Water Sustainability: Global and Local Overvie€¦ · scrutiny and may affect their social license to operate. ... Proactively addressing potential shareholders concerns on water

Water Sustainability:Global and Local Overview

Jose “Tony” Hernandez, PEERM P t Ri & P áERM Puerto Rico & Panamá

Managing PartnerMarch 2, 2011

January 2011

Delivering sustainable solutions in a more competitive world

Agenda

Introduction Key Facts about Water Global Water Overview

B i Ri k & O t iti Business Risks & Opportunities Water Footprint Energy & Water Balance Energy & Water Balance Local Water Overview References


Introduction


Key Facts About WaterKey Facts About Water


What You Should Know About Water

A water footprint, or virtual water, is the amount of water used in the entire production and/or growth of a specific product. For example,entire production and/or growth of a specific product. For example, 1 kilogram (2.2 lbs) of beef has a water footprint of 16,000 liters (4,226.8 gallons); one sheet of paper has a water footprint of 10 liters (2.6 gallons); one cup of coffee has a water footprint of 140liters (2.6 gallons); one cup of coffee has a water footprint of 140 liters.

One drop of oil can make up to 25 liters (6.6 gallons) of water undrinkable.undrinkable.

A person is able to survive one month without food but only five to seven days without water.

Of all the Earth’s water 97 5 percent is salt and 2 5 is fresh Of that Of all the Earth s water, 97.5 percent is salt and 2.5 is fresh. Of that water, about 70 percent is locked in glacial ice and 30 percent in soil, leaving under 1 percent (.007 percent of the total water) readily accessible for human use.


Delivering sustainable solutions in a more competitive world [Hoekstra & Chapagain, 2008]



Global OverviewGlobal Overview


Sustainable Water: An Introduction

Water conservation and responsible water use are among the major strategic goals inuse are among the major strategic goals in any sustainability strategy.

Understanding the water carbon and Understanding the water, carbon and energy nexus

Key component of any ecological footprint Key component of any ecological footprint

Corn- based ethanol production and oil sands development have increased energy supplies incrementally but have significant water impacts


energy supplies incrementally but have significant water impacts

Declining qualityGrowing demand

Decreasing availability

A i i ffi i tAging or insufficient infrastructure

Climate change will exacerbate these issues especially as theworld population grows by 50 million a year


p p g y y

1995 vs. 2025 Water Business Challenges

Increased uncertainty about availability and quality of water supplies

Intensifying conflict between energy use and water availability

Increased public scrutiny of corporate water practices Iran, Afghanistan, Pakistan

Demands from investors for meaningful corporate water disclosure South

AfricaIndia

South Korea

ChinaKenya

The map projects how much water will be withdrawn with respect to the amount that is naturally available.over 40% 40% to 20% 20% to 10% less than 10%

Argelia, Lybia, Egypt


over 40% 40% to 20% 20% to 10% less than 10%

Business Risks & OpportunitiesBusiness Risks & Opportunities


Business Water Risk

Water is essential for life and crucial resource for nearly all commercial activities. Yet water resources around the globe are more and more under pressure.

Business water risks are increasing and becoming more complex due to a number of global trends affecting availability and access to freshwatera number of global trends affecting availability and access to freshwater resources, including: • Demand for freshwater increases due to population and economic

growth g• Water quality declines in many regions of the world • Climate change is likely to exacerbate water scarcity and water

quality problems due to changes in precipitation patterns, severe drought and flooding, and sea-level rise

• Delivery and treatment of water requires energy, yet energy use is also increasingly constrained


The Four Main Business Risks

Physical risks: direct risks related to a lack of availability of quality water, caused by water scarcity, drought, increased competition for water resources, infrastructure failure, poor water management, water source contamination etc.

Reputational risks: physical constraints in water resources increase Reputational risks: physical constraints in water resources increase competition for clean water, and lead to potential conflict with other water users including local communities. Increased awareness around water scarcity and quality means companies’ water use and discharge come under scrutiny and may affect their social license to operate.

Regulatory risks: both physical and reputational pressure for water use and discharge can result in more regulation, price increases, and even loss of operating licensesoperating licenses.

Financial risks: water shortages translate into higher energy prices, higher insurance and credit costs, and lower investor confidence, all of which further undermine business profitability.


u de e bus ess p o tab ty

Business Opportunities

Increased profits from efficiency and operational improvements

Growing demand for water efficient products and technologies

Improved relations with stakeholders by improving water systems and management

Proactively addressing potential shareholders concerns on water issues


Water FootprintWater Footprint


Water Footprinting

Water Footprinting is a method for characterising the water use of an organization or product and minimising the impacts of a changing global water resourcewater resource

Business water footprint consists of the total volume of freshwater that is used directly or indirectly to run and support its operations.

Analysing an organization’s business water footprints can benefit itsAnalysing an organization s business water footprints can benefit its operations in various ways and can be used to:• Identify the water-related impacts of the business on its social and

natural environment;• Create transparency to shareholders• Assess water use in comparable business units (within a business

or cross-businesses) and subsequent benchmarking and target ttisetting;

• Identify and support the development of policy to reduce business risks related to freshwater scarcity


Business Water Footprint Defined

Water footprints are also formed of three key water streams: blue, green and grey water.

