Volume XXIII, Number 11, 2010 Water/Wastewater Industry Environmental Business International Inc.

U.S. Environmental Industry in 2009: Revenues by Media Segment Air Water/ Haz Remed- Solid Multi- Total WATER INDUSTRY Wwater Waste iation Waste Media STILL STRIVING SERVICES Analytical Services 0.06 0.9 0.3 0.4 0.2 1.9 TO ARTICULATE Wastewater Treatment Svcs. 44.1 44.1 RESOURCE’S VALUE Solid Waste Management 51.1 51.1 Hazardous Waste Management 8.6 8.6 he pervasive dynamic influencing the global water industry is the Remediation/Industrial Services 11.9 11.9 value of water itself—who under- Consulting & Engineering 1.6 8.9 4.5 6.4 1.3 2.9 25.7 Tstands that value, who takes it for granted, EQUIPMENT and what that balance means for funding Water Equipment & Chemicals 26.6 26.6 the reliable, efficient infrastructure required Instruments & Info. Systems 1.0 1.9 0.6 0.9 0.10 0.7 5.2 to provide high-quality drinking water and Air Pollution Control Equipment 15.8 15.8 to clean up the wastewater before discharg- Waste Management Equipment 2.8 1.0 7.1 11.0 ing it back into the hydrological cycle. Process & Prevention Tech/Eqt. 1.8 1.8 Fortunately, that balance has tilted RESOURCES enough towards those who do appreciate Water Utilities 40.6 40.6 the value of water to make the global wa- Resource Recovery 0.7 23.8 24.5 ter industry a steady growth business even through recessionary times. EBJ market Clean Energy Systems & Power 35.8 35.8 analysis indicates that the $85 billion in Total All Segments: 18.6 122.9 17.7 20.6 83.6 41.3 304.6 revenues generated by U.S. water utilities 6.1% 40.4% 5.8% 6.8% 27.4% 13.6% and wastewater treatment works increased Source: Environmental Business International Inc., San Diego, CA, units in $bil by better than 5% in 2009—and further health and livelihood—their citizens are something that has not always happened data indicates that numerous overseas mar- just not accustomed to paying for it. Ac- in water infrastructure development in the kets are growing even faster. cess to clean supplies and adequate sanita- developing world in the past. tion is clearly understood to be critical to Water and wastewater accounted for In the developed nations, where reliable economic growth and improved standards 40% of the $305-billion U.S. environ- water and wastewater infrastructure is af- of living. The people and governments of mental industry in 2009, and the water fordable, there’s something of a myopia re- these countries certainly want the fund- industry’s growth of 2.1% in 2009 was garding water’s value, arising from people ing for water infrastructure projects; the three and a half percentage points higher being habituated to turning on the faucet issue is getting it. And the issue for those than the environmental industry’s -1.4%. and getting clean water instantaneously, In EBJ’s 2010 Snapshot Survey, the largely providing the financing is getting it back, environmental service provider respon- dents reported “water purification” and Inside EBJ “wastewater treatment” as the top two of 22 service and media categories in terms Water Market: The $127-billion U.S. water industry grows through the recession of growth in 2009; in the forecast out to as rate increases sustain the municipal infrastructure, but experts warn that a major 2012 the two water/wastewater categories funding gap still exists for water markets to reach their potential...... 1-5 placed in the top eight behind only emerg- Features: Wastewater biogas emerges as a legitimate play as carbon footprint focus ing service categories related to renewable turns on facilities; Desalination keeps growing but rising cost profile is an obstacle; energy, energy efficiency, climate change, Wet infrastructure projects increasingly demand integration and sustainability, says smart growth and green building. In terms COO of MWH; Design-Build takes firmer hold as a project delivery vehicle...... 6-15 of international growth, water and renew- Company Profiles: ThermoEnergy’s distillation technology, Siemens Water able energy development topped the list. Technologies’ broad suite of brands, United Water’s combination of services and To be sure, developing nations know Aqua-Pure Ventures’ and Altela’s work in the emerging field of production water treatment at shale gas fields find the diversity of water markets leave healthy niches well the value of water, as the lack thereof open for business opportunities in the water industry...... 15-21 presents immediate and obvious threats to Environmental Business Journal, Volume XXIII, Number 11, 2010 thus taking the resource for grant- The U.S. Water Industry ($mil) ed. In the abstract, people under- Segments 2008 2009 2010e 2008 2009 2010 stand that there’s no replacing water Growth Growth Growth for the vital service it provides—in Water Treatment Equipment 11,090 10,420 10,900 6.2% -6.0% 4.6% contrast with oil, which does have Delivery & Infrastructure Equipment* 13,030 11,990 12,230 3.4% -8.0% 2.0% substitutes—and in select regions of the developed world, scarcity of the Chemicals (Bulk & Specialty) 4,340 4,210 4,340 2.0% -3.0% 3.0% resource makes this understanding Water Equipment & Chemicals 28,460 26,620 27,470 4.3% -6.5% 3.2% more than a mere abstraction. Contract Operations 2,760 2,860 2,930 4.8% 3.6% 2.6% Consulting & Engineering: Design/PM 8,940 8,900 9,160 4.8% -0.4% 2.9% OBSTACLES TO Maintenance Services** 1,990 2,030 2,080 3.6% 2.0% 2.5% PRIVATIZATION Services, Consulting & Engineering 13,690 13,790 14,170 4.7% 0.7% 2.8% Still, in the United States at least, Instruments 1,110 1,120 1,180 8.4% 0.6% 5.0% there’s a serious undervaluing of wa- Analytical Services 960 910 920 1.6% -1.1% 2.0% ter that’s reflected in multiple ways. Wastewater Treatment Works 40,980 44,050 46,910 4.4% 7.5% 6.5% One is the continued aversion to Water Utilities 39,220 40,590 42,050 3.5% 3.5% 3.6% the private sector’s involvement in Total Water Industry 124,420 127,080 132,700 4.2% 2.1% 4.4% owning or operating water utilities, the value and efficiencies that pri- SOURCE: Environmental Business International, Inc., San Diego, CA, figures rounded to the nearest 10 million. *Delivery Equip- ment is pipes, fixtures, pumps and valves for treatment and delivery; **Mostly industrial & municipal plumbing contractors vate companies can bring notwith- performing routine maintenance on lines and stations; Note: Maintenance and contract operations not counted on the environ- standing. There’s a persistent “water mental industry chart on page 1. is a gift from God” mentality that told EBJ several years ago, “He forgot to crease of 8.5% was the largest since the thinks clean water should be inexpensive lay the pipes and take out the pollutants.” early 90s. As portrayed on the chart on to provide, and the idea that some entity The public in all too many jurisdictions page 3, NACWA’s data shows only mod- should profit from doing so is anathema in gets angry when rate hikes—the principal est 1-3% annual increases during the more some circles. way to fund marginal infrastructure im- heady economic times around the turn “Obviously, there are two sides to the provements—are proposed. of the century when broader municipal finances were less compromised. Notably issue, but there’s no balance to the discus- In spite of the general opposition, mu- NACWA’s forecast is for annual increases sion,” says water industry analyst Steve nicipal authorities have been reasonably of 6-8% out to 2014 (based mostly on ‘ap- Maxwell, president of TechKNOWL- successful in getting rate increases in re- proved’ increases in 2010, but ‘planned’ EDGEy Strategic Group (Boulder, CO). cent years. According to the 2009 Service increases from 2011-2014), indicating “It’s one side or the other.” The upshot, Charge Index that measures year-to-year that many municipalities are at least taking he says, is that right now there isn’t much percentage changes in residential sewer a more active approach to securing some of a growth market for private operation service charges published by the Nation- additional funding. Global analysts, how- of water and wastewater utilities in the al Association of Clean Water Agencies ever, continue to rail at the municipal ori- U.S., whether in the form of outright asset (NACWA, Washington, DC), 2009’s in- ownership or through contract operations. entation of the U.S. water industry. “Companies are going elsewhere in the world where privatization is proceeding.” Environmental Business Journal ® (ISSN 0145-8611) is published by Environmental Business International, Inc., 4452 Park Blvd., #306, San Diego, CA 92116. © 2010 Environmental The private sector’s penetration of the Business International, Inc. All rights reserved. This publication, or any part, may not be market for water and wastewater system duplicated, reprinted, or republished without the written permission of the publisher. operations at about $3 billion in annual revenues is still well less than 10% of mu- To order a subscription, call 619-295-7685 ext. 15 or visit us online at ebionline.org/ebj. The annual subscription rate for single-issue access or individual subscription is $695. A corporate nicipal spending, so the market potential electronic subscription with internal reproduction license and access to data files starts at is there, and companies like United Water $1,250 and allows up to five registered users with rates increasing in five user increments. (see page 18) have been able to grow both its contract operations and regulated utility Editor in Chief, Grant Ferrier Federal Analyst, Andrew Paterson business. But private ownership and man- Senior Editor, George Stubbs Research Analyst, Jim Hight agement is still an uphill battle that needs Research Analyst, Jenny Christopher Managing Editor, Lyn Thwaites more success stories and a lot of vigor and persistence to make the case for the value EDITORIAL ADVISORY BOARD Andrew Paterson, Chairman; Dr. Edgar Berkey, Vice President, Concurrent proposition. Technologies; Richard Fortuna, President; Strategic Environmental Analysis; The “gift from God” mentality also for- Daniel Noble, Founder, Resource Trends; Paul Zofnass, President, Environmental Financial Consulting Group gets that, as one water industry executive

 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

“The central problem for the water FUNDING GAP STILL YAWNS Top U.S. Water/Wastewater sector [in the U.S.] is that the long-term Another direct reflection of the “value Environmental Consulting investment cycles of the industry do not gap” is the water/wastewater infrastructure fit the short-term electoral cycles of city & Engineering Firms funding gap—the multi-billion dollar dif- Ranked by 2009 Revenues politicians, or the day-to-day exigencies of ference between what’s needed to expand unelected leaders who live in constant fear and upgrade our aging infrastructure and CH2M Hill Inc. of provoking disorder,” said an editorial in what rates can support. The lack of public AECOM Technology Corp Global Water the November 2010 issue of concern and political will means there has MWH Global Intelligence (GWI) magazine (London, been very little if any closure of this gap Tetra Tech Inc. U.K.). Get the politics out of water, GWI even as our needs mount. CDM argued. Black & Veatch Corp. The U.S. Environmental Protection URS Corporation A study released in October 2010 by Agency (EPA) released its latest estimate ITT Corp. Stantec Consulting Inc. $10.9-billion (White Plains, of the water infrastructure need during The Louis Berger Group Inc NY, whose water equipment revenues are the summer of 2010, pegging that need Carollo Engineers in the $3 billion range) appeared to suggest at about $330 billion and change over the Hazen & Sawyer that U.S. attitudes towards the true value next 20 years. The need on the wastewater HDR Inc. of water may be changing. Based on a sur- infrastructure side, for which EPA issues Bowen Engineering vey of approximately 1,000 voters and 500 estimates on the off year from the water facility and operations managers at U.S. infrastructure assessment, has historically Brown and Caldwell industrial and agricultural companies, ITT been comparable, according to Tom Cur- ARCADIS USA Inc. found that about 63% of voters and 57% tis, deputy executive director of the Amer- Kleinfelder Inc. of water businesses would be willing to pay ican Water Works Association (AWWA). HNTB Corp. a little more to correct the “sorry state” of Hatch Mott MacDonald U.S. water infrastructure and fund up- “It’s not that this money has to be put PBSJ (Atkins) grades to “ensure long-term access to clean on the table all at once,” Curtis notes. Freese & Nichols water.” “What is important is that we recognize Michael Baker Corp. that the replacement needs are increasing.” Woodard & Curran The report, titled Value of Water Sur- The year-by-year operations spending is Jordan, Jones & Goulding (Jacobs) vey: Americans on the U.S. Water Crisis, already substantial—up to $90 billion Greeley & Hansen concluded that voters would be willing to for water and wastewater combined—but Dewbery Cos spend an average of 11% more on their “we are at the beginning of the era during Gannett Fleming, Inc. monthly water bill, an amount that would which significant replacements need to be Woodard & Curran generate an additional investment of $5.4 made,” he says. billion per year in U.S. water infrastruc- Weston & Sampson Engineers ture, or more than four times the federal “The question is, where does the money Source: EBJ C&E database and annual surveys investment in drinking water systems in come from. Probably, the correct answer of C&E firms 2009. ITT’s findings invite a reasonable Percentage Change in U.S. Wastewater Treatment Rates amount of skepticism. “You sit down and 9% explain things to people—‘it’s only $10 increase; think about what $10 means to 8% you’—and they’ll say, that seems to make 7% sense,” notes Maxwell. “But you propose 6% rate hikes at public meetings, and people go haywire. It’s just a sense of entitlement 5% and the free-good nature of the commod- 4% ity. People still have that in their heads. 3%

“There’s been lots of publicity about 2% water these days,” Maxwell continues, “but it’s not there yet in terms of what it 1% all means. As problems and breakdowns 0% and infrastructure catastrophes happen, that will force us that way, but it won’t be 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 proactive, it will be reactive.” Source: National Association of Clean Water Agencies, 2009 Service Charge Index, 2010-2014 projected rate changes based on approved and anticipated rate increases.

