Transcript: The Intersections of Energy & Water

CNA

ENERGY CONVERSATION

THE INTERSECTIONS OF ENERGY AND WATER

WELCOME:
LAURA MACCOBY

INTRODUCTION:
ADMIRAL WILLIAM BYRD,
U.S. NAVY

GUEST SPEAKER:
DR. ROBERT WILKINSON,
DIRECTOR, WATER POLICY PROGRAM, BREN SCHOOL OF ENVIRONMENTAL SCIENCE AND MANAGEMENT

MONDAY, JUNE 23, 2008

Transcript by
Federal News Service
Washington, D.C.

LAURA MACCOBY (SP):  Hello, energy conversation people.  Can we please get settled?  I’m very happy to welcome you all tonight.  And I’d like to give a major thank you to the CNA Corporation for sponsoring a project that we’ve been working on for awhile.  It’s called the Eaglefeathers Family and we’re creating a new mascot to talk about energy, sort of like Smokey the Bear was, and the whole family with eagle feathers so that we can involve families and all ages into one of the issues that is probably the most pressing issue to our society today.  And it involves all other arenas of our life.  So you’re welcome to go to our website; we’re going to be watching this very soon.

Yeah, the nest, if I can figure out this – Masenti (ph) Enterprises, Peter Masio – his birthday is – (inaudible).  This is the Eaglefeathers’ nest.  As you can see, it’s very unsustainable.  The Eaglefeathers are hoarders, consumers; they don’t know how to stop consuming.  But they only have one electrical outlet so when a storm comes, then it dismantles their energy systems.  They have to find a new way to make energy.  And so they learn how to – how the energy system, the grid, works and that there are other renewable systems out there, and that there is a diversity in energy and that they have choices.  And those are pretty much really important concepts, I think.  So you can look at this.

All right, this is Professor Dave Energy Eaglefeathers.  He’s head of the sustainability department at Blackbird University and he’s going to be leading a series on energy and how it works.  And we’re going to be doing PSAs, hopefully we’re going to be working with Disney and doing cartoons, and we’re also looking for anybody who wants to partner with us and collaborate and work on projects.  And across all mass media, we’d really like to make energy the number-one issue in the coming months as we take a big move into our next leadership of this country.  So Peter, can you get it?

Okay, Samantha Eaglefeather, she’s a computer specialist who works out of the nest.  After conquering her shopaholic-ism and the professor’s out-of-control hoarding, she decided to concentrate on improving how systems function.  Mostly, she works with her Eaglefeathers extended family as the rest of the Eaglefeathers catch up on their understanding of how a functional community works, what with the professor’s evil twin, Sidney Eaglefeathers, and his family always standing in the way of progress.

Sprocket Eaglefeathers is a freshman at Blackbird University and a soaring-wing scholar.  He spends his time working with cutting-edge inventors, scientists, and researchers on advanced clean energy technologies.  When not playing with video games, listening to the best current music, or testing new gear, Sprocket is always on the lookout for the silver bullet technology.

Pocahontas “Poca” Eaglefeathers, 14, is a student at the Great Owl Academy.  Besides learning basic studies, her focus is on multi-species languages, including Butterfly, Dolphin, and Whale, as she learns about energy systems that partner with nature.  Poca’s a huge pop music lover. 

And the twins, Patsy and Blair Eaglefeathers, also go by Hustle and Bustle.  The twins are still babies, but they have their own special language and not only do they know how to talk to the weather, they also translate for plant life.  So you’re all welcome to join us and the Eaglefeathers, and thank you to Mitzi Wertheim (ph) and Sara Machesky (ph), Peter Mazio and all his team, Ryan and for – especially thanking. 

And anyway, so now we have Admiral Byrd to introduce our third speaker.  Thank you.

(Applause.)

ADMIRAL WILLIAM BYRD:  Hi, I’m Bill Byrd.  I’m a Navy officer on the Navy staff at the Pentagon.  I have the honor of introducing our guest speaker tonight.  But before I do that, there’s a few announcements.  Next month’s meeting will be July 21st, and the subject is energy and climate integration systems.  And a few thank yous, once again, to Masenti, to Doubletree Hotel for our venue tonight; for CNA, for all they do to make this happen, and to the Energy Concessions Group.  And you’ll be able to see more of that work on the website.

Our speaker is the catalyst for our own Sara Machesky’s active interest in energy and climate change.  He and Sara developed a course on climate change at the University of California in Santa Barbara, when Sara was an undergraduate there.  Dr. Bob Wilkinson is director of the Warner Policy Program at the Bren School of Environmental Science and Management at UCSB, and he’s a lecturer at the environmental studies program there.  He’s teaching research and consulting, focused on water policy, energy, climate, and environmental policy issues. 

He’s a senior fellow at the Rocky Mountain Institute.  He advises business, government, and nongovernmental organizations on water policy, climate research, and environmental policy issues.  He serves on the taskforce on water and energy technology for California Climate Action Team.  He’s an advisor to DOE and EPA, and he’s established and directed the graduate program in environmental science and policy at the Central European University in Budapest.  He’s worked extensively in Western Europe, Central Europe, the former Soviet Union, Australia, New Zealand, Canada, Japan, South Africa, and China.  His recent publications include methodology for analysis of energy intensity of California’s water system, and an assessment of multiple potential benefits through integrated water energy efficiency measures. 

Dr. Wilkinson, thank you for traveling from Ethiopia to be here with us tonight.  We look forward to your talk on the intersections of energy and water.  Please join me in a warm welcome for Dr. Bob Wilkinson.

(Applause.)

DR. ROBERT WILKINSON:  Great, well, thank you very much.  In the two-and-a-half hours that I have to speak to you tonight, I thought I’d cover the – (laughter) – that’s the time, right?  I do have a lot to cover and I’m going to try to link these four points.  The climate change context – I presume you’re all well versed in climate and in climate change issues, but I’m going to run through a few points to kind of set the framework as I see it for all the rest of the challenges put together: the energy-water links, some issues around resilience, vulnerability, conflict, and then a bit about what we might do about it.  I will try to bring in a little bit of the information I picked up in the last couple of weeks in Ethiopia.  I was involved in a study of the Nile basin and conflict, water, and climate change in that region, and my first time in Ethiopia headwaters, the Blue Nile for the Nile system, and sobering, to say the least.  So I’ll bring a little of that in and then, if you’d like, in Q&A we can talk about that more.

Climate context:  Let me start with Commander Revelle.  In a quote from 1990, he and Paul Wagoner, governments at all levels should reevaluate legal, technical, and economic procedures for managing water resources in the light of climate changes that are highly likely.  Indeed, a lot of the changes that we’re talking about that have come about, in fact, more quickly.  The rate of change and the magnitude of change, I would say, is greater than they might have predicted then, but I think they were right on the mark.  We talk a lot about adapting with infrastructure changes, but they put their finger as well on the legal and technical kinds of questions that we need to think through.  And I’m going to try to return to that; I think that’s a big part of what we need to think through. 

We’ve all seen the curves.  This is picking up last year’s data point now, tied, I think, for the second hottest year on record.  One thing I’ll point out is that the green error bars are shrinking; that is, the projections are getting tighter as we go along, so just another confirmation.  This is what it looks like in map form, with the comparison to the 51-to-80 figure.  This is from Jim Hanson’s work.  I’ll point out – let’s see if we can use – you’ve probably all seen these temperature anomaly maps and of course that’s departure from the normal but – that’s not working either – yes it is – just not showing up too well.  So you can see some of these areas – the hot spot right here is exactly where I was working on this Nile Basin issue and it begins to give a sense of some of the places in the world where we really have some concerns.

Here’s the basics with the increase in temperature, the sea level, and the snow cover.  But what I want to point out is the rate of change.  The left image there is from 1992, forward a decade to the middle image and just three years to the one on the right.  It’s this rate of change and the processes of change that we don’t fully understand and the modeling, of course, is being redesigned completely to figure out how Swiss cheese operates versus a block of ice.  Many of you probably have thought about, perhaps worked on specifically, the events in the poll.  Look at the dates there – 2005 to 2007, just two years shift.  My first exposure to the seriousness of this was a bit over a decade ago.  Some folks from naval intelligence has started talking about what they were seeing occurring and the rate of change was something that was of very considerable concern.

If you don’t believe all that signs, this is some of the studies we’re doing in California – (laughter) – that’s starting back in the 18th century.  I know it’s politically incorrect but it’s – it’s true.  More seriously, John Holdren, who was the immediate past president of AAAS, just this winter, had a talk here in Washington, made the following statement, the world’s already experiencing dangerous anthropogenic interference in the climate system.  That’s the end of sub-quotes because that is the language that we are party to and framework convention – you want framework convention signed by Bush the elder in Rio.  The question is now whether we can avoid catastrophic interference.

I think many of us would agree with that statement and it’s then leading to what do we need to do.  And I think the urgency of this issue is cranked up just even in the last year or two to the point where really we are now looking at what kinds of catastrophic changes might be coming at us.  We understand something about the intensity of events, droughts, focusing here on the water issues versus floods and the insight that says river flood unlikely and that kind of sums up some of our policies – human health, we got all kinds of issues with vectors, direct heat waves actually are a significant health concern and on down the list.

