Worlds first regular bulk water shipment by tanker

July 12, 2010 1:20 PM

A Texas company S2C Global Systems has announced that it is moving forward with a plan to ship 2.9 billion to 9 billion gallons of water a year from the small Alaskan town of Sitka to the west coast of India (near Mumbai). If the company succeeds in carrying out the shipments, the deal would represent the world’s first regular, bulk exports of water via tanker. The water will be redistributed to places in India, southeast Asia and the Middle East. The Alaskan town of about 8,000 people could earn up to 90 million a year in revenue.
posted by stbalbach (53 comments total)

1. I really hope the tankers never held anything other than potable water. It would suck if in 5 years it comes out these tankers previously ported pesticides.

2. Seems like this is pretty environmentally unfriendly, but then people ship water from France just to have the brand on the side.

3. At least when there is the inevitable spill the jokes will write themselves.
posted by cjorgensen at 1:23 PM on July 12, 2010

They're taking a boat and filling it with water?
Give me $45 million and a drill. I'll do it for half the price.
posted by -harlequin- at 1:24 PM on July 12, 2010 [1 favorite]

Actually, just give me $45M, I'll buy my own drill.
posted by -harlequin- at 1:25 PM on July 12, 2010 [2 favorites]

They could double their efficiency by floating a second tanker on the cargo of the first tanker.
posted by Babblesort at 1:27 PM on July 12, 2010 [8 favorites]

Whilst this seems like a worthwhile cause (India getting water) it seems to me that it just has to be a bad idea somehow. Not sure how, just seems like a really bad fucking idea.
posted by jontyjago at 1:28 PM on July 12, 2010

The Alaskan town of about 8,000 people could earn up to 90 million a year in revenue.

Wow. So how do you handle that? Everybody gets a vacation in the South of France for 3 months in winter? All the kids go university? Everyone gets a check in the mail? Main Street is paved with goldbricks? Also, do new arrivals get the same deal?

I have vague memories of a documentary about a tiny South Sea Island that was one giant pile of phosphorus and for a while everybody on the island was a millionaire, but now the phosphorus is gone and people are back to being poor. I imagine it is the same sort of thing as some average Joe winning a huge lottery-- it takes a lot of work, some brains, and restraint not to blow through the whole pile and end up bankrupt in the end.
posted by Secret Life of Gravy at 1:32 PM on July 12, 2010 [1 favorite]

Meanwhile, T. Boone Pickens has a plan to pump water to Texas cities that often experience drought, from other cities in Texas.
posted by zarq at 1:34 PM on July 12, 2010

The water wars are coming, that's for sure.
posted by 2bucksplus at 1:35 PM on July 12, 2010 [3 favorites]

The politics of water, in the 21st century, will make the politics of oil look like rookie-league practice.
posted by Thorzdad at 1:36 PM on July 12, 2010 [8 favorites]

I don't know if it's a bad idea per se, but you have to wonder at what point it becomes cheaper to just build local desalination plants rather than ship halfway around the world. (which isn't to say desalination might not have it's own problems, just, at least not relying on foreign countries for something as vital as water...)
posted by yeloson at 1:36 PM on July 12, 2010 [1 favorite]

Actually Sitka has a population of about 9,000 not 8,000, making it the fourth-largest city by population in Alaska. That one thousand makes a huge difference, in Alaska.
posted by stbalbach at 1:39 PM on July 12, 2010

Not sure how, just seems like a really bad fucking idea.

Probably because it smacks of a thirsty, overcrowded and dying civilization trying desperately to stave off starvation and death for a few more generations.

We used to treat oil like water and now were treating water like oil.

We're in decline, folks.
posted by Avenger at 1:41 PM on July 12, 2010 [6 favorites]

Sweet. Now all the residents of Sitka can afford to stop drinking that communist government tap water and buy cases of Fiji water instead.
posted by freecellwizard at 1:45 PM on July 12, 2010

Wow. So how do you handle that? Everybody gets a vacation in the South of France for 3 months in winter? All the kids go university? Everyone gets a check in the mail? Main Street is paved with goldbricks? Also, do new arrivals get the same deal?

