[Water_news] 4. DWR'S CALIFORNIA WATER NEWS: WATER QUALITY - 6/19/08

Department of Water Resources

California Water News

A daily compilation of significant news articles and comment

 

June 19, 2008

 

4. Water Quality –

 

 

Keeping the Water Pure Is Suddenly in Demand

New York Times – 6/19/08

By JAMES FLANIGAN

 

WATER has always been an issue in California. But drought conditions, not to mention worries about continued supplies of clean water, are turning water into a growth industry in California and elsewhere.

 

Big companies like General Electric, Siemens and Veolia Environnement of France have ambitious plans to bring water to developing countries and clean water everywhere. But many small companies are finding niches and doing well these days, too.

 

Puretec Industrial Water, of Oxnard, Calif., for example, “grew 34 percent last year,” said Jim Harris, the owner and president. The company, with 90 employees, leaped to $18 million in revenue from $13.5 million in 2006. “We have 4,000 customers,” said Mr. Harris, “but we have grown 15 percent or more every year since I started.”

 

Puretec dates back to 1965, when Mr. Harris started an industrial division of his father’s and grandfather’s water business. They were franchisees of Culligan water softeners, a residential service that removed minerals from local water to make tap water taste better.

 

Mr. Harris, now 69, said he decided to go into purifying water for industry because he saw the rising semiconductor companies were demanding purer water for their processes and electric power plants were imposing stricter water standards.

 

“They used to throw any kind of water into turbine generators,” said Jed Harris, 32, who is in line to become the fourth generation to head Puretec. “But General Electric found that impurities damaged turbine blades and reduced output. So G.E. demanded purer water and raised standards of the whole industry.”

 

Drug makers and biotech firms, soft drink and food companies and other kinds of industry have raised purity standards in recent years. That increased business for Puretec, which uses membranes, ion transfer and activated carbon filters to remove impurities. “We rent or sell customers tanks of purifying resins and then pick up and replenish the tanks,” said Jim Harris. “It’s a service business and therefore has great stability.”

 

Business is also growing because municipalities are looking to recycle water to assure residents and businesses of having enough water at desired levels of purity. Los Angeles is planning a long-term project to recycle wastewater. Orange County will officially inaugurate a major recycling project next week.

 

Such projects increase demand for water treatment technologies, like those supplied by another California business, Systematix Company, a chemical engineering firm in Buena Park.

 

Charles F. Michaud, a chemical engineer, founded Systematix in 1982 to manufacture water filtration materials and to “interpret the complex design parameters of water treatment” so that small companies could keep up with developing technologies and compete with larger firms.

 

“This is a fragmented industry,” he said. “More than 500 companies are in water treatment, and the larger firms only have about 20 percent of the total market.”

Systematix is small, with $5 million in annual revenue and only four employees, including Mr. Michaud, whose title is technical director and who consults widely in the industry.

 

He is a consultant on the Orange County project, called Water Factory 21, that will pump 70 million gallons of treated sewage into the aquifer under the county, replenishing the volume of underground water and ensuring supplies for the county’s growing population. More than three million people already live there.

“We must replenish the aquifers or the ground will subside, as happened in Mexico City,” Mr. Michaud said. “The pumped water will, of course, mingle with the groundwater and soon become part of the regular water supply, coming through residents’ faucets,” he said.

 

Recycled water, he added, is simply a growing fact of life. “When you think about it, all water is recycled,” Mr. Michaud said, citing nature’s cycle of rainfall, absorption, evaporation and rainfall again.

 

The most immediate factor driving California to think of new sources and of treating wastewater is the drought. In many parts of the state, housing developments cannot be started without identifying water supplies for future residents.

 

The state is expected to have a 30 percent increase in population in the next dozen years. And allocations of water from the Colorado River and other sources are already being cut back, said Jeanette Lombardo, a longtime water policy planner who is now business development officer for City National Bank. “We must consider many alternatives,” Ms. Lombardo said.

 

There are 16 projects for desalination of seawater on the drawing boards and plans to pump recycled water into aquifers, in part to prevent seawater from flowing back into shrinking reservoirs of groundwater. Start-up companies like Green Wave Energy Solutions, of Ventura County, are looking to harness wave power for energy while desalinating seawater for freshwater supplies.

 

Nor is California the only state with water needs. Neil D. Berlant, an investment banker and manager of the PFW Water Fund, who has been involved in the industry for 22 years, said that there are 51,000 municipal water companies in the United States. He said these companies have deferred maintenance for so long that the nation now faces as much as $1 trillion in capital spending to upgrade the pipes and distribution systems.

 

As a result, municipal water companies are active customers for the kind of water treatments supplied by large operators like Siemens Water, which acquired the old US Filter company in 2004, and smaller companies like Puretec, which has been managing water treatment for Burbank, Calif., since 2004.

 

“It’s called own and operate,” Jim Harris of Puretec said. “We put equipment into Burbank, and it’s on a 10-year contract,” adding that “for us, it’s profitable and for them, there is no investment and they do not have to worry about training people for the highly specialized work.”

 

“The opportunities are tremendous and worldwide,” Mr. Berlant said. Indeed, Richard Heckmann, who pioneered the contemporary water business by putting together 50 companies to form US Filter in the 1990s, announced this month that his new investment company, Heckmann Corporation, is acquiring China Water and Drinks Inc., a bottled water company based in Hong Kong, for $625 million. “We are excited about the opportunity to build a global water company,” Mr. Heckmann said.

 

And at recent forum on water at the Milken Institute in Santa Monica, Earl Jones, general manager of GE Water and Process Technologies, and Eric Lesueur, project manager for Veolia Water, a descendant of France’s original Suez Canal company, spoke of global demand for water growing 40 percent by 2025.

 

Desalination and advanced techniques for recycling will be needed, the executives agreed. One panelist, Booky Oren, former chairman of Mekorot, Israel’s national water company, said that “Israel recycles 75 percent of its water.”#

http://www.nytimes.com/2008/06/19/business/smallbusiness/19edge.html?pagewanted=1&_r=2&ei=5040&partner=MOREOVERNEWS&adxnnlx=1213889380-08beTkAGuB%20Qelq57OqeBQ