9. The Politics and Geopolitics of Water
“We never know the worth of water till the well is dry.”
—Thomas Fuller, Gnomologia, 1732
“When the well is dry, we know the worth of water.”
—Benjamin Franklin (not too proud to borrow), Poor Richard’s Almanac, 1746
“Anyone who can solve the problems of water will be worthy of two Nobel prizes—one for peace and one for science.”
—John F. Kennedy
If current trends continue, there is no doubt that wars will be fought in the 21st century over water. Not oil. Not ideology. Not theology. Water. Survival.
Figure 9.1 might be a good segue into the politics and geopolitics of water. There is a reason why Israel and the UAE (and Saudi Arabia and Libya and almost every other nation in the Middle East) are spending big money to build desalination plants. The chart shows that only Lebanon can sustain its agricultural and human-survival level of water from renewable water resources—and then just barely.
Figure 9.1. Actual annual per capita renewable water resources
Source: USGS
The geopolitical implications of this fact are stunning. We leave the area of natural resources, discussed in Chapter 7, and the science of how to increase those resources, discussed in Chapter 8, and move on to what diplomats, intelligence professionals, and military and political leaders must consider. What are our vulnerabilities, and how would an enemy exploit them? What are our enemies’ vulnerabilities, and how might we exploit them? What could we use as a bargaining chip in negotiations? What do they have? Who will use which chip, and who will use it first?
One of the first things that leaps to mind, for example, is that a Middle East so dependent on desalination is remarkably vulnerable in its water supply. What if these single sources of water were contaminated in some way? By definition, they must be located near or have pipes into the sea. Might an enemy’s special-operations divers approach undetected underwater and sabotage some key element of a fixed number of plants? Might concentrating so much effort in so few places to provide sustenance to so many mean huge vulnerability to a kinetic (explosive) attack or a cyber attack? If you think the “water planners” in Israel aren’t working hand-in-glove with their military and law enforcement personnel to provide the best security, and “red-teaming” various scenarios to anticipate what an underhanded adversary might do, I have a bridge to sell you in New York.
For that matter, if you can identify your enemy’s key weaknesses, and one of them is water, a David in terms of size and armament might easily defeat a Goliath with a huge army and the most modern equipment with great logistics and all the fuel in the world. All you have to do is poison, contaminate, blow up, or render inoperable their ability to produce fresh water. Within 3 or 4 days without it, their armies will be laying down their arms and begging to surrender. These are not “think tank” scenarios that I am concocting because of my experience in this area. These are real-world issues borne out by historical example, current veracities of international relations, and, I am quite certain, existing planning being done in many nations’ capitals and among their senior-most leaders and war-gamers.
The Pacific Institute, as an adjunct to its annually updated book series, The World’s Water, maintains an online database of more than 200 examples of conflicts. Some recent ones were local protests resulting in violence; other historical incidents occurred during full-blown warfare. The Institute calls it the Water Conflict Chronology. If you are interested, you can see the entire chronology at http://www.worldwater.org/conflict/. The following list contains a few incidents from the Institute’s historical archives and a few more recent events to make the point that you dare not invest in this important sector without understanding the political and geopolitical possibilities, both for good and for ill!
Peter Gleick, editor of The World’s Water, notes in discussing the chronology, “Water resources are seldom the sole source of violence, but history is rife with tension over water and the use of water systems as weapons, targets, or tools during war. Inequitable access to resources is a critical source of conflict.” The following list begins, as so many conflicts have throughout history, in the Middle East, in this case in what is present-day Iraq.
• Circa 2500 BC: Urlama, King of Lagash, diverts water from Lagash to boundary canals, drying up boundary ditches to deprive Umma (today’s Iraq) of water.
• 720–705 BC: After a successful campaign against the Halidians of Armenia, Sargon II of Assyria destroys their intricate irrigation network and floods their land.