1. the $90 million quote is the max range, the article says the startup income estimate is about $26 million.

2. Even assuming that $90 million is pure profit, devoid of infrastructure costs, and there is some bizarre economics that distributes it to every living person in the town, that's less than 12 grand a year per person. Which is awesome, but not exactly "paving the streets with gold" there. $26 million divided amongst 8,000 people is less than most people making over thirty grand have to pay in income tax.

3. Much like Texas towns with oil revenues I imagine it mostly means residents don't have to pay a lot of taxes.
posted by XQUZYPHYR at 1:46 PM on July 12, 2010

Needs branding. How about "Grim Meathook Springs"?
posted by Joe Beese at 1:49 PM on July 12, 2010 [1 favorite]

Sitka, AK? Isn't that a punchline in a really stupid Sandra Bullock- Ryan Reynolds RomCom?
posted by vhsiv at 1:51 PM on July 12, 2010

"Whilst this seems like a worthwhile cause (India getting water) it seems to me that it just has to be a bad idea somehow. Not sure how, just seems like a really bad fucking idea."

Because this deal strips an ecosystem of its most vital resource (besides air, I guess) and sells it for profit. The downsides may be minor in Sitka because of their low population, but if water trading becomes a big deal in other places it'll cause no end of trouble.
posted by Kevin Street at 1:56 PM on July 12, 2010

> I have vague memories of a documentary about a tiny South Sea Island that was one giant pile of phosphorus and for a while everybody on the island was a millionaire

Nauru.
posted by Bangaioh at 1:56 PM on July 12, 2010 [2 favorites]

Even assuming that $90 million is pure profit, devoid of infrastructure costs, and there is some bizarre economics that distributes it to every living person in the town, that's less than 12 grand a year per person

You're assuming that the town will cut a check for each person. I'm not making that assumption. If the town itself gets a check for 90 million, and invests as a corporation that could add up over a few years. However they go about it, there will be some pretty heated townhall discussions. Does a family of seven get 80,000 vs. a family of two getting 22,000? If you decide each family gets a lump sum, what about singletons? Could lead to some interesting social upheavals.
posted by Secret Life of Gravy at 1:57 PM on July 12, 2010

Oh thanks, Bangaioh That's a pretty sad story. The island was destroyed ecologically and they inhabitants have little to show for it.
posted by Secret Life of Gravy at 2:00 PM on July 12, 2010

The water wars thing is greatly hyped up. Cooperation agreements don't make good headlines, but they're remarkably common when it comes to water.
posted by knapah at 2:04 PM on July 12, 2010

Because this deal strips an ecosystem of its most vital resource (besides air, I guess) and sells it for profit.

And let's not forget the other side of the coin: what would happen to the people in India who might become dependent on a source of water two oceans across if it suddenly became much more expensive or stopped being available altogether?
posted by Bangaioh at 2:04 PM on July 12, 2010

Wow. So how do you handle that?

Alaska has already handled it for their oil reserves: Alaska Permanent Fund. $1300 last year.
posted by smackfu at 2:04 PM on July 12, 2010 [1 favorite]

Alaska has already handled it for their oil reserves: Alaska Permanent Fund. $1300 last year.

Heh. I had actually walked away from the computer when I remembered when Palin was running for president she made a big deal out of how she cut a check for each and every Alaskan.

