Will Energy Producers Run Out of Water Before They Gather Steam?

A bipartisan bill was introduced earlier this month in the Senate which would require the Energy Department to analyze the impact energy development and production has on U.S. water resources. Senate Bill 531, the Energy and Water Integration Act of 2009, was jointly introduced on March 6, 2009 by Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) and ranking member Lisa Murkowski (R-Alaska). The Act would give the Energy Department 90 days to develop an “Energy-Water Research and Development Roadmap” to address water-related challenges to energy production.[1] It would also require the National Academy of Sciences to study water use and consumption related to different methods of producing fuel for transportation and electricity.[2] At the same time, the Energy Department would be required to identify best available technologies to maximize water and energy efficiency in electricity production.[3] The Act would require the Interior Department to identify Bureau of Reclamation water storage and delivery projects that consume the most energy and identify opportunities to conserve water and energy use related to such projects.[4] Reports on those subjects would be due to Congress in the next 18 months. The Energy Department would then be required to assess water-related energy consumption economy-wide every three years.[5]

Energy and Water Integration Act of 2009

The Energy and Water Integration Act is a response to challenges associated with the intersection between energy and water that are expected to intensify in the near future, particularly as the projected effects of climate change come to bear. As Senator Bingaman stated at the March 10, 2009 hearing on S. 531:

Energy production requires substantial amounts of water - this is of course a resource becoming increasingly scarce in several parts of the country. Whether it involves electricity generation or fuel production, the choice of fuel stock can dramatically influence the amount of water needed as part of the process of producing that energy. That nexus is starting to emerge in permitting decisions across the country. Similarly, acquiring, treating, and delivering water consumes a large amount of energy. Improving water use efficiencies, may yield multiple benefits in the form of reduced water demand during times of shortage, and reduced energy consumption with attendant cost-savings that result from reduced energy production. [6]

A late 2006 Energy Department study noted that power generation accounted for 39 percent of all freshwater withdrawals in 2000.[7] The Department’s study “cited estimates that if current trends continue, power plants will be withdrawing 7.3 billion gallons a day by 2030 – equal to all U.S. water consumption a decade ago.”[8]

As a result, the Act appears to have fairly wide support. It was sponsored by a member of each party. At the March 10, 2009 hearing, the Act received positive testimony from Steve Bolze, the president and CEO of GE Energy’s Power & Water business,[9] and Peter Gleick, president of the Pacific Institute, a research institute that works to advance environmental protection, economic development, and social equity.[10]

Study - Water and Energy Production

The Energy and Water Integration Act of 2009 would require three major new assessments of the intersection between water and energy. Under Section 2 of the Act, the Energy Department, in consultation with the Department of the Interior and the Environmental Protection Agency (“EPA”), is to enter into an arrangement with the National Academy of Sciences under which the Academy would conduct an in-depth analysis of the impact of energy development and production on the water resources of the United States.[11] The Academy’s study will have three sectors: transportation, electricity, and other impacts.

The transportation sector portion of the study will include a lifecycle assessment of the quantity of water withdrawn and consumed in the production of transportation fuels, or electricity, to evaluate the ratio that the quantity of water withdrawn and consumed in the production of transportation fuels or electricity bears to the total distance traveled as a result of the consumption of transportation fuels or electricity.[12]

The scope of the transportation sector of the Academy’s assessment may include, as applicable: exploration for, and extraction or growing of, energy feedstock; processing of energy feedstock into transportation fuel; generation, transportation, and storage of electricity for transportation; and analysis of the efficiency with which transportation fuel is consumed.[13] The scope of the electricity sector of the Academy’s assessment includes a similar set of items.

The transportation fuel sources subject to the study include:

• Domestic and imported crude oil and natural gas (including products derived from crude oil and natural gas);
• Oil shale;
• Tar sands;
• Domestic and imported corn-based ethanol;
• Advanced biofuels (including cellulosic- and algae-based biofuels);
• Coal to liquids (including aviation fuel, diesel, and gasoline products);
• Electricity consumed in fully electric drive vehicles; and plug-in hybrid vehicles;
• Hydrogen; and
• Any reasonably foreseeable combination of the listed transportation fuel sources.

