Water 4.0: Developing a water supply portfolio for the future
At the 10th annual OC Water Summit held in June, the keynote speaker was Dr. David Sedlak, Co-director of Berkeley Water Center and Director of Institute for Environmental Science and Engineering (IESE) at the University of California, Berkeley. He gave the following speech, likening an agency’s water portfolio to a stock portfolio. Here is what he had to say.
“There’s nothing like a crisis to focus people’s attention, and whether that crisis is real or perceived, it still makes a difference, because in times of crisis, people are willing to act differently,” began Dr. David Sedlak. “In times of crisis, people are willing to break the rules to get things done, and in times of crisis, people are willing to spend money.”
“But a crisis is not a time to really make differences in our infrastructure. As President John Kennedy said in his 1962 State of the Union Address, the time to fix the roof is when the sun is shining. So we find ourselves here at a unique position where the attention of the public is focused on our water infrastructure and our water needs, and the sun is shining. And so the question before us is whether we’re going to change the way in which we deliver water to California.”
“So I’d like to talk to you about whether we’re going to go back to the way we’ve been doing things in the past or whether we do things differently,” he said. “In water infrastructure, there’s no guarantee when you start bringing about major changes just because you’ve hit a time of crisis, because these systems tend to return to their original state and people do things the way they’ve always know to do them, because changing water systems is hard. When water systems change, it’s because they are no longer able to meet people’s needs and major changes happen, and when those changes happen, they happen very quickly.”
“In the book, Water 4.0, I talk about the three revolutions that already happened, and the fourth one that I see around the corner.”
“The first revolution in water systems was the creation of imported water systems, and we can give the Romans credit for this. Back in the time when cities grew quickly and we finally had groups of people living in large communities maybe exceeding a million people, we were no longer able to provide for their water needs simply by tapping the local environment, the groundwater and the rivers, and so the Romans came up with a system of importing water into their cities and at the height of the Roman Empire, they were delivering something like 100 gallons per person per day to the citizens of Rome. That really made it possible for people to live in big cities. The Romans also gave us another innovation that’s often not well appreciated, and that’s the sewers to dispose of the water after it’s done, so this Roman idea of the first water revolution is at the heart of all of our world water infrastructure systems.”
“The second revolution in water came with the advent of drinking water treatment at the start of the 20th century,” Dr. Sedlak said. “As cities grew and people lived closer and closer together and as their sewers discharged waste into rivers, people in downstream communities became sick with things like cholera and typhoid fever, and when that crisis finally became too much, people invested in sand filters and chlorination to alleviate the problems of cholera and typhoid fever. That was a revolution, because after that, you would never think about building a city without a water infrastructure system.”
“The third revolution in water systems came in the early 1970s when the public finally became sick of having closed beaches that were contaminated with sewage. And so in a period of about 10 years starting in 1972 with the passage of the Clean Water Act, we invested billions of dollars in creating water infrastructure systems that made our rivers and beaches and estuaries fishable and swimmable again, and that was a revolution that we didn’t go back from.”
“Here in California with the drought and in the recent history, we’ve started to undergo what I refer to as a fourth revolution, or Water 4.0,” he said. “You can see that the figure that I’m showing becomes a lot more complicated than the previous ones because we start closing the urban water loop. We start to reuse our wastewater, turning it into recycled water. We start to capture the stormwater that falls in our cities and turn it into the water supply, and we will no longer rely solely upon imported water for our sources of water.”
“We’ve made some great progress in this fourth water revolution, and so the question before us today, is does it continue or do we go back to our old ways? Because as I’ve tried to say to you, it’s really hard to change water infrastructure systems. When you know how to do something well, you keep doing it in the future.”
BUILDING A WATER PORTFOLIO
“So today I come to you, not as a professor and not as an author, but as a portfolio manager,” Dr. Sedlak said. “I’m here as a portfolio manager to advise you on your portfolio. And your portfolio isn’t a stock portfolio, it’s a water portfolio. Your portfolio has five different elements to it, and I’ll liken each of these different elements to a different kind of investment you might make, trying to make sure that your families wealth is there for your grandchildren and great grandchildren in the future, and that’s exactly what we do when we think in terms of water portfolios for our cities.”
