Exporting water
Comment of the Day

November 30 2012

Commentary by Eoin Treacy

Exporting water

It has long been a joke in Ireland that if a way could ever be found to export water or maybe swap it for oil, the country could be considered a resource nirvana where money literally falls out of the sky almost every day. I had to smile when a subscriber kindly sent through this presentation that is proposing just such a venture from Iceland and using large plastic bags to transport it to its end destination. Here is a section:
The target market for bulk water is commercial, industrial and municipal use. Although as yet, largely untapped, there are increasing signs of huge potential in this market, and IVL should ensure that it is an early entrant into it. The inability of suppliers to transport at a marketable price has been the inhibiting factor so far.

The large bulk water transport market natural competitor is desalinated water , however –

the environmental impact of the concentrated salt waste discharge from the desalination process is now an increasing issue,

the energy consumption of desalination plants is very high, and is therefore becoming increasingly more expensive as energy cost rise

human ingenuity is tackling some of the logistical issues to bring shipment costs down.

Eoin Treacy's view While there are currently no listed entities that offer exposure to water exports, the US listed Powershares Water Resources ETF is worthy of mention. It has been largely rangebound since early 2011 and is currently pressuring the upper boundary. A sustained move below $19 would be required to question medium-term scope for additional upside.

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