Water Supply

Relatively fixed global water supplies are increasingly stressed by population growth. Urban growth in particular both intensifies the demand for water and at least potentially reduces both water supply and water quality. Conventional urban development replaces native vegetation with paved surfaces, channeling rainfall away from where it lands and preventing it from filtering through the soil to replenish the groundwater. In contrast to the filtering and cleansing effect of the soil, water traveling along pavement and through cement storm systems picks up pollutants such as oil and gasoline residues, fertilizers, herbicides, and pesticides, and concentrates them downstream. As a result, conventional storm sewer systems can both divert a potential resource (water from rainfall) and increase water pollution.

Current negotiations over allocations from the Colorado River in the U.S. demonstrate the tensions between agricultural, municipal, and environmental requirements for water. Regions lacking generous natural water supplies have already tied new development to assurance of sufficient water to support it. California passed a law in 2001 prohibiting cities from approving subdivisions larger than 500 homes unless developers prove adequate long-term water supplies. Another bill is pending in California that would require cities to address water supply in their general plans -- advance planning documents that govern land use and development over a ten-to-20 year timeframe. Arizona's Groundwater Management Code of 1980 was designed to achieve long-term balancing of groundwater withdrawals with natural and artificial recharging of aquifers. New subdivisions in Arizona's major metropolitan and agricultural areas require assurance of a 100-year water supply and available financing to construct necessary water infrastructure.

Regions whose growth exceeds the water resources they can control will face increased competition for excess supplies from better endowed regions. However, it is also becoming clear that relying solely upon water imports is not a permanent solution. The U.S. Department of Interior has estimated that even if southern California is able to maintain its existing level of water imports from the Colorado River and the San Francisco Bay/Sacramento River watershed, it will still experience water shortages ten to 20 years in the future as anticipated population growth outstrips available water supplies. In addition, the fact the watersheds are not neatly contained within single state or national boundaries means that political disputes over water supplies will intensify.

A key part of water supply is water storage. In the past water storage primarily meant building dams and reservoirs to capture snowmelt and river flows for later use. Much of that infrastructure is now old and calling for decisions to repair, improve, replace, or remove it altogether. Damming rivers has negatively impacted downstream water quality, ecosystems, and in some cases, flood management, resulting in significant political pressure against new dam projects and in favor of removing some existing dam structures. In addition, there is increasing public resistance to taxes or general obligation bonds to support large capital-intensive infrastructure projects in general. Foreshadowing the anticipated December 2003 release of the state of California's long-term water plan, a Department of Water Resources official recently announced that California is no longer considering any new dam sites in the state, acknowledging funding limitations and environmental opposition. Instead, the state will place increasing reliance on conservation, recycling, seawater desalination, and groundwater storage.

Water Efficiency

Pressure on water supplies will lead to increased emphasis on water conservation and efficiency, resulting from both regulatory initiatives and market forces (higher prices).

In the U.S., hydroelectric power and irrigation (agricultural and recreational (e.g., parks and golf courses) combined) represent the largest water uses, presenting the greatest opportunity for overall water use reduction. Municipal water use is the fastest growing segment, presenting the greatest opportunity for controlling increases in overall demand. (see The Heinz Center's 2002 report, The State of the Nation's Ecosystems ).

Technological improvements in irrigation systems can achieve substantial water savings, and reduce soil salinity and runoff caused by overwatering. At the residential and commercial level, increased use of xeriscaping -- landscaping with native plants that require little or no watering -- also reduces both water usage and runoff. With lawn watering often the largest household water use, several communities in the arid southwestern U.S. have implemented programs to pay residents to replace lawns with native plants.

Building codes currently require water-efficient appliances and fixtures, reinforcing a market for existing and improved products. Some municipalities restrict water use, often on a seasonal or temporary basis. Denver, Colorado, for example, recently restricted residential outdoor watering to two hours twice a week and required commercial users, city parks, and golf courses to cut usage by approximately half. Some jurisdictions, such as Irvine Ranch Water District in California, use tiered pricing structures that reward water conservation and penalize water waste.

The value of water saved through efficiency measures often pays for their cost, and depending on the price of water, may return profits on investment sufficient to attract private capital. New uses for water saved through conservation measures also provide the basis for water transfer agreements, such as those for the transfer of water from Imperial Irrigation District in California to Metropolitan Water District and San Diego County Water Authority, who agreed to fund the improvements in return for use of the water saved.