All of the modeling runs are showing hotter.  It’s a question of how much hotter but the runs for precipitation get a lot more interesting.  This is from the latest IPCC report and essentially, the conclusion is wet areas get wetter, drier get drier, but I’m not so sure that the pattern changes – the location of the highs, the jets, and so forth are really going to follow that.  So I’m a little bit skeptical, frankly, that this generalization on patterns is going to hold.  We don’t know and the models are not particularly good at looking at that kind of shift in pattern so we’ll see where this heads.  But as you look at it, all of the areas that are going drier on this image and the areas on the boundaries of that – so for example, the Nile Basin may be wetter, may be drier, maybe some back and forth.  That becomes a real challenge in terms of trying to sort where things might be headed. 

We plotted everything out for northern California just to get a sense of this.  Mike Dettinger has scripts and you can see, zero being not wetter or drier so something below is drier and something above is wetter.  We’re quite certain it’s either going to be wetter or drier in California.  (Laughter).  That actually is valuable information if we know there is a probability but we don’t know what it is that we might have something in either direction.  One needs to begin to plan for what do you do and the eventuality is a drier or wetter or a future that oscillates back and forth between the two.

There’s a quick summary of the impacts of climate change on water systems.  Acceleration of the hydrologic cycle – that’s basic physics, more energy in the system; that’s going to speed it up.  Increased ration of rain to snow; that’s significant for a lot of places in the world and a lot of focus lately on the Himalayan Mountains, but certainly for California, the Rockies and so forth for water supply.  Increased evaporation and transpiration, increased frequencies of both droughts floods and increased demand for water. 

The point I want to make is that patterns can be as important as total amounts.  That is, statistically, we can have an average year but if the precip comes all on one or two big events, as we’ve had some examples.  I think, 1997 in California, we got it all in one big storm in January.  So statistically, it was a wet year.  From every other standpoint, it was a dry year because all that water came down all at once and blasted on through the system.  Likewise, getting precipitation at times when we’re not used to getting it in different parts of the world can be problematic so the patterns are not as easy for us to sort out as the long-term direction in the modeling.

I want to cite your own study, which I found very useful and if any of you have not looked at it, I really encourage you to look at this National Security and the Threat of Climate Change Study.  The finding: projected climate change poses a serious threat to America’s national security.  That’s a profound and direct statement and if you match that up from voices in other communities, you take the former Federal Reserve Chairman, Alan Greenspan, we have very little doubt that global warming is real and manmade.  But he goes on spewing CO2 into the atmosphere is as much a violation of property rights as my dumping refuse into my neighbor’s yard.  That has big implications, legally, in terms of liability.  And then we have our own governator (ph) in California, says the debate is over.  We know the science; we see the threat and so forth.

Here’s the first line in the law; this is AB-32.  Global warming poses a serious threat to the economic well-being, public health, natural resources, and the environment of California.  This threat, and specifically the impacts on water, is the lead cause of action for California’s case that went before the Supreme Court over California’s approach to climate policy, which is somewhat at odds with the federal position in the country.  This is the federal position in the country – (laughter).  That’s a little unfair but there is a lot of frustration building that we really ought to be moving forward and in fact, the CME study, I think, said it quite well – that we really do need to be moving forward.

So let me turn to the water, energy, climate nexus.  It goes both directions.  The energy for water and water for energy – let me start first with the energy for water systems and look at energy intensity, or the total amount of energy which we need to calculate on a whole system basis and I’ll explain what I mean by that, required for the use of a given amount of water in a specific location and that location is important as well.  So we run through the – run through the various boxes starting with a source of water, ground water, surface water, convey it – extract it from a system and convey it somewhere, treat it, distribute it, and then we have all the end uses on the box on the right – agriculture, residential, commercial, industrial.  From there, waste water is generated and we pump that and then treat it and then typically discharge it or move into that middle loop which is to reuse some of that with additional treatment. 

The important point is that everything saved over in that right-hand box in the end use saves everything ahead of it, that is water saved through efficiency improvements, doesn’t need to be extracted and conveyed and so forth.  And any of it that is otherwise going to become waste water, it avoids as well, everything on the bottom part of that loop.  If it’s for irrigation, say and it doesn’t become waste water, then you save everything on the front part of that loop.  When you look at all that and you add it up for a little country like California on the left coast, turns out it’s 19 percent of our electricity in California and about a third of the non-power plant gas.  That’s the biggest use of electricity in California.  So we’ve got a big opportunity, actually, in that a lot of the water that we use is wasted and in using that water more efficiently, we actually save a tremendous amount of electricity.

Let me run through a quick example.  This is the state water project – the red line – pumping water from the delta and the little part of California and down the valley, up over a mountain range, and down into Southern California.  And if you plot out all the various pumping plants that are associated with that particular system, including the biggest pumping plant in the world, this is half of it – the Edmonston Pumping Plant.  It’s essentially a dam built backwards – these are pumps rather than generators that drive water a lift – it’s almost 2,000 feet and one lift up over the Tehachapi Mountains by the Grapevine in the California for those that know the geography there.  This is, incidentally, that’s at the bottom of the valley on the little map there.

This is quite close to a little place called Fort Tejon; some of you may know the history there.  It turns out the biggest earthquake to ever strike in California, at least in our historical record, was not in San Francisco, it was actually the Fort Tejon earthquake with a 30-foot offset.  So we started looking at vulnerability of systems like this and what might occur should a big centralized pumping facility like this be disabled and we’ve got a real constriction on the system.  This was all set up for wonderful tours and I used to take my classes through it every year until 9/11 and now you can’t even get past the gate in the front.  It is vulnerable to different types of – (inaudible).

So we take all those different pumping plants, add it all up, and the bottom line is, by the time that water gets down toward the end of the system, it is extremely energy intensive.  If we plot it out, and this is just to give you a sense, in this case, of what’s involved, the yellow bars on the right are different estimates on ocean desalination.  The middle bar is the estimate that I came up with that we use in California for planning purposes.  Now about 4,400 kilowatt hours per acre foot and we’ve got bars on either side for proposed plans for right now.  The red lines are all that either basin transfers, starting with the Colorado River Aqueduct on the smallest red bar working up different points on the California system, including the two that are well in excess of ocean desal, just to get raw delta water to the endpoint on those systems.  It gives you some comparative sense of how much energy goes into some of these systems right now.

And now the green bars for ground water, including ground water that is tainted with nitrates and salts and is treated with reverse osmosis technology just to get it up to potable levels and you can see that even going through all that, the pumping and the treatment still is below some of the red bars there for – all of the red bars for comported.  And we also have efficiency that shows up at zero on that and I’ll get back to that why that’s so important and then reuse – waste water reuse – that inside loop on the diagram.  If we have to treat water to legal discharge requirements anyway, then bumping it up a little bit more and being able to use it for irrigation for industrial processes – most of the refineries in Southern California currently already use a significant amount of recycled water – which is a highly reliable supply, actually, so reliability’s a factor for the oil companies – makes a lot of sense.  But you can look at it in a comparative sense – that’s also an energy bargain.

Let’s flip the other way now.  Water for energy systems, the amount of water it takes to produce energy and I’m going to focus specifically on electricity.  About a little over a third of the total extractions, withdrawals of water in the U.S. goes to thermal power production.  Actually, only about 3 percent of that is consumptively used so it’s important to think about withdrawals separate from consumption.  Nevertheless, that’s still a significant amount of water that goes into our systems and if I’ll get to, there’s some vulnerabilities associated with it.

The energy sector is now concerned about constraints to power production coming from water availability in the U.S. and in fact, all around the world.  Here’s a snapshot of what things look like in 2003 at the peak of the heat wave of Europe and that did affect power production.  France had to shut down about a quarter of its nuclear capacity.  They have contracts, not only for providing power within France, but for other countries so naturally, as they scale back, they cut off the Italians.  But they did have quite a bit of trouble with that even though they waived the environmental constraints for the thermal discharge and so forth, they still had to throttle back.  We had the same kind of thing this last year for Tennessee Valley.  Authorities had cut back in Browns Ferry – same problem – there’s an absolute constraint on water and there’s also the thermal discharge issues and environmental impact. 

So different forms of power production have very different energy – very different water requirements ranging from zero and I’ll show you a graph my students – graduate students did an analysis and came up with the amount of water that goes into every different type of electricity production from coal and nuclear to wind, so forth.  And then they threw in some analysis as well on bio – (inaudible).  When they had a water amount which I couldn’t understand, they said they had – from reports indicating that people climbed up and washed the blades down but that was the smaller windmill so I think you get up to two megawatts and they’re not getting up there and washing those windmills so they’re down to zero, I think.  Likewise, some of the solar technologies and the rest – a considerable of water is used for cooling and part of that is consumptively used – that is get your heads up and steam and we don’t get it back. 

