Scattered thunderstorms early, then variable clouds overnight with more showers at times. Storms may contain strong gusty winds. Low 69F. Winds W at 5 to 10 mph. Chance of rain 60%..
Tonight
Scattered thunderstorms early, then variable clouds overnight with more showers at times. Storms may contain strong gusty winds. Low 69F. Winds W at 5 to 10 mph. Chance of rain 60%.
The recent cyberattacks targeting municipal water systems should serve as a wake-up call. While much of the public attention focused on whether hackers could disrupt drinking water supplies, the larger lesson received far less attention. Water has quietly become one of the most important strategic resources underpinning the American economy, national security and our quality of life.
Most of us think about water only when we turn on the faucet, water the lawn or order a meal at a restaurant where a glass of water appears almost automatically and at no cost. It is so abundant in our daily lives that we rarely stop to consider its value. Water is one of the few resources that remain largely invisible until it is suddenly unavailable.
History teaches us that societies rarely appreciate essential infrastructure until it fails. Electricity commands attention when the lights go out. Roads become important when they are impassable. Water is no different. Droughts, contamination, aging infrastructure and now cyber threats all remind us that our most essential resource is far more fragile than we assume. Even those examples only scratch the surface of water’s importance.
The modern industrial demands of our water resourcesÂ
Agriculture has always depended on water, but today’s competition for that resource is intensifying. Across the American West, farmers face shrinking water supplies, declining groundwater levels, changing regulations and growing uncertainty about future availability. Water is increasingly determining not only what crops can be grown, but where farmland retains its value and where investment flows.
At the same time, new demands are emerging. Artificial intelligence, cloud computing and cryptocurrency depend on massive data centers that require extraordinary amounts of water for cooling. Most end-users never consider the water footprint embedded in every digital breakthrough.
Energy production presents another challenge. Whether supporting traditional energy development or the expanding infrastructure required for cleaner technologies, water remains indispensable. Manufacturing, semiconductor production, pharmaceuticals, mining and countless other industries rely upon secure water supplies to function. Water is not simply another utility. It is a foundational input for nearly every part of the modern economy.
This growing competition raises difficult questions that communities nationwide are beginning to confront. How should limited water supplies be allocated among agriculture, housing, industry and technology? How do we expand supply in a fundamentally constrained natural resource? Do we need more aggressive water-use efficiency requirements? How should investors evaluate the risks facing assets in regions experiencing increasing water stress? What happens when deep-pocketed investors begin investing in real estate, not for the dirt, but for the water?
Water policy shapes public policy
These questions influence real estate values, lending decisions, insurance markets, infrastructure planning and investment strategies. Fortunately, innovation is also creating opportunities. Advances in desalination, groundwater recharge, water recycling, improved irrigation, water banking and evaporation-reduction technologies demonstrate that solutions exist. Better monitoring systems, improved forecasting and smarter infrastructure can help stretch existing supplies further while improving reliability. Technology alone won’t solve every challenge, but thoughtful planning and sound policy can drive meaningful progress.
The recent federal intervention in the Colorado River crisis makes clear that these pressures are already shaping public policy. The federal proposal would require Arizona, California and Nevada to confront deeper reductions in water use over the next two years as the system struggles with prolonged drought and competing demands. The future of agriculture, housing, energy, technology and economic growth across the West increasingly depends on decisions being made now.
Water has historically been inexpensive and readily available for Americans, so we have conditioned ourselves to think of it as limitless. The true value of water is rarely reflected by its price. Its importance only becomes obvious when it disappears.
Those who continue treating water as an unlimited resource may discover, too late, that the most valuable asset is often the one we spent a lifetime taking for granted.
Jennifer Simmonson is a director in real estate at Marshall & Stevens, a consulting and financial valuation adviser. She wrote this for InsideSources.com.
