Washington Square Capital Management Blog

There are two interesting articles published in today’s NY Times on the topic of water.  The first, from the front page, explores the challenges facing coal-fired power plants and the municipalities that surround them when it comes to waste disposal.  While many of these plants have reduced the amount air pollution they create, these pollutants are increasingly finding their way into our nation’s waterways, as restrictions on water pollution aren’t nearly as stringent as those on air pollution.

The second article details the recent push by the Schwarzenegger administration to address many of the water-related issues facing California.  Water shortage is a  serious problem and one that California has grappled with for decades, but it has seemingly been lost in the shuffle amidst the state’s myriad other problems:  real estate collapse, budgetary shortfalls, forest fires etc.

Both articles highlight the need for legislation on both the federal and state level to address our nation’s dwindling and oft polluted water supply.   Climate change, population growth, suburban sprawl and pollution are exacerbating matters, especially in developing nations like China, where water problems will likely be more acute.

These problems won’t go away anytime soon and will likely intensify in the coming years.  As these problems become more pronounced and widespread, we believe those companies engaged in delivering potable water to people will become increasingly vital.

Todd Woody writes in the New York Times on the obstacles solar energy plants in the Southwest face in securing necessary water rights.  Certain solar technologies, particularly solar thermal can require large amounts of water to produce and cool steam.  Coal, natural gas and nuclear plants require much larger amounts of water per unit of energy produced (though not all of it is consumed), but they can be located near large bodies of water, with the nuclear or fossil fuel being transported to the plant.  Utility scale solar power plants in contrast, must be located in areas that receive a lot of sunlight, have high temperatures and by definition are arid.  This makes the water sourcing problem much more acute for solar, particularly solar thermal.  The American Southwest has had a history of battles over water rights, and the alternative energy industry is only the latest entrant in a long running dispute between cities, farmers, miners and environmentalists in a fast-growing area which has historically been a desert.   The US Department of Energy produced a report for congress in 2006 on the interdependency of water and energy production including a discussion of various technologies to improve water-use efficiency in power plants.  Wind turbines do not require water.

The Conference Board’s Task Force on Executive Compensation issued a report earlier today on their findings. They recommend claw-back provisions, tough restrictions on perks and disclosures on fees paid to compensation consultants. The Financial Times, New York Times and Wall Street Journal have articles on the report.