So they won't be paying state taxes and they won't be paying city taxes. Nice. I hope that some of the money goes into a wilderness preservation fund or something.
posted by Secret Life of Gravy at 2:11 PM on July 12, 2010

It won't be so cost effective when the price of oil doubles. I don't reckon those supertankers just swim back and forth. A tanker filled with water is also going to sit lower and cost more in fuel than one filled with oil. (Though it won't sink because salt water is heavier than fresh.) I can't see the economics of this being anything more than a stunt.
posted by seanmpuckett at 2:13 PM on July 12, 2010 [1 favorite]

Isn't this illegal under NAFTA? Or maybe that only applies to watersheds shared with Canada. It sounds like surface water vs ground water (is there ground water in Alaska?) so it would not be a total surprise to hear about legal challenges under NAFTA in the future.
posted by GuyZero at 2:17 PM on July 12, 2010 [1 favorite]

And let's not forget the other side of the coin: what would happen to the people in India who might become dependent on a source of water two oceans across if it suddenly became much more expensive or stopped being available altogether?

Probably the same thing that would happen to the vast majority of people in industrialized nations who are dependent on sources of food which are generally quite distant. (note: even if you buy 100% local you're still usually dependent on imported food to the extent that there wouldn't be enough 100% local food to go around if the imports stopped).
posted by Justinian at 2:17 PM on July 12, 2010 [1 favorite]

Oh, Sitka is on an island off the coast so it definitely doesn't share a watershed. I wonder how much NAFTA's bulk water export restrictions figured into the location selection. Wikipedia says over 86 inches of rain annually so I guess there's a lot of otherwise unused fresh water just laying around.
posted by GuyZero at 2:34 PM on July 12, 2010

But industrialized nations can grow their own food. Canada and the United States could certainly survive without importing food from other continents, and most of Europe probably could as well, along with Australia and South America and so on. It isn't the same as becoming dependent on imported water.

Millions of people die in Southeast Asia because they don't have access to clean water. Let's say the supply from Sitka saves a good portion of them (although its cost would make that unlikely) - then oil gets too expensive and the supply stops. Do they go back to drinking arsenic tainted water from wells? Something needs to be done to help those people, but unsustainable solutions will only make the long term problem worse.
posted by Kevin Street at 2:35 PM on July 12, 2010 [2 favorites]

Something is not right here. Mumbai to Sitka is 7 / 8000 miles.
Within 2000 miles there is the tropical rain belt comprising of Thailand , Malaysia and Indonesia where rainfall averages nearly 100 inchs a year. Who pays for the water? Who owns the ships?
the world’s first regular, bulk exports of water via tanker Not quite right.
Here in Mallorca water was shipped by tanker from the mouth of the Ebro prior to Desalination plants being finished. Japan has also imported water by tanker. The economics seem unattractive unless there is a side game being played.
posted by adamvasco at 2:36 PM on July 12, 2010

What ever became of Dean Kamen's Slingshot invention? In a talk he gave at Microsoft a year or so ago, he said that he was trying extremely hard to convince the UN that shipping water was costly and stupid.
posted by hanoixan at 2:38 PM on July 12, 2010

The politics of water, in the 21st century, will make the politics of oil look like rookie-league practice.

They both pail (do you see what i did there?) before the politics of dancing.
posted by entropicamericana at 2:56 PM on July 12, 2010

That we get bottled water shipped from Italy and/or France is not really true. I was told at an upper end store that all that got shipped were lables! bottles and water were put on and in here!
posted by Postroad at 2:56 PM on July 12, 2010

Postroad, that's totally wrong. Whoever told you that had no clue. A bit of googling and you can see for yourself.
posted by cjorgensen at 2:59 PM on July 12, 2010

I have vague memories of a documentary about a tiny South Sea Island that was one giant pile of phosphorus

A giant pile of bird shit in the middle of the ocean. They squandered the highest island GDP per-capita in the world in a 20-year period on completely asinine "investments" like:

• A national airline (total area of country: 8 sq. mi.)
• A national shipping company
• Hundreds of millions of £s in foreign commercial real estate (hotels, pubs, etc., all sold for enormous losses)
• Financing the not-surpisingly-unsuccessful West End musical Leonardo: A Portrait of Love (check out the song list… really, it's awesome!)