The blue water footprint is the volume of water removed from the global surface water and ground water resources. The green water footprint is the volume of water removed from rainwater resource stored in the soil as soil moisture. The grey water footprint is the volume of freshwater required to dilute contaminants in wastewater t t d t lit t d dstreams to agreed water quality standards


Components of a water footprint

Direct water footprint Indirect water footprint

Green water footprint Green water footprint WconsuWater withdrawal

Blue water footprint Blue water footprint

Water

umptionNon-consumptive water

use (return flow)

Water withdrawal

Grey water footprint Grey water footprint

Wate

polluty p y p er tionThe traditional

statisticson water use

Delivering sustainable solutions in a more competitive world [Hoekstra, 2008]

ERM Water Footprinting

ERM’s methodology comprises five basic steps:

• Step 1: Define the business and business units• Step 2: Calculate the operational water footprint per business unit• Step 3: Determine the supply-chain water footprint per business unit• Step 4: Sum the total water footprint of the business• Step 5:Analyze the water footprint of the output products per

business unit



Global Average Water Footprint

Based on the top-down approach, the global average water footprint is found to be 1240 m3/yr/cap.

Average national water footprint per capita (m3/cap/yr). Green means that the nations' water footprint is equal to or smaller than the global average. Countries with red have a water footprint beyond the global


average. Period: 1997-2001.

Water footprint per capitaNational water footprint = national water use + virtual water import– virtual water export

3000 Domestic water consumption Industrial goods Agricultural goods

2000

2500

cap/

yr)

1500

ootp

rint (

m3 /c

Global average water footprint

500

1000

Wat

er fo

Puerto Rico

0

Chi

na

Indi

a

Japa

n

akis

tan

ones

ia

Braz

il

Mex

ico

Rus

sia

Nig

eria

haila

nd

Italy

USA


Pa Indo M R N Th

[Hoekstra & Chapagain, 2008]

Water Footprint Facts

Seventy percent of the world’s water is used for agriculture, 22 percent for industry and 8 percent for domestic use. Low and middle income countries use y p82 percent of their water for agriculture, 10 percent for industry and 8 percent for domestic use. High income countries use 30 percent of their water for agriculture, 59 percent for industry and 11 percent for domestic use

1 1 billion people lack adequate drinking water access; and 2 6 billion people1.1 billion people lack adequate drinking water access; and 2.6 billion people lack basic water sanitation.

By 2025, it is estimated that about two thirds of the world's population - about 5.5 billion people - will live in areas facing moderate to severe water stress Th t f t i t f The water footprint of:

• China is about 700 cubic meter per year per capita. • Japan with a footprint of 1150 cubic meter per year per capita. • USA water footprint is 2500 cubic meter per year per capita.p p y p p• PR water footprint is 250-300 cubic meter per year per capita (domestic and

industrial use only; minimum agricultural use).


Energy and Water BalanceEnergy and Water Balance


The Water/Energy Balance

Water and energy are interconnected

Climate change affects the il bilit d f b thavailability and use of both

water and energy

Need for integrated Need for integrated business strategies to address energy, water, and climate change holistically

Source: IWA


Cost of Water

• The price of water is increasing--in some places dramatically--throughout the World. Over the past five years, municipal rates have risen by an average of 27% in the U S 32% in the Unitedhave risen by an average of 27% in the U.S., 32% in the United Kingdom, 45% in Australia, 50% in South Africa, and 58% in Canada.

A f 14 t i i di t th t i f• A survey of 14 countries indicates that average prices range from 66 cents per cubic meter in the U.S. up to $2.25 in Denmark and Germany. Yet, consumers rarely pay the actual cost of water. In fact many governments practically (and sometimes literally) givefact, many governments practically (and sometimes literally) give water away for nothing.

• In Puerto Rico the price for water usage is high compared to other $Countries: $1.5 – 2.0 / m3. The price for sewage + water usage:

$2.8 – 3.5 / m3, since the government does not subsidize part of cost.


Average retail price of electricity

Puerto Rico = 20-25 /kvhrAll Sectors (2007)

Rank State Price

Panama = 11.00 /kvhr1 Hawaii 18.73

2 Connecticut 16.41

3 Massachusetts 15.13

4 NEW YORK 14.54

5 New Hampshire 13.59

6 Maine 13.44

7 Alaska 13.08

8 Rhode Island 12.7

9 Vermont 12.04

10 New Jersey 11.85

11 California 11.81

49 West Virginia 5 1149 West Virginia 5.11

50 Idaho 4.91

U.S. Average 8.77


Energy Cost of Delivering Water

Pumping water out of the ground or over land to higher elevations is energy-intensive. Pumping 480 cubic meters of water a height of 100 meters requires some 200 kilowatt-hours of electricity. At a price of 10 cents per kilowatt-hour, the cost is $20 d th t d t i l d th ll d i i$20--and that does not include the pump, well, and piping.

