If water is essential to human survival and we are running it into a state of scarcity, why doesn’t the price change? The past two blog entries on the ‘Worth of Water’ have reflected the reliance our economy has on the steady supply of water, leading to the question: what is the worth of an inch of water?
All goods have a market value, even if there isn’t a market price—but with water the value is too high to be given a suitable price. The economic paradox about the price of water versus the value originally comes from Adam Smith in the Wealth of Nations who asked: Why do diamonds cost more than water? Smith states “[n]othing is more useful than water,” but it doesn’t have enough monetary value to be exchanged for anything. On the other hand, diamonds have nearly no value in their usefulness, but are worth so much money they can be exchanged for nearly anything—leading to the question: how do you price a priceless asset?
The price of water needs to not only encompass the supply and demand, but also should absorb the cost of maintaining the quality of the water—also known as internalization. Moreover, there is hidden water use in everyday products—almost all materials and products require water to be produced. For example, it takes more than three gallons of water to make a single sheet of paper, seventy gallons of water to produce one gallon of gas, and thirty-five gallons of water to produce a bicycle. Nearly everything we use, eat, and drive/ride requires water to produce.
In general, government regulations require companies that damage natural resources like water to clean up their mess. The full cost to society from the production of goods is a reduction in water resources and, if the water isn’t properly processed, contamination leads to further externalities seen in pollution and, therein, health costs where the citizens are absorbing the costs of a manufacturers externality.
When the manufacturer cleans their own water through a waste water treatment process, they are internalizing their own externalities and absorbing their own costs. After cleaning the production water through chemistry and system treatment, the water is worth the same as when they received it from the POTW. They paid for the water, used it, and cleaned it themselves—this is known as an equilibrium where the cost for all absorbed externalities are seen in the cost of the manufactured products themselves. The manufacturer must choose to discharge the water back to the POTW or reuse it by rerouting it to the beginning of the manufacturing process to be reused. If the manufacturing facility were to discharge this water back to the POTW after the water goes through a treatment process, they would be in a constant state of cost as every time the water goes through a treatment it absorbs cost through chemicals, man power, hours, solid waste discharge, and the overall cost of operating the treatment system. However, by using a reuse system in this process and reusing their own waste water, they are not having to pay for new water from the POTW. Manufacturers are absorbing their pollution externalities by cleaning their own water, and, by doing so, are cost-shifting their activities. By decreasing liability on their neighbors, improving safety, health, and environmental hazards, manufacturers are also phasing into a cleaner, green economy and continual economic equilibrium.
In a future installment, we will give a cost-based example of how environmental economics works in the industry setting.
Katie McIntyre represented ProChem and our collaborative venture (KLeeNwater) with EES by presenting this week at the MEGA Symposium in Baltimore, Maryland.
MEGA focuses on the power plant industry response to upcoming environmental policy and consequent operational challenges. Acting as the power plant industry’s leading technical conference, MEGA includes policy discussion and sessions on water and air technology to meet the challenges of current requirements and regulations. The 2018 MEGA emphasized approaching up-coming regulations through the use of recent technological practices which meet operational demands while advancing industry toward sustainability.
Partnering with organizations such as Air & Waste Management Association, Institute of Clean Air Companies, EPA, and DOE, sessions were centered around one idea: maintaining the power grid through the lens of regulations. Steven Winberg, Assistant Secretary of Fossil Energy from the DOE, was the opening keynote speaker. Mr. Winberg has 39 years of experience in the energy industry and stated the DOE’s goals under the current administration are two-fold: “Meet (the) continually growing need for secure, reasonably priced…energy supplies through… realizing the promise of clean coal and developing America’s oil and gas reserves…” and “…executing regulatory responsibilities.” The following presentations reflected the question that was suggested by Mr. Winberg’s address: How do we maintain and strengthen our countries power grid while meeting the increase in environmental regulations?
Although many sessions included presentations on the detailed data surrounding the chemicals and practices used in the power industry, such as selenium, mercury, and ash ponds, the transformation of the power industry and technical solutions maintained the focus. The solutions to current regulatory compliance needs were broken up between air and water.
