You live in a remote village with few resources or job opportunities. Life is tough – so tough, in fact, that water is considered as precious as gold. If you want to secure fresh drinking water for you and your family, you need to walk ten miles to the nearest community well. Your government provides public water, but every time you turn on the sink, rusty water flows from the nozzle. You go to use the bathroom, and the toilet is infested with worms, but sadly, that is as close as it comes to fresh water.
This is a snapshot of daily life for poor villagers who live in countries where resources, including drinkable water, are few and far between.
And the world is expected to reach 9 billion people by 2050!
That is why water desalination is important – not only for the nuclear and energy industries, but to preserve human life around the world. People die every day from water-borne diseases like diarrhea and dysentery.
Meanwhile, the oil industry will need more water as fracking operations continue to grow across North America. Desalination technology will cut down on the amount of wastewater at drilling locales and could save companies money in recycling water for fracking operations.
Desalination capacity is expected to spike 50 this year over 2012. A 30 percent improvement in energy efficiency is expected to contribute to the rise, according to Bloomberg.
Desalinated water is a vital asset in securing higher efficiency rates in older wells, and this rise in capacity can be great news for older oil fields around the world.
You’re going to see plenty of growth within the next five years as more nations invest in water purification.
Nations like China, India, Chile, and Mexico will be doubling capacity for water desalination, Bloomberg reports. This is good news for the energy industry, and it could be a milestone in expanding access to fresh water in these countries.
But we need to see more growth in parts of Africa and Central Asia, where water sanitation is a major problem.
Saudi Arabia currently has the largest desalination infrastructure, followed by the United Arab Emirates, Kuwait, Algeria, and Spain.
It makes sense that Middle Eastern countries invest heavily in such technology, since water is so scarce in the region. These countries have been fighting for water rights for decades.
But I also see desalination taking off in the future for the bottled water industry.
Thanks to evolving technology, desalination technology is becoming easier to use. Water companies may not have to extract precious water resources from struggling villages and environmentally sensitive reservoirs.
International Desalination
Companies both big and small are investing in desalination technology around the world.
Let’s start with the Sorek Desalination Plant by Israel Desalination Enterprises Technologies. This new plant, which began operations this summer, will provide 7 million gallons of drinkable water to Israeli citizens every hour, and this is not even at full capacity. When it comes fully online, it will become the largest desalination plant in the world – taking water from the Mediterranean Sea and turning it into a viable source of usable water for its citizens, as JTA reports.
Another country following the same path is India – planning to spend $1.8 billion by March of 2014 in improving drinkable water for poor villagers. 200,000 children, ages four and under, die each year from non-drinkable water in that country alone. Five percent of the funds will go toward sanitizing contaminated water, and 15 percent will be used to provide upkeep for existing infrastructure.
And it seems everyone is going after the title of largest desalination plant, since corporate giant GE (NYSE: GE) played a vast role in the construction of the Victorian Desalination Plant in Australia – considered one of the largest reverse osmosis plants in the world. This plant is expected provide a steady flow of drinking water to the city of Melbourne and local communities.
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Desalination in the U.S.
While desalination technology can provide a huge benefit to poorer communities, it will help developed nations as well – especially across drought-prone areas around the United States.
It can be a useful asset in a region like South Texas, which is a primary hub of the shale oil boom but also prone to water shortages.
The region requires millions of gallons of water for fracking operations. We haven’t seen major problems in the region so far, but water desalination can be a useful tool if energy companies happen to encounter a shortage in the future.
And the U.S. could certainly benefit from the sale of Siemens’ (NYSE: SI) water-technology division to New York-based equity firm AEA Investors. There are few details about the deal at this point, but the division is expected to be valued at $800 million.
AEA has specialties in consumer products and chemicals, and the deal seems to be a perfect match for the firm, as it will bring on a unit specializing in water purification and membrane filtration.
All of these new ventures sound exciting, but this is just the foundation for what is coming in the future, as developing nations modernize and urbanization spreads.
This industry will become vital in the next few years as North America continues to engage in shale drilling and more countries like China and Poland join the shale craze.
And there are plenty of desalination hotspots across South America and especially Africa, where farmers suffer from crop shortages and dying livestock as a result of droughts and a lack of irrigation pipelines.
Companies investing in desalination can be a good way to expand your investment portfolio, while also playing a role in benefiting local communities.
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