US Water Resources Under Foreign Control Increasing Amid Security Concerns

An expert says up to 63 million Americans are potentially exposed to unsafe drinking water. Upgrading the country's nearly 50-year-old lead water pipes alone will cost an estimated $60 billion. (Emmily/Shutterstock)

While U.S. officials continue to express concern over the surge in foreign-owned farm acreage, an important question looms: Who owns America’s water?

Foreign interests are expanding their hold on U.S. water in opaque ways besides just land ownership. At the moment, the door is wide open for foreign investment in water privatization.

Increased privatization in water utilities also leads to higher prices at the tap for residents, new research suggests.

Water pumped up from an underground well flows into a cistern on a farm in Fresno, Calif., on July 24, 2021. (Robyn Beck/AFP via Getty Images)

Moreover, private water companies in the United States lack transparency.

Information gaps, inaccuracies, and ownership data are missing from 14 publicly traded water companies that serve 33 states, according to a U.S. Government Accountability Office report.

There also are water futures to consider. In 2020, the Chicago Mercantile Exchange established its first water futures market, allowing investors to buy shares as with any other commodity.

Some analysts claim big investments in U.S. water futures can drive up costs for residents, saying inflated market prices may result in hoarding among water rights owners.

This trifecta approach is effectively tightening a foreign investment noose around America’s water.

Long-Term Threat

The United States is grappling with drought in 44 percent of the lower 48 states as of January. Western states have endured prolonged arid conditions for years, affecting multiple farming regions and domestic food supply.

Meanwhile, outside investors are placing their biggest bets on land acquisition.

Foreign ownership of U.S. agricultural land represents nearly 38 million acres. For perspective, that’s roughly the size of Illinois or Iowa. Between 2009 and 2019, foreign land holdings doubled.

With that comes the potential for turning water into money.

While laws concerning water usage vary from state to state, landowners often have the right to use, sell, or divert those resources. Coupled with expanding foreign ownership, some insiders are worried about America’s water.

New water pipes awaiting installation in Flint, Michigan. (Bill Pugliano/Getty Images)

“The topic is a very serious one,” a senior official within California’s resource management agency, who spoke on condition of anonymity, told The Epoch Times. “Wealthy non-farming Americans and foreign interests are buying up U.S. farms and water rights.”

Foreign investors are “manipulating domestic politics” in ways that prioritize the commodification of farmland over things such as sustainable use, clean food, and water quality, the person said.

“Foreign ownership of American real estate is one of the biggest long-term threats to the integrity of our political systems.”

Lawmakers also are sounding the alarm over foreign companies and nations owning broad swaths of U.S. agricultural land.

In May 2022, U.S. Rep. Dan Newhouse (R-Wash.) proposed legislation that would prohibit individuals or companies associated with China from the purchase of public or private agricultural land.

Rep. Chip Roy (R-Texas) introduced similar legislation with restrictions against China-affiliated ownership of U.S. farmland in 2021.

“Direct Chinese investment in the U.S. economy is a major threat to the American way of life,” he said in a statement.

Leaky Infrastructure

When it comes to water privatization, advocates point to America’s aging pipes as proof that corporations can deliver where the government has failed for decades.

Upgrading the country’s nearly 50-year-old lead water pipes alone will cost an estimated $60 billion.

While President Joe Biden originally proposed $45 billion to upgrade public water pipes and service lines, only $15 billion was allocated for lead pipe remediation in a bipartisan infrastructure bill approved by Congress. That means America’s public water utilities won’t see dramatic improvements anytime soon.

Cue the entrance of foreign investors with deep pockets.

“It’s not so much about water quantity as it is about water quality,” water engineer Antoine Walter told The Epoch Times.

Unsafe Drinking Water

Walter has worked on water projects in places such as New York; Hong Kong; Melbourne, Australia; Vancouver; and the U.S. West. He noted that 63 million U.S. residents are potentially exposed to unsafe drinking water.

“Chronic underfunding in water utilities, combined with a system where 85 percent of these utilities have three or fewer employees ... hampers the chances for American citizens to keep accessing good water in the future,” he said.

“Privatization is one of the solutions to combat that trend.”

Foreign companies getting into the U.S. water game isn’t new. Big names in the world of water, such as the French-owned Suez Environment, and Veolia Environment, along with Germany’s Siemens, have all held stakes in U.S. water utilities.

“The part where foreign investment in water resources may play a role is in the agricultural and marginally industrial uses of water,” Walter said.

With the existing lack of clarity surrounding ownership data in private utility companies, it begs the question: Who will provide America’s drinking water?

National Security Threat

“In general, there’s always a risk associated with selling land to foreign investors. Rental periods are a much better way to preserve U.S. interests,” security analyst Irina Tsukerman told The Epoch Times.

Functioning as the president of Scarab Rising, Tsukerman said the outcome of foreign-owned land and water rights will largely depend on the country’s or company’s relationship with the United States.

“Short-term immediate risks with unfriendly or competing powers are a higher risk for many reasons,” she said.

Tsukerman says that in states with drought conditions, land ownership can become an additional risk factor.

She pointed out that Canada and a number of European nations have purchased huge amounts of land in various states.

“None of these countries will necessarily deliberately abuse their acquisitions to deprive Americans of water,” she said.

“However, the sheer number and quantity of such purchases for agricultural consumption ... raise risks and concerns about loss of control by the United States over agriculture, water, and other natural resources.”

In a historic first, the U.S. government flagged domestic water security as a national security issue in 2022.

Lugging gallon jugs of water, migrants thread their way along footpaths just north of the Mexico/Arizona border. (Don Bartletti/Los Angeles Times)

A National Intelligence Council analysis highlighted a growing risk of conflict over water and migration, which could wind up “creating additional demands on U.S. diplomatic, economic, humanitarian, and military resources.”

In addition, a White House report noted, “Global water security is essential to U.S. national security.”

Tsukerman supported this, saying, “There may have to be an outright ban for adversarial actors from owning or controlling entire supply chains involving water resources ... if there’s a realistic chance it could result in abuses and compromising precious resources.”