Peak Water?

I'm not sure who coined the term, but some, including Peter Gleick recently, have used the term Peak Water to refer to a growing water shortage in the world. I want to draw attention to the term Peak Water and its appropriateness for this situation.

“Is there such a thing as ‘peak water’? There is a vast amount of water on the planet—but we are facing a crisis of running out of sustainably managed water,” said Dr. Peter Gleick, president of the Pacific Institute. “Humans already appropriate over 50% of all renewable and accessible freshwater flows, and yet billions still lack the most basic water services.”

In using the term Peak Water, he is referring to Peak Oil, and trying to draw comparisons. For a more accurate version of what many believers of Peak Oil think, go here. Basically, because oil field production follows a bell curve, Peakers believe that they can extrapolate this bell curve to the entire world's supply. They are constantly looking for and predicting when the peak will come, but most importantly, want to discuss consequences of it once we get there.

Problems I have with Peak Oil theory:

1. While a single oil field may indeed follow a bell curve, the world's oil supply does not because searching, extraction and demand are not constant as the price rises.
   
2. Why does the peak really matter for prices? The short-run differences in the amount supplied and demanded matter, not the trend in supply per se.
   
3. Prices matter, and peakers forget about this. When the price spikes, many things happen--people use less, suppliers look for more oil, and suppliers extract more from already known fields, and do it with better technology developed because of rising prices.
4. Price spikes do not cripple our economy. Peakers like to believe that a X% cutback in oil will be felt equally thoughout the economy, but this is foolish. If the city of Berkeley is faced with less supply, for example, people cut back on those oil-using activities that are least important, and those that really need oil, like ambulance service and food transportation, still pay the increased prices of gas without a second thought.
   

Speaking of ambulance and food service, the group Oil Independent Berkeley released a draft report recently directing the city to do many things, one of which was to buy electric ambulances so that when the oil shortage hits, we will be prepared. A fantastically expensive way to use a tiny bit less oil.

Now, to get to water. Besides the major problems I have with peak oil, even if true, applying it to water is odd (as Gleick and Palaniappan point out) . Furthermore, water is a renewable resource rather than a nonrenewable one (except some groundwater situations), and so Peak Oil refers mainly to a permanent condition while with water, it is more about management (again, as they point out as well). The Gleick and Palaniappan chapter does a good job contrasting the two resources, but in general, I think attempts to bring the alleged water crisis underneath the umbrella of Peak Oil seem to be an attempt to corral anti-growth, anti-corporate activists into the same tent, and it confuses the message of both problems.

Bottom Line: People are flexible and can deal easily with less, but we need good price signals to do so. The oil market allows prices to rise and to therefore allocate the scare resource. Water prices ought to be able to do the same.