Water Scarcity Will Change How We Live and Work

A broad-reaching conservation ethic will take hold -- and not just in the water-starved West.

By Richard Sammon, Senior Associate Editor, The Kiplinger Letter

June 27, 2007

Get used to living with less water -- at home and at work. And it's not just about being better stewards of the environment. It has more to do with limited supply of the vital resource from a combination of climate change, population growth and development. Strained capacity in vital water supply systems and rising costs will be factors in how businesses operate and where they locate. These aspects will spur aggressive conservation campaigns, including stricter local mandates on how water is used, stored and recycled.

Severe droughts are here to stay in several large swaths of the country, what many climatologists are calling a new norm for parts of the U.S.

Worst off are the South and the West, which are struggling with persistent, year-in year-out drought, leaving large lake beds exposed and vital reservoirs receding to the lowest levels they have been in 40 years. But many other areas, too, will feel the strain brought on, if not by drought, by abnormally dry seasons, unchecked suburban sprawl, population growth and the business development that follows in its wake.

The shortage is not yet a crisis, and with planning and careful management, it's not likely to ever become one. Even so, it still means a lot of changes in the near term as states brace for population increases over the next few decades.

Conservation will be the new ethic. It's the only way, really, given that freshwater is a limited resource and costly to transport for any distance, unlike other natural resources. Higher prices will be a motivating factor. Consumers, both business and residential, will pay more. In some places, they'll pay a lot more with rates that escalate as use increases.

There will be limits on use, some of them by government mandates, as is the case in several California counties already. But most communities with less severe water issues will rely on pleading, cajoling or tax incentives to cut water usage.

Look for lots of innovative ways to save. Some businesses and homeowners will add new roofs that catch rainwater. Others will get rid of aesthetic fountains or replace lawns with less-demanding plants and ivy or artificial turf. Plus, faucets that shut off automatically will be more commonplace, as will more-efficient washing machines, central air conditioners, toilets and showerheads.

Water recycling will be center stage, much more than it is now. Las Vegas leans heavily on a capture, collect, treat and redistribute system, offering generous incentives to consumers and firms to comply. Companies can earn rebates, up to a lifetime limit of $150,000, and that may rise higher.

Las Vegas is a success story that other cities will learn from: In the past five years, annual water use declined by 18 billion gallons, even as the population surged by 330,000. Recycled wash water, also known as gray water, is used on golf courses, for hotel cleaning, in car washes, manmade waterfalls, water amusement parks, etc. Homeowners receive cash rebates if they agree to rip out their lawns and replace them with desert plants.

Learning to save water for a nonrainy day will be crucial. To help smooth out dips in supply, Florida communities plan to skim millions of gallons from rivers, such as the abundant St. Johns. The water will be pumped, cleaned and stored. Other communities are adding reservoir capacity and putting up new water towers to be used during future droughts, as well as planning to deal with possible saltwater intrusion of inland aquifers during hurricane storm surges.

Desalination can help, but it has many drawbacks. Florida, Georgia and South Carolina will add more plants, and San Diego is pinning its water hopes on a large desalination facility. One drawback about desalination, though, is the expense involved in the process. Conservation is far cheaper, and Congress will get in the game with several bills pending to provide grants and incentives to communities to adopt stricter conservation and recycling projects, more so than desalination.

Water technology companies will thrive. Sales of equipment for filtration, ultraviolet oxidation and vapor compression, for instance, will rise 15% annually for five years and probably beyond, up from about $1.8 billion today. Leading manufacturers of the equipment, as well as manufacturers of water-efficient appliances, include CH2M Hill, Separation Dynamics, Siemens, EZ Environmental Solutions and SETS Systems.

Watch Australia. When it comes to water, Australia's present may be our future. Climate changes that occurred there about a dozen years ago that dropped the country's average annual rainfall in half forced the nation to adopt among the most innovative conservation projects, substantially reducing per capita water use. Several Australian firms that flourished with their country's programs are also well positioned to benefit from an expanding U.S. market. Among them are Perpetual Water, which makes on-site and in-home water recycling systems, and Caroma, which specializes in highly water-efficient bathroom fittings and accessories.

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