• 600–590 BC: Athenian legislator Solon reportedly has roots of helleborus thrown into a small river or aqueduct leading from the Pleistrus River to Cirrha during a siege of this city. The enemy forces become violently ill and are defeated as a result.
• 430 BC: During the second year of the Peloponnesian War, when plague breaks out in Athens, the Spartans are accused of poisoning the cisterns of the Piraeus, the source of most of Athens’ water.
• 537: The Goths besiege Rome and cut off almost all of the aqueducts leading into the city.
• 1187: Saladin is able to defeat the Crusaders in 1187 by denying them access to water. In some reports, Saladin sanded all the wells along the way and destroyed the villages of the Maronite Christians, who would have supplied the Christian army with water.
• 1503: Leonardo da Vinci and Machievelli conspire to divert the Arno River from Pisa during a conflict between Pisa and Florence (although they end up not doing so).
• 1777: British and Hessians attack the water system of New York: “...the enemy wantonly destroyed the New York water works” during the War for Independence.
• 1860–1865: William Tecumseh Sherman’s memoirs contain an account of Confederate soldiers poisoning ponds by dumping the carcasses of dead animals into them. (Other accounts suggest this tactic was used by both sides.)
• 1907–1913: The Los Angeles Valley aqueduct/pipeline suffers repeated bombings in an effort to prevent diversions of water from the Owens Valley to Los Angeles.
• 1935: Arizona calls out the National Guard and militia units to the border with California to protest the construction of Parker Dam and diversions from the Colorado River. The dispute ultimately is settled in court.
• 1938: Chiang Kai-shek orders the destruction of flood-control dikes on the Huang He (Yellow) River to flood areas threatened by the Japanese army, spilling water across the flat plain. The flood destroys part of the invading army, and its heavy equipment is mired in thick mud. The waters flood an area variously estimated as being between 3,000 and 50,000 square kilometers and kill up to 1 million Chinese.
• 1939–1942: Japanese chemical and biological weapons activities reportedly include tests by “Unit 731” against military and civilian targets by lacing wells and reservoirs with typhoid and other pathogens.
• 1944: The German army floods the Pontine Marshes by destroying drainage pumps to contain the Anzio beachhead established by the Allied landings. Over 40 square miles of land are flooded. A 30-mile stretch of landing beaches is rendered unusable for amphibious support forces.
• 1948: Arab forces cut off West Jerusalem’s water supply in the first Arab-Israeli war.
• 1976: A local militia chief is shot to death in a clash over the damming of the Zhang River. Conflicts over excessive water withdrawals and subsequent water shortages from China’s Zhang River will continue for three decades.
• 1978 onward: Longstanding tensions occur between Egypt and Ethiopia over the Blue Nile, which originates in Ethiopia. Ethiopia’s proposed construction of dams on the headwaters of the Blue Nile leads Egypt to repeatedly declare the vital importance of water. According to Anwar Sadat, “The only matter that could take Egypt to war again is water.”
• 1990: The flow of the Euphrates is interrupted for a month as Turkey finishes constructing the Ataturk Dam, part of the Grand Anatolia Project. Syria and Iraq protest that Turkey now has a weapon of war. In mid-1990, Turkish president Turgut Ozal threatens to restrict water flow to Syria to force it to withdraw support for Kurdish rebels operating in southern Turkey.
• 1997: Malaysia, which supplies about half of Singapore’s water, threatens to cut off that supply in retribution for criticisms by Singapore of policy in Malaysia. (To prevent future extortion or control of its citizens, Singapore has embarked on numerous desalination projects.)
• 1999: Conflicts over excessive water withdrawals and subsequent water shortages from China’s Zhang River have been worsening for over three decades. During a clash around the Chinese New Year, farmers from the Hebei and Henan Provinces fight over limited water resources. Heavy weapons, including mortars and bombs, are used, and nearly 100 villagers are killed. Houses and water facilities are damaged, and the total loss reaches US$1 million. Parties involved are Huanglongkou Village, Shexian County, Hebei Province and Gucheng Village, Linzhou City, Henan Province. Some progress has been made to negotiate a settlement to this dispute, but new projects in the region may fuel new disputes.
