Water is the New Oil ...

Water has long been considered a right in the UK. But with the onslaught of climate change and shifting demographics, its value is changing.

Natural disasters are no longer things that happen elsewhere in the world as every nation's climate hangs in the balance. At the same time, consumption is increasing at an exponential rate. Philip Green, chief executive of United Utilities, one of Britain's largest water companies with a market value of £6.5bn, says: "Water is to the global agenda [today] what oil has been for the last few decades." So, as climate change bites, will water be rationed? "No, hopefully we'll use things like desalination to maintain supply."

United Utilities has a joint venture to develop desalination technology while the Government is backing a new plant in the Thames Gateway. Companies like United Utilities operate under huge pressures, which have been exacerbated by last summer's floods. So vital is their role in the battle to cope with changing weather patterns that MPs are to conduct an inquiry into how the water industry can meet these challenges.

Meanwhile, the utilities companies are mid-way through an extensive price review, which culminates in 2010 when the regulator sets prices for the next five years. For the first time, Ofwat has asked companies to give a 25-year view. Green says: "When I first joined United Utilities, I thought it odd that one would review asset planning every five years when the assets themselves last several decades."