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Vol. 1, No. 7: December 21, 2007
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A Year in Review: It has been a riveting year in the world of water trading. Drought has swept regions in the United States and Australia, as sales of water filtration technologies and products skyrocketed and bottled water sales continued to climb despite increasing criticism. 2007 saw the launch of water-based derivatives trading in Australia and the release of the US EPA's first Water Quality Trading Toolkit for Permit Writers. Congress voted to override President Bush's veto of the Water Resources Development Act of 2007 (WRDA), the first Congressional override of a veto from President Bush.
This last edition of WET for the year highlights how the business community is expressing more interest in water and, more importantly, investing in water-related enterprises and stocks. In one story, engineering and design firm Aecom Technology Corp plans to spend more than $150 million on acquisitions in the next 10 months, mostly in the water distribution market. In the US, Gov Schwarzenegger's Delta Task Force Report received heavy criticism, while the Senate considers Clean Water Act jurisdiction issues and a new partnership engenders a Nitrogen Trading Tool. In Canada, Ottawa is accused of breaking its own water laws and, down under in Australia, a water trade broker insists that water trading regulation is a must while others want to see water transfer fees paid by irrigation companies.
The Ecosystem Marketplace thanks you for your interest and support of WET in 2007, and looks forward to exploring water trading issues with you again next year!
Read on for more news water-related news and developments.
— The Ecosystem Marketplace Team
For questions or comments, please contact newsletter@ecosystemmarketplace.com
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INTERNATIONAL
Forbes: Innovation: Water's Life Saver
As the world frets about oil, its scarcity and sky-rocketing price, some investors are thinking one step ahead; focusing on a natural resource most people take for granted: water. According to Forbes, water remains among the cheapest commodities but is essential to all living things. As a critical component in virtually every manufacturing and processing plant, water is also necessary for economic sustainability and growth. Plus, unlike any other commodity, water has no substitute regardless of price.
– Read the Forbes article
The Best Stocks Right Now
Despite a rough-and-tumble two months for the market, water-related entities are gaining steam. As world populations continue to grow and emerging market economies improve, clean water infrastructure will need to be built to distribute the life-giving liquid to remote and populous cities alike. The PowerShares Water Resources exchange-traded fund looks to capitalize on this phenomenon by investing in companies "that focus on the provision of potable water, the treatment of water, and the technology and services that are directly related to water consumption." If it has anything to do with water, it's fair game."
– Read the Motley Fool article
Aecom Aims at Water Market with $150 Million to Spend
Engineering and design firm Aecom Technology Corp (ACM.N: Quote, Profile, Research) plans to spend more than $150 million on acquisitions in the next 10 months, mostly in the water distribution market, as it looks to expand its presence globally. Aecom, which went public in May, expects to target up to nine companies in fiscal 2008 and strike a balance in revenue coming from acquisitions and organic growth, Chief Financial Officer Michael Burke said in a telephone interview.
– Read the Reuter article
NORTH AMERICA
US Policies and Politics: Westlands Water District Critiques Gov Schwarzenegger's Delta Task Force Report
The Westlands Water District General Manager, Tom Birmingham, issued a press release that critiques the Delta Vision report, which was generated by the Delta Blue Ribbon Task Force. The Task Force was created by an executive order from CA Governor Arnold Schwarzenegger to address problems arising from the dependency of California on solving complex problems associated with the Sacramento – San Joaquin River Delta and supplying water to fuel the state's economy. The press release states that the Vision erects several barriers to solving many of the problems surrounding the Delta and the state's water supply, the primary barrier being that the state may have to reduce its reliance on water from tributaries to the Delta.
