What is the value of water?

David Crisman

This week NAEM’s Upper Midwest Local Networking Group met to discuss regional water management challenges and to explore best practices from around the world.  We caught up with speaker David Crisman, Principal of EHS Management Associate LLC, to learn about his research on water management approaches in Australia.

GT: Why did you begin research water management approaches in Australia?

DC: In the case of Australia, what has been the most fascinating to me is the Murray-Darling River Basin. It’s 14 percent of the country area-wide, six percent of the water that falls on Australia falls in the basin. It’s something like half of all the agriculture comes from the basin. Just to give you an idea, 44 percent of the water consumed in Australia goes to agriculture, so you’ve got fairly substantial land area, not so big of an input (because the only input is rain) and a huge water take. And now even in a good year less than half of the water makes it to the ocean. So it’s like our Colorado River.

In Australia, the individual states control resources, so the federal government said, “Wait a second. We’ve got three major states drawing water and as the federal government, we need to say what is the environmental water needed just so it makes it to the ocean so we have aquatic habitat, we have tourism, we have those benefits that we don’t normally think about, rather than throwing it on a rice field.

I thought this was a really good example to look at because as industry people, we don’t think of water coming in; our requirements are always on the water going out. And in the industry, I used to work in (specialty chemicals), water quality was important. If you start taking too much water out of this area, you start having saline problems, you start having acidification problems. Even if I had a plant in this area, you could be saying, “Is it drinkable?” but also, “Is it even useful in a manufacturing setting?” We don’t think of the upstream side. We think of the wastewater side.

So I was really trying to get into that particular issue by taking a look at Murray Darling. I think the cutting-edge thought was what they came up with, which was to create a water market.  They said, “The Basin has a finite amount of water and we’ve got to balance this whole water usage and it doesn’t matter if you’re taking it from a well or you’re taking it directly from the river, we’ve got to figure out that balance. It’s a commodity, there’s going to be years it’s in surplus, years that it’s deficient, so how do we, as Australia, buy water to lower the allocation within the Basin so there’s enough water for fish, for flow and all those other things?”

It’s a good technical problem.

GT: What are some of the guidelines of the water market Australia established?

DC: There’s permanent trades that going on – I can actually sell you my rights as a property owner—and there are allocation trades—I can sell you my annual take because it’s low this year. So if the tomato farmer decides it’s more worth his while to sell his allocation this year, he can give it to the guy who owns the vineyard. So what is the value of water? There are also regulations in place to ensure that the way you use the water on your land doesn’t impact others. So the legal framework is critical, too.

GT: How can those lessons be applied to water management in the Upper Midwest region?  

DC: Everything has a yin and a yang. So the fact that we have constant supply is really great. We may never think about water coming into a facility, but when we turn the tap, we will have water. The negative is ‘Have I really been thinking of the cost?’ And will that price for water increase? And will it become a variable cost for me? Meaning that one year I will pay x,  but two years later it may be 5x or something more. For businesses, it’s probably easier to plan on price than to deal with a disruption. So that’s probably an overall positive.

The next thing is quality. If I can get to a consistent quality grade it’s going to mean less disruption, less upset for my manufacturing process. But that again boils down to price. And then you start to see intangible benefits and impacts. People can’t come to work because their neighborhood is on fire. If you can have consistent supply, you can perhaps deal with drought situations. And of course there are lifestyle impacts in Australia because if you look up Australian water restrictions online you’ll see pages of instructions of when you can water your lawn, do your laundry. That’s at a more personal level but it could reach industry as well.

GT: How close do you think we are to seeing some of the approaches being used in Australia to be applied to the U.S.?

DC: It’s hard to say because it sometimes seems like if we want to focus on an issue, we need to have a crisis. Last year we were dealing with too much water. I think the question of quantity has to be driven by a drought. And certainly the Texas situation if it continues may end up pushing a lot of buttons because those Great Lakes look awfully tempting.


To learn more about NAEM’s Upper Midwest Local Networking Group, please visit http://www.naem.org/?LNG_Upper_Midwest

About David Crisman

David Crisman is the Principal at EHS Management Associate. As the former EHS Director for a global, specialty chemical company, he is well-aware of the challenges facing today's EHS managers. He continues to study trends to deal with water supply and quality issues throughout the world.

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