Water: Canada’s Most Valuable Resource

Posted by Jeff Rubin on September 8th, 2010 under SmallerWorldTags: , ,  • 3 Comments

Canadians will never go thirsty. With over one million lakes, including part ownership of the Great Lakes, and massive ice fields, Canada is home to nearly nine per cent of the world’s supply of fresh water. But with a population of less than one per cent of the world’s total, Canada has a lot of room for water exports. In time, those exports might be more valuable than the 170 billion barrels of oil that are trapped in the country’s tar sands.

The notion of exporting water is still a taboo subject in Canadian policy circles; the country took great pains to keep water out of the North American Free Trade Agreement. But, like most things, acceptance may be a matter of price. And the price of water is rising steadily, making Canada’s freshwater bounty more valuable every day.

As with tar sands oil, the natural market for Canadian water is the United States. While places like Buffalo and Cleveland have access to just as much water as any place in Canada, that’s not where folks have been moving to lately. Increasingly, states like California and Florida are turning to desalination to meet their freshwater needs. At around 65 cents per cubic meter, the going rate of desalinated water in the US provides a very attractive pricing point for potential Canadian water exports.

At those prices, one study calculated that the province of Quebec, home to roughly one third of Canada’s renewable sources of fresh water, could reap something in the neighborhood of a $6.5 billion annual tariff by selling as little as 10 per cent of its one trillion cubic meters of fresh water every year. That’s a multiple of the dividend Hydro-Québec pays the province from selling hydro-electric power. And those kinds of revenues could even convince Canadians that it’s even better to be an aqua-power than a petro-power. It certainly leaves a much smaller carbon trail.

Of course, pricing water, let alone exporting it, remains anathema to the majority of Canadians. But, at the same time, the enormous water usage involved in the country’s largest energy project, the Alberta tar sands, has made it painfully clear that a free-water policy is a recipe for waste and environmental degradation.

Would 250,000-plus-barrels-a-day producers like Suncor and Syncrude be so eager to pollute four barrels of fresh water in the production a single barrel of oil if they had to pay the same price that many Americans already pay for desalinated water? My guess is that if tar sand producers had to absorb those kinds of water costs, it wouldn’t take long before shareholders got management focused on finding ways to use a whole lot less water.

Americans are increasingly paying their northern neighbor to fill their gas tanks. In time, they may pay them even more to fill their taps.

  • Cyberclark

    Recently there were two news items in Alberta. Drumheller Alberta and Okotoks Alberta purchased water allotments. The first was from an unnamed party (insider)the other was from an Oil Company.

    The latter, cost Okotoks over a million dollars for rights to some 230,000 cubic feet of water.

    Water allotments have never been sold in the past. The oil companies, towns and cities received them free of charge as did the unnamed insider. Why then the sale?

    Bolstered by the Alberta Government's promise of untold riches the towns paid up.

    This adds many dollars to the resource and forces the price of water utilities way up. Edmonton, never shy about going for the gold now has the highest water prices in the world (National Geographic April 2010).

    The Conservative Association of Canada went before the Liberal dominated Privy Council to argue that bulk water export was included in NAFTA. Itthat it was not; definitely.

    The Conservatives at the time said they would wait for a better opportunity.

    Following the long standing Conservative dream of including water into NAFTA and changing bulk water to a commodity is fore front in their plans.

    With Conservative Governments in across the map it seems like a good time to go for the gold!

    If we export water under NAFTA rules (which are inherently unfair and biased towards the US), we must give the Americans first chance at the water and we cannot charge the Americans more money than we are now paying.

    The higher they push the prices on Canadian water to Canadians, the higher the exporters can charge for the water going to the US. This is simply price fixing on a grand scale!

    Under the new scheme, when it comes time to export, people in Alberta will be paying money than those people in
    California who are the targeted export market.

    Harper is on side. The Canada Environment are running an add on TV which is carrying subtle advertisements in fill in spots saying;our water is our finest resource and it must be shared!

    This is a north American movement which has been kept away from the eyes of the public.
    On the east coast quote:

    Fortunately, there is some hope that the wisdom of water sales may eventually triumph over emotionalism.

