An innovation in water utilization on California farmland may maximize the efficiency of how water is utilized, giving the industry and the exchange traded funds (ETFs) that track the sector a bump.

With the current conditions of a booming population, an aging water delivery infrastructure and ongoing environmental battles which have left California reservoirs dry and forced rural and urban cutbacks, water rationing will be absolutely certain, states the United Press International.

As a result of this dilemma, scientists have begun to devise a new plan to determine when to irrigate and how much to irrigate farmland. In particular, researchers are using laser technology to measure the amount of water that seeps into the atmosphere from soil surfaces and plants, states John Rogers of the Associated Press.

This new plan could be the stepping stone to a breakthrough that would maximize water efficiency and lift any rations that may be put on the resource.

Some possible ETFs that may be influenced by this research are:

PowerShares Water Resources (PHO): down 32.4% in 2008

PowerShares Global Water (PIO): down 46.4% in 2008

Note that both funds have crossed their 50-day moving averages.

Tags: PHO, PIO, Sector ETFs, Water