November 2010

Water Efficiency and the Corporate

Perspective

Cleantech Focus Los Angeles, 3-4th November 2010

© 2010 IBM Corporation

Problem - water stress, coming soon to a country near you…

 41% of the Earth’s

population (2.3 billion)
live in water-stressed
areas; 3.5 billion will
do so by 2025
–Increasingly
includes developed
areas such as
western USA,
Australia, UK and Source: http://www.cgiar.org/enews/june2007/story_12.html

southern Europe
 People with water-borne or water-related diseases fill half of all
hospital beds in the world;
 Water-related deaths exceed those from all wars and violence
© 2010 IBM Corporation
Signs of water stress here in the US…

 1950-2010: Groundwater in some US regions has fallen by 300-900 feet

 2001: Lack of hydropower on Columbia & Snake Rivers curtailed aluminum smelting
 2006: Browns Ferry, AL, nuclear power plant briefly closed for lack of cooling water.
Two others in SC came close.
 2007-8: Water bottlers denied permission to open plants (Healdsburg, CA; also FL)
 2008: Atlanta came within 90 days of running out of water
 2009: Farms in the central valley of CA being fallowed; water shortage a major
factor in 35% unemployment in some areas of Central Valley
 2010: Lake Mead at its lowest level since 1956. Hoover Dam energy output down
by 23% due to reduced water pressure and may drop further
 2010: Gas fracking acknowledged by oil industry as a source of water pollution
 2010: CERES and NRDC identifies LA, SF Bay area, Houston, Fort Worth, Atlanta
and Orlando in addition to “the usual suspects” in AZ, NV and NM as cities at major
risk of water shortage
© 2010 IBM Corporation
… and where US companies may have their supply chains
 India
– Major groundwater
overdraft
 Middle East
– Competition over surface
water – eg Tigris, Nile
 China - Work Bank warns of
“catastrophic consequences”
from pollution and shortage
– Major diversion projects
 Singapore taking aggressive steps to maintain its water supply
 Water shortages in Taiwan
 Arsenic pollution of groundwater in Bangladesh is a major health issue – WHO
predicts it will cause 1 in 10 adult deaths within a few years
 Even Brazil – with the Amazon - has issues with water shortage and salination
© 2010 IBM Corporation
Business risk from water issues – the SEC now requires
reporting on such risks
Risk Supply Chain
Physical Disruption from non availability
Scarcity drives up prices
Competition for scarce resources limits
growth
Regulatory Suspension of supplier’s license or
discharge permit disrupts supply chain
Reputation Competition with household demand
limits growth
Blame by association with suppliers’
pollution or water use damages brand
Source: World Resources Institute, in JP Morgan, “Watching Water”, April 1st 2008
Production
Temporary suspension of supply -
disruption to operations
Increased capital spend on treatment,
extraction
Competition for scarce resources limits
growth
Reallocation to more urgent needs
during drought disrupts operations
Suspension of license or discharge
permit disrupts supply chain
Increase capital spend on wastewater
treatment
Competition with household demand
damages reputation and limits growth
© 2010 IBM Corporation
Virtual water will become a trade issue…
(1 liter = 0.264 US gals
1 US gal - 3.785 liters)

“The food and beverage

sectors’…water use is so vast
that it affects overall water
availability in a significant way.
We estimate that the
combined direct
consumption of five food and
beverage giants …
approached 575 billion liters
per year, enough to service
the daily water needs of
everyone on the planet”
Source: World Resources
Institute, in JP Morgan, “Watching
Water”, April 1st 2008 (emphasis
added to quote)

Source: AY Hoekstra and AK

Chapagain, Water Resource
Management (2007) 21:35–48
© 2010 IBM Corporation
But businesses are not really ready… • Results from 2008 IBM Survey
• N=75-105 organizations, depending on question

 Formal communication of water management goals is lacking

– 77% considered water management “extremely important” to their business,
– But 51% didn’t have formal guidelines in place

 Future water quality and availability are key investment drivers

– Future concerns over water quality and water availability were the two factors
expected to most heavily influence investment in water management
– 76% saw each of water quality and availability as a major driver
– (Energy costs: 66%; Regulation: 62%; Reputational risk: 54%)

 Lack of decision support technology inhibits water management

– 63% lack integrated water management system and decision support.
– 55% believe their companies have no coherent plan for IT for water.
© 2010 IBM Corporation
IT and water management

 It’s all about the data:

–How much (raw and waste water)?
–By what/whom (by product, plant, machine, cost/profit center)?
–Where (what’s the water situation in each location…)?
–How (kwh/mg delivered)?
–For whom (accountability)?
 Energy and water go together
 New technologies, process design/redesign and process consistency
–Alternatives: drier and less polluting ways to do the work!

© 2010 IBM Corporation

Data-driven management - IBM Burlington
 The business problem
– Uses 4-6 mgd, of which 3m is ultra-pure (10,000,000 times purer than drinking water)
– Stringent water quality needs: process variable monitoring of temp, pH, organics, metals,
particles, resistivity, dissolved gasses ….

 Monitoring and control system

– SCADA based
– 5000 discrete and analog data points
– 600 msec scan rates, 400 million
data packets per day
– Real time trending and data
correlation: statistical process control
for KPIs
 Benefits:
– Improved decision making
– Quality control, risk mitigation
– $1.4m/year water cost reduction
(when business vols grew 30%) © 2010 IBM Corporation
Information technologies to watch in corporate water management

 An ERP/environmental impact management system, plus:

–Metering:
– Advanced metering (same as for water agencies)
– Or NIALM for water (Hydrosense and others)
–Leakage: analytics-based leak management (virtual sensing)
–Irrigation control and other process management technologies
–Pump optimization, pressure management
–Streaming data, real time alerts and analytics
–Modeling (for agriculture, complex operations)
–Data mining:
– Precision agriculture, other “process” industries
© 2010 IBM Corporation