When you start to think like we think, you don’t see water in the pipes. You see dollar signs.
—Eric Berliner,
IBM water manager in Burlington, Vermont
IN THE RANGELAND OF AUSTRALIA, sheep get frightfully dirty. They roam the outback among all manner of plants, trees, and scrub, they loll in the dirt, they sleep on the ground, they roll in their own poop. They only shower if it happens to rain.
So when Australian sheep get sheared—and Australia is still the largest producer of wool in the world1—the fresh wool is grubby. A specialized industry exists to clean it before it can be woven into everything from haute couture to bedding and carpeting. Wool scouring is as gritty and demanding as the name suggests, and it is a water-intensive business.
Michell Wool has been washing wool in Australia since 1870, and the big Michell Wool scouring plant in Salisbury, a suburb north of Adelaide, uses about a megaliter of water a day—a million liters of water, about what 750 families use.
Just-sheared wool arrives strapped into heavy, bulging bales, chest-high, bristling with grass, sticks, dirt, burrs. Raw wool is called greasy wool, because in addition to dirt, the wool is coated with the sheep’s natural protection, lanolin.
The machine that cleans the wool is a long line of connected stainless-steel tanks and conveyors, called a scour, which stretches more than half a football field. Wool gets unbaled and dumped into a tank at one end of the scour. It is washed in cold water, lightly agitated, wrung out, and moved up belts into successive tanks, pronged along gently to avoid damaging the fibers and ultimately washed in water that is 150°F, hot enough to dissolve off the lanolin.
The inside of the Michell scouring factory smells like a farm—a rich odor of sheep, dirt, the outdoors, and wet wool. The clean but uncarded wool itself feels like wet cotton. Michell uses a smartly counterintuitive washing technique. The cleanest water pours in at the end of the scouring process, onto the cleanest wool, and the water moves backward along the scour as the wool moves forward, so that the dirtiest water is used to rinse the dirtiest wool.
From January to July, high season, Michell runs the scours twenty-four hours a day, seven days a week. But wool is no longer as popular as it once was for apparel, and the Salisbury plant uses only a quarter of its floor space; each of the two scouring lines is running at about two-thirds of capacity. Michell wool remains well known—Armani used it in the spring 2009–2010 collection—and the firm remains not just one of the largest wool scourers in Australia but part of Australian lore. “Every ship that leaves Australia probably has wool from Michells on it,” the Sydney Sun-Herald quoted an Australian wool official saying in 1989.2
It is possible to know exactly how dirty the wool coming into Michell is—weigh it before it’s scoured, weigh it after. On average, the yield from raw wool is 55 percent—100 pounds of greasy wool yields 55 pounds of usable wool and 45 pounds of dirt, debris, poop, and lanolin. Greasy wool is almost half dirt. Hence the importance of the water—each pound of wool requires 3.6 gallons of wash water to get clean, almost twice what your home washing machine uses.3
It takes a lot of water to scour wool. And although Salisbury gets just eighteen inches of rain a year, less than Flagstaff, Arizona, and sits in South Australia, Australia’s driest state, until just a few years ago, Michell was washing all its wool in the same water Salisburians were using to shower and cook—drinking water. When you see how dirty the wool is, when you see how dirty the water gets, it seems absurd to be washing greasy wool in tap water.
“Back in the 1980s, we were using in excess of a gigaliter of mains water a year”—a billion liters, three times what they use today—“and we asked ourselves, is that a sensible place to be?” says David Michell, comanaging director of Michell, a fifth-generation member of the founding family. “We’re concerned about the environment, and also about making sure we don’t price ourselves out of the market.” Outside of farms, Michell is one of the largest single users of water in the state of South Australia, and the owners worried about a coming time when water scarcity became so serious that wool washing was competing with residential water use—in terms of price, or for adequate supply, or both. “If there is no water,” says Michell, “there is no business for us. Water is a strategic issue. We started looking for a Plan B.”
David Michell and his colleagues were feeling the first tickles of something most of us are utterly unfamiliar with: water insecurity. Just because the big supply pipe from utility SA Water was coming into the plant, just because Michell was spending A$1 million (one million Australian dollars) a year on water, didn’t mean that in a serious drought its supply wouldn’t be sharply limited, or the price wouldn’t rise, or both. The tickle of water insecurity turned out to be almost scarily prescient.
SA Water, South Australia’s statewide water utility, wasn’t interested in providing Michell with any kind of alternative water supply. “We went to SA Water,” says Michell, “and they said, ‘Just keep buying water.’”
As it happened, the city of Salisbury was worrying about water, too, but from the other end: how to dispose of storm water runoff more effectively, storm water that it was collecting in drains and culverts and piping untreated into the ocean six miles west, along a sensitive stretch of coastal mangroves and sea grass.
And so the town of Salisbury started a kind of upstart water utility, and Michell Wool became its biggest customer. In the 1990s, Salisbury started collecting some of its storm water, and routing it for filtration into wetlands and reed beds—some natural, some created by the city. Salisbury then injected the water into a limestone aquifer that happens to sit directly below the city, creating a bubble of fresh water in the aquifer. That bubble is also a reservoir of reasonably clean water that’s good for all kinds of purposes—watering ball fields, parks, and schools, irrigating commercial nurseries, even piping into toilets, and of course, washing wool.
“The basic idea with storm water, with urban runoff, is, Get it out of sight, get it away from my house and away from my foundation as fast as possible,” says Steve Hains, who has been Salisbury’s city manager for two decades. “We said, We’ve got the water in our pipes already—let’s do something with it.”
Salisbury now has fifty-three water-filtering wetlands, covering 740 acres, collecting about 8 gigaliters of water a year that it injects down into the aquifer. With no further treatment, it pumps 2 gigaliters a year of the water back out in purple pipes to customers who can use it instead of mains water from SA Water. Purple pipes have become the global standard for water that is not potable, but is clean enough for other routine use, everything from gardening, landscaping, and toilet flushing to wool scouring. The water supply pipes are purple so there is no confusing them with potable water supply pipes.
Michell Wool takes 15 percent of Salisbury’s purple-pipe water, so the wool scouring now gets done not in drinking water but in cleaned-up rainwater that once would have polluted the Indian Ocean. Michell Wool started taking purple-pipe water in 2003, after investing A$1 million to jumpstart Salisbury’s reclamation effort, and just as Australia’s Big Dry drought began to take unrelenting hold. The drought has been especially deep and devastating in the area supplied by the Murray River, from which Adelaide’s water comes, and from which Michell’s water used to come.
Michell pays two-thirds less per gallon for purple-pipe water compared with what it would pay for tap water from SA Water. It has helped develop a second source of water, which, while it isn’t climate independent (storm water runoff requires rainstorms), also isn’t subject to the kinds of competition and politics that affect mains water. And in stepping away as one of the largest customers of SA Water just as Australia’s drought has gotten progressively worse, Michell not only helped its own business but also took pressure off SA Water’s crisis-level supply problems for the rest of its customers.
“Now our water is about one-third the price it would otherwise be,” says Michell. “We got in early, we spent $1 million, and we helped Salisbury get going.”
Just by worrying, by starting to think differently about its water needs and its water supply, Michell Wool and Salisbury have created a virtuous water cycle whose benefits seem astonishingly simple and self-reinforcing. Michell Wool has improved its competitive position by using a less costly version of its main resource, and it has increased its security by finding a new source of water (Salisbury’s fresh-water “bubble” stored in the aquifer now equals about four years’ supply for its purple-pipe customers). Michell Wool has also been inspired to examine all kinds of other processes involving its water. It uses about 40 percent less water per pound of wool scoured than it used to, and the company now reclaims heat from dirty wash water, using it to heat clean water, cutting the cost of making hot water almost in half.