• 2000: In Kenya, a clash between villagers and thirsty monkeys leaves eight monkeys dead and 10 villagers wounded. The duel starts after water tankers bring water to a drought-stricken area and monkeys desperate for water attack the villagers.
• 2003: Four incendiary devices are found in the pumping station of a Michigan water-bottling plant. The Earth Liberation Front (ELF) claims responsibility, accusing Ice Mountain Water Company of “stealing water for profit.” Ice Mountain is a subsidiary of Nestle Waters.
• 2004–2006: In Ethiopia, at least 250 people are killed and many more are injured in clashes over wells and pastoral lands. Villagers call it the “War of the Well” and describe “well warlords, well widows, and well warriors.”
• 2006: At least 40 people die in Kenya and Ethiopia in continuing clashes over water, livestock, and grazing land.
• 2009: Ethiopian Somalis attack a Borana community in the Oromia region over ownership of a new borehole being drilled on the disputed border between them. Three people from the Oromia village of Kafa are killed and seven are injured, and the entire community is driven from their homes.
• 2009: A family in Madhya Pradesh state in India is killed by a small mob for illegally drawing water from a municipal pipe. Drought and inequality in water distribution lead to more than 50 violent clashes in the region in the month of May. The media reports more than a dozen people killed and even more injured since January, mostly fighting over a bucket of water.
You will notice that I selected Ethiopia for many of the final examples. In a study of the world’s 25 most populous nations compiled from the United Nations Population Division and the CIA World Factbook, Ethiopia is predicted to be the nation with the lowest total renewable water resources per person within two generations (see Figure 9.2). It is already the fourth-lowest in the world. Egypt is the second-worst and is projected to remain there. Ethiopia controls the headwaters of the Blue Nile, on which, along with the White Nile, Egypt depends for its survival.
Figure 9.2. Renewable water resources per capita of the most 25 most populous countries in 2009 (in cubic meters per person per year)
Source: World Factbook
Ethiopia-Eritrea-Somalia-Sudan-Egypt is just one flashpoint I see as a possible Water War of this century. Of course, it may not be an issue if funds are found to provide desalination for those with ocean access, which all have except Ethiopia. It would not surprise me to see Ethiopia again at war with Eritrea, which it briefly annexed before those two nations’ 30-year war (resulting in Eritrean statehood once more), or with Somalia, or perhaps even tiny Djibouti, if U.S. forces leave it undefended and untreatied.
Another possible flashpoint is the Levant and the ancient areas of Sumeria and Assyria—today’s Israel, Jordan, Lebanon, Syria, and Iraq. The continuing conflicts over water resources such as the Jordan, or concerns about Turkey’s ability to control the waters of the Euphrates, will always be an issue.
Arguments over who gets what from the Zambezi and Niger Rivers in sub-Saharan Africa will not end, nor will squabbles about downstream use of the Ganges and the Mekong in Southeast Asia.
The troubles are not only between neighbors, but within nations. Since India is the BRIC nation that is second-most-favored by the most analysts, it’s worth discussing in this context. With all that crystal-clear snow runoff from the Himalayas into some of the world’s most renowned rivers, one would think that what water India has would be exceptional. One would be wrong. According to the World Health Organization, India discharges 95% of its untreated urban sewage directly into surface waters. Of India’s 3,119 cities, only 209 have even partial sewage treatment facilities, and just eight have full facilities. Downstream, the polluted water is used for drinking, bathing, and washing. I point out all of this not to alarm but to clarify. In each of these crises, investment opportunity is likely. For instance, if India were to take steps to purify all that dank and malevolent water, how many billions would some lucky companies rake in, doing well by doing good?