Strategic Information for a Changing Industry  Environmental Business Journal, Volume XXIII, Number 11, 2010 is from the customer, in the bills. We at took EPA and others a long Water-Related Deals 2010 AWWA believe that most of the job could time to put regulations out Buyer Seller be done by the customers. Having said defining what that meant. At C&E that, there are important things the federal least six to eight months were government can do to make the job easier. lost as that issue was resolved, Opus Int’l Consultants Dayton & Knight One thing would be to create a low-inter- and there was a pretty tight TEC Inc. Taylor Associates, Inc. est loan function—a Water Infrastructure timeframe—about a year— Dewberry Integra Engineering Bank—that could make loans at Treasury- within which to obligate the Tetra Tech BPR like rates.” funds.” Jacobs Engineering Gp. Jordan, Jones and Goulding ESA Philip Williams & Associates The establishment of such a loan facili- SOME FALL-OFF IN ty would require federal legislation. “We’re GENIVAR Pryde Schropp McComb M&A ACTIVITY hoping to see a bill introduced into the Manhard Consulting White Engineering One trend in the current next Congress,” says Curtis. “The timing Stantec ECO:LOGIC could hardly be worse because of all the at- state of the water industry is WS Atkins PBSJ tention to the deficit and the need to con- the noticeable drop-off in the CHA Olver, Inc. trol federal spending. Remember, however, pace of consolidation, at least we’re talking about banks lending money among the large engineering Wardrop Hydromantis and being repaid with interest, so it’s not firms. “There will be quite a AMEC Entec Holdings a long-term deficit issue. AWWA is not bit of activity at the smaller Geosyntec Consultants Rainwater Recovery looking for a new grant program. We’re end, but as for the larger ones, GAI Consultants Bonar Group looking for a mechanism to lower the in- there aren’t that many left to AMEC* Lombardo Associates do,” says Maxwell. “That area terest cost.” AECOM* Organica Ecotechnologies is pretty picked over.” The Curtis readily acknowledges the gap UK’s WS Atkins did acquire Equipment/Technology between the current price of water and its Florida-based PBSJ this year, Heckmann Corp. Complete Vacuum and Rental value. “Value and price are different, and but most of the other deals in Bluewater Bio Int’l Water Innovate there is a disconnect between the cost of the water sector have been on Pure Technologies PPIC water and the value of the water service. a considerably smaller scale— Layne Christensen Intevras Technologies That’s something AWWA talks about a lot, picking up a new geography, ITT Godwin Pumps, Nova Analytics and experience shows that customers are or new expertise. Maxwell Measurement Specialties Pressure Systems more willing to shoulder and approve rate sees the same dynamic in the increases if the utility makes that connec- equipment and technology Freedom Envi’l Services Brownies Wastewater Solutions tion. Our experience is that utilities that sector. Watts Water Technologies Blue Ridge Atlantic Enterprises are efficient and well-managed and do a Utility It’s not due to lack of in- careful job of communicating with cus- J.P. Morgan SouthWest Water Co. tomers can successfully drive rate increases terest in investing in the water Veolia Water United Utilities (non-reg EU assets) sufficient to support the need.” sector. Maxwell says he still gets quite a number of calls Source: EBJ weekly news 2010; * AMEC teaming arrangement with Lom- bardo, AECOM partnership with Organica in eastern. Europe. The federal government should also from interested investors, es- fund the Clean Water and Drinking Wa- pecially from the private equity communi- ers of water scarcity, population growth and ter State Revolving Funds (SRFs) at much ty. One would think also that this interest urbanization, water reuse and desalination higher levels than it has historically, Curtis could be mustered to meet the great need are still growth sectors. Areas relating to affirms. Congress simply hasn’t demon- for infrastructure rehabilitation. But there- sustainability and life cycle costs regarding strated the will to do so—another reflec- in lies the paradox. “The big issue is, there energy and carbon are growing too, as well tion of the “value gap.” is a lot of money looking for investment as nascent work on water resources and cli- With about $6 billion for water and opportunities, and there is a huge need mate change adaptation. for investment, but the two never connect wastewater infrastructure, the American Desalination faces a new challenge, properly, because 75 to 80% of the wa- Recovery and Reinvestment Act of 2009 however: after years of going down, devel- ter/wastewater infrastructure is owned and (ARRA) helped a bit, but “we got far less opment and operating costs are now ris- operated by municipal entities,” Maxwell than we could have spent productively, ing (see page 9). The culprits appear to be says. One could invest in municipal bonds, and far less than we hoped for,” says Cur- rising energy costs and the limited avail- “but that’s not very exciting.” tis. “Furthermore, there were constraints ability of sites with limited environmental making it harder to spend the money than Market opportunities for water engi- concerns, which developers are now pay- may have been helpful. For example, there neering and technology firms mix some ing quite a bit to address to the satisfac- was a requirement that 20% of the money of the tried-and-true with the new-and- tion of regulators and the public. As for should be spent on ‘green’ projects, and it emerging. Reflecting the ever-present driv- energy consumption, the devices available  Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010 to recover energy are now fairly standard of Newfield Exploration Mid-Continent EBJ’s Top U.S. Water Equip- in the design of seawater reverse osmosis to recycle wastewater generated by oil and (SWRO) facilities, and any further reduc- gas exploration activities in the Woodford ment & Chemical Companies tion in consumption is going to require Shale region in southeastern Oklahoma. >$1 Billion in WE&C Revenues new breakthroughs. Under the contract, Ecosphere Energy GE Water & Process Technologies Services will use its Ozonix process to treat Recovering the energy value from ITT Industries and recycle frack water. Two companies wastewater treatment is another growing Siemens Water Technologies that were listed among the 2010 Artemis market, and very much a global one, ac- Nalco Company Top 50 Water companies (see box)—Al- cording to billion-dollar water engineering Pentair tela, Inc. and Aqua-Pure Ventures—are firms Black & Veatch and CDM that are profiled in this issue (see pages 19-21). Watts Water Technologies Inc. pursuing the business (see page 6). The >$100 million in WE&C Revenues biogas produced through anaerobic diges- Another market making steady gains— Ashland: Specialty Chemicals tion in particular can have energy value in not addressed this year in these pages—is Culligan International a variety of forms, and generators—not water right marketing. This market has “all Pall Corp. just utilities but industrial, commercial, the same sensitivities and emotional issues and agricultural concerns—are finding associated with privatization of infrastruc- Roper Industries that their efforts to reduce their carbon ture assets,” says Steve Maxwell, “but I Danaher (Trojan) footprint can have an economic up side in would say it’s quite active, and more and Gorman-Rupp biogas or other energy savings. more people are evaluating the potential Clarcor Inc of return from moving water from lower Perhaps the hottest market is being Calgon Carbon Corp. value uses [mainly agricultural] to higher fueled by development in the natural gas Dow Chemical (Liquid Separations) value uses.” business and the explosion of exploration 3M Corp. (Cuno) in the Barnett, Marcellus, and other U.S. To Maxwell, the water rights market Severn Trent Services shale formations. These drilling operations is emblematic of something fundamental Koch Membrane Systems Inc. generate millions of gallons of contami- about the future of water. “We’re moving The Marmon Group nated wastewater—so-called “produced from an era of development to an era of Proctor & Gamble (PUR) water” and the “frack water” generated by allocation,” he says. In many regions of the Tyco International hydraulic fracturing—for which tradition- world, such as the growing urban regions Aquatech International Corp al disposal options, such as discharge into of the American west, there is very limited wells, are narrowing due to regulations and opportunity to develop new sources of wa- Rainsoft (Waud Capital) economic pressures. ter. Rather, existing supplies will have to Flowserve Pump Division be used more efficiently. Citing a report by Axel Johnson (Parkson, Kinetico) Major players like GE Water and Sie- Lux Research, Maxwell notes that we can SPX Corporation mens Water Technologies are getting into no longer “hunt” water but instead will the game, along with smaller firms dedi- Eimco Water Technology have to “cultivate” it. Maybe when we start cated to oil and gas field wastewater treat- Source: Surveys, interviews and compiled public fighting over the allocations, the true value company research by EBJ ment. Recent deals include a joint venture of water won’t be such an abstraction.  formed by STW Resources Holding Corp. and Aqua Verde, LLC, a newly formed business entity serving the oil and gas in- The Artemis Project Lists Top 50 Water Companies dustry in the Rocky Mountain region. The n 2010, boutique water industry consulting practice The Artemis Project issued its new joint venture, called Water Reclama- Isecond annual Top 50 Water Companies to distinguish “advanced water and water- tion Partners, has taken over responsibil- related technology companies as leaders in their trade for helping to build water into ity for an existing master services contract one of the great high-growth industries of the 21st century.” The Top 50 (in alphabet- that Aqua Verde had signed with a major ical order) are: 212 Resources, A.U.G. Signals, AbTech Industries, Agua Via, Altela, oil and gas producer. Under the contract, Aqua Genesis Co., Aqua-Pure Ventures, Assure Controls, Baleen Filters, Biobooster Water Reclamation Partners is processing (Grundfos), BWA Water Additives, Calera Corp., CASTion Corp., CheckLight Ltd.; 4,000 to 30,000 barrels of produced water Clean Water Technology, Cyber-Rain, Derceto, Desalitech, Ecosphere Technologies, per day—just to give the scale of the types Emefcy Ltd., Energy Recovery, EnviroTower, Epuramat SA, eWater Ltd.; Hydration of operations involved. Technology Innovations, HydroPoint Data Systems, INFICON, In-Pipe Technolo- gy, Ionex Ltd., JMAR, MAR Systems, Marrone Bio Innovations, Micromidas, MIOX In another recent deal, Ecosphere En- Corp., NanoH2O, Oasys Water, Ostara Nutrient Recovery Technologies, PAX Water ergy Services a majority owned subsidiary Technologies, Pressure Pipe Inspection Co., ROTEC, SCFI Group, Seldon Tech- of water engineering and environmental nologies, Simbol Mining, SolarBee, Stream Control Ltd., TaKaDu, TransBiodiesel, services firmEcosphere Technologies Inc., Water Conservation Technology International, Wellspring Wireless, and Zeropex. has received a contract from a subsidiary