The city of Salisbury has taken a waste product that it had to spend money to manage and dispose of—storm water—and turned it into an asset that brings in about A$1.6 million a year, a city “business unit” that manager Hains aims to grow substantially. Salisbury makes money cleaning up polluted water, and the mangroves of Barker Inlet on the Indian Ocean don’t struggle to survive against urban runoff. The purple-pipe system reduces demand for a resource that has been so scarce in South Australia during the drought that SA Water is furiously building a desalination plant whose capacity was doubled even while its first phase was under construction.
Inside Michell’s wool scouring plant, streams of water flow everywhere—clean water, muddy water, foaming water headed into drains, greasy water headed to have the lanolin skimmed from it. The storm-water project has had another remarkable value inside Michell and in the city of Salisbury—perhaps the most important long-term value. It’s creating what Bruce Naumann, Salisbury’s water manager, calls “fit-for-purpose water.” You use water of a quality and a cleanliness that’s good enough for the task at hand. In fact, Salisbury is home to a large residential development called Mawson Lakes, where everyone of the 4,500 homes, and every business, has purple-pipe water, along with potable water. In Mawson Lakes, the purple-pipe water is a mix of Salisbury’s filtered storm water and SA Water’s treated wastewater, and it’s used for toilets and for outdoor watering. The hose spigots mounted on people’s outside walls in Mawson Lakes are bright purple. During the depth of the Australian drought, Mawson Lakes residents could still water their outdoor plants and gardens when no one else could—because they were using reuse water.
Upon reflection, it is absurd for drought-ravaged Australia to wash wool in drinking water. In fact, almost regardless of resources, it’s crazy to use drinking water for things like watering soccer fields or flushing toilets. It’s just what we’ve gotten used to.
Says Salisbury manager Hains, “We are changing the relationship between people and their water.”
If there is one truly arresting sign that our relationship to water is about to shift in fundamental ways, it comes not from the world of science, or climatology, not from United Nations officials or the people who run water utilities or the aid workers desperately trying to get water to people in developing countries. No, the most unequivocal signal about what’s happening with water comes from the people like those who run Michell Wool, in a quiet suburb north of Adelaide, it comes from Monsanto, the agri-conglomerate, and from Royal Caribbean, the cruise-ship company, it comes from Coca-Cola and Campbell Soup and Intel, from Levi Strauss and IBM, from GE and MGM Resorts.
They all have that same tickle of anxiety—in corporate terms—about water security that Michell Wool had a decade ago. For many companies, it’s much more than a tickle. Companies that live in the world of water every day are worried about the quality of their water, the adequacy of their supply, the long-term security of their water, and they aren’t waiting for someone else to alert them, or for someone else to tackle the problem. For business, water management is fast becoming a key strategic tool. Companies are starting to gather the kind of information that lets them measure not just their water use, and their water costs, but their water efficiency, their water productivity—how much work they get from a gallon of water, how much revenue, how much profit.
IN DESIGNING ARIA, one of the signature hotel-casinos of its $8.5 billion Las Vegas development called CityCenter, the staff at MGM Resorts International went looking for a showerhead that was both low-flow—the goal was 2 gallons per minute or less, down from the typical 2.5 gallons per minute—and also provided the indulgent shower experience that guests in a luxury hotel want. Aria is a soaring, spacious, upscale hotel with 4,004 rooms, built in a desert community that gets just four inches of rain a year. That small change in one design element in a new hotel—how much water per minute the showerhead uses—can save millions of gallons of water a year.4 But the folks at MGM Resorts couldn’t find a showerhead that combined the flow they wanted, the shower experience their guests would insist on, and the design flair the Aria’s high-end interiors required.
“I’ve heard it a thousand times,” says Cindy Ortega, MGM Resorts senior vice president for energy and environmental services. “‘If I’m going to pay $400 a night, I should be luxuriating in the shower.’ Yes, I’ve heard exactly that. Along with the plushness of the carpet and the fiber content of the pillows.” CityCenter, as a development, aimed to build unusually environmentally sensitive buildings, and the goal of Aria, says Ortega, is, in part, “to dispel the notion that there is a trade-off between luxury and environmental impact. We thought we could get past the idea that luxury means big crown moldings and plush-plushy carpet.”5
So, working with the Delta Faucet Company, through months of prototype showerheads tested in other MGM Resorts hotels like the Bellagio, and in the homes of MGM Resorts managers, Ortega and the Aria’s staff designed their own showerhead. Their creation, when the hotel opened in December 2009, was bolder than anyone expected at the start: A square, flat-faced, mirrored showerhead with just four holes. And it had a flow rate not of 2 gallons per minute but 1.5 gallons per minute. The Aria showerhead could easily save the hotel, and the residents of Las Vegas, two thousand gallons of water an hour, twenty-four hours a day—enough water saved every day to supply all the needs of 140 homes in Las Vegas.6
In a completely different corner of the world, agricultural conglomerate Monsanto is doing exactly the same thing—trying to develop a new line of products for its customers that require less water. Monsanto is spending tens of millions of dollars a year developing drought-tolerant varieties of crops—plants whose genes have been tweaked so, biologically, they make better use of less water. Because as climate shifts, people in newly dry areas will still need to grow food. And because Monsanto sells $4 billion a year worth of seeds—it sells more seed than any other company in the world7—it wants to make sure it has products to sell to farmers, to nations, even when they’re struggling through drought. In the summer of 2009, Monsanto opened a 155-acre water utilization learning center, a working farm in Gothenburg, Nebraska, that is an R&D facility to test drought-resistant crops in the dirt. If a crop typically takes twenty inches of irrigation water during a growing season, can you get the same harvest with eighteen inches of water? Or seventeen inches? And when in the growing cycle do you water less?
“We believe that by 2030, we can double the yield for many crops, compared to the year 2000,” says Robert Fraley, the chief technology officer at Monsanto, who is helping drive the effort to find and test genes that do things like increase the efficiency of a plant’s roots to absorb water, or protect sensitive parts of the plant from heat. “Literally, ten years ago, this didn’t exist as an option, the possibility to confer drought or thermal protection. It’s really exciting.” Monsanto hopes to have drought-tolerant corn seed available in 2012.
Many of the biggest companies in the world are starting out simply trying to understand and manage their own water use, rather than producing water-related products.
Right from the Web sites of Coca-Cola, Intel, GE, and IBM, you can find out how much water each of those companies uses each year, often in stunning detail. Intel lists not only total water use but water use broken down by each of the company’s manufacturing plants around the world, including what each factory’s source of water is—the names of the rivers and aquifers Intel is tapping. You can easily figure that Intel isn’t doing that well on its water goals, either in the big picture or based on water productivity. In 2009, the most recent year for which Intel has provided detailed numbers, the company used 19 percent more water than it did in 2005, but Intel’s revenue actually fell 10 percent in that time, in part because of the recession.
So one gallon of water used by Intel in 2005 generated $5.74 in revenue and $1.29 in profit; in 2009, a gallon of water generated only $4.37 in revenue and 55 cents in profit. In terms of water, Intel’s profitability fell 57 percent per gallon used. That’s a measure you don’t see very often, even on a Bloomberg terminal. Intel also reports renewed determination to hit its goal for water productivity—to reduce water per chip below 2007 levels by 2012.8
Coca-Cola, whose reputation has been doubly stung by controversy over its withdrawals of groundwater in India and by a backlash against its growing Dasani and VitaminWater bottled-water business, has vowed, in the words of CEO Muhtar Kent, that by 2020 Coke will become “the first major global corporation where we will be water neutral.”
Almost all of Coke’s products end up as pee—Coke’s customers don’t need more than a few hours to close the loop in the water cycle on the soft drinks and water they consume—and it’s not quite clear what a “water neutral” Coca-Cola will look like. But the company is gathering, analyzing, and revealing cascades of water data.
