On today’s show we’re talking about one of the hidden costs, and therefore one of the hidden values of a parcel of land. This has to do with access to fresh drinking water. Water is emerging as the master resource that will determine the very survival of the human species. We tend to think of our water needs in terms of drinking water for human consumption and for washing and bathing. That for sure is a very real need. What we don’t see is the water consumed to produce the food we eat. 

Some forms of food production consume incredible amounts of water. For example in the state of California, 15% of the state’s water consumption goes towards the cultivation of almonds. That’s a huge number. 

We are seeing erosion of the water table in many parts of the country. When Las Vegas was founded about a century ago, it was a valley in the desert. The people at the time drilled relatively shallow wells that seemed to flow without limits. The early users of that ground water did not pay any attention to conservation. Today, most of those wells are dry and the city of Las Vegas gets its water from the Colorado River. The water level in the Colorado River has fallen steadily over the years and today, the final stages of the Colorado river that flow into Mexico no longer reach the ocean. The river bed is bone dry. There have been multiple diversions of the mighty Colorado river to service agricultural and municipal water needs of the communities along its path. The Central Arizona Project diverted the river into the city of Phoenix to provide fresh water for a metro of over 4.3M people. 

India is running out of water. Saudi Arabia is out of water. They have used their oil wealth to build the most elaborate desalination systems in the world. There’s no question that the cost and efficiency of desalination have come down dramatically over the past 50 years. The older evaporation based systems were the most power hungry of all. Today’s modern multi-stage reverse osmosis systems use 1/10th the energy of those original systems. Depending on the salinity of the source water, you’re looking at somewhere between $0.75 per cubic meter of water to $1.30 per cubic meter of water, that’s about 250 gallons. That assume that you have a large capacity municipal grade system. When you look the breakdown if these costs, about 45% of the cost of producing the water goes to direct energy costs. The remainder is tied up in the life cycle costs of the equipment and the operation of the plants. 

Let’s look at how much water it takes to produce food. It takes 15 gallons of water to produce a pound of lettuce and about 22 gallons to produce a pound of tomatoes. 

At the other end of the spectrum, it takes about 3,000 gallons to produce a pound of beef. So when you have that 8 ounce filet mignon steak, you should be mindful that you’ve just consumed about 1,500 gallons of water. If you have steak 7 days a week, and I know a few people who do, you’ve just consumed 10,500 gallons in a week for just your steak. That’s half a million gallons of water a year.  

I’m not telling you this to advocate a vegetarian or Vegan diet. That’s entirely up to you. This is just the hidden resource consumption that goes into our personal consumption of the one master resource in the world.
So when you purchase a parcel of land, you want to pay close attention to the water rights and responsibilities that come with that parcel of land. In North America, the water rights generally date back to British common law and are based on the concept of riparian water rights. Generally speaking, you own the ground water under your property. You have no ownership of water that flows across your land and you have significant responsibility to protect and maintain the water that flows across your land.