until 2009 Nestlé’s Water business, Nestlé Waters, submitted annual reports to a group of local water districts showing how much ground water was being extracted from a spring in Millard Canyon, which is where the plant’s wells have been located for more than a decade.

There have been no reports since then, making it difficult to record how much water is being extracted from the area, but reports estimate it could be 244 million gallons a year. The Desert Sun has repeatedly asked for a tour of Nestlé Waters’ plant over the past year, which has not been granted.

Nestlé Waters said in a statement: “We proudly conduct our business in an environmentally responsible manner that focuses on water and energy conservation. Our sustainable operations are specifically designed and managed to prevent adverse impacts to local area groundwater resources, particularly in light of California’s drought conditions over the past three years.”

“Human Beings Have No Right to Water” & Other Words Of Wisdom From Your Friendly Neighborhood Global Oligarch

In Uncategorized on May 12, 2013 at 7:20 pm
http://andrewgavinmarshall.files.wordpress.com/2013/04/1521546_orig.jpg

Peter Brabeck, Chairman of Nestlé

Oldspeak: “Water, is of course the most important raw material we have today in the world, it’s a question of whether we should privatize the normal water supply for the population. And there are two different opinions on the matter. The one opinion, which I think is extreme, is represented by the NGOs, who bang on about declaring water a public right. That means that as a human being you should have a right to water. That’s an extreme solution. The other view says that water is a foodstuff like any other, and like any other foodstuff it should have a market value. Personally I believe it’s better to give a foodstuff a value so that we’re all aware that it has its price, and then that one should take specific measures for the part of the population that has no access to this water, and there are many different possibilities there. The biggest social responsibility of any CEO, is to maintain and ensure the successful and profitable future of his enterprise. For only if we can ensure our continued, long term existence will we be in the position to actively participate in the solution of the problems that exist in the world. We’re in the position of being able to create jobs… If you want to create work, you have to work yourself, not as it was in the past where existing work was distributed. If you remember the main argument for the 35-hour week was that there was a certain amount of work and it would be better if we worked less and distributed the work amongst more people. That has proved quite clearly to be wrong. If you want to create more work you have to work more yourself. And with that we’ve got to create a positive image of the world for people, and I see absolutely no reason why we shouldn’t be positive about the future. We’ve never had it so good, we’ve never had so much money, we’ve never been so healthy, we’ve never lived as long as we do today. We have everything we want and we still go around as if we were in mourning for something.” –Peter Brabeck-Letmathe, CEO, Nestle

“It’s important to note that this is not simply the personal view of some random corporate executive, but rather, that it reflects an institutional reality of corporations: the primary objective of a corporation – above all else – is to maximize short-term profits for shareholders. By definition, then, workers should work more and be paid less, the environment is only a concern so much as corporations have unhindered access to control and exploit the resources of the environmentWith this institutional – and ideological – structure (which was legally constructed by the state), concern for the environment, for water, for the world and for humanity can only be promoted if it can be used to advance corporate profits, or if it can be used for public relations purposes. Ultimately, it has to be hypocritical. A corporate executive cannot take an earnest concern in promoting the general welfare of the world, the environment, or humanity, because that it not the institutional function of a corporation, and no CEO that did such would be allowed to remain as CEO. This is why it matters what Peter Brabeck thinks: he represents the type of individual – and the type of thinking – that is a product of and a requirement for running a successful multinational corporation, of the corporate culture itself.” –Andrew Gavin Marshall


Behold! The convoluted sociopathic logic of the corporation! Only by privatizing all water, setting a ‘market value’ for it and selling it for profit can we “actively participate in the solution of the problems that exist in the world“. Never mind that water has been a universal bounty of the earth given freely for millions of years. Never mind that 1 in 10 people on earth lack access to clean water. Never mind that the active participation in solutions of most corporations is to poison water, and render it undrinkable to create products that are generally toxic to humans and the environment.  Never mind that only 2.53 percent of earth’s water is fresh, and some two-thirds of that is locked up in glaciers and permanent snow cover, which are coincidentally being destroyed and melted away, useless; as a result of the global warming and climate change that stems from activities like infinite growth and resource extraction required to maintain a”successful and profitable future” for corporations.  And how repugnantly reality detached is the  000.1% thought  to believe that “We’ve never had it so good, we’ve never had so much money, we’ve never been so healthy, we’ve never lived as long as we do today. We have everything we want. ” Ask the 80% of the world’s population living on less than 10 dollars a day how healthy, free of wants, long lived, & how good they have it.  This man embodies the ethos and worldview of the dominant institution of human civilization on our planet. If this remains so, despite his desire to create a positive image of the world and its future, the times to come will be very bleak indeed. Think Feudalism on steroids and cocaine. Not a good scene. ”

By Andrew Gavin Marshall @ Andrew Gavin Marshall:

In the 2005 documentary, We Feed the World, then-CEO of Nestlé, the world’s largest foodstuff corporation, Peter Brabeck-Letmathe, shared some of his own views and ‘wisdom’ about the world and humanity. Brabeck believes that nature is not “good,” that there is nothing to worry about with GMO foods, that profits matter above all else, that people should work more, and that human beings do not have a right to water.

Today, he explained, “people believe that everything that comes from Nature is good,” marking a large change in perception, as previously, “we always learnt that Nature could be pitiless.” Humanity, Brabeck stated, “is now in the position of being able to provide some balance to Nature, but in spite of this we have something approaching a shibboleth that everything that comes from Nature is good.” He then referenced the “organic movement” as an example of this thinking, premising that “organic is best.” But rest assured, he corrected, “organic is not best.” In 15 years of GMO food consumption in the United States, “not one single case of illness has occurred.” In spite of this, he noted, “we’re all so uneasy about it in Europe, that something might happen to us.” This view, according to Brabeck, is “hypocrisy more than anything else.”

Water, Brabeck correctly pointed out, “is of course the most important raw material we have today in the world,” but added: “It’s a question of whether we should privatize the normal water supply for the population. And there are two different opinions on the matter. The one opinion, which I think is extreme, is represented by the NGOs, who bang on about declaring water a public right.” Brabeck elaborated on this “extreme” view: “That means that as a human being you should have a right to water. That’s an extreme solution.” The other view, and thus, the “less extreme” view, he explained, “says that water is a foodstuff like any other, and like any other foodstuff it should have a market value. Personally I believe it’s better to give a foodstuff a value so that we’re all aware that it has its price, and then that one should take specific measures for the part of the population that has no access to this water, and there are many different possibilities there.” The biggest social responsibility of any CEO, Brabeck explained:

is to maintain and ensure the successful and profitable future of his enterprise. For only if we can ensure our continued, long term existence will we be in the position to actively participate in the solution of the problems that exist in the world. We’re in the position of being able to create jobs… If you want to create work, you have to work yourself, not as it was in the past where existing work was distributed. If you remember the main argument for the 35-hour week was that there was a certain amount of work and it would be better if we worked less and distributed the work amongst more people. That has proved quite clearly to be wrong. If you want to create more work you have to work more yourself. And with that we’ve got to create a positive image of the world for people, and I see absolutely no reason why we shouldn’t be positive about the future. We’ve never had it so good, we’ve never had so much money, we’ve never been so healthy, we’ve never lived as long as we do today. We have everything we want and we still go around as if we were in mourning for something.

While watching a promotional video of a Nestlé factory in Japan, Brabeck commented, “You can see how modern these factories are; highly robotized, almost no people.” And of course, for someone claiming to be interested in creating jobs, there appears to be no glaring hypocrisy in praising factories with “almost no people.”

It’s important to note that this is not simply the personal view of some random corporate executive, but rather, that it reflects an institutional reality of corporations: the primary objective of a corporation – above all else – is to maximize short-term profits for shareholders. By definition, then, workers should work more and be paid less, the environment is only a concern so much as corporations have unhindered access to control and exploit the resources of the environment, and ultimately, it’s ‘good’ to replace workers with automation and robotics so that you don’t have to pay fewer or any workers, and thus, maximize profits. With this institutional – and ideological – structure (which was legally constructed by the state), concern for the environment, for water, for the world and for humanity can only be promoted if it can be used to advance corporate profits, or if it can be used for public relations purposes. Ultimately, it has to be hypocritical. A corporate executive cannot take an earnest concern in promoting the general welfare of the world, the environment, or humanity, because that it not the institutional function of a corporation, and no CEO that did such would be allowed to remain as CEO.

This is why it matters what Peter Brabeck thinks: he represents the type of individual – and the type of thinking – that is a product of and a requirement for running a successful multinational corporation, of the corporate culture itself. To the average person viewing his interview, it might come across as some sort of absurd tirade you’d expect from a Nightline interview with some infamous serial killer, if that killer had been put in charge of a multinational corporation:

People have a ‘right’ to water? What an absurd notion! Next thing you’ll say is that child labour is bad, polluting the environment is bad, or that people have some sort of ‘right’ to… life! Imagine the audacity! All that matters is ‘profits,’ and what a wonderful thing it would be to have less people and more profits! Water isn’t a right, it’s only a necessity, so naturally, it makes sense to privatize it so that large multinational corporations like Nestlé can own the world’s water and ensure that only those who can pay can drink. Problem solved!

Sadly, though intentionally satirical, this is the essential view of Brabeck and others like him. And disturbingly, Brabeck’s influence is not confined to the board of Nestlé. Brabeck became the CEO of Nestlé in 1997, a position he served until 2008, at which time he resigned as CEO but remained as chairman of the board of directors of Nestlé. Apart from Nestlé, Brabeck serves as vice chairman of the board of directors of L’Oréal, the world’s largest cosmetics and ‘beauty’ company; vice chairman of the board of Credit Suisse Group, one of the world’s largest banks; and is a member of the board of directors of Exxon Mobil, one of the world’s largest oil and energy conglomerates.

He was also a former board member of one of the world’s largest pharmaceutical conglomerates, Roche. Brabeck also serves as a member of the Foundation Board for the World Economic Forum (WEF), “the guardian of [the WEF’s] mission, values and brand… responsible for inspiring business and public confidence through an exemplary standard of governance.” Brabeck is also a member of the European Round Table of Industrialists (ERT), a group of European corporate CEOs which directly advise and help steer policy for the European Union and its member countries. He has also attended meetings of the Bilderberg group, an annual forum of 130 corporate, banking, media, political and military elites from Western Europe and North America.

Thus, through his multiple board memberships on some of the largest corporations on earth, as well as his leadership and participation in some of the leading international think tanks, forums and business associations, Brabeck has unhindered access to political and other elites around the world. When he speaks, powerful people listen.