According to its figures, Coke sells enough servings of drinks to indeed “buy the world a Coke.” The company can buy every single person in the world more than fifty cans of Coke or Sprite a year. The company’s global use of water is staggering—Coke uses enough water in its global operations each day to provide all the water necessary for an American metro area of 1.5 million people.9
Viewed from one perspective, in fact, Coke’s business is really a water processing operation. As a company, Coke is dwarfed by IBM and GE, which together have nine times the revenue of Coke, and themselves use billions of gallons of water in industrial manufacturing. Yet Coke uses three times the volume of water used by IBM and GE together. The industrial giants use 11 ounces of water to generate $1 of revenue. Coke needs 333 ounces of water to generate $1 of revenue.10
Coke says that that every liter of beverage it manufactures and sells requires 2.43 liters of water—1 liter for the drink, and an additional 1.43 liters of manufacturing, cleaning, and process water. The good news is that unlike Intel, that represents a 9 percent improvement over 2004. Between 2004 and 2008, Coke cut the amount of process water per liter of drink by eight ounces. Sounds small, except when you multiply it by Coke’s relentless popularity—the company serves up a drink to 67 million people an hour. Its improved water efficiency between 2004 and 2008 saved 8 billion gallons of water in 2008.11
It’s easy to be charmed and hypnotized by all the details. But, in fact, the details are both beside the point—and the whole point. This kind of water reporting is amazing because it’s totally voluntary, it’s all new, and it is, quite literally, a window on the future. These companies aren’t metering their water use with such precision to satisfy their curiosity or to amuse us. They’re doing it because they want to use less water, because they think they may soon have no choice but to use less, because they’ve discovered that simply measuring water use quickly leads to managing it better, and because some of them see that the very act of measuring and managing water use is becoming a huge business in itself.
Even for companies, like Coke, that are utterly water dependent, thinking about water strategically, in detail, is new. In Coke’s 2002 annual report—the so-called 10-K filing with the SEC required of all public companies, which Coke submitted in March 2003—there is a typical section on Coke’s business operations. Under the heading “Raw Materials,” the first sentence is: “The principal raw material used by our Company’s business … is high-fructose corn syrup, a form of sugar.” The word “water” does not appear in the “raw materials” explanation of Coke’s business operations, as detailed in 2003, and the filing does not mention water supplies, water scarcity, water effluent, or water quality even once.
In Coke’s 2009 annual 10-K filing, submitted in February 2010, the “Raw Materials” section begins this way: “Water is a main ingredient in substantially all our products. While historically we have not experienced significant water supply difficulties, water is a limited resource in many parts of the world and our Company recognizes water availability, quality and the sustainability of that natural resource for both our operations and also the communities where we operate as one of the key challenges facing our business.”
Three pages deeper in the 2009 annual report, in the section titled “Risk Factors,” Coke says that water faces “unprecedented challenges from overexploitation, increasing pollution, poor management and climate change. As demand for water continues to increase around the world, and as water becomes scarcer and the quality of available water deteriorates, our system may incur increasing production costs or face capacity constraints which could adversely affect our profitability or net operating revenues in the long run.”12
In 2003, the main ingredient in Coke’s products isn’t mentioned. In 2010, water supplies around the world are one of the key challenges Coke faces, so much so that Coke is warning that access to water could impact its cost of doing business. Just to be clear: Water didn’t change between 2003 and 2010—what changed was Coke’s appreciation of water, Coke’s understanding of water.
Coke is hardly alone. Although water supplies are critical in semiconductor manufacturing, in Intel’s 2002 10-K filing, just as in Coke’s, water was not mentioned as a risk to its business. By 2009, it was included.13
This water focus isn’t trendy green consciousness, or corporate altruism, although in the case of Coke, it is vitally important PR. It’s business. Any water that the showers in the luxury rooms in the Aria hotel don’t spray on guests is water that MGM Resorts doesn’t have to buy from Las Vegas, water it doesn’t have to heat, then pump up to rooms, and then pay to have cleaned as wastewater. Similarly, the 8 billion gallons of water that Coke’s bottling operations didn’t use in 2008 was 8 billion gallons that Coke didn’t have to buy or pump out of rivers or aquifers, clean to food-manufacturing standards, and then dispose of. Companies are realizing that the water bill includes the electric bill, the natural gas and heating oil bill, the chemical treatment and filtration bills. Reduce your water use 9 percent, and you reduce a cascade of costs alongside the water bill.
That is the sense in which, in this instance, business is actually ahead of politics, and ahead of popular awareness. When a company that cleans dirty wool in Australia, a company that hosts gamblers in Las Vegas, a company that makes microchips in Ireland and Israel, and the company that sells the most popular drinks in the world in more countries than belong to the UN—when four such different organizations, in such different geographies and lines of work, all agree that a major shift is under way in something as basic as our relationship to water, when they don’t just agree, but change their behavior, that’s something the rest of us should pay attention to.
In the last decade, business has discovered water as both a startling vulnerability and an opportunity to reduce costs and turn water itself into a business. No less a sage than Warren Buffett has quietly realized how the water landscape is changing. In 2009, Buffett’s company, Berkshire Hathaway, became the largest shareholder in Nalco, a water services, treatment, and equipment company that has no public profile but twelve thousand employees and nearly $4 billion in revenue.
Sometimes the water consciousness percolating all over the world of commerce results in efforts that are less revealing than they are slightly silly. Levi Strauss, the apparel company, has been worrying about water for more than a decade. Since the 1990s, Levi has tried to get the outsourced global factories that make its jeans to treat their wastewater, in order to reduce pollution. In 2009, Levi released a painstaking “life cycle analysis” of the water involved in a single product—a pair of men’s 501 medium-stonewashed jeans. Levi wanted to track water use during the life of a pair of blue jeans. Levi, which now only designs and markets jeans, outsourcing all the sewing, discovered that that single pair of blue jeans required an astonishing 919 gallons of water during its lifetime. Levi attributed 450 gallons of water (49 percent) to growing the 2.2 pounds of cotton the jeans required; it charged 416 gallons (45 percent) of water to our washing the jeans once we bought them, leaving just 53 gallons (6 percent) for which Levi itself was directly responsible. In a moment of humility, Levi assumed the jeans would last only two years (104 washes)—otherwise our water burden as customers could easily have been much greater. One of the company’s great water-saving insights from this project is that the jeans would “use” a lot less water if we, the wearers, would replace our top-loading washing machines with more water-efficient front-loading ones.14
This kind of water analysis is so new, in fact, that a certain amount of silliness is inevitable, even desirable. No one has ever asked the kinds of questions that we are starting to ask about water and how we use it. Perfectly reasonable questions will sometimes bring silly answers; apparently silly questions will sometimes result in wonderful changes in perspective.
Cruise ships are fascinating water laboratories, because while floating on an unlimited cushion of water, they must be water self-sufficient, either tanking up on potable water in port or using fuel to run onboard desalination and purification systems. Every toilet flush, every cup of coffee, every shower, every ice cube, uses water that had to be ordered and accounted for. One of the great symbols of indulgence on cruise ships is the dining, and nothing captures the onboard culinary culture quite like their prodigious buffet lines, offering dozens and dozens of items, often available fourteen hours each day to provide anytime dining. Those buffet displays require literally tons of ice on each ship each day. For this ice, water has to be made or loaded onboard, ice makers have to run nonstop, ice beds must be laid out and replenished, and meltwater must be drained into the ship’s water treatment system, where energy has to be used to clean it before it’s released back into the ocean.
