The Raw Water Industry Uses, Labor Force Requirements, and Economic Development Implications of the KWA Pipeline

Project in Genesee County, Michigan

Prepared by:

January 7, 2016

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Table of Contents

Industry, Demographic and Economic Assessments ................................................... 3

Raw Water Uses ....................................................................................................... 3

Occupational Forecast and Hiring Needs ..................................................................... 5

Jobs Openings at Firms in High Raw Water User Industries ..................................... 5 Genesee County Jobs ............................................................................................... 7

Business Development ............................................................................................... 10

Growth Opportunities .............................................................................................. 10 Comparable Projects ............................................................................................... 10 Targeted Attraction List ........................................................................................... 11

Sources ...................................................................................................................... 13

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Industry, Demographic and Economic Assessments

Raw Water Uses Many industrial processes use a staggering amount of water from start to finish, including most notably firms in the agricultural, food processing, power generation, and manufacturing industries. There are two main types of water usage: direct water usage, which means bringing water into a manufacturing facility to be used directly in the industrial process, and indirect water usage, which occurs when a manufacturing facility purchases items from the supply chain that were manufactured by a supplier using water, then incorporating these materials into the finished product. A 2010 national study conducted by civil engineers at Carnegie Mellon University states that a majority of total water usage (approximately 60 percent) is indirect. 96 percent of industry sectors use more water indirectly than directly in their supply chains. Of the remaining 40 percent of total water usage that is used directly, over 90 percent is attributed to agriculture and power-generation industries. The study outlined the top sectors having the largest water use per dollar of output, which was largely dominated by agricultural sectors. The industry sectors are ranked from largest to smallest as follows, and grouped sectors are also discussed after:

1. Grain farming 2. Cotton farming 3. Sugar cane and sugar beet

farming 4. Tree nut farming 5. Fruit farming 6. Flour milling and malt

manufacturing 7. Power generation and supply 8. Wet corn milling 9. Beet sugar manufacturing

10. Vegetable and melon farming 11. Other animal food manufacturing 12. Sugar cane mills and refining 13. Poultry and egg production 14. Dog and cat food manufacturing 15. Cattle ranching and farming 16. Fiber, yarn, and thread mills 17. Tortilla manufacturing 18. Milk production 19. Paint and coating manufacturing 20. Frozen food manufacturing

Fruit and Vegetable Farming Fruit, grain and vegetable farming top the list in terms of water use per dollar of economic output. In particular, cash crops such as wheat, corn, rice, cotton and sugarcane use significant amounts of water in its farming processes. Better technology and irrigation management are needed to alleviate the high water demands and assist in better use of water resources. In fact, many farms are investing in technologies for water management—both hardware- and software-based solutions.

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Power Generation Water is used at almost every stage of energy production, including pumping crude oil, removing pollutants from power plant exhaust, generating steam to run turbines, washing away fossil fuel residue, and keeping power plants cool. According to experts at the Virginia Water Resources Group, it takes about 95 liters of water to produce one kilowatt-hour of electricity. That being said, not all energy is created equally when it comes to water usage. Thermoelectric-power is the most water-hungry process within the energy industry, with a 2005 estimate stating that approximately 201,000 million gallons were used each day to produce electricity. Surface water is the source for more than 99 percent of the water used for thermoelectric-power generation, therefore energy plants located in coastal areas with a ready supply of saltwater for cooling equipment were preferred over facilities that were forced to use fresh water. Natural gas yields the most energy per unit volume of water consumed, making it the most water-efficient energy production process. Coal-fired plants, biofuel, and other types of energy production processes fall somewhere in between.

Textiles and Garments As one of the biggest creators of wastewater worldwide, the textile industry uses water in what’s known as “wet processing” and dyeing of fabric. According to the US EPA, it takes 2,900 gallons of water to produce a single pair of jeans.

Meat Production Fruit and vegetable use more water than meat production, however a study by the UNESCO Institute for Water Education conducted between 1996 and 2005 stated that 29 percent of the total water footprint of the agricultural sector is related to the production of animal products. One-third of that water is used to raise beef cattle.

Beverage Industry The beverage industry, which produces sodas, beers, juices and other drinks, is another major user of water because its products not only use water in its production and bottling processes, but also require farmed products such as sugar, barley, coffee, chocolate, lemons, vanilla and other plant-derived ingredients. It takes between 180 and 328 gallons of water to produce a 2-liter bottle of soda, 20 gallons of water to make a pint of beer and nearly 37 gallons of water to produce the ingredients to make a single cup of coffee (Water Footprint Network).