China has engaged in military combat with three of its immediate neighbors in the past 50 years and has done its best to influence or control the internal affairs of several more. China “defended” itself against Indian and Russian “incursions” (read: China interpreted its boundaries differently than those other two nations). It also invaded Vietnam to punish it for tossing the Pathet Lao out of Cambodia and attempted to supplant Vietnamese influence there. At one time, more than a million and a half Chinese soldiers were stationed along the old USSR/China border. China has a recent history of either being very paranoid about defending its territory or very truculent in doing so.
China has one-fifth of the world’s population. If life were fair, China also would have one-fifth of the world’s water. It doesn’t. China has just one-fourteenth of the world’s water supplies. This is the same as Canada, but with 200 times as many people vying for it. And much of that water is rank, dank, and polluted. You think oil is important? Try living without water. Or with water too polluted to drink. And problems have worsened considerably in recent years as the population has burgeoned and factories have dumped toxic pollutants into rivers and lakes. A Chinese bureaucrat recently noted that 90% of China’s cities and 75% of its lakes suffer from some degree of water pollution. The Chinese have water—they just can’t drink it.
Russia has huge water resources in its sparsely populated eastern provinces commonly thought of as “Siberia,” for instance. And all that excess water mostly just drains into the Arctic and Pacific Oceans.
What if? What if China, with 1.3 billion thirsty inhabitants and too little clean water, suggested diverting some of that freshwater southward? Would Russia be wise to barter something for the water or sell it cheaply enough that it wouldn’t be worth China’s effort or price in blood and treasure to take it?
Declassified documents show that the USSR considered using nuclear weapons against China as long ago as 1969, at the height of their border wars. But it was dissuaded from doing so when the U.S. said it would consider such an act detrimental to American security. The U.S. may have had no recourse but to use its own nuclear arsenal against the then-Soviet Union. “Oh, what a tangled web we weave...” Today it might well be the Russians on the defensive as China’s military might grows stronger every day and its desire to project power in what it considers its sphere of influence increases apace.
Of course, numerous water wars could stop well short of actual violence. The whole of Tibet, it seems, is destined to be turned into “nature parks” by the central government in Beijing. Already over 100,000 Tibetan mountain dwellers and nomads have been “resettled” into concrete housing and are excluded from the 34% of Tibet now considered nature parks. These nature parks include the headwaters for three great Asian river systems: the Yangtze, the Yellow, and the Mekong. It is clearly not a shooting war to resettle indigenous populations without representation, but, to many observers, the goal is aggrandizement, and the effect is the same. If another project to divert water from Tibet to northern China is successful (water now flowing to India and Bangladesh), there may be even more unhappy campers in the neighborhood. Is a second India-China war brewing?
Even the most grandiose and international schemes for water procurement and waterway development may one day come under the rubric of Water Wars. Right now there are great plans for a Kazakh-Russian “Eurasia” canal, which would link the Caspian and Azov seas. This would allow landlocked Kazakhstan to ship its oil (estimated to double in the next 5 years to some 150 million tons) by much cheaper waterways to the Azov Sea and on to the Black Sea and then straight to the world’s oceans—assuming that the Bosporus Strait stays open during some other conflict, of course.
With some 5% to 10% of the world’s oil reserves, Kazakhstan remains the only one of the world’s top 20 producers without access to oceangoing ports. Russia would benefit hugely from such a project, because all of the canal portion would be built on Russian soil. This would allow Russia not only to collect transit fees for transport on this new waterway, but also to shut it down or select which traffic passes through if any of its European or Asian neighbors displeases it. “The geopolitics of water” isn’t only about drinking water! It’s about all the ways in which water may be used as a carrot, stick, or anvil to secure one nation’s political objectives over another. In fact, if fellow Caspian neighbors (and large oil and gas exporters) Iran and Azerbaijan were to join with Russia and Kazakhstan, they could form quite the cartel in the energy field, perhaps on par with OPEC.
