It’s been a “water week” so far here at Green Chip Stocks.

The theme kicked off on Monday, which the United Nations declared World Water Day. The UN says that more than 1 billion people are dependent on water resources that are hard to access, disease-ridden, or simply unavailable.

The United Nations Environment Program’s “Sick Water” report put the result of that reliance on bad water in stark terms, pointing out that more people die each year from polluted water than from war or any other form of violence; over half of the hospital beds on earth are occupied by people who could die because the most basic element of life has been compromised.

Even though we didn’t hear much about World Water Day in the U.S. press, as health care reform took every headline, Nick Hodge was invited to discuss water investments and give his five top water-related stocks on Canada’s Business News Network Monday. (I’ve linked that video for you at the bottom of this article so you can hear all about those plays for yourself.)

Then, Tuesday evening, I sat in with a small group of investors, civil servants, and water entrepreneurs from Israel and the U.S. at the American Association for the Advancement of Science in Washington, D.C. as they explored the best ways for Middle Eastern companies to move their own hydro-tech into the American market.

It’s like getting a piece of the automobile market back in 1908.

And not just Ford either. We’re talking about the market as a whole. Oil, rubber tires, road construction… the whole nine yards!

Click here to learn more.

---

In its Mediterranean location, Israel is a microcosm of the global supply and demand situation in 2010, and it’s also a hotbed of innovation.

But where does the rubber meet the road — or the water hit the ground — when it comes to growing profitable Israeli water-related investments that you can access?

That innovation to implementation link, or i2i, was the crux of our discussion, and I took the opportunity to follow up on years’ worth of research with the experts themselves.

Here’s what I learned…

I’ve Seen This Movie Before!

As you move from the southern Negev Desert to the north near the Sea of Galilee (which is actually a lake), yearly rainfall levels more than triple from a maximum of 200 mm/year to about 700 mm. In the middle, Israel looks pretty much like California, with a semi-arid coastal plain giving way to high country around Jerusalem and forbidding terrain closer to the Dead Sea.

So since the birth of the state in 1948, handling water resources has been job one for Israeli engineers. To make the desert bloom, Netafim — a company developed on a kibbutz cooperative agricultural settlement — became the world leader in drip irrigation. Drip irrigation basically entails poking holes in a hose very close to the plants you’re watering, instead of spraying a large area and suffering major losses to evaporation in the hot Middle Eastern sun.

One of the panelists Tuesday was Booky Oren, the former head of Israeli water utility Mekorot and current President and CEO of water technology company Miya.

(Now, if you’ve ever heard an Israeli give a presentation, you may know that they like speaking idiomatic English. Listen to the Prime Minister, Benjamin (Bibi) Netanyahu sometime. His nearly flawless American accent comes from years spent in the Philadelphia area during his youth and then at Harvard and MIT, and when Bibi throws in expressions like “not throwing out the baby with the bathwater,” it’s like WD-40 for getting his message into Anglophone ears.)

Booky is also a fan of colorful language. At a New York cleantech conference back in 2007, I first heard him introduced as Israel’s “water guru,” on account of his experience with several water companies of all sizes. He dove right in to talk about the state of water supply and demand in the U.S., where important freshwater resources like the vast Ogallala Aquifer is depleted, parching parts of my home state of Kansas.

I remember how Booky began his talk a few years ago with an idiom. “We have a saying in Hebrew: Raiti et haSeret haze.”

“I’ve seen this movie before,” he quickly translated. Whichever language launched the expression first, the sabra water guru was right on… Israel’s experience comes in an area the size of New Jersey where the population has multiplied 25 times in two generations (including Palestinians).

Do you think the rainfall has kept up? Not by a long shot.

Yet, Israel’s net water consumption has remained steady since the 1960s due to early advances.

I know Kansans now using drip irrigation to grow grapes atop the drying Ogallala. The idea is remarkable for its simplicity, but what is more remarkable to me is that — having seen the movie before — Israeli water technology companies haven’t been able to write a script for their own success in the stock market.

After all, Israeli companies are second only to Canadian and American firms in the number of Wall Street share listings they have. China is getting up there, but Israeli life-science stocks like Teva Pharmaceuticals (NASDAQ: TEVA) and even car-location system maker Ituran (NASDAQ: ITRN) have built millions and billions of dollars in market cap on their ideas since the 90s.

And Israeli tech wiz Shai Agassi is the golden boy of the electric vehicle world with his Better Place startup plan to put millions of EVs on the road around the world in the next several years.

Booky said a few years ago that water-tech should be Israel’s top export sector in a decade. Three years closer, I wasn’t hearing much progress toward that goal on Tuesday.

“I’ve seen this movie before… ” I thought. Frankly, I expected to see a listed Israeli water-tech company on the NASDAQ by now.

So I asked Booky, “What happened?”

To get to the answer, we had to define what water technology really means…

One double-digit gain per month…

Every Month…

Guaranteed!

