Challenges & Opportunities
As we move into 2009 and continue to watch economic developments, it is likely that the road ahead for the water and wastewater industry will present both challenges and opportunities. To help gain a better grasp of what’s in store for 2009, Water & Wastes Digest asked various industry professionals to provide their views on the current state of water and wastewater industry and chart its possible outlook and direction in 2009.
Dawn Kristof Champney
WWEMA recently held its 100th Annual Meeting, during which time the results of our annual Market Indicators Survey were released. The findings were illuminating, with 68% of the manufacturers and 62% of their reps having experienced positive growth in the past year, while only 36% of the manufacturers and 25% of the reps expect marginal growth in the coming year. The remaining respondents were split between zero to negative growth in 2009. Expectations for design work, quotations, bookings and employment tracked similarly, with the only bright signs being continued—modest growth in international sales and a continued lowering of material costs.
During roundtable sessions, the members offered further predictions about the outlook for the water and wastewater industry, noting that our industry lags the general economy by 12 to 18 months. Collapse of the housing market and credit freeze were being felt in project delays and in some cancellations, though sales in spare parts and the after-market service business were expected to improve as communities retrofit their plants in an attempt to extend the life of their existing infrastructure. While most anticipate a dip in commercial activity over the next 12 months, they all agree that the fundamentals of the business are intact and the future looks promising for companies serving the water and wastewater industry.
ITT Fluid Technology President
The year 2008 was an exceptional one for ITT’s Fluid Technology business, with strong growth across our global business, even setting a new sales record during the second quarter. And now we’re challenged by one of the most significant business downturns in 80 years. Staying up- to-the-minute on changing market conditions will be especially critical in 2009. While conditions vary from market to market, the credit crunch is impacting our municipal and industrial customers. The availability of low-interest money for governments will be a big factor, and municipalities may be forced to make tough choices on their infrastructure priorities.
The demand for stability, value and strong technical support will continue to grow as our customers require more for the limited dollars they have to spend. There is also a growing demand for technologies, which improve reliability such as intelligent pumping, advanced monitoring and controls and energy- efficient treatment technologies, just to name a few.
Our nearly $200-million annual investment in R&D has allowed us to release new robust products for the transport and treatment of water and wastewater.
The coming year will be challenging, but with challenges come opportunities. We are confident that as a company that continues to invest in service infrastructure and value-added products, and by staying close to our customers, we will emerge stronger than ever.
Ian C. Watson, P.E.
AMTA Executive Director
The need for reliable supplies of clean freshwater is present in every aspect of our daily lives. Much has been written over the last two or three years about this subject. Reports on droughts in California, Texas and Florida, the publicity surrounding the presence of personal care products and pharmaceuticals in drinking water supplies, and the technologies available to effectively treat these impaired sources have been present in the press and the news media with increasing frequency.
The technologies exist today and are being used on an ever-increasing scale. 2009 will see increasing application of membrane technology for filtration, compliance with the surface water treatment regulations and exploitation of brackish groundwater for seawater conversion. MBRs (membrane bioreactors) will continue to see growth. Even in developing countries, this technology is taking root. For example, when its current program is completed, Algeria will have more than 1,000,000 cu m/day of seawater RO (reverse osmosis) in operation.
The population is growing and the traditional supplies are dwindling. Water is the essential driver of our economy and will remain so. The cost of water will increase, but the value of water will increase more. It is beholden upon us, the practitioners of water treatment, to continue to find ways of improving the technology and to urge our elected officials not to ignore the real need for realistically funded federal research programs at universities and in the private sector. 2009 and beyond will, I believe, see further advances in the state of our art, to the benefit of every American and by extension, the world.
Black & Veatch, Global Water Business President and CEO
The water business of Black & Veatch is prepared to employ innovative approaches and emerging technologies to address the challenges of concern to our clients.
The whole-of-the-environment approach recognizes the interdependence of resources and environmental systems. This includes water supply planning with sustainability in mind—increased focus on technologies that transform wastewater treatment into an activity with positive net energy production, recycled byproducts for beneficial use, minimal residuals and more.
Faced with reduced financial funding, which impacts capital and O&M [operations and maintenance] budgets, utilities can benefit from optimization of chemical addition, mixing and sedimentation and filtration processes. When plant operators receive sufficient training, results can include less chemical use, lower operating costs, fewer residuals for disposal and less truck traffic for delivery of chemicals and disposal of waste. Alternative project delivery approaches can also enable utilities to do more for less.
Water scarcity issues are affecting communities globally. As climate changes cause shifts in water patterns, many previously water-rich communities are increasingly experiencing imbalances in supply and demand. Those with already limited water resources continue to experience high growth, which exacerbates water supply problems. The search for water must reach beyond traditional freshwater sources and consider conservation, nonpotable reuse, indirect potable reuse, impaired waters (brackish or contaminated waters), desalination and water sharing.
Desalination technologies continue to rise in importance. With predicted population migration to coastal areas globally, desalination use is anticipated to grow. Major challenges confronting wider use of desalination relate to energy consumption and disposal of concentrated salts in the brine stream. Research focuses on energy recovery within the RO process and further concentration of salts in the brine stream.
Renewable energy applications include biogas, biofuels using algae and alternative sources like water and wind.
Compounds of emerging and potential concern will continue as a topic of discussion. The toxicological relevance of the concentrations found in drinking water will be part of the debate as more utilities begin to sample their water and report results.
