The recent Texas catastrophe exposed the fraying connection between a trifecta of critical services: water, power and energy, writes Reese Tisdale.
Exposing fraying interconnections & risks
Poor water management catalysed Texas's recent catastrophe, affecting oil & gas wellheads through to the household tap. Electrons don't freeze; water does.
Even in this context, the responsibility still lies heavily, if not solely, with policymakers, regulators, and asset owners for the energy and power sectors. Frozen gas pipelines, frozen nuclear power cooling systems, and, to a lesser extent (let’s be honest), locked-up windmills produced a tsunami of water-related problems. These include water-main breaks, water quality issues, and soon-to-be insurance claims.
“Impacting more than 14 million people, it exposed the fraying connection to a trifecta of critical services: water, power, energy.”
The event impacted more than 14 million people in Texas alone. More importantly, it exposed the fraying interconnection and risks to a trifecta of critical infrastructure services: water, power, energy.
Setting aside the partisan chicanery surrounding climate change and the Green New Deal, this is not a 100-year event. The US alone has sustained 255 weather and climate disasters exceeding US$1 billion since 1980.
No further back than 2011, the state of Texas experienced blackouts because of freezing temperatures that led to broader infrastructure shutdowns.
Separately, Hurricane Harvey, which doused Houston with 51-inches of rainfall over a couple of days, was the third event in as many years that the city experienced a 500-year flood. The estimated bill for Harvey? US$125 billion.
Supply chain independence
As we move forward, experiential learning and liability will begin to swing this pendulum in another direction.
If water utilities and commercial and industrial companies cannot rely on the politicians to provide safeguards for reliable power, gas, and other critical infrastructure services, new water management strategies and business models will accelerate.
“When faith in the system deteriorates, those with means will take matters into their own hands.”
When faith in the system and its reliability deteriorate, those with means will ultimately take matters into their own hands. At the forefront of this change will be commercial and industrial companies with more financial flexibility and acute bottom-line pressures to secure their supply chains. This includes alternative sources of power, water, and treatment.
The proliferation of more efficient, onsite water management (e.g. water reuse) and power management applications (e.g. solar, battery backup) is already being realised and likely to quicken in the aftermath of more blackouts, wildfires, hurricanes, and droughts.
Leadership from the federal government
Unfortunately, the long-term impacts for utilities are less optimistic. This isn’t a concern just for Texas.
If a flight of larger-scale customers from volume-based water and wastewater service providers is realised, municipal and residential stakeholders will bear the burden of increased rates and reliability. Further, the social and economic divides in access to public services will become even more polarised.
Now is the time to consider the bigger, long-term outlook for infrastructure, whether for a week, month, a year or a decade. At some point, the federal government will need to provide the leadership and necessary backstop to make America’s infrastructure more resilient. We now know, water is an integral piece of the puzzle.
- Reese Tisdale is the president of Bluefield Research.
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