Changes, Challenges & Opportunity: Water/wastewater industry professionals provide their outlooks for 2007
Dawn Kristof Champney, president of the Water and Wastewater Equipment Manufacturers Association
According to the most recent market indicators survey conducted by the Water and Wastewater Equipment Manufacturers Association, the industry manufacturers and their representatives are predicting an average 5% increase in design work and a 10% increase in bookings over the next 12-month period. Why the cause for optimism?
First, a healthy economy. Indicators continue to show growth in the economy, and the bond market continues to show favoritism to the water and wastewater industry with more than 8% of the $300-billion tax-exempt market going toward water and wastewater utility tax-exempt debt issuances in the last year. Second, growing consumer awareness. The public is becoming increasingly aware of the value of water and is willing to pay for the true cost of providing water supply and sanitation services. Third, strengthening political will. Municipal officials have come to accept the fact that federal subsidies are a thing of the past and full cost of service rates are not only necessary but also essential in helping move the industry toward long-term sustainability. Lastly, new leadership. The 110th Congress is expected to be more receptive to environmental issues and protection of our nation’s natural resources. A winning combination!
Mohamed Dahab, president of the Water Environment Federation
With the changes in Congress from the recent elections, I believe that a number of issues affecting the water and wastewater sector will receive greater attention over the next few years. Water and wastewater infrastructure funding issues are a major concern, as is the fact that there is sometimes a lack of coherence between federal, state and local programs intended to achieve both environmental protection and opportunities for economic growth and development.
In addition, the country is reaching a point where our investment in research and development has also dwindled to dangerous levels. This fact will have many major ramifications, including our ability to remain competitive in the world environmental market, not to mention our ability to create new solutions to the steadily more complex environmental problems and issues facing us. In terms of issues directly impacting the U.S., re-authorization of the Clean Water Act, which expired in 1992, should remain one of the highest priorities, and the 2007 Farm Bill, along with its potential impacts on watershed management and non-point source pollution issues, will be a top issue within the water quality community.
Jeff R. Garwood, president and chief executive officer of GE Water & Process Technologies
In 2007, GE Water & Process Technologies expects to see an increased focus on water conservation through reuse applications, as well as an increase in discharge regulations and requirements. A decrease in water quality spawned by higher turbidity and development is also predicted. In other locations, the use of desalination technologies as a supplement to municipal potable water supplies is expected to grow.
In the coming year, it will be important to continue to raise awareness around these issues as we work with key stakeholders and engage in strategic partnerships focused on addressing the issues at stake.
Simultaneously, we will continue forward with our ecomagination effort—our commitment to develop and bring to market advanced water and wastewater technologies designed to address our most pressing environmental needs.
Chuck Gordon, EVP Systems Group, Siemens Water Technologies
Siemens Water Technologies has seen a steady increase in the demand for its water reuse technologies, especially its Memcor membrane products.
We estimate demand for new water technologies will double the size of the wastewater reuse and recycle industry—estimated at $40 billion today—in the next eight to 10 years. In 2007, we expect to continue to see an increase in demand for innovative water reuse technologies.
In addition, we’re seeing a trend toward more integrated systems, where customers demand solutions rather than equipment supply. Right now, the company is seeing technical advancements in integrated biological systems, in which we combine biological treatment with membrane systems, plus controls. With our biological treatment technology toolkit and technical expertise, we are able to customize solutions to meet specific wastewater treatment goals.
Benjamin H. Grumbles, assistant administrator for the U.S. EPA Office of Water
In 2007, the U.S. EPA Office of Water envisions advancing sustainable infrastructure, watershed protection and water quality monitoring, and focusing on science-centered, results-oriented, and market-based approaches that accelerate environmental progress, while maintaining our country’s economic competitiveness.
