The Crisis in Louisiana is the Latest Example of Mismanagement of a Critical Commodity
Louisiana is in trouble. This is the worst we’ve seen in the Gulf state since 1988. It’s so bad the governor declared a state of emergency.
If I just told you that, you’d think hurricane, right?
But it’s actually the opposite. Drought and consumption reduced the river flow to its lowest point ever in 2022. EVER!
That allowed salt water to move up the river and pollute drinking water.
This is just another data point in an emerging water crisis in the U.S. Michigan, Mississippi, Louisiana, Texas, and North Carolina all had major water issues. And the U.S. continues to ship its fossil water under the American southwest to Asia and the Middle East as hay to feed cattle.
The Director of the Center for Colorado River Studies at Utah State University, Jack Schmidt, criticized the practice:
“We’re irrigating alfalfa in 120-degree temperatures in the dead of July … how does that possibly make any sense?”
The Western U.S. is in the worst drought in 1,200 years. The main reservoir, Lake Mead, dropped to 25% of capacity last year. News outlet The Hill called it, “…its driest period in human history…” which is a bit of hyperbole.
However, it is the worst drought in U.S. history, and it highlights the poor water use practices in the region.
In response, the federal government suggested water cuts of between 2-million and 4-million-acre feet of water usage. That’s roughly 40% of the entire river’s flow. The implication here is that the Colorado River is over allocated.
That’s similar to what’s causing Louisiana’s troubles today. A major drought in the Mississippi Valley reduced the flow the Mississippi river to the point that salt water is moving up the river. The Army Corps of Engineers expects the salt “wedge” to reach New Orleans by October 22. Some of the southern parishes have not had drinking water since June.
The situation is so dire that the Army Corps of Engineers barged water in for dilution.
Water, like electricity, is a commodity we take for granted in the U.S. We expect fresh, clean water to come out of our taps and shower heads on demand. And we pay pennies per gallon for it. The national average for water bills is $54 per month.
On the high end, West Virginians pay the most, at $91 per month. That’s followed by California, Oregon, and Washington at $77, $76, and $75, respectively.
Wisconsin and Vermont are the lowest at $18 per month. North Carolina and Louisiana are next at $20 and $21 per month.
The low price is partly why we consume a lot of water. According to the website wisevoter.com, the U.S. consumes about 355 billion gallons of fresh water per day. That includes all uses like irrigation and industry.
That works out to 88 million gallons per person per day. And perversely, the Southwestern states use more – about 200 million gallons of water per person per day.
Individuals use much less – about 101.5 gallons per day. That means people in our most expensive state pays about $0.90 per gallon while our least expensive state pays about $0.18 per gallon.
That needs to change.
The current state of water is so poorly managed that we can expect more frequent and more extreme disasters. That will spur litigation, which will change political will. That will spark change, at a cost.
For the Good,
The Mangrove Investor Team
P.S.: At Mangrove Investor, we believe water will be an investible commodity in the near future. We are considering ways to invest in water infrastructure right now
Numbers to Know
A third of U.S. rivers have become more salty in the past quarter-century, according to an analysis by Sujay Kaushal, a biochemist at the University of Maryland, College Park (Yale Environment 360)
How much salt water is too much. The Environmental Protection Agency has set an upper advisory level for salt in drinking water at 30-60 parts per million. In Florida, some aquifers have reached 1000 ppm (Circle of Blue)
Sea water salinity is expressed as a ratio of salt (in grams) to liter of water, It is written parts per thousand (ppt). In sea water, there is typically close to 35 grams of dissolved salts in each liter. (NOAA)
By the end of 2023, Japan plans to introduce an impact investing programme to foster a conducive environment for impact investing both locally and globally. (Fintech Global)
Check out this podcast with Garvin Jabusch, Co-Founder and CIO of Green Alpha Advisors, discusses ESG investing. Hosts: Carol Massar and Tim Stenovec. (Bloomberg)
Video Of The Week
It is not just NOLA. Salt water intrusion is a global problem.
See how California is using high-tech flights to help fight the threat of sea water intrusion along their coast.