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Power costs are stable.  Gas prices decreased markedly in 2014 Oil futures are low compared to 2013 and earlier.  .  Production is constant.  Low energy likely is fueling an economic expansion.  Gas economy in vehicles is at an all-time high.  Fuel efficiency lowers GHGs and cuts oil imports.  America is less reliant on foreign oil.  We have more money in our pockets.  Utility power costs and vehicle costs are lower.  Generator operations are lower.  Life is great.  Or is it?

 

Well, that depends on who you talk to.  Politicians in states with in oil and gas based economies are scrambling to deal with large deficits in their budgets.  The railroads are not happy over the Keystone pipeline vote.  Green energy manufacturer are unhappy.  Environmentalists are unhappy.    Heck even the Koch brothers are probably not completely happy

 

The first issue is methane gas.  Pipelines and fracking operations lose about 6% of the gas. A Washington Post article estimates 8 million metric tons of methane is lost each year.  That is where we are trying to capture and transport it.  The Bakken fields lack pipelines for gas, so much if it may be flared.  The amount of fracking will continue (Florida Power and Light has said it will get into the business – but outside of Florida), so more exploration will likely lead to more methane escaping.  Why do we care?  Methane is 22 to 80 times the greenhouse gas that carbon dioxide it (depending on who you talk to).  It accounts for 9% of GHG emission in the US – a third of that from the oil and gas industry.  That gas is concentrated in the western US which makes them ripe for regulation.

 

Enter cap and trade.  The cap and trade “industry” has been opposed by the oil and gas industry for years.  However there are a number of groups –from Indian tribes to NextEra Energy are posed to benefit from cap and trade (C&T) rules.   They have reduced their carbon footprint enough that they can sell carbon credits.  It is doubtful that this Congress with pass C&T legislation, but much of the regulatory focus could be shifted if C&T was in place.  C&T could accelerate green energy efforts.

 

Green energy folks want continued subsides or policies that encourage increased green power supplies, improve technology and reduce prices – all at the same time.  Rolling out a major change in the energy picture is a huge investment that will not gain traction without policies to encourage it   At least for now, green energy creates more jobs per KW-hr than conventional oil and gas, primarily in research and development and product manufacturing.  Sewing up the patents would portend positively for America in the 21st century, much as sewing up the car, gas engine, and nuclear patents did for the 20th century.  He who owns the technology should benefit.  Unfortunately that isn’t the Koch brothers who are unhappy with green energy but are happy that lower oil prices might decrease the competition in the future when oil prices inevitably rise.  But America would be better off in a non-oil based economy in 50 years if we developed an energy policy to address these issues with a long-term view.

 

However, that would take a lot of business and political leadership to overcome some of those who do not want change.  These are people who have more money than the Concord coach makers who could not fight the technology change to automobiles in the early 20th century.  It also takes a vision of what America should look like in 50 years. We might be short on those visionaries.  And how will utilities be a part of it.


ASCE came out with more bad news about infrastructure.  60 Minutes did a piece about deterioration of bridges. The magazine American City and County has published a couple articles about the risks of aging infrastructure.  Asset management is practiced by few governments, and even fewer small ones.  The public doesn’t want to foot the bill and lobbyists want taxes cut further.  Where does it end?

The infrastructure crisis is a political and business leadership crisis.  Or vacuum.  The economy of America and much of the developed world was built on advanced (for their time) infrastructure systems constructed by governments with a vision to the future.  Some of this infrastructure was repurposed (federal interstate system for example), but much of it has addressed critical issues that hampered our development.  For example, the lack of water severely inhibits many third world nations.  Even when they have water, it is unsafe to drink or use.  In America, at the turn of the 20th century 1:100,000 people DIED each summer from typhoid.  Just typhoid, not all the other waterborne disease options.  Many more were sick.  And the population was much smaller.  Talk about reduced productivity.  Now we have advanced water systems, disinfection practices that protect people and pipes, and few event get sick from contaminated water.  Those that do, become headlines.  You don’t want to be a headline.  Productivity is up.  But we expect good water and can’t see the pipes.