Strategic Information for a Changing Industry  Environmental Business Journal, Volume XXIII, Number 11, 2010

been nice to have,” McCarthy notes. “But with today’s economic pressures, utilities ENERGY FROM WASTEWATER TAKING OFF: are saying now is the time to jump out and A ‘MATURE’ CONCEPT BENEFITS FROM do some of these things.” BEING GREEN, GHGs AND BEST PRACTICES The pressure to “be green” is comparably effective. “Utilities don’t want to volunteer bout 10 years ago, the “water-ener- Today, however, there’s a surging inter- the fact that they are still flaring off the gas gy nexus” was viewed as a potential est in energy generation from wastewater from their digesters,” McCarthy says. symbiosis of the business models treatment. With the current pressure to re- Afor water and power delivery. Water can duce greenhouse gas (GHG) emissions, en- “It’s absolutely a growing area for us,” produce power; the production of water ergy consumption, and carbon footprint, he continues. “I think the energy-water requires power, in substantial amounts; however, wastewater utility operators, nexus is coming rather quickly to the scene people need both. Combining the two industrial companies, and other wastewa- on the wastewater side of the business, and utility functions appeared to make some ter generating operations are increasingly we’re seeing it on the energy side as well, sense, at least in theory. looking to extract the energy value from because water is becoming critical as an is- the treatment of wastewater and sludge. sue around power generation.” “Water resource management and pow- The value can go beyond savings in energy er production and delivery are clearly re- The dominant form of energy recovery consumption to include revenue streams quired for most industries and for any city, in wastewater treatment contexts today is from energy delivery and even the sale of town or village,” EBJ publisher Environ- anaerobic digestion of treated sludge, or carbon credits. mental Business International (San Di- biosolids, to generate a biogas. Biosolids ego, CA) wrote in the 2001 version of its “It’s a very mature market,” says David incineration with energy generation is an- WaterView market report. “The degree to Parry, senior vice president and wastewater other possibility, but incineration is not which these are managed together to cre- practice leader and energy practice leader currently in favor and itself consumes a lot ate economies of scale, interrelationships at CDM (Cambridge, MA), a $1-billion of energy, according to the professionals of services, and optimization of processes consulting, engineering, construction, and working in the field. is a key competitiveness and overall effi- operations firm with a major focus on the Anaerobic digestion is also preferable ciency issue.” water and wastewater markets. Maturity, to aerobic digestion, according to Parry. “I to Parry, means a market that makes sound It didn’t quite work out that way. The see tremendous interest in anaerobic diges- economic sense to utility managers, and most high-profile play attempting to tion, because it recovers more energy than not one that’s simply an outgrowth of a take advantage of the putative water-en- it takes, as opposed to aerobic digestion.” new grant or funding program. ergy connection was the former Enron’s The latter process does not produce- bio launch of Azurix, which was designed to “Many utilities and managers are do- gas. Instead it uses oxygen to facilitate the make inroads in both water operations and ing it,” says Parry. “It’s the right thing to microorganism digestion that stabilizes the maintenance contracts and water rights do. It’s part of best business practices.” It’s sludge, and the required blowers and aera- marketing. Azurix seemed to dissipate into also a global market and growing rapidly. tors are substantial energy consumers. the sands even before Enron itself melted Parry says he’s been working on projects That said, there has been progress in down, as Enron put the Azurix assets and designed to generate energy from wastewa- making aerobic digestion more efficient, contracts on the selling block in 2002. As ter treatment for 30 years, but now, “I’m Parry points out. “New high-speed blowers one water industry analyst told EBJ in doing a lot more of it.” are getting a lot of attention, and they are mid-decade, “I think the supposed syner- now more efficient than they used to be. gies between power and water have been NOBODY WANTS TO FLARE They’ve applied micro-turbine technology debunked.” THEIR GAS OFF ANYMORE to blowers and can adjust to the amount of Today, the water-energy nexus has According to Dan McCarthy, CEO of air needed.” emerged in a new form. Except it’s not the global water business at $2.7-billion Another way to squeeze more value out really new. Generating energy from waste- consulting, engineering, and construction of the gas generation process is enhanc- Black & Veatch water treatment, typically by producing firm (Overland Park, KS), ing primary treatment, according to Parry. biogas through digestion and using the gas the surge in interest in generating energy “The first step after screening and grit -re as a fuel, has been around for some time. from wastewater treatment is being driven moval is primary treatment—settling out The gas generated by these operations has by two forces: “economics, and the aspira- the solids. If you can enhance and improve long been recognized as an energy source; a tion to be green.” The traditional mission that process to get more removal, you can report by Irish energy company Bord Gáis for water and wastewater utilities has been get more sludge out to be treated by the says digester gas from a sewage treatment to provide water that’s safe for drinking anaerobic digesters and reduce the load on plant was used to fuel street lamps in Ex- and then clean enough to discharge back the secondary treatment stage.” eter, England, starting in 1895. into the environment. “Everything else has

 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

One company attempting to do just of the food and beverage sector at $150- non-traditional wastes to boost the energy that is M2 Renewables, Inc. (Lake For- million environmental consulting and en- generation, is starting to take hold, says est, CA). “We essentially have a method gineering firmO’Brien & Gere (Syracuse, Greene. He points to a marquee proj- of scraping the solids off the rotating belt NY). That option is limited regionally, ect in Des Moines, where the wastewater screen,” says Scott Noll, M2’s director of however, because of emissions standards. treatment plant is accepting glycerin from renewable energy. “The solids fall onto an biodiesel production, high-strength waste Fuel cells present another option, but auger screw trough, and that auger screw streams from ethanol plants, food wastes, they are expensive, although grant and compresses the solids in a dewatering pro- and brown grease from grease traps. “Over rebate programs like those in California cess. What comes out is a ‘log’ that is 30 40% of the organics digested at the plant can make fuel cells more economically vi- to 35% solids. You haven’t let the solids sit are from trucked in organic wastes. The able, according to Greene. The third op- at the bottom of a primary clarifier to start operation has three revenue streams: one tion is micro-turbines. “Companies like degrading. We call that ‘fresh solids.’” from tipping fees for accepting the or- Capstone have installed a lot of turbines ganic waste, another for selling biogas to a M2 has developed an ultra-high-tem- to generate energy from landfill gas, which nearby industry, and a third for electricity perature gasifier technology to take the is a more mature market than generating savings from a biogas-fueled cogeneration biosolids and produce a syngas that can be biogas from wastewater.” system,” says Parry, who is working with used to produce electricity for wastewater It isn’t just wastewater utilities that are others at CDM as the engineers designing treatment operations. The company - re taking advantage of the water-energy con- the upgrades to the digesters and organic cently announced a partnership with Har- nection, and it should be mentioned that waste receiving facility. vey Mudd College to prove the efficiency it isn’t just the extraction of the energy val- of the dewatering step. “We’re seeing good growth across all ue that’s considered desirable. In fact, we four markets,” Greene notes. The drivers “Because we use the micro-screen up should be talking more precisely about a are coming from many different directions. front, we get a huge energy benefit,” says water-energy-materials connection. Walmart, for example, “has laid down the Noll. “That’s key. If you don’t remove the “Industries are looking at this as a busi- law on banning the landfilling of food solids up front to get the relatively high ness model,” says CDM’s Parry. “Some wastes from their stores. “Little niches like solids and Btu content, then it’s difficult to companies are looking to take tipping that that are giving the market a boost,” work with a conventional process.” fees for bringing in organic waste, selling says Greene. “They’ve shown biogas pro- duction to be their top priority, because BIOGAS BEING USED FOR the stabilized, digested biosolids as a soil amendment, and then selling the power.” you can make energy as well as compost. ELECTRICITY, HEAT, FUEL CELLS AND VEHICLES Greene breaks down wastewater-to-en- “We’d love to be doing more work in ergy activity into four market segments, this area,” he adds. “Right now, gas prices Biogas, or digester gas, can be parlayed from his company’s perspective. There is, are soft. We’d like to see the gas prices that into energy value in several ways. It can of course, the municipal wastewater treat- existed two years ago. That would help us be combusted in gas engines and turbines ment market, and then there is the agri- generate more projects.” (or used in a fuel cell) to generate electric- cultural market, “where large combined ity; burned to heat buildings or industrial For its projects, O’Brien & Gere is re- animal feeding operations, or CAFOs, and processes (including the digesters, which viewing a variety of technologies, accord- dairy farms are making energy out of ma- require heat); sold into natural gas mar- ing to Greene. “There are about 15 compa- nure.” kets; or, potentially, compressed for use in nies from Europe actively promoting their vehicles. Third is the aforementioned industrial digestion technology in the United States. market. The fourth segment is a commer- We’re talking to all 15 and embracing one Worldwide there is 5,300 to 6,300 cial market, “where companies are divert- of them on this Southeast opportunity. megawatts (MW) of digester gas to energy ing waste from landfills and generating en- Then there’s a Swedish company, Swedish (DG-E) electric generation capacity, most ergy from digesters,” says Greene. Biogas International, with whom we’re de- of it on farms in Asia, according to a 2008 signing the details of the technology to up- California Energy Commission (CEC) re- One novel, collaborative project, on grade some old digesters in at the munici- port. Europe hosts about 300 MW, most which O’Brien & Gere is serving as the site pal treatment plant in Flint, Michigan.” of it in Germany, where on-farm digesters developer, is a community-based digester were originally promoted for odor control, in the southeastern United States. There, FIRMS GETTING WORK according to the CEC report. five large food companies are sending their THROUGH ESCOs organic wastes to a third party that is us- Combusting the gas to make electricity ing a digester to generate energy and com- One widening avenue to the market typically takes one of three forms. “Recip- post. for technology and engineering firms is via rocating engines made by GE and others energy service companies (ESCOs). “We’re are the cheapest and most durable,” says This kind of project, where wastewater seeing more performance contracting op- Paul Greene, vice president and manager utilities and other entities are taking in portunities at plants—upgrading equip-

Strategic Information for a Changing Industry  Environmental Business Journal, Volume XXIII, Number 11, 2010 ment, looking at incineration and ad- and power DG-E system for Baltimore’s the San Antonio treatment plant, which vanced digestion, and funding the project Back River treatment plant in 2008, esti- produces about 1.5 million cubic feet through guaranteed savings through the mates on its website that “for digester gas (cf) of gas per day, the Persigo wastewater ESCO,” says Black & Veatch’s McCarthy. to be a viable option, wastewater treatment treatment plant jointly owned by the city Incineration may be out of favor in gen- plants should have a capacity of 25 to 75 of Grand Junction and Mesa County, pro- eral, but he notes there is still opportunity million gallons per day and serve 150,000 duces just 100,000 cf/day. to take facilities that had been oriented to 500,000 people.” Other engineers in What’s making this small DG-E project towards disposal and upgrade them to en- the industry believe this rule of thumb is work economically? Grants from the state ergy-generating units. on the high side, and that a facility with and a large energy company have helped capacity of 5 mgd or greater, serving about Black & Veatch is currently working enormously, but the key was the operators’ 50,000 people, is the threshold. on one municipal wastewater-to-energy decision to turn the digester gas into com- project that’s at the upper end of the scale. “You do need a certain critical mass to pressed natural gas (CNG) to fuel its own The firm started work in early 2010 on the make the economics work,” says Michael new CNG sanitation trucks and transit design of an upgrade to the Davyhulme Bakas, senior vice president of Ameresco buses. Wastewater Treatment Works in Manches- (Framingham, MA), a $600-million ESCO “If you take the gas and put it into ter, England, as principal contractor under that develops DG-E projects. “Although CNG, its value is increased significantly,” United Utilities’ Sludge Balanced Asset you’re using a wasted resource, there’s a lot says Dan Tonello, wastewater services Programme. of technology required to process the fuel manager for the city. He estimates Persigo’s to make it useable.” Under the ₤75 million contract, Black 100,000 cf/day will produce the equivalent & Veatch will double the plant’s sludge Ameresco is building two DG-E fa- of 400 gallons of gasoline per day. treatment capacity, incorporating sludge cilities in Texas—one at the San Antonio “We figure we’ll offset gasoline usage reception, thickening, and blending facili- Water System’s Dos Rios Water Recycling by about 142,000 gallons per year with ties, a Cambi thermal hydrolysis process, Center and the other at Dallas Water Utili- methane that we’re currently flaring,” says and sludge digestion and dewatering fa- ties’ South Side Wastewater Treatment Tonello. “The dollars make sense, but we cilities. The completed plant will process Plant. The firm will finance, design, build, also want to do the right thing. We live in a biosolids that can be applied to land as a own, and operate both projects. valley with a wintertime inversion. Hope- fertilizer or supplied as a feedstock to the fully we’ll contribute to improved air qual- Mersey Valley Sludge Processing Centre, ity by substituting natural gas for diesel.” and the process will produce biogas for use “We’d love to be doing more in a combined heat and power plant that work in this area... Right now, In general, when the economics are will generate up to 10 MW of electricity properly worked out, wastewater-to-en- for running the new treatment process and gas prices are soft. We’d like to ergy projects are offering a good payback, delivery into the national grid. see the gas prices that existed according to Black & Veatch’s McCarthy. The extent of the payback may depend on On a smaller scale, “we’d be interested two years ago. That would help regional economics, however. in projects in the $5 million to $10 mil- lion range if the dynamics were right,” says us generate more projects.” “It will play out better where the price of McCarthy. “There aren’t that many large, electric power is higher,” he says. “Payback large wastewater plants. You get down off might not be as quick in the Midwest, but The Dallas project will generate elec- the size of Davyhulme pretty quickly. Lon- go to the coast and the Northeast, where tricity to offset the treatment plant’s load don has multiple plants, and they are all you’re in double-digit cents per kilowatt- and supply hot water for the digesters. big, but not as big as Davyhulme.” hour, and you’ll see that these things make According to a presentation from the city sense more quickly, where the cost of pure Developing new DG-E projects in of Dallas, the facility will produce 30,000 energy is a driver.” the United States has proven challenging, megawatt-hours (MWh) annually, cutting largely due to the up-front capital expens- the treatment plant’s power purchases by The cost of energy isn’t the only region- es, and the fact that many wastewater treat- 60% and saving $1.6 million per year. It al factor. “An issue we have in the United ment plants don’t deploy digesters. Most of will also generate about 30,000 renewable States is that landfill prices are still very those that do use anaerobic digestion don’t energy credits per year. The San Antonio low in some areas,” says O’Brien & Gere’s produce anywhere near the volume of gas project will sell processed gas directly to Greene. “One of the drivers in Germany that landfills do, so that balance of capital the local gas utility. was a landfill ban on organics. In New York cost with economic value has to be closely City, where landfilling costs $90 per ton, A small community in Colorado is examined. it’s a different market opportunity than in looking to make DG-E work on a much Michigan, where it’s still $15 per ton.”  Johnson Controls, Inc. (Milwaukee, smaller volume of digester gas than the WI), which built a 2.4 MW combined heat Texas projects produce. Compared with

