There’s a major disconnect in the energy industry, and it will be the downfall of the clean energy movement.
Okay, dramatic, but not untrue.
You see, there are two distinct markets that most people don’t consider to be connected at all, and that’s causing problems across the board.
But there’s no denying it any longer: water and energy are 100% interdependent.
And since we’re dependent on both of them, it’s high time we started giving this relationship some attention.
The Nexus Situation
Without water, there is no energy. And without energy, there is no water.
First of all, the energy market we have today wouldn’t be in its current state without a steady supply of water.
Water is not only a direct form of energy — hydropower is the largest renewable energy source in the world — but it also supports all other forms of energy production.
Fossil fuel and nuclear reactors can’t run without a way to cool down, since both produce a lot of heat.
Without a coolant like water, plants could burst into flame, or worse, into a nuclear meltdown. Yikes!
The Department of Energy’s report on the water-energy nexus notes that thermoelectric energy generation like this is nearly 20% more water-intensive than the entire agriculture industry!
And that’s just in making the energy; we use plenty of water before even getting to that point.
For instance, oil production can consume hundreds gallons of water per barrel of crude, including what’s used in enhanced oil recovery methods, hydraulic fracturing, and transportation through pipelines.
But here’s the catch: we wouldn’t have as much water as we do today — still not enough, mind you — without the wide range of energy production methods we’ve created.
We use energy to not only harvest fresh water but also treat wastewater and desalinate saltwater. It also has to be transported, then heated or cooled when it gets to your home, which uses even more energy.
So water begets energy, which begets more water.
This wouldn’t be an issue at all… if we weren’t running out of usable, clean H2O.
Large parts of the U.S. are facing droughts or having to drink water from lead-leeching pipes. It’s more than just a health hazard at this point, and it’s not even limited to just this country.
Our water-intensive energy production methods are using up global supplies quicker than we can replace them, even with energy-intensive water production bringing up the rear.
One obvious solution is to stop using so much of it to make energy. Letting up on the fossil fuels would surely cut down the waste, right?
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
Clean Energy’s Water Crisis
It’s true: solar and wind use the least water of any other kind of energy production method.
They are also among the least efficient when it comes to actually producing energy.
Even the most efficient solar and wind technologies take up a lot of space, and in return produce not a lot of electricity for use. So it won’t be as easy as shutting down our drills and putting up more wind turbines.
Moreover, it’s not just fossil fuels that are the problem.
Even today’s clean energy processes take up their own share of water.
Biomass is the biggest consumer of water compared to other energy production methods. The process of production and use can consume thousands of gallons of water per unit of energy produced. Corn- and soy-based ethanols are among the biggest culprits.
Hydropower itself uses up a decent amount of water, too.
The damming of a river can leave it stagnant on one side, which has the unfortunate effect of leaving more water to evaporate. What’s more, running the water through machinery can also change the temperature dramatically, leading to big changes in the local ecosystem.
And nuclear, the most efficient clean energy we have, uses more water than both coal and natural gas plants to cool back down.
So let’s recap. We are:
- Already short on fresh water
- Using that water to produce the energy we need
- Using more energy to produce the water that we need
- Unable to slow down one side or the other
- Doomed. Facing the investment opportunity of a lifetime.
All About Balance
The world is pushing for clean energy across the board. We’re also looking to improve the conditions of our water industry, from new desalination plants to updated pipelines.
Both industries are finally starting to gain some traction, which makes investing as soon as possible all the more important.
It’s just common sense: life as we know it can’t function without energy, and life in general can’t function without water. They’re not the next big fad, but two things that we can’t live without!
The only caveat is that we can’t just focus on one. Both need ongoing investments if we’re going to keep the electricity and the water running.
More importantly, with something this imperative to the whole world, investments in either industry are set to pay off in spades.
Until next time,
Megan Dailey
Energy and Capital
