Expanded Bonus Web Edition
From Site Selection magazine, September 2008
If water is the
'oil of the future,'
then the future is
very soon indeed.

ituated at the confluence of the River Liffey and the Rye Water, the industrial economy of Leixlip, Ireland, has always had a river running through it. The quality and quantity of water has helped boost the fortunes of operations ranging from the first Guinness brewery to one of the most recent semiconductor chip fabs from Intel Corp. Now employing 5,000, that complex is among the largest non-U.S. facilities owned by Intel.
      Tom Cooper, worldwide water program manager for Intel, has 23 years of experience with environmental, health and safety (EHS) programs at major industrial corporations such as Lockheed-Martin, GE and the NASA-Ames Research Center. Based in Monterey County, he often is reminded of the preciousness of the resource while kayaking in Monterey Bay. (As it happens, the Monterey Peninsula Water Management District has voted to study a seawater desalination vessel as a possible source of freshwater for the region.)
      After a decade with Intel, not long ago Cooper joined the company's Global Site Selection & Development team. But he says Intel has long been a leader in the area of water management.
Water is cheap and not a driver in most communities in the world.

      "Intel has always taken availability and management of water and wastewater in site selection with the utmost importance," he says, characterizing the whole team as very water savvy. He says Intel is all about process, and setting water conservation and efficiency goals is no exception. The team publishes its goals every year in the company's corporate responsibility report, and in 2007 helped the firm win a Water Efficiency Leader award from the U.S. EPA. The company even produces its own byproducts when it comes to water.
      "The process called HERO – which stands for High Efficiency Reverse Osmosis – is one of the most advanced water recovery processes in the world," Cooper explains. "It squeezes out more water and maximizes the efficiency of water recovery when making ultra-pure water for many industries that require super clean water, obviously including Intel's business. This technology was developed at Intel's [Rio Rancho] New Mexico facility."
      Asked whether the way communities charge for water usage and wastewater treatment has changed much over the past decade, Cooper says, "Not much at all. Water is cheap and not a driver in most communities in the world. If this was the only factor driving Intel's water conservation programs – like it is for most other companies and communities – we would have never saved approximately 30 billion gallons since the late '90s or treated and re-injected over 3 billion gallons of ultra-pure water into an Arizona aquifer."
      That said, arid regions naturally do more to nurture the liquid resource. "And, if we choose to operate in these regions – that is, the other benefits of the region, such as education, engineer availability, transportation, taxes, and so on, outweigh the water challenges – we do more too," says Cooper. "It drives innovation, for sure."
      With major operations in Israel and Arizona, Intel has faced that challenge. The next place it will face it is Dalian, China, which he calls "another location where water is a challenge. We are planning to open one of the world's largest fabs there in a few years, and, as for water,
Tom Cooper
Tom Cooper, worldwide water program manager for Intel Corp., kayaks through Monterey Bay's Elkhorn Slough near his home in Monterey County, Calif.
you can be assured that our water/wastewater management and sustainability practices will be top notch."
      Around 2000, the company did a lot of work on water-use reductions in concert with the transition from 200-mm. wafer production to 300-mm. production. Now Cooper says a similar approach will be in order for the company's announced transition to 450-mm. wafers. Though the industry faces new challenges with water and chemical use, he says his team is up to the challenge, given the sustainability mandate that he says is "part of our corporate DNA."

Ground Work
      So, how can a community make development of top-notch water and wastewater infrastructure part of its own DNA?
      "Be smart. Educate. Focus on the big water users where simple fixes do a lot of good," says Intel's Cooper. A specific recommendation: Reuse water from sewage treatment for irrigation and cooling towers.
      "Our most significant water conservation achievement for 2008 is to recycle de-ionized water from manufacturing operations," says Guy Robinson, head of global facilities services for Applied Materials, speaking of the company's operations in Austin, Texas. "This recycled water will contribute approximately 6 million gallons toward the overall water conservation goal for 2008. We have another project under review that will save an additional 4 million gallons per year."
      Asked how community water and wastewater charges have changed, Robinson's colleague Barry Lewis, facilities engineering manager, says,
"Our city-owned water utility periodically performs a cost-of-service study to determine how costs should be allocated to each rate class. The last study was performed in 1999 and there is currently a study under way which will help determine recommended cost allocations for 2009. The Austin City Council ultimately determines the final allocations, and will use the cost-of-service study as a guide."
      When it comes to specific negotiations with users, however, it may just be that one candidate plant gets surcharges for wastewater treatment, and another doesn't. Some jurisdictions are more adept at using new technology to save or measure water. Toss in persistent drought, and the pressure can hit the boiling point. But working together, companies and towns can come up with creative solutions.
      "To avoid paying wastewater fees for cooling tower evaporation we have installed metering that allows us to take advantage of evaporative credit from the City," says Guy Robinson by way of example. Another one: "Irrigation consumes 44 percent of our total water usage," he says. "When the site was designed, all of the water used for landscape irrigation was metered separately. This allowed us to avoid wastewater charges for this water."
      But there's always one more example waiting to be set.
      "Currently, we have two lakes on our property. However, we don't have permission to use this water for irrigation from the State of Texas," he says. "Rainwater from our impervious cover drains into these lakes, and there is an opportunity to harvest it. We are looking forward to working with the proper authorities to obtain some of these water rights for irrigation."