The other interesting finding, for me, is that hydro uses a lot of water consumptively just because it’s held behind reservoirs and we lose a lot of water.  I think the figure is up to a million acre feet per year for each of the two major reservoirs on the Colorado River system.  As an example, Salt Lake, Mead, and Lake Powell.  And here’s a little plot that came up with – this is a study that’s available but I would say it’s a very good graduate student’s study but it needs to go further.  It’s quite consistent and goes a little further than some of the DOE analysis that’s also come out in some the labs so it’s a similar story but you can see – I guess the point of this is, big variability in the water intensity of different sources.  So as we think about building resilience in systems; part of that is how do we avoid some of the vulnerability and constraints of water inputs for different forms of power production.

I switch over to water directly now.  You’ve probably seen a lot of the literature on running out, even in the last couple of weeks, there’s an article on the table about T. Boone Pickens going after the water market in Texas – a lot of press on this.  Human beings already take about a quarter of the total water that is in circulation – that doesn’t count salt water and what’s frozen and about half of runoff already.  This is what withdrawals look like in the U.S.; this is from the USGS analysis that’s done about every five years.  The little mountains over on the right tend to be thermal power plants; over on the left, that tends to be irrigated agriculture, so different profile and you can see we’re pretty thirsty in the U.S. southwest.

Here’s a water stress and vulnerability map from IPCC.  It’s a poorer image – I apologize – but it gives you a sense of IPCC’s look at this; this is coming out of the fourth assessment report last year – beginning to look at different water-related issues and stresses.  There are a lot of different stress maps.  Again, I’m a little bit concerned the data may not be as tight as we’d like and so there’s kind of broad, you know, colors on maps and it needs to be refined.  But it does look like we’re withdrawing about a third or so of the renewable water resources and consumptively using about 15 percent. 

This is from a very good report that I’m going to suggest as a recommended reading that came out of J.P. Morgan.  I met the author when we were both doing this little testimony to the House Science and Technology Committee last month and I then read through the report and it’s really a very interesting piece of work.  If you look at about 1,700 as a meters per year, keep it meters per year as a limit, which is what they use for that stress line and then go down to a full-on shortage – the point of this – this is major river systems around the world – is that those bars moving from 1995 on the blue to 2025 in purple is the scariest shift.  That obviously is a population versus a water supply dynamic and the shift on those bars is meaning that a lot of areas are moving from adequate water to water stress.

Here’s a quick breakdown on how that’s used around the world based on analysis by the World Water Council, ag industry, and domestic use and you can see the consumptive use over on the right.  I’m more familiar right now with the California scene and every single – every major source of water in California is already over-allocated.  So most of the game in California is figuring out how to manage a growing economy with less and restore systems in the process.  And generally, as you look around the country from the Great Lakes to Florida and Florida, you think of as a wet place, but it’s not an accident the largest ocean desal plant in the United States is located in Tampa.  Atlanta has just gone through a – in that area – difficult drought this last year so pretty much there’s a myth that just the dry part’s west of the Mississippi but plenty of water in the east and we’re learning that isn’t the case.

This was the plan 50 years go.  I want to just show this just for our thinking and how our thinking has evolved about water supply.  And it’s actually a similar story that the energy story.  Up in the upper left; that’s the water collection area.  This is a study from Parson’s Engineering.  There’s a water transfer region that is Oregon and Washington and then the water distribution region – very friendly with Mexico, we’re going to go right across the border and supply plenty right down across the southwest.  And here’s the plumbing system that was devised to do this.  This is a real plan, done about 50 years ago, and this was the idea.  Of course, it would take a fair bit of energy to pump a lot of that water from all the up in the Yukon and Alaska and on down and at the time, of course, energy was not a problem; it was going to be too cheap to meter.

And I don’t say that in jest; that was the engineering framework for this kind of inner-basin transfer design and that includes the California State Water Project that I just talked about.  It’s very energy intensive.  My dad was a mechanical engineer in that era and that was the idea that just energy wasn’t going to be a constraint, the limiting factor, we were going to have cheap energy, in particular, nuclear energy that was going to take care of this so we could contemplate this kind of re-plumbing. 

Well, it didn’t quite turn out that way and energy’s not that cheap and the last I checked, it’s getting more expensive and so we’re coming up with very different approaches to this kind of inner-basin transfer system.  In fact, if you look at California specifically, ground water and local projects provide the majority of the water, not the projects that we tend to think about, the big dams and conveyance systems; those are relatively small slices.  And as we look ahead for 25 years, this is the official state plan for California.  The largest new water supply for the next quarter century for California is urban water efficiency improvements; that’s that big bar on the right.  The light blue is the higher end of the expectation, the dark blue is the – what would be certain.

The next is conjunctive use of ground water management and then the third biggest bar is recycled water.  Those are probably understated, actually, looking at current costs and technology, so it looks like those are really going to be where California’s going to look.  The little 0.1 low bar there is what’s fairly certain for new dams and that’s being pushed aggressively, including the governor of California’s excited about the idea of building three dams.  Many feel that that’s probably not even realistic – that given the cost of something like $11 billion and the actual benefit received; it’s going to be tough sledding.

So that’s important to just think about the shift from re-plumbing and building that kind of infrastructure 50 years ago to where we are now, and looking at a very different source for new water.  Quickly, here’s our demand; we’re about 20 percent urban and about 77 percent agriculture, which tracks actually, pretty close to global averages for water distribution.  If you break out that urban use, about two-thirds of that with multi-family and single-family views, the residential sector, and then you break that indoor and outdoor and you begin looking at all these great opportunities we’ve got for new water supplies.  That’s one of them.  These are some of the technologies that we’re looking at everything from cooling systems for lasers and X-ray machines to plumbing devices of all types.

Here’s how we cleverly manage storm water in Southern California, here’s how we could be doing better with it, capturing and recharging a lot of that into the ground water supply.  Every unit of water in Southern California that we can capture and recharge into the ground water is a unit of water we don’t have to pump in from some other watershed.  It turns out Southern California provides about half of its own water supply by local water supplies.  A lot of people think of it as a desert and everything gets bumped in from the Colorado and the – actually, the Colorado is about a quarter, Northern California water’s about a quarter, and half is local water supply.  So this really does matter, being able to increase the amount of water captured and used locally really does make a big difference in the system.

Here’s some more images of what some of these simple capture systems look like.  Recycled water – a lot of water is actually recycled already within industry, treated and reused for various purposes and we’re going to see, I think, a lot more of that.  And a lot, now, is being captured and reused at the municipal scale.  California right now, we’re recycling about 10 percent of the stream so we’ve got 90 percent to go.  As I said, the oil refineries and others like this because the reliability is far greater than precipitation and other water supplies that are more highly variable.  So just from a consistency and reliability standpoint, I think we will probably shifting more to reclaim.  It turns out, given energy costs and treatment technology, that it’s really quite cost competitive with other sources already – even using this kind of state-of-the-art reverse osmosis technology which isn’t used for all of it but even when we get to that point we’re still competitive.

So we need to integrate water management strategies, end-use efficiency, and really look for multiple benefits – the energy benefits, the water benefits, the environmental benefits that can accrue by integrating all these strategies.  Now let me shift a little bit to water and conflict and where we’re not getting this right is leading to – to issues.  I stole this from the Economist magazine, a very good piece last month in the Economist.  And I want to a little bit about some of the issues leading to stress and then I’m going to talk a little bit business perspectives from this J.P. Morgan study.

Catastrophic water shortage could prove an even bigger threat to mankind this century than soaring food and relentless exhaustion of energy reserves.  This came out at this top five risk conference that just occurred and I think, you know, you can take it for – we have some kind of excited statements about water and conflict and I think that may fall into the category, but I think there’s something behind it.  Here’s some of the classic statements that have been made on water and conflict: only reason for Egypt to go to war in the future would be over the resources of the Nile and anything that threatens the life of the more than 60 million Egyptians – 60 million, it’s now, I think, 87 – sorry – 78 to 80 million since this statement was made.  This was viewed by many as a significant threat and actually 85 percent of Egypt’s water comes from the Blue Nile when it reaches Khartoum about 15 percent comes from the White Nile so that watershed, which is where I just spent the last couple of days, is the source and so it’s quite clear where this was directed.

Boutros Boutros-Ghali:  “The next war in the Middle East will be fought over water and not politics;” I’m not sure how you really put those – break those two apart.  This is the area they’re talking about.  You’re probably fairly familiar with this – two parts – again, I swiped this from the Economist because it depicted it quite well.  But this is the – basically the two flash points that many are concerned with.  It’s only one now; I’ll show another that I think may be in some ways more important.  Water wars loom – an excited headline in the British press after John Ried was former defense secretary let it be known that they were making plans for how to deal with conflicts over water.  And then just this year Ban Ki-moon made a statement:  “As the global economy grows so will its thirst; many more conflicts lie over the horizon.  Too often, where we need water, we find guns.”  So a whole series of these statements alluding to people starting to head to conflict over water.

