The events of September 11 have prompted increased scrutiny concerning water safety and security. Yet, as the national focus shifts to water security needs, local communities and businesses are still faced with the pre-existing need to upgrade water and wastewater treatment systems, address increasingly stringent environmental requirements and manage dwindling water supplies without increasing costs to ratepayers. Additionally, in the face of a slowing world economy, many corporations are searching for better ways to manage costs and investments associated with water and wastewater infrastructure.
Continued Growth in Public-Private Partnerships and Outsourcing
In 2001, the American Society of Civil Engineers' "Report Card for America's Infrastructure" gave the nation's wastewater and drinking water systems a "D" rating. The group maintained that federal funding for water and wastewater infrastructures has remained flat despite the fact that many regions of the country are still relying on 100-year-old sewer systems and drinking water systems in dire need of upgrade or repair.
Outbreaks of waterborne parasite contamination in the United States and Canada underscore the risks that communities face without adequate funding to water and wastewater systems that are largely viewed as "out of sight, out of mind." New U.S. Environmental Protection Agency (EPA) regulations (arsenic, for example), compliance with EPA existing regulations and potential new guidelines on infrastructure safety and redundancy will only add to the financial burden municipalities confront at a time when rate increases and tax increases lack political appeal.
Many regions of the country are still relying on 100-year-old sewer systems and drinking water systems in dire need of upgrade or repair.
One solution to the dilemma is the use of public-private partnerships, which combine the larger scale, experience and lower cost structures of private companies with the control and financing capabilities of local municipalities. An estimated five percent of American municipal facilities are currently managed by public-private partnerships - agreements between local/regional governments and private-sector companies with operations and technical expertise. In 2001 alone, scores of cities like Chicago, Ill., and Lynn, Mass., pursued public-private partnerships in order to address their water, wastewater and environmental management needs.
The Metropolitan Water Reclamation District of Greater Chicago has entered into a public-private partnership for the design, construction and long-term operation of its 150-dry-ton-per-day pelletization facility that will process sludge from the Stickney Wastewater Treatment Plant to create Class-A biosolids. The facility will be the third largest of its kind in the United States. The 20-year, $217 million agreement is well below the district's original cost estimate of approximately $300 million.
Similarly, the city of Lynn, Mass. signed a $128 million agreement for the long-term management and capital upgrade of its 26 million gallons per day (MGD) wastewater treatment facility. The agreement is part of a long-term partnership that began with the city in 1985. In fact, in December 2000, the city signed the nation's first agreement with USFilter to design and build a system to mitigate combined sewer overflows. The city estimates it will save many millions of dollars through the life of the project.
Regardless of whether the economy is strong or weak, industrial customers are also convinced that outsourcing initiatives make good economic sense for their businesses. In the industrial market, outsourcing agreements support bottom-line growth and manufacturing processes through monetization of assets, improved operational efficiency and technology applications. Industrial customers recognize that they serve their shareholders and customers best by delivering the best products and services to customers -- not by pouring more resources into their water and wastewater treatment infrastructure.
In 2001, Westlake Chemical Corporation signed one of the chemical industry's largest industrial outsourcing agreements for water and wastewater treatment. The 15-year, multi-million dollar agreement will save Westlake nearly $1 million annually in operating costs.
In 2001 alone, scores of cities like Chicago, Ill., and Lynn, Mass., pursued public-private partnerships in order to address their water, wastewater and environmental management needs.
Likewise, one of the world's largest chemical producers, Houston-based Equistar, recently entered into a multi-million dollar, long-term outsourcing agreement. USFilter will operate and maintain Equistar's water and wastewater systems, with the design, build and implementation of numerous capital improvements managed at the chemical company's facility in Clinton, Iowa.
Cities such as Chicago and Lynn, Mass., and companies like Westlake Chemical Corporation and Equistar demonstrate a growing trend in both the municipal and industrial markets to let the water and wastewater treatment professionals do what they do best, allowing cities and businesses to focus on their own core competencies.
Water Scarcity Impact on Industry and Water Technology
The World Water Council predicted that between 1995 and 2025, U.S. residential water consumption will increase 100 percent, while industrial water use will increase by 33 percent.
