March 1, 2015

Water Alarm

It’s critical for business to take strategic action now.

Think of groundwater as a savings account, a backup source to tap when other funds run dry. In the southwestern United States, the Colorado River Basin is the largest account, providing water to some 40 million people in seven states and irrigating roughly 4 million acres of farmland.

Now factor in that, according to the U.S. Bureau of Reclamation, this source has faced severe drought since 2000, the driest 14-year period in the last century. While it’s no surprise that the region has been increasingly reliant on its underground resources, the scale of its dependence may be.

With the aid of satellites and a monitoring mission to track changes in water mass, NASA found that the basin lost nearly 53 million acre feet of freshwater between December 2004 and November 2013 (an acre-foot is the volume of water sufficient to cover an acre of land to a depth of one foot). That’s nearly double the volume of Lake Mead in Nevada, the nation’s largest reservoir—and more than three-fourths of the total came from groundwater.

In other words, the Colorado River Basin savings account—which includes deep aquifers that contain ancient water and cannot be replenished—is being sucked dry.

Suffice it to say, the experts are alarmed. “We don’t know exactly how much groundwater we have left, so we don’t know when we’re going to run out,” stated Stephanie Castle, the satellite study’s lead author and a water resources specialist at the University of California, Irvine. “This is a lot of water to lose. We thought that the picture could be pretty bad, but this was shocking.”

That picture has spurred Jay Famiglietti, Castle’s co-author and water scientist at the NASA Jet Propulsion Laboratory, to question whether the public is prepared to take action to sustain the water supply, especially when lushly watered landscapes mask the underlying reality. “There is no proof against drought when there is no snowmelt to feed the rivers that normally refill our reservoirs,” he wrote in a July 2014 Los Angeles Times op-ed, “or when groundwater—our buffer against dwindling surface water supplies—continues to disappear with over-pumping.”

“This is a lot of water to lose. We thought that the picture could be pretty bad, but this was shocking.”

While the southwestern United States represents only one particularly stressed slice of the growing national, indeed global, water shortage problem, it offers a vivid illustration of the growing need for business, government and citizens to take action—to gather data, rethink water policies, deploy new technologies and pursue other behavioral changes. One overarching question is whether the responses now will be quick enough, strategic enough in their scope and sufficient to avoid reactive, crisis-driven actions later.


What the Future Looks Like

Looking ahead to 2030, the global statistics are striking. The National Intelligence Council (NIC), which conducts research for the director of national intelligence, projects a water shortfall of 40%. With the world’s population increasing to about 8 billion people from approximately 7.2 billion today, demand for food will increase 35% and energy by 50%. The NIC—which assesses national security risks triggered by water shortages and other destabilizing threats—projects that nearly half the world will live in areas with severe water stress, particularly in North Africa, the Middle East and South Asia. Water scarcity “will hinder the ability of key countries to produce food and generate energy, posing a risk to global food markets and hobbling economic growth,” the NIC noted in its February 2012 report, “Global Water Security.” Some experts warn that governments could be destabilized and countries pitted against one another in the coming scramble for reliable water supply.

While large enterprises with globally disparate supply chains may be most clearly threatened by this unfolding volatility, a 2014 report by the Government Accountability Office underscores the widespread U.S. reality that freshwater supplies are at risk. In fact, water managers and other experts in 40 out of 50 states anticipate water shortages in some part of their state during the next decade, driven by such factors as population growth, insufficient data on water availability and use, trends in types of water use, as well as the growing impact of climate change and extreme weather events.

These risks are particularly pronounced in agriculture production, which is responsible for about 80% of water use in the United States and about 70% globally. (Industry is responsible for about 4% of water use in the United States; 20% globally.) In California, the nation’s largest food producer and exporter, some 80% of the fresh water is used by agriculture—at a time when, as a 2014 Brookings Institution report notes, 80% of the state is suffering “extreme or exceptional drought” conditions. Not only have farmers in the most hard-hit areas seen as much as tenfold jumps in water prices, drought statewide has cost $1.5 billion in lost revenue, the loss of more than 17,000 seasonal and part-time jobs, and caused 428,000 acres (5%) of irrigated cropland to go fallow in 2014, according to a recent study by the Center for Watershed Sciences at the University of California, Davis.