 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

really get at those energy costs, you have to come up with something more,” he DESALINATION GROWTH CONTINUES, BUT says. “We’re approaching the point where PROCESS COSTS ARE RISING, NOT FALLING conventional desalination processes are as efficient as they can be. You can have he familiar market drivers—water mosis was invented in the mid-1960s. a more flexible device that operates over a scarcity, water security, urbaniza- Since 2005, however, when the price of wider range of salinities, but at the end of tion, and growing populations— desalinated water had reached a low of the day, most desalination plants are pretty Tensure growth in the development of $0.48/m3, prices have gone up, to about darn energy efficient. We’ve already taken seawater and brackish water desalination $1.03/m3, according to GWI. those big advantages over the past 10 years, capacity for several years to come. The fi- and now as the price of energy goes up, the The rising prices reflect the fact that nancial downturn that began in 2008 and price of desalination goes up.” continues to limp along through a ques- newer plants have become much more tionable recovery has had a sobering im- expensive to build, largely because of the Powering these plants with renewable pact on growth projections issued a couple growing need to address environmental energy sources may reduce carbon foot- of years ago, but the need for new supplies concerns, the GWI report said. Savings prints and address emission issues, but for of clean water continues to make a com- related to the greater energy efficiency the time being, it doesn’t address the cost pelling case for desalination. of new desalination plants have failed to problem. Several plants in Australia, for compensate for the increased capital cost example, are powered by wind, and “that’s Global contracted capacity for water of new plants. more expensive than conventional power,” desalination is on track to increase from 68 says Pankratz. “If you go to renewables at “The desalination industry has been million cubic meters per day (m3/d) this 14 cents per kilowatt-hour, your operating able to take advantage of new technology year to 130 million m3/d by 2016, accord- costs go up.” ing to the recently released Desalination and economies of scale to prevent costs Markets 2010 report by Global Water from rising more than they might,” notes Then there are those environmental Intelligence (GWI; London, U.K.). Geo- Tom Pankratz, editor of the Water De- costs. “The easy-to-permit sites are getting graphically, the Middle East, North Africa, salination Report (Houston, TX), a GWI harder to find,” notes Pankratz. “We’re and China present strong markets, while affiliate. “But costs are generally going up now putting in these plants into places activity in Australia is winding down, as around the world.” where the costs of the development go up because of the cost to minimize environ- every major city there has at least one plant There are exceptions, he notes. The mental impacts.” already built or nearing completion. 500,000 cubic meter per day (m3/d) Soreq By comparison with Australia, the U.S. plant in Israel, contracted earlier in 2010, A final factor leading to rising desali- market for building and operating seawa- was bid at a relatively low price in the nation costs is the cost of money itself, he ter and brackish water desalination facili- range of $0.53/m3. Bringing up the aver- adds. “It’s harder to find people who are ties is good, projected to reach $3.33 bil- age, however, are seawater reverse osmosis willing to put up these sums of money.” lion per year by 2016—a 191% increase (SWRO) plants in Australia, where the cost can range from $1.80 to $2.25/m3. Yet the desalination market continues over current expenditures, according to on its growth trajectory. “The financial the GWI report. The contracted level of Developers of desalination plants have downturn has certainly had an impact, but 2,334 million gallons per day (mgd) of de- taken advantage of energy recovery tech- it hasn’t erased projects, it’s just delayed salination capacity in the United States as nology developed by Calder AG (now a them by six months to a year and a half— of mid-2010 will grow to 3,434 mgd by unit of Texas-based Flowserve) and the because there is just no other option,” Pan- 2016, in response to increased demand for aptly named Energy Recovery Inc. (San kratz explains. water arising from urbanization, economic Leandro, CA). Yet these types of devices, growth, and increased irrigation, the re- which return the recovered energy to the “Conservation is certainly a partial so- port said. energy-intensive process of building the lution, as is reuse, but in some cases, the pressure to drive seawater through the RO cost of reuse is approaching the cost of de- Yet something counterintuitive is hap- salination, because of the piping required. pening in the desalination market. As membranes, are rapidly becoming standard in desalination facility design. Still the cost When you build a desalination plant, you technologies gain maturity, their cost of build a very large regional plant. When deployment is supposed to decrease with of energy, which accounts for 40 to 60% of facility operations, is on an upward swing, you do wastewater treatment, you do the consequent improvement in manufac- smaller, more localized plants, and if you turing, installation, and operating efficien- doubling over the past few years to 12 cents per kilowatt hour and up, according want to reuse that water, you have to send cies. In fact, the cost of desalination is, in it somewhere.” most locations, going up, not down. to Pankratz. On a geographic basis, Australia and The price of desalination had decreased The energy recovery devices have- cer tainly made their contribution, “but to Spain dominated the global desalination during the four decades since reverse os- market for a period, but they are near- Strategic Information for a Changing Industry  Environmental Business Journal, Volume XXIII, Number 11, 2010 ing the point of saturation, having added mission (CCC) issued its final approval proceeded at an incremental pace, but the lots of capacity this decade, and activity for Poseidon to build the $300 million, 50 pace has stepped up in the case of water is winding down, according to the GWI mgd Carlsbad plant (see EBJ, Vol. XXI, desalination. Whether they will be game- report. Libya and Algeria have continued No. 9/10, 2008). Hopes were high that changers in large-scale desalination re- to develop new projects, while projects de- Poseidon could finally proceed with con- mains to be seen. layed in Dubai because of economic prob- struction after years of dealing with often Two companies—Modern Water lems may be poised to start up again. contentious permitting issues, but little (Guildford, U.K.) and Oasys Water progress has been made, for a number of One major Middle Eastern project that (Cambridge, MA)—are developing for- reasons. showed the effects of the economic down- ward-osmosis (FO) technology. Modern turn was the 1.025 million m3/day desali- For one thing, Poseidon had water pur- Water undertook an initial public offering nation component of the Ras Azzour wa- chase agreements in place with nine local (IPO) in June 2007 and has installations of ter-power project in Saudi Arabia, which agencies, but various complications and its technology, which it calls “manipulated was originally intended to be bid out as legal issues arose, so it was subsequently osmosis” (MO), at plants in Gibraltar and an independent water and power project decided that Poseidon would work out a Oman. (IWPP). Because of the economic down- single water purchase agreement with the Oasys is commercializing technology turn and a higher-than-expected price San Diego County Water Authority under developed at Yale University, has raised for the combined project, the desalina- a public-private partnership. Negotiations Series A funding, and is gearing up to do tion portion was re-bid as an engineering, were ongoing as of the end of November. a Series B round. A third provider of FO procurement, and construction (EPC), As developers of renewable energy systems is Hydration Technology Inno- eventually awarded to $18-billion Korean know well, however, the lack of a purchase vations, LLC (HTI; Albany, OR), which conglomerate Doosan Heavy Industries agreement can be a considerable disincen- has been around for awhile but is “start- & Construction. tive for potential financing partners, who ing to make some headway,” says Pankratz. Meanwhile, enormous growth in de- are tough enough to line up in the current In October 2010, HTI signed a distribu- salination capacity has been projected for economic climate. A couple of companies tion and services agreement with China- China. “There have been a number of proj- are reportedly looking at buying Poseidon, based Tri-Tech Holding Inc., a provider ects, but it’s too early to tell whether the and “some people are saying that the proj- of turnkey solutions for the Chinese water growth projections will be realized,” says ect won’t move forward without that hap- resources, water and wastewater treatment, Pankratz. As noted above, the U.S. market pening,” says Pankratz. industrial safety, and pollution control has prospects for considerable growth, but markets. “The company is having a hard time get- caution is advised for prospective develop- ting the equity investors in place to move Another company, called NanoH2O ers. Thinking big hasn’t paid off well. forward on the bond financing. There are (El Segundo, CA), is working to improve A CHALLENGING U.S. MARKET a lot of issues to be sorted out.” Califor- the productivity of RO systems through nia has 10 large-scale desalination proj- the use of nanotechnology. The Nano- “The U.S. invented the reverse osmosis ects in the works, and recent survey data H2O approach involves the embedding of desalination system, but it still struggles compiled by Water Desalination Report in- nanoparticles in the membranes to increase with the concept of actually building large- dicates a growing sense that the Carlsbad productivity by up to 70%, the company scale seawater desalination plants,” said plant won’t be the first of them to start up claims. In November 2009, NanoH20 GWI’s Gasson in announcing the Desali- operations, despite the lead it once had in formed a partnership with Veolia Water nation Markets 2010 report. “Almost all of the development pipeline. Solutions & Technologies to jointly ex- the 2.3 billion gallons a day of contracted plore opportunities for deploying the tech- One U.S. market segment that could desalination capacity is for desalting inland nology. brackish water.” He added, “we have been have very big potential for desalination is tracking desalination projects in Califor- treating produced water generated by oil The desalination industry may enjoy nia for seven years, and during that time and gas exploration. “If the production of growth down the road ahead, but it still not a single large-scale project has started the Marcellus and Barnett and other shales has some questions to answer: What can construction in a meaningful way. It is not moves forward, there’s a big opportunity be done to reign in rising costs? Can the because they don’t need the water or can’t for desalination,” says Pankratz. “People environmental impacts of desalination be afford it; it is because there is not the po- just aren’t sure what type of desalination managed in a cost-effective manner that’s litical will to break the deadlock.” technology will be used, and how much it satisfactory to all constituents? Where will will be required. But it could have a big the next breakthrough in reducing energy Mention desalination in California, and impact.... There’s a similar situation in Aus- consumption and the carbon footprint of one’s thoughts quickly turn to the project tralia with coal-bed methane,” he adds. desalination plants come from? The desal being pursued in Carlsbad by Poseidon industry will have to answer these ques- Over the years, technology advances Resources Corp. (Stamford, CT). In Au- tions if it is to achieve the growth it’s an- in water and wastewater treatment had gust 2008, the California Coastal Com- ticipating. 

10 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

of water they require now and will require finding that supply-and-demand balance in the future. Recent advances in this area deficits under each of the scenarios would MWH USES NEW balance supply and demand, as well as cus- reduce with investment in data collection, APPROACHES TO WET tomer needs and environmental consider- particularly on outage events. The planning ations, and they result in a more accurate models showed that Watercare would need INFRASTRUCTURE anticipation of water resources needs to increase source capacity to meet its level of service target and invest in increased By Alan Krause, President and Chief One such advancement that originated treatment plant capacity to deliver water Operating Officer,MWH Global in the United Kingdom is already having to its customers during critical periods of an impact on the other side of the globe. high demand. Perhaps most significantly, pgrading and expanding water The concept of headroom, introduced by the new approach showed that Watercare infrastructure presents a consis- U.K. Water Industry Research (UKWIR), needed to invest in infrastructure improve- tent challenge to communities was a critical element of the planning pro- ments or expansions 10 years earlier than Uacross the globe. Government and private- cess for New Zealand’s largest water utility, had been identified in traditional models. sector leaders alike must navigate evolving Watercare Services Ltd. political and regulatory landscapes to fund This assessment enabled Watercare to The UKWIR defines headroom as “the and prioritize improvements. At the same better analyze and proactively incorporate minimum buffer that a prudent water time, utility providers in many areas of the those elements of system performance and company should allow between supply and world recognize that water demand, driven uncertainty into a plan to ensure current demand to cater for specified uncertainties by population growth and increased agri- and future service for Auckland’s 1.4 mil- (except those due to outages) in the over- cultural and industrial use, is outpacing lion customers. Understanding the avail- all supply and demand balance.” Available supply, and that practices and technologies able and target headroom of a water supply, headroom is the difference between the wa- need to evolve to deliver the necessary in- along with vulnerability to supply outages, ter available for use and the volume of wa- frastructure improvements. ultimately increases supply security. It also ter in demand. When available headroom prevents a utility’s revenue stream from be- Chief among the growing challenges falls below the target headroom, there is a ing negatively impacted by having to im- is the need to expand wet infrastructure supply-demand balance deficit. pose short-term restrictions on customer while minimizing environmental impacts use. This new approach helps companies and preparing for the potential effects of To develop headroom benchmarks, wa- focus investments by clearly showing how climate change. Engineering firms increas- ter resource planners consider uncertain- to balance water supply and demand. ingly are being brought to the table to help ties in supply and demand projections and common disruptions to water supply, in- leaders address sustainability issues that go In this instance, Watercare received cluding power outages, plant failures and beyond traditional wet infrastructure proj- board approval for a capacity upgrade of contamination. The factors are not part of ect planning. its Waikato Water Treatment Plant, which traditional water resource planning, which will meet current service levels and future For a growing number of new wet in- is simply a straight-line water demand water demand. The findings from the -ap frastructure projects, sustainability is a fo- forecast against the known source capac- plication of the headroom and outage cal point around which details of planning, ity. While accounting for headroom is an methodologies were a key component in design, and construction are formed. additional step, it is important for a more the decision to move forward. accurate water forecast. Firms are responding with new ap- Watercare is exploring other water re- proaches that address a heightened focus MWH (Broomfield, CO), a global en- source planning methods developed in on strategic sustainability planning across vironmental engineering firm, incorporat- other areas of the world to refine its ap- the project life cycle. A subtle, yet sig- ed the headroom and outage methodolo- proach to outage assessments and get a bet- nificant, process change is advancing the gies in the planning process with Watercare ter understanding of climatic uncertainty supply-and-demand equation for water re- to provide answers to the company’s most on operations and performance. One source planning. More comprehensive ap- pressing question: “As things stand now, promising area is end-use modeling to proaches toward wet infrastructure design when will we need a new water source?” develop climate-corrected water demands and construction, including the forma- Motivated to quantify uncertainties inher- by customer type and end use. These mod- tion of unique partnerships, are also help- ent in traditional supply-and-demand as- els take into account market penetration ing achieve new standards for sustainable sessments and to gain a better understand- of water-efficient fixtures and appliances building. ing of the impacts of both planned and such as toilets and washing machines and unplanned temporary supply loss, Water- Central to any sustainable wet infra- proposed demand management programs. care applied the headroom approach to its structure project is strategic and effective This type of “bottom-up” modeling leads domestic water infrastructure planning. planning. Efforts to build sustainable wet to more accurate demand forecasts and infrastructure are compromised if commu- The utility considered a range of sce- cost savings. nities fail to accurately assess the amount narios over a 20-year planning horizon, By understanding and evolving ap-

