Annual water usage has expanded almost twice as fast as the global population, averaging 2.5 percent to 3 percent per year, according to data compiled by the World Water Council. The World Bank estimates that annual water demand now doubles every 21 years.
Roughly 17.5 percent of the world’s existing population, or 1.15 billion people, presently lacks access to ready sources of clean drinking water. Although more than 70 percent of the earth’s surface is covered by water, 97.5 percent of it is undrinkable seawater. Most of the remaining 2.5 percent is inaccessible, leaving just 0.1 percent of global water readily available for human use and consumption. Consequently, the provision of usable water requires enormous investment in capital and labor. While many of the issues regarding water resources are concentrated outside of the United States, America has its own unmet needs.
In 2009, the
American Society of Civil Engineers (ASCE) estimated that $2.2 trillion needs to be invested through 2014 to bring the nation’s infrastructure up to good condition. That estimated shortfall represents an increase of more than half a trillion dollars since the ASCE’s 2005 estimate of $1.6 trillion. In other words, the nation’s infrastructure deficit is climbing in conjunction with a host of other shortfalls, including federal, state and local budgets. The present pace of spending only meets about half of the estimated need across all levels of government.
Among the most jarring aspects of the nation’s under-investment in infrastructure is the lack of financing for water resource projects. During the past three decades, the nation’s population has increased from 227 million to 310 million, and gross domestic product has expanded from $5.8 trillion to $13.2 trillion, yet capital investment in public water resources infrastructure has declined 70 percent.
Some of the implications associated with ongoing under-investment are predictable and obvious. Water pipes are breaking at a rate of more than one per minute, which equates to roughly 540,000 bursts per year across the nation’s 1.8 million miles of water distribution lines. According to the
American Water Works Association (AWWA), U.S. water leaks total roughly 6 billion gallons per day, which is enough to fill 200,000 backyard swimming pools.
Matters are positioned to deteriorate before they get better. Much of the nation’s water infrastructure has been in place since World War II. For example, the Hoover Dam, which pumps water to Los Angeles, Las Vegas and other major cities in southern California, is more than 70 years old. Other key water installations and facilities are even older, with water pipes dating back 100 years in cities like Chicago and Washington, D.C.
Earlier this year, the San Diego County Water Authority Board of Directors voted to defer the construction of 11 infrastructure projects to save $82 million during the next two years. According to published media reports, the board also directed staff to evaluate three other projects for possible deferral, potentially saving another $68 million. The deferred projects include new pump stations, pipeline expansions, flow control facilities and mitigation projects linked to future construction.
The AWWA estimates that as many as 36 states could face serious water shortages in as little as five years. While this means already challenged municipal capital budgets will be stretched beyond their limits and many streets will be torn up, the implication is that a considerable amount of demand will exist for contractors that work in the area of water resources. Stricter environmental regulations being promulgated by the federal government will only augment that demand in the years ahead.
When required investments are made, they often translate into large rate increases for purchasers of water. Agencies across the nation have raised rates by 60 percent or more in recent years to keep up with a variety of costs, including higher charges for imported water, personnel expenses, regulatory compliance and infrastructure upgrades. The expectation is that charges will continue to expand and that increasingly frequent infrastructure emergencies will create opportunities for water resource firms in the years ahead.