Sewer is an even better example.  People just don’t want to know.  Flush and it’s gone.  But the equipment, treatment and materials may be even more complex than the water system.  But few people get sick from sewage because of the systems we have built.  Now think about third world examples.  Or conditions you have seen in documentaries, the news or movies.  Being in sewage is not a great place to be.  Even the manhole thriving cockroaches agree..

Stormwater is probably the laggard here, in part because changes in development patterns have overwhelmed the old systems.  Miami Beach experienced this when redevelopment replaced small houses on permeable lots with large housed with mostly impermeable property.  Oops.  Meanwhile road and bridges have received a lot of funding – with much to do (see bridge that collapsed on I-75 in Cincinnati a few weeks back).  Most states fund transportation at a magnitude more than water and sewer.

What is the problem?  Local officials do not convey an understanding of these complex system to the public very well.  In part this may be because understanding the maintenance needs is difficult and highly variable.  And many do not fully comprehend the assets they have, their condition, life expectancy or technological needs.  No one knows when things will fails, so maintenance or replacement of some equipment or pipeline is always the thing cut in the budget, with no real understanding of the consequences.

The public does not see the asset, assumes it will have a long life, so is unconcerned until they are affected.  Then it is personal.  The public does not understood the impact or value that these assets have to society – they tend to be personal focused, not societal.  That is a leadership issue.  That leadership starts with vision and communication from those that understand the issue to the elected officials that need to advocate for their infrastructure.  Elected officials need to take ownership of infrastructure.  It is like your house – you need to upgrade and protect it constantly.  You do not let that roof leak keep leaking!  Elected officials that do not invest in infrastructure, are letting the roof leak.  Making is someone else’s problem for political expediency is not leadership.

Despite the infrastructure crisis, the good news is that construction of piping is increasing – both new and replacement.  Every so many months, the magazine Utility Contractor will note current trends and pipe seems to be going up.  That’s good but there is a long way to go.  Better news – the construction of buildings is increasing.  That could lead to more revenues.  In Florida, all of a sudden finding experienced construction workers is a problem.  Things are definitely better economically, but are we taking advantage to improve the local infrastructure, or is you economy simply an infrastructure disruption away from another fault?


If you are a wastewater utility, and you create a high quality effluent product that can be used for industrial purposes, irrigation or aquifer recharge, who “owns” the water?  If the utility is sending to a golf course pond for discharge, the answer seems obvious – the golf course owns it.  Not so fast.

Now let’s day you are recharging and aquifer.  You pump it into the ground with the intention of recharging the aquifer to benefit your wellfield.   Or you pump it into an aquifer storage and recovery system with the intent of recovering it when you need it.  Quick impression is that you should own it, but what about the people that sink walls along the way?  Or have existing wells in the vicinity that can tap your injected water?  Can you keep people from pumping it out?  Not as clear.

What about discharge to a stream with the idea of capturing it downstream in an intake system for your water system?  Much less clear.  The ecosystem, farmers, irrigation users, etc. along the stream could use the increased flows.  Can you keep them out?  Very unclear.

Now assume you are a water rights state and there are people who have rights to the aquifer or stream that are more senior to yours.  Can you clip their claim to the water by claiming the water is yours?  Really not clear and the subject of ongoing regulatory discussion and legal proceedings.

There are no clear answers to these questions but they have major long-term impacts of water resource planning in much of the US.  The problem is the rules assume facts not in evidence at the time of the permit (or claim).  Conditions can change – permits and rules may not (or have not).  Maybe the water regulations and that the changed condition should perhaps obviate the prior claim?  A very tough legal issue and one bound to make a bunch of people unhappy.  The concept of reclaiming water from waste was not a consideration in the past, so clearly the rules that cover reclaimed water need to be revised.  I can’t wait to see the results.


