Water is the new oil

So what will be the next hot commodity?
Goldman Sachs, the investment bank that coined the term Bric (Brazil, Russia, India and China) and was talking about $100 oil when everyone else was stuck at $40, thinks it has found the answer: water.
It has called the commodity the “petroleum for the next century” and says it has been grossly undervalued for years. The story behind it is the same for every other commodity: demand is soaring while supply is tight.

In the United States, water demand has tripled in the past 30 years, while the population has grown just 50%. Globally, water consumption is doubling every 20 years, more than twice population growth.
Given current trends, it is estimated that by 2025 about a third of the world will not have access to adequate drinking water.

On the flip side, supply is fixed. Only 2.5% of all water is fit for human consumption and around two-thirds of that is locked away in icecaps and glaciers. That percentage is not about to change.

Even if there were enough to go round, piping it to those who need it is getting harder. America desperately needs to upgrade its water infrastructure, a job that will cost between $300 billion (£153 billion) and $1 trillion (two-thirds of which is for distribution pipes and pumps).

An estimated 60% of America’s water main pipes will be classified as substandard by 2020.

And the water supplied is deteriorating. American companies test for nearly 100 known contaminants, and a disturbing number of new compounds are being found - a glass of water could contain aspirin, caffeine, and even animal growth hormones from farm-water run-off.

One solution to the global problem is desalination, which is already popular in the Middle East. It is an expensive solution - 100m gallons of seawater produce just 50m gallons of desalinated water - though costs have fallen three to four times in the past 30 years.

The problem for investors is that the world leader in water and desalination, American giant GE, gets only 2% of its revenues from this area, so it hardly offers pure exposure.

Goldman tips smaller companies such as filtration specialists Clarcor and Pentair. They should benefit from the recent backlash against bottled water and are likely takeover targets as the $425 billion industry consolidates.

by Kathryn Cooper

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Green energy 'revolution' needed

A leading energy body is calling for a $45 trillion (£23 trillion) green revolution to tackle global warming.

The International Energy Agency (IEA) said nations must spend 1% of annual economic output on new technology to halve carbon dioxide emissions by 2050.

It warned that without action, CO2 emissions would rise by 130% and oil demand would jump by 70% by the middle of the century.

But the IEA added that meeting the new target would be a formidable challenge.

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Drivers pay price of great diesel 'rip-off '

Millions of drivers are being 'ripped-off' by oil firms which have not passed on a 10% drop in diesel prices.
The AA said the savings should be worth around 7p a litre at the pumps. And it warned that it will call on the Government to investigate if diesel prices continue to climb.

Energy experts Platts said the wholesale price has significantly fallen in the past fortnight.

On May 23 - the day after oil hit a record $135 a barrel - diesel was selling at $1,342 a ton, but yesterday the price had dropped to $1,203. On May 23 the average cost of a litre of diesel was 126.7p per litre. Yesterday it stood at 129.9p.

Andrew Bonnington, a spokesman for Platts, said: 'The wholesale cost of diesel cargo delivered into the UK has fallen by 10% in two weeks.' The union Unite accused Shell of 'profiteering' after the company announced record profits of nearly £ 14billion in January.

Shell denied the claim. The AA said disquiet over rising prices would prompt anger from millions of diesel car drivers if the drop in price was not passed on.

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You can blame the European power giants for sky-high bills

Foreign power firms are buying cheap North Sea gas from Britain in the summer and putting it into vast storage facilities on the Continent.

They then refuse to pipe it back to the UK when it is needed in the winter, effectively rationing supplies and pushing up prices.

The UK is vulnerable to these strong-arm tactics because we have such tiny gas holding facilities that we cannot store cheap North Sea gas in the summer for use in the winter.

There is enough storage to supply the country with gas for only 13 days, compared with 99 days in Germany and 122 in France.

Yesterday large-scale gas users warned the Commons Business and Enterprise Select Committee, which is investigating the reasons behind the price rises, that Britain's energy needs were at the mercy of foreign suppliers.

Jeremy Nicholson of the Energy Intensive Users Group told the MPs that foreign energy companies are failing to sell gas to the UK when we need it.

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