    Last spring the Mc Curdy Group, a Newfoundland company looking for permission to tanker 13 billion gallons a year from pristine Gisbourne Lake, received an unexpected endorsement
    from Newfoundland's Liberal Premier Roger Grimes.

    Mr. Grimes has promised to use the money the government gets from the deal to underwrite university tuition in Canada's poorest province.

    A better plan would be to auction the rights and use the proceeds for much-needed tax cuts. (A striking difference between Conservative and Liberals)

    The McCurdy Group is still waiting for an official go-ahead but thanks to Canadian law, the federal government can't stop the province from granting the permit. “We don't want to sell water in bulk,” says Mr. Chretien,”But at the same time, we have to realize that we don't have absolute control of the water. We have control of navigable waters, but we don't have control of other types of water that are under the provincial jurisdiction.” Ontario and British Columbia have already said “no” to companies that want to sell water by tanker but if Newfoundland has success in water marketing that might change.

    Notably this legislation puts all the water into one bucket so to speak and leaves exporting bulk up to the provinces.

    And in Calgary a quote from the Green Party; still another Conservative party:

    * The case for selling Canadian water is being presented more forcefully in the media by SPP proponents, journalists, business strategists and investors seeking profits in this potentially lucrative market.

    * Massive NAFTA Super-Corridors, complete with plans for water pipelines, are in the works.
    * Bulk water exports were the focus of meetings of the North American Future2025 Project. According to documents leaked by a Washington-based think tank,SPP meetings in Calgary on April 28, 2007 were to discuss “water consumption, water transfers and artificial diversions of bulk water” with the aim of “maximizing the policy impact.

    And the nail in the coffin from Alberta:

    In the 80s the Alberta Government commissioned a study by pipeline Weatherford on moving water from the Peace River into Southern Alberta, using it to irrigate the pipeline corridor and export huge amounts into the American northern states.

    This plan calls for an immense pipe line capable of moving two-thirds of the Peace River Flow through the pipe along with the assurances it will not harm the wild life.

    This same plan calls for 8 lift stations to move the water (Another reason why Alberta is after more Generation and trying to freeze out Calgary); each of them using the electrical power of a small city.

    Further, this plan was approved, only shelved, until the weather gets dry enough and the public can see the light or, the political opportunity, such as now arrives.

    All this ties in with the new dam being built on the Peace announced by BCs Gordon Campbell who at every opportunity is telling the world he is going to usher in a new way of looking after our resource.

    Between the existing dam on the Peace River and the proposed New Dam on the Peace River there will be created a large lake, sufficient to act as a sump to draw down the amount of water this pipeline is capable of, all year around; regardless of water levels.

    If there is a shift away from the Conservatives or it comes to Canadians attention they are charged exploitative charges on their water service the whole scenario can change.

    If water can be exported outside of the NAFTA agreement and Canadians will not have to bear the brunt of the higher exploitative pricing. The Conservatives will find a way!

    The Federal Liberals' Mr. Michael Ignatieff has betrayed the rank and file Liberals by endorsing Bulk Water Exports to the US under a NAFTA agreement; contrary to Liberals Policy.

    He is known to have spent much of his time in the US and is very Pro US in his thinking, pandering to the US while deceiving his Canadian voter base.

    Pundits place Mr. Ignatieff as being a professional lecturer in politic with absolutely no experience under foot. This leaves him very prone to gaffs and water may well be the biggest of them all.

    The NDP is the only political party in Canada that is against turning water into a commodity by exporting it to the US!