Thanks to Obama’s Alternative Energy Funding, we’re now guaranteeing

no less than one double-digit gain per month.

Click here before the next one is released!

---

Defining Water Technology for Success

From ocean, lake, or pond to pump and then spigot, through desalination, filtration, or even co-generation that gives energy and purified water at the same time, “water-tech” can touch on several sectors.

Minister Ohad Cohen, the commercial attaché of the Embassy of Israel in Washington, observed that sensing technology similar to smart grid cleantech we’ve discussed extensively in Green Chip belongs in the realm of telecommunications. As utilities send and receive data on water usage, they can minimize wasted pumping power.

California currently devotes about 19% of its statewide energy consumption to water infrastructure, and data systems to sync water and power are worth millions to Golden State utilities.

That energy-water nexus is where I think Israeli water-tech companies will rise to prominence, but as Booky Oren told me, they’re looking for a balanced approach between decades worth of track record in Israel and American utilities’ reluctance to deal with international firms when it comes to delivering a resource as intensely local as water.

It could be a cultural thing, where Israelis came on too strong a few years ago without the links and comfort to gain customers in each individual market within the U.S.

Former Virginia State Rep. Bob Hull, the third panelist at the AAAS meeting, spoke of helping Israel’s Environmental Protection Company (EPC) to forge connections here at the state and county level. State health departments are now taking control of septic tank and well-water system standards, which would at least mean Israeli market entrants will have to convince 50 capital offices instead of countless counties and municipalities.

As understanding of smart-grid technology spreads nationwide, we should see openness to water-related sensing technologies rise as well. Then there’s the matter of onside processing like reverse osmosis and aerobic treatment systems, and that’s where utilities must have a sense that the water itself will be in responsible hands.

I don’t need to tell you how dire things can get when water is bad — you can read the UNEP Sick Water report for yourself.

The good news is that this challenge is an opportunity, and the energy-water nexus gives us a springboard to jump into some investments.

In his interview with Business News Network, Nick highlights exchange-traded funds like the two PowerShares ETFs, its Water Resources Portfolio fund (NYSE: PHO) and Global Water Portfolio (NYSE: PIO).

PIO leads PHO over the past year, with a return of nearly 58% compared to just about 43%.

You can watch Nick’s full interview here on our media page and learn about five of his top water stock picks right away:

Investing in Water – Nick Hodge on BNN

And for more on the international money flow into cleantech and water stocks we’re already monitoring in the Alternative Energy Speculator global portfolio, check out this report we’ve prepared:

What Luck and Good Ears Can Get You

From innovation to implementation (i2i), I want to add another “i” — and that’s for investment.

Regards,

Nairobi — Wallace Kantai – www.AllAfrica.com 23 November 2009

There is a very useful principle in economics called the diamond-water paradox.

It captures the oddity of the relative value placed on diamonds (which serve no useful purpose, but are highly prized) against that of water — crucial for sustenance of life itself, but whose unit cost is usually negligible.

Normally, water is a utility that is easily available — simply by turning on the tap.

It is thus an unremarked-upon part of urban life.

Its value only becomes obvious in its scarcity, which may be why East Africans have begun thinking hard about our urban (and rural) water supplies.

East Africa is today at the forefront of global water issues, in more ways than one.

First, the raison d’etre for the regional bloc is the shared resource of Lake Victoria, which we are fond of boasting of as the world’s second largest freshwater reservoir.

However, mismanagement, unplanned use and environmental degradation have meant that cities that should have a natural water supply from such a source, such as Entebbe, Kampala and Kisumu, have unpredictable supplies.

How East Africa manages an internationally shared freshwater resource may provide very useful lessons for the rest of the world.

Second, a great deal of East Africa, especially “upper” Kenya and “upper” Uganda, is in a rapidly drying out ecological zone.

A city such as Nairobi is right at the edge of this zone, and urban expansion is colliding head-on with an ecological and climatic reality that means less easily available water.

Third, our municipal water sup-ply systems are antiquated, with most having last seen a substantial upgrade in the 1950s.

How we choose to develop our urban water systems is going to be an interesting process to watch.

I was guided through some of the intricacies of municipal water management in East Africa by Rogers Obare, GE’s territory manager for the region for water technologies, and the conversation was eye-opening.

The first is that the manner in which we manage water in East Africa is still stuck in a 50-year time-warp: a linear flow of water from riverine reservoirs, through storage dams, on to treatment plants, municipal water pipes, your and my taps, and on to waste water, which is treated and pumped back, often into the same river systems.

While this may have served us well in the past, it does have several weak points.

First, and most obvious, the rains are not co-operating.

With even mountain sources drying up, whole river systems will not be reliable enough to support a water supply.

The second issue is a technical one.

For a long time, our water treatment has relied on a chemical called aluminium sulphate (“alum” in the lingo), which is fairly efficient at removing visible contaminants from water, as well as binding on bacterial and other organic contaminants.