Automotive Industry It takes about 39,000 gallons of water to produce the average domestic car, including the tires. Major water uses in the automotive manufacturing industry include surface treatment and coating, paint spray booths, washing/rinsing/hosing, cooling, air conditioning systems and boilers.

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Occupational Forecast and Hiring Needs

Jobs Openings at Firms in High Raw Water User Industries Firms in industries that use significant amount of raw water resources often require skilled trade workers and laborers with special skills and specific work experience. Based on the categories outlined in the previous section, below are lists of the types of positions in demand at these companies.

Food and Vegetable Farming, Meat Production, Beverage Industry and Other Agricultural Job Titles Top positions in demand at agricultural companies operating in the food, vegetable, grain, meat, and beverage industries include:

Plant Managers

Grain Operations Managers

Regional Managers

Safety Technicians

Equipment Operators

Farm Assistants

Raw Material Buyers

Field Technicians

Sales Managers and Representatives

Fabrication Production Supervisors

Agronomy Specialists

Power Generation Job Titles Top positions in demand at firms in the energy industry, namely at various types of power plants, include:

Plant Managers

Operating Engineers

Supervising Operators

Document Control Analysts

Industrial Engineers

IT Project Managers

Field Pipeline Technician

Utility/Facility Technician

Control Room Operator/Supervisor

Gas Pipeline Engineer

Electrician

Electrical Maintenance Shift Manager

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Textile and Garment Job Titles Top positions in demand at firms involved in the production and dyeing of textiles and garments include:

Production Managers

Process Development Engineers

Materials Engineers

Sales/Service Engineers

Materials Examiners and Identifiers

Technical Designers

Mechanical Technicians

Shift Leaders

Automotive Industry Job Titles Top positions in demand at automotive firms include:

Automotive Technicians

Fleet/Fuel Managers

Engineers

Production Supervisors

CNC Machine Operators

Manufacturing Maintenance Technicians

Programmers

Sales Engineering Managers

Quality Analysts

Automotive Research Analysts

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Genesee County Jobs Job postings in Genesee County increased between Q2 and Q3 2015, particularly in the Skilled Trades & Technicians occupational clusters. The most in-demand job was heavy and tractor-trailer truck drivers, signifying that the region remains a hotspot for distribution facilities across a number of industries. Over the past few years, the labor force in Genesee County has remained somewhat stagnant, increasing in some years and decreasing in others, but employment has been on the rise. Q3 2015’s level of postings marked another consecutive quarter of growth in demand since Q1 2015.

150,000

155,000

160,000

165,000

170,000

175,000

180,000

185,000

190,000

2011 2012 2013 2014

Genesee County Labor Force & Employment(2011 - 2014)

Labor Force Employment

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Top job listings in the most recent quarter mirror many of the positions listed under the high raw water user industries above. This suggests that the talent needed to fill any new positions brought by a spur in economic development as a result of a new raw water pipeline project is not only already in demand, but potentially already available in the region.

Top Jobs Q3 2015

Job Title Number of Job Openings

Heavy and Tractor-Trailer Truck Drivers

270

Retail Salespersons 241

Registered Nurses 217

Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products

189

First-Line Supervisors of Retail Sales Workers

163

Customer Service Representatives 124

Medical and Health Services Managers 78

Laborers and Freight, Stock, and Material Movers, Hand

75

Maintenance and Repair Workers, General

70

Nursing Assistants 63

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The Skilled Trades cluster outlined below experienced employer demand increase during the previous quarter. Postings were led by ads for production workers, which was more than double that of the next in-demand Skilled Trades job of first-line supervisors of production and operating workers.

Skilled Trades Top Jobs Q3 2015

Job Title Number of Job Openings

Production Workers, All Other 38

First-Line Supervisors of Production and Operating Workers

16

Welders, Cutters and Welder Fitters 14

Inspectors, Testers, Sorters, Samplers and Weighers

12

Computer-Controlled Machine Tool Operators, Metal and Plastic

6

Milling and Planing Machine Setters, Operators and Tenders, Metal and Plastics

6

Machinists 6

Metal Workers and Plastic Workers, All Other

5

Cooling, Painting and Spraying Machine Setters, Operators and Tenders

4

Electronics Engineering Technicians 3

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Business Development

Growth Opportunities Here are just a few growth opportunities and examples of companies located in Genesee County that could greatly benefit from the completion of the KWA Pipeline project:

Thetford Natural Gas Power Plant by Consumers Energy In 2012, Consumers Energy and Thetford Township officials announced plans for a $750 million, 700-megawatt, natural gas-fired power plant on 272 acres in Genesee County. In addition to the initial investment, about $6.5 billion will be further invested to support the utility operations.

