The subject of a drought may surprise you since we just experienced hurricane Sandy. With more than 63% of the U.S. classified as experiencing drought in July 2012, water, or a lack thereof, has been prominent in the news and in the lives of everyday Americans. While the lack of rain and soaring temperatures (yes, July was also the hottest month ever on record in the United States) are a product of meteorological phenomena and can’t be controlled by today’s technology, the chronic state of disrepair of our outdated water infrastructure – well chronicled in this blog space – only serves to exacerbate our country’s water shortage at a time when American farmers have watched crops wither and die, and cattle and other livestock ranchers have had to sell off or liquidate their herds due to a lack of grazing land and skyrocketing feed prices.

American consumers are already feeling the effect of the drought at the grocery store, and surprising to some, at the gas pump – and the high prices could persist into the winter of 2013 as the grain supply shortage ripples its way through the economy. The drought has devastated the corn harvest in the U.S. (as of August, the USDA expected a corn crop that was at least 23% smaller than its already pessimistic outlook from earlier in 2012), leading to all-time high corn futures prices on the commodity markets and higher prices at the grocery store, of both corn and corn-fed animal products (steak, chicken, milk, eggs, bacon, etc). But it’s not just food that suffers from a lack of water. Non-profit group, Sustainable America, does a stellar job of pointing out the interplay of corn and gasoline prices in America – a problem caused in part by the high ethanol content in our gasoline (10-15% of each gallon of gasoline is comprised of ethanol). With 45% of the nation’s corn crop now going to ethanol production, corn scarcity leads to ethanol scarcity, which refiners pass down to consumers at the pump. Anyone who drives to work can see this at play, right now, at their local gas station.

Yet ethanol isn’t the only gasoline feedstock that is threatened by the drought. The recent surge in domestic oil production (up 3.5% year over year, for two years running) touted during President Obama’s most recent State of the Union Address, may be at risk, as farmers and ranchers face off with oilmen in competition for scarce water supplies –ranchers and farmers to water their crops, and oilmen to use in the completion of their wells.

This year’s drought is certainly beyond man’s control, but the practical ramifications of a water shortage should serve as a wake-up call to policymakers and the public alike that America should address the water problems it can control and solve, such as replacing our decrepit infrastructure and building smarter water systems to maximize the benefit of the water that we have. The economic health of our nation depends on it.