Here’s some of the stressors and drivers: population growth, poverty, hunger, pollution, disease, and then we’ve got drought, desertification, flood, and all within the context of ultimately limited water supplies.  This shows the Nile Basin and I wanted to put this up because I’m going to talk about the population growth rates in that area and what’s driving some of the potential for conflict – unfortunately, a lot of other causes of conflict, a lot of people fighting with each other in that region for other reasons as well.  The highlands of Ethiopia, as I said, about 85 percent of the water is coming from the Blue Nile, which, by the way, is not blue.  I got to the head waters at last week, and it’s very brown and it gets browner as it comes down; it’s like very strong hot chocolate as it comes down the system, carrying tremendous amount of sediment. 

About 160 million people live in the actual watershed – that’s not in the countries – it’s more than that, it’s probably about 300 million in the countries, but about 160 million in the actual watershed and that number is predicted to double in a couple of decades.  The growth rates are very high in the Nile Basin states.  Egypt’s population could more than double to 160 million by 2050; that’s what’s in the entire watershed right now – 2050, not too far out.  Ethiopia, meanwhile, has about the same population as Egypt and it, too, is looking to double in about the same time frame.

Here’s Hosni Mubarak from a headline that I saw as I was flying into the region the week before last.  “Population growth is a key obstacle to our efforts for development and improving the standard of living.”  So the statements are quite interesting to me that even the leader of Egypt is saying we’ve got a problem with meeting people’s needs and how are we going to do it with twice as many people and this is very much tied directly to water resources and then from there to food.  We got about 263 by last count that I’ve got, watersheds that span more than one country and there’s the breakdown: about 60 percent of the world’s water flow, about half the land area and about 40 percent of the world’s population and that 40 percent happens to be growing very rapidly.

Here’s treaties in international basins, just to give you a sketch of where some of these conflicts are occurring – not all of them over water scarcity, some of those treaties over water sharing agreements for hydro and so forth as you see in the upper right hand part of North America but a lot of them are over water shortages.

Let me switch to another area that’s worth thinking a bit about and that is what’s coming out of the Himalayan Mountains.  About 1.3 billion people are relying on water flowing out of those and a lot of the concern now is with melting glaciers will have a, basically, a drawdown on the bank account that’s been there for a long time and then we’re moving into very, very different realms.  Tibetan Plateau is the watershed of origin for a number of major rivers coming down through China and then flowing south; that’s just on the northern side of the Himalayas.  If you look at this somewhat fuzzy picture, you can see origin of those rivers; that includes the Yangtze and then of course, there’s three different diversion projects right now moving water from the Yangtze north to the Yellow. 

One of the concerns I’ve got is – you’ve got shortages but at the same time, if you look at some of the latest modeling, there’s a big dark blue spot right over the Tibetan Plateau in terms of projections for increased precipitation.  If that unfolds, it’s a very flash watershed and there’s a tremendous amount of water coming down out of that system, for example, in the Yangtze.  What would that mean for potential flooding?  And some of the big facilities, including the Three Gorges Dam on the Yangtze River.  If we start getting hydrology that’s significantly different.  What would that mean for potential flooding and some of the big facilities, including the Three Gorges Dam on the Yangtze River, if we started getting hydrology that’s significantly different than what we’ve had in the past, and what might that mean for dam safety and so forth? 

Let me switch now to the economic risks.  This is the study that I’ll recommend.  How many have seen this study, J.P. Morgan?  I think it’s available, just go to that website there, morganmarkets.com.  Mark Levinson (sp) testified to Congress on this little panel that I joined and I was very impressed with his comments.  And they’re looking at risk from a business standpoint, how do you make or lose money in all this, and what should one be thinking about.  But I think there are parallels to what we might think about in other realms concerning risk, so I’m going to give you a couple of quick snippets from this report.  Water is increasingly scarce due to the confluence of population growth, urbanization, and climate change, so they’re reading it, I think, in exactly the same way. 

Four findings, the beginning of their study:  Exposure to water scarcity and pollution is not limited to on-site production processes, and may actually be greater in company supply chains than in their own operations.  And they go into an extensive set of case studies from energy sector, food, semiconductors, and so forth.  It went across a number of different areas and looked at where the vulnerabilities lie, and it’s probably worth taking a look at just that logic by itself.  Power generation, mining, semiconductor manufacturing, food/beverage, particularly exposed to water-related risk in their view and again, not just the on-site but the supply chain side of the equation.  Corporate disclosure of water-related risks is seriously inadequate and typically included in environmental statements prepared for PR purposes.  Their point is we don’t have good information and so we’re not able to judge, at least for their purposes, for financial risk; more broadly, just to really understand where those vulnerabilities lie. 

And finally, we recommend that investors assess the reliance of their portfolios and water resources and their vulnerability to problems of water availability and pollution.  Interesting to me that it’s a substantial study by a major player in the finance sector, and they’re really – I think they really nailed the water issues very well.

So let me go through a couple of concluding comments and then open it up to some Q&A.  This is a statement from almost a decade ago, from the American Geophysical Union which, for those of you that know the science community, this is not exactly a liberal group that is prone to making statements on the fly.  They have a very deliberate process.  And they said that rapidity and uneven geographic distribution of these changes could be very disruptive.  I think we’ve seen that, even in the last decade.  I think their warning was clear.

Science and technology are critically important to addressing more of the water energy climate challenge.  We need to do a lot in this area.  At the same time, policy design and implementation is, I think, at least equally as important.  We need to figure out how to apply the technology and science that we’ve got in ways that really do solve the problems.  We need to develop and implement integrated whole-system approaches to water and energy management.  It won’t be enough if we figure out how to meet our energy needs and miss the water dimension, or vice versa; we’ve got to figure out how to put those together.  And that’s of course only two, two important ones, but only two of the things that need to be integrated.

We need to design for multiple benefits, not just single benefits, as we look at those systems.  And we really need to think about flexibility, in my opinion, so that we don’t lock in on a technology or an approach or a policy.  It may not work; we need to be prepared to admit that we made some mistakes or have worked our way up a learning curve to go to another point.

We need to decouple water and energy systems where there are high costs, stresses, damages, or vulnerability to systems.  I think this is quite important.  A lot of the strategies are how do we get more water or more energy – cheap, of course, because everybody wants it cheap – and we’re in fact increasing our vulnerability and stress in doing that.  So we really need to step back and think are there ways to decouple those where that’s really not going to the solutions we want. 

I’ll close with my favorite Winston Churchill quote:  “People and nations behave wisely once they’ve exhausted all other alternatives.”  (Laughter.)  And I think it’s – you know, it’s time for us to re-evaluate our thinking, certainly in the last 50 years or so, and see if we can come up with some smarter ways to do this.  So that’s my rap; thank you very much.  I’ll take your questions.

(Applause.)

(Off mike.)

Q:  Good evening.  Paul Ryan, from Whitney, Bradley and Brown Consulting.  Is the problem any worse in some geographic areas compared to others?  For example, the water problem in China; is that more severe than water problems in India?  Or how does India compare to California?

DR. WILKINSON:  I think that’s an interesting question.  There’s a lot of literature on this.  I think it’s a common issue of the capacity of the people that are managing water in each of those regions, so there are some dry areas where people have done a very good job of using water sustainably and effectively.  And in fact, others that have plenty of water are still wasting a tremendous amount of it.

My sense is China is a very serious concern.  You have Lester Brown as a presenter at a recent – one of these talks.  He’s done a lot and in fact, the Plan B 3.0 goes through a whole litany of depth to groundwater pumping and so forth, kind of run around the world from Pakistan to China to Africa and so forth, looking at exactly that.  I’d say it’d be difficult to say there is a specific to the geography independent of the human capacity to figure out the limits and operate water system sustainably.

Yes, sir.

Q:  In the case of motor gasoline, it’s possible –

(Off mike.)

Q:  Is this not working?

MS.    :  No, no.  Introduce yourself.

Q:  Oh, Tom Sheehan, National – (inaudible) – Energy Lab.  In the case of motor gasoline, you can make it out of coal, but it’s the Fischer tropes process and it’s expensive.  I wonder if there is anything similar that sets an upper limit to the price of water, such as desalination of seawater, or if that is so far away that we have to first worry about other factors.

DR. WILKINSON:  You know, there is a lot of very interesting parallels between water and energy.  There are some key differences, but a lot of similarities.  One key difference – people have talked about peak oil versus peak water – is that water is renewable, but it’s limited in space in time, whereas on depletable fossil fuels, you only have so much.  So you have a different dynamic. 

The other thing is that energy enjoys tremendous substitutability.  If one thing goes up, we can go to another.  Liquid fuels, but you can go from electricity to hydrogen if you use electrolysis and so forth.  Water has very, very little substitutability, not much else you can water crops with and not much else you can use for human metabolism and so forth.  So one of the upper boundaries is something as that essential and not substitutable, probably a different dynamic as you look at it from that standpoint.  So right now, I’d say ocean desal is kind of the upper bar, and reverse osmosis is the main process.  There’s a lot of flats distillation and variants of that in the Middle East still, but most of the new installations going in even in the Middle East are RLC.  You can use that as your benchmark in the upper limit right now for energy intensity and cost of water.

Q:  Bill Burke (sp), from the Navy staff. 

Bob, if you were the advisor to one of the candidates today, what would you suggest to them are the basic tenets of an energy policy for America?

