A global crisis


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America and much of the world are facing a clean-water crisis of epic proportions.

It came to the forefront in the states recently with the Flint, Michigan lead-water fiasco that has poisoned thousands, been linked to a Legionnaires’ disease breakout that killed several people and resulted in criminal charges against three city and state workers.

In 2013, to save money, the emergency administrative manager of Flint, Michigan — appointed by the governor — discontinued the city’s connection to Detroit’s water system and instead began drawing water into the town from the chemically toxic Flint River.

The treatment plant suddenly assigned to handle the new water source wasn’t prepared and the river’s different chemistry corroded the old lead water pipes throughout the town, leaching lead into drinking water. Despite powerful and mounting evidence that the citizens of Flint were drinking contaminated water, local, state and federal authorities allowed the situation to persist.

Residents are still lining up at fire stations to drink bottled water, showering at relatives’ houses on other water systems, and down-at-the-heels Flint is looking at as much as $1.5 billion to replace the ruined conduits.

THE LEAD WATER LESSON NEVER LEARNED

While Flint’s story has some unique elements, toxic lead in the public water supply isn’t a new story – nor is the unfolding crisis in the world’s water systems.

In fact, it’s an ancient story. Ancient Rome was plumbed with lead pipes (the word “plumbing” comes from plumbum, the Latin word for lead). Roman engineers had discovered that lead was cheap, plentiful and dense enough that it wouldn’t spring pinhole leaks, but still soft enough to be worked with relative ease.

The plumbing industry didn’t mess with a good thing. And public and private water systems around the world were created with lead piping. It was only in the last half of the 20th century that concern about lead contamination in old pipes steadily grew, especially as systems built decades earlier began corroding.

A study by the Natural Resources Defense Council found that as late as 2002, the public water supply in the US cities of Boston and Newark, NJ, exceeded the national standard for lead and 8 percent of homes in Atlanta exceeded the level requiring remedial action. While not exceeding federal standards, Philadelphia’s water showed enough lead in water supplies to schools and homes with young children to raise alarms. When the Flint news broke, Cincinnati reviewed its plumbing grid and determined that as many as 16,000 homes may still have old lead pipes connecting them to the city’s water mains; the kind and conditions of pipes inside the houses themselves are anyone’s guess.

A report published this year in the Journal of the American Water Works Association estimates that more than 6 million lead water pipes in the US still link mains to homes where as many as 22 million people live.

ROTTING, DECAYING SYSTEMS

But the problem isn’t just lead in the pipes. It’s the entire water delivery systems themselves.

And this isn’t a new problem, at least not to the Trends Research Institute, which identified the trend line decades ago and has tracked it since. In fact, Gerald Celente wrote in 1997:

“Crumbling infrastructures, an emasculated Safe Drinking Water Act, hundreds of thousands of rotting fuel-storage tanks, ruptured pipelines, and the heightened ongoing environmental onslaught of spills, runoffs and effluents will make it difficult even to obtain safe water from public supplies.” (Trends 2000, 1997, p. 102.)

Most municipal water systems in the US have significant portions of their infrastructures that are more than 100 years old. There are about 240,000 water main breaks in the US each year.

The American Society of Civil Engineers rates the US public water system every four years and consistently assigns a grade of “D”. These antiquated systems leak an estimated 14 to 18 percent of water traveling through them — although some systems, such as Flint’s, are estimated to lose up to 40 percent. That not only wastes water and, therefore, money, but also creates low-pressure spots where contamination can infiltrate the grid — and there’s plenty of that going on. 

The US Environmental Protection Agency’s most recent annual compliance report for public water supplies logged 16,802 “significant violations” of national drinking water safety standards. More than 47 percent of the violations were in the form of bacteria; 22 percent involved synthetic chemicals and radioactive compounds; and 13 percent came from the byproducts of the chemicals used to disinfect the water in the first place.

CONTAMINANTS ARE PERVASIVE

The sources of these contaminants abound. In more than 750 US cities, sewer systems allow storm runoff and domestic sewage to mingle; a heavy rain can overflow these systems and send the mixture into lakes and streams that supply public water. Perchlorate — an ingredient in rocket fuel, fireworks and fertilizers, among other toxins — is a persistent guest in the public water supply and can disrupt human hormones. Prescription drugs thrown into the trash or excreted by humans and farm animals make their way into water sources that drinking water is drawn from; so do endocrine disruptors, chemicals found in fertilizers and loose in nature that also can play havoc with the human hormone system.

So why hasn’t someone done something? 

First, most experts cite the same problem: out of sight, out of mind. People tend to assume their public water supply is safe; and, aside from the day they pay their water bills or a broken pipe temporarily dries up the taps, most people don’t think about water any more often than they think about air they’re breathing. 

