Delegates at the ‘Singapore International Water Week’ conference seemed to agree a few days ago that the world water market would be bigger than the oil market by 2030. This annual meeting brings together ministers, mayors, top government officials, global water industry leaders, heads of international organisations, leading researchers and practitioners to consider pressing water governance, technology and business issues. Many felt, however, that massive challenges faced the business of moving the critical commodity in the future.
Brokers CLSA Asia Pacific Markets estimates that global water demand will reach 6.9 billion cubic m/year by 2030, i.e. 119 million barrels a day. This statistic translates into a staggering 53% increase over current levels. At the same time, brokers quote the US Energy Information Administration recent estimate that the demand for oil will be at 107 million b/d of consumption by 2030, an increase of 24% over today. The water demand, delegates were told, will be ‘significantly more than that for oil’
CLSA Director Ed Slade feels that the biggest opportunities in the water market would come from investment in infrastructure: the building of treatment plants, reservoirs and pipelines. Trading in water may be a new growth business, particularly in Asia, a region that will continue to develop a huge thirst for both oil and water. CLSA estimates a growth in demand of more than 60% in this time in Asia, and says that this spurt will come largely from the agricultural sector and strain the infrastructure of many countries in the region. Some of these countries are not expected to be able to meet the demand of their booming economies or populations, and will have to buy water from elsewhere.
Traders said that the present market for trading in water is minuscule. “Water is not being traded. There are some attempts at trading water rights,” said Sam Ong of Hyflux, a company that, under the previous name of Hydrochem, was set up for trading. Today, Hyflux focuses on developing water treatment, reclamation and infrastructure to deal with water demand. Hyflux mooted, at the conference, the idea of “water footprints,” similar to the carbon trading regimes that have been developed around the world. A market in water footprints, which could provide similar cash incentives to reduce water consumption “should be part and parcel of what we do,” said Ong.
Although the conference did not talk specifically about water tankers that may be part of the infrastructure requirements of the future, analysts point out that the process may have already begun many years ago. For example, Australia had a longstanding research programme to build ships using wind and solar energy to transport water from Tasmanian dams to parched mainland cities. And just two years ago, in the scorching European summer of 2008, the tanker ‘Sichem Defender’ was contracted to carry six shiploads of water- 23 million litres of it each trip- for three months into Barcelona in drought hit Spain, at a cost of €22m.
The water tanker may well be the ship of the future