Strategic Information for a Changing Industry 11 Environmental Business Journal, Volume XXIII, Number 11, 2010 proaches to water planning, water utilities The Society for the Environmental Pro- the spread of oak wilt, developing plans can apply new thinking and best practice tection of the Olona River Basin provided for karst void mitigation, and preparing to develop plan for sustainable develop- more than half the funding for the project. a preconstruction stormwater pollution ment of their water resources. Plants like this one are a critical part of the prevention plan (SW3P) to appropriately regional water cycle and play an important phase construction activities and plan for Once communities understand their role in the full recovery of the Olona river. monitoring and compliance. current and future water needs, they in- creasingly are looking to engineering firms Even the most environmentally consid- In addition, the plant is located near to develop systems that meet a broad set erate planning and design can be dimin- the Balcones Canyonlands Preserve, home of sustainability goals that go beyond tra- ished if construction techniques are not to flora and fauna that are exclusive to the ditional wet infrastructure design. To ad- aligned to the same set of standards. A wa- area, including some endangered varieties. dress this need, firms are advancing their ter treatment plant currently under con- Because of this, environmental specialists approaches to plant design and technology struction in Austin, Texas, demonstrates are on site to ensure preservation of the and seeking out new partnerships. the type of environmental commitment natural state while following the environ- and planning community leaders across mental compliance and management plan NEW PLANTS DESIGNED TO the world are asking of builders of wet in- developed and instituted by MWH. MEET INTEGRATED NEEDS frastructure. One of the most visible aspects of the A newly built wastewater treatment The city of Austin created an “environ- effort is the approach to waste - manage plant in northern Italy demonstrates the mental commissioning” (EC) process to ment. Considering that approximately integration of wet infrastructure design allow for an expanded and collaborative 25% of landfill content in the United with broad environmental goals. The Gor- focus placed on minimizing environmen- States is construction waste, the project nate Olona Wastewater Treatment Plant tal impact during construction of Water team partnered with a local recycling firm located in northern Italy near Verese was Treatment Plant No. 4 (WTP 4), a plant to develop a waste management plan to built to meet the growing wastewater with a raw water intake and tunnels, pump emphasize zero waste at every opportunity, treatment needs of the 82,000 people in stations, pipelines, and water treatment fa- applying inventory management practices, 11 nearby communities. The plant serves cilities that will produce 50 million gallons reusing materials on site, and composting as a capstone project of a nearly 45-year of water a day (mgd).This type of focused organic matter. The recycling program is effort to correct decades of industrial pol- effort is a new approach to large construc- expected to divert up to 90% of remaining lution along the Olona River, once one of tion projects, evolving from a system that materials from Austin’s landfills. the most polluted waterways in Europe. considered the environment, albeit typi- Joint efforts like the partnerships Beyond this key role in the overall envi- cally in distracted, sporadic systems. ronmental scheme, designers were tasked formed in Austin between the city, de- with considering a range of environmental Austin intrinsically is a city that takes signer, and contractor, including local, considerations in their plans. pride in its natural environment and sus- small, and minority businesses, in concert tainability efforts, and it is at the forefront with the EC team and a group of local Advancing the plant’s role in the broad- of environmentally considerate construc- and national environmental experts, are er community effort to improve water tion. The EC team is as an independent becoming the norm in many parts of the quality, design teams aligned the need for team established by and reporting to the world and will continue to be adopted as advanced wastewater treatment technol- city, with the directive to ensure that envi- more successes are reported. By planning, ogy with critical environmental objectives, ronmental and sustainability goals are met. designing, and constructing infrastructure while addressing the needs of the immedi- With a responsibility beyond strictly au- projects with new approaches that mini- ate community. diting work, the EC team is instrumental mize environmental impact, water and in the overall project team, including daily wastewater service providers can effectively Chemical and biological treatment plans interaction with the engineer, designer, manage budgets and improve customer included specific units for the removal of and contractor, working collaboratively to service while building truly sustainable organic matter, nitrogen, and phosphorus address environmental concerns. All new communities.  using biofiltration and ultraviolet (UV) workers at the site participate in a manda- technologies. The plant is also covered to Alan Krause is president and chief operat- tory safety and environmental orientation minimize odor pollution—a unique de- ing officer at MWH Global, headquartered program, developed jointly by the EC team sign aspect for this type of facility. The in Broomfield, Colorado., a 6,000-person and the contractor, to ensure understand- plant was also designed to accommodate a technical engineering, consulting, and con- ing of site requirements. 2,500 cubic meter solar photovoltaic (PV) struction services company. Their wet infra- plant, which is currently being installed Construction protocols developed structure business encompasses a full-range of on the rooftops. The solar PV plant will through the partnership with the EC team water-related projects including water supply, ultimately generate nearly a quarter of the are wide-ranging, including erecting chain treatment and storage, water resources man- energy required to operate the plant. link fences to protect oak trees, trimming agement, dams and hydropower, renewable trees according to set standards to prevent energy and environmental services.

12 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

tion of new technology and required rapid implementation. One such project was the ALTERNATIVE DELIVERY IN WATER ozone addition to both water treatment AND WASTEWATER PROJECTS GAINS plants in the City of Milwaukee. Ozone disinfection was new to the U.S. at that GROUND IN MULTIPLE FORMS time and Milwaukee needed the new tech- The Water Design-Build Council (WDBC: Washington, D.C.) is an organization of de- nology quickly. You’ll recall that the city sign-build firms that perform consulting, engineering, construction, and construction manage- had an outbreak of water-borne disease ment. Member firms are dedicated to the development and rehabilitation of municipal water that claimed lives, so the city wanted to and wastewater infrastructure through alternative delivery approaches to contracting, such as undertake this crucial upgrade, get it done design-build (DB), construction management at-risk (CMAR), design-build-operate (DBO) quickly, and they wanted to transfer the and other variants. Recognizing that alternative delivery is rapidly taking hold and taking risk. CH2M HILL competed with Bruce’s new forms, the WDBC will soon issue a revised edition of its handbook, The Municipal Water firm for the project, and they won it and and Wastewater Design-Build Handbook, to provide updated guidance to municipalities on did a terrific job. the benefits and challenges of choosing alternative delivery methods. EBJ recently spoke with BA: Not only did we introduce the representatives of the WDBC member firms about the trends and issues involved in alternative ozone technology, but we brought the delivery for water and wastewater infrastructure projects. Bruce Allender is director of busi- project in on schedule and under budget, ness development for design-build in North America for Black & Veatch’s global water busi- and that could only have been done on a ness (Overland Park, KS) and current WDBC president; Mark Alpert is senior vice president DB basis. at CH2M HILL (Denver, CO); Pete Kinsley is vice president of the water division at The Haskell Company (Jacksonville, FL); and Sarah Chittenden is WDBC’s executive director. MA: That was a marquee project, and other cities followed Milwaukee’s example EBJ: DB and CMAR are reported to be Bruce Allender: I can’t add much more and began considering and using design- increasingly popular delivery vehicles. to what has been said. We’re seeing small build. The point was, communities started Are there any quantitative measures of communities and large communities using to see faster and likely less expensive proj- just how rapidly these types of delivery CMAR and DB, and in most cases they ects, and in some cases, with the risk trans- vehicles are growing? all have different drivers for why choose fer they were seeking. This event began to Mark Alpert: We’re currently devel- CMAR and DB delivery mechanism to open the door. deliver their project. oping some quantitative data, but I don’t BA: It’s interesting from my perspec- know exactly when it will be made avail- Sarah Chittenden: Also, geographi- tive. I’ve been in the U.S. for 10 years, and able. But it is fair to say that, as of De- cally, the reach is broadening. As far as we when I got here, the average size project cember of 2010, there exists the greatest know, there are no states where design- was $20 million to $40 million. Because number of opportunities ever for alterna- build is not permitted, at least to some the industry is now more comfortable with tive delivery in the U.S. water market. The extent. DB, we’re seeing $150 million to $200 pipeline of projects that our members are million projects. pursuing is in excess of several billion dol- BA: There are a few states that still don’t lars. These opportunities will be competed have CMAR or DB legislation for water PK: In my view, the water/wastewater in numerous states in 2011, with awards and wastewater. To Sarah’s point, where industry is a perfect application for DB of about three quarters of them expected state legislation isn’t in place, we have delivery because it’s a performance-based to come in 2011 and the rest carrying seen some home rule cities decided to use industry. We have influent with certain over in 2012. Member utilities of the As- CMAR or DB or both to implement their characteristics, and we have to produce sociation of Metropolitan Water Agencies water and wastewater projects. potable water or treated wastewater with (AMWA) and the National Association EBJ: Why is the water/wastewater sector certain characteristics for distribution or of Clean Water Agencies (NACWA) are so well-suited to DB/CMAR delivery? discharge, and there are a number of de- looking at these types of delivery vehicles. sign solutions that can be considered. Some are experimenting, some are on their MA: In the 1970s and 1980s, EPA’s This characteristic of the water/wastewa- third, fourth, fifth projects, and for some Construction Grants Program afforded the ter industry is ideal for collaboration and it’s now a standard form of business. opportunity for municipalities to adopt innovation, which is best achieved using innovative and alternative technologies. design-build delivery. Pete Kinsley: I would echo that. We’re The challenge was that municipalities were BA: seeing many clients using an integrated, al- using traditional contracting approaches, We find that when new technol- ternative delivery method for the first time, which were not well-suited to deliver- ogy is introduced to the U.S. market, it’s and that’s a clear indication of growth. ing projects that required design innova- probably going to go to DB because the We’re also seeing use of these delivery tion. In the 1990s, however, there were owner wants a performance guarantee. methods by smaller utilities that aren’t a handful of projects that got significant On brownfield projects we are seeing more members of these larger organizations. recognition as they required implementa- owners using progressive DB as they want

