Water Futures to Start Trading Amid Growing Fears of Scarcity

[IsailedawayfromFR]

Water is joining gold, oil and other commodities traded on Wall Street, highlighting worries that the life-sustaining natural resource may become scarce across more of the world.

Farmers, hedge funds and municipalities alike will be able to hedge against -- or bet on -- potential water scarcity starting this week, when CME Group Inc. launches contracts linked to the $1.1 billion California spot water market. According to Chicago-based CME, the futures will help water users manage risk and better align supply and demand.

The contracts, a first of their kind in the U.S., were announced in September as heat and wildfires ravaged the U.S. West Coast. They are meant to serve both as a hedge for California’s biggest water consumers against skyrocketing prices and a scarcity gauge for investors worldwide.

“Climate change, droughts, population growth, and pollution are likely to make water scarcity issues and pricing a hot topic for years to come,” said RBC Capital Markets managing director and analyst Deane Dray. “We are definitely going to watch how this new water futures contract develops.”

Two billion people now live in nations plagued by water problems, and almost two-thirds of the world could face water shortages in just four years, Tim McCourt, global head of equity index and alternative investment products at CME, said in an interview. “The idea of managing risks associated to water is certainly increased in importance.”

The increasing scarcity of water is one reason I chose to not live in a dry part of Texas.  Plenty of lakes and rain to head off problems the desert folks will begin enduring.

[Smokin Joe]

Seems the problem is that in some places there isn't good water to drink, and some just don't have much. But that's why there weren't many people in those places to begin with. The bad water problem can be solved by treating or distilling it, no water, not so much.

[IsailedawayfromFR]

Seems the problem is that in some places there isn't good water to drink, and some just don't have much. But that's why there weren't many people in those places to begin with. The bad water problem can be solved by treating or distilling it, no water, not so much.

Agreed.  The water crunch will continue.

BTW.  What type of job do you have now that motivates you to post at 4am?

Are you sitting wells once again?

[Victoria33]

 

[Smokin Joe]

Agreed.  The water crunch will continue.

BTW.  What type of job do you have now that motivates you to post at 4am?

Are you sitting wells once again?

Nope, and that might not happen again if Biden and Harris have their way with fraccing. Working evenings to  late at night delivering food, and it takes a while to wind down, especially during hours I used to be awake when I was working in the patch.

[catfish1957]

Amazing...  From the feast or famine department, my location in SE Texas has probably had close to 400-425 inches of rain in the past four years.  Of course most of that was compliments of Harvey, Imelda, Laura, and Delta. 

As far as making water a commodity?  I had hoped it would never get to that point.  Price control for water on a municpal and industrial level mostly has already been subject to pricing from normal supply and demand constraints.  I know right now the west is suffering due to the present weather patterns that are supressing rainfall.  Hopefully these climatic pattern will change soon, in conjuction with new and improved technologies to treat and recycle, and desalination. 

Making Water a listed traded commodity, might have less than positve implications to the population and industries who might have to live with water bill rate changes that will be unpredictable at best. And as far, as water as a commodity being market cornered, and power broking?  We'll have to see.

[IsailedawayfromFR]

Nope, and that might not happen again if Biden and Harris have their way with fraccing. Working evenings to  late at night delivering food, and it takes a while to wind down, especially during hours I used to be awake when I was working in the patch.

God bless you. SJ.

I trust life returns to some type of normalcy soon.

[IsailedawayfromFR]

Amazing...  From the feast or famine department, my location in SE Texas has probably had closed to 400-425 inches of rain in the past four years.  Of course most of that was compliments of Harvey, Imelda, Laura, and Delta. 

As far as making water a commodity?  I had hoped it would never get to that point.  Price control for water on a municpal and industrial level mostly has already been subject to pricing from normal supply and demand constraints.  I know right now the west is suffering due to the present weather patterns that are supressing rainfall.  Hopefully these climatic pattern will change soon, in conjuction with new and improved technologies to treat and recycle, and desalination. 

Making Water a listed traded commodity, might have less than positve implications to the population and industries who might have to live with water bill rate changes that will be unpredictable at best. And as far, as water as a commodity being market cornered, and power broking?  We'll have to see.

it does smell akin to another Enron manipulation scheme, doesn't it?

[catfish1957]

Nope, and that might not happen again if Biden and Harris have their way with fraccing. Working evenings to  late at night delivering food, and it takes a while to wind down, especially during hours I used to be awake when I was working in the patch.

Keep the Faith Joe.  I am from the oil industry too (retired), and I am most hopeful that this NGD insanity will end, when society in general finally realizes that petrochemical industry touches every aspect of their life, from gas from heating, to plastic, to rubber, solvents, gasoline, jet fuel. all the way to waxes and asphalt.

I am hopeful there will be a moment soon when they wake up, and those working hard in our industry get their due and their contribution to society.

I lost my first job way back in about '81 when I got caught in that economic downturn, and our plant closed.  I rebounded better than ever.  I'll bet you'll do the same.

[catfish1957]

it does smell akin to another Enron manipulation scheme, doesn't it?

Or at least, greasing the skids for a very few rich and powerful to control most of the water and its price west of the rockies.  $200 water bills at your house in a normal month?  Not inconceivable.

In Texas we have quasi municipal type organizatons controling waters and watershed in conveyed (non well) water.  What's the setup out west?

[Smokin Joe]

God bless you. SJ.

I trust life returns to some type of normalcy soon.

Thanks. But even here there are those cheerleading against any such thing for the rest of my working years.

[Smokin Joe]

Keep the Faith Joe.  I am from the oil industry too (retired), and I am most hopeful that this NGD insanity will end, when society in general finally realizes that petrochemical industry touches every aspect of their life, from gas from heating, to plastic, to rubber, solvents, gasoline, jet fuel. all the way to waxes and asphalt.

I am hopeful there will be a moment soon when they wake up, and those working hard in our industry get their due and their contribution to society.

I lost my first job way back in about '81 when I got caught in that economic downturn, and our plant closed.  I rebounded better than ever.  I'll bet you'll do the same.

If the Democrats get the trifecta (House, Senate, and White House), when prices for most everything go up because of their planet saving policies, they will seek to nationalize the oil industry like Chavez.

That was the beginning of the real death spiral in Venezuela, which sits on the largest reserves in the world.

I just have a hard time believing that that many Americans are stupid enough to vote for that.

[Fishrrman]

I sailed wrote:
"I trust life returns to some type of normalcy soon."

This is a joke, right?
If the communists win both Georgia Senate seats, what we saw in 2020 is gonna look like "normalcy" in the rear view mirror five years from now.

Maybe only two years from now...