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The Water I Drink: Trading on The Great Lakes Water Resources

December 28th, 2009 Leave a comment Go to comments

Quarterly average water bills for high-volume industrial customers:

  • Sheboygan: $37,119
  • Milwaukee: $41,151
  • St. Louis: $53,497
  • Green Bay: $64,086
  • Chicago: $65,800
  • Dallas: $79,512
  • Louisville: $80,087
  • Kansas City: $90,544
  • Philadelphia: $105,717
  • Denver: $110,717
  • New York: $115,528
  • Cleveland: $121,430
  • San Diego: $157,557
  • Pittsburgh: $172,367
  • Phoenix: $176,405
  • Seattle: $209,482
  • Atlanta: $251,984
  • Los Angeles: $274,000

Source: Public Service Commission of Wisconsin

via [ Journal Sentinel ]

Milwaukee, which has a lackluster record in luring new industry with tax breaks or subsidies, has a new plan up its sleeve: giving deeply discounted water to new companies that create jobs.

At a time when regions such as metro Atlanta and the Southwest face acute water shortages, the Milwaukee Water Works operates at only a third of its capacity. And it draws off the Great Lakes, which hold a fifth of the world’s surface supply of freshwater.

That means the city, which operates the utility, can add new water customers at marginal cost – even if they guzzle prodigious volumes of water.

“This is our comparative advantage,” Milwaukee Mayor Tom Barrett said Monday at a conference on the economics of water at Marquette University. “We have to sell on our comparative advantage. We cannot sell our winter weather.”

“We would be the first city to offer water for jobs,” said Richard Meeusen, the chief executive of Badger Meter Inc., a Brown Deer-based maker of water meters.

Meeusen said Milwaukee should begin by poaching industries from metro Atlanta, which was regarded as an economic boomtown for the past two decades. Atlanta, which already faces water shortages, will confront even tougher challenges after a federal judge ruled in July that Atlanta must stop drawing water from its Lake Lanier reservoir within three years.

“Their taps are going to run dry in three years,” Meeusen told the conference. “We should be running full-page ads in the Atlanta papers, ‘Worried about Water?’

John Laumer of Treehugger offers a response Milwaukee’s plan for economic development.
via [ Treehugger ]

Although superficially, this may seem quite sensible, there is a high risk of unintended and unwanted consequences if a cheap water incentive were offered to all comers. The choice is one of seeking sustainable industry or returning to the Iron Age trade offs of environmental degradation and hidden impacts on taxpayers.

Strategic context.
Duluth, Green Bay, Escanaba, Marquette, Munising, Green Bay, Racine, Kenosha, Chicago, Toledo, Erie, Buffalo, Toronto and other Great Lakes cities all are capable of making a similar offer of cheap water for jobs. In that context, any well-led business would step back into due dillegence, looking for possible unintended consequence down the road.

High industrial water consumption brings other intensities.
Water-intensive industries very often also are energy intensive, and also tend to have high air and water pollution burdens. The much diminished paper and steel industries, once common in the Midwest, exemplify the pairing of water and energy intensities with water and air pollution.

For every gallon of water taken in by industry, there will be some fraction of a gallon discharged into public sewers: typically flowing into a publicly owned treatment works (POTW), constructed and operated at public expense.

Water supplies from Lake Michigan are, for local purposes, near infinite. On the other hand, both sewerage treatment capacity and ability of Lake Michigan to assimilate pollution are limited. Overuse can have hidden direct and indirect costs. Logical questions to precede any water sale to industry, then are:

is there excess treatment capacity at the sewerage treatment plant which matches the discharge potential of water intensive industries?

could waste water discharges from a single, new polluting industry potentially “limit out’ waste water treatment capacity, excluding other job opportunities?

is it possible to compare jobs creation potential per million gallons per day of wastewater discharged by industry sector?