Strategic Information for a Changing Industry 13 Environmental Business Journal, Volume XXIII, Number 11, 2010 a single point of responsibility for the de- the DB team. speed to the delivery by using a phased sign and construction of the project, where approach with early start packages, which EBJ: How much, typically, can you com- they can participate in the design decisions allows concurrent design and construction press a project schedule by going to DB and operation scheduling through con- and the release of long-lead items. or even CMAR, as opposed to design-bid- struction, start-up and commissioning of build? EBJ: In the water/wastewater arena, what the project. Progressive DB allows them are the trends in the use of design-build- to participate with the DB team in those MA: It’s project specific. In some cases, operate (DBO), design-build-finance-op- decisions before a final guaranteed maxi- projects can be completed 30 to 40% fast- erate (DBFO), and design-build-own-op- mum price is set. er than traditional delivery. We completed erate-transfer (DBOOT)? And could you our first projects in the Los Angeles area, PK: It’s important to make the distinc- comment further on trends in progressive in nine months—which was almost too tion between progressive DB and fixed- DB versus fixed-priced DB? fast. That was a hard cold start on two $10 price DB. On a retrofit project, if the own- million projects in parallel, and they were MA: DBO is a carryover from the er is going with fixed-price DB, the owner completed perhaps 75% faster than the 1980s when DBFO and DBOOT delivery has to capture the existing conditions to owner had expected. In general, these proj- structures were deployed by communities describe and define the project, which can ects are faster because of the integration of in the US. They were termed then as priva- be a challenge on a brownfield project. The the design and construction phases. tization projects and were very attractive task is better accomplished using progres- due to favorable tax treatment that allowed sive DB, in which the project owner and When I first started practicing engi- the private sector to offer “all-in” pricing its design-builder can collaborate closely in neering in the late 1970s, it took five years to communities comparable to traditional identifying existing conditions and devel- to do a project, no matter how big or delivery. The window for the use of such oping a solution during the design phase. small—one year to do the feasibility study, structures was from 1981 through 1986. EBJ: Under DB delivery, have service pro- one year to do the design, six months to viders tended to bring the construction get the permits, and two and a half years In the mid-1990s, senior staff with the capability in house, or do they still tend on average to do the construction. There City of Seattle authored a book on their to subcontract it out? Put another way: At were some that took longer, like mega- approach to alternative delivery that en- the recent Environmental Financial Con- projects in Los Angeles, Chicago, and New compassed DBO. They wanted to finance sulting Group (EFCG) CEO conference York City. and continue to own their facilities, yet take advantage of the efficient delivery in New York City, one water engineering When you look at the projects that our models available with a strong risk trans- executive said that his firm will “look a member firms are doing now, you see those fer to the service provider. Seattle procured lot more like a contractor in five years.” Is sequential steps taking place in parallel, the Tolt River Water Treatment Plant and this a trend? with the delivery time considerably com- the Cedar River Water Treatment Facility pressed. The old model was mandated, and MA: I see that trend happening with under DBO structures. Both projects were the projects seemed interminable. Clearly, about half of our members. The other deemed great successes. Several Seattle there are opportunities today for consider- members are uncertain about that direc- team members went all around the coun- able improvement in the efficiency of the tion and are evaluating it. But I believe try giving presentations on their experienc- project delivery. you’ll see more of our members adopt- es. Emanating from the Seattle story came ing strong, internal construction capabil- BA: I would add that, progressive DB DBO projects in a few locations through ity, in some cases having their own labor provides the opportunity to compress the the early 2000’s. There have been maybe force build complete projects. That’s one overall project schedule more than a fixed- 20 to 25 DBO projects in the U.S. since of the reasons that drove the formation of price DB procurement, because the owner the 1990s. our association because contractors felt we selects on a qualifications basis and then Now the trend is towards an increase were really treading on their territory. works with the contractor to establish the in DBO, with maybe five or six projects a design and construction schedule to then PK: Haskell’s history has been one of year being procured. That’s a significant -in fix the price. Compared to a fixed price self-performance, so it’s really not a “trend” crease, and these are generally large green- procurement where the owners firstly have with us. But I do continue to see other de- field projects. Two were competed success- to establish the full commercial and tech- sign-build firms taking on construction ca- fully in the last six weeks. nical specification and then bid out the pabilities. I would argue that is one of the project to establish a fixed price. With the economy today, and the push ways you add value through design-build. by every trade association in Washington, PK: I would agree. The integration BA: We are seeing more engineering D.C. to lift the cap on private activity of design and construction is where that firms working as joint venture partners or bonds, the private sector may be able to value is created. Selecting the engineer and as engineering subcontractors to construc- bring “private” tax-exempt financing to builder under a single procurement saves tion companies. Through these commer- help even more projects move forward. time and allows design and permitting to cial arrangement they are adding value to There’s still a barrier, because some cities be accelerated. You can further add to the 14 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010 and towns will not accept private parties design and other aspects of the project, having some integrated relationship with and that’s why progressive DB is gaining them for financing/ownership of their ground. On fixed-price DB, there are some THERMOENERGY projects. I think that that hurdle has to be owners who still want to control the scope overcome, because of the significant need of work decisions as if the project was re- STAYING NIMBLE for infrastructure improvements and the ally a traditional DBB. It would be better if THROUGH NEW shortage of public capital. they go to progressive DB. Likewise, there APPLICATIONS are some owners who are using the fixed- BA: I agree. I think we’ll see more cit- price model and think it’s terrific, and feel FOR PLATFORM ies looking at the viability of private-sec- really good with whomever they contract tor financing as part of the overall delivery TECHNOLOGY with, because they had the decision vali- model. It gets back to overcoming the bar- dated by an open price competition. It’s a elling capital equipment into U.S. riers Mark talked about, with cities getting nuance here, but it’s something all of our industrial markets has been a chal- more comfortable with different types of member firms have to work through. lenge in recent years as the economic contractual relationships. We are seeing Sdownturn has compelled companies to PK: more owners using CMAR, Although not We talked earlier about brownfield, strictly prioritize and triage such expendi- a single point contact for the delivery of where progressive DB really is gaining tures. Despite offering a value proposition the project, some owners see the benefit of ground. With fixed-price, the owner has to aimed at improving operating efficiencies selecting their engineer and contractor on define the project well in order for design- and reducing costs, providers of industrial a qualification basis and then working in builders to prepare responsible and com- wastewater treatment technology have not collaboration with the engineer and con- parable proposals. That’s the challenge for been immune to these same pressures. tractor to execute the project. fixed-price contracting; the owner’s RFP and accompanying criteria package must ThermoEnergy Corp. (Worcester, Progressive DB is becoming a more accurately depict the owner’s requirements MA) offers a vacuum-assisted flash distilla- popular form of DB delivery because the as their RFP is the basis of the design- tion technology that recovers various ma- owners are seeing the benefits associated builder’s price and technical proposal. terials, such as ammonia and metals, from with the integration of the design and con- industrial wastewater streams and allows BA: struction within a single contract while I think further education on the sale of the recovered product or the re- also getting the benefit of a collaborative CMAR and DB, is a critical factor to over- cycling of the process chemistry back into process for its staff with the DB team coming some of the concerns owners have the process. The process is applicable to a through execution of the project. Especial- with regard to these delivery mechanisms. number of wastewater treatment settings; ly through the initial design period before This is one of the reasons why we wrote the trick has been moving quickly to take the final price is set. the WDBC handbook. The more -edu advantage of applications in the healthier cated owners become on the various forms PK: We see communities that value the sectors of the economy. of delivery mechanisms out there, then the integration of design and construction but more options owners have in delivering The ThermoEnergy platform technol- are hesitant to release control of the design their Capital Improvement Programs, in ogy is based on a process developed by selecting CMAR. CMAR is kind of a start- the most effective manner. er kit for DB, which in part is why we felt the WBDC handbook should be revised to Relative Importance of Reasons for Choosing Design-Build include this delivery method. Fixed-price is still prevalent in our business—widely Single-Point A c c ountability used by the federal government and various branches of the military. But progressive Speed of Deliv ery DB is growing. Communities are choosing alternative delivery methods increasingly Builder in the Des ign Proc es s across the board, and progressive DB is seeing great traction. Pric e Certainty

EBJ: What needs to happen to leap any Cons truc tion Quality remaining hurdles to increased use of DB, CMAR, and other alternative delivery Few er Change Orders /Claims mechanisms? Low er Costs MA: Just more successes. Owners should talk to other owners about their ex- 0 1 2 3 4 5 periences. But there is a segment of own- Source: The Design-Build Handbook 2010, Water Design-Build Council, Inc. Survey of municipal owners with 5 ers who will want to retain control of the as the primary reason, 3 as a secondary reason and 1 as not a reason.

Strategic Information for a Changing Industry 15 Environmental Business Journal, Volume XXIII, Number 11, 2010 the former CASTion Corp. What the two ing which ThermoEnergy is demolishing glycol, ethylene, and glycerin, “and EPA companies’ engineers found when they and refurbishing an unused building and would like airports to recover those prod- came together was that CASTion had a installing the balance of plant; manufac- ucts,” says Delasanta. In September 2010, platform technology also based on vac- turing and installing the treatment equip- ThermoEnergy announced a partnership uum-assisted flash distillation, the CAST ment; and operating the system for one with Contego Systems (Newark, NJ) to system, that presented “a very efficient year. pursue the airport deicing fluid manage- way of removing the ammonia from the ment market. “It was a sole source award based on the wastewater stream,” according to David technology,” says Delasanta. “We did a lot As for BOD control, “there are a num- Delasanta, Thermo Energy’s executive vice of testing in 2008 and 2009. The client be- ber of sweeteners, such as high fructose president. lieves very strongly in the process and has syrups, that are transported all over the ThermoEnergy acquired CASTion in been a great advocate for us.” country, and the trucks have to be cleaned 2007 and integrated its operations into out,” Delasanta points out. That wastewa- ThermoEnergy is currently tracking or the company over the next couple of years, ter stream, which contains a high amount pursuing another 10 potential opportuni- working at the same time to improve the of sugar, would normally be sent to a mu- ties in the municipal market with its part- overall capital base, obtain some financing, nicipal wastewater treatment plant, but ner, AECOM Technology Corp. (Los An- and build up a sales network. Altogether, these plants have problems with highly geles, CA). Project sizes can range from $1 ThermoEnergy claims 60 to 70 installa- variable wastewater, and they can get fined million to $30 million, but more typically tions of the CAST platform technology in heavily. will fall between about $5 million to $10 industrial settings. million, according to Delasanta. “Companies will spend hundreds of Of course, this is the same period thousands of dollars in BOD fines,” says In April 2010, ThermoEnergy Corp. through which the recession was delivering Delasanta. “We have a system in Pennsyl- and F.R. Mahoney & Associates (Rock- severe body blows to U.S. industrial com- vania, at an L&S Sugar plant, that takes land, MA) formed a partnership to jointly panies.ThermoEnergy’s financials continue out the sugar and recovers it. The prod- develop technology for removing nitrogen to reflect the economic clouds: Revenue for uct is bought by farmers in the area as a from industrial and municipal wastewater. the first nine months of 2010 totaled $2.1 supplement for the cows to enhance milk The new process, called BioCAST, will million, compared with $2.6 million for production. Apparently cows have a sweet combine ThermoEnergy’s ammonia recov- the first nine months of 2009. However, tooth.” ery process with F.R. Mahoney’s biological by continuing to implement cost efficien- AOx process to achieve what the compa- The principal competition for the cies, the firm was able to reduce operating nies expect to be greater than 85% nitro- CAST platform is not other wastewater expenses for the first nine months of 2010 gen removal. According to ThermoEnergy, treatment and material recovery technolo- to $5.3 million in 2010 compared with the BioCAST process will be able to treat gies, but rather more traditional approach- $6.7 million in 2009. high volumes of wastewater using just one- es to treatment, according to Delasanta. Financials will continue to be volatile sixth of the footprint occupied by a fully “On the industrial side, the competition is for a while, CEO Cary Bullock said during biological treatment process. treat and dispose,” he explains. a shareholders conference call on Novem- “Companies are just interested in meet- ber 18. ThermoEnergy is aiming for strong OPPORTUNITIES IN GLYCOL, ing the regulations—doing flocculation, growth in 2011 and profitability by 2012. DEICING AND BOD CONTROL coagulation, etc.—and then trucking off Bullock noted that the 2011 pipeline is Other new application areas being ac- the solids for disposal. It’s cheaper from a ranges from $50 million to $60 million. tively pursued by ThermoEnergy include capital expenditure standpoint, but com- To level off the volatility and return to glycol recovery and biological oxygen de- panies are more and more interested in profitability, the company is looking to mand (BOD) control. “Glycol is widely sustainability and zero liquid discharge. stretch the application base for the CAST used as an antifreeze in cars, trucks, and And there are many parts of the world, platform technology, and it has promis- compressors,” says Delasanta. “We can re- including California, where there just isn’t ing options on several fronts. One is mu- cover the glycol and reuse it.” A lot of the enough water, and you need to reuse what nicipal wastewater treatment, where Ther- aftermarket product is made of reclaimed you can. moEnergy has already scored one major glycol, he adds. “Our biggest advantage is that the success. In June of this year, the company In a related area, the U.S. Environmen- customer gets a payback of less than two received a $27 million contract from New tal Protection Agency (EPA) has proposed years,” he continues. “And we meet a lot York City to install an ammonia recovery a new rule calling for improved manage- of the new commitments for sustainability. system at the 26th Ward wastewater treat- ment of airport deicing fluids to prevent Our technology is highly adaptable, and ment plant. the discharge of those fluids into water- we have a lot of experience with different The project has three phases, Delas- ways near airports. Airplane deicing flu- applications.”  anta reports: design and engineering, dur- ids consist of a mixture of chemicals like