Brabeck’s Brain

Brabeck has become an influential voice on issues of food and water, and not surprisingly so, considering he is chairman of the largest food service corporation on earth. Brabeck’s career goes back to when he was working for Nestlé in Chile in the early 1970s, when the left-leaning democratically-elected president Salvador Allende was “threatening to nationalize milk production, and Nestlé’s Chilean operations along with it.” A 1973 Chilean military coup – with the support of the CIA – put an end to that “threat” by bringing in the military dictatorship of Augusto Pinochet, who murdered thousands of Chileans and established a ‘national security state’, imposing harsh economic measures to promote the interests of elite corporate and financial interests (what later became known as ‘neoliberalism’).

In a 2009 article for Foreign Policy magazine, Brabeck declared: “Water is the new gold, and a few savvy countries and companies are already banking on it.” In a 2010 article for the Guardian, Brabeck wrote that, “[w]hile our collective attention has been focused on depleting supplies of fossil fuels, we have been largely ignoring the simple fact that, unless radical changes are made, we will run out of water first, and soon.” What the world needs, according to Brabeck, is “to set a price that more accurately values our most precious commodity,” and that, [t]he era of water at throwaway prices is coming to an end.” In other words, water should become increasingly expensive, according to Brabeck. Countries, he wrote, should recognize “that not all water use should be regarded as equal.”

In a discussion with the Wall Street Journal in 2011, Brabeck spoke against the use of biofuels – converting food into fuel – and suggested that this was the primary cause of increased food prices (though in reality, food price increases are primarily the result of speculation by major banks like Goldman Sachs and JPMorgan Chase). Brabeck noted the relationship between his business – food – and major geopolitical issues, stating: “What we call today the Arab Spring… really started as a protest against ever-increasing food prices.” One “solution,” he suggested, was to provide a “market” for water as “the best guidance that you can have.” If water was a ‘market’ product, it wouldn’t be wasted on growing food for fuel, but focus on food for consumption – and preferably (in his view), genetically modified foods. After all, he said, “if the market forces are there the investments are going to be made.” Brabeck suggested that the world could “feed nine billion people,” providing them with water and fuel, but only on the condition that “we let the market do its thing.”

Brabeck co-authored a 2011 article for the Wall Street Journal in which he stated that in order to provide “universal access to clean water, there is simply no other choice but to price water at a reasonable rate,” and that roughly 1.8 billion people on earth lack access to clean drinking water “because of poor water management and governance practices, and the lack of political will.” Brabeck’s job then, as chairman of Nestlé, is to help create the “political will” to make water into a modern “market” product.

Now before praising Brabeck for his ‘enlightened’ activism on the issue of water scarcity and providing the world’s poor with access to clean drinking water (which are very real and urgent issues needing attention), Brabeck himself has stressed that his interest in the issue of water has nothing to do with actually addressing these issues in a meaningful way, or for the benefit of the earth and humanity. No, his motivation is much more simple than this.

In a 2010 interview for BigThink, Brabeck noted: “If Nestlé and myself have become very vocal in the area of water, it was not because of any philanthropic idea, it was very simple: by analyzing… what is the single most important factor for the sustainability of Nestlé, water came as [the] number one subject.” This is what led Brabeck and Nestlé into the issue of water “sustainability,” he explained. “I think this is part of a company’s responsibility,” and added: “Now, if I was in a different industry, I would have a different subject, certainly, that I would be focusing on.”

Brabeck was asked if industries should “have a role in finding solutions to environmental issues that affect their business,” to which he replied: “Yes, because it is in the interest of our shareholders… If I want to convince my shareholders that this industry is a long-term sustainable industry, I have to ensure that all aspects that are vital for this company are sustainable… When I see, like in our case, that one of the aspects – which is water, which is needed in order to produce the raw materials for our company – if this is not sustainable, then my enterprise is not sustainable. So therefore I have to do something about it. So shareholder interest and societal interest are common.”

Thus, when Brabeck and Nestlé promote “water sustainability,” what they are really promoting is the sustainability of Nestlé’s access to and control over water resources. How is that best achieved? Well, since Nestlé is a large multinational corporation, the natural solution is to promote ‘market’ control of water, which means privatization and monopolization of the world’s water supply into a few corporate hands.

In a 2011 conversation with the editor of Time Magazine at the Council on Foreign Relations, Brabeck referred to a recent World Economic Forum meeting where the issue of “corporate social responsibility” was the main subject of discussion, when corporate executives “started to talk about [how] we have to give back to society,” Brabeck spoke up and stated: “I don’t feel that we have to give back to society, because we have not been stealing from society.” Brabeck explained to the Council on Foreign Relations that he felt such a concept was the purview of philanthropy, and “this was a problem for the CEO of any public company, because I personally believe that no CEO of a public company should be allowed to make philanthropy… I think anybody who does philanthropy should do it with his own money and not the money of the shareholders.” Engaging in corporate social responsibility, Brabeck explained, “was an additional cost.”

At the 2008 World Economic Forum, a consortium of corporations and international organizations formed the 2030 Water Resources Group, chaired by Peter Brabeck. It was established in order to “shape the agenda” for the discussion of water resources, and to create “new models for collaboration” between public and private enterprises. The governing council of the 2030 WRG is chaired by Brabeck and includes the executive vice president and CEO of the International Finance Corporation (IFC), the investment arm of the World Bank, the administrator of the United Nations Development Programme (UNDP), the chief business officer and managing director of the World Economic Forum, the president of the African Development Bank, the chairman and CEO of The Coca-Cola Company, the president of the Asian Development Bank, the director-general of the World Wildlife Fund (WWF), the president of the Inter-American Development Bank, and the chairman and CEO of PepsiCo, among others.

At the World Water Forum in 2012 – an event largely attended by the global proponents of water privatization, Nestlé among their most enthusiastic supporters – Brabeck suggested that the 2030 Water Resources Group represents a “global public-private initiative” which could help in “providing tools and information on best practice” as well as “guidance and new policy ideas on water resource scarcity.”

Brabeck and Nestlé had been in talks with the Canadian provincial government of Alberta in planning for a potential “water exchange,” to – in the words of Maclean’s magazine – “turn water into money.” In 2012, the University of Alberta bestowed an honorary degree upon Peter Brabeck “for his work as a responsible steward for water around the world.” Protests were organized at the university to oppose the ‘honor,’ with a representative from the public interest group, the Council of Canadians, noting: “I’m afraid that the university is positioning themselves on the side of the commodifiers, the people who want to say that water is not a human right that everyone has the right to, but is just a product that can be bought and sold.” A professor at the university stated: “I’m ashamed at this point, about what the university is doing and I’m also very concerned about the way the president of the university has been demonizing people who oppose this.” As another U of A professor stated: “What Nestlé does is take what clean water there is in which poor people are relying on, bottle it and then sell it to wealthier people at an exorbitant profit.”

The Global Water Privatization Agenda

Water privatization is an extremely vicious operation, where the quality of – and access to – water resources diminishes or even vanishes, while the costs explode. When it comes to the privatization of water, there is no such thing as “competition” in how the word is generally interpreted: there are only a handful of global corporations that undertake massive water privatizations. The two most prominent are the French-based Suez Environment and Veolia Environment, but also include Thames Water, Nestlé, PepsiCo and Coca-Cola, among others. For a world in which food has already been turned into a “market commodity” and has been “financialized,” leading to massive food price increases, hunger riots, and immense profits for a few corporations and banks, the prospect of water privatization is even more disturbing.

The agenda of water privatization is organized at the international level, largely promoted through the World Water Forum and the World Water Council. The World Water Council (WWC) was established in 1996 as a French-based non-profit organization with over 400 members from intergovernmental organizations, government agencies, corporations, corporate-dominated NGOs and environmental organizations, water companies, international organizations and academic institutions.

Every three years, the WWC hosts a World Water Forum, the first of which took place in 1997, and the 6th conference in 2012 was attended by thousands of participants from countries and institutions all over the world get together to decide the future of water, and of course, promote the privatization of this essential resource to human life. The 6th World Water Forum, hosted in Marseilles, France, was primarily sponsored by the French government and the World Water Council, but included a number of other contributors, including: the African Development Bank, African Union Commission, Arab Water Council, Asian Development Bank, the Council of Europe, the European Commission, the European Investment Bank, the European Parliament, the European Water Association, the Food and Agricultural Organization, the Global Environment Facility, Inter-American Development Bank, Nature Conservancy, Organisation for Economic Co-operation and Development (OECD), Organization of American States (OAS), Oxfam, the World Bank, the World Business Council for Sustainable Development, the World Health Organization, the World Wildlife Fund; and a number of corporate sponsors, including: RioTinto Alcan, EDF, Suez Environment, Veolia, and HSBC. Clearly, they have human and environmental interests at heart.

The World Bank is a major promoter of water privatization, as much of its aid to ‘developing’ countries was earmarked for water privatization schemes which inevitably benefit major corporations, in co-operation with the International Monetary Fund (IMF), and the U.S. Treasury. One of the first major water privatization schemed funded by the World Bank was in Argentina, for which the Bank “advised” the government of Argentina in 1991 on the bidding and contracting of the water concession, setting a model for what would be promoted around the world. The World Bank’s investment arm, the International Finance Corporation (IFC), loaned roughly $1 billion to the Argentine government for three water and sewage projects in the country, and even bought a 5% stake in the concession, thus becoming a part owner. When the concession for Buenos Aires was opened up, the French sent representatives from Veolia and Suez, which formed the consortium Aguas Argentinas, and of course, the costs for water services went up. Between 1993, when the contract with the French companies was signed, and 1997, the Aguas Argentinas consortium gained more influence with Argentine President Carlos Menem and his Economy Minister Domingo Cavallo, who would hold meetings with the president of Suez as well as the President of France, Jacques Chirac. By 2002, the water rates (cost of water) in Buenos Aires had increased by 177% since the beginning of the concession.

In the 1990s, the amount of World Bank water privatization projects increased ten-fold, with 31% of World Bank water supply and sanitation projects between 1990 and 2001 including conditions of private-sector involvement, despite the fact that the projects consistently failed in terms of providing cheaper and better water to larger areas. But of course, they were highly profitable for large corporations, so naturally, they continued to be promoted and supported (and subsidized).

One of the most notable examples of water privatization schemes was in Bolivia, the poorest country in South America. In 1998, an IMF loan to Bolivia demanded conditions of “structural reform,” the selling off of “all remaining public enterprises,” including water. In 1999, the World Bank told the Bolivian government to end its subsidies for water services, and that same year, the government leased the Cochabamba Water System to a consortium of multinational corporations, Aguas del Tunari, which included the American corporation Bechtel. After granting the consortium a 40-year lease, the government passed a law which would make residents pay the full cost of water services. In January of 2000, protests in Cochabamba shut down the city for four days, striking and establishing roadblocks, mobilizing against the water price increases which doubled or tripled their water bills. Protests continued in February, met with riot police and tear gas, injuring 175 people.