The Union of Concerned Scientists reviewed recent wildfires in the west. One of the concerns they raised was that increased forest fires are both a climate change and a man-induced issue.  Wildfires on federal land has increased 75% on federally owned land.  Fire impacted areas are larger and impact more development which encroaches on those federal holdings.  We spend over $1 billion in fire fighting on federal lands each year.  But why?

Because many of the forest are in mountainous areas, fire season starts earlier in year with less mountain snowfall.  And that is  most years as snowfall accumulation decrease.  Temperatures are warmer, earlier with shortens the snow season.   Water runs off faster.  Of course the fact that we altered management philosophies to prevent all forest fires didn’t help because some burning is natural each year. As a result there is a huge reserve of unburned land out west.  The beetles did not help either as they left millions of acres of dead trees on mountain sides from Canada to New Mexico. Beetle infestation is clearly climate change driven.

The solutions are more difficult.  Building up next to federal land needs to be restricted.  Regulations in dealing with trees, bushes and underbrush in fire prone areas need to be enacted and enforced. Early spring fires set as control burns need to happen more frequently. But these are all local responses to a global climate problem.  That response is currently lacking.  These are leadership issues.

From a utility perspective, this issue may be significant.  We like those high, clean mountain streams.  But after a forest fire, those streams are often warmer and less clean.  The soot, ash and runoff from now barren land can create significant impacts on water plant, create major treatment alterations, increase costs, and risk contamination.  A friend some years ago suggested that utilities were instruments of social change.  The fact that we have treated water and sewer creates social change.  We need to protect water supplies and therefore we should be a part of the conversation on land use.  That requires some leadership.

 


Orange County, FL has become the second school district I know of that has decide that giving students a zero on a assignment causes the kids to lose hope of passing so they just quit.  To address this problem, the worst grade you can give them is a 50 instead of a zero.  That way they can recover from one missed assignment.  Huh?!?!  No, you read this right.  The school superintendent was quoted in the SunSentinel as saying that only 43 percent of the students who received a 50 actually recovered to pass the class with a D.  I have several questions.  First, how does this policy teach these kids any responsibility?  For the kids that do their work, how is that fair?  What message does this policy send to the kids?  Be a lazy dumbass and do nothing and you can still pass?  That reinforces the concept of entitlement which we all agree is a problem in society that we need to overcome.  Finally, if one missed assignment causes the kids to fail, why are there not more assignments so missing one is not fatal?  That is what happens with my students (who still get a zero for not doing an assignment).

It would seem that such a policy is not based on an educational goal but more like a political one to improve school perception.  That is as bad an idea as having kids beg for money for uniforms and class trips etc.  Kids do not sell anything they just beg for money.  So are we teaching them that begging and panhandling is an acceptable career?  Seriously what impression does that provide to these young minds?  How does either experience prepare kids for the real world where doing nothing gets you fired, not rewarded, and begging for money vs actually work is also not rewarded.

Once upon a time, education was the purview of the wealthy.  American businesses argued that a basic education was needed to train a workforce for industrial jobs.    The American public education system was created with this in mind- to train the next generation of workers.  With education came great social and economic advancement.  We clearly are deviating from that goal.  Students need a good foundation in math, writing and reading (in English!), civics and science so they understand social responsibility, can communicate, understand how things work the world and can solve complex problems.  They do not need pseudo-science or politicized science, but real science.  Business understands this.  But where is the business community on job training in schools?  It would seem the business community has abdicated their responsibility to local districts who are trying to meet political goals, not economic goals.  Why are we not using all the extensive testing to figure out the strengths of students and encourage them to play to those strengths? Not every kid can go to college, or should, but that does not mean they cannot achieve or be successful.  They may need different training to hone their strengths.

Back in the day my Dad told me that as the education system was developed in his hometown of Detroit, students were given aptitude tests.  I was also.  The kids were divided up based on skills and aptitude.  Students were even sent to different schools as they got older that tailored programs to their interests and skills set.  Kids that the schools system felt had the aptitude to succeed in college had different courses than students that were less academically included but perhaps more mechanical, more artisan, more labor, clerical, etc.  Different kids go training to help them succeed with their skills.  Less academic did not mean less inclined to succeed or be successful. just differently.  And they had a better chance to be successful.  We seem to miss that today.