DR. WILKINSON:  Oh, that’s a small question.  (Laughter.)  Well, I guess one of them is going to be listening to the Navy, so – (laughter) – at least one out of two.  Hopefully, they’re both listening to the Navy, that would be a good thing. 

Golly, I think we’ve got a really serious issue on energy generally, and that is we have a seriously vulnerable and unsustainable system that needs to change in significant ways and quite rapidly, I think, or it’ll be changed for us.  I’m afraid that’s the truth.  So I think we need to step back and take economics very seriously, take engineering constraints and science very seriously.  There’s a lot of proposals that have been floated that I don’t think make a lot of sense when put through that lens.  And I think we need a lot more diversity.  I think we need to think about secondary effects; I would say that the corn ethanol strategy had a lot of and-then-what questions that weren’t asked, or at least asked seriously enough, and we’re paying the price for that now.  We’re not that far into it; we’d probably pull back if we want to, and we’ll see where the candidates go on that and where the country goes on that. 

But I think we’ve got to stop and really look at not only the immediate apparent wind strategies, but how do they come together and what do they mean for us longer-term.  Some of the strategies build in vulnerabilities that I think we’d regret down the road and we need to rethink them carefully.

Q:  Hi, my name is Barry Elie-Reese (sp), I’m with Polytrade International Corp.  And I have a two-part question for you:  One, concern about the increase in the bottled water that we have, so my concern is mainly actually with our ability to continue to purify and clean the water that we drink.  And one of the questions is like redline, I understand, is one of the substances – and you could correct me if I’m wrong – that we have been able to purify it all the way, except for that particulate matter or substance, and if you could answer that. 

And the other question is with contaminants like MTBE, which was used to clean the emissions.  You know, it’s infiltrated into the groundwater and even in, like, Santa Monica, where the city has been – you know, they had to close it down.  So that’s – currently, it’s forbidden, you know, to be used here, but we do still have a couple of manufacturing plants and we do still export it.  So I’m concerned about somehow, it’s still going to end up – you know, we live in a universal world.  It’s going to end up coming back to us just like pesticides that – we can ban it here but, you know, they spray it on the food and it comes back to us.  So if you could answer something to that, please, thank you.

DR. WILKINSON:  I guess that’s another good example of the not asking the and-then-what question for MTBE.  A lot of people actually did ask that question, though, and solving the air problem but creating a water problem. 

I don’t know the answer to your first question on bottled water.  It did come home to me, though, this last week, in a place where there is no safe water other than what you can get in bottles or what you boil or filter.  And the fact that most of the world’s in that position, that you can’t trust what comes out of the tap for potable water.  And we take a lot for granted in this country and in some others, in terms of an ability to trust in the water supply and how that important that is.  And you realize that most people don’t have that luxury and it’s a difficult situation. 

Yeah?

Q:  During your prepared comments, you made a fitting comment – oh, I’m sorry.  David Commiss (sp), Syntac Incorporated. 

During your comments, you mentioned the three dams that Governor Schwarzenegger was interested in, and you seemed to give him a little bit of short shrift.  Given the lowering levels of Lake Mead, given the nascent (?) need for energy storage systems in order to go bring large-scale renewables online, would you explain your comments a little further?

DR. WILKINSON:  Sure.  The three dams are a sites reservoir, which is an off-stream storage facility in the Sacramento Valley, an expansion of another off-stream storage facility in East Bay.  And the third is a new dam on the Sacramento – or the San Joaquin River, upstream of Friant Dam.  The San Joaquin River is the second major river in California, if you read the textbook, although, by flow, it is dry for 30, 40, 50 miles downstream of Friant Dam.  There is a court order now, after over a decade of litigation, that puts some water back into the second major river in California.  It turns out that there’s some correlation of fish needing water and the swim up.  They’re working the science out on that one.

    So, somehow, the idea of yet another dam above that one smaller one that actually is going to inundate some hydro-facilities that are there that Edison owns is, well, let’s just say, no good engineering or science information and economics has been disclosed yet to defend the logic of these systems.  I’m sure it will be coming.  There’s a lot of money being spent on it, but, so far, we don’t have a basis to judge affirmatively the kind of investment $11 billion, even for California, is not chump change.

    But it really does look like we’ve got a lot of other opportunities to manage water, spend that kind of money and get a lot more results.  You have the same problem – you mentioned Mead and Powell.  They’re both down about 50 percent.  And they lose a great deal to evaporation every year.  One of the big considerations, especially with climate change, in increasing temperatures is how much we lose off of surface storage facilities and how to put that into the equation for what the choices would be. 

    I would not say at all new surface storage is out of the question.  There may be some facilities we need to build.  And, so far, the case, in my view, hasn’t been made for this.  So I guess I’m being taped now and I just said the wrong thing in terms of California’s water future for the official position.  But I do think we’ve got to take a much harder look at this and figure out is that the best way to meet those needs.

    Q:  Andy Patterson (ph) with Eco-energy.  I’m curious to get you – and your graduate students, perhaps – thinking about comparative advantage based on water because you’ve done a lot of analysis by country.  I wonder if you could flip back in your charts to the California pie chart where you show urban and environment and agricultural use, that pie chart, because that’s a good example where California may no longer have a comparative advantage in agriculture for, say, rice or alfalfa.  And what would –

    MR. WILKINSON:  That’s the problem with doing a lot of slides there.

    Q:  Well, what it would be – it’s in the California – that’s it.  So you had a breakout of the urban pie chart, but you didn’t do one for agriculture.  And so I’m wondering if you and your graduate students could go after comparative advantage in fresh water using something like rice, which may not make sense for California to produce anymore. 

    Most of the comparative advantage studies that are done are on labor inputs or capital inputs.  But what you’re bringing forward is, maybe we have to look now at water and energy as the basis for comparative advantage.  And so, rice is a concrete example where, I think, if you’re using 5 percent of all California water just to grow rice, stop it.  Grow it elsewhere.  But it leads to a whole other economic analysis rather than talking about conflict.

    MR. WILKINSON:  You picked on the number three and I think you make a good point.  I’ll one-up you.  The top two water-using crops in California are irrigated pasture followed by alfalfa, then you get to rice.  Rice is considerably more cost effective from the standpoint of – California is the number-one ag state in the country by value.  It’s about twice the next state, which is Texas.  California’s economy is about 1.7 trillion, but it may be falling back a little bit; we’re having trouble with real estate out there.

    And the ag economy in California is about 35, 37 billion.  Quick arithmetic there – that’s about 2.5 percent or so of California’s economy: 77 percent of the water, 2.5 percent of the economy.  A lot of questions are being asked about the allocation of that.  And the pasture and alfalfa account for about half of that ag water.  There’s a huge portion of that water going to lower-value crops. 

    On the other end of the scale, you have the wine industry, which is essentially all on drop: very, very cost effective, profitable in terms of crop-to-drop, dollar crop-to-drop, et cetera.  So you raise a very good point.  Is that allocation sensible and where are we going to go with it?  There are a lot of other reasons why we do what we do, having to do with historic water rights and contracts and all of the rest.  And that’s a tough one to crack.

    It’s not actually atypical all around the world though.  We see a lot of similar, subsidized water systems and distortions in the system.  And I think we need to be careful as we look at changing them, but I think there’s no question that we do need to change those systems and come up with uses of water that more closely approximate a beneficial use than what we’ve got now.

    Q:  But I think it’s going to take the comparative-advantage argument to flip the politicians away from the entrenched interests.

    MR. WILKINSON:  Yeah, yeah.  If you want to come out and work on that in California – (chuckles) – I’ll give you some help on that. 

    Q:  I’m from there so I would love that. 

    MR. WILKINSON:  Jerry?

    Q:  Yes, Jerry Barney (ph) from Howard Task (ph).  We’re an international network of young adults who are trying to develop our own plan for managing the planet through the 21st century.  Part of what we’ve been doing relates to this chart that you’ve got up here, where, looking at all of the major U.N. and World Bank studies of future and analyzing the assumptions and the models that have been here to develop those projections, and one of the things we discovered is that, when you get below the big print down into the fine print a little, all of the studies of energy, agriculture, and industry are implicitly assuming that energy, agriculture, and industry have all of the water that they want with no competition from anybody else. 

    And I’m wondering if you’ve discovered similar things in California and if you have any suggestions on how to encourage some coordination among our water assumptions.
   
    MR. WILKINSON:  Hmm, you stumped me a little bit there.  Jerry, give me a little bit more of what you want me to go on there.  You covered a lot of ground and I’m not sure what the question was in there.  So help me on that. 

    Q:  Well, our team is trying to develop recommendations for changes that would lead to a better future for young people.  And one of the things they really think is going to be important is to coordinate the assumptions that are implicit in these major global studies.  And they’re perplexed as to how to make some recommendations that would be effective.  And I’m wondering if in California you’ve come across any ways that you think would be effective.

    MR. WILKINSON:  Okay.  I guess when you look at the limits to the resource and, in the case of water, it’s evident that we’ve gone beyond the limits, if you define those as being able to sustain ecosystems and species and so forth.  And so we’ve got one after another: court cases, political decisions and the rest to go back and live within a limited resource allocation, natural allocation, whether it’s the Mono Lake decision, restoring Mono Lake, or the California 4.4 diet plan to get back to our allotment, that system, or we’re looking at removing some dams in Northern California to restore flows on the Clamoth River.  We’ve got listed species there and big impacts and so forth. 

