The 21st Century’s New Oil

The 21st Century’s New Oil

In a recently released research report, Goldman Sachs describes water as “The Petroleum For The Next Century”. In 3rd World Countries, millions of people are dying every year from water shortages and contamination.

Goldman’s report goes on to state:

“The demand for water—the life-sustaining natural resource that has no substitute—continues to escalate at an unsustainable rate, fueled by population growth and industrial expansion. The world’s fresh water supply is also shrinking due to pollution, draining of underground aquifers, and climate change. As a result, we expect to see a sustained focus and investment in the global water sector for years to come.”

Just to give you an idea of the magnitude of the problem, here’s a global map depicting the areas of the greatest shortages around the world:

As you can see, much of the modernized world does not suffer from water shortages. However, look at the purple areas of Africa, Central America, South America, and parts of Southeast Asia. There are critical water shortages described as “Economic”- meaning their economies cannot function properly due to lack of water.

So- how pervasive is this problem? Glad you asked.

The World Health Organization estimates a lack of safe drinking water affects 1.1 billion people globally. One of every six people on Earth lacks available safe drinking water.

The Sub-Saharan portion of the African continent has the largest number of nations and the largest populations afflicted with water stress. The lack of safe water affects health, agriculture, women, education, and mostly children. The fight over water is considered by many to be the new catalyst for armed conflict in the 21st Century.

So, how’s the outlook for the future? If the last century gives us any clue as to what we can anticipate going forward in this century, hyper critical water shortages lay in our future.

As you can easily from this UN prepared chart- competition for water vs human consumption grew in the 20th Century far faster than the global population. As the US entered the Industrial Revolution, water was required in disproportionately greater quantities for a myriad of uses.

The 21st Century is expected to be much the same. However, far larger populations- China, India, and Africa- are expected to modernize over the coming years, and related water use is expected to grow exponentially.

In fact, the Pacific Institute forecasts global water demand will grow by 40% in the next 10 years. That’s a mind boggling statistic, and one not to be taken lightly.

If you’re a growth oriented investor, you cannot ignore this largely under followed sector.

The number of young, entrepreneurial companies that grow and prosper as new technologies and techniques are adopted could rival the growth in the oil sector from 1950 to 2000. After all, one doesn’t have to consume oil to survive.

You can even live for about 28 days without food. However, you can only live about 72 hours without any water. H2O is the one resource humans must have on a daily basis to sustain life.

I’m going to be scouring the microcap world for ideas in this sector.

Stand by to make some money if you have the vision and patience. More to come.

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