BBNA Interview: GE Executive Discusses Water Reuse to Address Drought

Heiner Markhoff said discussions surrounding water reuse “are picking up” as municipalities and industrial users consider approaches, including water reuse, for responding to water supply concerns to drought-stricken areas in the American West and in countries around the world. Water supply challenges continue to be ranked as a top global risk in terms of both their economic and social impacts.

Markhoff and Ralph Exton said there appears to be a growing shift in public perception toward the reuse of wastewater in drought-stressed areas and said clearer regulations and increased clarity of incentives would help municipalities or industrial customers apply new technologies as a way of addressing water challenges.

This interview has been edited and condensed.

Bloomberg BNA: With drought conditions becoming more severe in California, and with Texas still facing water supply issues, can you speak to how this has affected your business in assisting customers with water scarcity or supply issues?

Heiner Markhoff: One of the big things that we're driving to address with water scarcity is advanced technologies as well as water reuse [and to] some degree desalination solutions.

Specifically, in the area of Texas and California, we have quite a number of installations, but worldwide, our technology enables the reuse of about 1 billion gallons of wastewater and purifies 2 billion gallons of drinking water every day, and we have served about 35 public and private wastewater installations in California. We have over 20 potable water installations providing up to and more than 250 million gallons per day of drinking water.

And a lot of what we do is related to addressing water scarcity, water quality and environmental challenges.

BBNA: Earlier in the year, GE Power and Water assisted the cities of North Las Vegas and Abilene to help address water scarcity issues, specifically through the enlistment of a wastewater treatment system. How typical are they in terms of customers facing water scarcity issues and how large a role is reuse playing in responding to drought?

Markhoff: It's playing an increasingly more important role. And if you just take North Las Vegas, the water reuse—that's enabling recharging to some degree Lake Mead. Those solutions help address the big issues. North Las Vegas is only one example, Abilene is another. We see a number of cities that are looking at water reuse.

We have a number of other smaller installations, but we also see water reuse in industrial facilities, for instance in Arizona, Frito-Lay. In Napa Valley, where we're taking wastewater and making it available for irrigation of vineyards and golf courses after tertiary treatments.

Water reuse plays an important role, and the discussions around reuse are picking up even more, and it's really regarded as a viable solution to fight the drought in California and other places in the United States.

BBNA: While falling reservoir levels and drought present their own share of challenges, in what way is the approach toward water supply and scarcity different when the water shortages result from a rapidly exploding population?

Markhoff: I think they all kind of go together. If you look at exploding populations, sure you get some of the other population centers in California, but it holds even much more true in the developing world.

If you look at parts of China and other locations in Asia, and in other developing countries there are water scarcity situations and it's basically population growth, industrial growth, competing for the same finite resource, water.

Water reuse is clearly a subject that we discuss and implement in many parts of the world. It clearly goes together, in terms of addressing scarcity for one but also enabling growth, both for population and industrial uses.

BBNA: The California city of American Canyon expects to see a doubling of its population by 2025 and wants to reuse a portion of its treated wastewater for irrigating vineyards and golf courses, thereby curbing the need to draw fresh water from the Napa River. What kind of challenges did that water supply puzzle pose, and what lessons can be learned?

Markhoff: This is not the first instance. There are many other examples, if you look around the world. Singapore leads the way with a ratio of about 35 percent to up to 45 percent water reuse, where they have invested over the years in water reuse capabilities for indirect potable reuse and to some degree even potable reuse or aquifer recharge.

In many places we see treated effluent being used for agricultural purposes or being provided to other industrial users as process water. So maybe for vineyards it's kind of cutting edge, but using it for irrigation and using it for industrial purposes as well as broader agricultural purposes, it's been done around the world in many places.

BBNA: Obviously, technology is the driving force in addressing water supply and or scarcity. What kinds of technology are being employed to help meet those challenges?

Markhoff: It really is our advanced membrane technologies that we've developed over the years. Our ultrafiltration and bioreactor membranes—those are technologies coupled with reverse osmosis membranes that really provide water quality [that is] basically ready for potable reuse.

That can definitely fulfill the needs for irrigation and aquifer recharge and agriculture uses. It is different membranes technologies that we've developed over the years that enable us to be a solution provider for these kinds of applications.

BBNA: What other technological approaches are there on the horizon?

Markhoff: In addition to the technologies already mentioned, what's high on our agenda is looking at wastewater not really as a wastewater, but [as] a resource water and getting to developing a flowsheet and technologies to establish and provide a solution for an energy-neutral, even an energy-positive wastewater treatment plant.

What we're trying to achieve there is a much more energy-efficient process in the aeration process to begin with …

BBNA: What kind of process?

Markhoff: Aeration—there's always a lot of oxygen that needs to be provided to the wastewater in order to stimulate the process. And then at the end, to use the sludge or use the organics in wastewater and put them through an anaerobic digestion process—and we've bought a company to advance our anaerobic digestion company last year—which generates gas and turns these organics in wastewater into gas which then in turn can be used as input or as fuel for gas engines to generate electricity.