By April, the protests began to spread to other Bolivian cities and rural communities, and during a “state of siege” (essentially martial law) declared by Bolivian president Hugo Banzer, a 17-year old boy, Victor Hugo Daza, was shot and killed by a Bolivian Army captain, who was trained as the U.S. military academy, the School of the Americas. As riot police continued to meet protesters with tear gas and live ammunition, more people were killed, and dozens more injured. On April 10, the government conceded to the people, ending the contract with the corporate consortium and granting the people to control their water system through a grassroots coalition led by the protest organizers.

Two days later, World Bank President James Wolfensohn stated that the people of Bolivia should pay for their water services. On August 6, 2001, the president of Bolivia resigned, and the Vice President Jorge Quiroga, a former IBM executive, was sworn in as the new president to serve the remainder of the term until August of 2002. Meanwhile, the water consortium, deeply offended at the prospect of people taking control of their own resources, attempted to take legal action against the government of Bolivia for violating the contract. Bechtel was seeking $25 million in compensation for its “losses,” while recording a yearly profit of $14 billion, whereas the national budget of Bolivia was a mere $2.7 billion. The situation ultimately led to a type of social revolution which brought to power the first indigenous Bolivian leader in the country’s history, Evo Morales.

This, of course, has not stopped the World Bank and IMF – and the imperial governments which finance them – from promoting water privatization around the world for the exclusive benefit of a handful of multinational corporations. The World Bank promotes water privatization across Africa in order to “ease the continent’s water crisis,” by making water more expensive and less accessible.

As the communications director of the World Bank in 2003, Paul Mitchell, explained, “Water is crucial to life – we have to get water to poor people,” adding: “There are a lot of myths about privatization.” I would agree. Though the myth that it ‘works’ is what I would propose, but Mitchell instead suggested that, “[p]rivate sector participation is simply to manage the asset to make it function for the people in the country.” Except that it doesn’t. But don’t worry, decreasing water standards, dismantling water distribution, and rapidly increasing the costs of water to the poorest regions on earth is good, according to Mitchell and the World Bank. He told the BBC that what the World Bank is most interested in is the “best way to get water to poor people.” Perhaps he misspoke and meant to say, “the best way to take water from poor people,” because that’s what actually happens.

In 2003, the World Bank funded a water privatization scheme in the country of Tanzania, supported by the British government, and granting the concession to a consortium called City Water, owned by the British company Biwater, which worked with a German engineering firm, Gauff, to provide water to the city of Dar es Salaam and the surrounding region. It was one of the most ambitious water privatization schemes in Africa, with $140 million in World Bank funding, and, wrote John Vidal in the Guardian, it “was intended to be a model for how the world’s poorest communities could be lifted out of poverty.”

The agreement included conditions for the consortium to install new pipelines for water distribution. The British government’s Department for International Development gave a 440,000-pound contract to the British neoliberal think tank, Adam Smith International, “to do public-relations work for the project.” Tanzania’s best-known gospel singer was hired to perform a pop song about the benefits of privatization, mentioning electricity, telephones, the ports, railways, and of course, water. Both the IMF and World Bank made the water scheme a condition for “aid” they gave to the country. Less than one year into the ten-year contract, the private consortium, City Water, stopped paying its monthly fee for leasing the government’s pipes and infrastructure provided by the public water company, Dawasa, while simultaneously insisting that its own fees be raised. An unpublished World Bank report even noted: “The primary assumption on the part of almost all involved, particularly on the donor side, was that it would be very hard, if not impossible, for the private operator [City Water] to perform worse than Dawasa. But that is what happened.” The World Bank as a whole, however, endorsed the program as “highly satisfactory,” and rightly so, because it was doing what it was intended to do: provide profits for private corporations at the expense of poor people.

By 2005, the company had not built any new pipes, it had not spent the meager investments it promised, and the water quality declined. As British government “aid” money was poured into privatization propaganda, a video was produced which included the phrase: “Our old industries are dry like crops and privatization brings the rain.” Actually, privatization attaches a price-tag to rain. Thus, in 2005, the government of Tanzania ended the contract with City Water, and arrested the three company executives, deporting them back to Britain. As is typical, the British company, Biwater, then began to file a lawsuit against the Tanzanian government for breach of contract, wanting to collect $20-25 million. A press release from Biwater at the time wrote: “We have been left with no choice… If a signal goes out that governments are free to expropriate foreign investments with impunity,” investors would flee, and this would, of course, “deal a massive blow to the development goals of Tanzania and other countries in Africa.”

The sixth World Water Forum in Marseilles in 2012 brought together some 19,000 participants, where the French Development Minister Henri de Raincourt proposed a “global water and environment management scheme,” adding: “The French government is not alone in its conviction that a global environment agency is needed more than ever.” A parallel conference was held – the Alternative World Water Forum – which featured critics of water privatization. Gustave Massiah, a representative of the anti-globalization group Attac, stated, “Should a global water fund be in control, giving concessions to multinational companies, then that’s not a solution for us. On the contrary, that would only add to the problems of the current system.”

Another member of Attac, Jacques Cambon, used to be the head of SAFEGE’s Africa branch, a subsidiary of the water conglomerate Suez. Cambon was critical of the idea of a global water fund, warning against centralization, and further explained that the World Bank “has almost always financed large-scale projects that were not in tune with local conditions.” Maria Theresa Lauron, a Philippine activist, shared the story of water privatization in the Philippines, saying, “Since 1997, prices went up by 450 to 800 percent… At the same time, the water quality has gone down. Many people get ill because of bad water; a year ago some 600 people died as a result of bacteria in the water because the private company didn’t do proper water checks.” But then, why would the company do such a thing? It’s not like it’s particularly profitable to be concerned with human welfare.

In Europe, the European Commission had been pushing water privatization as a condition for development funds between 2002 and 2010, specifically in several central and eastern European countries which were dependent upon EU grants. Since the European debt crisis, the European Commission had made water privatization a condition for Greece, Portugal, and Italy. Greece is privatizing its water companies, Portugal is being pressured to sell its national water company, Aguas do Portugal, and in Italy, the European Central Bank (ECB) and the Commission were pushing water privatization, even though a national referendum in July of 2011 saw the people of Italy reject such a scheme by 95%.

In this context, among the global institutions and corporations of power and influence, it is perhaps less surprising to imagine the chairman of Nestlé suggesting that human beings having a “right” to water is rather “extreme.” And for a very simple reason: that’s not profitable for Nestlé, even though it might be good for humanity and the earth. It’s about priorities, and in our world, priorities are set by multinational corporations, banks, and global oligarchs. As Nestlé would have us think, corporate and social interests are not opposed, as corporations – through their ‘enlightened’ self-interest and profit-seeking motives – will almost accidentally make the world a better place. Now, while neoliberal orthodoxy functions on the basis of people simply accepting this premise without investigation (like any religious belief), perhaps it would be worth looking at Nestlé as an example for corporate benefaction for the world and humanity.

Nestlé’s Corporate Social Responsibility: Making the World Safe for Nestlé… and Incidentally Destroying the World

As a major multinational corporation, Nestlé has a proven track record of exploiting labour, destroying the environment, engaging in human rights violations, but of course – and most importantly – it makes big profits. In 2012, Nestlé was taking in major profits from ‘emerging markets’ in Asia, Africa, and Latin America. However, some emerging market profits began to slow down in 2013. This was partly the result of a horsemeat scandal which required companies like Nestlé to intensify the screening of their food products.

Less than a year prior, Nestlé was complaining that “over-regulation” of the food industry was “undermining individual responsibility,” which is another way of saying that responsibility for products and their safety should be passed from the producer to the consumer. In other words, if you’re stupid enough to buy Nestlé products, it’s your fault if you get diabetes or eat horsemeat, and therefore, it’s your responsibility, not the responsibility of Nestlé. Fair enough! We’re stupid enough to accept corporations ruling over us, therefore, what right do we have to complain about all the horrendous crimes and destruction they cause? A cynic could perhaps argue such a point.

One of Nestlé’s most famous PR problems was that of marketing artificial baby milk, which sprung to headlines in the 1970s following the publication of “The Baby Killer,” accusing the company of getting Third World mothers hooked on formula. As research was proving that breastfeeding was healthier, Nestlé marketed its baby formula as a way for women to ‘Westernize’ and join the modern world, handing out pamphlets and promotional samples, with companies hiring “sales girls in nurses’ uniforms (sometimes qualified, sometimes not)” in order to drop by homes and sell formula. Women tried to save money on the formula by diluting it, often times with contaminated water. As the London-based organization War on Want noted: “The results can be seen in the clinics and hospitals, the slums and graveyards of the Third World… Children whose bodies have wasted away until all that is left is a big head on top of the shriveled body of an old man.” An official with the United States Agency for International Development (USAID) blamed baby formula for “a million infant deaths every year through malnutrition and diarrheal diseases.”

Mike Muller, the author of “The Baby Killer” back in 1974, wrote an article for the Guardian in 2013 in which he mentioned that he gave Peter Brabeck a “present” at the World Economic Forum, a signed copy of the report. The report had sparked a global boycott of Nestlé and the company responded with lawsuits.

Nestlé has also been implicated for its support of palm-oil plantations, which have led to increased deforestation and the destruction of orangutan habitats in Indonesia. A Greenpeace publication noted that, “at least 1500 orangutans died in 2006 as a result of deliberate attacks by plantation workers and loss of habitat due to the expansion of oil palm plantations.” A social media campaign was launched against Nestlé for its role in supporting palm oil plantations, deforestation, and the destruction of orangutan habitats and lives. The campaign pressured Nestlé to decrease its “deforestation footprint.”

As Nestlé has been expanding its presence in Africa, it has also aroused more controversy in its operations on the continent. Nestlé purchases one-tenth of the world’s cocoa, most of which comes from the Ivory Coast, where the company has been implicated in the use of child labour. In 2001, U.S. legislation required companies to engage in “self-regulation” which called for “slave free” labeling on all cocoa products. This “self regulation,” however, “failed to deliver” – imagine that! – as one study carried out by Tulane University with funding from the U.S. government revealed that roughly 2 million children were working on cocoa-related activities in both Ghana and the Ivory Coast. Even an internal audit carried out by the company found that Nestlé was guilty of “numerous” violations of child labour laws. Nestlé’s head of operations stated, “The use of child labor in our cocoa supply goes against everything we stand for.” So naturally, they will continue to use child labour.