In 2008, the vice president of culinary operations for Royal Caribbean’s high-end Celebrity ships, Jacques Van Staden, suggested substituting superchilled river rock for ice on the buffet lines. Van Staden had come to Celebrity from Las Vegas, and he thought in addition to saving water, the river rock would look better. It had a high-fashion flair—distinctive black rock instead of prosaic clear ice.
“This was the heyday of super-high fuel prices,” says Scott Steenrod, director of food and beverage operations for Celebrity. “As Jacques and I talked about it, we knew this would save a lot of energy as well. We tried it on one ship. We knew immediately that [the rock] was equally effective at keeping the food chilled. And people liked it—it looks good.”
In fact, testing showed that the smooth black river rock actually held cold longer than ice. Now, on all nine of Celebrity’s megaships, the river rock has replaced ice for cold food on the main buffet line at breakfast, lunch, and dinner. Each ship has two sets of 1,500 pounds of rock—one set of rocks clean and being chilled, one set out on the buffet line. The rock is easily sanitized—kitchen staff take it from the buffet line and run it right through the standard dishwashers on sheet trays. The rock is chilled in belowdecks cold rooms that are already in use, and wheeled out to support the buffets as easily as ice.
Each Celebrity ship used to make 7,500 pounds of ice a day, just to support that one buffet line. So each of the nine ships is saving 2.7 million pounds of ice-making a year, ice that requires 330,000 gallons of water to be made, frozen, and then treated and pumped back overboard.
From one perspective, on ships using more than a million gallons of water each a week, the rocks-for-ice swap is trivial. It comes to saving about two gallons of water per passenger per cruise.15
On the other hand, it is a small stroke of genius. Royal Caribbean has eliminated a whole category of water use, reducing its costs while improving both the environment and the cruise experience the company is trying to offer. “We were able to turn off one ice machine completely on each ship,” says Steenrod. “We literally put a sign on it that says, ‘Not in Use.’ It’s off at the circuit breaker.” And of course, on a cruise ship, every bit of electricity has to be generated by burning fuel, so unplugging an ice maker that used to run 24 hours a day saves real fuel and smokestack emissions, however modest.
More than that, the rocks-for-ice swap represents exactly the kind of mind-flip that a smart-water culture requires. Not just, How can we use less water? but, What are we using water for? Water, it turns out, has the capacity to inspire creativity about how we use it.
AT THE IBM microchip plant in Burlington, Vermont, the factory where they make the ultra-pure water necessary to produce semiconductors, the staff knows a lot about its water.
For the ultra-pure water—the exotic liquid that is so clean it isn’t safe to drink, so clean it requires its own separate factory inside the microchip factory—the water staff measures eighty characteristics all the time, in real time. Just for a moment, see how many characteristics of water you could imagine measuring—temperature, flow rate, pressure, pH, clarity. Unless you’re a chemist, good luck getting to ten.
But beyond the ultra-pure water system, IBM Burlington has created an internal nervous system to monitor and gather data about its water across the whole facility. The plant’s pumps, tanks, and pipes are wired with five thousand electronic sensors, which each gather about 1 data point a second. The water staff at IBM Burlington gathers 400 million data points about the factory’s water every single day.16
It’s hard to know where you’d even begin to use that much data effectively. If you wanted to, you could just sit at your computer in IBM Burington and keep up in real time: you’d only need to observe and interpret a stream of 300,000 data points a minute. For comparison, the double-deck stock ticker streaming along the bottom of CNBC provides 52 data points a minute.
Eric Berliner, one of the water and environmental managers of IBM Burlington, is giving a tour of the Central Utilities Plant, the place where water is heated, chilled, pumped, and cleaned to the point that only microchips can drink it. The plant hums twenty-four hours a day with the sound of pumps moving fat pipes of water; it has the musty smell that comes from water and metal pipes in contact for years. Berliner stops in an alleyway deep inside the plant and nods toward the ceiling. It’s hard to absorb the array of piping overhead. Perhaps six distinct layers of pipe, crossing over each other, some as big as a person’s waist, some no bigger than your wrist. Many have labels—“Hot Water,” “Chilled Water”—with arrows pointing in the direction the water is flowing.
“When you start to think like we think,” Berliner says, his eyes tracing the pipes, “you don’t see water in the pipes. You see dollar signs.”
The water bill at IBM Burlington, just to get 3.2 million gallons a day into the plant, is $100,000 a month. And that’s not the important cost. The water staff turns plain municipal water into a product—actually, into a portfolio of products, depending on whether someone is mixing high-tech chemicals or running air-conditioning chillers or supplying water fountains and coffeemakers. IBM’s utility plant creates nine custom varieties of water—and that’s where the real money goes, for chemicals, filters, energy for pumps and boilers and UV disinfection, for staff on duty 24 hours a day, 365 days a year. Each brand of water costs four or five or ten times the cost of the raw water itself.
A few years ago, Janette Bombardier, site operations manager in Burlington, and her staff had a revelation: Water is so important that although it seems far removed from the final product—the computer chips—it could actually be a competitive advantage. “We’ve moved from being a facility that makes chips for IBM products to a facility that makes chips directly for the consumer market. We make cell phone chips, we make chips for printers, for TVs, for cameras and GPS systems. We go head-to-head with other fabricators in the Far East.”
We don’t think about the cost of the water necessary to make our cordless phones or DVRs or Sony PlayStations. But you can bet that IBM and its chip competitors think about it—there is hardly a more relentlessly price-cutting arena than computer chips.
From Bombardier’s perspective, if she and her staff can find ways to use less water, and to make water more smartly, she’s directly reducing the cost of IBM’s chips. Wringing expensive water out of the process helps the giant stay nimble.
“All the issues with water, with energy, with the increasing cost to produce water and move water,” says Bombardier, “that’s always inches from my nose.”
The daily water bill at IBM Burlington, including energy and chemicals, is $10,959. Most of the water used each day—2.2 million gallons— becomes ultra-pure water, the most expensive kind. Of the $10,959 bill, $9,300 a day goes to make ultra-pure water. That’s the big target for the water staff. Not much point in worrying about how much water the toilets use, when 85 percent of each day’s cost is in the ultra-pure water.
That, in fact, is the first lesson from IBM Burlington. It’s not about saving water per se—it’s about understanding how you use water; where the costs are, and reducing them; where the value is, and preserving that.
In that sense, IBM Burlington’s water factory is just like a Celebrity cruise-ship buffet line or the shower of a Las Vegas hotel. You still need the qualities that the water is providing—you want to rethink your use of ice without leaving the chicken salad lukewarm, you want to reduce the amount of water the hotel bathroom consumes while preserving an indulgent shower experience. But if in those examples Royal Caribbean and MGM Resorts are working with an inspired idea and good instincts about their customers, IBM Burlington is working from the analytics—from the billions of bits of information it gathers about water, sifting for patterns, trends, for bulges of wasted energy that aren’t being harnessed. That, in fact, is part of IBM’s business: teaching people to sift huge quantities of data for important insight, and then selling them the computers and the software to do it themselves.
In the ultra-pure water factory, though, as on the buffet line, it’s the mind-flip about water that gets you started. You have to take a step back and look at the water cycle as a whole. “One of the most innovative things we’ve done,” says Bombardier, “is we take the energy the water inherently has in it, and we use it for other purposes.” Or, as her deputy Eric Berliner put it, Everywhere you see water flowing in pipes, think dollar signs.
Water comes into IBM Burlington cold from Lake Champlain and the Champlain Water District. It’s so cold, in fact, that it has to be warmed up before they can turn it into ultra-pure water. Meanwhile, the factory has thirteen massive, two-story-tall chillers using huge quantities of electricity to produce cold water, even in winter.