Not to mention the tens of millions just flat-out stolen from the trust by their Sydney advisers. And most of the "good life" the native people saw was the tons of Western food they became addicted to, causing "rates of diabetes, heart disease and hypertension to reach world-beating levels and life-expectancy to plummet."

Then when the money started drying up they tried laundering Russian mobster money for a while until they got smacked down [PDF].

Nauru is like the Pacific Island nation version of Frankie Lymon.
posted by Civil_Disobedient at 3:07 PM on July 12, 2010 [2 favorites]

...2.9 billion to 9 billion gallons of water a year ... The Alaskan town of about 8,000 people could earn up to 90 million a year in revenue.

does that strike anyone else as sinful somehow? let's say they ship 9 billion gallons of water (high end estimate) & get $26 billion in revenues (low end estimate). and that doesn't account for the company's profits, and whatever middle(wo)men are involved. i mean ... wtf? that's just. plain. wrong.
posted by msconduct at 3:10 PM on July 12, 2010

at what point it becomes cheaper to just build local desalination plants

The Libyans built the Great Man Made River because it was cheaper than desalination. Using the numbers in that article they figure 85 cents per cubic meter of desalinated water. At that price the 156,000 cubic meters S2C are sending would cost $132,600 if it were desalinated instead. I'm guessing shipping is cheaper.
posted by IanMorr at 3:12 PM on July 12, 2010

The Alaskan town of about 8,000 people could earn up to 90 million a year in revenue.

That's great but where are they going to house an extra 90 million people a year? I mean, it'll only be 72 years before everyone on Earth is living there. Might get a bit crowded.
posted by EndsOfInvention at 3:18 PM on July 12, 2010

Also adding to the shame of Nauru is that they now finance their country by being a detention center for immigrants to Australia. Kind of like what Guantanamo Bay was before all the torture and stuff.

There's a decent This American Life report about it too. If I remember correctly, that report highlighted the strange political and social limbo the refugees were in.

It was pretty sad.
posted by dave78981 at 3:37 PM on July 12, 2010

It isn't the same as becoming dependent on imported water.

What you're saying is only true if you're drawing a really, really arbitrary line between foodstuffs which are imported across national borders and foodstuffs which are transported two thousand miles but stay inside national borders. The United States and Canada can absolutely feed themselves. They can do so by shipping food for thousands of miles; it just so happens that those miles don't cross borders.

Europe doesn't even have that loophole; food shipped from the Ukraine or whatever crosses a heck of a lot of boundaries.

In any case I don't think the relevant issue is whether food crosses borders, it is how far you ship it.
posted by Justinian at 3:49 PM on July 12, 2010

Justinian: I think the point is that if you are dependant on a foreign power for your freshwater, you are in a bad, bad position. Fresh water isn't a luxury...
posted by TravellingDen at 4:08 PM on July 12, 2010

Fresh water isn't a luxury...

Some interesting info here about this topic...
posted by dave78981 at 4:16 PM on July 12, 2010

Think of the ecological destruction if it spills!
posted by jefflowrey at 4:26 PM on July 12, 2010

Not only a foreign power, but one on another continent. Ideally, we should be working towards making this a world where everyone has enough clean water to drink right where they live, and it shouldn't have to be shipped across an ocean to keep people alive.
posted by Kevin Street at 4:28 PM on July 12, 2010 [2 favorites]

"Alaska has already handled it for their oil reserves: Alaska Permanent Fund. $1300 last year."

"So they won't be paying state taxes and they won't be paying city taxes. Nice. I hope that some of the money goes into a wilderness preservation fund or something."

Actually, Alaska has no state tax. And the PFD is usually around the $800-$900 mark.
posted by Foam Pants at 4:47 PM on July 12, 2010

Give me $45 million and a drill. I'll do it for half the price.