A necessary requirement for most regulatory and market approaches to reducing water consumption is reliable information on water usage. The U.S. Bureau of Reclamation, for example, has required meters to be installed at the point of use as a condition of renewing federal water contracts. California currently requires water meters to be installed in all new homes. Proposed legislation that would have required water meters to be installed at all residences and most commercial buildings statewide by 2008 was recently withdrawn due to politically powerful opposition from the city of Sacramento (other currently unmetered cities such as Fresno support state mandates in order to be able to meet federal water contract requirements despite local resistance to meters). Private equity firms have recently announced investments in two water meter companies -- Wellspring International (Expansion Capital, Nth Power, and Calvert) and Viterra Energy Services (CVC Capital Partners).

Water Reclamation and Recycling

Water has the potential to be a completely renewable resource. Most water is used and returned, directly or indirectly, to the water supply, though often in a more degraded form. Technologies that capture used water, treat it for reuse, upgrade water quality, and provide for environmentally benign disposal, use or elimination of water treatment byproducts will be in demand.

Some jurisdictions are requiring new developments to install greywater systems for lawn watering (Orlando, Florida), though proposals elsewhere have been defeated by public resistance (Redwood City, California).

Infrastructure Repair and Replacement

The U.S. Environmental Protection Agency (EPA) has estimated future capital investment needs of $485 billion to $896 billion from 2000 through 2019 for water infrastructure repair, replacement, and upgrades, based on a number of trends:

Deferred maintenance
Inadequate capital replacement
Existing infrastructure nearing the end of its useful life
Continued population growth
Continued pressure for new development
Based on its analysis of historical spending, the EPA also predicts a gap in available funding of up to $724 billion over the same period.
While the devil is certainly in the details, it is clear that replacing aging public infrastructure is not fully funded, creating opportunities for privatization of water-related assets and for innovative public-private partnerships.

Water Quality

Water quality has obvious impacts on water supply. This section will discuss three threats to water quality: intentional contamination, groundwater contamination and contamination from runoff.

The September 11, 2001 attacks on New York City and Washington, DC focused new attention on water security. The 2002 Public Health, Security and Bioterrorism Act requires utilities to report and develop plans to remedy security vulnerabilities. In recent reports to the EPA under the Act, providers of 80 percent of the U.S. drinking water supply estimated that they will need an aggregate $1.6 billion in security upgrades, including increased physical security (more guards and better fences and lighting) and more frequent and more sophisticated water quality testing.

Groundwater contamination can spread far beyond its original source, as underground plumes of contaminants travel through aquifers. Significant recent media attention has focused on perchlorate, a rocket and missile fuel byproduct that has been used in 22 U.S. states and has been detected in the groundwater and in the Colorado River, a major source of water to agricultural regions in California. The chemical has been found to cause thyroid dysfunction and developmental disorders. A recent study by the Environmental Working Group, a non-profit organization based in Washington, DC and Oakland, California, found concentrations of perchlorate in 4 of 22 samples of winter lettuce purchased from grocery stores. The city of Rialto, California has lost half its water capacity due to perchlorate contamination. Lake Mead (created on the Colorado River by the Hoover Dam), which provides the drinking water supply for Las Vegas, was recently found to contain ten times the level of perchlorate determined by the U.S. EPA to be safe. Perchlorate has attracted significant political attention, particularly in the context of proposed federal legislation that would exempt the U.S. military and defense contractors from a wide range of environmental laws and regulations. The Bush administration referred perchlorate contamination issues to the National Academy of Sciences for review, and banned EPA scientists from talking publicly about the subject until that review is concluded. Three U.S. Senators demanded that the gag order be lifted, and one has also requested that the U.S. Food and Drug Administration conduct its own study in consultation with the EPA and Department of Agriculture. The EPA announced in July 2003 that it will not set a federal drinking water standard for perchlorate, leaving each state to determine whether and at what level to set its own standard.

Surface water runoff following storm events also results in water pollution. Common pollutants include fertilizers, herbicides, and pesticides from residential areas and agricultural land, oil and gasoline residues from streets, and trash. Soil erosion at sites containing hazardous chemicals can also lead to contaminated runoff. Following fires at the Los Alamos National Laboratory in 2000, for example, New Mexico environmental officials found elevated levels of plutonium in storm runoff. Soil erosion and water runoff increased dramatically after the fires, resulting in post-fire plutonium concentrations in the runoff of about 100 times pre-fire levels. Erosion control and effective stormwater management are essential to water quality.