If it seems stunningly obvious to connect these two problems—well, not really. There was coldness in the incoming water that for most of its fifty years, IBM Burlington wasn’t quite smart enough to use—in fact, the coldness was undesirable; IBM spent money getting rid of it. In another part of the 750-acre campus, water had heat in it that was undesirable, and IBM spent money getting rid of that. In most companies, in most organizations, though, there wouldn’t be much of a pipeline connecting the specialty department that creates ultra-pure water with the everyday engineering department that is running the air-conditioning systems.
What IBM Burlington’s engineers have done isn’t nearly as glamorous, or as comprehensible, as substituting cold river rock for ice. But it is, in fact, exactly the same concept. In a plant that already has something like eighteen plumbing systems—from steam to a segregated fire-sprinkler system—they’ve created three fresh loops of water, to capture cold and heat where it is and use it where it’s needed. The cold incoming water, for instance, is routed to areas that need chilling. It provides “free” cold, and in the process, it gets warmed up, also “free,” so it’s ready to be ultrapurified.
IBM Burlington also now uses cold outside air—which is abundant in Burlington, where the average high in December, January, and February is never above freezing—to make cold water in winter, instead of using its big chillers.
All of this saves water, and it saves all the things water requires to do its jobs. These kinds of projects are daunting enough that IBM Burlington uses computer models to track water, temperature, and energy to make sure its ideas are going to work.
And the result? Between 2000 and 2009, IBM Burlington cut its water use 29 percent—that saved the factory $740,000 a year in water bills. But here’s where the magic of water really kicks in. Cutting water use by $740,000 is saving $600,000 in chemical and filtration costs each year. It is saving $2.3 million in electricity and energy costs.
For every $1 that IBM Burlington cuts its basic water bill, it saves $4 more in chemical, electricity, and energy costs.
By the end of 2009, production of chips at IBM Burlington was up 30 percent compared with 2000. So over the course of nine years, the water staff had cut water use 29 percent, saving $3.6 million a year—while the facility was actually increasing its output by a third. The result: Between 2000 and 2009, “water productivity” at the plant very nearly doubled. A thousand gallons of water in 2009 produced 80 percent more chips than a thousand gallons of water in 2000.
So it isn’t just that Janette Bombardier’s team saved $3.6 million a year by being smarter about water. If they’d done nothing, increased production of chips would have actually raised the cost of water by perhaps $2 million in 2009. The real savings—out there in a world where even $4.99 birthday cards contain computer chips—the real savings is $5 million a year.17
“We did fifty things to get there,” says Bombardier. “Angles of usage, treatment, energy capture, using less pump capacity, capturing internal pressure that comes with the water in the line—fifty different things.”
As IBM has discovered, the measuring alone creates an imperative for curiosity and innovation, for changing behavior—just like when you keep track of every calorie you eat, you start cutting back, just like when there’s a real-time miles-per-gallon number on a car’s dashboard, you can’t help but drive in such a way as to keep the mpg number high.
“We are never done,” says Bombardier. “We are never out of ideas.”
Water consciousness has a kind of infectious quality, an upward spiral in which better water management spins off all kinds of benefits that reinforce the original impulse to think about water. For IBM, the real inspiration from Burlington has been far more dramatic than simply saving water and money. Burlington has helped IBM change the way it thinks about itself. IBM, the computing company, is creating a whole business around water. IBM wants to do for its customers—for companies, for cities, for utilities, for whole natural ecosystems—what it has done in IBM Burlington.
IBM’s leap seems bemusing on the face of it. Why would the world’s legendary computer company go into the water business? The answer is really both simple and brilliant. In most places, in the United States and the rest of the world, water is not smart. Traffic signals have intelligence, highways have intelligence, the electric grid has intelligence, the cell phone network, the cable TV network, heck, even Wal-Mart’s long-haul trucks are connected on an intelligent network. Water’s network typically moves only water, not any information about the water. Even at the simplest level, for instance, most water meters are still read, not automatically but manually, with someone striding along and popping open your water-meter cover.
“Water is not really measured and monitored in a way that allows you to manage it,” says Sharon Nunes, a vice president at IBM in charge of the company’s Big Green Innovations effort. Her job is to create businesses for IBM out of the exploding world of sustainability. “We think there is a big business opportunity around managing water. Water is not disappearing. But as it becomes more scarce in more areas, it becomes critical to manage it better.”
IBM, in fact, wants to do for water what Apple’s iTunes has done for music. At the simplest level, iTunes is just what the corporate IT types would call a “dashboard” for managing your music. You can see what you’ve got, you can see what’s out there, you can see how much it costs, you can see what you’ve bought, you can even see what other people are buying. iTunes is a music ecosystem—Apple doesn’t know anything in particular about music, except how you might want to use it, display it, arrange it, analyze it. iTunes offers you a “smart music” system.
That’s exactly what IBM wants to offer for water users. What IBM can do is lay down a nervous system of water sensors, feeding an array of computers, loaded with analytical software that lets you see and understand your water—whether you’re running a microchip factory, as IBM does, or a sprawling university, or a sewage treatment plant, or trying to understand the hydrodynamics of a whole bay. IBM wants to offer a “dashboard” of water intelligence, a way of grasping your whole water ecosystem. That kind of intelligence has transformed the world of music—for anyone who listens to music, for music companies, and for the artists themselves. (One crucial difference, of course, is that iTunes is a closed system, valuable but hermetic; water is the original open-source system.)
IBM, in short, wants to usher in the era of what it calls “smart water.” That’s what it has created with its five thousand sensors and its 400 million data points a day in Burlington: smart water. Not just the kind of information that lets it use less water here and there, the kind of information that lets it take the qualities inherent in the water it is using, and shift those qualities around to where it needs them.
In March 2009, IBM formally announced the creation of a water management services business unit, along with a list of pilot customers and projects, including a sensor system to monitor Ireland’s Galway Bay, a similar system to model and monitor New York’s Hudson River, and a contract to create an “end to end” smart-water utility for the island nation of Malta.
The conventional estimate is that around the world, water is a $400 billion-a-year business—that’s four times the size of IBM’s annual revenue, but it includes everything from digging up worn-out water pipes to building billion-dollar desalination plants. IBM says the information technology part of water, the smart-water market, could be $15 billion or $20 billion a year.
For the moment, water seems to be inspiring not just a mind-flip at IBM but also a burst of creativity and cross-pollination that is a reminder of how spartan water technology really is, despite a hundred years of modern water systems. The century-long golden age of water has made the water world complacent. There aren’t many areas of modern life in the developed world where thousands of staff people routinely maintain vital technology that is forty or fifty or even a hundred years old. But that’s the standard in water. Even lightbulbs—evolving from incandescents to compact fluorescents—have made more progress than most water technology.
In the spring of 2010, IBM vice president Sharon Nunes announced a partnership with a Saudi Arabian research center to develop a new, inexpensive desalination system that could be powered by solar energy. In the Middle East, of course, where the whole region needs to manage its fresh water with an eyedropper, finding ways to use the sun to make cheap drinking water is a near obsession. What was remarkable about the IBM announcement is that the project relies on combining two unrelated areas of IBM’s technology portfolio: microprocessor technology (in a new kind of solar panel) and nanotechnology (in a new kind of desalination filter), in the service of a third business—making clean water, a business IBM wasn’t in just four years ago.18
If water is going to get smart, or more to the point, if we’re going to get smart about water, that’s the kind of convergence, the kind of cross-disciplinary leaps, that are going to be required.
IBM, in fact, seems to be betting that it can learn about the water business even while it is teaching its customers about their water. Most of its early water projects include partners with deep experience managing or understanding the water part of water systems. “There are very few water experts in IBM,” says Cameron Brooks, who is part of Nunes’s team in charge of building IBM’s water business. “For the moment, we’re trying to bring the capabilities we already have to this new area, to figure out how to make a difference.”