The issues surrounding air balanced between emissions and abatement strategies that followed, while discussions on water encompassed our specialty: reuse. Our presentation at MEGA was a ‘Detailed Overview of the KLeenNwater Pilot System for ELG Compliance.’ The report, written by Katie McIntyre on the pilot system, describes KLeeNwater as a platform with a “novel approach to pretreat and concentrate wastewater streams to meet ELG and ZLD requirements.” This strategy has end result of both cost and water volume reduction with the highest recorded value achieved at 99% recovery. The KLeeNwater approach is able to use the current ProChem pre-treatment options, including sand filtation, physical/chemical treatment, and take further steps in microfiltration and ultrafiltration to greatly reduce contaminates and meet and exceed proposed water regulations. “A brackish RO polishing system can be utilized as the final step of the system, which has proven to have the ability to reduce TDS to below 25 mg/L to meet voluntary BAT. Additionally, KLeeNwater is capable of providing multiple options for concentrate management including fly ash wetting, solidification, and evaporation. The system consists of one 40’ Hi-Cube steel conex container housing a complete fully automated wastewater treatment system.”
The KLeeNwater system presentation highlighted that multiple pilots have been completed—yielding “excellent results to prove that it is an ideal system to meet upcoming ELGs, provide high levels of water reuse and cost-effective solidification-based concentrate management.”
Based on the information given by the paper and presentation, “A Detailed Overview of the KLeeNwater Pilot System for ELG Compliance” – Katie McIntyre
While improving water culture and citizen awareness to water-related issues are the first steps to buffering potential water crises, collective responsibility through city planning and local water restrictions must follow. An industrial economy strengthens under smart water management and policy, but a lack of policy can prevent growth and diminish currently thriving cities.
Nearly everything we use, from the cars in our driveways to the phones in our hands, requires hundreds to thousands of gallons to create and maintain. How will we continue to produce these everyday goods when wells start to run dry? The world is currently experiencing rapid population growth and urbanization, two factors which are making development of water polices even more complex and demanding. Governmental officials and city planners are collectively responsible for making water the lens in which they draw out the future of a city—making room for policy that calls for fundamental change in the way water management is implemented.
Below our feet lies an immense infrastructure of channels and pipes, sustaining city life through the transfer of water by moving it from large aquifers to densely populated areas (Note: Some of the issues with existing water infrastructure is discussed in the first blog here). High-density urban developments like those in Las Vegas overburden already exhausted water systems. At this rate, the end result will be a water-deficient environment that suppresses industry and censors individual water supplies.
Over ninety-percent of Las Vegas’s water comes from the Colorado River, the diversion of which depletes flow through the Grand Canyon. Through this water, the Las Vegas population has hit 2.2 million and is growing by 127 people a day— increasing the city’s already massive demand.
Las Vegas’s problem is compounded by one fact: the city doesn’t have a water reuse system. Instead, water evaporates out of the water features on The Strip, is used to maintain the bright green planted grass that seems to be everywhere you look, and is generally perceived as ‘single-use’. How low will the city’s reservoir get before planners implement conservation strategies? Of course, taking actions like recycling water, turning off sprinklers, and putting their many golf courses on a diet won’t eliminate the threat to the city’s water supply. It’s a slow start to say the least. A true solution starts with asking the question: “How do you grow a city without depleting water reserves?”
To propose a simple first step toward protecting this environmental and sociological necessity: stop watering the grass. Your lawn may go from blazing green to Tuscan brown, but sustainability isn’t always pretty. It may be a cultural about-face to put aside current notions of what is aesthetically pleasing, but it is a critical part in creating efficiency. Second, the city must improve public transit. Although not particularly intuitive, more cars cause more water use. Producing, maintaining, cleaning, and fueling cars all create water waste that could be negated through investments in public transportation. Third, cities must encourage a creative and knowledgeable workforce. A water-sustainable city starts with its citizens (city planners included) recognizing problems and being educated on current environmental issues. Education gives individuals the platform to question the lifecycle of their clothes, cars, and water, and can result in a different, more sustainable end-point for reuse.
The way city planners cope with urban water issues should reflect public concern for environmental quality of water resources outside of the city limits and exploitation of land and water that keeps the city afloat. Controlling development of any city rather than growth for the sake of growth presents water resources into the planning process and recognizes the hydrological consequences that result from neglect. Operating through a lens of conservation culture can absorb the shock to city water resources before the tap runs dry.