Today we have parents insisting that everyone be treated the same, and that no kid gets left behind.  But putting kids with different aptitudes, maturity, and academic inclinations in one class is destined to either fail for all, or fail for everyone but the average.  Such a protocol begets policies like Orange (and Broward) County that direct teachers to adjust grades so “Little Johnny” doesn’t feel bad.  Extensive college prep testing and disconnected learning discourage the less academic kids, leading to dropping out, or other behaviors.  Such policies and expectations by parent and political leaders are not helpful for building an educated society.  Instead we need to search further into the root causes.  Are there too few assignments?  Are they too disconnected for students to appreciate?  Should we sort out strengths and treat different students differently to discourage disinterest?  How do we assess their strengths and design programs to help students succeed.   And who takes responsibility for these kids?  And perhaps we should revisit some of the lessons learned from the early years of the industrial development (1930s) to figure out what they did well, and see how policies today frustrate those goals.  Maybe the way forward is rooted in the past.


Have we passed peak diamonds? Just as a prior blog outlined the concept of peak oil, gas, metals etc, the recent news not suggests that diamond miners are decreasing their exploration investments because the number of new finds is decreasing each year, and those found are far more expensive to extract than the current values.  Sounds like oil?  We find less each year, it is more expensive and current oilfield yields are on the decrease.  Phosphorous is similarly situated which is why there is much research taking place to find means to recover phosphorous from ag lands and wastewater effluent – recover phosphorous meant to be resold to ag interests as fertilizer as the price of phosphorous continues to increase as a result so increasing demand and decreasing supplies.

We are also being told that while peak diamonds have passed perhaps chocolate will become scarcer and the demand for chocolate is outstripping the supply, and the available land for cropping is being out competed by more lucrative crops in South America.  At some point the available land for many crops will be exhausted.  It is then that we reach peak agriculture?


There is a recent iPos MORI study that evaluated the perception and reality of issues in 14 western, industrialized countries to determine how well the perception of the populace matched reality.  The US was one of those surveyed.  No surprise, most Americans’ perception is very different than reality because the news and politics get in the way of the facts.  The study found for example that Americans perceived that teenage birth rates were 24 % of girls vs the real number of 3%, that 32% of the population is immigrants vs 13% actual, and that the majority of people perceiving welfare were black vs. the reality of 39% (38% are white and 15% Hispanic).  The states with the largest number of welfare recipients are in the northeast, which are also the states that received the smallest amount of federal funding per capita.  Talk about misperceptions.

While other countries have similar misperceptions, perpetuating misconceptions is part of the extreme discourse in Congress and among different constituencies. When we perceive the issues incorrectly and our elected officials do nothing to improve that perception?  What does that say about them?  No wonder we cannot get infrastructure to the top of our funding needs?  They perceive if you get water, can drive on it or flush it away, things must be fine?


2014 is almost over.  Hard to believe.  I have been attending or annual Florida Section AWWA conference, meeting up with old friends, making new ones and learning new things.  Conferences and connections allow us to do our jobs more efficiently because as we learn how to solve problems or where we can find a means to solve whatever problem we encounter.  It is a valuable experience that I encourage everyone to get involved with, especially young people who need to make connections to improve their careers.  The technical sessions seemed to be well received and popular.  That means that there are issues that people want to hear about.  Things we focused on were alternative water supplies, water distribution piping issues, disinfection byproducts, ASR and reuse projects.

The reuse projects focused on Florida efforts to deal with 40 years of reuse practice and a movement toward indirect potable reuse. This is the concept where we treat wastewater to a standard whereby it can be put into a waterway upstream of a water supply intake or into the aquifer upstream of wells.  The discussion was extended to a number of discussions about water shortages and solutions for water limited areas.  Florida averages 50-60 inches of rain per year as opposed to the 6-10 inches in areas of the southwest or even 15-20 inches in the Rockies which makes the concept of water limitations seem a bit ludicrous for many, but we rely on groundwater that is recharged by this rainfall for most of our supplies, a lack of topography for storage and definitive wet and dry seasons that do not coincide with use.