Peter Brabeck stated that it’s “nearly impossible” to end the practice, and he compared the practice to that of farming in Switzerland: “You go to Switzerland… still today, in the month of September, schools have one week holiday so students can help in the wine harvesting… In those developing countries, this also happens,” he told the Council on Foreign Relations. While acknowledging that this “is basically child labor and slave labor in some African markets,” it is “a challenge which is not very easy to tackle,” noting that there is “a very fine edge” of what is acceptable regarding “child labor in [the] agricultural environment.” He added: “It’s almost natural.” Thus, Brabeck explained, “you have to look at it differently,” and that it was not the job of Nestlé to tell parents that their children can’t work on cocoa plantations/farms, “which is ridiculous,” he suggested: “But what we are saying is we will help you that your child has access for schooling.” So clearly there is no problem with using child slavery, just so long as the children get some schooling… presumably, in their ‘off-hours’ from slavery. Problem solved!

While Brabeck and Nestlé have made a big issue of water scarcity, which again, is an incredibly important issue, their solutions revolve around “pricing” water at a market value, and thus encouraging privatization. Indeed, a global water grab has been a defining feature of the past several years (coupled with a great global land grab), in which investors, countries, banks and corporations have been buying up vast tracts of land (primarily in sub-Saharan Africa) for virtually nothing, pushing off the populations which live off the land, taking all the resources, water, and clearing the land of towns and villages, to convert them into industrial agricultural plantations to develop food and other crops for export, while domestic populations are pushed deeper into poverty, hunger, and are deprived of access to water. Peter Brabeck has referred to the land grabs as really being about water: “For with the land comes the right to withdraw the water linked to it, in most countries essentially a freebie that increasingly could be seen as the most valuable part of the deal.” This, noted Brabeck, is “the great water grab.”

And of course, Nestlé would know something about water grabs, as it has become very good at implementing them. In past years, the company has been increasingly buying land where it is taking the fresh water resources, bottling them in plastic bottles and selling them to the public at exorbitant prices. In 2008, as Nestlé was planning to build a bottling water plant in McCloud, California, the Attorney General opposed the plan, noting: “It takes massive quantities of oil to produce plastic water bottles and to ship them in diesel trucks across the United States… Nestlé will face swift legal challenge if it does not fully evaluate the environmental impact of diverting millions of gallons of spring water from the McCloud River into billions of plastic water bottles.” Nestlé already operated roughly 50 springs across the country, and was acquiring more, such as a plan to draw roughly 65 million gallons of water from a spring in Colorado, despite fierce opposition to the deal.

Years of opposition to the plans of Nestlé in McCloud finally resulted in the company giving up on its efforts there. However, the company quickly moved on to finding new locations to take water and make a profit while destroying the environment (just an added bonus, of course). The corporation controls one-third of the U.S. market in bottled water, selling it as 70 different brand names, including Perrier, Arrowhead, Deer Park and Poland Spring. The two other large bottled water companies are Coca-Cola and PepsiCo, though Nestlé had earned a reputation “in targeting rural communities for spring water, a move that has earned it fierce opposition across the U.S. from towns worried about losing their precious water resources.” And water grabs by Nestlé as well as opposition continue to engulf towns and states and cities across the country, with one more recent case in Oregon.

Nestlé has aroused controversy for its relations with labour, exploiting farmers, pollution, and human rights violations, among many other things. Nestlé has been implicated in the kidnapping and murder of a union activist and employee of the company’s subsidiary in Colombia, with a judge demanding the prosecutor to “investigate leading managers of Nestle-Cicolac to clarify their likely involvement and/or planning of the murder of union leader Luciano Enrique Romero Molina.” In 2012, a Colombian trade union and a human rights group filed charges against Nestlé for negligence over the murder of their former employee Romero.

More recently, Nestlé has been found liable over spying on NGOs, with the company hiring a private security company to infiltrate an anti-globalization group, and while a judge ordered the company to pay compensation, a Nestlé spokesperson stated that, “incitement to infiltration is against Nestlé’s corporate business principles.” Just like child slavery, presumably. But not to worry, the spokesman said, “we will take appropriate action.”

Peter Brabeck, who it should be noted, also sits on the boards of Exxon, L’Oréal, and the banking giant Credit Suisse, warned in 2009 that the global economic crisis would be “very deep” and that, “this crisis will go on for a long period.” On top of that, the food crisis would be “getting worse” over time, hitting poor people the hardest. However, propping up the financial sector through massive bailouts was, in his view, “absolutely essential.” But not to worry, as banks are bailed out by governments, who hand the bill to the population, which pays for the crisis through reduced standards of living and exploitation (which we call “austerity” and “structural reform” measures), Nestlé has been able to adapt to a new market of impoverished people, selling cheaper products to more people who now have less money. And better yet, it’s been making massive profits. And remember, according to Brabeck, isn’t that all that really matters?

This is the world according to corporations. Unfortunately, while it creates enormous wealth, it is also leading to the inevitable extinction of our species, and possibly all life on earth. But that’s not a concern of corporations, so it doesn’t concern those who run corporations, who make the important decisions, and pressure and purchase our politicians.

I wonder… what would the world be like if people were able to make decisions?

There’s only one way to know.

Andrew Gavin Marshall is an independent researcher and writer based in Montreal, Canada, with a focus on studying the ideas, institutions, and individuals of power and resistance across a wide spectrum of social, political, economic, and historical spheres. He has been published in AlterNet, CounterPunch, Occupy.com, Truth-Out, RoarMag, and a number of other alternative media groups, and regularly does radio, Internet, and television interviews with both alternative and mainstream news outlets. He is Project Manager of The People’s Book Project, Research Director of Occupy.com’s Global Power Project, and has a weekly podcast show with BoilingFrogsPost.

Water Scarcity: A Widening Global Emergency & The Coming Water Wars

In Uncategorized on February 26, 2013 at 6:23 pm

Oldspeak: “The wars of the 21st century will be fought over water.” –Ismail Serageldin.A comprehensive report from the global conservation organization WWF, released August 16, details how the looming water crisis is now affecting rich countries as well as poor. Global warming, diminishing wetlands, and inadequate resource management are the main causes of expanding water shortages worldwide, according to the group.” As water scarcity grows worldwide, mighty rivers to tiny streams dry up. We continue unabated to expand our obviously unsustainable use of water intensive and contaminating production of our food and energy. While 40% of the world population lives with little or no access to clean water (expected to jump to 50% in 12 years).  Investors are positioning themselves to profit from water shortages and the water purification technology that will be come essential. This is seen as normal and sound business in a civilization animated by greed and exploitation. Cannibal capitalism is that particularly vicious and vampiristic form of capitalism that encourages greed, austerity, prefers gambling to investing and advances the economic interest of the top 00.1% at the expense of all others.  At what point will we shift our priorities from manufactured crises like “The Sequester”, “The Debt Ceiling”, “Entitlement Spending” and “Crises of Confidence” to actual existential crises, threatening our water, soil, air and environment?

By Doug Hornig & Alex Daley @ Casey Research:

Water is not scarce. It is made up of the first and third most common elements in the universe, and the two readily react to form a highly stable compound that maintains its integrity even at temperature extremes.

Hydrologist Dr. Vincent Kotwicki, in his paper Water in the Universe, writes:

“Water appears to be one of the most abundant molecules in the Universe. It dominates the environment of the Earth and is a main constituent of numerous planets, moons and comets. On a far greater scale, it possibly contributes to the so-called ‘missing mass’ [i.e., dark matter] of the Universe and may initiate the birth of stars inside the giant molecular clouds.”

Oxygen has been found in the newly discovered “cooling flows” – heavy rains of gas that appear to be falling into galaxies from the space once thought empty surrounding them, giving rise to yet more water.

How much is out there? No one can even take a guess, since no one knows the composition of the dark matter that makes up as much as 90% of the mass of the universe. If comets, which are mostly ice, are a large constituent of dark matter, then, as Dr. Kotwicki writes, “the remote uncharted (albeit mostly frozen) oceans are truly unimaginably big.”

Back home, Earth is often referred to as the “water planet,” and it certainly looks that way from space. H2O covers about 70% of the surface of the globe. It makes all life as we know it possible.

The Blue Planet?

However it got here – theories abound from outgassing of volcanic eruptions to deposits by passing comets and ancient crossed orbits – water is what gives our planet its lovely, unique blue tint, and there appears to be quite a lot of it.

That old axiom that the earth is 75% water… not quite. In reality, water constitutes only 0.07% of the earth by mass, or 0.4% by volume.

This is how much we have, depicted graphically:

Credit: Howard Perlman, USGS; globe illustration by Jack Cook, Woods Hole
Oceanographic Institution (©); Adam Nieman.

What this shows is the relative size of our water supply if it were all gathered together into a ball and superimposed on the globe.

The large blob, centered over the western US, is all water (oceans, icecaps, glaciers, lakes, rivers, groundwater, and water in the atmosphere). It’s a sphere about 860 miles in diameter, or roughly the distance from Salt Lake City to Topeka. The smaller sphere, over Kentucky, is the fresh water in the ground and in lakes, rivers, and swamps.

Now examine the image closely. See that last, tiny dot over Georgia? It’s the fresh water in lakes and rivers.

Looked at another way, that ball of all the water in the world represents a total volume of about 332.5 million cubic miles. But of this, 321 million mi3, or 96.5%, is saline – great for fish, but undrinkable without the help of nature or some serious hardware. That still leaves a good bit of fresh water, some 11.6 million mi3, to play with. Unfortunately, the bulk of that is locked up in icecaps, glaciers, and permanent snow, or is too far underground to be accessible with today’s technology. (The numbers come from the USGS; obviously, they are estimates and they change a bit every year, but they are accurate enough for our purposes.)

Accessible groundwater amounts to 5.614 million mi3, with 55% of that saline, leaving a little over 2.5 million mi3 of fresh groundwater. That translates to about 2.7 exa-gallons of fresh water, or about 2.7 billion billion gallons (yes billions of billions, or 1018 in scientific notation), which is about a third of a billion gallons of water per person. Enough to take a long shower every day for many lifetimes…

However, not all of that groundwater is easily or cheaply accessible. The truth is that the surface is the source for the vast majority – nearly 80% – of our water. Of surface waters, lakes hold 42,320 mi3, only a bit over half of which is fresh, and the world’s rivers hold only 509 mi3 of fresh water, less than 2/10,000 of 1% of the planetary total.