IBM’s favorite example of smart-water effectiveness, in fact, is its own Burlington semiconductor plant. “We bring the institutional expertise in how to do this,” says Janette Bombardier. Her senior water system manager, Jeff Chapman, has been tapped dozens of times for sales presentations around the world, including as far afield as Singapore, to explain what it means to look at your pipes as if they have dollar signs flowing by. “Jeff is helping to create a strategy for the whole corporation,” says Bombardier. And what is Chapman’s hourly consulting rate to IBM’s sales operation? Bombardier smiles. “I give him up for free, until there’s a real contract signed.”
THE LARGEST BOTTLED-WATER FACTORY in North America is located on the outskirts of Hollis, Maine. In the back of the plant stretches the staging area for finished product: 24 million bottles of Poland Spring water. As far as the eye can see, there are pallets double-stacked with half-pint bottles, half-liters, liters, Aquapods for school lunches, and 2.5-gallon jugs for the refrigerator.
Really, it is a lake of Poland Spring water, conveniently celled off in plastic, extending across six acres, eight feet high. A week ago, the lake was still underground; within five days, it will all be gone, to supermarkets and convenience stores across the northeastern United States, replaced by another lake’s worth of bottles.
Looking at the piles of water, you can have only one thought: Americans sure are thirsty.
Bottled water has become the indispensable prop in our lives and our culture. It starts the day in lunch boxes; it goes to every meeting, lecture hall, and soccer match; it’s in our cubicles at work; in the cup holder of the treadmill at the gym; and it’s rattling around half-finished on the floor of every minivan in America. FIJI Water shows up on the ABC show Brothers & Sisters; Poland Spring cameos routinely on NBC’s The Office. Every hotel room offers bottled water for sale, alongside the increasingly ignored ice bucket and drinking glasses. At Whole Foods, the emporium devoted to sustainable food, bottled water is the No. 2 item by units sold.19
Thirty years ago, bottled water barely existed as a business in the United States. In 2009, we spent $21 billion on bottled water, more on Poland Spring, FIJI Water, Evian, Aquafina, and Dasani than we spent buying iPhones, iPods, and all the music and apps we loaded on them.20
Indeed, if there can be said to be a “business of water” in the United States, a business with which we are both familiar and utterly at ease, it is the business of bottled water. For most Americans, bottled water is the one spot in their daily lives where water and commerce routinely intersect.
And bottled water certainly represents a water mind-flip. A generation of American adults raised on tap water and water fountains, we now drink a billion bottles of water a week, and we’re raising a generation that views tap water with disdain and water fountains with suspicion. We now drink more gallons of bottled water than milk. Touchy about the cost of everything from the monthly cable TV bill to microwave ovens, we’ve nonetheless acclimated ourselves to paying good money—two or three or four times the cost of gasoline—for a product we have always gotten, and can still get, for free, from taps in our homes.
It would be easy to regard bottled water as a bemusing sidelight to the world of water. While the volumes of bottled water are staggering when considered as a consumer product—we drink eighteen times as much bottled water per person today as we did in 1976, seventeen bottles a month for every man, woman, and child in the country—the amount of actual water involved is trivial. In 2009, a total of 8.4 billion gallons of water was sold on store shelves in the United States. That’s 27 gallons of water per person, per year. If you take one bath all year, you use almost twice that. In fact, U.S. water systems leak about 7 billion gallons of water a day—so the water pipes supplying our homes leak more drinking water in thirty hours than we buy at stores in a year.21
But bottled water isn’t a curiosity. In some ways, it isn’t just the water business we are most familiar with, bottled water is the water phenomenon of our times. The water business has remained stagnant for forty years, even as dramatic innovation has swept through almost every other arena you can point to, from the engines in our cars, to how we cook, to the “technology” embedded in our Kleenex. If you were to look for water innovations that people could point to, could appreciate, in the last forty years, well, the availability of chilled water from the island nation of Fiji in a sexy square bottle in the cooler of your corner 7-Eleven—that would be one of the standouts. Bottled water has certainly turned out to be more popular, and more prized, than, say, the dual-flush toilet.
Walk into the water aisle at any large suburban supermarket—an aisle that didn’t even exist thirty years ago—and you’ll find water from three or four continents, water from glaciers (they’re melting anyway). You’ll find water with added oxygen. IBM notwithstanding, you’ll find bottles of SmartWater, with added electrolytes to “one-up Ma Nature.” There’s certainly been more creativity in bottled water in the last three decades than there has been from the makers of the lowly water fountain.
The problem is that bottled water is a wacky, funhouse-mirror version of the real world of water. Bottled water subtly corrodes our confidence in tap water, creating the illusion that bottled water is somehow safer, or better, or healthier. In fact, tap water is much more tightly regulated and monitored than bottled water.22 The three largest brands of bottled water—Nestlé Pure Life, Coke’s Dasani, and Pepsi’s Aquafina, which together make up 20 percent of all bottled water—are nothing but municipal tap water, repurified and packaged up for our convenience. Bottled water undermines our financial and civic commitment to a reliable public water system. Why accept an increase in the water bill, why vote yes on a water-system bond issue, when you can always get your water at the supermarket? Indeed, bottled water offers a kind of spring-fed vision of water security, a vision that turns out to be a mirage the moment we need to depend on it. When one of the main aqueducts feeding Boston’s water system failed in May 2010, 2 million people in the Boston metro area were ordered to boil their water before using it, not just to cook but even to wash their dishes. Supermarkets across Boston sold out of bottled water within hours after the boil-water order went into effect. And Boston’s system didn’t fail to deliver water—everyone still had water pressure for toilets and showers; the water just wasn’t dependably clean enough to consume during the water-main break.23
Americans spent $21 billion on bottled water in 2009. It doesn’t seem like an astonishing sum of money—about $65 per person, $1.25 a week. But in the context of water, $21 billion is huge.
Consider, for instance, what Americans spend for all the water delivered to their homes—350 gallons per family per day, 365 days a year. The water bill comes to about $412 a year. Which means we spend $46 billion a year on all the household water we use all year long—to run the morning shower, to boil the pasta, to water the lawn. As a nation, we spend $46 billion for a year’s water, always on, whenever we need it. And we spend another $21 billion—almost half as much—for bottled water, for an amount of water that wouldn’t get us through eight hours of water use at home on any given day.
But there’s an even more arresting comparison. We spend about $29 billion a year maintaining our entire water system in the United States—the drinking water treatment plants, the pump stations, the pipes in the ground, the wastewater treatment plants.24
So as a nation, we spend very nearly as much on water delivered in small crushable plastic bottles as we do on sustaining the entire water system of the country.
When we buy a bottle of water, of course, what we’re often buying is the bottle itself, as much as the water. We’re buying the convenience—a bottle at the 7-Eleven isn’t the same product as tap water, any more than a cup of coffee at Starbucks is the same as a cup of coffee from the coffeemaker on your kitchen counter. But we’re also buying the artful story the water companies tell us about the water: where it comes from, how healthy it is, what it says about us.
Bottled water, in that sense, is often simply an indulgence. The problem is that it is not a benign indulgence. We’re moving 1 billion bottles of water around a week in ships, trains, and trucks in the United States alone. That’s a weekly convoy equivalent to 37,800 18-wheelers delivering water. (Water weighs 8.33 pounds a gallon. It’s so heavy you can’t fill an 18-wheeler with bottled water—you have to leave empty space.)
Meanwhile, of course, one out of six people in the world has no dependable, safe drinking water. The global economy has contrived to deny the most fundamental element of life to 1 billion people, while delivering to us in the developed world an array of water “varieties” from around the globe, not one of which we actually need. That tension is only complicated by the fact that if, as a nation, we suddenly decided not to purchase the lake of Poland Spring water in Hollis, Maine, none of that water would find its way to people who really are thirsty.
