The energy industry likely will compete for freshwater resources across the globe as water becomes more strategically significant, the World Economic Forum and Cambridge Energy Research Associates (CERA) reported.

Water’s role in energy production and the new risks and opportunities are growing in significance, said the authors of “Thirsty Energy: Water and Energy in the 21st Century.” Solutions that join needs for local water use and local energy use have to be found to optimize both of the resources across the globe, the study concluded.

“Understanding how to best optimize the use of water and energy in a carbon-constrained environment is becoming critical for both business leaders and policymakers,” said CERA Chairman Daniel Yergin. “Energy companies will increasingly be called upon to be partners in managing the world’s water resources, along with agriculture and other large users.”

Water rights advocates in the United States have been increasingly at odds with the natural gas industry because of the amounts of wastewater produced by hydraulic fracturing for unconventional horizontal wells. Hydraulic fracturing was exempted from regulation under the U.S. Safe Drinking Water Act, but some Congressional members have vowed to change that (see Daily GPI, Nov. 29, 2008). Meanwhile, U.S. gas producers have begun to use innovative technology to recycle the wastewater created from hydraulic fracturing (see Daily GPI, Nov. 25, 2008).

“The importance of bringing water into the energy equation now cannot be underestimated as we are heading for a more water-scarce future,” said World Economic Forum Senior Director Christoph Frei. “Optimizing future energy choices is becoming a ‘trilemma’ as water implications need to be considered alongside energy security and climate change impacts.”

Agriculture is the world’s largest water user, representing 70% of freshwater withdrawn worldwide. The energy sector uses only about 8% of the world freshwater, “but this number can be as high as 40% in developed countries,” the study noted. “By comparison, water consumption for energy in the United States is about 5%, compared to 85% for agriculture.”

The report is available at www.2.cera.com/docs/WEF_Fall2008_CERA.pdf.

©Copyright 2009Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.