In northern China, lifts of 1,000 meters sometimes are required. Mexico City, at an elevation of 2,239 meters, has to pump parts f it t l 1 000 t t i Thof its water supply over 1,000 meters up a mountain. The

operating costs alone amount to $128,500,000 annually.


Local OverviewLocal Overview


Source, Use, and Disposition of Water in PR

PR is a highly federal and state regulated country. Water is regulated by the Clean Water Act (Drinking Water, Oil Pollution Prevention NPDES UIC Program National PretreatmentPrevention, NPDES, UIC Program, National Pretreatment Programs), and many others local regulations.

Water diverted from streams and pumped from wells constitutes the main sources of water for the 78 municipalities at PR.p

The population of Puerto Rico increased 15 percent, from 3.4 million in 1985 to 3.8 million in 2010, and resulted in an increased demand for freshwater, mostly for the public-supply water use

tcategory. Almost 99 ** percent of the residents in Puerto Rico are served by

public-supply (PRASA) water systems. A total of 722 ** million gallons per day (Mgal/d) of freshwater is A total of 722 ** million gallons per day (Mgal/d) of freshwater is

processed in Puerto Rico to satisfy the demand of approximately 3.9 million of people

**Data from 2005


Source, Use and Disposition of Water

Approximately 55 percent of the population receives service from the Authority's wastewater system.

Puerto Rico has only three main natural sources of freshwater: Puerto Rico has only three main natural sources of freshwater: groundwater (20%), surface water (79%), and desalinated water (less than 1%).

Water Offstream use accounted for four major water-use categories: j g(1) domestic use (2) agriculture use (irrigation and livestock), (3) industrial use (commercial and mining), and (4) thermoelectric power use.Th t t l f h t ithd d d li d d i 2005 The total freshwater withdrawn and delivered during 2005 was 341.4 Mgal/d or 47 percent for consumptive use. An estimated 283.8 Mgal/d or 39 percent was returned to the environment, mainly through wastewater treatment plants. The remaining 96.8 Mgal/d or g p g g13 percent was unaccounted use that was lost and not returned to the environment for further use.


Source, Use and Disposition of Water

Puerto Rico has ample water even during droughts. The average annual precipitation over the Island is 69 inches per year, with several basins receiving as much as 100 inches a year.

We estimate that under the worst case scenario of a 100-year drought, the streams and aquifers in the Island, combined with the storage in over 30 public reservoirs, can deliver easily 500 million gallons per day (mgd’s).


PRASA Water Infrastructure

PRASA has a total of 130 filtration plants, 328 water extraction wells,12,400 kilometers of potable water piping, 1,679 storage tanks and thousands of pumping stations and valvestanks, and thousands of pumping stations and valves.

PRASA’s purification network and distribution system is considered one of the most complex in the World.

PRASA operates 60 wastewater treatment plants; including Vi d C l b i 55% f th l ti d iVieques and Culebra serving 55% of the population and processing an average of 308 Mgd.

Underground injection systems are used in most of the rural zones on the Island.

PRASA serves the highest percentage of people in their service area than any other single utility in the world (3.8 of the 3.91 population of the island).

If potable water losses are reduced from 40% to 25% of production If potable water losses are reduced from 40% to 25% of production, the Island would not need much additional infrastructure for the next 15 years.


Challenges for our Island

Although, Puerto Rico has invested more than $1 Billion to improve its water utility infrastructure in the past 3 to 5 years, the following aspects y p y , g pneed to be considered in order to reduce our water footprint and enhance our business competitiveness:

I l t t t th ti f tImplement awareness programs to promote the conservation of waterSimplify PRASA’s infrastructure systemIncrease water reservoirsReduce water lossesReduce water contaminationEstablish and monitor KPI’s (Key Performance Indicators)Establish and monitor KPI s (Key Performance Indicators)Promote efficiency of water useAdjust price according to Energy Cost


References

“Investigating Shared Risk in Water: Corporate Engagement with the Public Policy Proess” http://assets.panda.org/downloads/investigating_shared_risk_final_low

f_res.pdf The CEO Water mandate, United Nations Discussion Paper From

Footprint to Public Policy – The business future for addressing water issues March 2009

WaterFootptrint.org Hoekstra, A.Y. and Chapagain, A.K. (2008) Globalization of water:

Sharing the planet’s freshwater resources, Blackwell Publishing, Oxford UK ISBN 978 1 4051 6335 4Oxford, UK, ISBN 978 1 4051 6335 4.

Edwin H. Clark II in the Eco-Economy Update Series from Earth Policy Institute, Washington, D.C.

Source, Use, and Disposition of Freshwater in PR, 2005, USGS, , p , , www.acueductospr.gov USA Today (Society for Advancement of Education), April 2007 http://www.ppinys.org/reports/jtf/electricprices.html (2007)


Documents

Water Sustainability: Global and Local Overvie€¦ · scrutiny and may affect their social license to operate. ... Proactively addressing potential shareholders concerns on water