The situation is distinctly different in much of the US that relies on surface waters or is just plain water limited.  We have a severe multi-year drought going on in California and huge amounts of groundwater being used for irrigation in many rain-challenged areas.  That is what all those crop-circles are as you fly over the Plains states and the wet.  Where you see crop circles, think unsustainable water supplies.  They are unsustainable because there is no surface water and the recharge for these aquifers is very limited.  Most leakance factors in aquifers is over estimated and hence water levels decline year after year.   Water limited places need answers because agriculture often out-competes water utilities, so in the worst of those areas, there are discussions about direct potable reuse (which occurs in Texas).

Direct and indirect potable reuse are offered as answers which is why this topic was popular at our conference.  A recent 60 Minutes presentation included a tour and discussion of the Orange County Groundwater Replenishment program, where wastewater is treated and injected into the ground for recovery by wells nearer to the coast.  They discussed the process (reverse osmosis, ultraviolet light and peroxide) and they took a drink.  “Tastes like water” was Leslie Stahl’s comment – not sure what she expected it to taste like, but it provides a glimpse into the challenge faced by water utilities in expanding water supplies.   Orange County has been injecting water for many years into this indirect potable reuse project.  The West Coast Basin Barrier Project and several others in California have similar projects.  South Florida has tested this concept 5 times, including one by my university, but no projects have yet been installed.

But until recently, there were no direct potable reuse projects where wastewater is directly connected to the water plant.  But now we have two – both in Texas with a number of potential new projects in the pipeline.  Drought, growth, water competition have all aligned to verify that there many are areas that really do not have water, and what water they do have is over allocated.  A 50 year plan to manage an aquifer (i.e.. to drain it) is not a sustainable plan because there may not be other options.  But Texas is not alone.  Arizona, Nevada, New Mexico, Utah, Colorado, The Dakotas, Kansas Oklahoma and I am sure others have verified water limitations and realize that sustainable economic activity is intrinsically linked to sustainable water supplies.  Conservation only goes so far and in many of these places, conservation may be hitting its limits.  Where your rainfall is limited and/or your aquifer is deep, replenishable resource is not always in the quantities necessary for economic sustainability.  Water supplies and economic activity are clearly linked.

So the unimaginable, has become the imaginable, and we now have direct potable reuse of wastewater.  Fortunately we have the technology – it is not cheap, but we have demonstrated that the reverse osmosis/ultraviolet light/advanced oxidation (RO/UV/AOP) process will resolve the critical contaminant issues (for more information we have a paper we published on this). From an operational perspective, RO membranes, UV and chemical feeds for AOP are easy to operate, but there are questions about how we insure that the quality is maintained.  The technical issues for treatment are well established.  Monitoring is a bit more challenging – the question is what to monitor and how often, but even this can be overcome with redundancy and overdosing UV.

But drinking poop-water? The sell to the public is much more difficult.  It is far easier to sell communities without water on the idea, but the reality we need to plan ahead.  There are no rules.  There are no monitoring requirements, but we MUST insure the public that the DPR water they are drinking is safe.  WE are gaining data in Texas.  California and Texas are talking about regulations.  The University of Miami has been working of a project where they have created a portion of a dorm that makes its own water from wastewater.  Results to come, but the endeavor shows promise.