Top Hops Farm LLC Top Hops LLC is a family owned and operated business, using part of a 55 acre farm in Goodrich, Michigan, to grow hops.

Magna Magna Mirrors, located in Holly, Michigan, is a Tier 1 supplier that manufacturers auto parts for the major OEMs. The plant employs approximately 250 people.

General Motors The GM Assembly plant located in Flint, Michigan, produces full-size GM pickup trucks. The company recently announced an $877 million investment to build a new body shop at this location.

Comparable Projects

The Lake Oswego Tigard Water Partnership (Oregon) In 2008, the cities of Lake Oswego and Tigard formally endorsed a partnership agreement for sharing drinking water resources and costs. The partnership expands Lake Oswego’s existing drinking water infrastructure so that it can serve both communities. Lake Oswego withdraws water from the Clackamas River in Gladstone, which then travels through a large pipe under the Willamette River to a facility in West Linn to undergo safe drinking water standard tests. The finished water is then pumped through another large pipeline to Lake Oswego customers, and through additional pipes to Tigard’s Bonita Road pump station. For more information, visit www.lotigardwater.org.

Other Pipeline Projects in Operation and in the “Pipeline” For a list of other pipeline projects currently in operation or in the process of construction, visit this website.

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Targeted Attraction List

Below are the top 50 food and beverage companies by sales. Click on each name of the company to get a complete list of executives that oversee company operations.

2015 2014

1 1 Pepsico Inc.

2 2 Tyson Foods Inc. (9/28/13)

3 3 Nestle (U.S. & Canada)*

4 4 JBS USA *

5 11 Coca-Cola Co.

6 5 Anheuser-Busch InBev*

7 12 ConAgra Foods Inc. (5/31/15)

8 6 Kraft Foods Inc.

9 8 Smithfield Foods Inc.

10 7 General Mills Inc. (5/31/15)

11 10 Mars Inc.

12 9 Dean Foods Co.

13 14 Kellogg Co.

14 15 Hormel Foods Corp.

15 16 MillerCoors LLC

16 13 Cargill Inc. (5/31/15) *

17 21 Saputo Inc. (3/31/15)

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18 17 Pilgrim's Pride

19 19 Mondelez International

20 22 Bimbo Bakeries USA

21 20 Hershey Co.

22 23 Dr Pepper Snapple Group

23 24 J.M. Smucker Co. (4/30/15)

24 26 Land O'Lakes Inc.(2)

25 29 Campbell Soup Co. (7/28/13)

26 86 Dairy Farmers of America (2)

27 27 H.J. Heinz Co.

28 33 Agropur Cooperative (11/2/14)

29 31 Perdue Farms (3/31/15)

30 32 Brown-Forman Corp.

31 37 Flowers Foods Inc.

32 18 Unilever U.S. *

33 35 E&J Gallo Winery

34 36 Chiquita Brands Intl.

35 38 Constellation Brands (2/28/15)

36 44 Great Lakes Cheese Co.

37 NR Koch Foods Inc.

38 46 TreeHouse Foods Inc.

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39 52 WhiteWave Foods

40 61 Prairie Farms Dairy Inc. (9/30/14)

41 42 Sanderson Farms

42 39 Rich Products Corp.

43 25 Maple Leaf Foods

44 59 Lactalis American/Parmalat North America

45 41 Pinnacle Foods

46 68 Dannon Co. Inc.

47 49 H.P. Hood Inc.

48 39 McCain Foods (6/30/13)

49 85 Post Holdings

50 48 Molson Coors Co. (Canada only)

Sources Schelmetic, T. “Down the Drain: Industry Water Use.” Thomasnet (April 10, 2012). Workforce Intelligence Network. Genesee & Shiawassee Counties Quarterly Report (Q3 2015).

Michigan Department of Technology, Management, & Budget. Labor Market Information (Retrieved Dec. 20, 2015).

Food Processing – Website – Top 100 Food and Beverage Companies