My brother called last night, and we talked for over two hours about politics, the upcoming Madonna U.S. concert tour (my daft middle-aged brother has tickets), and water. Yes, I know I've talked about water before, but much has changed since that time...now, it seems, water – like corn – has become a commodity that can and might be considered for any diversified portfolio.

The first example about “new” water usage comes from T. Boone Picken's Quixotian effort to build a massive windmill farm in the Texas panhandle. The Pickens Plan is aggressive and seemingly admirable. In fact, it's a plan that any investor might watch watched closely, as Pickens made his fortune in oil, so he - by all logical accounts - should not veer off into an illogical investment.

But anyone who has followed Pickens over the years knows that this man is not totally altruistic. He's in the game for the money. So, it seems wise to ponder why Pickens should suddenly go 'green.' A few Internet searches reveals that behind the blades of that windmill project lies another project concerned with water.

While Pickens was pushing his windmill project to environmentalists, the government and other sympathetic ears (for tax incentives, support, and attention), he also was forming a town. This town is possibly the smallest town in America, as it is filled with two of Pickens' employees who voted unanimously to create a fresh water district within the town limits. This district happens to sit on the United States' largest fresh water aquifer, the Ogallala Reservoir. Pickens plans to send this water to Dallas. For a profit.

At this point, which commodity do you think is more valuable to Pickens? If you really want to know, read the first few paragraphs again. Water comes first, windmills second.

I'd like to point out that Pickens doesn't own the water in the Ogallala Reservoir. But, he owns the land that sits on top of that water. In Texas, whatever you sit on – be it oil or water – can be drilled, pumped and sold.

I'm not here to judge what Pickens did; however, it would behoove anyone who is interested in investing in natural resources to pay attention to what's happening out there. Especially when that action is running under the guise of alternative energy resources.

Let's talk geothermal energy for a moment as another example on water investments. Geothermal energy, which presents itself as steam and hot water (think hot springs and geysers), is found in various geographical surroundings. As of 2007, geothermal energy represented a mere one percent of the world's energy. But, it's a valid renewable resource that can be developed and marketed. Most of the geothermal energy produced in America is produced out west in four states - Nevada, Hawaii, Utah and California, with the majority of plants located in the latter state.

But, Colorado and Alaska may be next on the list for geothermal energy production. This venture might prove sane and lucrative, but only a geologist or a hydrogeologist might find holes in the fabric of this plan. These holes consist of the nature of the geography in each state, which is different from region to region. Colorado, for instance, might not have the geography that would be conducive to geothermal production, and Alaska may have bans on producing any natural resource in certain areas – at least for now.

Geothermal reservoirs, like any water reservoirs, consist of water that sits in a pocket of earth surrounded by rock. The issue is the type of rock that happens to shelter the reservoir, the size of the reservoir, and whether that reservoir is protected by small or large rocks. It all makes a difference, since once a reservoir is emptied (and that's a very real possibility, especially during droughts), the rock that surrounds that now-empty reservoir may collapse.

Poof! No more water, no more energy-generating possibilities. I'm not saying that Pickens' water source will dry up, nor am I saying that geothermal energy possibilities won't work in Alaska or Colorado. I'm just saying that it helps to know something about your investment ideas before you put money into them.

A number of other water investment possibilities exist outside drinking water and heating water. The fact that humans need potable water to drink is a profitable endeavor as well. You'd be surprised at the companies involved in this business throughout the world. Another profitable water business is desalinization, or the process of removing excess salts and other minerals from water.

The difference between making water potable, or drinkable, and desalinization is slim, but there is a difference. Desalinization converts saltwater into drinking water, but it also is a process that is used to make water more effective for farming and to “clean up” water so it doesn't destroy natural vegetation. Many times, desalinization is a process used to remove farming or manufacturing chemicals from irrigation or waste water so that it can be reintroduced to the natural environment.

Potable water may require desalinization, but often – especially after a natural disaster (even in a first-world country) – people are admonished to either boil their drinking water or to use water purification tablets. Both processes can kill pathogens that can cause diseases in humans and in animals. Other techniques used to purify water include varying forms of filtration, chemical disinfection, and exposure to ultraviolet radiation (including solar UV).

Find blogs, such as David Zetland's Aguanomics, so you can begin to understand why water has become so valuable.

Until Later,