The Rude Awakening
Wall Street, New York
Thursday, October 12, 2006 ------------------------- - Fire, Water and Air - sating the thirst of a thirsty
planet and its people is becoming serious stuff,
- Very little technology for very large problems – The
latest from the nano-tech front,
- Another special Rude research report, 12,000 on shaky
ground and plenty more…
------------------------- Eric Fry, while taking a break from testing nuclear-
weapons, reports... Another day, another water crisis...or two... From today's headlines comes news that the world's natural
resource companies are struggling to find the water they
need to conduct their operations. Meanwhile, the newspapers
report, the Australian outback is even more parched than
usual. "Water is becoming a constraint for the resource industry,"
Alcan Inc. Chief Executive, Dick Evans tells Dow Jones
News, "It'll be interesting to see how it plays out. But
certainly over the next decade, it'll be a constraint that
had not been considered a problem previously." To make his point, Evans cited the Alberta oil sands in
Canada. Extracting the tar-like bitumen from these oil
sands requires prodigious quantities of water. Most of this
water derives from the once-pristine Athabasca River.
"The amount of water that currently is being extracted from
the river, or is currently licensed to be extracted from
the river, places the river at risk when the river is under
low flow conditions in the winter time," says Severson-
Baker, director of Energy Watch program at the Alberta-
based Pembina Institute. Draining the Athabaska River, however, is only half of the
water problem in oil sands district. The other half of the
problem is that the post-production water flows into vast,
toxic tailings ponds. Residents living nearby – or downstream on the Athabasca –
blame the oil sands projects for the seemingly elevated
cancer rates that exist in the region. "People are dying of cancer all around us," says Yvonne
Shott, a lifelong Fort MacKay resident. "The industry is
all around us...The kids are always sick from the water.
The tap water that we use is no good; it has to be boiled."
Even if Ms. Shott's claims prove to be unfounded, the oil
sands developments in Alberta are clearly encountering
water-scarcity and water-purity issues. And clearly, these
water-related challenges will impede development and raise
costs. Meanwhile, down in the Southern Hemisphere, two large
Australian cities are finding themselves desperately short
of water. "Victoria's two biggest inland cities, Ballarat and
Bendigo, are on the brink of major water crises after
record low rainfalls over the past decade," reports last
week's Australian. Water storage levels are at 13% in
Bendigo and 26% in Ballarat, and spring has hardly sprung." Your California editor does not know Bendingo from
Bakersfield, but a water storage level that is only 13% of
normal sounds very dire indeed. Unfortunately, the "Bendingoans" can't just make water
appear from thin air...or can they? --- Special ---
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By Jonathan Kolber [Joel's Note: Jonathan is a regular columnist for Penny Slueth
where he reports on a range of emereging technology. For a look
at his latest articles, you can visit the Penny Sleuth website at:
www.pennysleuth.com] New technology is about to make shortages of potable water
a thing of the past. I recently met with a representative
of the AirWater Corp. in California, and it's but one of a
collection of companies capable of, well, making water from
thin air. Wired News reports that the technology is winning
acceptance from the military. Defense Advanced Research
Projects Agency (DARPA) seeded the research by backing a
few early stage companies including LexCarb and Sciperio.
However, an independent company is leading the pack. Aqua Sciences was first to market with a system capable of
delivering water in places with unforgiving climates, such
as Iraq. A 20-foot machine produces 600 gallons of water a
day with zero toxic emissions or byproducts. It was
demonstrated on Capitol Hill last week to accolades from
congressmen. According to CEO Abe Sher, "The atmosphere is a river full
of water, even in the desert. It won't work absolutely
everywhere, but it works virtually everywhere... We figured
out how to mimic nature, using natural salt to extract
water and act as a natural decontamination." While the economics of replacing conventional sources of
water with "air water" have yet to be convincingly
demonstrated, AirWater Corp. believes its process will
ultimately produce water at 7 cents per gallon. Clearly,
such pricing will make it an attractive alternative to
trucking water into disaster areas or military theaters. Further, as deep aquifers begin to be depleted in places
such as Las Vegas, expect these units to become an
attractive alternative to bringing in water via truck,
train or diversion of rivers. All of those alternatives
carry a tremendous cost in fuel, infrastructure or
environmental consequences. In military theaters and disaster relief, it's a slam-dunk.
Bringing water via C-17 cargo planes costs $30 a gallon.
The Aqua Sciences approach slashes that 100-fold, to just
30 cents a gallon. While many technologies can produce water this way in
theory, the Aqua Sciences' machine needs just 14% humidity.
This makes it suitable for most places on Earth. What is the significance of this? Many forward-looking
thinkers have made the case that fresh water is the "next
oil crisis." Supplies in many parts of the world have been
diminishing as demand has been rising. Global warming will
disrupt ecosystems, further reducing supplies and – if
predictions of more severe weather prove accurate –
increasing need for disaster relief sources of water. 
But there is a practically unlimited supply of fresh water
in Earth's atmosphere. Just to give one example, scientists
have documented a "river of air" that is more than 100
miles wide and carries more water than the Amazon. This water from air is but the first of a series of
emerging technologies that will shortly arise to address
the need for potable water. I am also aware of
nanotechnology membranes that use minimal amounts of
electricity to separate salt and all other substances from
ocean water, cutting the costs of reverse-osmosis
dramatically. These membranes are not yet being produced in volume. Once
volume production is underway for new approaches, whether
nanotechnology membranes, air extraction or others, costs
will plummet as they always do. I am looking to see which small public companies will lead
this transformation. [Joel's Note: Mr. Kolber is not the only one on the hunt
for the next big technology breakthrough to help alleviate
the growing strain on earth's most precious resource. With
thirst from a swelling global population not about to abate
anytime soon and pollution a major problem in developing
nations, it comes as little surprise that investors are
pouring money into research and development projects at a
rate previously unseen. We here at Rude have recently completed a months long
research project of our own to help you identify the best
investment opportunities in this rapidly expanding sector.
For all the information you need to know about how to
invest in water, please visit our website for this special
Rude Research Report: Investing in Water: A Special Rude Research Project
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