Who might fund a project of such magnitude? Well, already the Chinese have volunteered. Given that the EU is China’s second-largest trading partner and that they have a desperate need for energy, the Chinese have an incentive to get on neighbor Kazakhstan’s good side. They may secure Kazakh oil and gas rights in exchange, and they might be able to ship goods to Europe less expensively in the bargain. Shipped from western China by truck across Kazakhstan, and then loaded onto ships and never offloaded until the goods hit the EU in Romania for overland delivery. Quite the dream. If a land and sea “road” were to connect China, Russia, and Kazakhstan and siphon just a 5% market share of current Europe-Asia sea cargo, the transit countries might receive some $3 billion in transit fees annually. (This is according to Kazakh sources in September 2009.)
Heady stuff. Now, I don’t see water trading for more per unit than, say, oil. Desalination and purification will keep the threshold well below such figures. But we use a bit more water every day than we do oil! Like about 100 gallons more every day. Trading the amount needed, or withholding the amount needed, of each may be a parity game for some. And the simple geographic ability to withhold water sends a message to a potential adversary that may well prevent them from taking a precipitous action against you.
Now let’s take this from the geopolitical to the merely political. Tip O’Neill, former Speaker of the House, once proclaimed that “All politics is local.” Well, it’s not as if we don’t have our own Water Wars and water problems right here in the U.S.
For our first case, let’s look at the city where what happens there, stays there—Las Vegas.
Anyone who’s ever been there can readily attest that, except for a little snow runoff from Mt. Charleston and its environs, no water is in sight for a hundred miles from the corner of Glitter Gulch and the Strip. But that never stopped an entrepreneur. Las Vegas was founded in 1905 as a sleepy way station. A couple years later, some settlers struck water held for eons in the aquifer beneath the city—and Vegas never looked back. (Or more deeply, as it turns out.)
Back in the day, the groundwater that evaporated or transpired or collected at the surface was just about the same as the amount coming in from Mt. Charleston and the rest of the Spring Mountains. The discovery of the aquifer, however, turned the valley into a desert oasis. In Spanish, Las Vegas means “the meadows.”
By 1968, however, Las Vegas residents were pumping an average of 88,000 acre-feet of water every year, while only 25,000 to 35,000 acre-feet of water were naturally recharging the aquifer every year. About the same time, surveyors noticed that the city was sinking. In 1968, three years after I graduated from high school in that little town, Vegas was nothing compared to what it is now. Today, Las Vegas is the fastest-growing metropolitan area in the U.S. It grew from fewer than 200,000 people to 2 million. And some 30 to 40 million tourists pour into the city every year, drinking a little branch water with their bourbon. That aquifer is fast disappearing; some estimates say it will be completely gone in 20 years. Others are slightly more optimistic. But green irrigated lawns and swimming pools that evaporate an inch a day in the broiling sun do not exactly instill confidence in hopeful projections.
Still, Vegas is a gambling town. And gamblers aren’t known for their propensity to think much further ahead than the next roll of the dice. Since gambling fills the city coffers, the attitude is to eat, drink, and be merry and worry about where to site the next Las Vegas (maybe Macau?) tomorrow.
Of course, Las Vegas does have another source of water. By order of the Colorado River Commission, which governs the relationship between all states downstream of the headwaters of the mighty Colorado, Nevada is allotted 300,000 acre-feet a year from the river. That’s for the whole state, although Vegas and Clark County figure all those other southern counties can pound sand for a living. Every year, Southern Nevada exceeds its allotment, according to the Las Vegas Review-Journal. Within the next 20 years, the Review-Journal reports, the state will likely need 700,000 acre-feet or more per year. Says Devin Galloway, a groundwater specialist for the USGS Western Region, “The biggest problem everywhere is groundwater depletion.”