16 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

customers continuing to find value in this offering, and the key value is for them to SIEMENS WATER TECHNOLOGIES RIDES R&D concentrate less on their wastewater needs PUSH TO LOCK IN VERTICAL MARKETS and focus on their core business.” For the BOO offering, the best growth fter making a big splash in the wa- a five-year project aimed at reducing the opportunities today are in the chemical, ter industry through acquisition in energy consumption in seawater desalina- petrochemical, mining, and power indus- the early 2000s, Siemens Water tion by 50%. This project has received an tries. The company currently has more ATechnologies (Warrendale, PA) has spent award issued by the Singapore Water En- than 100 major BOO contracts globally, the latter part of the decade organizing its vironment and Industry Council under its as well as several hundred smaller projects, water business around key vertical markets Innovation and Technology Challenge. according to Costello. and building a global support network for “In addition to desalination, we’ve in- those markets. Following the model of par- The company’s overall growth strat- vested a lot of time and energy into green ent company €77.3 billion Siemens AG egy hasn’t changed over the years and was wastewater solutions in municipal applica- (Germany), the Water Technologies unit is reiterated in March 2010, when the par- tions,” says Costello. For example, “we are presenting a face to the world that is based ent company announced that it’s aiming aiming to reduce municipal sludge genera- on client sectors rather than technology to grow its water equipment and services tion by 50%. We’re developing technology platforms or geographical markets. business at twice the pace of the overall wa- to treat sludge in addition to harvesting ter market. Siemens pegged water market The acquisitions Siemens made— the biogas. Our goal is to extract the bio- growth at 5% annually through 2015. Memcor, Zimpro, Wallace & Tiernan, gas and convert it to energy... to move the Stranco, Envirex, Permutit, and many municipality to near or complete energy Growing populations, increased urban- others as part of the $1-billion 2004 acqui- independence.” ization, and “enormous” deficits in waste- sition of USFilter—have been effectively water treatment will drive opportunity Another example of R&D innovation absorbed into the organization, although in the global water market, particularly is a collaborative effort with Saudi Aramco the names are still out there as equipment in Asia and Latin America, Siemens said, on a project called EcoRight MBR. “The brands, according to Mike Costello, SWT adding that it will strengthen and expand goal here is industrial reuse of highly or- vice president of strategic marketing. Now, its water business from a new central office ganic wastewater, where we can treat high the company structures its organization in Erlangen. “We are the only supplier that concentrations of organic load, removing to serve the following verticals: municipal has technologies for every stage of water the organics and reusing the water, and drinking water, municipal wastewater, life and wastewater treatment, which enables thereby significantly reducing capital costs sciences, food & beverage, microelectron- us to meet the demands in this business,” in industrial settings,” Costello notes. All ics and solar, oil and gas, chemicals, power, said Jens Michael Wegmann, CEO of the of these projects are at various stages in the and mining and metals. Each vertical has a Industry Solutions Division in Siemens’ R&D process, whether still in the labora- marketing director reporting to Costello. Industry Sector. “But we can only main- tory with some field testing, or, like the tain a reliable supply of clean water to The entity serving these markets is large Aramco project, fully released and being towns, communities, and industry if there indeed, perhaps the largest company in the piloted at full scale, he adds. is massive investment in the treatment of world. Although Siemens doesn’t break To support the vertical markets, Sie- wastewater,” he added. out revenue at the Water Technologies mens Water Technologies has over the past level, the other measures of its size show The U.S. marketplace continues to two years established seven regional hubs. considerable heft: 6,000 employees at 179 be an important growth sector for Water Located in North America, South Amer- global locations, more than 900 different Technologies, “but our greatest growth is ica, Southeast Asia, China, Europe, the technology offerings, and over 200,000 coming from the emerging markets out- Middle East, and the Pacific region, these equipment installations. side the U.S.,” says Costello. “The principal hubs provide the sales, technical, customer drivers are sustainability, energy reduction, The vital keel of Siemens Water Tech- service, project management, and applica- increased operational performance, wa- nologies’ business development initiatives tions engineering capability to support the ter/wastewater reduction, and ultimately, has been an aggressive push in research and client sectors. The seventh hub, serving lower cost of ownership.” development (R&D), focusing on innova- North America, was established in 2010. tions in critical areas of water asset manage- The economic downturn prompted While the water business is built largely ment. “Sustainable solutions is a big focus, the company to shift some resources and around selling technology, equipment, in terms of water and energy savings,” says strategies, “but it hasn’t changed our core and associated support services to clients, Costello. “Also, lowering life-cycle costs.” mission—focus on innovation to deliver Siemens Water Technologies has a build, value,” says Costello. “The underlying Driving the push in innovation is a new own, operate (BOO) services business that principle of how we go to market and de- R&D center in Singapore with 150 per- “is a very important part of our overall liver value remains unchanged.”  sonnel undertaking several projects. One is growth strategy,” says Costello. “We see Strategic Information for a Changing Industry 17 Environmental Business Journal, Volume XXIII, Number 11, 2010

way to do that. Yet the politics is infused systems serving real-estate complexes, and with the U.S. public’s view that “private if these are excluded, the major inves- UNITED WATER water operators must be rapacious capital- tor-owned utilities like American Water, CONFIDENT THAT ists who would be happy to see all of their Aqua America, and California Water ac- customers die of thirst if there was a dime count for about 7% of the asset-owned, or CASE CAN STILL BE of profit to be made,” Gasson said. regulated, market, Camus estimates. “Be- tween the regulated and outsourced opera- MADE FOR PRIVATE “Obviously, there are two sides to the tions, the big players represent maybe 10% issue, but there’s no balance to the discus- UTILITY OPERATION of the market,” he adds. sion; it’s one side or the other,” says wa- n the early 2000s, the opportunities ter market analyst Steven Maxwell, presi- Still, market penetration has been lim- for the private sector to participate in dent of TechKNOWLEDGEy Strategic ited through the decade, he acknowledges. the U.S. municipal water and waste- Group (Boulder, CO). “The upshot is, at One factor imposing constraints on pri- Iwater market appeared very enticing. Yes, the moment, there isn’t much of a market vate-sector involvement has been tax ex- the growth in the “privatization” market— in the United States. Companies are going empt financing to municipalities, “which using the term here to include outright elsewhere in the world.” was not possible for the private sector.” ownership of the utility assets as well as More importantly, however, “we need The rancor of the debate aside, Bertrand the provision of contract operations ser- to have success stories. There was a wave Camus, CEO of $800-million United vices—was not matching that of France or of projects in the late 1990s that did not Water (Harrington Park, NJ), believes that the United Kingdom in their heyday. Be- do very well,” says Camus, citing United the case can still be made for private-sector cause private-sector penetration was only Water’s own experience in Atlanta as an contribution to the problems that U.S. wa- in the range of about 5% of the available example (see EBJ, Vol. XVI, No. 9/10, ter and wastewater utilities face. With the U.S. market, however, the potential was 2003). “It’s an industry that needs to de- financial constraints facing municipalities, considered to be enormous. velop some success stories to realize the the high costs of advanced technologies, potential.” In 2010, that potential remains far from and the ability of the private sector to pro- realized. By many accounts, the reason is vide more cost-efficient services, “calling in A unit of France’s €12-billion SUEZ that the U.S. public continues to regard the private sector to outsource and some- Environment, United Water has man- the involvement of private companies in times finance those needs is something that aged to enjoy growth through the decade, the ownership or operation of water and makes a lot of sense,” says Camus. even during the economic downturn. The wastewater systems as a bad thing. The company expects to top the $800 million He cites as an example the design-build- American public as a whole does not ap- mark in revenue this year. The asset-own- operate (DBO) project that United Water preciate the true cost of water, doesn’t un- ing regulated side of the business accounts recently won for the city of Providence, derstand the level of investment required for about 55% of the revenue and is lo- Rhode Island. Under the contract, United to deliver high-quality water, and isn’t cated primarily in the Northeast, with ad- Water is upgrading an existing wastewater ready to accept the private sector’s role in ditional operations in Idaho and Arkansas. treatment facility to the tune of $52.5 mil- making those deliveries efficiently—or so That side of the business has grown at good lion while continuing to operate the exist- the argument goes. rates over the past five years, from $327.7 ing facility in parallel. “This is a case where million in 2006 to a projected $451.1 mil- The problem with U.S. water systems the project was so complex that calling on lion in 2010. is not so much the inefficiency of manage- the private sector to come in was not con- ment—although that is an issue in some troversial,” says Camus. On the non-regulated side of the busi- cases, wrote Christopher Gasson, editor ness, the company now has two lines of The $52.5 million cost of the upgrade of U.K.-based Global Water Intelligence business. One of those lines is the contract is projected to save $13 million compared magazine, in the publication’s November operations business, providing facility op- to what the city was budgeted to spend us- 2010 issue. “The problem is the lack of erations and maintenance services to mu- ing a traditional project delivery approach, capital investment. It is not as if America nicipalities primarily east of the Mississippi according to United Water. It didn’t hurt is too poor to finance proper water infra- River, with some operations in California the company’s chances of winning the job structure. The problem is that it doesn’t and Texas. want to.” that it has other well-running water system operations in the Narragansett Bay area. The other line is new, arising from the Local politicians are loathe to raise rates acquisition of Utility Service Co. (Perry, The potential for further private-sector because it’s political suicide, thereby ham- GA) in 2008. Utility Service provides spe- penetration of the municipal water/waste- stringing any reasonable attempt to plan cialty services to water utilities, specifically water utility market is certainly there, Ca- long-term water infrastructure investment, focusing on the inspection, re-condition- mus asserts. Of the 52,000 water systems Gasson continued. Somehow, the United ing, and re-certification of elevated water in the United States, about 15% are pri- States must get the politics out of water, tanks. United Water claims a 5% market vately owned. Many of these are very small and the privatization model would be one share in this service category, through con-