As water costs increase and supplies dwindle, more and more industries are turning to high-tech water treatment systems that recycle and reuse water within plant production processes. Some of these systems include "closed loop" technology -- known as Zero Liquid Discharge (ZLD) -- that recycles all in-plant water streams and discharges none to the environment.
In 2001, the power industry continues to be an industry segment with significant growth potential. As the need for new power plant construction approaches $250 billion, with an increase in capacity of 210,000 MW over the next five years, there will be an even larger demand on the nation's water supplies, and thus the need for more innovative approaches to water management.
U.S. power plants use a total of about 3,300 million gallons of water a day. The scarcity and high cost of water in many areas has forced power producers to reuse and recycle their water or to find alternative sources. They may need to use wastewater effluent from publicly owned treatment works (POTWs) or operate their plant as a zero liquid discharge (ZLD) facility.
Industrial customers are also convinced that outsourcing initiatives make good economic sense for their businesses.
One such facility is Constellation Energy Group's new High Desert Power Project in Victorville, Calif, a 750-megawatt plant, which will be the first new major power plant to be built in Southern California in more than a decade. A wide range of integrated technologies will meet the water treatment needs for the power plant, including pre-treatment of raw water, treatment of cooling tower blow-down, and treatment and recycle of all wastewater. Commercial operation is scheduled for July 2003.
In the automotive sector, a Daimler-Chrysler truck production facility in Saltillo, Mexico, was the first to employ ZLD when it started to treat and recycle water in 1996. Using a variety of treatment processes, industrial wastewater is purified and returned to the manufacturing plant, and sanitary wastewater is treated and reused for irrigation. To achieve the required ZLD, the plant uses a wastewater recovery system that includes multimedia filtration followed by reverse osmosis.
Similarly, in the oil and gas market, wastewater from the production of petroleum-based products and a co-generation facility are treated with a variety of technologies, including carbon adsorption and reverse osmosis, then reused in boilers and cooling towers.
And in the microelectronics industry, several semiconductor companies are choosing to reclaim spent elements while recycling high-purity water back into the process, leading to significant savings and important new production efficiencies.
In recent years, advancements in membrane filtration, liquid-solid separation, deionization, and importantly, the integration of these technologies into complete systems, have given industrial clients proven technical solutions for water reuse. ZLD and water reuse systems will become more common as the true costs and true availability of clean water are recognized.
New Arsenic Regulation Impacts Small Communities
Already stressed community drinking water systems and budgets will be impacted over the next several years by EPA's new arsenic standard announced on October 31, 2001. The standard, which reduces the maximum amount of arsenic allowed in drinking water from 50 parts per billion to 10 parts per billion by 2006, is estimated by EPA to impact one in 20 or about 4,000 community water systems nationwide. Nearly 97 percent of those are small systems serving communities of fewer than 10,000 people.
To help alleviate some of the financial burden to these communities, EPA said it plans to provide $20 million over the next two years for the research and development of more cost-effective technologies. Private companies, associations and government agencies are already hard at work to develop and educate communities about effective and economical arsenic removal methods.
Technologists from USFilter's North American Technology Center are collaborating on various arsenic research projects sponsored by the American Water Works Association, EPA and the Association of California Water Agencies. Developments in arsenic removal methods over the last several years allow communities many options for treatment -- from wellhead arsenic removal systems to microfiltration or reverse osmosis to point-of-use or point-of-entry systems for household and commercial use.
Most people take water for granted, viewing water as abundant and renewable, not as a precious resource to be managed and conserved. Clearly, as the demand for water increases from ever-growing populations and industry - further compounded by water quality issues, new regulations, and the need to build and upgrade water infrastructures - so too will the need to manage, recycle and conserve the nation's water. The market trends are undeniable and robust - companies engaged in the delivery of service, products and most importantly, solutions to the residential, municipal and industrial customers of this country will be in demand for years to come.
This article originally appeared in the 01/01/2002 issue of Environmental Protection.
Joseph P. Williams is a partner in the Environmental and Land Use Practice Group of Shipman & Goodwin LLP located in Hartford, Connecticut. He practices in the areas of land use and environmental law and litigation. He can be reached at (860) 251-5127.