Second, public water is political. Officials don’t heap glory upon themselves by telling voters they’re going to raise taxes to fix the plumbing and then dig up the streets for years on end. Instead, municipalities tend to budget enough on average to replace half of 1 percent of their water systems each year, since three-quarters of such costs are borne locally instead of by the federal government. At that rate, a city would need 200 years to update its entire water grid — far short of $1 trillion that the American Water Works Association thinks the US will need to invest in its water infrastructure over the next 25 years to meet the nation’s needs. 

Also, poor neighborhoods tend to have less clout in the halls of power than corporations or wealthy residents who can wield power in the form of campaign donations or phone calls to well-placed friends when water goes bad in their enclaves. (A majority of Flint’s residents have low incomes.) This creates what was politely called “a persistent drinking
water burden” on communities of color, according to a 2012 study published in the journal Environmental Health.

THE PRIVATE SECTOR STEPS IN

Celente forecast in Trends 2000: “Any water-supply-related business represents a sound investment for the foreseeable future — water sources, purification systems and supplies, distribution and marketing.” (Trends 2000, 1997, p. 103.)

And that forecast, in the face of fast-deteriorating water systems worldwide, is accelerating.

Municipalities are dabbling in various ways to fund fixes. Some small water systems are merging to make regional systems and capitalize on economies of scale. A few states are offering grants or low-interest loans to localities to bring their systems up to snuff.

However, faced with the choice of raising taxes, issuing bonds or both to fund replumbing entire cities, public officials increasingly are looking to a different option: taking water systems partly or fully private. Already, almost 100 million Americans are served by private water systems. The results have been mixed.

It worked well in Coatesville, Pa. In 2001, the cash-strapped town sold its water system to American Water Works Co. The town cleared $39.5 million from the sale, which it used to set up a reserve fund and plowed back interest from the fund into other infrastructure investments and economic incentives and assistance to bring new businesses to town, among other things. In return, the company began to systematically replace the town’s decrepit water mains, and customers’ water and sewer rates were frozen for three years.

The Colorado hamlet of Silver Plume, in the Rocky Mountains west of Denver, couldn’t meet more stringent federal water quality standards with its old treatment plant and couldn’t afford the full cost of a new one. It partnered with Southwest Water Co. to install a new, state-of-the-art microfiltration system that needs only a few hours a week of on-site maintenance and with quality monitored remotely by electronic sensors.

PUBLIC-PRIVATE: RISKS AND REWARDS

Public-private partnerships — in which towns and private investors put up capital to help build or modernize water infrastructure — are especially popular in poorer countries. In January 2014, the World Bank noted that 309 such arrangements in China had drawn $8.2 billion during the previous 10 years; together, 17 Latin American countries had marshaled $9.7 billion to fund 133 projects during that time. The World Bank itself had shoveled billions into these projects in the first decade of this century, but has since scaled back its enthusiasm.

The reasons are plentiful. In Uruguay’s Maldonado Province, a subsidiary of the giant Spanish water company Aguas de Bilboa was awarded a “full-cost-recovery” contract to run a for-profit water system. The result: Water prices soared while quality deteriorated. In Puerto Rico, global water conglomerate Suez was contracted to provide services. In reviewing the company’s performance, Puerto Rico’s solicitor general complained that Suez had devoted itself to billing and collection but had done nothing to improve water quality or delivery.

The most egregious example of water privatization gone wrong may be in the Bolivian city of Cochabamba. Bechtel, the global engineering giant, bought the water concession and instantly raised the price beyond most of the population’s ability to pay. The contract also allowed the company to charge customers for water they took from their own wells and rainwater they collected. When public howls forced the government to yank Bechtel’s contract, the company sued for $25 million in lost profits.

Things can go almost as badly in more developed countries. In 1999, the city of Atlanta signed a 20-year privatization deal with a Suez subsidiary. The company’s stewardship was fraught with pipe breaks and spurts of brown water from homeowners’ spigots. For its part, the company claimed that the city’s water system was in worse shape than portrayed when the deal was signed and the city refused to renegotiate the contract, making it impossible for the operator to make basic investments. Ultimately, the parties tore up the contract after four years and the subsidiary paid the city a net $5 million to settle various legal claims — and the city was left with its $800 million problem of how to upgrade an aged water system. (Since, Atlanta has undertaken a $4 billion overhaul of its water and sewer systems under the thumb of two federal consent decrees.)

The lesson: Modernizing water systems around the world is unavoidable and the private sector can leverage resources to speed needed repairs and upgrades – if the agreements are negotiated to standards of full disclosure, public participation and realistic expectations. Profit motive cannot be placed above safety. A public utilities model, with built-in systems for rates/spending accountability, is a better model to control costs and ensure safety.  TJ

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