And that’s where the problem lies. In 2005 in the US alone, we humans used about 328 billion gallons of surface water per day, compared to about 83 billion gallons per day of water from the ground. Most of that surface water, by far, comes from rivers. Among these, one of the most important is the mighty Colorado.

Horseshoe Bend, in Page, AZ. (AP Photo)

Tapping Ol’ Man River

Or perhaps we should say “the river formerly known as the mighty Colorado.” That old Colorado – the one celebrated in centuries of American Western song and folklore; the one that exposed two billion years of geologic history in the awesome Grand Canyon – is gone. In its place is… well, Las Vegas – the world’s gaudiest monument to hubristic human overreach, and a big neon sign advertising the predicament now faced by much of the world.

It’s well to remember that most of the US west of the Mississippi ranges from relatively dry to very arid, to desert, to lifeless near-moonscapes. The number of people that could be supported by the land, especially in the Southwest, was always small and concentrated along the riverbanks. Tribal clusters died out with some regularity. And that’s the way it would have remained, except for a bit of ingenuity that suddenly loosed two powerful forces on the area: electrical power, and an abundance of water that seemed as limitless as the sky.

In September of 1935, President Roosevelt dedicated the pinnacle of engineering technology up to that point: Hoover Dam. The dam did two things. It served as a massive hydroelectric generating plant, and it backed up the Colorado River behind it, creating Lake Mead, the largest reservoir in the country.

Early visitors dubbed Hoover Dam the “Eighth Wonder of the World,” and it’s easy to see why. It was built on a scale unlike anything before it. It’s 725 feet high and contains 6 million tons of concrete, which would pave a road from New York to Los Angeles. Its 19 generators produce 2,080 MW of electricity, enough to power 1.75 million average homes.

The artificially created Lake Mead is 112 miles long, with a maximum depth of 590 feet. It has a surface area of 250 square miles and an active capacity of 16 million acre-feet.

Hoover Dam was intended to generate sufficient power and impound an ample amount of water, to meet any conceivable need. But as things turned out, grand as the dam is, it wasn’t conceived grandly enough… because it is 35 miles from Las Vegas, Nevada.

Vegas had a permanent population in 1935 of 8,400, a number that swelled to 25,000 during the dam construction as workers raced in to take jobs that were scarce in the early Depression years. Those workers, primarily single men, needed something to do with their spare time, so the Nevada state legislature legalized gambling in 1931. Modern Vegas was born.

The rise of Vegas is well chronicled, from a middle-of-nowhere town to the largest city founded in the 20th century and the fastest-growing in the nation – up until the 2008 housing bust. Somehow, those 8,400 souls turned into a present population of over 2 million that exists all but entirely to service the 40 million tourists who visit annually. And all this is happening in a desert that sees an average of 10 days of measurable rainfall per year, totaling about 4 inches.

In order to run all those lights, fountains, and revolving stages, Las Vegas requires 5,600 MW of electricity on a summer day. Did you notice that that’s more than 2.5 times what the giant Hoover Dam can put out? Not to mention that those 42 million people need a lot of water to drink to stay properly hydrated in the 100+ degree heat. And it all comes from Lake Mead.

So what do you think is happening to the lake?

If your guess was, “it’s shrinking,” you’re right. The combination of recent drought years in the West and rapidly escalating demand has been a dire double-whammy, reducing the lake to 40% full. Normally, the elevation of Lake Mead is 1,219 feet. Today, it’s at 1,086 feet and dropping by ten feet a year (and accelerating). That’s how much more water is being taken out than is being replenished.

This is science at its simplest. If your extraction of a renewable resource exceeds its ability to recharge itself, it will disappear – end of story. In the case of Lake Mead, that means going dry, an eventuality to which hydrologists assign a 50% probability in the next twelve years. That’s by 2025.

Nevadans are not unaware of this. There is at the moment a frantic push to get approval for a massive pipeline project designed to bring in water from the more favored northern part of the state. Yet even if the pipeline were completed in time, and there is stiff opposition to it (and you thought only oil pipelines gave way to politics and protests), that would only resolve one issue. There’s another. A big one.

Way before people run out of drinking water, something else happens: When Lake Mead falls below 1,050 feet, the Hoover Dam’s turbines shut down – less than four years from now, if the current trend holds – and in Vegas the lights start going out.

What Doesn’t Stay in Vegas

Ominously, these water woes are not confined to Las Vegas. Under contracts signed by President Obama in December 2011, Nevada gets only 23.37% of the electricity generated by the Hoover Dam. The other top recipients: Metropolitan Water District of Southern California (28.53%); state of Arizona (18.95%); city of Los Angeles (15.42%); and Southern California Edison (5.54%).

You can always build more power plants, but you can’t build more rivers, and the mighty Colorado carries the lifeblood of the Southwest. It services the water needs of an area the size of France, in which live 40 million people. In its natural state, the river poured 15.7 million acre-feet of water into the Gulf of California each year. Today, twelve years of drought have reduced the flow to about 12 million acre-feet, and human demand siphons off every bit of it; at its mouth, the riverbed is nothing but dust.

Nor is the decline in the water supply important only to the citizens of Las Vegas, Phoenix, and Los Angeles. It’s critical to the whole country. The Colorado is the sole source of water for southeastern California’s Imperial Valley, which has been made into one of the most productive agricultural areas in the US despite receiving an average of three inches of rain per year.

The Valley is fed by an intricate system consisting of 1,400 miles of canals and 1,100 miles of pipeline. They are the only reason a bone-dry desert can look like this:

Intense conflicts over water will probably not be confined to the developing world. So far, Arizona, California, Nevada, New Mexico, and Colorado have been able to make and keep agreements defining who gets how much of the Colorado River’s water. But if populations continue to grow while the snowcap recedes, it’s likely that the first shots will be fired before long, in US courtrooms. If legal remedies fail… a war between Phoenix and LA might seem far-fetched, but at the minimum some serious upheaval will eventually ensue unless an alternative is found quickly.

A Litany of Crises

Water scarcity is, of course, not just a domestic issue. It is far more critical in other parts of the world than in the US. It will decide the fate of people and of nations.

Worldwide, we are using potable water way faster than it can be replaced. Just a few examples:

  • The legendary Jordan River is flowing at only 2% of its historic rate.
  • In Africa, desertification is proceeding at an alarming rate. Much of the northern part of the continent is already desert, of course. But beyond that, a US Department of Agriculture study places about 2.5 million km2 of African land at low risk of desertification, 3.6 million km2 at moderate risk, 4.6 million km2 at high risk, and 2.9 million km2 at very high risk. “The region that has the highest propensity,” the report says, “is located along the desert margins and occupies about 5% of the land mass. It is estimated that about 22 million people (2.9% of the total population) live in this area.”
  • A 2009 study published in the American Meteorological Society’s Journal of Climate analyzed 925 major rivers from 1948 to 2004 and found an overall decline in total discharge. The reduction in inflow to the Pacific Ocean alone was about equal to shutting off the Mississippi River. The list of rivers that serve large human populations and experienced a significant decline in flow includes the Amazon, Congo, Chang Jiang (Yangtze), Mekong, Ganges, Irrawaddy, Amur, Mackenzie, Xijiang, Columbia, and Niger.

Supply is not the only issue. There’s also potability. Right now, 40% of the global population has little to no access to clean water, and despite somewhat tepid modernization efforts, that figure is actually expected to jump to 50% by 2025. When there’s no clean water, people will drink dirty water – water contaminated with human and animal waste. And that breeds illness. It’s estimated that fully half of the world’s hospital beds today are occupied by people with water-borne diseases.

Food production is also a major contributor to water pollution. To take two examples:

  • The “green revolution” has proven to have an almost magical ability to provide food for an ever-increasing global population, but at a cost. Industrial cultivation is extremely water intensive, with 80% of most US states’ water usage going to agriculture – and in some, it’s as high as 90%. In addition, factory farming uses copious amounts of fertilizer, herbicides, and pesticides, creating serious problems for the water supply because of toxic runoff.
  • Modern livestock facilities – known as concentrated animal feeding operations (CAFOs) – create enormous quantities of animal waste that is pumped into holding ponds. From there, some of it inevitably seeps into the groundwater, and the rest eventually has to be dumped somewhere. Safe disposal practices are often not followed, and regulatory oversight is lax. As a result, adjacent communities’ drinking water can come to contain dangerously high levels of E. coli bacteria and other harmful organisms.

Not long ago, scientists discovered a whole new category of pollutants that no one had previously thought to test for: drugs. We are a nation of pill poppers and needle freaks, and the drugs we introduce into our bodies are only partially absorbed. The remainder is excreted and finds its way into the water supply. Samples recently taken from Lake Mead revealed detectable levels of birth control medication, steroids, and narcotics… which people and wildlife are drinking.

Most lethal of all are industrial pollutants that continue to find their way into the water supply. The carcinogenic effects of these compounds have been well documented, as the movie-famed Erin Brockovich did with hexavalent chromium.

But the problem didn’t go away with Brockovich’s court victory. The sad fact is that little has changed for the better. In the US, our feeble attempt to deal with these threats was the passage in 1980 of the so-called Superfund Act. That law gave the federal government – and specifically the Environmental Protection Agency (EPA) – the authority to respond to chemical emergencies and to clean up uncontrolled or abandoned hazardous-waste sites on both private and public lands. And it supposedly provided money to do so.

How’s that worked out? According to the Government Accountability Office (GAO), “After decades of spearheading restoration efforts in areas such as the Great Lakes and the Chesapeake Bay, improvements in these water bodies remain elusive … EPA continues to face the challenges posed by an aging wastewater infrastructure that results in billions of gallons of untreated sewage entering our nation’s water bodies … Lack of rapid water-testing methods and development of current water quality standards continue to be issues that EPA needs to address.”

Translation: the EPA hasn’t produced. How much of this is due to the typical drag of a government bureaucracy and how much to lack of funding is debatable. Whether there might be a better way to attack the problem is debatable. But what is not debatable is the magnitude of the problem stacking up, mostly unaddressed.

Just consider that the EPA has a backlog of 1,305 highly toxic Superfund cleanup sites on its to-do list, in every state in the union (except apparently North Dakota, in case you want to try to escape – though the proliferation of hydraulic fracking in that area may quickly change the map, according to some of its detractors – it’s a hotly debated assertion).

About 11 million people in the US, including 3-4 million children, live within one mile of a federal Superfund site. The health of all of them is at immediate risk, as is that of those living directly downstream.

We could go on about this for page after page. The situation is depressing, no question. And even more so is the fact that there’s little we can do about it. There is no technological quick fix.

Peak oil we can handle. We find new sources, we develop alternatives, and/or prices rise. It’s all but certain that by the time we actually run out of oil, we’ll already have shifted to something else.

