Sunday, December 21, 2008

Customers Want Abundance – Suppliers Want Scarcity


What if I could show Southern Nevada Water Authority (SNWA) that desalination is cheaper than the watergrab pipeline?


Would it matter? I have my doubts.


If SNWA were always going to be a municipality, they would want to keep the price of water down. And the best way to keep prices down is to increase supply. (In case you didn't realize, draining water from the Central Great Basin ultimately reduces overall water supply.) Actually, the only way to increase the long-term supply of fresh water is to make it from non-potable or saltwater.


However, there is no guarantee that SNWA will not privatize. In fact, they already claim to be a QUASI-municipality. What does that mean? Well, they haven't clearly explained that. But their actions tell us more than they've been willing to tell. They're acting like a corporation. Corporations want scarcity. It means more profits.


From the first day the watergrab pipeline starts pumping, there will be less and less water available. Who benefits from that? Not the customers.


Desalination, on the other hand, increases the overall long-term supply of water. That's what we want. We want abundance, not scarcity.


So, is desalination do-able? Sure.

Spectra Watermakers sell a portable desalination unit with triple the efficiency of conventional desalinators. It's so efficient that it runs on attached solar panels and/or a small windmill. Spectra Watermakers “Solar Cube” desalination system is already installed and working in a number of countries. It costs between $40 thousand and $80 thousand dollars – and desalinates almost 1000 gallons per day.


Here's the math (you can skip this part if you have an aversion):


The watergrab pipeline is designed to “steal” up to 200,000 acre feet per year from Rural Nevada.


200,000 acre feet per year x 326,000 gallons per acre foot

___________________________________

365 days per year x 1000 gallons per day


= 180,000 Solar Cube units


Now, obviously this is not how to best build up this desalination system. Building larger systems could vastly reduce the number of units necessary, and the economies of scale would greatly reduce the costs.


But, for rough a comparison, that would mean:


180,000 units x $40,000 per unit = $7.2 billion

180,000 units x $80,000 per unit = $14.4 billion


So, what we're looking at is the costs of desalinating an equivalent amount of water, AND the cost of power generation to do it of between $7 and 15 billion.


Yes, that sounds like a lot. But remember, the cost of power expenses for the watergrab hardly ever gets discussed by SNWA. Those costs will be enormous!


And moreover, anyone who has been seriously following the construction cost estimates for the watergrab pipeline knows that they're low-balling us. Everyone in the know expects cost overruns. One independent estimate ranges as high as $20 billion!


So let's just guess that the watergrab pipeline is double what SNWA claims – and Spectra Watermakers can build large scale desalination facilities at the cheaper end of their price estimates.


That would mean they would both be about $7 billion... about the same!

But, with the desalination system, we would also get power generation – worth billions in savings.


And better yet, with desalination, water facilities could be built as needed. Meaning we don't have to come up with all the money up front.


Yes, there are a number of other things to consider, such as whether to build these desalination plants offshore – or how much the (ultimately) rising price of coal or gas fired power will effect the cost of power to SNWA. But my point is simple.


Desalination is NOT prohibitively expensive.

Therefore, SNWA must be considering other variables in their decision to build the watergrab pipeline. My guess is that SNWA executives do NOT want there to be an abundance of water. That would cut into future profits.



1 comment:

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