Is Water the New Oil?

By Jennifer Hopfinger
June 20, 2008 04:15 PM

The cover of the June 23 issue of BusinessWeek asks a frightening question: “Is Water the New Oil?” As someone who grew up on the Michigan side of Lake Michigan and currently lives on the Illinois side and who dearly loves the beauty of this expansive freshwater sea, I certainly hope the answer to that question is no. But the cover story, by Susan Berfield, is less optimistic.

Berfield profiles an 80-year-old Texas oilman and corporate raider named--almost unbelievably--T. Boone Pickens. “If water is the new oil, T. Boone Pickens is a modern-day John D. Rockefeller,” Berfield writes. “Pickens owns more water than any other individual in the U.S. and is looking to control even more. He hopes to sell the water he already has, some 65 billion gallons a year, to Dallas.”

Climate change is causing severe drought in certain regions--regions that include enormous and growing urban areas--making water a scarce and valuable resource. Here’s a scary stat: “By 2030 nearly half of the world's population will inhabit areas with severe water stress.” And so Berfield writes: “the rush to control water resources is gathering speed around the planet.” Brokers in Australia are buying water rights from farmers. Royal Dutch Shell is buying groundwater rights in Colorado

The article chronicles the interesting and contentious path that led Pickens into the water “business” and the battles he’s won and the controversy he’s created along the way. Unfortunately for Pickens, who has spent $100 million on his project, no city in Texas has yet offered to buy his water. But according to the article, there's an ominous saying in Texas that doesn’t bode well for the future: "Whiskey's for drinking. Water's for fighting."

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Copyright © 2008 Donald W. Reynolds National Center for Business Journalism