While inefficient flood irrigation is typically targeted as an overriding source of the problem, experts note that the runoff not consumed by crops or evaporated does recharge depleted aquifers for subsequent use. But limited supplies and rising prices have pushed farmers to reconsider their focus on low-value, high-water crops such as alfalfa, corn, rice and cotton. In the San Joaquin Valley, for example, many farmers have implemented more efficient irrigation and fertilizing techniques and shifted to more profitable, but in some cases more water-intensive, fruits, nuts and vegetables.

Upmanu Lall is a hydrologist and director of the Columbia Water Center, a unit of the Earth Institute at Columbia University. He sees “big challenges” ahead driven by major droughts, floods and climate variability, plus “usage that is not very efficient and most of the infrastructure that is 50 to 100 years old.”

Lall offers practical ways to reduce consumption in agriculture, “the area where we have most to gain”: Plant crops consistent with the local climate; use sensors to more effectively track soil moisture conditions; and limit the reliance on flood irrigation and deploy more targeted sprinklers and drip systems. But he knows that agriculture reform only begins to address what is a multi-industry problem: “A lot of economic activities are at risk. Water is going to be a significant constraint in this country.”


Building a Strategic Water Program

A 2013 global survey of S&P 500 companies by Deloitte Consulting and the Carbon Disclosure Project (CDP) found that nearly half of U.S. respondents have already experienced negative impacts related to water, with costs as high as $400 million and projected impacts up to $1 billion. Yet changes are not keeping pace with the threat: Only a third of U.S. companies report board-level oversight of water risks, and nearly half lack knowledge of whether key inputs or raw materials come from regions most at risk.

While nearly two-thirds of the companies have created targets or goals for water management, the report notes, nearly all of these are focused on direct operations. “Companies should consider looking beyond direct operations to build broad water stewardship strategies that mitigate water-related risks and create strategic advantage,” the Deloitte/CDP report notes. This may include long-term conservation, better local assessments, and more significant partnership building to share information and best practices.

One key, says William Sarni, a director at Deloitte and leader of the firm’s water conservation efforts, “is to address water risk across the value chain. Our point of view is for companies to align that water strategy with their business growth strategy.” This means going beyond the price of water to calculate its impact on operations and the supply chain, taking into account regulatory and reputation issues (companies don’t want to be known as “water guzzlers”) in addition to direct costs resulting from scarcity.

A 2014 survey of 30 major U.S. cities by the Circle of Blue, a water research group, found that the price of water has increased by a third since 2010. In the last year alone, that includes an average jump of 6.6% for a family using 150 gallons per day, with municipalities charging higher-volume users more to encourage conservation.

For residents of Austin, Charlotte, San Francisco and Tucson, the price increases were even greater—up more than 50% on average since 2010. These kinds of price increases “reflect the growing reality of scarcity,” Sarni notes. “That’s a trend that will be with us.”


Can Desalination Save Us?

That the ocean contains 97% of the planet’s water—not a drop of which can quench your thirst—is a cruel irony. The billion-dollar desalination plant in Carlsbad, California, near San Diego—the largest of its kind in the Western Hemisphere upon completion in 2016—offers the promise that technology will solve this dilemma.

Using two gallons of seawater to produce one gallon of freshwater, the massive Carlsbad plant will be able to create 50 million gallons each day. This “desal” plant is one of at least 17 under construction or planned along the California coast, in addition to several dozen others in Florida and Texas. It will be one of more than 16,000 around the world, particularly in arid regions such as Israel, Oman, Saudi Arabia, the United Arab Emirates and Australia.

Given severe droughts and the depletion of groundwater as temperatures rise, advocates says desalination is the best bet for the long term. Yet critics emphasize that this solution is energy intensive and expensive. When water rates rose after Florida’s Tampa Bay Seawater Desalination plant started up in 2007, for example, consumers began using less water, causing the plant to run well below its capacity of 25 million gallons a day (as low as 14%, according to Columbia’s Lall).

“It’s much larger than water. It’s about giving hope that man can fix the problems we’ve created.”

“Over time we expect that the cost of desalinated water will equal, and be less than, the cost of imported water,” Bob Yamada, water resources manager for the San Diego County Water Authority, told CNN. “That may take 15 or 20 years, but we expect that to occur.”