Yeah, because that worked so well for Bangladesh.

I really hope the tankers never held anything other than potable water.

While there are tankers out there specifically designed to carry food-grade products (including special orange juice tankers, who knew?), there are also an awful lot of single hulled oil tankers that from this year are banned from European waters. See smaller ships that can deliver to shallower ports in the article, I bet they're going cheap at the moment.
posted by Lebannen at 5:56 PM on July 12, 2010

The classes of vessels they are talking about taking on (Suezmax and VLCC) carry exclusively crude oil. Just FYI.

No, I'm not sure how they plan on cleaning them, but new ones will cost you hundreds of millions of dollars.
posted by digitalprimate at 5:58 PM on July 12, 2010

Most likely they'll line the interior, like this bathtub liner.

Since the water is coming from a lake, it will have to treated in some way to make it potable, so there is some cost involved for a water treatment facility.
posted by stbalbach at 6:43 PM on July 12, 2010

I'm not sure how they plan on cleaning them

That's easy they take all the water and just run all of it through some kind of filter syst… oh.
posted by Civil_Disobedient at 6:45 PM on July 12, 2010

This is BS.

The company doesn't appear to have any money, they're a penny stock worth $0.02/share. The CEO never worked in the water or shipping business, his only qualification seems to be "international market development, import, export, sales, marketing and public relations." That he picked up working in a family business. Only one director has any experience in the water business. There is only one other significant employee who is not a director. Another director is "renowned as the co-producer of Andrew Lloyd Webber's The Phantom of the Opera and CATS", which does not IMHO make her a useful director of this type of business. This team has very little credibility.

This reads like an aspirational press release written after a business trip to India that is a poor attempt to pump up a penny stock. I think it's these kind of total BS/zero credibility companies that give green technology a bad name. It just pisses my off no end.
posted by Long Way To Go at 7:47 PM on July 12, 2010 [4 favorites]

Those are interesting links, and maybe your synthesis is right, but as a counter-point, penny stock's don't mean anything, they are often just shells. Owning a penny-stock would allow them at some future date to access the public markets for funds without having to go through the expense and time of an IPO. Penny stock shell companies can sit idle for years doing nothing, worth nothing, while the real business is done in private - then when they are ready to go "public", the penny stock buys out the private company by issuing stock to the owners in a "merger".

As for experience in the water business, well, lots of people get involved in things they don't have experience in, that doesn't mean it's a scam. And I think the experience of the CEO and BOD is related, even if you don't. This looks like a small time affair, they are probably contracting out most of the work, they don't need to be experts in shipping, rather marketing and business contacts.

Should you invest in it? No way. But no ones asking for your investment. What's the stock's volume? "Avg Vol (3m): 94,398" at 5c per share that's about $4700 a day in total volume. If this was supposed to be "pump and dump" they seem to have failed because no one is buying the stock!
posted by stbalbach at 10:02 PM on July 12, 2010

The negotiations for this deal with Indian cities would probably have been conducted starting last year, when the monsoon was abysmal, and necessitated water rationing in most parts of Bombay. However, just today, I read a front page article in the Times of India, that Mumbai has already received half of its average annual rainfall after just 5 weeks into its 4 month monsoon season. I suspect the status is similar for most regions along the western coast. Maybe this changes the prospects of this arrangement being executed. Maybe not over the long term, but for the next year or two.
posted by Gyan at 10:24 PM on July 12, 2010

I have to disagree with the common sentiment. As a way to make up for a lack of rainfall in a given area, there's nothing wrong with shipping water. Now, if it becomes a permanent thing where even in normal rainfall years water is being imported, that's a different deal entirely.

And as far as the US and Canada being self-supporting food wise? Well, it's hard to say. You see, in all (or most of) the areas where we grow lots of food crops, we are also using water faster from aquifers faster than it is replenished.
posted by wierdo at 9:40 AM on July 13, 2010