“If the assumption of all economists, government officials and investors is that the population must increase exponentially, what does that suggest for our future?” was a question asked a few days back.  Did you ponder this at all?  I suggest we should and here is why.  An exponential growth rate assumes a certain percent increase every year.  That means the increase in population is greater the farther out you go.  That doesn’t really make sense except perhaps at one point in Las Vegas (but not anymore).  The economy cannot really expand at a rate greater than the expansion of the population because there is no one to buy the goods or increase the demand, which is why increasing the US population is going to be viewed favorably by all politicians regardless what they say today.  House values do not increase faster than population increase unless they are in a bubble, nor does the stock market really (inflation adjusted).  Your water sales will not increase faster than your system’s population increase for any extended period of time either, so an assumption of ever increasing water sales is likely to be an overestimation sooner as opposed to later.  And then what – you have to raise rates, and keep raising rates to keep up because your demands are too low?

And what if your growth stagnates, or goes backwards as many did in 2009/2010?  That was a severe problem for most entities, causing layoffs and higher prices, pay cuts and deferral of needed improvements, mostly because no one had reserves because people thought the good times would roll on forever.  Layoffs, price hikes, pay cuts and deferral of needed improvements do help society (of course if you had lots of reserves, you weathered the recession without a problem, but too many did not).  Keep in mind the repair, replacement, and maintenance needs, along with ongoing deterioration, do not diminish with time or lack of new customers.  We have relied on new people to add money to solve old as well as new problems for many years.  What is the contingency if growth stops?

So a growth scenario makes us feel better and more confident when we borrow funds.  But if growth does not stop, where is the water to come from?  What are the resources that will be used faster?  Where does the power come from to treat the water or cool the houses?  And the cooling water to cool those power plants?  Even renewable resources are limited – most metals and oil have likely passed their peaks as far as production and water does not always fall consistently.  We have overstressed aquifers and over allocated surface waters, especially in the west.  So while growth makes us feel good financially, we need answers to the growth scenario despite the fact that we may have more funding.  Many resources are not limitless, but an exponential growth pattern ignores this.  Locally growth maybe less of an issue, but society wise?  Maybe a societal problem, or maybe we get into extreme completion with each other.  Some how that doesn’t look like a solution either


Once upon a time, people worked until they died.  But the longer people lived, the more infirmities impacted older people, and the concept of stopping work came into play.  So these folks labored all their lives, put some money away in a safe place, like a bank, where someone else would watch over an manage their money until they needed it.  Then one day, they found out that the banks have gambled and lost on real estate, and their money was gone.  There was no government to bail anyone out.  So the people had to try to go back to work, became beggars and destitute or died.  The government thought this was unfair to those older folks who had worked so hard, but through absolutely no fault of their own, had lost everything.  So the government decided that it would “tax” people a portion of their income, and put it into a retirement system.  People could retire at 65, and of course they were only expected to live another r3 or 4 years.  There were 16 people laying in for every person taking out.  And the government told the banks that they could not gamble with people’s hard earned savings, passed legislation and created an insurance pool to backstop losses by criminal or unethical activity.  All was good and the people were happy.

As time went on some things changed.  For one, people lived more than 3 or 4 years.  The population retirees increased, and the ratio dropped to 1:10 and then to 1:6 ration of retirees:workers, but the “tax” did not go up, but investments were made that increased the pool.  It was called good management.  The government also encouraged people to save money by deferring taxes, which they did, and the banks used it to make money.  All good as long as the investors gambled well.  They gambled so well, they were able to talk the government into undoing the anti-gambling rules from the past, so their pool to invest was twice as much.  And the markets grew and the portfolios grew and the people were happy.

And then it came to pass that the banks again gambled on real estates, and created complicated investment tools to hide the risk, but the risk was exposed and half the money was gone overnight.  And the retired were wondering about jobs again.  But there were no jobs.  And the employed now had fewer jobs.  So less people paid into the system.  And the people were sad.  And mad because they thought they were being protected from the gambling of the past.  They did not understand.

And the government could supply no answers because they had changed the rules and they knew the people would be unhappy, so the government felt there was no choice, so they borrowed money, and bailed out the banks.  And some people were happy.  And some people were concerned about all that debt.  And some people wondered why it was that history could repeat itself and put society at risk.  And some people asked why people who did bad things were not punished.

And none of these questions has been answered.  Good thing that these fairy tales don’t depict anything real right?