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.