But “peak water” is a different story. There are no new sources; what we have is what we have. Absent a profound climate change that turns the evaporation/rainfall hydrologic cycle much more to our advantage, there likely isn’t going to be enough to around.

As the biosphere continually adds more billions of humans (the UN projects there will be another 3.5 billion people on the planet, a greater than 50% increase, by 2050 before a natural plateau really starts to dampen growth), the demand for clean water has the potential to far outstrip dwindling supplies. If that comes to pass, the result will be catastrophic. People around the world are already suffering and dying en masse from lack of access to something drinkable… and the problems look poised to get worse long before they get better.

Searching for a Way Out

With a problem of this magnitude, there is no such thing as a comprehensive solution. Instead, it will have to be addressed by chipping away at the problem in a number of ways, which the world is starting to do.

With much water not located near population centers, transportation will have to be a major part of the solution. With oil, a complex system of pipelines, tankers, and trucking fleets has been erected, because it’s been profitable to do so. The commodity has a high intrinsic value. Water doesn’t – or at least hasn’t in most of the modern era’s developed economies – and thus delivery has been left almost entirely to gravity. Further, the construction of pipelines for water that doesn’t flow naturally means taking a vital resource from someone and giving it to someone else, a highly charged political and social issue that’s been known to lead to protest and even violence. But until we’ve piped all the snow down from Alaska to California, transportation will be high on the list of potential near term solutions, especially to individual supply crunches, just as it has been with energy.

Conservation measures may help too, at least in the developed world, though the typical lawn-watering restrictions will hardly make a dent. Real conservation will have to come from curtailing industrial uses like farming and fracking.

But these bandage solutions can only forestall the inevitable without other advances to address the problems. Thankfully, where there is a challenge, there are always technology innovators to help address it. It was wells and aqueducts that let civilization move from the riverbank inland, irrigation that made communal farming scale, and sewers and pipes that turned villages into cities, after all. And just as with the dawn of industrial water, entrepreneurs are developing some promising tech developments, too.

Given how much water we use today, there’s little doubt that conservation’s sibling, recycling, is going to be big. Microfiltration systems are very sophisticated and can produce recycled water that is near-distilled in quality. Large-scale production remains a challenge, as is the reluctance of people to drink something that was reclaimed from human waste or industrial runoff. But that might just require the right spokesperson. California believes so, in any case, as it forges ahead with its Porcelain Springs initiative. A company called APTwater has taken on the important task of purifying contaminated leachate water from landfills that would otherwise pollute the groundwater. This is simply using technology to accelerate the natural process of replenishment by using energy, but if it can be done at scale, we will eventually reach the point where trading oil or coal for clean drinking water makes economic sense. It’s already starting to in many places.

Inventor Dean Kamen of Segway fame has created the Slingshot, a water-purification machine that could be a lifesaver for small villages in more remote areas. The size of a dorm-room refrigerator, it can produce 250 gallons of water a day, using the same amount of energy it takes to run a hair dryer, provided by an engine that can burn just about anything (it’s been run on cow dung). The Slingshot is designed to be maintenance-free for at least five years.

Kamen says you can “stick the intake hose into anything wet – arsenic-laden water, salt water, the latrine, the holding tanks of a chemical waste treatment plant; really, anything wet – and the outflow is one hundred percent pure pharmaceutical-grade injectable water.”

That naturally presupposes there is something wet to tap into. But Coca-Cola, for one, is a believer. This September, Coke entered into a partnership with Kamen’s company, Deka Research, to distribute Slingshots in Africa and Latin America.

Ceramic filters are another, low-tech option for rural areas. Though clean water output is very modest, they’re better than nothing. The ability to decontaminate stormwater runoff would be a boon for cities, and AbTech Industries is producing a product to do just that.

In really arid areas, the only water present may be what’s held in the air. Is it possible to tap that source? “Yes,” say a couple of cutting-edge tech startups. Eole Water proposes to extract atmospheric moisture using a wind turbine. Another company, NBD Nano, has come up with a self-filling water bottle that mimics the Namib Desert beetle. Whether the technology is scalable to any significant degree remains to be seen.

And finally, what about seawater? There’s an abundance of that. If you ask a random sampling of folks in the street what we’re going to do about water shortages on a larger scale, most of them will answer, “desalination.” No problem. Well, yes problem.

Desalination (sometimes shortened to “desal”) plants are already widespread, and their output is ramping up rapidly. According to the International Desalination Association, in 2009 there were 14,451 desalination plants operating worldwide, producing about 60 million cubic meters of water per day. That figure rose to 68 million m3/day in 2010 and is expected to double to 120 million m3/day by 2020. That sounds impressive, but the stark reality is that it amounts to only around a quarter of one percent of global water consumption.

Boiling seawater and collecting the condensate has been practiced by sailors for nearly two millennia. The same basic principle is employed today, although it has been refined into a procedure called “multistage flash distillation,” in which the boiling is done at less than atmospheric pressure, thereby saving energy. This process accounts for 85% of all desalination worldwide. The remainder comes from “reverse osmosis,” which uses semipermeable membranes and pressure to separate salts from water.

The primary drawbacks to desal are that a plant obviously has to be located near the sea, and that it is an expensive, highly energy-intensive process. That’s why you find so many desal facilities where energy is cheap, in the oil-rich, water-poor nations of the Middle East. Making it work in California will be much more difficult without drastically raising the price of water. And Nevada? Out of luck. Improvements in the technology are bringing costs of production down, but the need for energy, and lots of it, isn’t going away. By way of illustration, suppose the US would like to satisfy half of its water needs through desalination. All other factors aside, meeting that goal would require the construction of more than 100 new electric power plants, each dedicated solely to that purpose, and each with a gigawatt of capacity.

Moving desalinated water from the ocean inland adds to the expense. The farther you have to transport it and the greater the elevation change, the less feasible it becomes. That makes desalination impractical for much of the world. Nevertheless, the biggest population centers tend to be clustered along coastlines, and demand is likely to drive water prices higher over time, making desal more cost-competitive. So it’s a cinch that the procedure will play a steadily increasing role in supplying the world’s coastal cities with water.

In other related developments, a small tech startup called NanOasis is working on a desalination process that employs carbon nanotubes. An innovative new project in Australia is demonstrating that food can be grown in the most arid of areas, with low energy input, using solar-desalinated seawater. It holds the promise of being very scalable at moderate cost.

The Future

This article barely scratches the surface of a very broad topic that has profound implications for the whole of humanity going forward. The World Bank’s Ismail Serageldin puts it succinctly: “The wars of the 21st century will be fought over water.”

There’s no doubt that this is a looming crisis we cannot avoid. Everyone has an interest in water. How quickly we respond to the challenges ahead is going to be a matter, literally, of life and death. Where we have choices at all, we had better make some good ones.

From an investment perspective, there are few ways at present to acquire shares in the companies that are doing research and development in the field. But you can expect that to change as technologies from some of these startups begin to hit the market, and as the economics of water begin to shift in response to the changing global landscape.

We’ll be keeping an eye out for the investment opportunities that are sure to be on the way.

While profit opportunities in companies working to solve the world’s water woes may not be imminent, there are plenty of ways to leverage technology to outsized gains right now. One of the best involves a technology so revolutionary, its impact could rival that of the printing press.

Message from Mexico: U.S. Is Polluting Water Reservoirs It May Someday Need to Drink From

In Uncategorized on January 29, 2013 at 5:29 pm

Oldspeak:”U.S. environmental regulators have long assumed that reservoirs located thousands of feet underground will be too expensive to tap. So even as population increases, temperatures rise, and traditional water supplies dry up, American scientists and policy-makers often exempt these deep aquifers from clean water protections and allow energy and mining companies to inject pollutants directly into them. the U.S. Environmental Protection Agency has issued more than 1,500 permits for companies to pollute such aquifers in some of the driest regions. Frequently, the reason was that the water lies too deep to be worth protecting. –Abrahm Lustgarten. From the Department of Galatically Stupid Policy Planning. The U.S. government has allowed ancient, unspoiled sources of an essential building block of life crucial to our survival;  water,  to be poisoned by short-sighted, profit-polluted energy corporations.  These industries ironically use untold trillions of gallons of water, to extract refine death energy. This despite devastating droughts through the summer of 2012 that rendered half of U.S. counties “natural” disaster areas. Despite reports of perpetual drought becoming an increasingly intractable problem in the coming decades, with scientists predicting the devastating conditions of “The Dust Bowl” in the 1950 becoming the new normal. The U.S. President takes every oppurtunity he gets to tout 100 years of energy independence to be gained from drilling for “natural” gas, but never mentions how much precious and irreplaceable water is lost to secure this “independence”. What will it take for policy makers to understand that they’re lining their pockets with riches begotten of  devolution, death, destruction? What will it take to make them understand that there is no prosperity, no power, no prestige, on a dead planet? “Ignorance Is Strength”, “Profit Is Paramount”

By Abrahm Lustgarten @ Pro Publica:

Mexico City plans to draw drinking water from a mile-deep aquifer, according to a report in the Los Angeles Times. The Mexican effort challenges a key tenet of U.S. clean water policy: that water far underground can be intentionally polluted because it will never be used.

U.S. environmental regulators have long assumed that reservoirs located thousands of feet underground will be too expensive to tap. So even as population increases, temperatures rise, and traditional water supplies dry up, American scientists and policy-makers often exempt these deep aquifers from clean water protections and allow energy and mining companies to inject pollutants directly into them.

As ProPublica has reported in an ongoing investigation about America’s management of its underground water, the U.S. Environmental Protection Agency has issued more than 1,500 permits for companies to pollute such aquifers in some of the driest regions. Frequently, the reason was that the water lies too deep to be worth protecting.

But Mexico City’s plans to tap its newly discovered aquifer suggest that America is poisoning wells it might need in the future.

Indeed, by the standard often applied in the U.S., American regulators could have allowed companies to pump pollutants into the aquifer beneath Mexico City.

For example, in eastern Wyoming, an analysis showed that it would cost half a million dollars to construct a water well into deep, but high-quality aquifer reserves. That, plus an untested assumption that all the deep layers below it could only contain poor-quality water, led regulators to allow a uranium mine to inject more than 200,000 gallons of toxic and radioactive waste every day into the underground reservoirs.

But south of the border, worsening water shortages have forced authorities to look ever deeper for drinking water.

Today in Mexico City, the world’s third-largest metropolis, the depletion of shallow reservoirs is causing the ground to sink in, iconic buildings to teeter, and underground infrastructure to crumble. The discovery of the previously unmapped deep reservoir could mean that water won’t have to be rationed or piped into Mexico City from hundreds of miles away.

