Gulp!
Is Water the Next Oil?

Can you imagine a day when water is more precious and more expensive than oil? A day when wars are waged over water? In many countries, these scenarios are already reality. And experts worry that the day is quickly approaching when the U.S. will face the same water shortages as other parts of the world.

Although developed nations have long taken for granted the availability of cheap fresh water, it's now in jeopardy. By 2025, more than half the countries across the globe will either experience shortages with their freshwater resources or those resources will be stressed – meaning that more people demand more water than is available for use. Over the same period, 46 countries with a combined population of 2.7 billion people will see "a high risk of violent conflict" over water, according to London-based International Alert.

As populations soar and cities expand, water supply cannot keep pace with demand. Moreover, water quality is deteriorating in many areas of the world due to pollution and poor water treatment and management systems. About 95 percent of the world's cities still dump raw sewage into their waters.

Today, the U.S. is facing an unprecedented era of water scarcity in which efficiency will play an increasingly important role, according to Circle of Blue WaterNews, a non-profit affiliate project of the Pacific Institute. Scientists anticipate water scarcity in parts of the U.S. that have previously had ample supply – the Great Lakes, for example, which are shrinking. Similarly, the Southeast has experienced several years of drought, creating difficult conditions for Georgia and Florida, in particular.

"We've had a drought here in Georgia and living in a region where you constantly hear about how many more days of drinking water is available makes you start thinking about conserving water not just at home but in the commercial buildings you build and own," says Bill Morrison, senior vice president of development for Carter, an Atlanta-based full-service real estate company.

The water situation is even worse in arid, desert like areas such as Arizona, Nevada, Utah, where Lake Mead and Lake Powell could become "dead pool" mud puddles within 13 years, according to scientists at the Scripps Institution of Oceanography. And, cities like Los Angeles, which rely on the Colorado River, are already seeing their water supply diminish.

Los Angeles-based Arden Realty Inc. is currently evaluating its water usage for its office building portfolio, which is largely concentrated in Southern California. "We are revisiting water conservation because of the potential for a shortage in our region," says Greg Husebye, first vice president of engineering & environment programs for Arden Realty.

Increasing water costs

On a yearly basis, the U.S. uses more than 148 trillion gallons for all purposes including agriculture and manufacturing. Commercial buildings consume 15 to 30 percent of total public water supply in the U.S., creating opportunities for property owners to use water more efficiently and to save money.

Today, commercial building owners and managers are concerned about reducing operating costs, and in many parts of the country, water and wastewater expenses are growing exponentially. Recent droughts and increasing demand in water-scarce regions such as the southwest have led to a 27 percent average nationwide increase in urban water prices over the past five years, according to Rand Institute.

"In the past, $20,000 worth of water expenses wasn't a big deal, but now every nickel you pay out makes a difference," says Dennis Thurman, senior vice president of engineering and director of the Energy Star program at Transwestern Commercial Services. "As water gets more and more expensive, we're seeing more owners taking water efficiency and conservation more seriously. It's becoming more of a priority."

Within the commercial sector, businesses use water to serve the daily needs of their employees, provide services to clients, and maintain building comfort, and landscaping. However, the amount of water a typical commercial building needs to provide such services as restrooms and cooling systems depends on a number of factors including the technology employed in water-using devices, system maintenance, and how often the building is in use – 40 hours a week for an office building versus 24 hours a day for a hotel.

Property owners can save money by encouraging water efficiency in three different categories: water costs; wastewater costs and energy costs related to water. Water costs are the amount spent on buying water from the local water company. Wastewater costs relate to the amount charged by water utility companies to dispose of any wastewater leaving the facility. And, energy costs related to water can involve costs associated with heating water or those associated with heating and cooling a building.

Interestingly, a report from American Rivers, a river conservation organization, says Metro Atlanta could save over $700 million and up to one third of its water supply by embracing water efficiency solutions like stopping leaks and upgrading old buildings.

Saving water inside & outside

Building owners can improve their water efficiency and water management in a number of ways. But, the easiest way to achieve efficiency goals is to think about water from an interior and exterior standpoint, experts says.

