New Quaker Notebook

The following story about an entrepreneur and his commodification of water is one that we can expect to see more of. And we won't like the results.

There Will Be Water
BusinessWeek
June 12, 2008

.... If water is the new oil, T. Boone Pickens is a modern-day John D. Rockefeller. Pickens owns more water than any other individual in the US and is looking to control even more. He hopes to sell the water he already has, some 65 billion gallons a year, to Dallas, transporting it over 250 miles, 11 counties, and about 650 tracts of private property. The electricity generated by an enormous wind farm he is setting up in the Panhandle would also flow along that corridor. As far as Pickens is concerned, he could be selling wind, water, natural gas, or uranium; it's all a matter of supply and demand. "There are people who will buy the water when they need it. And the people who have the water want to sell it. That's the blood, guts, and feathers of the thing," he says.

In the coming decades, as growing numbers of people live in urban areas and climate change makes some regions much more prone to drought, water—or what many are calling "blue gold"—will become an increasingly scarce resource. By 2030 nearly half of the world's population will inhabit areas with severe water stress, according to the Organization for Economic Cooperation & Development. Pickens understands that. And while Texas is unusually lax in its laws about pumping groundwater, the rush to control water resources is gathering speed around the planet. In Australia, now in the sixth year of a drought, brokers in urban areas are buying up water rights from farmers. Rural residents around the US are trying to sell their land (and water) to multi-national water bottlers like Nestlé (BW—Apr. 14). Companies that use large quantities of the precious resource to run their businesses are seeking to lock up water supplies. One is Royal Dutch Shell, which is buying groundwater rights in Colorado as it prepares to drill for oil in the shale deposits there.

Into this environment comes Pickens, who made a good living for a long time extracting oil and gas and now, at 80, believes the era of fossil fuel is over. So far he has spent $100 million and eight years on his project and still has not found any city in Texas willing to buy his water. But like many others, Pickens believes there's a fortune to be made in slaking the thirst of a rapidly growing population. If he pumps as much as he can, he could sell about $165 million worth of water to Dallas each year. "The idea that water can be sold for private gain is still considered unconscionable by many," says James M. Olson, one of America's preeminent attorneys specializing in water- and land-use law. "But the scarcity of water and the extraordinary profits that can be made may overwhelm ordinary public sensibilities."

[ READ MORE » ]

In real Capitalism, where everything is a commodity (something to be bought or sold), it all looks good on paper, especially in the profits column. But not everything ought to be a commodity. Or perhaps I should say: It ought to be that not everything is a commodity.

Capitalism Is Thirsty