“I want to talk today about imported water, water recycling, stormwater harvesting, seawater desalination, and water use efficiency and I want to talk about all of these things in a different way,” he said. “I want to think about them as a portfolio. When we think about what’s going on in Orange County, you’ve made investments in the past, you have a certain geology and geography and community here that has one type of portfolio to invest in. If we went up to Santa Barbara or if we went to Los Angeles or if we went to the Bay Area, they would each have different needs for their portfolio investments, so the first thing to think about is that every different group of people is going to have different needs with respect to their portfolio.”
“As investors, you need information to make sound decisions about your portfolio, and so the other thing that you have to realize is that you can make investments in making those different options within your portfolio more effective, and by doing research and development, by investing in experiments and demonstration projects, you can create a more robust portfolio that you can have more confidence in. So let’s take a little health check of our portfolio and think about how we might go about making these investments now that the sun is shining again.”
“We’ve heard about our decaying water infrastructure in California,” said Dr. Sedlak. “When we think about issues like the Water Fix, when we think about issues like restoring our dams and reservoirs, we recognize that the price tag for this is in the tens of billions of dollars, and that translates to thousands of dollars for every person in California over the coming generations just to keep the portfolio operating the way it was before.”
“Now, this imported water system has worked pretty darn well for us over the past generation, but I liken the imported water portfolio to blue chip stocks that might be sitting in your portfolio, such as Disney or a retailer such as The Gap. These are things that you know well and understand well, and they have performed reliably for you in the past. But as they say in the investment business, past returns don’t predict future returns. As things are changing, as people are staying home and playing video games and buying online clothing, maybe bricks and mortar retail and theme parks won’t be a great investment in the future. Maybe they are going to have to change if they are going to make returns the way they did in the past.”
“I want to think about imported water infrastructure and the risks that are facing it, so in addition to just the investment that we need to make on the scale of tens of billions of dollars to keep things operating the way they did in the past, we have a new risk, and for imported water infrastructure, that is the risk of climate change,” Dr. Sedlak said.
“Climate change predictions show us that in the coming decades, the storm tracks hitting California might end up hitting further north and dumping the water in places where we’re not set up to capture it, and as it becomes warmer, there’s going to be lower yields of that water making it to our reservoirs, and demand is going to increase for agriculture and maybe even more importantly, we’re going to have less snowpack in the mountains. So by the end of the 21st century, depending upon what our decisions are about how we respond to climate change, we’re going to have a decreased snowpack in California’s mountains, and that decreased snowpack is also going to exist in the Colorado Rockies, and there’s going to be a general drying of the west according to all the best predictions.”
“If we’re going to make investments of tens of billions of dollars in our imported water infrastructure in the coming decades, we have to recognize that it might not yield as much water as it did in the past,” he said. “Of course we’re going to have to rely on imported water in the future, but we have to recognize its limitations, and we have to be realistic about how much it’s going to yield us, so we can’t rely on this one source of water alone.”
“To continue the analogy of a stock portfolio, water reuse and water recycling is like the iPhone – it’s your Apple stock,” Dr. Sedlak said. “It’s returned very well for you in the past generation, it’s done incredible things and it’s been a really good investment. But now everyone has an iPhone in their pocket. Who are the next iPhone buyers? Where is this market going to expand in the future, how is this going to be valuable stock, now that it’s completely built out? At least that’s the case here in Orange County. There really isn’t a lot more wastewater left to recycle.”
“Orange County has taken water reuse, that is taking municipal wastewater effluent and cleaning it up to the point where it can be put back into the drinking water supply, and that is the way that most people are thinking about water reuse now. So 20 years ago, people were still taking water and recycling it, and building golf courses and using it for highway median landscaping, but now the Orange County model is spreading throughout California and throughout the world.”
“What we do is we take wastewater effluent, we put it through the reverse osmosis process, we pass it in front of UV lights and hydrogen peroxide and we return it to the drinking water supply,” he said. “And if you’re fortunate enough to be Orange County and Orange County Water District, you put it in the aquifer laying underneath your treatment plant, and you can do this in places like the Inland Empire or West Basin in Los Angeles; but if you’re San Diego and you don’t really have a groundwater aquifer to speak of, or if you’re the city and county of Los Angeles and you have to send this water all the way into the San Fernando Valley to get it back into the drinking water aquifer, you’re facing a problem. So the question of where water reuse goes in the coming decades is really going to be tied to this fork in the road that we’re at.”