    So I guess the point would be to really understand the limitations of the systems that how to work effectively within those with the economic benefit, with the jobs, and all of the rest, but also within the environmental limitations that are socially derived because, after all, those decisions about whether or not to preserve a species or not is a political, social decision.  So I’d say work with them in that context and you’re quite familiar with that, I know, from way back.

    Q:  I’m Joanna Zutterberg (ph) with the Department of Energy.  One of your final slides was on the decoupling of energy and water systems.  And I’m wondering if some solutions that you see to the problems you present are somewhere within that slide.  Could you just define that a little bit more and maybe talk about some examples?

    MR. WILKINSON:  Yeah, we talk – I’ve often used this language of the inextricable links between water and energy.  And I realize that’s probably not right.  We’re kind of trapped in that mindset.  If there are a number of ways to meet energy needs that don’t require water and the main thing that we do with the water in thermal-power production is use it to throw energy away, right, cooling systems.

    Well, we can use fossil sources without throwing energy away, just by capturing it in combined systems.  So we have technology right now that will do that.  We have renewable options like wind, photovoltaic, and so forth that can operate with zero water.  So stepping back and thinking about the thermodynamics and the logic of throwing energy away in cooling systems – so you have a water impact and maybe that’s not the best way to be converting primary sources to usable energy anyways – so putting that into the equation at least. 

    That doesn’t mean we get rid of all thermal processes that require cooling, but let’s think harder about that and let’s think harder about the costs and implications and constraints and potential vulnerabilities of those kinds of systems.  That might lead to diversifying our portfolio as more – shifting more onto less water-intensive sources within a mix of energy types that would hedge your bet, for example, against drought and heat waves.

    We think of intermittency of something like wind.  When you think of intermittency as prolonged droughts and having to throttle back major coal and nuclear facilities, that’s a very different scale of intermittency and quite problematic.  So at least beginning to think about it in that context might be helpful.

    Q:  Bill Charlow (ph) with PCS.  Two questions for you.  You showed – when I think of water use and the water industry, I think of energy being predominantly electricity.  You showed a pretty large number for natural gas and I wondered what that use is.

    MR. WILKINSON:  Yeah, on that plot that my students did?  I think I’m going to have to send you to their study – (chuckles) – to go through each one of those.  It depends on the – what they did is take every primary source of energy – natural gas, coal, and so forth – then looked at the conversion technologies, because there are lots of different ways to take natural gas and get it to electrons.  So some of those are very water-intensive; some are quite water-thrifty and I think that was what you were seeing on the bars.

    Q:  Well I – was the chart you had where you were talking about energy use in California?  And you had a pretty big natural-gas segment there and I was wondering what that’s going to.

    MR. WILKINSON:  The 33 percent of natural gas is the non-electric.

    Q:  Oh, oh, oh.  That’s in the water cycle.  A lot of that is for water heating.  It turns out that, as you look at natural gas use, you know, for water heaters, that is a significant portion.  That was the California Energy Commission’s integrated energy policy report 2005, that’s when they did the major analysis.  There’s a good staff report behind it that fed into the IEPR and then the main integrated energy-policy report.  The IEPR for 2005, that’s where all of the data is for that one and that’s all available on the California Energy Commission website.  That’s energy to make hot water – is that what you’re saying?

    MR. WILKINSON:  Yeah, the natural gas feel in accord (?) to that water system, a lot of that is at the end use.  Part of that relates to wasting hot water and so forth so the feedback there is, efficient showerheads, washing machines, and all that saves you water, saves a big amount of energy.  And the thermal dimension of that, heating the water, is where that comes in.  And that’s a big piece of it.

    Okay, the second question was on the next slide.  Maybe the next one after that?  Well, it was the one where you had all of the little bars, maybe it’s the previous one, all of the little bars.

    Q:  When you had – you were showing very large energy savings from energy-efficiency improvements.  And I was wondering where those – in the urban setting – and I was wondering where those improvements were coming from.  Is that just reducing long irrigation or –

    MR. WILKINSON:  You know, I’d rather flip back and forth on these.  You’re talking about the California water future?

    Q:  Yes.

    MR. WILKINSON:  This one.

    Q:  Yes.

    MR. WILKINSON:  Like the far right-hand bar.  So what this is is the official California State Water Plan.  We do it about every five years.  So this is the current one, Bulletin 160.  And that’s all of the new projections for new water supply for the next quarter century for California.  And so, where that water’s coming from and that urban water-use efficiency, is essentially water that’s not going to be used by improving efficiency.

    That was a real shocker.  I mean, up to now, it’s kind of been the inverse of this.  The new water supply is going to be big physical infrastructure.  That was everybody’s mindset.  Suddenly, it’s not new dams and so forth; this is where the water would be coming from and what is that?  That’s millions of toilets retrofitted and showerheads and industrial processes and landscape and all of that, when you add it all up.

    Now, that’s the biggest bar, but, as you notice, that’s only 20 percent of the total supply.  A lot of people feel that that very small agriculture bar, which is 77, 80 percent of the water supply, is vastly understated.  I would tend to be in that camp.  I think that bar could be much, much higher as well.  There’s a big potential for improving water-use efficiency in the ag sector as well as the urban sector. 

    But I argue that, if it’s cost effective to go after the savings in the urban sector, then why have that argument – those are two separate arguments.  If it’s cost effective, we have the technology, and it makes good economic sense to use it, then go after this big bar in the urban sector even though that’s out of only the 20 percent.  And a separate dialogue is, how could we use energy more or water more efficiently in the ag sector?

    Q:  Thank you.

    Q:  I’m Robert Eberth (ph), Chanderling Research Corporation (ph).  You’ve very strongly hinted at a new analytic challenge for the community writ large.  The interdependencies among energy, water, and you said, others – I assume agricultural is in there.  One might even say population growth should be in there.  Where is that work happening?  Is there an effort right now not just – I’m purposely not saying, we need a model because before we need a model, we need a theory.  We need something that links all of this together.  And I’m reminded of a presentation at the Swedish Embassy about a year ago on virtual water and the concept of virtual water, which would tell you there’s even a water cost to those windmills.  It may be small; it may not be in the operation of them, but it is certainly in the manufacture and the fabrication of them.

    Is anyone working on that kind of an integrated theory that ties all of these critical pieces of the world’s economy and population together?

    MR. WILKINSON:  I’m sure it’s going on.  It’s all classified.  (Laughter.)  People can’t talk about it.  I don’t know.  I will say this.  “Virtual water,” for those of you who haven’t heard the term, is essentially the embedded water in crops or materials and so forth that then get moved around from one place to the next, an interesting discussion.

    In my view, there’s two things that are helping us think differently about this integration of issues.  One is climate change.  As we look through the climate-change lens, we’re seeing a lot of issues and connections that perhaps were obvious before, but we weren’t focusing on them.  So I think it’s been actually helpful for us to think carefully.

    The other is security considerations, certainly after 9/11.  So I think we’re beginning to think differently about the same old things and think about vulnerability and resilience in the face of perturbations, whether they are from climate change and other factors or people with bad intentions.  And that’s as far as I could go.  I hope that a lot of people are thinking about this, not just one.  And I think we’ll need many models and theories about what to do about it.  But I do think that the combination of those two factors is leading us to step back and ask hard questions about what does connect to what?  How do they work and how do those vulnerabilities – how can one design to address those vulnerabilities and build resilience in systems?  And I think we’ve got a long way to go on it, but at least we’re beginning to ask those questions seriously now.

    Q:  Brian Grew (ph) with the Clarke Energy Group.  If you could go back to slide 37.

    MR. WILKINSON:  (Chuckles.)  You counted them?  (Laughter.) 

    Q:  No, I saw the labels when you had them up there.

    MR. WILKINSON:  I don’t – can you tell me forward and back?

    Q:  It was the energy intensity of California for different technologies: desalination versus transportation?

    MR. WILKINSON:  Okay.

    Q:  Right there.

    MR. WILKINSON:  This one?

    Q:  Yeah.

    MR. WILKINSON:  Okay.

    Q:  It seems to show that there is – that the energy intensity of transporting water is incredibly high, especially when you’re going long distances.  So even if we had super energy-efficient desalination technologies, we’d still have a huge transportation problem.  Have you seen any technologies that look like they’re promising on the horizon to address the energy intensity of water transportation?

    MR. WILKINSON:  Well, pump efficiencies are getting better bit by bit.  But, as you can see from this, even with retrofits and so forth, it is very energy intensive.  What I suggest my students do is grab a couple of five-gallon buckets, you know, those big plastic buckets, fill them up with water, and go up a flight or two of stairs.  And you quickly get that intuitive sense of, it takes a lot of energy to lift water up over mountain ranges and take it long distances.