Stormwater and Nonpoint Source Pollution

Stormwater is runoff from land and impervious areas such as paved streets, parking lots, and building rooftops during rainfall and snow events that often contains pollutants that adversely impact water quality. Most pollution from stormwater is considered nonpoint source pollution. Unlike point source pollution -- water pollution with a distinct, identifiable source, such as a pipe or channel -- nonpoint source pollution has no distinct source -- runoff, for example, originates everywhere precipitation hits the ground. Nonpoint source pollution is both difficult to regulate, because it is everywhere, and the most significant cause of impaired water bodies today.

The Clean Water Act of 1972 requires states to develop watershed-based plans for controlling nonpoint source pollution. California's approach, for example, involves a collection of best management practices (BMPs), the implementation of which is determined by nine regional water quality boards.

Amendments to the Clean Water Act classified some stormwater discharges (municipal, construction-related, and industrial) as point sources to be regulated by the U.S. EPA under its National Pollutant Discharge Elimination System (NPDES) program. Phase I, developed in 1990, covers medium and large municipal separate storm sewer systems located in incorporated places or counties with populations of 100,000 or more; construction activity that disturbs five or more acres of land; and ten types of industrial activity. Phase II, effective March 2003, extended the program to small municipal separate storm sewer systems located in urbanized or other specifically designated areas, and to construction activities disturbing between one and five acres of land.

Those responsible for regulated stormwater discharges must obtain an NPDES permit and implement stormwater pollution prevention plans (SWPPPs) or storm water management programs that incorporate BMPs, which are necessarily location- and activity-specific. BMPs for the construction industry, for example, include methods for erosion and sediment control during construction (e.g., geotextiles to protect steep slopes, sediment filters), and structural methods to reduce runoff post-construction (e.g., porous paving, filters). Extension of the NPDES program to smaller municipal systems and construction sites should increase demand for stormwater management technologies, products, and related services.

Except for larger or higher risk animal feeding operations, agricultural operations are not regulated under the federal NPDES program. States have the authority to regulate agricultural runoff, but not many do in any comprehensive way, according to an Environmental Law Institute study. Despite farm industry arguments that voluntary programs are successful and that the industry cannot afford increased regulation, general exemptions for agriculture are coming under intense pressure as many environmentalists and scientists believe that agricultural practices are the leading cause of water pollution in the U.S. In California, agricultural waivers granted 20 years ago are under review by the state water board, and environmental groups have sued the Central Valley Regional Water Control Board to end waivers in the state's most productive agricultural region.

Some communities are taking an integrated approach to stormwater management, using methods that accomplish several objectives including increasing water supply. The Sun Valley Watershed Project in Los Angeles County, for example, is developing a watershed management plan that is designed to capture stormwater before it becomes runoff, treat it if necessary, and let it filter through the soil to recharge groundwater supplies. The plan contemplates a variety of stormwater best management practices, including retention basins that hold runoff for gradual release, underground filtration fields that hold stormwater until the ground can absorb it, home cisterns that capture rainfall for irrigation use, and mulching to slow runoff and encourage plant growth. In the state of Washington, pending legislation would provide a minimum 10% credit on stormwater or surface water management fees charged by local governments to building owners and developers who install permissive rainwater harvesting systems on new or remodeled commercial buildings. Other jurisdictions have implemented stormwater utilities to fund infrastructure for stormwater management, sometimes with credit given for design features such as rainwater harvesting or green roofs that mitigate stormwater flows.

Desalination

Desalination is the treatment of water to remove dissolved salts. There are more than 12,500 desalination plants in 120 countries, and the worldwide desalination market is forecast to grow from US$2 billion in 1997 to more than US$70 billion over 20 years, according to a Frost & Sullivan study.

Desalination has several applications, including treating irrigation drainage and other wastewater, reducing groundwater salinity (e.g., in irrigated areas and in coastal communities where seawater intrudes depleted aquifers), and making seawater suitable for potable use. Once economically feasible only in extremely arid regions of the world such as the Middle East, seawater desalination has again captured the attention of coastal communities in the U.S. that currently rely heavily upon water imports to meet their needs. Several California coastal communities (Carlsbad, Huntington Beach, Long Beach, Marin, Morro Bay, and Santa Barbara) are in various stages of exploring and developing desalination plants, some after earlier disappointments.

Desalination plants are expensive to build and energy-intensive to operate, though costs and energy requirements have both declined significantly with technological advances. Disposal of brine by-product -- the salts remaining after the water is extracted -- is also an ongoing environmental concern requiring some resolution, as high concentrations of salt can disrupt ecosystems wherever they are dumped.