According to the Times report, Mexican authorities have already drilled an exploratory well into the aquifer and are working to determine the exact size of the reservoir. They are prepared to spend as much as $40 million to pump and treat the deeper water, which they say could supply some of Mexico City’s 20 million people for as long as a century.

Scientists point to what’s happening in Mexico City as a harbinger of a world in which people will pay more and dig deeper to tap reserves of the one natural resource human beings simply cannot survive without.

“Around the world people are increasingly doing things that 50 years ago nobody would have said they’d do,” said Mike Wireman, a hydrogeologist with the EPA who also works with the World Bank on global water supply issues.

Wireman points to new research in Europe finding water reservoirs several miles beneath the surface — far deeper than even the aquifer beneath Mexico City — and says U.S. policy has been slow to adapt to this new understanding.

“Depth in and of itself does not guarantee anything — it does not guarantee you won’t use it in the future, and it does not guarantee that that it is not” a source of drinking water, he said.

If Mexico City’s search for water seems extreme, it is not unusual. In aquifers Denver relies on, drinking water levels have dropped more than 300 feet. Texas rationed some water use last summer in the midst of a record-breaking drought. And Nevada — realizing that the water levels in one of the nation’s largest reservoirs may soon drop below the intake pipes — is building a drain hole to sap every last drop from the bottom.

“Water is limited, so they are really hustling to find other types of water,” said Mark Williams, a hydrologist at the University of Colorado at Boulder. “It’s kind of a grim future, there’s no two ways about it.”

In a parched world, Mexico City is sending a message: Deep, unknown potential sources of drinking water matter, and the U.S. pollutes them at its peril.

 

 

Two Big Decisions Loom On The Fate Of Drinking Water For 15,800,000 People Living Near The Marcellus Shale In Northeast U.S.

In Uncategorized on November 11, 2011 at 3:45 pm

Oldspeak:” Not for nothin but Fuck Herman Cain. We have more important things to think about. With mountains of evidence demonstrating the grave threats to the free, natural water supply for millions of Americans and irreversible environmental damage done by high pressure hydraulic fracking, the fact that some states will be voting to allow it to go ahead, amid tens of thousands of objections, with grossly inadequate restrictions and regulations, one begins to understand the breath and scope of control the Transnational Corporate Network has over the U.S. government and indeed countless governments worldwide. Natural gas/oil drilling and production are demonstrably dangerous and environmentally devastating means of energy production. Everyone knows this, innumerable accidents worldwide leave no doubt. Yet it continues unabated. 5 people will decide the fate drinking water 15 million. Oil and Natural gas corporations wield infinitely greater power over our political and regulatory systems than the majority of people who supposedly elected officials to represent their interests.  Democracy Inaction. One has to wonder why there is so much pressure and power behind the efforts to proceed with efforts that will in all probability lead to permanent contamination of freely and naturally produced water supplies for millions worldwide, coinciding with curiously sparse corporate news coverage of this issue. Could this be a roundabout way of forcing transitions to privatized water production and distribution? Once people’s water is contaminated, they’ll be left with little other choice than paying for and drinking commercially produced water. Hmmm. Stranger things have happened.”

Related Story:

New Fracking Regulations For The Delaware Basin Unacceptable To Environmentalists

By Stephen Wishnia @ Alter Net:

The fate of fracking in the Northeast may be determined soon.

On Nov. 21, the Delaware River Basin Commission, comprising representatives from four states (New York, Pennsylvania, New Jersey, and Delaware) and the federal government, will vote on whether to allow the intensive method of natural-gas drilling in the river’s watershed. The watershed, which supplies drinking water for more than 15 million people, overlaps the eastern end of the Marcellus Shale, an underground geological formation touted as the “Saudi Arabia of natural gas.”

The commission’s rules, which will apply in the Delaware watershed, will overlap with state regulations. Pennsylvania already allows fracking. New York is in the process of developing regulations about where it might be allowed and under what conditions. The state Department of Environmental Conservation will hold public hearings in November, and says it will decide sometime next year. Many environmental activists believe Gov. Andrew Cuomo is fast-tracking the issue.

The Background

Fracking is currently on hold in New York and the Delaware watershed while regulations are being developed. In Pennsylvania west of the Delaware watershed, more than 4,000 wells have been drilled since 2005, with almost 1,500 started this year.

The proposed Delaware River regulations will be released Nov. 7. Environmental activists are pessimistic about both processes. “We know they’re going to going to be bad,” says Tracy Carluccio, deputy director of Delaware Riverkeeper. “We don’t know how bad.”

“The fix is in in both,” says Bruce Ferguson of Catskill Citizens for Safe Energy. “Cuomo’s going to shove it down our throats.”

Fracking — a nickname for “high-volume hydraulic fracturing” — involves drilling down into shale layers thousands of feet underground, then pumping in thousands of gallons of water, sand and often toxic additives to shatter the shale and enable gas trapped in it to bubble up through the pipes. Unlike traditional gas wells, which go straight up and down, fracking wells are drilled out horizontally once they reach the shale. The process is fraught with environmental hazards, from above ground spills to the possibility of gas and the toxic chemicals used leaking into groundwater.

The Marcellus Shale is a layer of black shale rich in organic materials along the west side of the Appalachian Mountains. Formed about 400 million years ago, it covers the area under eastern Ohio, most of Pennsylvania, almost all of West Virginia, the Maryland panhandle, and upstate New York from the Southern Tier counties along the Pennsylvania border to the Catskill Mountains. Most of it is more than a mile underground, but the areas where it is closer to the surface — northern Pennsylvania and upstate New York — are where the gas is purest and most easily accessible.

NY Learning from Pennsylvania’s Mistakes?

Pennsylvania has relatively loose regulations. It allows drilling as little as 100 feet away from streams or wetlands and 200 feet from a structure. While it prohibits companies from dumping drilling waste into streams or unlined pits, it lets them store it in open-air pits, as long as the pits are lined with a synthetic material.

The proposed New York regulations, at least the draft issued in September, would be somewhat stricter. They would allow fracking in an estimated 80 percent of the Marcellus Shale, but would ban it within 2,000 feet of public drinking-water supplies and within 500 feet of private wells. They would require “flowback” — the water that returns to the Earth’s surface after fracking, which contains numerous toxic chemicals used in the process — to be stored in watertight tanks. Most important for both political and environmental reasons, they would prohibit fracking within 4,000 feet of the New York City and Syracuse watersheds, as both cities do not filter their water supplies, and it would cost billions of dollars to build filtration plants.

“In developing the permitting process for high-volume hydraulic fracturing, DEC’s number one priority is to protect drinking water for all New Yorkers,” says a Department of Environmental Conservation spokesperson. “New York has taken a cautious and deliberate approach to propose the strictest standards in the nation that are based on sound science and engineering principles. The draft SGEIS [supplemental generic environmental impact statement] contains multiple barriers to protect the state’s drinking water and public health, which include generous buffers around water supplies.”

Richard Young, a geology professor at the State University of New York at Geneseo, calls the buffers “ridiculous.” In fracking, he says, water is pumped underground at pressures of 15,000 pounds per square inch, capable of lifting an 8,000-foot column of rock. This would force the gas and the chemicals used up into fractures in the earth, where they then would inevitably wind up in groundwater.

“There’s lots of faults and fractures in New York State that nobody has mapped. Once you start pressurizing them, there’s no controlling where things go,” he explains. “The cleanup costs would be astronomical even if you could do it. Once you contaminate water underground over a broad area, there’s nothing you can do about it. There’s no bailout plan.”

A Duke University study released in May found methane gas concentrations averaging 19.2 milligrams per liter in water from wells within 1,000 meters of shale-gas well pads in Pennsylvania and upstate New York-17 times the amount of methane in wells farther away. The methane found was distinctly “thermogenic,” prehistoric and from deep underground, rather than “biogenic,” from recent organic decay near the surface. The study listed three possible sources of water contamination: that the process itself had forced gas and toxic chemicals up into aquifers; leaks from defective drill pipes closer to the surface; and spills above ground.

“Methane migration through the 1- to 2-km-thick geological formations that overlie the Marcellus and Utica shales is less likely as a mechanism for methane contamination than leaky well casings,” it said, “but might be possible due to both the extensive fracture systems reported for these formations and the many older, uncased wells drilled and abandoned over the last century and a half in Pennsylvania and New York.”

“Every time you drill a well, be it a water well or a gas well, you’re breaking a seal, says William Kappel, a hydrologist with the United States Geological Service office in Ithaca, New York. Still, he says the chances are “nil” that fracking would force toxins up into groundwater. The intense pressure used, he explains, is to balance the high pressure underground, and the actual pumping takes only 15 to 20 minutes. Underground vertical faults are very small, he adds, sometimes as thin as a sheet of paper. They can be as much as 1,000 feet long at depths of 7,000 feet, but closer to the surface, they are shorter and much more likely to be horizontal.

From the data he’s seen, he says, leaks from vertical drilling pipes are a far more likely hazard.

That is what happened in Dimock, Pennsylvania, a town of 1,400 people near the New York border, in April 2010. The cement casing around a drill pipe cracked, allowing methane to leak into the groundwater, poisoning 19 wells. The water in those wells contained so much methane that there was a risk it might explode. The gas that leaked in Dimock, says Kappel, was not from the Marcellus shale, but from a slightly higher geological layer. Drilling was banned in a nine-square-mile area after the leak. Cabot Energy, the operator of the defective well, signed a consent decree that it would provide water to the 19 households affected. Originally, it was going to build a pipeline to bring water from the nearby town of Montrose, but it decided that supplying 550-gallon “water buffalo” tanks was cheaper.

On Oct. 18, the Pennsylvania Department of Environmental Protection said that Cabot could stop providing water to the affected households after Nov. 30.

“They said they weren’t going to spend any more money testing our water,” says Dimock resident Craig Sauter. “They said it was a done deal. One of our neighbors turned on his water today, and it came out brown and orange.”

Sauter and his wife signed a lease for $2,500 an acre in June 2008 to let Cabot drill on their land. The company promised to restore his water if it was degraded, he says, but “they never have.” When the air in his well was tested Sept. 15, he says, it contained 20 percent methane. His tap water “looked like coffee with milk in it.”

Cabot is required to give the affected households gas mitigators. “We’ve been down that road before, and it didn’t do the job,” says Sauter. The device got a lot of the methane out, he says, but his water was still contaminated with arsenic, barium, and uranium. Cabot insists those elements were there naturally.

