Why do many environmental agencies promote conservation of water even though a large portion of earth's surface is covered with water?

Because though there is a lot of available water, an ever shrinking 3% is freshwater, which comes from groundwater and streams. The ocean is salinated and in order for it to be fit to be used by humans for domestic needs or for drinking, it needs to undergo a huge desalination process which costs lots of money and time.

Air occupies