by Dawn Kristof Champney
WWEMA recently held its 34th Washington Forum in the Nation’s Capital. In attendance were the industry’s leading producers of water and wastewater technologies, accompanied by their manufacturer representatives. They spent two intensive days hearing regulatory officials, financial analysts, consultants, academicians, trade specialists and congressional staff members discuss the forces driving today’s water and wastewater treatment markets.
The theme of this year’s event was “Anticipating the Perfect Storm - Regulation, Enforcement, Funding and Technology.” Weakness in any of these four major drivers, taken independently, could signify a potential storm brewing on the horizon, shading the economic outlook for the industry. But by the conclusion of this year’s Washington Forum most of the attendees were in agreement that no major storm was in the making and, with the exception of a few clouds on the horizon, all indicators remain fairly positive that demand for water and wastewater technologies will remain strong in the foreseeable future.
Why the cause for optimism? Hear is a sampling of what several of the speakers had to say:
Regulation
Kevin Weiss in EPA’s Office of Wastewater Management announced that EPA was “just looking at the tip of the iceberg” in dealing with municipal storm sewer systems and that “fundamental changes are needed” to deal with managing wet weather events. He noted that while “blending” may be a temporary option to manage peak flows, “we ultimately want to prohibit these discharges.” He further predicted that higher treatment levels were likely with regard to nutrients, water reuse, water quality standards, and endocrine disrupters and that improved monitoring and information-based management to better manage the dynamics of collection systems will be needed.
Enforcement
The director of EPA’s Water Enforcement Division, Mark Pollins, affirmed that wet weather events will remain his office’s main priority for the 2007-2010 enforcement and compliance cycle. “Communities with combined sewer overflows must evaluate their systems to determine whether they need a long-term control plan or be on an enforceable schedule to develop one,” he asserted. “EPA will also be directing its attention to municipal and industrial storm water and sanitary sewer discharges as well as concentrated animal feeding operations, with the number of CAFOs estimated to be in excess of 20,000,” according to Pollins. He also spoke of growing interest in ‘green’ infrastructure such as green roofs and tree boxes, adding that their results “must be quantifiable.”
Funding
The topic of funding was covered extensively throughout the program. Staff members from House and Senate committees on Capitol Hill spoke about efforts to move legislation forward which would dramatically increase monies available through the state revolving fund programs to build and restore the nation’s water and wastewater infrastructure. Jon Pawlow from the Committee on Transportation and Infrastructure reported that the House moved three water infrastructure bills out of the gate early this year providing $14 billion for the Clean Water State Revolving Fund (SRF) over four years, $1.8 billion for wet weather grants, and $125 million for alternative water sources. Michele Nellenbach from the Committee on Environment and Public Works predicted that the Senate would likely incorporate the three bills passed by the House into one comprehensive water infrastructure bill.
Hunt Shipman, former USDA Deputy Undersecretary for Farm and Foreign Agricultural Services, described how the 2007 Farm Bill currently working its way through Congress could provide $1.27 billion in annual funding for the Environmental Quality Incentives Program to be used for farm conservation activities, including water-related projects. John Montgomery from the National Rural Water Association noted that the Farm Bill might also give an additional $500 million to the USDA Rural Utility Services’ water and wastewater loan and grant program to reduce the $2.5 billion backlog of unfunded projects.
“Rural communities receive on average $1.6 billion in annual assistance through this vital program to meet their infrastructure needs,” noted Montgomery.
Debra Coy of Janney Montgomery Scott and Jud Hill of The Halifax Group provided an insightful look into the world of private equity, reporting that over $100 billion has been raised for global infrastructure funds in 2006, with water being a favored sector to invest in. “Basic is the new black,” Coy explained when discussing investors’ love affair with pipes, pumps and value.
The upbeat market was clearly evident in the numbers presented by Ken Simonson, chief economist at the Associated General Contractors of America, with the sewage and waste disposal sector having experienced a 17% growth rate in 2006. He cautioned, however that growth could be modest in 2007 - averaging around 6% - due in large part by the decline in home building and reduced state and local revenues.
Technology
Rounding out the four mega-market drivers in this industry were presentations made on the state of today’s water and wastewater technologies. Mike Dimitriou of Water Innovations spoke about global forces that are changing how we treat, transport and deliver safe water in the 21st century. They include pressures of human population growth and shifts; poorer source water quality; climate change; impact of developing economies; affordable and sustainable energy sources; and the need for sustainable infrastructure.
Dr. Mark Shannon from the University of Illinois and head of its Center of Advanced Materials for the Purification of Water with Systems (WaterCAMPWS) spoke of the stresses being placed on the world’s water supplies and the potential consequences of not taking steps today to mitigate what could become a global crisis. “The fact that seven million people in China don’t have adequate water or energy should worry you,” he exclaimed, adding that China builds a new coal-fired generator every four days from which 33% of its water is lost through evaporation in its coal stacks. “Alternative energy supplies also have the potential for creating additional stresses on water supplies,” he noted, citing the fact that its takes 130 gallons of water to create one gallon of ethanol. On a positive note, he predicted that “treatment will continue to grow exponentially with population and the global market for water purification technologies will be in the trillions in the next two decades.”
That sounds like a good forecast in my book!
About the author:
Dawn Kristof Champney is president of the Water and Wastewater Equipment Manufacturers Association, a national trade association founded in 1908 to represent the leading producers of technologies used for treating wastewater and producing potable water for municipal and industrial applications, worldwide.
