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VIEW: ‘Canada should look at Spain’s water banks,’ says Eric Reguly

Globe and Mail columnist Eric Reguly writes in today’s Report on Business magazine that, “Spain is creating Europe’s first ‘water banks,’ which may be the forerunners of the water markets of the future. This has the potential to be the biggest resources growth story since the oil trade began more than a century ago.”

Due to water shortages in Spain, “Last summer, Barcelona briefly relied on shiploads of water from Marseilles to keep the taps on. Expensive, energy-gobbling desalinization plants-Spain has more than 700 of them-are being built everywhere.”

Reguly writes that, “‘water use rights exchange centres,’ better known as water banks…allow farmers with irrigation rights, typically in the wetter central and northern parts of Spain, to sell to the parched regions in the south, where cities, resorts and golf courses are going dry.”

“The Spanish government plans to set up water banks to allow farmers and others to sell their water rights, freeing up tens of billions of litres of annual water flow. The system is in its infancy and cannot be considered a true market yet, because public agencies control the transfers. But over time, the experiment could well evolve into a larger and more sophisticated tracking and delivery system.”

“One report late last year said the farmer Manuel Vicente Piriz, in central Spain, left fallow 150 acres of land and sold the water rights for more than €200,000-more than he would have earned on the crop. He was just one of 200 farmers in the area to boost their family wealth by producing less. Never mind that less farmland means less food and higher food prices.”

Citing the USD $425 billion global water business, Reguly concludes,”The water banks are being watched closely by other countries as the water crisis emerges. Canada should take a good long look at the Spanish experiment.”

But already in Canada, the Water Transfer Alberta website notes, “The issue of water scarcity is affecting an increasing number of Alberta businesses and individuals. As part of the recently implemented South Saskatchewan River Basin Water Management Plan, Alberta Environment has imposed a moratorium and no longer accepts new water licence applications to draw water from the Bow, Oldman, and South Saskatchewan River sub-basins.”

“The issue is not confined to Southern Alberta. New projects in northern Alberta such as mining and oil sands operations will consume increasing quantities of water from the Athabasca and other area rivers. Looking forward, National Energy Board publications have acknowledged that the demand from planned mining operations will soon exceed the capacity of the Athabasca River.”

“Water is becoming an increasingly valuable commodity in Alberta. In particular, the moratorium is forcing new users of surface water outside of urban centers to contract directly with existing licence holders in order to acquire water rights.”

The website notes, “Water Transfer Alberta…helps new users get water rights and we help existing licence holders realize value. Through our extensive network of contacts in the industry, we can find buyers and sellers fast.”

His full column can be read at http://www.theglobeandmail.com/servlet/story/LAC.20090424.ROB5PG33//TPStory/Business

Water Transfer Alberta is at http://www.watertransferalberta.com/about.asp?mid=2