Long-term health effects

Used together with effective filtration, alum can ensure a good supply of potable water.

The problem with it is two-fold: It takes a long time to be effective — in practical terms, water needs to sit for a while to precipitate all the harmful bits out — and there have been concerns about the long-term health effects of using aluminium sulphate.

Many water treatment plants in the developed world have moved on to using other technology, such as reverse osmosis.

Another issue is antiquated pipes.

Many of the decades-old pipes are corroded, or so calcified that their efficiency is severely reduced.

Pipe-bursts are common and, even when pipes are not breached, their enfeebled capacity is such that a lot more effort is required to pump water through them.

Lastly, a large percentage of urban dwellers in East Africa do not have access to piped, potable water.

Part of it is a result of poor urban planning, as there is simply no way of getting water through the warrens of unplanned housing structures.

Cities are expanding much faster than services can be provided.

What then, is to be done?

One is a fundamental rethink of what actually constitutes our water use.

It is no mistake that Nairobi’s water supply company is called the Nairobi City Water and Sewerage Company.

While we are rightly concerned about the supply of clean water into our taps, the other side of it should also exercise our minds.

A glance at my water bill shows it to average 40 per cent of the total every month.

There is no reason why grey water (from showers, dishwashing and laundry) cannot be lightly treated and recycled into the urban supply separately and billed at a lower cost.

The other is technologies such as desalination.
Relevant Links

* Water
* Sustainable Development

Whereas these used to be prohibitively expensive, they have now become inexpensive enough and small enough that they are being deployed by hotels along the coast.

The privatisation of water supply companies — if well carried out — may also mean that efficiencies can start creeping into a hitherto stodgy industry.

Of course, it would necessitate having a strong regulator to ensure rapaciousness and illegal water harvesting does not imperil everyone’s supply.

So, while the great drought of 2009 brought home to most East African urbanites the fact that water is a scarce commodity (and may actually be worth more than diamonds to some — think pastoralists), it also means we’re now thinking about managing our water supply enough to actually start correcting 50-year-old mistakes.

South Africa has even less water than previously thought, a study has found. Scientists have warned that the country, with 98 percent of its surface water allocated for use, faces tough decisions as it becomes hotter and drier.

But the Water Resources of South Africa 2005 study, the fifth of its kind, found 4 percent less surface water than had been estimated in 1995.

“With each of the national water studies carried out since the 1950s, our estimate of the country’s total natural water resources has declined,” project director Brian Middleton said. “If we were allocating water according to the higher estimates made in previous studies, we would find that there is simply not enough water to meet our needs.”

The study, completed late last year, with its findings now being released, was commissioned in 2004 by South Africa’s Water Research Commission (WRC) “after significant consultation in the water industry”.

It was carried out by a consortium of scientific and engineering consulting firms, producing a detailed survey of surface and groundwater and water quality.

Middleton said the findings were intended as a planning tool for a wide range of users, including developers, farmers, policy-makers and municipalities. It provided localised information that would be useful, for example, for showing how much water was available and how wastewater would affect water quality.

What made the new data particularly valuable was that it integrated surface and groundwater information, Middleton said.

The study found that about 10 000 million cubic metres of groundwater was available for use every year, but that this would be 25 percent less during droughts.

Nearly 50 000 million cubic metres of surface water was available yearly.

Another study, reported in the SA Journal of Science this year, found that while 98 percent of surface water was allocated for use, 41 percent of the usable groundwater was also allocated. Also, the country had become 2 percent hotter and 6 percent drier since the 1970s and this would affect food security and hit poor people hardest.

craig.mckune@inl.co.za

* This article was originally published on page 5 of The Cape Times on September 28, 2009

What on earth is a Dunning Charge? Not simple to explain but, let me have a go.
The avaricious Municipality of Cape Town has invented a new charge levied against unsuspecting property owners. If for any reason you have not paid your rates bill, these kind boys and girls will send you a letter threatening to cut your water supply and pre-paid electricity meter. For this there is a charge of some eighty six Rand. But wait there‘s more! Should you as a good citizen pay the arrears, a further “Dunning “charge will be levied against you, which is the same value of eighty six Rand again to lift the threat of the cut off. This too is called a “dunning charge”
Thus at their pleasure you will be levied on your next rates bill for twice eighty six Rand.
All this is in spite of the fact that it is illegal to cut off our pre-paid electricity. What is more these boys and girls say that it does not matter that you may be using less than the free six kilolitre allocation of water they are still entitled to cut off your water! If you us say 5 kilolitres of water in any one month, your water and sewerage bill will be R0.00.
Nowhere in their account structure can you possibly read about a “dunning charge”, so if you want to hear how bad these people have been and their illegal acts you have to call their helpful helpline to ascertain how bad you have been in not paying your rates. Continue Reading