Talk of battles over water usually provokes images of refugees in desolate districts in the developing world. Think again.
Mark Twain supposedly once said that in the American West, “whiskey is for drinking and water is for fighting.” Water technology in the U.S. is not so much a matter of rendering water safe for drinking, but about making sure there is enough to satisfy the nation’s enormous thirst for industrial water, agricultural water, and water that permits lush exurban lawns to bloom on the fringes of sprawling metropolises.
Water demand in the U.S. has tripled in the past 30 years, according to Goldman Sachs, and the U.S. Department of the Interior’s Bureau of Reclamation—the federal agency most concerned with water—lists “keeping water affordable” as one of its chief objectives. To that end, the Bureau of Reclamation calls for reducing the cost of desalination technology by 50 to 80 percent by 2020. That’s a tall order.
Today, the minimum cost of turning seawater into potable water in the U.S. is around $3 per 1,000 gallons. At the upper end, it costs the consumer $8 for every 1,000 gallons. Still, those prices are coming down as the demand for more water rises and new technologies make the process cheaper.
Energy Recovery in San Leandro, California, a small company with 25 employees and expected revenues for 2005 of $12 million, tells the story of changing attitudes toward desalination in the U.S.
Purchased in 2000 from the inventor of its core desalinating technology with $22 million in venture funding, Energy Recovery does most of its business in Europe. But the U.S. is becoming a larger market. What’s driving the shift? “There’s no water,” says Ian Cameron, sales manager for Energy Recovery, only half jokingly.
Energy Recovery has grown its business 10-fold since 2000. It expects to double revenues for 2006. Cities, counties, and states are beginning to experiment with desalination. Drive along the coastline of Southern California between Los Angeles and San Diego to catch a glimpse of the future. The city of Carlsbad hopes to build a reverse osmosis desalination plant that would deliver enough water to meet the needs of 225,000 people at a cost of around $200 million.
For Energy Recovery, which would sell its power exchange product to the plant’s manufacturer, that means a sale of around $8 million. Its product allows a desalination plant to lose only 3 percent of its energy as it sluices brine back into the ocean at the end of the process. The energy consumption results in cheaper production costs.
Can companies such as Energy Recovery help the Bureau of Reclamation meet its goals? The company says it has a pilot project in the Southern California town of Port Hueneme that provides desalinated water to the customer at $2.80 per 1,000 gallons. That figure is nowhere near the $0.54 per 1,000 gallons that the best desalination plants in the Middle East provide customers. Mr. Cameron says it is still cheaper than pumping it hundreds of miles from the Colorado River.
And the claims growing on the waters of the Colorado River will only increase as 15,000,000 move into California over the next few years. If desalination can’t be made to work in a way that makes economic sense to cash-strapped communities, water really will be for fighting.