18 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010 tracts with 2,000 municipalities. of investor-owned utility Aquarion Water Co., and 130 contracts in the Northeast The non-regulated side of the business, and Midwest from Earth Tech, now a AQUA-PURE encompassing Utility Service and contract unit of AECOM Technology. Those -ac operations, has also grown at solid rates VENTURES, THROUGH quisitions helped account for a big jump over most of the past five years. Sales in in revenue for the non-regulated side of FOUNTAIN QUAIL, 2006 were about $188.4 million and are the business, from nearly $217 million in projected to reach $351.5 million in 2010, SEES SHALE GASS 2007 to $266.1 million in 2008 and then although that’s down about 2% compared to $359.2 million in 2009. PLAY AS TURNING with 2009. Although municipalities are becoming THE CORNER “I would say we are in a unique position more sophisticated in purchasing services compared to other players,” says Camus. oming out of the oil patch in Al- and negotiating contracts, companies like Competitors tend to focus on the regu- berta, Calgary-based Aqua-Pure United Water are still faced with a “push lated side of the business or the contract Ventures Inc. had been selling market,” according to Camus. “You need Cits wastewater treatment systems based on operations side, but not both. “We’re the to convince them that they are better off by only player that has a mixed and balanced evaporator technology to heavy oil and going to a private operator. You need to do portfolio, which allows us to be more flex- shale gas exploration operations, but in a lot of preparatory work to convince them ible in terms of what municipalities want. the 2002-2003 timeframe, felt the time to explore the possibility. We see today that We are covering the full spectrum of pos- had come to generate a recurring revenue to make an offer attractive, we cannot limit sibilities.” stream. The company had a technology ourselves to simple O&M, but rather we that, in its view, was far more compact and According to Camus, United Water has need to enlarge the scope of activity, to in- efficient than other approaches to - waste engaged in significant investment on the clude energy management and everything water treatment, but in northern Alberta, regulated side of the business to upgrade around efficiency improvement.” those advantages didn’t mean much in aging infrastructure. For example, it com- Aside from making the case to munici- terms of competitive advantage. The time pleted a project in 2009 in which it turned palities about the virtues of private-sector had come to find where the technology its 200 million gallon per day (mgd) water involvement in operations, and building a could leverage its advantages, in a way that treatment plant in Haworth, New Jersey, stable of success stories, there is one other paid ongoing revenue. into “if not the most advanced then one challenge facing the water industry that of the most advanced treatment plants in Enter Fountain Quail Water Manage- Camus feels should not go unmentioned. the U.S.,” says Camus. The upgraded fa- ment (Fort Worth, TX)—or more pre- “We have a very aging workforce. The last cility includes dissolved air flotation for cisely, enter Aqua-Pure into Texas, where big influx of money for water infrastruc- pre-treatment, installed by United Water’s it found Fountain Quail, which asked ture was in the 1970s, and plenty of people €1-billion sister company Degremont, Aqua-Pure to join it in providing waste- joined the industry. But since then, the and ozone purification for disinfection. water treatment services to the oil and gas fact that water is not being put among the Degrémont is SUEZ’ global contractor industry in the Barnett Shale region. The top priorities makes it something that our arm that designs, builds and commissions two companies formed a joint venture on young people are not considering.” production plants for drinking water, de- the recurring revenue model, and “we liked salination plants, wastewater sewage plants To be sure, environmental and water is- Fountain Quail so much, we bought the and treatment plants and sludge treatment sues are subjects of elevated concern, “but company,” says Aqua-Pure CEO Brent facilities. being interested in these issues and being Halldorson. interested in operating a water or waste- Other examples of investment include Through Fountain Quail, Aqua-Pure water treatment plant are two different the addition of a new membrane filtration entered the Barnett Shale market in things,” Camus concludes. “There is a big capability at a water treatment plant in 2004 with its NOMAD mobile evapora- gap to be filled.” Boise, Idaho, and the installation of a ra- tor, which treats the flowback water from dionuclide removal system at a water treat- hydrological fracturing, or “fracking,” ment plant in Tom’s River, New Jersey. nvironmental Industry operations. The frack water is collected, The latter was on the list to receive some Summit 2011 run through a clarifier to remove solids, E leaving a salty water for treatment by the funding under the American Recovery and EBI Inc. presents our 9th annual NOMAD evaporator units, which boil the Reinvestment Act (ARRA), but the fund- Environmental Industry Summit March water to make steam. The two products of ing didn’t come through. 9-11, 2011 at the Hotel Del Coronado this process are pure, distilled water, which near San Diego, California. EBJ’s On the contract operations side of the can be reused at another well, and a con- 2009 Business Achievement Awards business, the company acquired two port- centrated brine that can be used as a “kill folios of systems over the past three years— ceremony will be March 9. www.ebionline.org fluid” to contain gas pressure under certain the New York operating services company exploration circumstances. The process can

Strategic Information for a Changing Industry 19 Environmental Business Journal, Volume XXIII, Number 11, 2010 recycle 70 to 85 barrels of every 100 bar- cally 10 hour round trip. is pushing—producers will still want an rels of wastewater handled, according to alternative to trucking to Ohio, and that’s In Pennsylvania, Fountain Quail is Halldorson. where centralized plants come into play, teaming with Eureka Resources and according to Halldorson. “DEP is saying, Despite the availability of disposal op- counts Range Resources, Chesapeake ‘we’d much rather have eight to ten central- tions in the Barnett Shale—essentially, Energy, Southwestern Energy, and XTO ized plants that we can keep an eye on.” shallow wells with limited effectiveness but Energy among its customers. It has three offering inexpensive disposal costs—Foun- NOMAD units located in Williamsport, Evaporation “is more expensive than tain Quail was able to strike a relationship providing a combined feedwater capacity producers like to pay for on site,” he con- with Devon Energy, which was dedicated of 7,500 barrels per day (bpd). The com- tinues. For on site operations, Fountain to water recycling. Still, “it’s been a bit of pany is planning to move a fourth unit up Quail performs very basic treatment, or a scary ride over the past five years,” says to Williamsport, for a total feedwater ca- pre-treatment, to clean the water up to the Halldorson. pacity of 10,000 bpd. level for reuse.” First, it took about six months to treat The GEs and Aquatechs of the world Fountain Quail is planning to pursue the first 30,000 gallons of water. “Now, we are taking aim at the Marcellus Shale as other shale gas opportunities, and each do that in a day,” notes Halldorson. Then, well, but Halldorson believes his firm has play has its own economic justification just as the firm was getting on its feet, and the advantage of flexibility. A GE likes for wastewater recovery. The Fayetteville as the Texas Railroad Commission, which to build large, centralized plants, which Shale formation in Arkansas, for example, regulates operations in Texas shale forma- doesn’t match up well to the dynamism of has lots of fresh water, and the gas produc- tions, was beginning to scrutinize more gas exploration in today’s world, as veter- ers don’t want it back, so their wastewater closely the practice of wastewater disposal ans of the oil patch can appreciate, accord- needs to meet state standards for discharge in the existing wells, the more viable wa- ing to Halldorson. into streams. ter-bearing Ellenburger Formation was By comparison, in the Eagle Ford for- discovered underneath the Barnett Shale mation south of San Antonio, there isn’t formation. “We’re competing with GE enough freshwater to sustain the explora- “All that meant was, disposal got cheap and Siemens. As a small tion activities, so water recycling is a must. and abundant overnight,” Halldorson company, even though we San Antonio’s water supply is the Edwards recalls. “That was a disaster for us.” The Aquifer, and “they have real concerns company considered moving to other have an excellent reputation, about having enough water to feed the area shale plays—the Piceance Basin in Colo- we’re capital constrained today,” says Halldorson. rado was an option, but difficult to work As efficient as Fountain Quail is in its in, while Marcellus was only starting to be and somewhat business operations, the company is still looking for discussed—but “we decided to get efficient development constrained.” partnerships to pursue the available mar- in Texas and drive our costs down.” GE ket. “We’re competing with several of the Water & Process Technologies and others very largest companies in the world, like came to the Barnett, but “we were more Gas today is very cheap, and “gas pro- GE and Siemens,” Halldorson says. “As a efficient. We didn’t make money the last ducers are running in punching holes just small company, even though we have an five years, but we said, ‘we’re just glad we to hold leases,” he says. Service providers excellent reputation, we’re capital con- came back alive.’” thus have to be very nimble. “Let’s say we strained and somewhat business develop- need 100,000 barrels per day capacity next The difficulties are still reflected in ment constrained.” year; we’ll build a fixed evaporation plant,” Aqua-Pure’s financial reports. The com- he explains. “But if we find that we need to The company has signed a memoran- pany reported a net loss of $4.3 million on be in New York, we can pick up the NO- dum of understanding with Schlum- revenue of $2.3 million for the first half MADs and move them there.” berger to jointly market their services, and of 2010, compared with a net loss of $1.6 “we’re looking at several different kinds of million on revenue of $8.2 million for the Halldorson goes on to explain that relationships, including construction com- comparable period of 2009. there are two schools of thought on waste- panies, even entities that can get us into water management in the Marcellus Shale. What Aqua-Pure sees as allowing it to Europe or expand in Canada. What we’re “Producers like on-site disposal; it costs a turn the corner is the application of its looking for is help in business develop- lot of money to move water around. And technology in the now vibrant Marcellus ment, financial strength, and the ability if you’re doing it on site, they want it basic, Shale region of Pennsylvania and New to ramp up our equipment. “It really is a cheap, simple.” York. For those shale gas operations, recy- David and Goliath scenario,” Halldorson cling is much more economically viable, as To meet more rigorous disposal re- concludes. “The good thing about being the standard practice is to truck wastewater quirements—as the Pennsylvania Depart- David is being so flexible and mobile.” to Ohio at up to $12 per barrel, for a typi- ment of Environmental Protection (DEP)

20 Strategic Information for a Changing Industry Environmental Business Journal, Volume XXIII, Number 11, 2010

“We can make the towers pretty much any size,” says Godshall. “Picture them as a ALTELA IN THE OIL FIELD WITH LOW-ENERGY little taller than your normal water heater, UNITS FOR PRODUCED-WATER TREATMENT with the same footprint.” The water pro- duced by the process can be returned to ndustrial problems mean markets, and The AltelaRain system is a treatment the gas operation for the next “frack” job there may be no opportunity more solution, mobile or stationary as needed, in place of water from the local utility, talked about in today’s water treatment with clear advantages over off-site disposal, thereby complementing the savings from Imarket than solving the problem of dispos- says Godshall. Oil and gas production op- reduced off-site disposal as part of the val- ing of the enormous volumes of wastewater erations in the Marcellus Shale region are ue proposition. generated by oil and gas exploration activi- currently trucking their produced water ties. Typically this wastewater—contami- to Ohio, at a cost of $5 to $12 per barrel. Godshall, who has undertaken a series nated water from production (“produced “Our proposition is to eliminate eight or of startups since leaving Sandia National water”) and hydraulic fracturing flowback nine of every ten of those trucks,” God- Laboratory in 1994, and water rights law- water (“frack water”) is trucked off site for shall declares. yer Matthew Bruff launched Altela with disposal at great expense. Oil and gas com- their own funds in 2005, licensing the Ate- He adds by way of gauging the poten- panies are looking for cheaper and more laRain technology from a professor at Ari- tial market size that government studies environmentally sensitive options, and zona State University. New Mexico-based conservatively estimate a total of about companies are lining up to serve them. venture capital firmVerge Fund led a $1.2 18 billion barrels of produced water that million round of investment in 2006, and Developers of desalination technolo- will require disposal in the United States Altela raised another $7.1 million in Se- gy—salt is a major component of produced as the available fossil fuel resources are ex- ries A funding in late 2007. When God- water—are hot on the trail of this new ploited. “Suffice to say, it’s a billion dollar shall spoke with EBJ in mid-November, market. “The real potential game changer problem at least in the Marcellus Shale,” the company had just completed a Series in the desalination industry is the potential he points out. “That’s why there is so much B round of financing with an undisclosed in the produced water market,” says Tom talk about it right now. The only thing that investor group. Prototypes of of the Alte- Pankratz, editor of the Water Desalina- could stop Marcellus gas from being a very laRain system were tested in New Mexico, tion Report (Houston, TX). “The market good energy solution is this water prob- with the help of state grants, and in the has a very big potential, because the water lem. So that’s why we feel we are at the Piceance Basin in Colorado. Cold-weather quality is so terrible.” right place at the right time to help solve tests were also successfully conducted in that problem.” Even Richard Heckmann—the same Canada, north of Edmonton. Richard Heckmann who built the USFil- Altela’s value proposition compared The company is now selling commer- ter empire more than a decade ago before with other treatment alternatives is based cial units in the Marcellus Shale region. selling out to Siemens—is back in the on the fact that those alternatives—mem- “We can basically clean up any kind of water business, aiming his cash directly brane technologies like reverse osmosis, or contaminated water, but we’ve chosen to at the wastewater treatment needs of the thermal distillation technologies, or vari- target the oil and gas industry, because oil and gas industry. Operating more on a ants on those themes—require pressure they have the most-contaminated brack- transport/disposal model than a treatment to operate. That means high capital and ish water, and they pay the most now to model, Heckmann Corp.’s (Palm Desert, operating costs, for the expensive metals ship the water,” says Godshall. He doesn’t CA) latest move (as of early November) has needed to build pressure vessels that can disclose annual revenue. “You can certain- been to acquire Complete Vacuum and resist corrosion, and for the electric power ly say that our revenues are compounding Rental Inc. to complement Heckmann’s required to drive the pressure pumps. greatly, year over year.” As for profitability, 50-mile pipeline in the Haynesville Shale Godshall and his colleagues at Altela “our pro forma is picturing crossover into region of Texas with the water-handling like to describe their system as mimicking profitability in the first quarter of 2012.” needs of the region’s oil and gas operators. nature—specifically, the evaporation/con- Where does Altela expect to be in five Ned Godshall, co-founder and CEO of densation process involved in the hydro- years? “We’ll be a much bigger company, Altela, Inc. (Albuquerque, NM), believes logical cycle. The AltelaRain system con- but I expect we’ll be acquired,” says God- his firm offers an economic advantage not sists of towers made of inexpensive plastic, shall. “If you look at good water companies only compared with the transport/disposal like that used in the signs dotting lawns with novel ideas, they tend to get snatched solution but also with other forms of treat- prior to elections. The wastewater evapo- up by one of the three big water companies ment. Godshall isn’t making his claims rates on the outside of these plastic towers. in the world—GE, Siemens, or Veolia.” based on bench-scale test results either; Low-grade heat in the form of steam from In the meantime, “we’re the only company commercial units of the AltelaRain desali- a natural gas or waste heat source creates a out there in Pennsylvania treating water at nation system are currently operating in temperature difference on the top and bot- a well site. The others aren’t doing it, be- the Marcellus Shale formation straddling tom of these plastic sheets to effect con- cause it’s too expensive.”  New York and Pennsylvania. densation.

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