Get Specific
      Edward C. Fiss, Jr., manager, Process & Design Group for Charlotte-based environmental consultancy AWARE Environmental, has been counseling both sides of the fence on water and wastewater issues for 31 years, though 90 percent of his work has been on industrial clients' needs.
      "However, municipal experience is very important, because to do a good job on site selection, you need to understand both sides," he says. "In site selection we're frequently looking for incentives, [but] you need to have some ideas of what [municipalities] can and can't do, and what their real problems are.
      "Anybody selecting a site should be looking at water, sewer and energy costs," he says, "and frequently the rates for water and sewer can be negotiated with the municipality as part of a site selection deal."
      Fiss makes a habit of personally touring community water and wastewater facilities, making sure capacity promises can be kept. And he's done it all over the world.
      "When you're going to build an industrial plant, no matter what kind, it's a huge investment, and for most industries, water and wastewater is a critical component of the facility. If you don't have the capacity, you're in deep trouble."
      How deep is the trouble caused by the drought in the U.S. Southeast?
      "The drought has tightened things up," says Fiss. "It makes municipalities sensitive to the actual water usage of industry. It's also made industries very aware that some communities really haven't kept up with demand for water in their areas, and there may be a real shortage. Atlanta is an area right now where I'd be very concerned about siting a high water use facility."
      As if on cue, as Fiss speaks, an e-mail enters this reporter's inbox from the Atlanta Regional Commission headlined "It's time to explore long-term water solutions."
      If a company is in a water-crisis region, he says, tracking actual needs is essential.
      "For industry, they're probably going to be the first restricted on usage if there's a crisis," he explains. "On the other hand, it's important going in that you have a realistic projection of how much water you'll need. It's one thing to say you need a 10-inch or 12-inch line, but another to say 'This is our average demand, our maximum month or week demand, and day demand' – and even take it further and say 'This is our peak hourly demand.'
For the long haul, all industries need
to be treating water as a valuable
resource. That may come down to
setting priorities that can't be
cost-justified under current terms

      "In a lot of industries, equipment is running on and off," he says. "When it's on, in a day you may consume 1,000 gallons per minute. But it may be 5,000 gallons a minute for 30-minute periods. You have to have enough transmission and storage capacity in the municipal system to handle that, or provide it on site."

Cost Means More Than Dollars and Cents
      Similarly, says Fiss, maximum water demand over the course of a year can be matched with weather patterns to determine whether an area is a good match. Increasingly, though, good matches are hard to come by, given sheer population growth and the concomitant scarcity of water.
      "For the long haul, all industries need to be treating water as a valuable resource," he says. "That may come down to setting priorities that can't be cost-justified under current terms. For most companies and even communities, it's all cost-based, and we used to see a lot of energy projects you couldn't do that weren't cost justified. Ten years from now, we'll see a lot more that are cost-justified. To stay ahead of the curve, you have to assign a value to the resource that's really higher than the current value."
      That goes for the communities too, says Fiss, citing bottled water prices.
      "I could easily price it at two times or even 10 times its current value," he says. "On the municipal side right now, there is a lot of discussion about water being under-priced, and I think we're going to see the monetary cost of water increasing very rapidly. Municipalities probably are going to have an easier time increasing their cost structures because of their desire to encourage water conservation."
      Indeed some Canadian provinces are coming on board with water royalties to be paid by large-volume industrial users. British Columbia has charged for surface water use for more than 150 years. Ontario's new royalties begin in 2009, and Quebec plans to institute its own groundwater and surface water royalty system for industrial and commercial users that same year, after declaring via legislation this year that special permits would now be required of large users.
      "Historically, in the U.S., we've had basically unregulated water usage," says Fiss. "We've been able to use as much as wanted. The movement is toward permitting of water withdrawals, and restriction of them based on drought conditions."

