I've got a 1901 house, with copper (new) piping. Some of the electrical (old knob and tube circuits) are grounded to the water pipes. The copper pipe goes out to my shutoff valve located outside. so far so good. However, the waterpipe from the shutoff valve to the ground has been replaced with PVC. So, the contact with the ground is actually a PVC waterpipe for at least 1' above ground. My question - Is this considered to be safely grounded? (or do I need to install a ground rod from the cu pipe?).
The grounding is accomplished through the metal pipe, not through the water.
Pure water is an effective electrical insulator. It's only conductive when there are dissolved salts in it (not just NaCl, but any metal salts creating free ions floating around in the water). In that case, water can become a very good conductor. But it isn't really the water doing the conducting.
That PVC pipe is not creating a suitable path to ground.
You need to drive at least one grounding rod (probably an 8' copper or galvanized steel solid rod, which you can buy at your local home improvement warehouse), and run a #6 copper wire from that rod to your main service panel, where you'll bond it to the grounding bus. You also need to leave all of your copper and/or iron pipes bonded to the grounding bus in your main panel.
Way back when it was allowed to run grounding conductors to any cold water pipe for equipment grounds for circuits. This allowance was removed from the code a LONG time ago due to the practice being potentially very unsafe.
When your water pipe was metallic going out into the yard it was being used as a grounding electrode and should have been bonded to the electrical panel. The grounding electrode and being in contact with the earth had NOTHING to do with the pipe being able to be used as a grounding source for circuits. The function of allowing it to be used to ground circuits came from the fact that the pipe was bonded to the main panel. Problem is, using the pipe as an equipment grounding conductor means that and problems or faults would have to go through every fitting and joint in the path back to the panel.