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The Impact of Water Policy and Infrastructure on Your Manufacturing Efforts

November 30, 2017 by Midlothian Economic Development

MED-The Impact of Water Policy and Infrastructure on Your Manufacturing Efforts.jpgWhen we think of the importance of water, we often think of it in regards to life and survival. However, water also plays an important role in everyday production and manufacturing. According to the United States Geological Survey (USGS), “industrial water” (water used for industrial purposes) is vital for fabricating, processing, washing, diluting, cooling, and transporting certain manufactured products. Industrial water is also used in smelting facilities, petroleum refineries, and industries for the production of chemical products, manufactured food, and paper products.

Yet much like everyday consumers, businesses don’t carefully consider their water consumption and infrastructure needs when choosing a business location. This can be a hassle for those businesses down the line as shortages, government policies, and regulations can impact their processes. These are the things a savvy business should consider when looking at sites with regards to water resources.

Taxation and Supply in Local Policies

Water used for manufacturing and mining makes up about 6% of water withdrawals in the United States, just 1% behind residential consumption. The largest chunks of water are consumed by thermoelectric power (45%) and irrigation (33%). These uses have great impact on water availability, circulation, and even infrastructure. Yet despite these broad areas, there is little to no data on the specifics of water usage in these categories (and more specifically, manufacturing) on a federal level. The primary reason for this is that water is controlled on a largely regional level. This is detrimental because it is difficult for businesses to analyze their water use and consumption against an industry norm, and understand how that usage impacts their business.

In Texas, water is regulated differently whether it is surface water or groundwater. According to the Texas Water Code, surface water is natural flowing water: this can be from rivers, streams, the gulf, or water from storms, floods, and heavy rain. Groundwater, on the other hand, occurs in a reservoir or well below the surface of the earth. While Texas requires rights issuing and permitting for surface water usage, groundwater rights are considered proprietary to private property, and therefore related to property rights. California has similar rights related to permitting of public waters, however there is a difference in private land and water rights. Water rights are allotted to landowners for use but not ownership to water that touches their land, meaning even private water is technically owned by the state. For ground water, while most private property owners have no permitting required, they may be subjected to regulation based on regional authorities. Similarly, New York requires permitting for all water withdrawal systems, public or private, with the capacity to withdraw 100,000 gallons or more a day.  While these permitting differences may seem full of nuance and legalese, they can make an impact (and cause a headache) when you have to deal with water consumption for your site.

Additionally, in Texas, manufacturers who rely on water for certain processes or equipment to help create or change a product are eligible for certain tax exemptions on machinery. Similarly, manufacturers who have machines aiming to reduce waste water, recycle their water, or replace freshwater are also eligible for exemptions on those machines. And sites that have made water conservation modifications are also allowed certain property tax exemptions in relation to those modifications. For businesses heavily reliant on water in their process, this can have significant impact on creating efficiency in water dependent processes, and in operations costs and finances.

Understanding and Augmenting Your Water Infrastructure

There’s a common misconception that water that is self-supplied from ground sources on private property is “free.” The reality is that though you don’t pay permitting for this water, you can still see significant costs in its use, particularly with regards to pumping and treating the water to meet your manufacturing needs. This is where developing a water strategy and understanding your company’s water processes can improve operations.

When we speak of water infrastructure, we don’t mean just the tools through which you pump and move water, such as pipes or irrigation systems, but also the machines and processes used in your manufacturing efforts. Understanding these systems can greatly improve the impact of water on your business from both an efficiency and cost standpoint. The first thing to think of in terms of improving these efforts is how water can be reused and recycled, and how wastewater can be minimized. A great example of reusing water in a manufacturing system is called cascading. A cascading rinse takes rinse water from a final stage of processing (which requires high water purity) and uses that water in an earlier stage that is less dependent on purity. The water can then be used in other places like irrigation or coarse washing where purity and quality is less critical. This recycles the water, thereby reducing costs associated with pumping freshwater into the process.

It may seem a hassle or even unreasonable to expect companies to dive so deeply into analyzing and updating their processes related to water use. However, these ideas have already been proven to have great positive impact on businesses and their bottom lines. PepsiCo was able to successfully implement reuse and recycle efforts that reduced water usage by 26% while also saving $80 million in operating costs. This proves that although water is often our least considered resource, it is one we should not ignore. When a company considers policy and infrastructure in relation to water, the effects are tangible.

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