- Building on our “Four Pillars of Sustainable Infrastructure” with new tools, guidance and work shops for asset management and full-cost pricing, and initiatives for innovative financing to leverage public and private resources;
- Growing the EPA’s WaterSense program, a voluntary public-private effort to inform consumers and communities about ways to save water, energy and money through water-efficient products and appliances;
- Finalizing regulations to reduce pollution from Concentrated Animal Feeding Operations;
- Advancing our partnership with agriculture on credit trading for water quality upgrading;
- Clarifying the role of the Clean Water Act for water transfers and other water resource management issues;
- Interpreting the 2006 Supreme Court decision on wetlands jurisdiction, finalizing a wetlands mitigation banking and conservation rule, and advancing President Bush’s goal of gaining, not simply maintaining, wetlands;
- Improving surface water monitoring and standard-setting while ensuring implementation of recent drinking water rules on Cryptosporidium, disinfection byproducts and groundwater;
- Finalizing a rule to improve monitoring and control of lead in drinking water;
- Advancing water security through additional tools, training, guidance and contaminant warning systems; and
- Working with Congress to pass the administration’s Good Samaritan Clean Watershed Act to clean up abandoned hardrock mines as well as legislation to clarify and improve control of invasive species.
Jack Hoffbuhr, executive director of the American Water Works Association
The American Water Works Association conducts its State of the Industry survey each year to help gauge the mood, concerns and priorities of the water community. Four of the top five issues identified in the 2006 survey—infrastructure issues, regulatory factors, financing and source water supply—are carryovers from previous years. A fifth issue, workforce, nudged into the top five for the first time, replacing security in the hierarchy of industry concerns.
Infrastructure repair and replacement continues to be a looming problem for many utilities, and the concerns over finances are largely a reflection of utilities’ struggle to pay for reinvestment while balancing the costs of complex new regulations and source water development. The issue of source water supply continues to rise in importance, particularly in arid and semi-arid regions with expanding populations and in areas experiencing prolonged drought. A growing number of utilities are investing in technologies that allow them to treat lower-quality waters, such as brackish water or seawater for irrigation or industrial uses, thereby freeing up freshwater supplies for drinking and home use. Others are looking more seriously at water reuse. The “workforce” concerns center on meeting the challenge of finding qualified employees at a time when many long-time workers are retiring, and the future pool of talent is shrinking. The water industry is going to have to be smart and creative to continue to attract skilled, committed professionals.
Jack Hoffbuhr, executive director of the American Water Works Association
In 2007, the market will continue to be strong. Drinking water utilities will modify treatment to meet the U.S. EPA’s Stage 2 microbial/disinfection byproduct rule package, and wastewater utilities are facing CSO/SSO compliance, as well as biological and phosphorus removal in selected geographic areas. Perhaps an even greater market driver is the need for sustainable water resources due to the large population influx in several regions (the Southwest/California, Texas and Florida). New sources must be developed, with water reclamation and desalination topping the list.
These needs will drive the continued implementation of membrane technologies and alternatives to chlorine disinfection such as ultraviolet (UV) disinfection. The upcoming release of the EPA’s UV Disinfection Guidance Manual will provide some clarity for UV implementation.
Federal funding will continue to be sparse; although, statewide funding in high-growth areas will provide money for design and construction improvements. Growing urban areas will levy local taxes and user fees, but areas with stable or declining populations will struggle with infrastructure financing. Economical and minimally disruptive collection system condition assessment and improvement technologies will flourish.
The “war for talent” will continue and will create an increased emphasis on creative and flexible HR solutions. The push for “remote” operations will challenge IT solutions that allow services to be provided in “real-time” with minimal system disruption.
John S. Young, chief operating officer of American Water
The primary operational challenge for water and wastewater utilities over the next several decades will be to address the deteriorating condition of underground infrastructure. To adequately address this challenge, utility managers will need to optimize their financial capabilities and workforce resources to replace and maintain water distribution and collection systems. Better asset management, project prioritization, and improved technology to determine the condition of buried infrastructure and repair and replace pipelines, combined with an effective knowledge transfer from an aging workforce, will all be needed to identify affordable solutions.
Given the magnitude of these challenges, the water industry must do a better job of educating its customers about the value of services and the true cost associated with providing quality drinking water, as well as reliable wastewater services. The financial requirements associated with deteriorating infrastructure will also require creative solutions, such as regionalized projects, public/private partnerships and total water resource management.