The other concern about this top-down response is that it promises a fix that may discourage conservation efforts and other lifestyle changes that can make a difference. “We need a new infrastructure model,” insists Columbia University’s Lall. “Do we need treated water for the washing machine and the toilet?”


Fixing a Global Problem With a Slingshot

When Dean Kamen began developing his latest invention, he wasn’t thinking about how to solve global water problems. He was building a small kidney dialysis machine that could be used at home. “It worked,” he said, able to turn tap water into steam and then into pure distilled water with only the power required to operate a blow dryer.

This led Kamen to contemplate how the elements of his invention could be reconfigured and deployed in places where fresh water for drinking, cooking and sanitation is in sorely short supply. Fifteen years and various iterations later, Kamen and his Slingshot are now positioned to tackle the global water problem, particularly in the developing world where a child dies every 15 seconds from a water-related disease and more than 3 million people die each year because of bad water.

Kamen chose the name Slingshot to refer to the David and Goliath story in which a simple technology slayed a giant. With this machine, any liquid—pond water, a dirty puddle, seawater, sewage water, even urine—can be transformed into fresh, potable water. It does not need to be tested before or after going through the machine. Each Slingshot is capable of producing 1,000 liters of water each day, enough for 100 people to drink, cook and keep clean. Over a three-year cycle, the machine’s predicted lifespan, it can produce 1 million liters of clean water.

While a version of the Slingshot will likely end up in U.S. homes and campuses and other settings over the next decade, Kamen’s innovation may be felt more widely than what ends up in a glass. “It’s much larger than water,” insists Paul Lazarus, director of a new documentary about Kamen and the Slingshot. “It’s about giving hope that man can fix the problems we’ve created. … Given the right set of skills, resources, time and care, you can go after anything.”


Ford’s Lesson for Industry

In 2009, Ford Motor Co. set a goal of cutting by 30% the amount of water used to make each of its vehicles by 2015. It hit the target two years ahead of schedule—just one more milestone in a water strategy that has cut Ford’s total global water use by 61%, or some 10.6 billion gallons, between 2000 and 2013. That’s how much water is used in nearly 100,000 U.S. homes each year or 265 million loads of laundry. And Ford is not the only car manufacturer making cuts: General Motors cut its water consumption by 44% worldwide between 2005 and 2013.

Since environmentally minded William C. Ford Jr. took over as chairman in 1999, Ford launched a water strategy that has included minimizing water use and consumption; seeking ways to use alternative, lower-quality water sources; prioritizing water technology investments with an eye on local water scarcity and cost; and meeting or surpassing local standards for wastewater discharge. With an overall target of 3% year-over-year reductions, Ford sought buy-in at all its manufacturing operations globally.

On the technology front, this has included deploying known processes such as storm water management systems and reverse-osmosis recycling of non-potable water in its manufacturing. Ford also pioneered a “dry-machining” process that relies on oil rather than large amounts of metalworking fluids and water to lubricate and cool tools. Known as “minimum quantity lubrication” or MQL, this process can cut 280,000 gallons of water each year in a typical production line. In one engine plant in Germany, MQL cut water use per engine in half.

In addition to less high-tech initiatives such as water assessments to calculate use and waste in its facilities, Ford began a voluntary program last year with its major suppliers to report their water use. The company also has begun tracking consumption over the life of a typical light-duty vehicle: water used in material production, parts production, vehicle assembly, vehicle use and end-of-life disposal.

“It’s important for us to be a leader,” says Susan Rokosz, principal environmental engineer at Ford. “We have started to share our learnings and best practices with our suppliers.” Adds Thomas Niemann, Ford’s social sustainability manager: “The idea is for us to surround ourselves with like-minded companies. … They are hoping to learn the business value benefits along with the environmental benefits.”

And what advice would Niemann give to manufacturing companies that haven’t yet shaped or executed a water strategy? “Start. Do the assessments. See where the openings are, whether it’s fixing leaks or [installing] timers and sensors. Look early on at every opportunity. Understand that it’s a journey. Take a measured approach to the problem. Solve the business value and the corporate citizen value. We didn’t try to solve the problems in one fell swoop. This has been a journey of 15 years.”

Steven Beschloss is an award-winning editor, journalist and filmmaker. His work has been published in The New York Times, New Republic, Chicago Tribune, Village Voice, The Wall Street Journal and Parade Magazine.

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