Energy and water are linked in many ways. Most energy production requires huge amounts of fresh water, while the consumption of water for domestic and agricultural demands uses large amounts of energy. Future water availability, whether from long distance transport or desalination, will require even greater amounts of energy.
Water scarcity, especially in the U.S. west of the Mississippi River, as well as in the Southeast, has become a growing source of concern and tension. Consequently, water availability is becoming an important consideration for energy projects in certain regions. The potential for the demand for water to outstrip available supply in these regions is already beginning to have a material impact on energy economics.
Despite water being of vital importance for future energy choices, water is rarely addressed in energy policy discussions.
Should water be part of the energy policy debate, and if so what are the right tools to address the water-energy challenges? Should water be a regionally tradable commodity with a price? In the absence of water policy can the markets solve these water-energy challenges naturally without expensive disruptions?