    So, you know, it’s non-trivial.  We’ve taken for granted some of that, as I said, because we designed some of those systems, anyway, in an era where that wasn’t the limiting factor of concern to the engineering.  Quite clearly, it is now.  The interesting thing now is that you have onsite treatment both for waste water, to treat it to be able to reuse it, and for water supply, is moving in a direction where some of the technology for filtration and so forth is getting better and better.

    Yeah, it may be energy-intensive, but, as you see from this low bar here, it’s the highest green bar, is ground water with RO – that’s reverse osmosis.  That’s got salt and nitrates.  Even with that, you know, that’s beating the other options pretty handily and that’s getting better.  I think that what that implies is that more localized water-treatment options on both ends of the canyon may be becoming more cost effective and may be a piece of that resilience and robust system design that we need to think very carefully about.  That’s as an alternative to more centralized systems that then need for the water to be moved around.  So we may be decentralizing water systems for various reasons just like we’ve been thinking hard about decentralizing energy systems for some of the same reasons.

    Q:  Sir, Patrick Murphy (ph) from the Department of Homeland Security.  The map that you showed of Asia, when I saw that in the Economist, scared me.  Given the amount of water that flows off the Tibetan plateau through Tibet and down into a dozen countries, two of those that have a billion people in them each and two of them that have nuclear weapons and, given that one of those countries, China, is already redirecting water from the Yangtze to the Yellow, how long until we start seeing other water redirected from Tibet into the Yangtze into the Yellow?  And how long until China and India go to blows over it?

    MR. WILKINSON:  I can’t answer that question.  (Chuckles.)  I don’t know.  I think that the stresses are mounting.  There’s a lot of speculation as to why the Tibetan plateau is a strategic area and that certainly has to do with water, among other reasons.  It’s very important – it’s critically important to water supply.  Those diversions, if we have increased precip, maybe there’s more, a bigger pie and maybe it works out well.  Maybe it gets too much too fast and we have another set of concerns.  If we’re looking at scenarios of losing some of those facilities, the figures I got when I was teaching in China on the order of 200 million people would be at risk, for example, if they lost the Three Gorges Dam. 

    So the scale is beyond my – I can’t think of those kinds of numbers, but that’s easily comparable to any kind of major conflict you might contemplate.  So it’s just – and that’s just one dam, a big one, but just one.  So whether we go up or down in terms of precip in that system, it’s going to be very important.  And, you’re right, it’s going to affect not just China, but China’s neighbors to the south.  And there are already a lot of controversies around plans for diversions – (inaudible) – diversions in that system now.  So that’s one we definitely need to look at and understand.

    Q:  Hi.  I’m James Kevin (ph) from the Center for Strategic and International Studies.  And I should say that there is a global strategy institute at CSIS and it’s looking at the interaction of energy and water and agriculture. 

    MR. WILKINSON:  These are the guys that – to answer your question there.  They’re taking care of that one.

    Q:  I was wondering if your grad students or anyone had looked at the water-use implications of technologies designed to reduce CO2 emissions, say, coal with carbon capture and storage, and, if so, whether they took a more geographical look at where those technologies would be deployed and if those places have water shortages.

    MR. WILKINSON:  My grad students haven’t, but there is a study by – I’m going to mess up with acronym, but it’s the federal lab that is working specifically on coal.  NTSE – is that something else?

    Q:  NETL.

    MR. WILKINSON:  NETL.  Thank you.  And they just did a revision of I think it’s the third round of a study on the water intensity of coal operations.  And their findings are: coal does take quite a bit of water.  Carbon capture and storage, if you’re going to go the next step, is a significant additional water requirement.  So the water intensity of going with clean coal and with trying to capture and sequester the CO2 actually has a rather significant bump on the water impact. 

So it may be worth doing, but probably worth looking at very carefully because some of the areas where we’re doing – where we were contemplating moving in that direction where we have coal already are actually much more water-constrained than people realize, including some of the area in the Great Lakes region, just south of the Great Lakes.  And I would presume that’s true around the world by merits.

So definitely that’s one of those questions really worth looking at carefully, I think, because, yes, maybe we could go with that technology.  But what are the implications for water in the broader context and what are the tradeoffs?

Q:  Adam Siegel, Energy Consensus.  First of all, thank you very much.  It was a lot of very interesting material and I look forward to having the slides available.  Two things that I think Ogallala Abuz (ph) was a place really brought out to me was – and that, I’m sure you’re much more familiar with both of these than I.  But talking first of all about aquifers, you didn’t really mention aquifers and the amounts of – the places in the world that are on million-year water and basically running out, at most decades ahead if not closer than that. 

And the second is, one of the ones that I found very interesting about the laws of unexpected consequences is, there are actually – in agriculture, there are a lot of places where the agricultural waste are the way for recharging the aquifer.  And so, the more efficient we might become in agriculture in some places, we’ll have other challenges in the aquifer. 

MR. WILKINSON:  That has – the second part – that has been an argument and, in fact, that’s why the figures are low for the ag efficiency.  The argument goes, well, gee, you really can’t waste water in agriculture because whatever you don’t use flows back into the stream or in the groundwater so it’s not a problem.  There are issues with how much is extracted in the first place, how much of it evaporates, how much of it actually gets back and what quality gets back into the groundwater and so forth.  So it’s a bit more complicated. 

Your first references to what we call “fossil water,” or these aquifers that were charged up a long time ago and are not recharging, deep aquifers like the Ogallala.  It’s interesting now, when we look at the two forms of fossil water, one is the glaciers.  So if you look at the water supply in many parts of the world including this critical dimension in the Himalayas, and then you look at fossil groundwater, you really have the same thing.  You can use it basically once and that’s it; you’ve taken it. 

So some – Ogallala is a very substantial water system, but it is limited.  And so, if you take a look at the rate of pump, we’ve already exhausted significant parts of the Ogallala within 100 years.  And so, I don’t know if you read that article for what T. Boone Pickens is looking at doing in Texas.  The basic argument there, of course, is that if he doesn’t take it, the neighbor will and then it will be gone.  So the one thing he better do is take it before the other guy does. 

Well, if you wanted to sustainably manage a resource for as long as you could, use it to the best effect, that’s probably not the best logic, policy logic, for groundwater.  But unfortunately, in many places – not just Texas – that kind of race to the pump as a zero-sum game is what’s driving things.

Fossil water, when you look worldwide, is a relatively small part of the water supply.  Most of it is renewable sources, surface and ground interaction, because it’s that cycle you’re dealing with.  So that’s, I think, the main focus.  But if you look at the falling water table, say, in China, and a lot of other places in the world, that’s the renewable source.  And the trick is to get into some state of being able to use what’s being recharged on an ongoing basis.

Yes, sir?

Q:  Bill Cone (sp), Arctic Energies.  We’ve done some work for the DOE and it’s also a piece of work that was going on in the Congress that asked for two senators from New Mexico, the so-called energy-water nexus study.  From a recent conversation with Mike Hitar (ph), I got the impression that the DOE was sitting on the results.  Is that true?  You’re not publishing it?  It was supposed to be done and given to the Congress in 2006, I think.

MR. WILKINSON:  I believe the study you are referring to was the collaborative among the federal labs on the energy-water nexus study that Domenici and yeah.

Q:  That’s the one.

MR. WILKINSON:  I think it was delayed but it did come out last year, so I believe that is out and available on the web.  And I don’t remember the exact title but I do have the URL if we need to get there.  So that one is out if that’s the one you’re referring to.  That’s’ the only one I know –

Q:  That doesn’t square with the information I got from Mike Hitar less than six months ago.  He said it was being held at headquarters, DOE.

MR. WILKINSON:  I just – in that case, I can’t comment.  I know that one was held.  And then, it was released.  And I think it was released by the end of last year, the first of this year.  So I think that one is out.  But I may be thinking of a different one.

Q:  Thank you.

Q:  One of the earlier questions triggered a thought.  Since the long-term hydrogen economy depends on a very pure water supply, is there any limitation there?  I don’t know if anyone has looked at –

MR. WILKINSON:  Yeah, it’s in interesting question.  People have asked what would the water implications of using electrolysis for hydrogen look like?  I don’t know.  I think that’s an interesting thing to look at.  My sense is that a lot of different sources of water that one can use for hydrogen production, including cleaned-up, you know, recycled wastewater and that sort of thing.  And of course, you’re cycling it – pretty fast cycling times then, because what comes out the tailpipe if you’re using it.  And that metaphor goes back to the water.

So I don’t know whether that would have a significant impact on actual water supplies in the system.  It would be an interesting thing to look at.

Q:  (Inaudible) – I was wondering if the global climate change issue and the dam construction issue might actually be changing.  If we’re looking at the fact that glaciers are being removed, it seems to be making more sense to actually start building some of these dams, especially in terms of flash flooding and droughts and way more patchiness in terms of precipitation.  Do you think that – I mean, fisheries are definitely important and that’s definitely an issue.  But on the overall scale, there seems to be change within this – (inaudible).

MR. WILKINSON:  Alexei, good to see you.  You know, one of the fun things of doing this sort of thing is you run into students from years past.  And there are several in the audience and that’s kind of fun.  I haven’t seen Alexei for how long now?

Q:  Sixteen.

