How does energy production affect water stress in China and the United States? During today's OnPoint, Betsy Otto, water initiative director at the World Resources Institute, explains why water risk should be a critical consideration for governments and businesses as they develop energy strategies.
Monica Trauzzi: Hello and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Betsy Otto, water initiative director at the World Resources Institute. Betsy, thanks for coming on the show.
Betsy Otto: Thanks for having me.
Monica Trauzzi: Betsy, one of the key things you focus on in your work is water risk assessment. Why is water risk such a critical issue for governments and businesses to be considering right now?
Betsy Otto: Well, water is essential to everything, to life, to cities, to economies. And we're looking more and more at what our water needs are globally and trying to understand where is the demand, where is the supply for water, and what's the combination of those two? Where is water going to be more at risk in the future?
Monica Trauzzi: So what's the story here in the United States on water risk?
Betsy Otto: Well, it varies greatly by the part of the country that we're talking about. What's interesting is that even in relatively water-rich areas, let's say the Northeast or parts of the Eastern Seaboard, what we've noticed over time is that there's increasing demand for water. And so if you just think about the competition for water, for available water for energy, for food production, for cities and so on, we see the potential for water risk increasing even in places that we think of as having plenty of water.
Monica Trauzzi: So let's talk energy. Fracking's impact on water gets the spotlight quite often. How does shale gas development impact water in the U.S.?
Betsy Otto: Well, in many ways. There are many water quality impacts. We've done some analysis that looks at the water quantity impacts, and that's a pretty interesting picture. We did some recent analysis with an investor group called Ceres, and we found that nearly half of all the areas where there's shale gas in the United States are in areas that are already experiencing really significant water risk. So they're either high or extremely high water risk. So if there's new shale gas development in those places, either new methodologies and technologies need to be used to reduce that water risk, or there's going to be increased competition among the folks that already need that water in those places.
Monica Trauzzi: Do those technologies already exist?
Betsy Otto: Yes in some cases. There are less water-using technologies, and some companies are looking toward those. But those are the kinds of policy questions that need to be addressed. We need to understand what the water picture is first.
Monica Trauzzi: So on the policy front, how would you gauge the level of understanding among members of Congress on the water risk issue?
Betsy Otto: I think water quality issues have been getting much more attention than water quantity issues, although in certain parts of the country, in the Southwest, in Texas, for example, which has already been experiencing a lot of water stress and drought and so on, there's been increased attention to this question.
Monica Trauzzi: So moving outside the U.S., China is a hot spot when it comes to water risk. Describe the tension that exists between China's coal use and its water.
Betsy Otto: Yes. So China gets most of its power, electricity generation and industrial power from coal. That's the source of most of its energy. And energy in coal is extremely water-intensive both for energy extraction, for extracting coal and washing the coal, and then also for the actual energy generation at the power plants. We did an analysis recently that showed that there are 383 new proposed coal-fired power plants in the northern part of China, the most water-stressed or arid part of China. And so we know that water risk in those areas is going to be very great. Fifty percent of these new proposed coal-fired power plants are in areas of already very high water risk.
Monica Trauzzi: And the Chinese government has laid out some national goals for water. Do they create the proper framework, and how should China really be looking to address this interplay between energy development and water?
Betsy Otto: So this is really a challenge for a country like China that is growing very rapidly; that needs to continue to provide energy but also needs to guard its water needs. And China is starting to think about it. It needs to do more to have a coordinated national policy between energy development and also management of its water resources.
Monica Trauzzi: And beyond China, what other countries do you look at and think, "Wow! This is one of those countries that have a real problem on its hand."
Betsy Otto: Well, countries in Africa, in the Middle East, of course, are challenged because in many of those countries it's very arid. They don't get a lot of rain and so they're dependent either on groundwater stores or they have to very carefully utilize the existing surface water sources that they have. But countries like India, also growing very rapidly; very active economies also really challenged by water risk both for food production and energy production.
Monica Trauzzi: Is there an international movement to regulate water stress, or is it best handled on a country-by-country basis?
Betsy Otto: There's no international movement. It's an interesting question. But what we are seeing is that more and more companies in the private sector are paying attention across their operations globally to where they're experiencing water risk. And I think that's an opportunity to have companies engaging with governments and other stakeholders to think about available water resources and how those can be utilized more effectively.
Monica Trauzzi: All right. We're going to end it right there. Thank you for coming on the show. Nice to see you.
Betsy Otto: Thank you very much.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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