Looking into the Water Crystal Ball

Having been involved in the business of water for going on thirty years now, it is clear to be there are four significant trends evolving here in the U.S. and in many other industrialized parts of the world as it pertains to water.  Some of these trends you may already be aware of or suspect they are evolving, others you may not.

The first one is that water is no longer dependent on rainfall.  I’m sure you want me to clarify that.  In 2016, California which desperately needs water and has been in a drought for four years, may be in for very significant rainfall events if the “El Nino” predictions hold true.  While this will be a great relief for everyone and all businesses in the state, it does not mean consumers and industry will go back to old ways of using water as if it is plentiful and will always be there when we need it.  At this point, I would have to say that’s a 1960s mentality that has long faded away along with Herman’s Hermits, The Kinks, and Tom Jones, and the rest of the music icons of that era.  California and the rest of the nation now knows that no matter when we are water plentiful or when we are water short, using water responsibly and efficiently is an ongoing practice

Second, expect to see water become the fourth “factor” in business.  Let’s say you are considering starting a new manufacturing business.  Traditionally the “factors” you will be most concerned about are that you have the capital to finance your startup; have the people in place to work with you and that share your passion; and can obtain the necessary parts, raw materials, and components to build your new quizmo.  Well now we have to tack on water. Possibly this example will help clarify. Unless you have not heard, “specialty beers” are a very fast growing business in the U.S.  If your startup will introduce a new beer to the consumer, the fact that it can take 1,500 gallons of water to make a barrel of beer will likely steer your venture away from California and the Southwest to a more water abundant part of the country, such as the northern Midwest.

Third, an entire new industry is evolving now and that will grow considerably in the future and that is the reusable water industry. As we know, there are different types of water: potable (drinking) water; gray water; salt water; rainwater; recycled water; etc.  In order to use water more efficiently, industry and consumers will now be able to select exactly the type of water they need from reusable water companies.  For instance, say you operate an outdoor garden center.  Your plants will do just as well if they are irrigated using potable water as they would with gray water or recycled water.  Possibly even better.  By your outdoor garden center purchasing non-potable water means there is more water available for people, which is what water efficiency is all about.

Finally, the trend that many might like to keep under raps but must now be discussed is the pricing of water.  Historically there simply was no correlation between what it costs to gather, store, treat, and deliver water to what Americans paid for water.  For decades it has been underpriced. 

For instance, in one study published several years ago, it was found that the
average household in Washington D.C. consumes about 127,400 gallons of water annually and for that pays about $350 or about $30.00 per month. In Guatemala City and many other parts of the world, that amount of water would cost close to $2,000 or $167.00 per month, which better reflects it true costs.

Very likely American communities historically have viewed water as a community necessity, just like hiring police, fireman, and installing streetlights so they kept the costs of water very low.  In the 1970s, the Federal government provided generous grants to communities to help them clean-up their water plants and improve distribution systems, which also helped subsidize water. Those grants are over and as we now, getting money for infrastructure investment in today’s Congress is like pulling teeth. So that means we are going to see – if we have not already – significant jumps in the cost for water for the foreseeable future.

Posted on November 5, 2015 .