A side effect of all this is earth fissures. There’s one in the desert just miles from my old high school (near Nellis Air Force Base). As Garrett Hardin said way back when (and in Chapter 7), “We can never do merely one thing.” These fissures, due to depleted groundwater causing the rock and soil to lose integrity, are appearing in many places—at a cost of tens of millions of dollars in damage to existing structures and automobiles and scaring the bejeezus out of people.
Some parts of the valley sank as much as 6 feet between 1960 and 1990, says John Bell, a research engineering geologist. He and other researchers also found that the northwest portion of the city continues to sink at about 2.5 to 3 centimeters per year. The city is trying to “recharge” the aquifer by pumping Colorado River water into the ground in wintertime and then praying that they won’t take out as much in summer. So far, that approach has had less-than-stellar results.
All researchers agree that the city’s future depends on how much water it can garner from outside the valley. “I don’t think there’s enough water in Las Vegas Valley to sustain the economic activity taking place there,” one of them says. “They really are going to have to look for surface water. In the long run, the groundwater is limited by the natural recharge.” Welcome to the Water Wars of the West. Do you really think California and Arizona will give up their agricultural allotments of Colorado River water so that people in Las Vegas can have manicured lawns and kidney-shaped swimming pools?
Of course, often the Water Wars won’t be so clearly defined. Sometimes the wars will take place between growing cities and the farmers who feed them.
It takes somewhere between the 3 pounds of grain the National Cattlemen’s Beef Association estimates and the 16 pounds some environmentalists and vegetarians claim it takes to produce a single pound of beef. I believe the truth lies closer to the cattlemen’s numbers. All the ranchers I know, and I know plenty, graze their cattle where they consume vast quantities of weeds and natural grasses. What rancher wants to buy grain, adding to his cost of doing business?
On northern-clime ranches, however, covered in snow in winter, ranchers have to provide hay or other feed to keep their cattle alive. But often the supplemented feed is the garbage that is left after crops grown for human consumption have been extracted. These are things like almond hulls; tomato, soy, and other pomace; and the soybean meal that comes from the bean flakes remaining after the soy oil is extracted for those who demand only soy oil. (Before any busybody with a need to tell others how to live gets their knickers in a knot, I enjoyed a soy hot chocolate this morning—while contemplating what kind of steak to put on the grill tonight.)
Whether you like the cattlemen’s numbers or some other, one fact is inescapable: Whether you are producing grain, meat, fruits, or vegetables, you are using water—lots of it. More than 50% of America’s fresh water goes to irrigate our crops and provide us with food. Do you like whole grain bread? I do. According to Kansas State University, which knows a thing or two about wheat, it takes 151 gallons of water to produce one pound of wheat. And I’ve read that it takes 2,000 gallons of water to make one gallon of milk, which sounds awfully high unless you accept that it takes a lot of grain to feed a cow to make that milk. Figure 9.3 shows how many gallons of water are needed to make some common products.
Figure 9.3. Water used in common products
Source: U.S. Geological Survey
Industrially, it takes nearly 20,000 gallons of water to make one ton of steel. And U.S. power plants alone go through 136 billion gallons a day, meaning that this industry uses more water on a daily basis than do humans for drinking. As countries further industrialize, levels of water consumption will grow, further straining water supply. These trends could potentially force companies to find water in new places and most certainly force all of us to develop more efficient recycling systems.
From this perspective, it is astounding that we haven’t run out of water already.
We have not yet reached the point of recycling all wastewater like the Fremen of Arrakis in Frank Hebert’s brilliant novel Dune. But if we are consigned to endlessly squabble over that fixed 1% in a world where population is anything but fixed, many will die, and many more will suffer.
Finally, before moving on to investment opportunities, let me leave you with Figure 9.4, courtesy of ITT Industries. I first published it in the September 2006 issue of our investment publication, Investor’s Edge®. Nothing has changed since then. Oil for water, anyone?
Figure 9.4. Nations that are experiencing water stress and water scarcity
Source: United Nations
