Water shortages can have many undesirable effects on the economy. What is less accepted globally is the fact that water and energy are very much interlinked and it sooner or later will pile up leading towards economic threat as there is mass migration, defense warfare and scarcity of food and this threat is being faced in most of the countries.

As water being the basic element needed for the process of energy production, it needs proper utilization ensuring zero wastage as most of the energy productions make heavy use of water. In Saudi Arabia, oil sites pump more water to increase the base reservoir pressure than the oil it generates. As per the U.S Department of Energy, an oil shale needs more than 6 gallons of water to produce about 1 gallon gasoline, whereas a conventional crude needs just about 2 to 2.5 gallons water to produce a gallon of gasoline.
The production of a gallon of corn ethanol also needs about 3.45 gallons of water, as per the U.S ethanol industry, the Renewable Fuels Association. This therefore concludes that other substitute fuel is also water intensive.

All major sources of energy are water intensive — that includes electricity as its generation needs billions of water gallons to cool the energy turbines making it no less water intensive. As a matter of fact, almost ninety percent of the electricity generating power plants in U.S. are thermoelectric due to which the plans to obtain water permits have not been allowed to setup new power plants. Hydroelectricity is the main electricity source in many Latin American countries like Paraguay, Peru, Brazil and Argentina.

If you think solar or thermal power plants, or even nuclear power plants can generate clean energy without water, you could be mistaken — it needs ample water supply in the vicinity, as it needs water to create steam that spins the turbines and cools the towers. It’s also a bad idea to have a solar power plant in Sunny places like southern California or Nevada where sunlight is plenty and you may think solar power would be a perfect equipment but the water shortages these places suffer mars the entire formation of energy.

Today, the problems encountered with water scarcity can be controlled using the latest technologies available, but most of the technological equipments need energy in various forms. The process of cleaning water also needs energy in the form of electricity, petroleum and natural gas. Another threat is in the form of  energy intensive processes like waste water treatment plants and desalination which emits harmful gases associated with greenhouse effects.

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