“The fork in the road is basically what do the cities that aren’t already recycling water and putting it into their aquifers going to do? On the one hand, we have one model which involves a whole lot of pipes – basically building a pipe network to get water from Long Beach or from LAX all the way into the San Fernando Valley, or in the case of San Diego, getting it up to their reservoirs, or taking the path of direct potable water reuse and recycling this water directly into the distribution system. The expert panel for the state of California has advised the state that it may be possible to permit direct potable reuse facilities in the future, but there is still a lot of research and development and experimentation to go before we should be making large investments in this technology.”
“I would liken stormwater harvesting to a tech startup like Instagram,” Dr. Sedlak said. “The public’s really excited about this. It has the potential for great returns on investment in the future, but the professionals look at this and say, maybe it’s not everything it’s cracked up to be and it’s just going to fizzle out. I think we have to look at stormwater harvesting with this view, because we live in a Mediterranean climate where it’s very challenging to harvest stormwater and get it back into the water supply.”
“For many generations, stormwater was a nuisance. It was going to flood our cities, it was going to cause catastrophic problems, it was going to pollute our beaches, and that’s how we built our infrastructure, so when we think about stormwater harvesting and stormwater capture, we’re not talking about building systems like what they have in Seattle to capture the little misty rain that falls in the winter; we’re talking about capturing these big California storms that we encounter every winter.”
“One of the best examples of stormwater capture is a project that is being built in Burbank called the Rory M. Shaw Wetland Park by the City of Los Angeles and County of Los Angeles. And what they are doing is they are repurposing an abandoned gravel quarry to capture the rain water that falls in the neighborhood. They hold on to this rainwater, they pass it through a constructed wetland, and then percolate it into the groundwater. And what we’ve learned in our research is that this stormwater isn’t as clean as you hope it would be because it falls in the neighborhood, it falls very quickly and it scours the ground surfaces and it scours the roads and carries contaminants with it, and so one of the big challenges here has been developing passive ways of treating the stormwater before percolating into the aquifer, so we’re not introducing contaminants into the water supply as we harvest the stormwater.”
“The other thing we have to recognize is that stormwater harvesting is a really heavy lift,” he said. “We’re not talking about a benign small amount of rain falling that makes it easy to capture; we’re talking about something that can really be quite dangerous if we don’t manage it correctly, so I would say that this is still an unproven technology in many ways when we think about the applications to Southern California.”
Stormwater, traditionally thought of as a flood management problem, is getting attention as a resource with the potential to increase water supplies by up to 630,000 acre-feet per year. But implementation of stormwater projects face challenges by high costs and water quality concerns. Click here to read more about urban stormwater capture and management.
“Carrying the portfolio analogy further, seawater desalination is like Tesla,” Dr. Sedlak said. “It’s really cool technology, it’s developed faster than anyone thought it could, but we’re still not sure that everyone’s going to want one of these in their driveway because they are still quite expensive. And that’s the case with seawater desalination around the world. People who are wealthy and desperate build seawater desalination plants. People who are creative and resourceful do everything they can to avoid building desalination plants.”
“The Carlsbad desalination plant is producing 50 million gallons of water a day. It’s delivering it just as planned, but it’s among the most expensive sources of water in California, and so if seawater desalination is going to be an important part of our water portfolio in the future, we need to think about ways to make it less expensive. Because as it stands now, we just might have the same experience that they had in Australia where every major city built one seawater desalination plant and stopped there, because they could come up with ways that were a lot more cost effective for delivering water to their portfolio.”
“In thinking about this issue of seawater desalination and how to make it really cost competitive, during the Obama Administration, the White House had an initiative that they called the ‘Pipe Parity Challenge”. It was inspired by a trip to Israel that Secretary of Energy Ernest Moniz made, where he saw that the Israelis were delivering desalinated seawater to their drinking supply at a much lower price than what we do here in California with the desalination plant at Carlsbad.”
“The idea here is that it’s not a magic kind of seawater desalination membrane or new kind of treatment, but it’s taking all of the elements of the seawater desalination plant from the capital costs to the operating costs to the permitting costs and all the other aspects of desalination and looking at them and making them all less expensive. The goal that was set by the president’s office was to reduce the cost of seawater desalination by 75%, and there was a program in the Department of Energy designed to fund what they called desalination hub to make this possible in California, the same way that they’ve reduced the cost of rooftop solar in the first part of the Obama Administration.”
Desalination holds the potential of providing a highly reliable water source for some communities; however, there are major cost and environmental concerns that must be addressed. Click here to read more about desalination.
