The Oxford-based monthly Global Water Intelligence provides coverage and analysis of the world’s water markets. It has a strong emphasis on desalination and prides itself on having access to exclusive and little-known industry developments. Executive talked to its publisher Christopher Gasson about what’s in store for H2O’s future.
E Global warming appears to be playing a role in the world’s desertification. Is it correct to assume that global warming will only increase pressure on the world’s fresh water resources?
Not necessarily. Global warming has a very complicated effect. Virtually none of the models for global warming give us a consistent view of where precipitation will move. It is predicted that by end of the century there will be 14% more moisture in the atmosphere. And that has to fall somewhere. At the moment, people are interpreting this by saying that we are going to see more intense flood events and more droughts. If that occurs, it is terrible for those government agencies planning for water. On the one hand, they have to spend a bunch of money on flood defenses and on the other hand, they have to spend money to protect against droughts. Therefore, it is worse news than if things were just likely to get drier.
In fact, it is wrong to say global warming is the main cause of water scarcity. The main cause of water scarcity is too many people needing too much water in places with few natural resources.
E Can we point to Abu Dhabi and Dubai as examples of these types of places?
Exactly. Water shortages in the Gulf have nothing to do with global warming. It is entirely to do with the very rapid growth in population. Over the next few decades, Saudi Arabia is going to go from a population of 25 million to a population of 40 million, but their natural water resources are not going to increase. In fact, their natural water resources are likely to decrease because in dry countries the population is dependent on mining non-renewable ground water.
Across the Gulf the natural supplies of water are falling and demand is rising. In a few of these countries the natural life of some of the main desalination plants is coming to an end. That is particularly true in Saudi Arabia, where some capacity is going to come off-line. This means we will need to have a huge boost in desalination to sustain the population.
E But is this necessarily the case? For example, Saudi Arabia plans to phase out its production of wheat in order to lighten the load on its water resources. Will this negate the need for a huge boost in desalination?
I think the best they can hope for is a standstill in their agricultural water use. Agriculture in Saudi Arabia grew very quickly and it continues to grow, from wheat to massive dairy farms. I do not know how easy it will be to take away those water allocations to farmers without them saying, ‘Hold on, this is our water. You can’t take it from us’.
There is a very great water shortage in Saudi Arabia. Right now in Jeddah you are lucky if you get water every other day and in summer the situation will get worse.
E Saudi Arabia has just launched their National Water Company. What is the idea behind this project?
Essentially, they are incorporating the ministry, going for a more private sector model. They are contracting out the water management of Riyadh to Veolia, that of Jeddah to Suez, and other cities will go to other companies. The National Water Company acts as an asset-owning body, while the private companies operate the assets.
E Is this something we are going to see in other Arab countries as well?
It is. I think that we will see similar privatization in Egypt and Libya. It is already happening in Algeria and Morocco. We will also see it in Abu Dhabi and Oman. The two places in the Gulf that have not been keen on this model are Dubai and Kuwait. Dubai is developing along the private concession model and it has not used the private sector model to finance its water desalination program.
In general, the Middle East has decided that only the private sector can deliver the efficiency that they need. The state has failed for years in many of these countries.
E What are these private companies, for example Veolia, doing right?
Veolia has a thermal technology that has a significant cost advantage over the main thermal desalination methods. In a traditional Multi-Stage Flash (MSF) desalination plant, one needs a lot of electricity to pump water around the system, using more than Veolia’s Multiple Effect Distillation (MED) process. Both of them use the same amount of steam to make the same amount of water, but MSF uses a lot more energy than MED.
Previously, this did not matter because MSF had economies of scale, which meant it was used in the largest plants. This was not true for MED — the largest plants of this type had been in the region of only 40,000 cubic meters a day. What Veolia has done, through SIDEM [a subsidiary], is find a way to deliver economies of scale with MED up to 800,000 cubic meters a day. This is why they have been successful. But the MSF people aren’t entirely out of the picture. I think Fisia [Italimpianti] won more contracts last year than SIDEM.
E So is it accurate to say that Veolia is the world’s largest plant supplier of desalinated water?
It depends on the time scale. Veolia has won three major projects recently. However, Doosan has built the most capacity in the last five years. It was really SIDEM’s transformational year of 2006 that has raised their profile. In that year, they won two major projects, but that does not mean the others no longer matter.
The next big deal is the Ras al-Zour one million cubic meter a day project in Saudi Arabia. It is the biggest desalination plant ever considered and bids will be submitted on May 5.
For this tender we will see Veolia, with their MED technology, teaming up with Suez. Then Fisia will team up with GE to pitch a combined MSF and RO (Reverse Osmosis) facility. Finally, we believe that Doosan will bid on its own and that it will offer straight MSF technology.
E Who do you think is going to win the tender?
It is going to be very interesting. We have the three technologies competing against each other and we will see which one comes out on top. But right now, it is impossible to tell who will win.
E Some pundits say that due to scarcity, water will become the new oil in the Middle East. Countries will go to war over this resource.
Do you agree with that?
Water is obviously a huge issue in the Levant. Some people say the Six-Day War was fought over water. A big portion of Jordan’s water was annexed in that war. To replace that with desalination is quite difficult because they only have a tiny bit of coastline at Aqaba in which to put a desalination plant. In fact, the Jordanians are getting desperate. They now have the Diseh-Amman water conveyer. They are spending a large amount of money to pump, treat and send low grade, non-renewable water to Amman. That water is only going to be there for about thirty years, and then what will they do?
The Jordanian situation is bad. The problem with desalination is that you have to have a significant population by the coast.
I think the country that is closest to the edge is Yemen. They have one of the fastest growing populations in the world, they have no water and no money. Moreover, their capital city happens to be at a very high altitude. There is just no solution. People talk about them evacuating the capital.
In the Gulf, though, there is a well-established way of getting water, desalination. If a country in the Gulf was offered the choice between building a new desalination plant or going to war, most of them would choose to build a new desalination plant.
In the end, conflict over water will likely be limited to those countries with little money and no real opportunity for desalination.