Robert Y.G. Andoh
Hydro Intl. Director of Innovation
My sense is that the storm water sector is going to come under a lot of pressure as a result of the current credit market freeze because our market is driven primarily by development. In this current climate, honestly, unless there is something that gives the construction industry a boost overall, I think there is going to be a slowdown in the storm water market in 2009 and then probably an uptake when there is an upturn in the economy.
The other issue is there are going to be multiple demands on scarce resources. In the current economic climate, you have other things like health care going for the same amount of tax dollars, so it is going to be an interesting to see how things evolve.
Severn Trent Services Vice President, Marketing and Business Development
Looking forward to 2009 and beyond, the U.S. water and wastewater management industry is facing tough, but not insurmountable, challenges. The key is to efficiently manage financial resources by employing creative water and wastewater management methods to meet growing public and industrial demands and ensuring that water quality meets regulatory requirements. Many states and municipalities faced with budget deficits are turning to public-private partnerships to gain much-needed operating efficiencies. The public-private model—once an experiment—has moved into the mainstream as more elected officials and utilities managers recognize the benefits of reduced operating costs plus the added insurance that their regulatory requirements will be met, thus reducing violation penalties.
Globally, all indications are that the emphasis on readily available potable water for all peoples in the world will move to center stage. The new U.S. leadership is poised to set a sustainable environmental management agenda not only for our own country’s water resources, but also those in developed and developing countries. Furthermore, the treatment of water and wastewater will continue to grow as a priority as developing countries demand greater water availability to meet their industrialization goals. Wastewater treatment for water reuse has been identified as a growth market, as many countries view wastewater as a valuable resource rather than a waste product to be treated and released.
Although the U.S. and the U.K. continue to represent the largest market for water purification products, the greatest growth opportunities are in the Middle East, Asia and South America. The current global financial crisis likely will forestall some larger projects that have not yet already secured funding, but regional and local projects, including infrastructure improvements that have already secured funding, will see less delay over the next 12 to 18 months.
As the economies of the world struggle to rebound, water and wastewater professionals and stakeholders in private industry, government organizations and associations can be counted on to tackle the challenges ahead. Together, the industry and its public and private partners will collaborate to offer unique solutions ranging from new technology to uniform standards to global partnerships. Difficult economic conditions will necessitate fiscally and economically responsible water and wastewater development and management.
Schneider Electric National Sales Manager, Water Wastewater Competency Center
Currently, customers are feeling pain from increased regulatory requirements, higher energy costs and in many cases, reduced revenues due to water restrictions and drought. Today, roughly one-third of a municipal water system’s operating cost is energy-related.
Energy use will likely increase as newer technologies such as UV [ultraviolet], ozonation and reverse osmosis are deployed to assist in achieving tougher regulatory requirements. Reuse is also gaining interest but can use 20% to 40% more energy than conventional treatment methods. These technologies also raise power-quality concerns.
Schneider Electric is committed to providing our customers with solutions that will both increase energy efficiency and lower their carbon footprint through our extensive product offerings and knowledge of water processes. As the global energy-efficiency specialist, we are actively supporting and promoting U.S. EPA’s Energy Star program for water/wastewater, The Consortium for Energy Efficiency and AWWA’s Energy Efficiency Committee. We estimate that for every 1 mgd [million gal per day] processed, the average potential savings are $17,000 per year and more than 170 tons of carbon footprint.
In order to more efficiently operate facilities, SCADA and automation system upgrades that leverage open network standards and information exchange will become more popular. Power monitoring systems and intelligent motor-control offerings will enable operators to understand when, where and how they are using power. Active power-quality correction will become standard as more harmonic producing technologies are deployed.
Elster AMCO Water, Inc. President
Recent findings from AWWA’s new State of the Industry survey indicate that industry professionals from the U.S. and Canada are deeply concerned about the future of our industry, its infrastructure and the depletion of our water supply. While the water industry is undergoing significant change and growing problems such as decaying infrastructure have long been neglected, this does not mean that the outlook for our future is bleak; that is, if utilities and manufacturers work together and take action now. The undercurrent of serious issues in the industry presents significant opportunities for manufacturers and utilities to cooperate to ensure a sound future for water businesses as well as for the consumer and the preservation of our precious resource.
At Elster AMCO Water, we anticipated many of these industry issues, especially the need to conserve water, and we began developing innovative, technologically advanced water metering products and solutions to address these problems.
Columbian TecTank General Manager
In 2009, leading tank manufacturers will be called upon more than ever to help engineering companies and system integrators provide targeted, cost-effective solutions for their customers. Organizations will be seeking opportunities to optimize their current wastewater treatment systems. Adding influent flow equalization tanks would be a great example of this. In addition, energy recovery will continue to grow as companies invest in tanks to support new environmental initiatives. In tank design, a high-quality coating with low maintenance requirements will be a key consideration to ensure longevity and a cost-effective total life cycle for the investment.
Hungerford & Terry President
In 2009, Hungerford & Terry celebrates 100 years of state-of-the-art water treatment systems. During this time, we have witnessed two World Wars, a stock market crash and numerous other social upheavals.
Back in 1909, we billed ourselves as “filtration engineers” and specialized in the “purification of highly polluted water for manufacturing purposes.” We transitioned into the heyday of ion exchange with high-purity boiler makeup systems.
Today, our business centers on drinking water systems and our specialties include the removal of iron, manganese, arsenic and nitrates.
Despite the current volatile economic climate, we remain bullish about the future and convinced that providing the necessary clean water to meet the added growth of two to four billion more people by 2050 is essential.