As we begin to look into 2012, we attempt to predict what challenges and opportunities await. Despite funding issues, economic concerns and political pressures, the water and wastewater industry continues to weather the storm.
Only time will tell what surprises 2012 has in store for us, but some factors will play a particularly significant role in shaping the upcoming year:
Regulations. Changes to environmental regulations are always a cause for concern. New requirements can lead to increases in operating and capital costs and have a significant impact on water and wastewater utilities. It appears, however, that the regulatory environment in 2012 will remain pretty stable.
The U.S. Environmental Protection Agency (EPA) will focus on promoting sustainable water infrastructure and watershed protection and restoration. Efforts in limiting nutrient and phosphorous pollution will result in restrictions to discharge limits for sewer utilities renewing their discharge permits, and could lead to additional costs.
Energy. In 2012, energy will continue to provide growth opportunities for the water sector. As demand for water grows, so will the need for energy. This will drive the development of new technologies and approaches that can improve the energy efficiency of water and wastewater processes. The industry will proceed to overcome existing barriers, such as cost, to adopt these new technologies.
As the water and wastewater industry continues to study the water-energy relationship, we will see increased commitments by water agencies to reduce power consumption and seek alternative means to supplement their energy needs.
Fracking. We likely will continue to see daily reports on hydraulic fracturing. A widening division will exist between those who view this controversial practice as a great opportunity for job creation and energy independence, and those who see it as a public health risk.
In 2012, the EPA will review the effects of hydraulic fracturing on drinking water resources, specifically by studying water acquisition, chemical mixing, well injection, flowback and produced water, and water treatment and waste disposal. The final study findings are expected to be completed by the end of the year, and I am certain that our industry will track these developments closely.
Rates. The issue of water and sewer rates is ongoing. There is a growing need for rates to reflect actual operation and management costs as well as capital costs for system improvements, replacements and expansions.
In 2012, dwindling funds will push municipalities to raise rates across the board, with some notable increases. Most of these funds will be used for system and infrastructure improvements. While some adjustments will be significant, the final cost of water and sewer services will remain affordable.
Drought. Persistent and severe droughts gripped much of the South in 2011. The percent of contiguous U.S. land area experiencing exceptional drought in July 2011 reached the highest level in history, according to the U.S. Drought Monitor. Unfortunately, the drought outlook for 2012 is similar. As a result, the need to conserve and reuse water will become more and more critical.
Overall, I anticipate that our industry will remain on a steady and stable course in 2012. The upcoming presidential election certainly will pose many questions and speculations about its effects on the water and wastewater industry. Whatever the outcome, one can only hope that we will continue to see an overall economic improvement. Personally, I hope that water and infrastructure awareness remains on a path of growth. I would like to wish all of you a successful and prosperous 2012!