So that's really for us the ‘next generation’ and the next frontier in terms of wastewater treatment—not just making water available for water reuse but also designing the process so efficiently and using the waste or the organics in the process to create an energy-positive flowsheet. Those are the things we're spending a lot of time on right now.

BBNA: More generally can you speak to the challenges you've had to face when fielding water supply challenges? For example, what government policies were you not expecting to have to deal with?

Markhoff: I think regulation is always something that is important for us or that we keep an eye on. And clearer regulations … as well as clarity of incentives for municipalities or industrial customers to apply these technologies really is something that would help alleviate some of the scarcity, would alleviate the pressures in order to be able to implement some of these technologies.

I think that's something we always keep an eye on and actively share with regulators or the customers, best available technology and business cases. But that's something where we've got to continue to work with customers and regulators and government. Ralph [Exton], is there anything else that comes to mind from your end?

Ralph Exton: I think the biggest one is not necessarily the regulations we come up against, it's sometimes as Heiner suggests, the lack of regulations that's in place to drive the right behavior and also the incentives.

I would say that the other thing that was probably a little bit of a surprise—but now fortunately we're seeing a shift in this—and that's really the public perception part. Particularly the public perception around water reuse. Even when you're doing indirect potable reuse by recharging either a lake or a groundwater source or something like that, you still see some of the public perception is: ‘ooh, don't want to do that’ or ‘that's too much of the ick-factor,” as we used to call it. I think two or three years ago that was a bigger problem.

It's less of a problem now, particularly in those areas that are facing significant drought and water scarcity in California, Texas and the Southwest. But you'd be surprised at the times we've run into it where projects take longer to implement so that they can get over the hurdle on [public perception].

Some of the municipalities and other project developers go through a long series of piloting and trials and testing and proof-sourcing before they implement, even though the technology exists and that it's been proven in so many different ways and so many different times, they still have to go through that longer process just to get over the public perception issues.

BBNA: In other words the perception of ‘toilet-to-tap’ isn't what it once was? That it has become an easier needle to thread? Is that fair to say?

Exton: It is fair, particularly in the water-stressed geographies, yes.

BBNA: What I hear you saying is regulation is really largely a positive. What would be on your regulatory wish-list for the next year in terms of measures that would help get projects off the ground? Is there something out there that would make providing water solutions and drought responses a little bit easier and more efficient for everybody?

Exton: I think in terms of carrot and the stick, you could push it further by policies being put in place similar to what you saw in California, saying, ‘Hey look, you must do 20 percent X or 30 percent Y' or what have you.

But I would put incentives higher on my list in terms of what I would like to see more of, to drive the right behavior around water reuse and water reuse in terms of: ‘let's go find sources of water that currently are not being used for certain applications' –and use them, instead of drawing from a freshwater or a natural resource like a reservoir, a river or a groundwater source.

For example, municipal wastewater is largely—by a very large percentage—just discharged into a receiving stream, which isn't a bad thing unto itself but that water is relatively clean and can be used for so many different applications such as industrial feed water, recharging an aquifer for reuse into a potable water source.

And agriculture. [That's a] Big one, absolutely a huge one, is rather than agricultural [water use] drawing from natural resources and putting up a pretty significant drain on that, if we could reuse more of that wastewater into those applications and there were incentives to do so, it would change the landscape pretty significantly from a water reuse standpoint.

Markhoff: That's something I would echo—clarity of regulations and incentives. If you look at those areas and countries in the world like Singapore or Israel to some degree too, you have clarity of policy plus incentives to achieve a higher degree of water reuse.

BBNA: Can you give an example of an incentive you would hold out as a model worthy of broader application? You talked about the carrot earlier. What does the carrot look like?

Markhoff: Investment credits, tax advantages, things like that.

BBNA: Staying on the issue of policy, the Clean Power Plan rule has been released. What does that mean in terms of challenges or opportunities given the company's profile as it relates to water and renewable energy?

Markhoff: When it comes to the Clean Power Plan, we offer a number of solutions for our customers in the power industry. When it comes to discharge, be it either zero-liquid discharge technology, be it metals-removal technology, we have a suite of solutions we can apply and offer to our customers, and have in areas with already more stringent regulations to help address the regulatory challenges. So I think this is something where we are ready to help our customers in the power industry with proven solutions.

BBNA: How much is industrywide collaboration a part of the equation in terms of developing greener low-carbon outcomes? For example, General Electric has teamed up with Shell and Dow to create the Energy Transitions Commission to move toward a low-carbon economy and it seems like there would be some opportunity there.

Markhoff: I can only speak for the water side, where it's more related to discharge levels and heavy metals and things like that. I know we've been working with different power companies as well as power associations and research companies to address some of the challenges and provide solutions, so I think it's important. It's also important to drive standards there so you can get to cost-efficient scale for these solutions, so that's on the water side—we're less involved on the CO2, other than we do work a lot on energy efficiency for our solutions that we provide so that that's not a drag on further energy.