The water problem
One of the “megatrends” impacting the chemicals, metals and mining industries is the increasing need to manage limited water resources. Growing populations, and as noted in a prior blog1, greater affluence increases demand for agriculture and livestock output, which demands more water management, especially in times of major weather changes, including droughts and flooding. In addition, some new processes and products require greater water use, such as ethanol production and coal to olefins2 processes. What is being done to preserve the biggest requirement for life? Fortunately, fast-moving technology presents an opportunity for companies to partner with technology providers, equipment vendors, neighboring companies, universities and communities on the solutions.
The convergence of water trends has caused some leading chemicals and minerals companies to view water management as an opportunity to create value through water conservation, recovery/reclamation, tapping new sources and even managing excess water.
Demand for new equipment and materials
The “water market” holds significant volume and growth potential for the basic materials industry, from commodities to specialized materials, with opportunities that include water treatment chemicals and technologies, plastic pipe and tubing, agricultural tile, water filtration and other applications.
Another key technology for solving the water scarcity problem is water desalination. Almost 98% of the world’s water is saline, most of which resides in the world’s oceans3. At this time, desalination accounts for less than 1% of the world’s water supply4. Therefore it makes sense to concentrate on developing ways to desalinate water inexpensively, presenting a huge growth opportunity for desalination technologies. Indeed, patent data shows increased levels of activity (with patents almost doubling between 2005 and 20105) here by chemical companies, metals/mineral companies, equipment manufacturers and universities. Currently, the desalination equipment market is growing almost 12 percent per year6. Imagine large scale, low-cost water supplies for the arid regions of the Middle East and Africa that change the quality of life and even agricultural output of those regions.
Agriculture alone is responsible for 70% to 80% of fresh water use and water access is a hurdle for farms in developing countries. About $1 trillion of investment will be needed worldwide in irrigation technologies by 20507. Irrigation can raise crops yields by 100% to 400%, but it is often too expensive for small-scale farmers in developing countries. Plastics are used in conventional and drip irrigation and, therefore, can provide the solution to low income farmers, perhaps through new system designs, less expensive materials/grades, financing terms or other means.
The use of agriculture water drainage, which removes excess water from fields, has been practiced for many years. Now there is an effort to reclaim that water for future reuse, using desalination and other treatment technology. Sometimes this water can be used for selected local municipal purposes. The drainage networks, essentially a system of under-field piping, also represent opportunities for plastics, such as polyethylene. Again, the cost of these items can be burden to low income farmers in developing nations. Creative approaches to making this affordable are needed, and may include integration with wider local community water systems.
Opportunities to increase industrial water efficiency
As more water resources are demanded, new operations solutions are also being developed, ranging from treatment methods to information technology solutions. With the advent of improved sensor and wireless technologies, great leaps can be made in the monitoring of industrial operations, enabling predictive modeling and water optimization.
In the energy business, hydraulic fracking in North America generates about 70 million barrels of produced water per day. “Produced water” originates from oil and gas operations some of which is naturally present in hydrocarbon deposits while some comes from water injected for hydraulic fracturing. The produced water can include contaminants (some naturally occurring) and is traditionally handled through evaporation ponds, which are becoming less acceptable, especially in drought areas. As a result, reinjection and re-use is increasingly being employed. Re-use involves the removal of contaminants, such as hydrocarbons, injected chemicals and dissolved or suspended solids. Treatment methods rising in popularity include filtration, chemical treatment and evaporation. BCC Research estimates that the water treatment equipment market for this segment will grow at 7.7% per year over the next five years. However, water treatment firms have generally not been able to make large profits and a possible solution is the siting of large scale treatment plants serving multiple participants at given shale plays, enabling greater cost savings8. Information technology may be able to play a role here in monitoring flows and contamination levels, to optimally manage a large network of drilling and production operations.
Water management is also a growing issue for miners. Miners consume water for processing, metal recovery and dust control. They are frequently located in remote, water challenged, areas. A new emerging trend may be greater participation of industry with communities to tackle water issues. One mining company has recently even transformed mining waste water into drinking water for 80,000 people near Johannesburg, South Africa, providing 12% of the area’s drinking water supply.9
Some mining regions are setting lower limits on impurities in treated water, creating new challenges for miners10. While traditional treatment methods using chemical precipitation, filtration, reverse osmosis, ion exchange, biological reduction and other techniques are employed, miners may begin to exploit technology to tackle the water issue holistically, by tapping big data, integrating water management methods with climate data, telemetry and other control systems to effectively treat water11.
New developments continue changing the outlook for future water supply, such as new aquifers found under vast parts of Africa12 and the possible use of LPG in fracking, replacing water (see Peter Spitz’s blog on this topic here).
Clearly technology is moving fast and will provide new solutions to the water problem. Basic materials companies should work closely with technology providers, equipment vendors, neighboring companies, universities and communities to most effectively tackle the problem. The answers will mostly reside in companies’ own “ecosystems”, where sensor and monitoring technology can be harnessed for water management insights.
1 “Chemical solutions to food megatrends”, Accenture, http://www.accenture.com/us-en/blogs/cnr/archive/2013/06/05/chemical-solutions-food-megatrends/
2 A 600 kmtpy coal to chemical plant require 20 million gallons of freshwater per year. Source: “The party begins for US chemical makers,” Chemical & Engineering News, April 14, 2014
3 USGS reference to “Water in Crisis: A Guide to the World’s Fresh Water Resources”, 1993, website: http://water.usgs.gov/edu/gallery/global-water-volume.html/
4 BCC Research, “Seawater and Brackish Water Desalination,” July 2013
5 “Global Desalination Patents,” Tyler Algeo, BlueTech® Research. January 2012
7 Food and Agriculture Organization of the United Nations (FAO)
8 “Fracking Water Treatment: The North American Market,” BCC Research, May 2014
9 “Water reclamation plant to be expanded,” Mining Engineering, June 2014
10 “Water Treatment” feature, Mining Magazine, March 2014
11 “Managing big data,” Mining Magazine, March 2014
12 “'Huge' water resource exists under Africa”, BBC News, April 20, 2012