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US Water Crisis: Be Part Of The Solution, Not The Problem

China, Company Strategy, Economics, Environment, Europe, Sustainability, Technology, US
By John Richardson on 09-May-2016


By John Richardson

IT SHOULD be pretty obvious to all of us that there is a huge gap in the provision of basic needs in the emerging world. Just look, for example, at the some 2.3bn people who in 2015 still lacked access to modern sanitation, according to the World Bank.

The vast majority of these people are in developing regions, which lack not just sanitation, but also sufficient access to safe drinking water, to electricity and to the other basics of modern life that people in the West take for granted. So you can see the huge opportunity for the chemicals industry here. It hits you right between the eyes with a giant dollar sign, whilst also giving companies the opportunity to do the right thing.

But what about basic needs in the developed world? Is this as widely understood? I suspect not. Here too there is an opportunity for the chemicals industry because of infrastructure shortfalls that are really quite shocking and needless, when you consider the wealth gas between the developed and developing world.

Take safe drinking water in the US as just one example. As we point out in our new Study:

Around two-thirds of all US homes still having lead solder in their pipes – and the lead can leach into tap water if it is supplied from soft upland water supplies (hard water adds a protective scale to stop the lead dissolving into the supply).

The other problem relating to water is overall drinking water supply.  The problem in the US is two-fold here:

  1. Some 1 trillion gallons of water is leaking every year from broken mains pipes, leaking kitchen and bathroom faucets, malfunctioning toilets and faulty sprinkler systems etc. This is equivalent to 9% of the water needed to solve California’s drought crisis.
  2. California, Texas and Louisiana have been badly affected by droughts, which are of course being linked to man-made climate change. The US National Resources Council suggests that 10 major cities in the States are at risk of major water shortages in the relatively near future. Lack of water could end up restraining economic growth in cities such as Los Angeles, Houston and Phoenix.

It is estimated that it would take a trillion dollars to fix the problem of water wastage. This is of course an enormous sum. But I would argue this expenditure would have yielded far more sustainable economic growth the US Federal Reserve’s economic stimulus programmes.

Why? Because Fed stimulus has amounted to an effort to “print babies”, to create demand where demand doesn’t exist because of the retirement of the Babyboomers.

What instead needed to happen was to find other ways of rejuvenating the economy through not only tackling the water issue, but in dealing with the sustainability in general through, for example, greater fuel efficiency and improved recycling of all industrial waste.

“Doing more with less”, from  now on, has to be the approach.  This is not only because of environmental pressures, but also because Western economies in general confront a demand deficit. During the height of the Babyboomer-driven Supercycle the developed world faced a demand surplus.

There is another reason why this approach makes sense, and that is changing public perceptions. Social values are  changing as consumers are becoming more focused on people rather than things. Experiences, rather than consumption, are becoming more important to them.

Just imagine, therefore, if the oil, gas and chemicals industry took a greater lead here. This would a.) Create vast new sources of sustainable demand for chemicals and polymers and b.) Improve the image of an industry that is far too often seen as the cause, rather than the solution, to today’s challenges.

And just think about this: The more that the oil, gas and chemicals industries are seen as causes rather than solutions, the greater the chance of legislation that limits their ability to operate. One very strong example of this is the ongoing debate in the US about fracking and water consumption.