The chilled plastic bottle of water in the convenience-store cooler is the perfect symbol of this moment in our relationship to water. As a business, bottled water stands triumphant. The variety available is staggering—it’s as hard to pick the right water as it is to pick the right toothpaste, or the right laundry detergent. There’s water from the French Alps, from the Italian Alps, and water from a spring in Indiana packaged in a striking glass wine bottle. There’s water touting qualities that seem a bit redundant— skinny water, life water, zero-calorie water—and water with added antioxidants, or vitamins, or a zest of raspberries, which seems to be drifting away from actually being water.
Evian packages its famous French mineral water in an aerosol mister so you can use Evian to refresh your face as conveniently as you use it to refresh your thirst. The Evian facial mister may offer the most expensive water routinely available at retail: the 3.3 tablespoons in a palm-size aluminum can cost $5.50. At that price, a single half-liter bottle of Evian would go for $55—$427 a gallon.
Bottled water is the final flowering of the old water culture. Nothing says indulgence, in fact, like paying for something you don’t need to pay for, like paying for something you don’t need. Superficially, it looks like a somewhat silly triumph for capitalism—look what really smart, creative people can do with something as utterly pedestrian as water. In fact, it’s a reminder of exactly the opposite—the market has created very persuasive solutions for water problems that don’t exist, while failing to find any solutions for real water problems.
As the first decade of the twenty-first century came to a close, though, bottled water was taking a beating in terms of its public image. The cities of San Francisco and Seattle and the New York city council all banned the purchase of bottled water with city money except in the case of emergencies.25 There was a growing awareness of bottled water’s environmental impact. We only recycle 27 percent of the plastic bottles in which our water comes—so in the United States alone we’re throwing away 36 billion plastic water bottles a year, 115 discarded water bottles for each of us.26
In fact, the amount of bottled water sold—which grew by 8.6 percent in 2004, by 10.8 percent in 2005, by 9.5 percent in 2006—peaked in 2007. Whether because of the recession, or because of bottled-water skepticism, sales fell in 2008 by 1 percent, and fell again in 2009 by 2.7 percent. The slippage was small—less for bottled water than the drop in beverage sales overall. But the real significance was this: 2008 was the first year bottled-water sales in the United States had fallen since 1976, the first pause in thirty-two years of nonstop growth. Said the Beverage Marketing Corporation, in its analysis of the 2009 bottled-water sales: “While not specifically measured for this study, tap water was likely one of the winners in 2009, driven by cost-conscious consumers.”27
It is, of course, just bottled water, not high on the list of modern sins one might routinely commit—hardly comparable in impact to driving a Hummer or driving a Prius while texting. Carbonated soda, the only category of drink in the United States that outsells bottled water, is hardly better for you, or for the environment—and it, too, is mostly water in a bottle. In a country where one-third of us are obese, we could clearly use a little more water and a little less soda.
Is the bottled-water aisle at the supermarket really different from, say, the cookie aisle, where the varieties of Oreos alone now number at least ten?
It is different, in this way: The variety and intensity of the bottled-water business isn’t a signal that the water economy is flourishing with creativity. It’s a signal that the water economy has malfunctioned. The bottled-water aisle is less a sign of intelligent life in the water business than of water illiteracy—mostly on the part of us, the customers. No matter what the ads say, bottled water is not, in fact, smart water.
If bottled water has been the water phenomenon of the last thirty years, FIJI Water has been the phenomenon of the bottled-water boom, carefully cultivating celebrity customers and fashionable outlets to become the No. 1 imported bottled water in the United States, besting Perrier and Evian.28 Much to the company’s delight, Barack Obama and his family were photographed drinking FIJI Water on election night. Obama has since been reported to drink FIJI Water during his daily workouts.29
FIJI Water is a miniature miracle of the modern global economy— water from an aquifer on the isolated north coast of Fiji’s main island, bottled in a state-of-the-art factory that fills and packs more than a million bottles of water a day, water that then makes its way by truck, cargo container, ship, and even the Panama Canal, to the hippest clubs and restaurants in Los Angeles (5,520 miles from Fiji) and Miami Beach (7,480 miles from Fiji). Meanwhile, more than half the residents of the nation of Fiji do not themselves have safe, reliable drinking water. Which means it is easier for the typical American living in Beverly Hills or Miami or Manhattan to get a drink of safe, pure, refreshing Fijian water than it is for most people in Fiji.
IN 2008, GE STARTED AIRING a TV commercial that was beautiful, original, and a little eerie. Scored to a haunting version of Creedence Clearwater Revival’s “Have You Ever Seen the Rain?” the video takes place in the clouds, where it turns out that a silent staff is at work, powering nature’s water cycle. Everyone wears white, including white hard hats and white hooded jumpsuits. Water evaporates into the clouds in white buckets. A huge white bellows turns the water into cloud vapor. Water flows through the old-fashioned wringers once used to launder clothes—tended by women in white jumpsuits—presumably to get cleaned. A white-goateed technician samples the water with a test tube, then examines it closely. Long, meandering lines of white-suited workers form bucket brigades, filling enormous white watering cans, which, as thunder rumbles, are tipped over to bring on the rain.
The lighting and design perfectly capture that mood before a storm when the thunderheads are building but the sunlight is still streaming through them with heightened brightness.
The commercial’s opening scene plays in sync with the opening line of the song. “Someone told me long ago, there’s a calm before the storm. / I know, it’s been coming for some time.”
A first-time viewer would be captured but, for almost the entire commercial, would have no idea what it was about. Right at the end, as the watering can rocks over, a narrator offers twenty words. “Just as nature reuses water, GE water technologies turn billions of gallons into clean water every year. Rain or shine.”
There is a brief moment—two seconds—showing water bubbling in the tanks of a GE water treatment plant. As the GE “ecomagination” logo comes up on the screen, vocalist Juju Stulbach sings the song’s final line: “Coming down on a sunny day.”30
It would be hard to pack more into forty-five seconds—more vivid imagery, more unspoken foreshadowing about the future, more potent reassurance of water well cared for—than GE’s “Clouds” commercial does. The world of water may seem calm now, but it’s the calm before the storm. Nature does a super job cleaning and recycling water, but so does GE. Clouds are great, but nothing beats a battalion of white-suited technicians, who are respectful enough of the purity of water to cover their hair and wear white gloves. In fact, as the narrator points out, GE water technologies have one tiny edge over nature—GE provides water, rain or shine. Water, from GE, “coming down on a sunny day.”
The giant industrial conglomerate—it makes diesel locomotives in Erie, Pennsylvania, jet engines in Cincinnati, Ohio, wind turbines in Pensacola, Florida—has an ambitious water division, GE Water, with eight thousand employees at fifty manufacturing facilities worldwide and revenue of about $2.5 billion.31 GE Water cleans water for a Virginia coal mine to reuse; GE Water built the largest desalination plant in Africa, in Algiers; GE Water created a small wastewater purification plant that produces 172,000 gallons a day of reuse water to keep the fairways and greens at Pennant Hills Golf Club in Sydney, Australia, lush right through Australia’s brutal drought. (Australians refer to it as the country’s first “sewer mining” facility; the golf club literally taps a nearby municipal sewer line as the source for the water its GE-supplied facility cleans up.)
China’s Lake Taihu—source of drinking water for 30 million people in the Wuxi metropolitan area—suffered an algae bloom in 2007 so catastrophic that it covered 70 percent of the lake’s surface and cut off drinking water supplies to at least 4 million people. Wuxi subsequently chose GE Water to provide the technology necessary to clean up the heavily polluted lake, which is larger than Florida’s Lake Okeechobee.32
Around the world, most of the water treatment systems in use in Coca-Cola bottling plants come from GE Water.