MR. WILKINSON:  Sixteen years.  Alexei was a student of mine at the Central European University, Budapest after the wall came down.  Things changed.  And so I had the pleasure of meeting you then.  You know, the issue of – this is the argument coming from certain quarters.  Climate change, you need to run out and build a lot more surface storage to capture more, especially if we’re losing snow.

The counterargument is, what are the options for spending scarce capital to meet the needs?  Is that the best use or are there other ways to do it?  It looks like there are many other ways – just on an economic analysis – to meet water needs that are faster, cheaper, and more reliable than more surface storage.  That doesn’t mean you wouldn’t do any of it, but the default isn’t so obvious.

It gets even more complicated though if we have less certainty in the precip patterns.  And that’s clearly what we’re finding now – wetter wets, dryer drys, changes in patterns.  Then, if those surface storage facilities are designed for flood control as well as for water supply, which most of them are, then the operating theory is you need to keep more space behind the dam longer through the year, because you’ve got less certainty and more potential that you’re going to have a big precip event, a bunch of water coming down.  You need to attenuate that for flood control.  What that means is you sacrifice water supply and hydro production in order to attenuate that risk of flooding.  So they become much less cost-effective from a water and hydro standpoint.

And then, the question is, and can they actually hold the floods?  Or are we going to get spikes that are beyond the capacity?  All of that tends to lead in at least what I’ve looked at on the systems to, well, setting back levees, managing groundwater, doing a bunch of other things may be a lot more certain, a lot less risky, and a whole lot cheaper than trying to solve the problem by building more surface storage.  So that’s kind of where it’s coming out now.

I think all options should remain on the table, but we need to be brutally honest about the engineering and the rule curves and what we’re really going to get out of these different options.  And unfortunately, a lot of the debate is driven more by ideology – I’m for this; I’m against that.  And so, it’s tough to get an honest assessment on the table.  But I think we’ve got to look at that.  And that’s why I’m challenging some of the wisdom of where we’re headed in California right now.  I don’t think we’re ready yet to invest that kind of money in that solution.  I don’t think we’ll get the return.  I think we’ve got to look very carefully at a range of options and figure out a more robust, more resilient strategy than what we’ve got.

Q:  Jeff Bakers from the Joint Staff.  Every morning, when I go into work in D.C., here in D.C. we wash the sidewalks with water.  At about 6:00 every morning, the downtown sidewalks are all being cleaned with hoses.  Yet down in Atlanta, when they have a drought, obviously, the city ordinance makes something like that illegal.  Similarly, up here in D.C., especially in the Pentagon, we have these pretty whiz-bang urinals and toilets that you don’t have to touch to flush; they flush automatically with the IR thing.  And sometimes, if you move around too much, you get four flushes.  It’ll do you the favor of flushing four times.

MR. WILKINSON:  Now, we’re getting down to brass tacks.

Q:  Or if you walk by one.  Yet, down in Atlanta, when they had the drought and they had a big baseball game, they turned the sensors off and they installed people in the bathrooms.  And their job was to make sure they only flushed once for every four people to conserve water.  The point being that we’re good with conservation in times of crisis, immediate crisis.  No pun intended but is that stuff a drop in the bucket?  And if it’s not, then how do you get policy-makers to implement policy-based solutions whether it’s regulatory or legislative that aren’t just incentivized or motivated by immediate crisis, but view this as a perpetuating crisis that we’re in that’s ongoing and enduring?

MR. WILKINSON:  You know, that’s a good question.  And it really does get down to specifics but I think that’s what it takes.  I guess the first observation is really quite gender-unfair because you’re only dealing with half the population solving this particular problem.

Been a lot of studies on these automated systems and it looks like they’re wasting a huge amount of water; they were designed to conserve water; but for just the reasons you cite, they’re going off way too often, these sinks and plumbing fixtures and so forth.  So a lot of places are yanking that stuff out because it actually is wasting a lot of water.

Of course, what we really out to go to for the urinals is the waterless urinals.  They work great.  And especially in places like ballparks and airports and the rest, it’s nuts that we’re doing anything else.  Those systems really solve the problem.

You know, your broader point though, how do we capture the idea of responding to some particular crisis or problem like they are in the Atlanta area in a more systematic way, rather than just at that time, I think does take a sense that this is a critical resource.  It is a serious issue that we deal with.  And frankly, water is so cheap that there is debates in the academic community as to whether there is demand elasticity for water.  And the problem is, if you go from really, really cheap to really cheap, you’re not going to get much of a signal.  People just don’t pay attention.  It’s got to get up to the point where it makes some difference to people.  And we’re still a long way from that in a lot of places, so you have to go to these measures of having somebody stand there and manage things.

I think part of it is getting a price signal to more accurately reflect the real scarcity value and what water is really worth.  I don’t know how to go beyond that in terms of how to capture that sense of responsibility issue with the prices.  Yeah?

Q:   Tom Wallace.  I was interested in hearing about your work in Africa that you just returned from.  And then also, any of the – what are kind of the unique issues to Africa related to potential conflict around energy, water issues?

MR. WILKINSON:  Sure, maybe a good one to end on, am I getting the hook?  Okay, well, let me say, Africa was an incredible learning experience.  It’s the first time I’ve been in Ethiopia.  And you’ve got a situation with a large number of people that are moving literally from year to year without much depth and resilience in food supplies and so forth.  And so, they literally live by the rains.  And if they get the rains, they do okay.  Subsistence agriculture – I think 80 percent of their country is farmers, and agriculture is extremely important.  The largest export crop from Ethiopia is coffee.

And so, if you go even one dry year, you’ve got a serious problem; multiple dry years, you’ve got a full-on crisis.  And food reserves are thin.  People tend to farm and have their own food.  You don’t’ have the stocks of food, as I understand it, that you do in some other countries.  So it’s a frightening situation in terms of the vulnerability and the scale, the number of people that are at risk, not just in that country but in many countries that are like it and then where that heads when people are facing that kind of crisis.

For me, coming from the U.S., from California, very different contexts and set of issues in trying to understand and look at it through a very different lens like that.  And then, looking at the potential for conflict between people, but also between countries that are relying on a limited system like that is a lot to digest.  So I came away with more questions than answers but with a whole new appreciation for people that are facing a very different kind of challenge than the one that I’m used to in this country.

One last question?  All right.

Q:  Again, thank you.  Adam Seo (ph), Energy Consensus.  Again, thank you very much.  But your last – previous question – is the first time I vehemently disagreed with something you said, which is price signal, that if we just change the price signal, then we’ll have action.  It seems to me this is the energy conversation.  That’s basically what’s been said about energy in the United States forever.  And we’ve quadrupled the price of gasoline in less than a decade, and we just recently are down 1 percent, I believe, in gasoline use.  So we have – the price signal works, sort of.

If we think about regulation and policy, think of the difference that, for example, the average homeowner of what if my price of water had gone up a few bucks a months as opposed to my regulation requiring me to have a 1.6 gallon versus a four gallon, or the possibility of a composting toilet or whatever, that it’s regulatory; it’s forcing efficiencies into the system is where we can go fastest in making change with water, it seems to me, except for perhaps in crisis situations.

MR. WILKINSON:  My sense would be it’s a both/and not either/or question.  So I didn’t mean to imply – if it sounded that way – that fix the price signal and everything else follows.  I think they’re coupled.  I think that you’ve got to have a meaningful price signal or people don’t pay much attention.  General Motors is beginning to get the sense that maybe a price signal is kicking in.  They shut down four of their plants.  I just happened to have met with the head of GM very recently.  And I can tell you, they’re very sobered by what’s going on.

But sometimes, there’s a lag in that.  And in this case, there is a bit of a lag.  I think you need both.  And you need the price signals to reasonably – that doesn’t mean pure economic, just let the market solve it all.  But having some accurate reflection in prices helps.  But having the regulatory framework designed to accommodate those decisions and having the technology development such that there are ways to meet our needs: water, energy, mobility, the rest – I see it all is coupled.  So I see it as a link thing, not as a one or the other.

Thank you very much.

(Applause.)

MS. MACCOBY:  Okay, a few announcements before we all – (inaudible).  Thank you all for coming.  I apologize to anyone who was as cold as I was during this presentation.  A special thanks to Bob – it was great to see you – and to Pat Butler who provides us tremendous support out of the office of the secretary of Defense; and also to Bill Burke.  And to our wonderful interns who are here this evening to help out at the front desk, wonderful job; we appreciate your help so much.  The next meeting will be July 21st.  It’s going to be a panel discussion on systems thinking and looking at climate and energy and how those systems overlap and the importance of understanding the second, third, and fourth-order consequences.  That will be with Judge Schilling from the Millennium Institute, Peter Schultz at the U.S. Climate Change Science Program out of the White House, and Steve Warrenburg (sp) from the Coast Guard.  Again, that’s July 21st.  Please see details on the energyconversation.org website.

Peter, happy birthday.  And – (applause) – we do recycle our name tags.  There is a box on the way out.  Please drop them in there.  We’re doing our best to conserve resources.  Please do the same.  Get home safely.  Thank you.

(END)

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