What IBM (NYSE: IBM) wants to do for the electricity grid, it now wants to do for water.

The computing giant is set to announce a set of services and technologies aimed at helping utilities, governments and businesses better monitor and manage their water usage.

The age-old business of water management may seem light years away from the high-tech fields that IBM has made its name pursuing.

But in fact, experts say, water resources are coming under unprecedented pressure from growing populations and increased contamination -- potentially putting businesses from farming to semiconductor manufacturing at the risk of having to pay more for what is now a virtually free commodity (see A Smart Grid for Water).

And managing those increasingly scarce – and valuable – resources could represent a $20 billion information technology business opportunity, according to Sharon Nunes, vice president of IBM's "Big Green Innovations" team.

"What we're proposing is to make the water grid smart," Nunes said in a Thursday interview. It's an echo of IBM's efforts in smart grid projects meant to bring enhanced communications and controls to the currently "dumb" electricity distribution and transmission grids around the world (see IBM, EDF to Research Smart Grid and IBM Snags Another Smart Grid Deal).

There's a closer connection between water and energy than some may think, Nunes noted. About one-fifth of all the electricity used in California goes toward pumping and treating water, for example, and electricity generation plants use huge amounts of water for cooling.

The interconnection hasn't been lost on Congress, where a bill that would require federal agencies to consider water impacts when making decisions on energy policy is being proposed.

And IBM sees a role for information technology in the water world that's analogous to its role in smart grid projects, Nunes said.

That includes sensor networks that can track water flow and quality, water meters that can give utilities and customers up-to-date information on water use and price, and complex "predictive" modeling to let water managers plan for the future.

Much of the preliminary work has been done in Ireland, where IBM has opened a "Centre of Excellence for Water Management" and is completing the first phase of a project in Galway Bay dubbed "SmartBay."

The project includes sensor-equipped buoys and underwater fiber-optic cables that collect information on currents and water contamination and send it to monitoring systems ashore. It also includes a system for fishermen to call in the location of drifting object that present a navigation threat, combined with a predictive model that projects where those objects will be over a 24-hour period based on weather and tidal conditions.

That gives IBM a real-world test of its ability to collect information and present it in an "easily understandable format, for scientists and fishermen" alike, she said.

The next real-world application could come in Malta, where IBM is working with the Mediterranean island's electricity and water utilities to install "smart meters" that can track and communicate usage and pricing information across the entire nation (see IBM Brings Smart Meters to Malta).

"More and more there's becoming a need for more frequent monitoring of water systems, and actually looking at the quality of water," Nunes said. IBM is working with an unnamed water sensor company to bring that kind of monitoring to its Malta project, she said.

IBM is also launching a water consulting business aimed at finding ways to reduce water use. A pilot project at IBM's Burlington, Vt. semiconductor facility managed to cut water use by nearly 30 percent and save the company about $3 million a year at a cost "a lot less than that," she said. (IBM isn't divulging how much money it's sinking into its new water efforts.)

Whether high-tech solutions are the best way to address water management challenges is up for debate.

Peter Gleick, a noted water expert and president of the Oakland, Calif.-based Pacific Institute, said that low-cost, low-tech solutions are needed to address the water shortage and contamination problems facing the world's poorest people (see ‘Peak Water' Requires Low-Cost Solution).

And IBM is far from the first company to target water management – a host of water purification and monitoring technology developers are seeking to capitalize on the market (see A Guide to the Water World).

But IBM is also making a foray into water purification, it announced Friday – it has co-developed a new membrane that it says could be the first to effectively remove arsenic from water.

The membrane is made of a hydrophobic, or water-repellent, material originally developed for the company's work in immersion lithography, a semiconductor manufacturing process.

But when researchers discovered the material turned hydrophilic, or "water-loving," when exposed to water with an alkaline pH balance, they realized they were onto something, said Bob Allen, manager of materials for water purification at IBM's Almaden Research Center in San Jose, Calif.

That's because the material, formed into a "molecular net," can serve as a membrane that allows water through very easily as long as it has a high pH balance. That means less energy to move the water, Allen said.

Bringing water to a high pH also causes arsenic – a contaminant that's very difficult to remove from water without expensive distillation techniques – to ionize, meaning "you have a very good chance to separate them through reverse osmosis," a less expensive technique used in water desalination, he said.

"This is a research result – we don't have membranes in the field yet," Allen said.

But IBM and its partners on the membrane research – Japanese materials company Central Glass, the Saudi Arabian research center King Abdul Aziz City for Science and Technology and the University of Texas, Austin – hope to continue testing it with an eye toward real-world applications.