The New Oil

Sitka, Alaska, is home to one of the world’s most spectacular lakes. Nestled into a U-shaped valley of dense forests and majestic peaks, and fed by snowpack and glaciers, the reservoir, named Blue Lake for its deep blue hues, holds trillions of gallons of water so pure it requires no treatment. The city’s tiny population—fewer than 10,000 people spread across 5,000 square miles—makes this an embarrassment of riches. Every year, as countries around the world struggle to meet the water needs of their citizens, 6.2 billion gallons of Sitka’s reserves go unused. That could soon change. In a few months, if all goes according to plan, 80 million gallons of Blue Lake water will be siphoned into the kind of tankers normally reserved for oil—and shipped to a bulk bottling facility near Mumbai. From there it will be dispersed among several drought-plagued cities throughout the Middle East. The project is the brainchild of two American companies. One, True Alaska Bottling, has purchased the rights to transfer 3 billion gallons of water a year from Sitka’s bountiful reserves. The other, S2C Global, is building the water-processing facility in India. If the companies succeed, they will have brought what Sitka hopes will be a $90 million industry to their city, not to mention a solution to one of the world’s most pressing climate conundrums. They will also have turned life’s most essential molecule into a global commodity. The transfer of water is nothing new. New York City is supplied by a web of tunnels and pipes that stretch 125 miles north into the Catskills Mountains; Southern California gets its water from the Sierra Nevada Mountains and the Colorado River Basin, which are hundreds of miles to the north and west, respectively. The distance between Alaska and India is much farther, to be sure. But it’s not the distance that worries critics. It’s the transfer of so much water from public hands to private ones. “Water has been a public resource under public domain for more than 2,000 years,” says James Olson, an attorney who specializes in water rights. “Ceding it to private entities feels both morally wrong and dangerous.” Everyone agrees that we are in the midst of a global freshwater crisis. Around the world, rivers, lakes, and aquifers are dwindling faster than Mother Nature can possibly replenish them; industrial and household chemicals are rapidly polluting what’s left...more

For a different view on water markets, visit the website of the Property and Environment Research Center.