Processing Magazine

Rising water costs could cause major shifts in processing landscape

April 9, 2013

According to a USA Today survey of more than 100 municipalities, in the last 12 years, “water rates have at least doubled in more than a quarter of the locations and even tripled in a few.” Continuing rate increases are expected of 5% to 15% every few years. 

Steep consumer increases lead to heightened scrutiny of arrangements local industries have with their municipalities. A March 27th report on the website of KTBS in Shreveport, La., for example, asked whether “big business” will see the same rate increases impacting consumers.

“Operations find themselves pressed to conserve water, not just to relieve stressed aquifers and because water is a finite resource, it’s just that the cost of water has sky-rocketed,” says Daniel L. Theobald, aka “Wastewater Dan,” principal with Environmental Services, Simpsonville, S.C.

The KTBS report cites Pratt Industries, a local recycling company, which uses about 23 million gallons of water per month. “Companies like Pratt pay $2.13 for every thousand gallons of water they use,” the report says. With a proposed 26 percent increase currently on the table in Shreveport, Pratt would pay $2.68 for every thousand gallons.

The city of Shreveport says it has run “grey” water supply lines to a Pratt plant where drinking-quality water isn’t needed and that it is working with the company to eventually make use of it.

The water situation in some U.S. localities is increasingly dire based on demand coming from the oil and gas industries. Hydraulic fracturing and horizontal drilling, key technologies in the shale gas revolution, necessitate use of millions of gallons of water for every well drilled.

A January article on the website, “Circle of Blue,” discusses a Carlsbad, N.M., proposal to triple water rates for oil and gas companies as a way of discouraging those companies from using the municipality’s resources. Revenues from Carlsbad’s two water systems have doubled since 2009, and are projected to rise 15% in 2013, due to drilling activity in the region. Residential customers pay $1.06 per thousand gallons says the report, while industrial users pay $23.81 per thousand gallons.

This remains cheaper than other water resources available to the oil and gas companies in the region, and some in Carlsbad want to make the water too expensive for oil and gas companies to use. The Carlsbad ordinance would mean oil and gas companies would have to pay $71.43 per thousand gallons.

Circle of Blue says an analysis of an opinion poll of more than 1,200 sustainability experts suggests that in the coming era of water scarcity, manufacturers may shift new plants from the increasingly dry Southwest back to the water-rich Great Lakes region. “They may no longer have the luxury of producing water-intensive products – cars, steel, chemicals and energy, to name a few – in water-stressed areas just because labor, land and electricity costs are low.”