    Article with full links at:

  • Vegie grower

    OK–Cyberclark actually knows what he is talking about.Really knows! . Which forces me to do some actual thinking for a change which may take a day or two. But first, Jeff,in all truth you started off with the most massively deceptive paragraph I have ever seen you write. One million lakes ?Perhaps ,if you include farm dugouts and similar sized natural wet spots and sloughs. On top of that those one million lakes,(by volume),contain in them predominately fossil water first deposited at the end of the last ice age and maintained by replacement of very small annual runoff and evaporation by rain and snow melt that is sufficient to do so only because annual temperatures are so low with such long sub zero (frozen) periods that runoff/evaporation is very low. The entire northern boreal forest and far northern tundra are both, in precipitation terms, cold deserts. Precipitation for the last several thousand years has been inadequate to replace the water in those lakes if they were ever drained or if rising temperatures increased evaporation rates.Whether glaciers (melt them once and they won't be back in any time frame relevant to us) or boreal /tundra lakes (drain them once and they are gone forever and,very likely, the forests around them) the water they hold is an artifact that, in the current environment, is in grave peril. If they disappear, within a relatively short time frame we would very likely be left with a cold Gobi desert north. In this time of accelerating CO2 increases with almost certain attendant temperature increases and consequent evaporation increases from those lakes they are in peril without any diversion of water from them OR the drainage systems that barely maintain them. Those lakes very likely maintain the viability of the largest one of the large boreal forests/slash/carbon deposit ecosystems on the planet. Drain the lakes,kill the forest,raise the temperature,kill the moss underlay,release the largest captured CO2 and methane deposit on the planet,and then,throw in the Russian and Scandinavian boreal forests; YOU VERY LIKELY KILL THE PLANETARY ECOSYSTEM THAT ALLOWS US TO LIVE IN IT.Not to sound too extremist but reality sometimes bites. The problem here is you have ,assuming you are aware of the implications of your thesis,seen pricing as a solution. Shamefully inadequate analysis. Tell you what.Let's start with Lake Ontario or Erie.Take them through a dozen 5ft pipelines at high velocity.

    The reality is that the Americans do not have a water shortage.They have a shortage of cheap water. In environmental,planetary health terms,the best thing we can do is force up the price of their water,thus creating conditions where pricing will stop wastage and force use to the highest value demands. Further more using American demand to force up the price of our water is saying that we are so juvenile that we are incapable of recognizing the unique nature of our water. Okay,now stop and take a breath. You are saying “but I said renewable !”

    Fair enough.So what does that mean and what are the implications.The devil is always in the details Jeff. To my knowledge there are only two significant Canadian drainage basins,and admittably several very minor ones, that do not end up draining into the Arctic basin,including Hudson”s Bay.Northern draining systems, whether in clear rivers like the Yukon or MacKenzie or Saskatchewan or in lake overflow systems like the Churchill all send fresh water to the Arctic Ocean and allied basins.That fresh water dilutes the saltiness of the northern seas and thereby raises the freezing temperature of the water. Remove or reduce that fresh water and the northern seas lose there ice cover even faster-thereby raising northern temperatures and accelerating CO2 and methane release from both land and sea.During the 1960's the old USSR studied the concept of damming their northern draining rivers in order to drain them south to provide irrigation water to southern dry areas. To all our benefit they decided against it for the reasons I just put out. Sound familiar? Damn — reality really sucks. Frankly I find it incomprehensible that the inefficient old USSR with it's incompetent central planning political structure could figure this out while we just can't get it through our efficient little narrow minded capitalist minds that price is not king in all things. Legislation really does have a role.

    Vegie Grower

  • Denny

    I apologize for going somewhat off topic but I was amazed by the Peter Beutel CNBC interview on Monday, September 13. The Cameron Hanover analyst whined for several minutes about the high price of oil and how it is hampering economic growth in the United States, asking “do we really need oil at four times the price of 1995?”, as if it was the god given right of every American to have cheap gasoline. Joe Kernan then took a shot at supports of “Malthus” who, in his judgement, have been wrong about the limits of natural resources to support a growing population (never mind rapidly rising food prices and the impact of drought in Australia). However, the truly shocking of the piece was delivered in the final minute when Beutel stated that he believed peak oil would hit sometime between 2014-2018. A shocked Kernan could only respond, “really?” Light humor followed but no further questions such as, “how can you believe oil prices should be lower today when you also believe that peak oil will will hit within the next 4-8 years.” In any case, Beutel then gave his support to oil shale, canadian tar sands, and natural gas all of which (as Jeff Rubin has repeatedly emphasized) require a high oil price and plenty of water. Jeff, can you please have your agent get you on CNBC to provide some reality to the masses?