The water-energy nexus

Matt Simmons, energy investment banker and author of a leading peak oil book, gave a speech in Dubai last month about the role of water in energy. Oil is priceless, Simmons said, but water is even more valuable since:

– Without water, we cannot create modern energy
– Without water, we have no food

It is similar to oil in that we will never run out of it, but good (sweet light, in the case of oil, or potable in the case of water) supplies are becoming scarce.

The problem is, as both supplies become more scarce, both are demanded more by the other – and of course, by the world’s growing population. Available water, says Simmons, is increasingly brackish or saline, which is energy-intensive to convert to drinkable water.

And energy – particularly some newer sources, such as solar thermal and shale gas, are extremely water-intensive:

Simmons is not alone in this view. At the CERA Week conference under way in Houston, the water problem was addressed in a panel on Wednesday. From the Houston Chronicle’s report, it sounds as if the most concerned of the industry representatives present was one Arnold Smith of Fluor Corp, an engineering and construction management firm:

“Water is directly tied to energy use,” Fluor Corp.’s Arnold Smith said. “Twenty years ago it was almost an afterthought to presume where water would be coming from. Now it’s at the top of the list.”

Scott Weaver of the American Electric Power Company meanwhile  “said that the current administration is focusing on environmental issues and water use is being controlled by a number of regulators”.

The panel’s conclusion?

All the speakers agreed that there are opportunities to get around the water problem, like looking at heat recovery as power to minimize water consumption. The biggest tool would be to increase efficiency, not just on the part of the energy industry, but also efficiency in how everyone uses water.

Simmons, however, sees a very specific light on the horizon in the grim picture he paints of our current oil and water predicament; that is marine energy. New breakthroughs in offshore wind technology from the University of Maine, he says, could make it a competitive energy source even without subsidies and a source of filtered water. Other ways of tapping energy from the ocean itself have barely begun. The huge power of the sea, he argues, makes it equivalent to the offshore gas and oil industry of 80 years ago.

Related links:

Resource wars, ahoy (FT Energy Source)
Simmons vs Yergin, Lynch et al on peak oil (FT Energy Source)
Natural gas focus of oil conference, pointing to future (FT Energy Source)

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