WATER USE EFFICIENCY
“I would make the analogy with water use efficiency to a pharmaceutical company like a Genentech or something like that,” said Dr. Sedlak. “It’s delivered some blockbuster drugs in the past, but we’re not sure if there’s anything good in the pipeline anymore. That’s the case with water conservation in California. Much of the progress that we made in the days before the revolution came from building new dams and reservoirs, and creating better conservation programs, and a lot of the secret of California’s success in delivering water to its cities has been the gradual implementation of water conservation.”
“Here’s a figure from the Pacific Institute from 2007 showing some Southwestern utilities and the per capita water use in gallons per day. The darker blue bars indicate the water use indoors and the light blue reflects outdoor water use, so the first thing you’ll see is that indoor water use among southwestern utilities is about 60 gallons per person per day. The most efficient that you could expect based upon performance in other countries is around 40 gallons per day, and in the last ten years, we’ve made a lot of progress to going from 60 to 40 gallons per person per day, and we’ve probably locked in that change as new houses get built and old plumbing gets replaced, it will probably be using 40 gallons per person per day indoors. Outdoors, as we’ve all experienced during the drought of the last few years, we’ve severely reduced the amount of lawn space and switched over to California appropriate landscaping.”
“So the question before us is not how much more we can take the strategies that we’ve been using over the past 20 years and keep turning the crank on them; the question is what’s the next blockbuster for water conservation in our future?,” he said. “I would say that the next thing in the pipeline for us is this idea of hybrid distributed water recycling systems. If you look north to San Francisco, you’ll see the city of San Francisco is requiring new buildings that are being constructed in the central business district to do in building water recycling. This isn’t water recycling that’s creating a new resource like we’ve done in Orange County, where it’s not a way of making the sewage collection and water delivery systems go away, it’s a way to reduce the water footprint of people living in the city. So maybe with gray water recycling and in-building water recycling, that’s the next forefront to reduce per capita water use, and with those kinds of technologies, I think we could make the same sort of advances we have over the past three decades in water conservation in the traditional way.”
“So the sun is shining here in California and it’s our opportunity to make a difference,” Dr. Sedlak said. “As your portfolio manager, I would advise you to be responsible in your diversification strategy, so clearly we wouldn’t want to keep investing in only one or two forms of water. When we make investments in imported water, we really need to be realistic about the future climate scenarios and what it’s going to mean to our ability to rely on those imported water systems, so in some ways the drought is really just a wake-up call for the climate that’s going to develop over the next five decades.”
“We also have to have a realistic view of some of the barriers to the new approaches that are being touted as being our solutions. So I showed you stormwater capture for example, and I would say there are a lot of barriers to stormwater capture. It’s very attractive as a politician to get behind stormwater capture because it sounds logical to the public, but from the engineer’s standpoint, there are still a lot of technical barriers that have to be overcome, and that’s true of the other technologies as well.”
“So when the sun was shining on President Kennedy in 1962, he used it as an opportunity to create an initiative called the Office of Saline Waters, and the Office of Saline Waters greatly increased the amount of funding for water reuse, and one of the results of that was that a scientist at UCLA came up with the reverse osmosis membrane,” said Dr. Sedlak. “So the sun is shining on us, and we have a need not only to invest properly, but to invest in research and development. I’m particularly concerned with the stand of the federal government about federal research investment, because what I am hearing out of Washington is severe cuts to DOE. Basic research is where that water hub would have come from, and I’m hearing about cuts to the National Science Foundation, I’m hearing about cuts to the Environmental Protection Agency, and all of those make me think that the kinds of things that we’re supposed to be doing when the sun is shining may not happen.”
“It’s up to us as the generation that is here thinking about the future, the way in which Orange County’s Water District and elected officials thought about it in the early 60s and created the system we have today; it’s up to us to think about this next generation.”
“Direct potable reuse, it needs to be implemented, but there’s still a fair amount of research that has to be done to make sure it’s done properly. Stormwater capture has to be more than capture; it has to capture, treat the water, and recharge it effectively. Desalination, we can’t be content with the kind of desalination technology that’s being marketed to us now, we have to find ways to manufacture desalination plants more effectively; we have to find ways to permit them and operate them more effectively, or they are always going to be the Tesla in the driveway of our neighbor. With these decentralized systems, they have a great deal of potential. It’s a new industry that might develop, but it still needs a fair amount of R&D to make the jump to something we do.”
“So with that … “
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