An eerie article in Newsweek earlier this month painted a gloomy picture of the future of water access. Down the road, it portends, scarce water supplies will have been gobbled up by private corporations, only to be doled back out to the thirsty public at exorbitant costs. And in a way, this scenario is already playing out across the globe.
The article begins with a still-unfolding story set in Sitka, Alaska, where the city’s scenic neighbor, the Blue Lake reservoir, is set to quench thirst more than 6,000 miles away in India. The city of Sitka hold permits from the state that allow it to export up to 95 billion gallons of water every year. In 2006, the True Alaska Bottling Company (TAB) secured a contract with Sitka, handing over to TAB the right to 2.9 million gallons of water per year from the lake, which it intends to ship to Mumbai for processing and further distribution. TAB has partnered with S2C Global, who will build the water-processing facility in India. TAB’s project website explains how the water will make the long journey via ships that can carry between 70 to 100 million gallons of water per trip.
According to one of several S2C Global EDGAR filings mentioning the TAB arrangement, the city of Sitka will receive one cent per gallon of water, making this project very lucrative to the small Alaska town. With arrangements like this bolstering waterside communities and ensuring water for arid nations, what’s the downside?
While water sales from cities looking to privatize utilities may initially boost funds, Newsweek points out that private utilities, with virtual monopolies on the water supply, quickly become very difficult to work with. Performance is hard to monitor, and “according to some reports, private operators often reduce the workforce, neglect water conservation, and shift the cost of environmental violations onto the city.” And as water sources become more limited and demand skyrockets, it’s hard to imagine that private companies won’t see the profit potential in securing water rights wherever they can nab them.
Water rights laws are usually established by the states. In Alaska, these rights, which allow the holder “a specific amount of water from a specific water source to be diverted, impounded, or withdrawn for a specific use,” are defined under the Alaska Water Use Act and administered by the Department of Natural Resources, Division of Mining, Land, and Water. There are no restrictions on who can hold a water right in Alaska. According to the Bureau of Land Management, “state law says any ‘person’ can hold a water right and ‘person’ is defined as ‘an individual, partnership, association, public or private corporation, state agency, political subdivision of the state, and the United States.’” Guess they’ll just go to the highest bidder.