Lawyers for the affected households may appeal the decision, but Sauter doesn’t have much faith in the courts. “I know money talks, and that’s not reassuring,” he says. The New York DEC says that properly cementing the vertical drilling pipes would have prevented the Dimock gas leaks, as well as several others that occurred in nearby wells. It contends that because the Dimock well was located on a steep hill, it would have flagged the permit application and required “site-specific permit conditions designed to address the risks associated with hillside locations.”

Other fracking hazards include the huge numbers of truck trips required to carry supplies, the amount of water needed for the process, and waste storage. Flowback contains significant amounts of toxic volatile hydrocarbons, such as benzene, toluene, ethylbenzene and xylene, as well as lead and halogenated hydrocarbons such as dichlorobromomethane. In Pennsylvania, the ponds that contain the flowback are “the size of an Olympic swimming pool and lined with plastic slightly stronger than a trash bag,” says Gloria Forouzan of Marcellus Protest in Pittsburgh. “There’s no facility in Pennsylvania that can treat this fluid.”

The New York DEC claims that its proposed testing procedures would have averted an April incident in LeRoy Township, Pennsylvania, when, after a heavy rainstorm, a valve flange at a wellhead failed and 60,000 gallons of fracking fluids spurted out. About 10,000 gallons overflowed the edges of the containment pond, and some wound up in a nearby creek. Chesapeake Energy, the well’s operator, says it had passed all safety tests before the accident.

Companies are generally not required to disclose the exact chemicals contained in specific products used in fracking, because that information is considered a “trade secret.” The Bush administration exempted fracking fluids from the Safe Drinking Water Act’s restrictions. The Earthworks Action Web site calls that the “Halliburton loophole,” because “it is widely perceived to have come about as a result of the efforts of Vice President Dick Cheney’s Energy Task Force.” Halliburton is one of the top three manufacturers of fracking fluids. There are huge loopholes in the proposed New York regulations, argues Roger Downs, legislative director for the Atlantic branch of the Sierra Club. The regulations cover only wells that will use more than 300,000 gallons of water, he explains; about 5,000 are expected to use less. And the state has not considered the effect of 10,000 fracking wells, with an average of 1,200 truck trips to each one.

“They refuse to do a cumulative environmental impact statement,” he says. “They just concentrate on the impact of individual wells.” Organizing and financing the regulations is another concern. Downs estimates that the DEC would need to hire 220 new staff and spend $20 million a year to have adequate inspections and enforcement. If that doesn’t happen, he says, there will be “pandemonium,” and rules “will be negotiated at the well pad.” If the state doesn’t have solid regulations, he continues, it will be impossible for the public to sue to have them enforced.

There is no federal Environmental Protection Agency standard limiting the amount of methane in drinking water, notes Emily Wurth of Food & Water Watch. Some occurs naturally. Downs also questions whether the regulations will actually prohibit fracking in the New York and Syracuse watersheds. In any case, he adds, most people in rural central and western New York get their water from wells, so they’re also drinking unfiltered water.

Many activists believe that in order to enable fracking, Gov. Cuomo is planning to sacrifice upstate to protect New York City. “They certainly are deciding to drill around political boundaries,” Downs says.

Rural Towns Threatened

The politics of the issue come down to large gas companies versus local residents worried about having their environment poisoned, with the companies trying to win local support from the money drilling generates-in jobs and in payments to landowners. In October, the Pennsylvania Department of Labor and Industry announced that there were more than 20,000 jobs directly linked to Marcellus Shale gas development, more than twice the number in 2008, although jobs in other areas related to the gas industry fell slightly.

“This data further reinforces the undeniable fact that responsible American natural gas production is an unmatched, private-sector job-creation machine,” said a statement by Kathryn Klaber, president of the Marcellus Shale Coalition, an industry group based in Pennsylavania.

Elmira, New York, a depressed industrial city just over the border from Pennsylvania, “is indirectly benefiting from the gas boom,” says a local environmental activist. “The influx of gas drilling service industries is using more and more of Chemung County’s underutilized industrial infrastructure. High-paying, low-skilled jobs, albeit temporary, are creating enthusiasm with the working class.”

“It’s a really complicated issue,” says Autumn Stoschek of ShaleShock, an Ithaca-based activist group. She lives in Van Etten, a small town nearby. “It’s a depressed area, but on the other hand, it’s a rural area, and people really like the outdoors.” The rural residents are more likely to display gas-company logos in their yards than the anti-fracking signs that dot the college town of Ithaca, she explains, but they’re suspicious of both environmentalists and corporations.

The Southern Tier has a long history of gas drilling, she says, but when fracking came in, “it was a big turning point,” as large corporations replaced “mom-and-pop gas companies.” Her parents signed a gas lease for $2 an acre in 1999. In 2005, Fortuna Energy drilled a horizontal well on their farm. Some now “regret that they signed the lease,” says upstate activist Lisa Wright. The gas-company “landsmen” who arranged the deals, she explains, didn’t tell them “it’s a huge industrial process. It involves hundreds of truck trips per well.”

“People had no idea what they were dealing with,” says Stoschek. “When they don’t restore your fields and leave a rubble pile, they tell you to sue them.” The pressure on homeowners to settle lawsuits is huge, says Gloria Forouzan. When people can’t live in their home because the water is destroyed, they can’t sell it either, so they are desperate-and gas companies demand silence as part of the settlement, she says.

“Working-class people don’t have the means to get a corporate lawyer to fight this kind of thing,” says Wright.

“We’re a sacrifice zone,” Stoschek concludes.

In New York’s Sullivan and Delaware counties, in the Catskill Mountains on the eastern side of the Delaware, a poll taken in early October found more than two-thirds of residents willing to support a fracking ban. The practice would bring money to the area, says Bruce Ferguson, but at the expense of tourism, farming, and land values. “People value above all the rural character,” he says. “They don’t want to live in an industrial zone.”

The Big Decision

The Delaware River Basin Commission received more than 69,000 comments from the public after its draft regulations were released last December. When it extended the comment period to April 15, the Marcellus Shale Coalition complained that it would “undermine dialogue” by “detracting from the voices of the key stakeholders… landowners, residents of the Basin, and our member companies who are investing capital and creating jobs in the region.”

The Hess company, a member of the coalition, objected to proposed restrictions on drilling within flood-hazard zones, on steep hills, or within 500 feet of water sources, saying they would affect 60 percent of the land the company has leased in the area. It urged more flexible, case-by-case rules.

Tracy Carluccio of Delaware Riverkeeper calls the draft regulations “totally inadequate” to protect the watershed. The commission has not done either a comparative environmental analysis of fracking or a cumulative-impact study, she says.

“They haven’t done the analysis to see if it could be done safely,” she says-and given the record of accidents in Pennsylvania, she adds, it can’t be done safely. “They are now putting in place the ruination of our aquifers.”

DRBC spokesperson Clarke Rupert responds that the commission’s work “was not created in an information vacuum.” It looked closely at how other areas of the country were handling fracking, he adds, and it is not required by federal law to do an environmental-impact statement.

States can enact stronger regulations than the ones the commission creates, Rupert says. The commission can also establish regulations stronger than state laws, but they would apply only to the areas within the Delaware watershed. In Pennsylvania, that would mean the counties along the river, not the western three-fourths of the state.

Activists suspect the commission has agreed not to propose regulations that would be stronger than those of any of the four states in the area. “They are opting out of anything stricter,” says Carluccio.

In May, New York State Attorney General Eric Schneiderman sued the federal government, demanding that it undertake a full environmental review before it allows gas drilling in the Delaware watershed. On Oct. 13, the Philadelphia City Council voted to join the suit.

Three of the five members’ votes are needed for the commission to approve regulations. Pennsylvania is considered a sure yes, as Gov. Tom Corbett is a strong supporter of fracking. He considers it a panacea for the state’s economy, and he received more than $1 million from oil and gas interests in his 2010 campaign. In April, after he proposed slashing the state’s higher education budget by half, he suggested that state colleges could offset the cuts by putting well pads on campus.

The other members’ votes are in play, activists say. In New Jersey, the state legislature recently passed a bill to ban fracking, but Gov. Chris Christie vetoed it. Delaware, which is at the mouth of the river, might be more likely to vote no. Andrew Cuomo may want fracking in New York, but may also want to get his own state’s regulations through first. Environmentalists have been urging the Obama administration to vote no.

Ultimately, says William Kappel, the question is of “relative risk.” He’s worked on drilling rigs, and “accidents do occur.”

All industrial processes cause some environmental degradation; it’s the price we pay for living at a standard above hunter-gatherers and subsistence farmers. Yet there is only so much damage the Earth can take. Is the risk that fracking poses to our drinking water worth the amount of energy it creates and the money it provides?

Steven Wishnia is a New York-based journalist and musician. The author of Exit 25 Utopia and The Cannabis Companion, he has won two New York City Independent Press Association awards for his coverage of housing issues.

The 1% Are Fracking the Rest of Us … Literally

 

 

The 1% Frack the 99%

 

As the Emmy-winning documentary Gasland demonstrates, hydrofracking (“fracking” for short) is

polluting water all over the country.

As I noted in August, the government has also officially stated that fracking can cause earthquakes.

A fracking company in the UK admitted last week that their activity was causing earthquakes.

As the New York Daily News notes, many locals suspect fracking of causing the largest earthquake in Oklahoma in 200 years:

Scientists are puzzled by the recent seismic activity.

***

There are 181 injection wells in the Oklahoma county where most of the weekend earthquakes happened, said Matt Skinner, spokesman for the Oklahoma Corporation Commission, which oversees oil and gas production in the state and intrastate transportation pipelines.*

Of course, the good folks making money hand over fist by fracking are encouraging open and truthful debate about the risks of fracking, right?

Well, not exactly.

Actor Mark Ruffalo was put on terror watch list after he organized showings of Gasland – the Emmy-award winner – part of a trend of using national security laws to protect big companies (more).

And fracking companies are using military psychological operations techniques to discredit opponents(and see this).

In short, the 1% are fracking the rest of us.

JP Morgan and BP Are Fracking Us, Too

JP Morgan was – at the time of last year’s Gulf oil spill – the largest owner of BP.

BP is ending its clean up operations in the Gulf.

Too bad the well is probably still leaking (and see this).

Indeed, the BP Gulf oil spill, the financial crisis, Fukushima and other major disasters were all caused by the 1%: (1) making insane bets that nothing would blow up, and (2) cutting every possible safety measure to make more money.

And exactly like the toxic financial assets that the big banks dumped onto the national balance sheets of Greece, Italy, America and elsewhere – and ultimately the people – JP Morgan, BP and the U.S. government are dumping the cost of the Gulf disaster on the backs of the American people.