GE Water even has a “mobile water” business unit that puts a complete water treatment plant inside an 18-wheel truck trailer or a cargo container. It has 800 of the self-contained, deployable mobile water units, which each make about 1 million gallons of clean water a day, for use in emergencies or when a factory needs to take its own water system off-line for maintenance. In an emergency, GE says, it can get a mobile water unit to most places in the United States in two or three hours.
Whether you’re trying to turn seawater into drinking water for your city, clean up your coal-seam water before it pollutes nearby streams, reuse sewer water for irrigation, or remedy decades of pollution that’s already gotten away from you, GE Water stands ready.
Says Jeff Fulgham, chief marketing officer for GE Water, “The beauty of the GE portfolio is, we can treat it all.”
The astonishing thing is, in 1999, GE wasn’t in the water business. Moving with quiet speed, GE has assembled its water division by spending $4 billion to buy up five existing water companies. Now GE can make the rain fall, and scrub it clean if it turns out to be acid rain. (For the truly conspiracy-minded, there is an odd bit of history from the GE corporate attic. Although GE only stepped into the water business in 1999, it was a GE researcher, Vincent Schaefer, who first developed the technology of cloud seeding in 1946, using a freezer, a cloud of his own breath, and dry ice. GE says the company has no involvement in the cloud-seeding business now, although that history does cast the “Clouds” TV commercial in a slightly different light.33)
The new GE business is busy, but it hasn’t grown as fast as CEO Jeffrey Immelt would like. GE wants water to quickly be a $10 billion-a-year business, but it turns out that many companies are skeptical about spending money on water when there is no urgent pressure—financial, governmental, or scarcity—to do so. “Customers aren’t feeling a cost for their water,” says Fulgham, “so they’re reluctant to spend money to improve their situation.”
Immelt, at least publicly, has urged patience. “People see me investing in the water business. It’s financially only so-so. You take four steps forward, three back. But they hear me constantly saying, ‘Don’t touch it. Someday this is going to be a really great business.’”34
It’s a funny moment in the world of water—big companies, water-dependent companies, companies with a particular risk or a particular sensitivity are ahead of the rest of us in worrying about water. Companies are cracking open their own understanding of how to use water, matching the right quality of water to the right need, learning how to reuse water or capture the qualities of water, like heat and pressure, that have often been discarded.
That’s good in all kinds of ways—it’s good because innovative companies are already trying to find solutions to problems the rest of us don’t know exist, problems that could become widespread; it’s good because it’s a clear signal to the rest of us to start paying attention to water; it’s good in the simplest terms of all: When the water crises start to break out more routinely, at least someone will be ready.
But it should also make us nervous. One CEO of a small, water-related company has been watching GE’s move into water with a touch of wariness. “It’s like a New Yorker cartoon,” he says. “The world is one man, dying of thirst, crawling on his hands and knees through the desert. Just up ahead stands a smiling guy in a suit, holding the last glass of water, available for a fee. That’s GE Water.”
Except for air and water, in fact, we pay for almost everything else in life that is essential; we entrust everything, from electricity to hospitals, to private companies. Private companies hold our money and, these days, manage our friendships and our love lives. But just as water technology has not evolved dramatically in the last fifty years, neither has water law or water regulation or water oversight. There is a strand of altruism running through all water management efforts—people at Michell Wool and Coke and GE drink water every day too. But it’s also true that you don’t pay $4 billion to create a business, and then complain publicly about its financial performance (as Immelt did about GE Water at an investors conference in December 2009) out of altruism.35
GE technology does, in fact, turn billions of gallons of water into clean water every year. But GE is also the company whose PCBs poured into the upper Hudson River, creating a pollution problem that stretches 197 miles, to the southern tip of Manhattan, and that GE hasn’t managed to fix since that stretch of Hudson River was declared a Superfund site by the EPA in 1984. Over a quarter-century of negotiations, foot-dragging, and preliminary work, two things are true: GE hasn’t yet removed the PCBs from the Hudson’s water and riverbed, and the company that spent $4 billion in seven years to create a clean-water business has spent not even $1 billion on its Hudson River efforts, which won’t be finished at the earliest before 2016.36
So while it’s important that companies are leaping into the water business, while it’s impressive that they are providing leadership and pursuing innovation and even a vision for the future, it’s also vital not to let business get so far ahead that we cede the future of water to commercial interests.
The companies themselves are discovering that our complicated attitudes about water mean that the rational solution, the logical fix, even if presented with style, may not work very well in the face of the very personal connection we have to water.
The new square showerheads for the 4,004 rooms at MGM Resorts’ Aria hotel in Las Vegas, for instance, were so dramatic and successful elsewhere that the Delta Faucet Company for months featured them on the home page of its Web site. The showerhead takes advantage of precisely the sort of cross-disciplinary technology that the whole world of water is waiting for. The goal was to get strong pressure, and to retain warmth in the shower spray, while using dramatically less water.
“The technology came over from the automotive industry,” says Paul Patton, a senior product development manager with Delta. “It came from car windshield washers. Remember ten years ago, the washer jets would be narrow, or weak, or they’d shoot over the top of your car? Today you get a nice even fan of water that goes on the window.
“That’s the ‘fluidics,’” says Patton. “It’s really not so different from the requirements for a showerhead—the windshield washer doesn’t have much pressure or much water.” Delta’s high-tech showerheads don’t have any moving parts inside. The water follows a kind of raceway through the showerhead—gaining force the way you do on a waterslide—and being broken into larger drops than typical, to retain heat further from the showerhead—so you feel like more water is hitting you. The four holes are misleading—with the new internal design, they manage to create a wide, warm spray zone.
There’s only one problem. Within a month of Aria’s opening, guests were complaining about the showerhead. “We were having mixed reviews from it,” says MGM Resorts senior vice president Cindy Ortega. Yes, luxury hotel guests in Las Vegas will take the trouble to grouse about the showerheads in their rooms, particularly if they don’t feel like the showerheads do a good job of rinsing off soap and shampoo.
Just weeks after the hotel opened, Ortega says, “I went and spent the night at the Aria for the purpose of testing the showerhead. To see what it’s like, again. I have to say, I thought the shower was really great. I like it. I think it’s really a love-it-or-hate-it kind of thing. That’s people’s reaction.”37
The Aria opened in December 2009. By April, the showerheads had all been replaced with a less cutting-edge, less distinctive, Delta model— classic round shape, forty-five holes instead of four, with a standard cone-shaped spray. The water use is pretty good: 2 gallons per minute, not as good as 1.5 gallons per minute, but better than 2.5. “With the showerhead, you know, we were reaching,” says Ortega, “and sometimes you reach too far.”
One thing that’s often oddly missing from the conversation about the business of water is the price of the water itself. The companies that are taking water seriously at this point have something at risk—their inability to function without reliable water, their reputation if they squander or damage local water supplies. Or they see an opportunity in convincing other businesses to try to understand their water risk.
The problem is that the water itself is free, or next to free. So making an argument to spend money in order to save water, or better manage water, on the basis of the cost of the water itself makes no sense. It is often cheaper to simply take fresh source water than to purify and reuse the water you’ve already got.
Although we don’t often notice it, every gallon of water we use has an economic value—the value of whatever we can actually do with that water, whether it’s boil a pot of rice, or grow an acre of wheat, or make a microchip.
In fact, we typically behave—in our homes, our schools, our companies and organizations—as if the opposite were true: We act as if clean, on-demand water had zero economic value. Especially in the developed world, the economic value inherent in the water is hidden under a cloak of invisibility, because although the water has indispensable usefulness, it rarely has a price.
That’s really what we mean when we shrug and say that people take water for granted—we take it for granted because good water is basically free, so we can afford to take it for granted.
What’s really interesting about the business of water is that people who start to take the economic value of water seriously immediately start to use water differently, and also to think about it differently.