Start Making Sense
      Fiss offer some guidance for all parties on wastewater evaluation too.
      "Typically, the higher the strength of pollutants in wastewater, the more economically they can be removed per unit of treatment," he says. "Frequently, it's more economical to pre-treat on site a high-strength industrial wastewater, then discharge it to a community sewer system for further treatment, instead of automatically looking for the community to provide 100 percent of the wastewater treatment. If there is the capacity available, that may lead to initially low capital costs for development of a site, but it may end up a much higher capital cost than if you'd built a wastewater treatment facility on site. That could be owned by the municipality potentially, but you need to look at it on a community basis – what makes sense, and how it's going to be allocated between the industrial user and the municipality."
      Asked to name communities that are out in front in such matters, Fiss points to Singapore, which treats wastewater for potable reuse. "We're not talking about low cost," he says, "but it's something for the future."
      PUB, Singapore's national water agency, won the Stockholm Industry Water Award at World Water Week in Stockholm in August 2007. And the water industry has been identified as one of the key growth sectors for Singapore's economy, with about S$330 million to be invested over the next five years to develop Singapore into a global hydrohub – an international center for the water industry and technologies, according to Ministry of the Environment and Water Resources.
      Fiss says San Diego has been doing quite a bit of proactive work in testing and development of wastewater reuse.
      "Communities that are looking to the future are trying to separate the types, and have more than one type of water available," he says. "You have reclaimed water for irrigation and cooling. And in Florida, for example, they're using brackish groundwater and some seawater for reverse osmosis treatment. That's a move toward the future. With membrane treatment and reverse osmosis, the technology is improving rapidly and costs are decreasing rapidly."
      A report released in April 2008 by the U.S. National Research Council calls desalination a realistic option for increasing water supplies in some parts of the U.S. But further research is needed to lower its costs and energy use.

To the Second Power
      The very electric power that companies also look for in large quantities can often be their chief competitor for water use. Fiss says reservoirs in Georgia and in the Catawba River area of North Carolina and South Carolina, for instance, were not constructed for water supply, but for flood control and power generation. Conflict inevitably arises.
      "We had it demonstrated to us here in the Carolinas last summer, when so much air conditioning was being used when it was so hot," he says. "Reservoirs were being used for power generation, and the availability of water supply suffered as a result."
      In the Sunshine State, that battle is currently pitched between the needy utilities of central Florida and the would-be protectors of Jacksonville's St. Johns River. In a related matter, a bottled water plant from Niagara Bottlers LLC is still ready to go forward with its plant in Lake County, despite the fact that it may not get a permit from the St. Johns River Water Management District, and that county commissioners backed out of incentives for the plant over concern about water shortages in the area.
      "Florida is a water-poor state," says Fiss. "There is a lot of competition for water in Florida, primarily due to the growth in population, which we see in a lot of areas. Most of the freshwater comes from groundwater. Although it is replenished, it's very easy to overtax a groundwater system."
      In New York, officials are concerned with increased drilling for natural gas in the upstate's Marcellus Shale formation, much of which serves as the watershed for New York City's only water supply source. Getting that water has heretofore allowed the city, via a federal waiver, to avoid constructing a new filtration plant with a price tag over $10 billion.
      The conflicts between energy and water affect the biofuels surge too. One study, published by the International Water Management Institute in late 2007, argues that continued biofuel production increases in China and India will only make worse the water shortages those countries already face, not to mention their food-vs.-fuel conundrum. The issue is just as meaningful in the U.S. Midwest, where biofuel production has caused some conflict with the irrigation needs of food farmers.
      For every area rich in conflict, however, there's another area rich in the resource. Trevor Hamilton, vice president of economic development for the Chattanooga Area Chamber of Commerce, says water resources are one of his area's shining attributes.
      "Water is not an issue here," he says during a tour of VW's newly chosen site for a $1-billion manufacturing plant at Enterprise South Industrial Park, which features a 30-inch water main from the treatment plant at the river's edge. "The vast majority of water resources come from the Tennessee River, and all systems are in really good shape, with plenty of capacity at peak times." Surface water is preferable to groundwater in its quality. Hamilton says several industries in his area enjoy that benefit, because the largest concentration of jobs in the area's manufacturing sector is in food and beverage.
      The State of Georgia, citing an age-old surveyor's error, is trying to legally gain access to a corner of that river, just to the west.
      And in the Great Lakes, even with the Great Lakes Compact seeking to protect what the region sees as rightfully its own water, there's plenty, apparently, to still go around. In a presentation to the Utility Economic Development Association in Cleveland in July, Todd Davis, the CEO of Hemisphere Development LLC who literally wrote the book on brownfield redevelopment for the American Bar Association, described the amazing evolution of one of the largest brownfield deals in the country, just 30 minutes to the east.
      With its partners, Hemisphere is redeveloping a former Diamond Shamrock chemical manufacturing plant site right on the shore of Lake Erie into a full-scale resort and residential community, complete with its own vineyards (using the high chalk content of a settling pond to advantage) and the participation of Cleveland-based sports management giant IMG.
      As a footnote, Davis mentioned that his firm still holds the permit that Diamond Shamrock used to extract some 100 million gallons of water a day from the lake, and has been meticulous about maintaining the piping into the lake. At this time, the company does not anticipate using the water infrastructure for purposes other than its own site use.
      "We've always thought that was a tremendous asset," he said of the water withdrawal permit, but "we have yet to attach a value to it."
      Some ideas on that soon may find their way to him.

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