– Read the Business Wire Press Release
Senate Panel Considers Clean Water Act Wetlands Jurisdiction
On December 13, the Senate Environment and Public Works Committee held its first hearing on the impact of recent Supreme Court decisions regarding the jurisdictional scope of the Clean Water Act on the nation's wetlands. Committee chair Sen. Barbara Boxer indicated that more hearings will be held next year on legislation that would remove "navigable" from the Act's references to 'waters of the U.S.' and try to clarify congressional intent regarding the Act's jurisdictional scope. In the 2001 SWANCC decision, the Supreme Court said the presence of migratory birds could not be used to claim federal jurisdiction over isolated, non-navigable, intrastate bodies of water and instructed the corps to define the federal scope of wetlands regulations. In related news, the EPA and the U.S. Army Corps of Engineers (Corps) announced on Nov. 28 that they are extending the public comment period for the interagency Joint Rapanos Guidance on the scope of the agencies' jurisdiction under the Clean Water Act.
– Read the Water Environment Federation article
– Read the Senate Committee Transcript
– The Federal Register notice
NRCS/EPA Nitrogen Trading Tool: Partnering with USDA/NRCS to Increase Farmer Participation in Water Quality Trading
The USDA has begun researching the use of market driven mechanisms to give farmers economic incentives to adopt more environmentally friendly practices, according to the EPA Water Trading Newsletter. In October 2006, USDA-NRCS and EPA Office of Water signed a Partnership Agreement to collaborate on encouraging farmers to participate in Water Quality Trading (WQT) programs.
One of the barriers, identified by both USDA and EPA, to farmer participation in WQT programs is the inability of farmers to readily estimate changes in Nitrogen (N) load, and therefore potential returns from selling credits. This is critical information for farmers to
know when considering business and land use decisions. The NRCS has therefore developed a prototype online technology tool to help farmers determine how many potential nitrogen (N) credits they can generate on their farming operation. The Nitrogen Trading Tool (NTT) allows farmers to enter geographic, agronomic and land use information to estimate baseline N loadings, and then enter land use changes and/or BMP information to calculate N load reductions.
– Read the Partnership Agreement and Principles (pdf)
Leaders in Water Conservation Recognized by EPA
Canada: Annual Federal Water Reports Tardy & Ottawa Breaks Own Law
According to reports, Canada's federal Conservative government, just like the Liberal regime before it, has violated the Canada Water Act which mandates yearly assessments of how supplies are used and maintained, the last report being from 2001-02. The mandated annual report should outline efforts across the country to protect drinking water, clean up the Great Lakes and track water use. NDP MP Peggy Nash introduced a motion last February calling for a national water strategy including federal standards, a ban on bulk water exports and Canada's signature on a United Nations covenant declaring clean water a basic human right. She also wants to ensure water is excluded from any current and future trade agreements.
– Read the Canadian Press article
INTERNATIONAL NEWS
Australia: Water transfer fees should be paid by irrigation companies
Water companies assert that billing them for water transfer fees would be one step towards reducing the turnaround time in processing water trades. Irrigation companies had lodged their recommendations on streamlining water trade processes with the Federal Government last week. Included in recommendations aimed at slashing red tape, which has seen trade turnaround times drag out into months, is a suggestion that transfer fees be billed direct to irrigation companies which can then pass them back to irrigators.
Bondi Group secretary and Coleambally Irrigation Cooperative chief executive, Murray Smith, said that "It's silly that a $150 fee can hold up a trade worth half a million," he said.
– Read the North Queensland Register article
Australia: Broker Asserts Water Trading Regulation is a Must
A major online water broker in Australia, Waterfind, fully supports calls for government regulation of the industry, stating that self-regulation isn't working. Waterfind also seeks reforms to end the practice of some water authorities and private irrigation companies acting in a dual role as both market operators and regulators.
– Read the North Queensland Register article
EVENTS
EPA Federal Advisory Committee to Examine CWA Detection and Quantitation Approaches
EPA is conducting a one-day meeting of the Federal Advisory Committee on Detection and Quantification Approaches and Uses in Clean Water Act (CWA) Programs on Friday, Dec. 21 via teleconference. The teleconference is open to the public. The public may obtain the call-in number and access code from Meghan Hessenauer at Hessenauer.Meghan@epa.gov or 202-566-1040. The draft agenda is available at www.epa.gov/waterscience/methods/det.
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