BMI View: This quarter we have substantially updated and expanded our forecasts across various areas of the water sector. We now cover mains and non mains consumption and extraction, water losses, desalination production and household connections to mains networks. Our new forecasts reflect our overall expectation that water demand in Australia will continue to rise, putting additional pressures on the dwindling freshwater reserves, and stimulating investment in desalination and water treatment and reuse infrastructure.
We believe that the current levels of water usage, both for irrigation and livestock is unsustainable and is putting extreme pressure on an already beleaguered water system struggling to cope with limited supplies and soaring demand. In addition to the issues facing agricultural users, we also feel that the burgeoning shale gas sector in Australia could be severely hampered by declining water availability. Over the longer run, we expect companies involved in shale projects will be obliged to invest in costly water recycling facilities (both desalinated and reused wastewater).
We view direct potable reuse (DPR) as a key development opportunity over the longer term, for both infrastructure and services companies, and benefiting larger users, such as agricultural consumers, by boosting the country's available resources and reducing the conflict between domestic industrial and agricultural consumers for Australia's increasingly limited natural freshwater resources. Moreover, an additional advantage to water reuse that outweighs desalination's attractions, are the former's lower energy and financial requirements. Less energy is required to put recycled water directly back into water supplies.
Within this, we anticipate the need for new developments in wastewater treatment, collection and redistribution infrastructure and policies. We see a possible opening for new water services groups to evolve, who cater solely to the water reuse sector (though...