Sustainability: Water prices keep rising
Dairy processors are using water more efficiently. That’s a good thing because the costs of this resource (incoming and discharging) will only continue to increase.
Water is the driving force of all nature.” — Leonardo da Vinci.
Water is essential to life. Approximately 70% of the human body is made up of water and about 75% of our planet is covered in water. With that much water in and around us it would seem that water would be cheap and abundant. But that isn’t always the case.
From a homeowner’s perspective, water is getting expensive. In the last six years, the cost of residential water in my area has nearly doubled, sewage rates are up by 48% and ongoing increases are here to stay. When I moved into the new development 12 years ago, most of my neighbors installed sprinkler systems for their lawns. Every morning they would be on. I wasn’t a big fan of dumping huge amounts of water on my lawn so I was somewhat of a holdout. In recent years the sprinklers are rarely on and the neighborhood has resigned itself to allowing the grass to turn brown in July and August.
Water for milk
In the late 1970s and well into the 1990s, Roy Carawan of North Carolina State University wrote a number of papers about the importance of conserving water in the dairy processing industry. Roy estimated that in 1986 dairy processors used 4 gallons of water to process a gallon of milk, though he acknowledged that some processors were getting that down to under a gallon of water per gallon of milk. In the 1990s, he predicted that regional water shortages, new pollution regulations and new policies of water pricing would make it even more important to conserve this valuable asset. Twenty years later I can say Roy had it right.
In 2007, the International Finance Corporation, part of the World Bank Group, published a paper that included a number of interesting dairy processing environmental statistics. For fluid milk processing the mean water use per gallon of milk processed for fluid milk was 0.78 in Denmark, 1.9 in Sweden, 2 in Finland and 4.1 in Norway.
The IFC report suggested the industry benchmark for water usage for fluid milk should be between 1 to 1.5 gallons of water per gallon of milk processed, 1.4 to 2 gallons of water per gallon of milk processed into cheese and whey and 4 to 5 gallons of water per gallon of milk processed into ice cream.
34.2 billion gallons of water
In 2011, U.S. farm milk production reached a record of 196.2 billion pounds, or 22.8 billion gallons. If we got our average water use down to 1.5 gallons of water per gallon of milk processed on average for all dairy products it would take 34.2 billion gallons of water to make those dairy products. That is a lot of water.
In addition to the water used to process dairy products, there is, for the most part, an equivalent waste water discharge. So there is a cost for incoming water and a cost for outgoing wastewater. Sewage rates are at times lower than incoming rates. For example, in Irving, Texas, industrial water is billed at $3.51 per thousand gallons and sewage at $3.02 per thousand gallons. On the other hand, Clarksville, Tenn., charges in-city industrial water at $4.02 per thousand gallons and sewage at $8.58 per thousand gallons (an 18% reduction from the previous year’s wastewater rates).
In an even more dramatic situation, Carlsbad, N.M. proposed in December that the industrial water rates would double to $71.43 per thousand gallons starting with the February 2013 invoices. The city said the dramatic rate increases were due to increased demand for water in southeastern New Mexico, which is experiencing an oil and gas boom. I suspect a large portion of that water usage is due to hydraulic fracturing, or fracking, which involves injecting large amounts of water and special chemicals into the ground to break up the rock substrate and release oil and gas for extraction.
Love it or hate it, fracking is here and likely to stay because it means U.S. jobs and it will make the United States a net energy exporter in the near term. So, on top of what appears to be a global climate change that has been causing water stress here and throughout the world, water demand is escalating due to the heavy usage by the oil and gas industry. Basic economics mandates that increased demand combined with a lower supply dictates increased cost.
If water were charged at the desired Carlsbad industrial user rate, the cost to the dairy industry would be $2.4 billion annually and another sizeable amount for wastewater. Thankfully for our industry, water is not so tight in other areas of the country. And don’t get me wrong, I think Carlsbad is a great city; it just isn’t a good place to operate a water-intense industrial operation.
Too much water for CIP?
In last year’s column I mentioned that the dairy industry has an opportunity to save money — potentially big money. My colleague Craig Nelson of Food Automation LLC had estimated clean-in-place (CIP) water overuse per plant, on average, was 25,000 to 30,000 gallons a day.
In 1986 Roy Carawan told dairy CEOs that they had a $500 million water-saving opportunity. Adjusted to today’s rates, we may be sitting on a billion-dollar opportunity. It behooves me to say: Dairy processors have not been sitting on their duffs all these years, so the exact size of the opportunity is hard to pinpoint. What I can say is whatever you are paying today will be more next year and even more in the years ahead.
Water and wastewater must be properly managed, whether for altruistic reasons or a pragmatic contribution to the bottom line.