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Peak Oil, Peak Water?
Peak Oil, Peak Water?
July 10, 2009
Originally published in Real Clear Markets
Watering the lawn in the summer can be expensive. And that might be
a good reason to consider alternative landscaping. But it you like the
lawn and are willing to pay for the water, should you worry about
"water waste" and the environment? Greens say yes. But their arguments
don't hold water.
According to the blog "Treehugger," the world is suffering from
a "peak water crisis," which implies that like oil, we could eventually
run out of water. This term has been be used in energy debates since
the 1950s. Roughly speaking, oil production will hit a peak level and
then decline until exhausted.
Framing the water issue in such a dire light is creative, but it is
nevertheless false. Consider the fact that water covers 70-75 percent
of the planet!
But more importantly, water and oil are two very different
resources. Peak oil is an issue because it takes millions of years for
oil to form, and thus for human purposes, is non-renewable. In
contrast, water is renewable and is replenished via precipitation.
Think of it like this: there is no practical way for humans to
reduce consumption of oil to a point where it can naturally replenish
itself. Even if oil consumption were cut in half, peak oil would be a
reality, perhaps a generation or two later than the current prediction.
However, it is possible to decrease water consumption to a level where
it will replenish even where it is in short supply.
The second area in which water and oil differ is in quantity. Peter
Gleick of the Pacific Institute makes the important distinction between
resources being "literally" and "practically" limited. The quantity of
water and oil are both "literally" limited. Oil is practically limited,
whereas water is practically unlimited as worldwide supplies are
By Glick's estimates, humans worldwide use approximately one
hundredth of one percent of the world's water. This figure includes
salt water, but that is not to say commercial scale desalination will
never happen. The water exists; it is just a matter of making it
feasible to use.
The third and final distinction between water and oil is whether
they are consumed. Oil can only be consumed once. On the other hand,
water is used for many non-consumptive purposes whereby most of it
simply returns to its source: industrial cooling, flushing, washing,
and recreational usage.
Some uses of water classified as consumptive, which involves
incorporation into a product or evaporation. Such uses include
irrigation because water is consumed by plants. But even in that case,
irrigation returns anywhere from 20-60 percent of water back into the
natural cycle immediately, according to the U.S. Geological Survey. And
even the consumed portion eventually does return to the environment
further down the line as rain or treated waste water.
This is not to say that there aren't any existing problems related
to water. Over 1.1 billion people worldwide do not have access to clean
drinking water, and some communities fight over limited water resources
available to a particular area.
Accordingly, use of such water supplies requires management, which
is what market pricing provides. Where water supplies are low, prices
would naturally go up to promote conservation. But if supplies are
plentiful and prices are low, there is no dire need to "save" the
resource. In that case, if you can afford it and want to-water the lawn!
Problems emerge mostly where government mismanagement prevents the
development of private water markets. Water is either a government
resource that is not priced properly or the water is essentially owned
by no one.
In the first case, under-pricing can encourage users to over
consume, producing shortages. In many cases, such shortages result when
the government- subsidizes use for politically organized groups like
farmers at the expense of everyone else. On the second case, a "common
water" resource that is not owned, protected, and managed by anyone
becomes overused and polluted.
The solution involves establishing water as an owned
resource-protected by its owners from pollution-that is sold in private
markets with market pricing. Then water will flow where it is most
needed and prices will promote conservation where most needed.
Peak oil is a legitimate issue, whereas "peak water" is nothing but
an attempt to raise alarm about an issue that does not even exist. To
frame the issue of water in the same light as oil is nothing but peak