Monday, August 06, 2007

Yeah...we've got Gas, & Power Issues....but the Elephant in the Room is Water

We can always pay more for gas and power. But you can only get so much water these days. I see it all over America, especially in the West.

Salt Lake City knows it does not have enough water to sustain it's economy for 20 years;.It's much the same for Phoenix Arizona. What highlights the elephant in the room that we are avoiding is the discontinuation of housing construction in areas where clearly, there are insufficient water sources even now to sustain the new construction.
Construction in Areas with Insufficient Water
Soon, very soon the people of Washington City and St. George Utah will find that out after they make their home purchase they cannot resell their newly purchased home for the price they paid for it. Reason: water table issues. People cannot live where there is going to insufficient water.

Corporate contractors from Temecula California to Delta, Colorado are over building in anticipated populations growths. The challenge here is they would be accurate. Reason: influx of new families in Mexico.

Growth is not going to help. Democratic candidates are interested in more voters, Republicans are interested in cheap labor. This is softening our borders...which ultimately increase the growth of Hispanic populations and softening of border laws therewith.

The ultimate challenge is how are we going to accommodate such growth for the lack of sufficient resources.

Ultimately it will be banks who decide where they will finance homes. Currently most banks require 5 gallons a minute for 4 hours of well water to qualify for parcel loan. Already most drillers have increased their drilling bit size from using a 6" bit to a 10" bit in order to get more wells to qualify for real estate loans. Banks need to become more vigilant on whether they will finance construction, by thoroughly investigating the 100 year expectation of water resources. They are failing to do so. The reason; they are looking out for themselves for a 30 year loan.

Ultimately what you buy now in the west very possibly could have lower property value not because of location, but because of water availability.

You wonder why we're ultimately going to pay $4.00 dollars a gallon for a gallon of gas. The easy is simple: Go to your local convenience store. The going rate of one quart of bottled water is $1.00. Go figure. That coupled with the fact the oil companies have not built any new refineries in 25 years. (I hear it on NPR this week.) And they have not motivation to do so. Increased supply mean lower profit. Maybe it's time the government got into the oil refining business?

Won't happen. If you think the corporate lobbies are strong for insurance, credit and banking industry...its not different than the oil lobby. It's just not going to happen. Why? Ask a retired any US Senator while they take their bankrolled yacht excursion to the Bahamas.

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