Water and Energy: Critical Resources to the U.S. Economy

Water and energy are vital to the U.S. economy. Hardly a portion of the national GDP is not tied to one or both of these critical resources because they depend heavily on one another. Energy is a key element in producing, processing, and distributing potable and wastewater. Likewise, water is a necessary feedstock to nearly all traditional electrical generation technologies, and is a primary component of hydraulic fracturing fluids, which are giving rise to the rebirth of the U.S. as an energy-producing nation.

The production and consumption of these resources are under increased pressure from population growth and climate change. As agricultural areas experience higher temperatures, evapotranspiration losses increase, resulting in the need for additional water supplies. Higher ground surface temperatures call for additional electrical production to meet air conditioning demands. Despite the critical, intertwined nature of these resources, policy makers have largely treated them separately.

Water for Energy

Nearly all traditional electricity generation technologies use water as both a working fluid and coolant. Thermoelectric power plants, such as those driven by coal or nuclear rely on the repeated boiling and condensing of steam to generate power. Thermodynamic considerations require that some of the input energy dissipate as waste heat, which is often accomplished with water-cooling. The U.S. Environmental Protection Agency (“EPA”) estimates that twenty-five gallons of water are withdrawn for each kilowatt-hour (“kWh”) of electricity produced. Much of this is returned to the water supply via once-through cooling systems, although two to eight kWh per gallon are lost due to evaporation. Since the late 1950s, environmental regulations have led to a decrease in the number of thermoelectric power generation systems employing once-through cooling, because of the negative environmental impacts of the associated thermal plumes. Closed-loop water-cooling systems, which use evaporative cooling, are largely taking the place of once-through systems. Although evaporative systems withdraw much less water from the environment, they actually consume more; once-through systems return nearly all their withdrawn water to the primary water source. Evaporative systems, in contrast, recirculate water, but require constant withdrawals to make up for evaporation losses. As of the end of 2012, evaporative systems made up approximately fifty-two percent of the thermoelectric cooling systems in operation in the U.S. generation fleet. However, since 2000, there has been a rise, albeit small, in the number of dry cooling systems deployed that use no water.

Recently, companies that provide water to hydraulic fracturing operations have begun to compete at auctions with Colorado farmers for water withdrawn from the Colorado River Basin via the Moffat Tunnel. This competition has given rise to concerns about the balance between energy and food production as beneficial uses of scarce water resources. Energy producers generally occupy a favorable economic position relative to farmers when bidding for water in the open market. The water needs of the hydraulic fracturing industry remain small, at about 0.1 percent of statewide water use. However, the industry expects its annual demand in Colorado to grow to 18,700 acre-feet by 2015. This reality has prompted some agriculture leaders to question how their business will fare in the face of more demand on a finite resource. On September 8th, Colorado Governor John Hickenlooper created the Task Force on State and Local Regulation of Oil and Gas Operations (“Task Force”). It remains to be seen whether the Task Force will address this issue with specific recommendations.

Energy for Water

Energy costs can account for as much as seventy-five percent of the total cost of providing municipal potable water, and accounts for approximately four percent of total U.S. energy consumption. In heavily agricultural states like California, that percentage may be much higher, for example, accounting for nineteen percent of electricity and thirty-two percent of natural gas consumed statewide. When water utilities must move water between basins, the cost of inter-basin pumping can be as high as 14,000 kWh per million gallons (4,700 kWh per acre-foot). By way of comparison, the average U.S. household uses approximately 11,000 kWh of electricity per year. Driven by population growth and higher water quality standards, national energy demand for water and wastewater treatment grew by over thirty percent from 1996 to 2013.

Mix of Regulations

Despite the critical nature of these deeply intertwined resources, most policy actions treat water and energy separately. On the federal level, three recent laws are highly influential on energy policy: the 2009 American Recovery and Reinvestment Act, the 2007 Energy Independence and Security Act, and the 2005 Energy Policy Act. These acts authorized additional energy development in the U.S., along with a variety of measures to promote energy efficiency and renewable fuels. Individual states have adopted a wide variety to renewable portfolio standards and goals, which promote changes in the energy mix, yet produce a patchwork of regulations.

Policy governing water resources is no less fractured. Important federal statutes regarding water include: the Clean Water Act, the Safe Drinking Water Act, the Reclamation Act, the Endangered Species Act, and the National Environmental Policy Act. The variety of state prior appropriation, riparian, and regulated riparian doctrines, along with international treaties complicates the situation further.

The additive effects of climate change and population growth will likely continue to stress the nation’s energy and water systems. In response to these challenges, the U.S. Department of Energy (“DOE”), in 2012, created the Water and Energy Tech Team (“WETT”) whose mission is to identify technology, data, analysis, and policy priorities in the Energy-Water space. WETT has identified six pillars as a foundation for its work including: (1) optimization of the freshwater efficiency of energy production and electricity generation technologies; (2) optimization of the energy efficiency of water treatment and distribution systems; (3) increased resilience of energy and water systems; (4) increased use of non-traditional water sources (e.g. brackish) for energy systems; (5) promotion of responsible energy operations with respect to water quality; and (6) exploration of synergies between water and energy technologies.

Regarding policy, WETT has highlighted successful regional efforts to integrate water and energy management, such as those of the Susquehanna River Basin Commission (“Commission”), for possible wider application across the nation. The Commission adapted early to increased water use for hydraulic fracturing in the Marcellus shale. It set all relevant regulatory thresholds to one gallon and promotes water sharing between companies, the reuse of flowback, and interbasin transfers of flowback. These efforts have resulted in an average flowback reuse per well of fourteen percent.

Recognition of the importance of the water-energy nexus to the economic and environmental security of the nation is beginning to take hold. Ample opportunities exist, both in the technology and policy spaces, to make these interconnected systems more robust, reliable, efficient, and secure.

The title image is of a geothermal power plant and has been released into the public domain. The original owner of this image does not endorse this blog. 


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