For the electricity sector, the assessment would contain an evaluation and analysis of electricity generation facilities that are constructed in accordance with different plant designs (including different cooling technologies such as water, air, and hybrid systems, and technologies designed to minimize carbon dioxide releases) based on the fuel used by the facility, including:

• Coal;
• Natural gas;
• Oil;
• Nuclear energy;
• Solar energy;
• Wind energy;
• Geothermal energy;
• Biomass;
• Beneficial use of waste heat; and
• Any reasonably foreseeable combination of the listed fuels.

In addition to the impacts associated with the direct use and consumption of water resources in the transportation and electricity sectors described above, the National Academy study must also identify and analyze any unique water impact associated with a specific fuel source, including an impact resulting from: any extraction or mining practice; the transportation of feedstocks from the point of extraction to the point of processing; the transportation of fuel and power from the point of processing to the point of consumption; and the location of a specific fuel source that is limited to one or more specific geographical regions.

Within 18 months of the Act, the National Academy of Sciences must submit to the Secretary of Energy and the public a report that summarizes the study’s results.

Study - Electrical Power Plant Water and Energy Efficiency

Section 3 of the Act would direct the Energy Department, in consultation with the Department of the Interior and the EPA, to study ways to protect water supplies and promote the efficient use of water in the electricity production sector.[14] Energy would apparently conduct its study at the same time the National Academy studies the impact of energy development and production on U.S. water resources. Energy would be required to identify and evaluate best available technologies and related strategies to maximize water and energy efficiency in the production of electricity. The study would evaluate energy production efficiency by type of generation facility, including:

• Coal – evaluating different types of coal and associated generating technologies as well as designs to minimize and sequester carbon dioxide releases;
• Oil and natural gas – evaluating designs to minimize and sequester carbon dioxide releases;
• Hydropower – including turbine upgrades, incremental hydropower, in-stream hydropower, and pump-storage projects;
• Thermal solar; and
• Nuclear.

Within 18 months of the Act, the Energy Department must submit a report to the appropriate committees of Congress that contains a description of the results of the Power Plant Water and Energy Efficiency study.

Study - Energy Use for Water Storage and Delivery

Section 4 of the Act would direct the Interior Department to study and evaluate energy used in federal water storage and delivery operations run by the Bureau of Reclamation.[15] The study’s purpose would be to promote the efficient use of energy in water distribution systems – including assessing and estimating the annual energy consumption associated with each “major Reclamation project.” Interior would be required to identify each major Reclamation project that consumes the greatest quantity of energy and the aspect of such projects that is the most energy intensive (including water storage and releases, water delivery, and administrative operations). Interior would also be required to identify opportunities to significantly reduce current energy consumption and costs with respect to each major Reclamation project, including, as applicable, through –

• reduced groundwater pumping;
• improved reservoir operations;
• infrastructure rehabilitation;
• water reuse; and
• the integration of renewable energy generation with project operations.

This report would also be due within 18 months.

Brackish Groundwater Desalination

Section 5 of the Act directs the Department of Interior to carry out carry out research, development, and demonstration activities on technologies that promote brackish groundwater desalination as a viable method to increase water supply, setting priorities for the existing Brackish Groundwater National Desalination Research Facility in Alamagordo, New Mexico.[16] The Research Facility, opened in August 2007, is a focal point for developing technologies for the desalination of brackish or saline groundwater that is frequently a byproduct of oil and gas production wells.[17] Brackish water must be desalinated to make it usable as freshwater. As a priority, the Department of Interior would be required to develop renewable energy technologies for integration with desalination technologies –

• to reduce the capital and operational costs of desalination;
• to minimize the environmental impacts of desalination, including reducing the volume and cost of desalination concentrated wastes in an environmentally sound manner; and
• to increase public acceptance of desalination as a viable water supply process;

The Act’s objectives for the Research Facility are to develop new water and energy technologies with widespread applicability and create new supplies of usable water for municipal, agricultural, industrial, or environmental purposes.

Energy-Water Research and Development Roadmap

Finally, the Act would direct the Energy Department to develop an “Energy-Water Research and Development Roadmap” within 90 days.[18] The roadmap would address water-related challenges to energy production. Within 120 days Energy Department would be required to submit to the appropriate committees of Congress a report describing the Roadmap, including recommendations for any future action.

The Act is currently in the first stages of the legislative process. We will provide updates as it moves through Congress.

For more information on Marten Law Group’s water and energy practice please contact Jeff Kray.