When it comes to the building interior, owners can reduce water usage by installing low-flow toilets, waterless urinals and low-flow plumbing fixtures including faucets and showerheads. When appropriate, automatic toilet flushers and faucets can be installed. By using these strategies, Opus Architects & Engineers was able to decrease water usage by more than 37 percent at Excelsior Crossing, a 700,000-square-foot corporate campus for Cargill Inc. in Hopkins, Minn. "A lot of these strategies are very simple and inexpensive," says project manager Garret Honeyman.

Hotel developer and owner R.C. Hedreen Co. took water efficiency to an even higher level with its Olive 8 Residences and Hyatt in downtown Seattle. The family-owned company installed 1.5-gallon showerheads instead of 3-gallon showerheads and dual-flush toilets (with two different buttons for two kinds of waste) in the hotel rooms. By the company's calculations, the low-flow showerheads will save more than 7,000 gallons of water per day, according to Olive 8 project manager Derek Janke.

Moreover, Hedreen has installed a tank and cooling system to collect steam condensate from its heating system. The tank and cooling system will allow the company to reclaim 370,000 gallons of water per year and the reclaimed water will be used to fill dishwashers, toilets and the pool, Janke says.

New York City-based Sheldrake Organization focused on wastewater management when it developed Riverhouse, One Rockefeller Park. The 32-story, 264-unit luxury condo building, which overlooks the Hudson River and fronts Rockefeller Park, features treatment systems for both black water and gray water. The black water system takes waste from the building, cleans it and pumps into the NYC sewer system, while the gray water system pipes water to the basement where it is treated and used to irrigate the planted roof, courtyard and landscaping around the building.

There are even more opportunities for water efficiency and management outside of buildings. Specifically, owners are increasingly focused on reducing stormwater runoff in an effort to prevent contamination of the existing groundwater and to avoid stressing the city sewer systems. For example, when designing and developing its Streeter project in downtown Chicago, developer Golub & Co. decided to utilize a French drain system and green roofs for the two-tower apartment project, according to CEO Michael Newman.

Instead of paving the street that runs through the site and the pedestrian pathways in the adjacent green space with concrete, the company installed a paver system for the street and crushed granite pathways. The pavers and crushed granite allows storm water and runoff from the buildings to fall into an underground drainage system that collects the water and slowly releases it into the sewer system. Meanwhile, the green roofs absorb water and prevent a deluge of runoff from the buildings.

Other owners have installed stormwater reclamation ponds or bioswales, which are ditches used to hold stormwater runoff. That's what Opus did at Excelsior Crossings. The corporate campus actually features several reclamation ponds, Honeyman says, so neighboring buildings can direct their stormwater runoff to the Cargill campus.

Becoming "water smart"

Additionally, owners can modify their landscaping and irrigation practices to minimize water use. Many owners have installed native grasses and plants that are suited for the particular environment and don't require more water than what nature provides. However, most owners still need irrigation systems, so they are looking for technology that allows them to pinpoint the exact amount of water they need for their particular landscaping, according to Tom Ash, director of Conservation for HydroPoint Data Systems Inc.

HydroPoint is the company behind the WeatherTRAK smart water management solution, which is proven in studies funded by the EPA to apply the right amount of water at the right time. WeatherTRAK customers, which range from REITs such as AvalonBay Communities to retailers like Kohl's Department Stores to major corporations such as Coca-Cola, Johnson Controls and Lockheed Martin Corp., tell the controller about their plants, soil, slope, and sun exposure, and the system creates a personal watering schedule that is automatically adjusted as the local weather changes. Entire groups of WeatherTRAK controllers can be centrally managed via an easy-to-use website.

"Landscape watering is huge portion of a building's water bill," Ash says, pointing out that all too often water ends up running down the street instead of on the landscaping. He says the number one problem owners face regarding irrigation is that watering is scheduled too often and the landscaping is over-watered by 50 percent or more.

The second most common problem is that irrigation systems are not working properly, for example, sprinkler heads are broken. And the third problem is that the system is designed improperly. HydroPoint conducts an audit of its clients' entire irrigation system to address all the problems. Ash says building owners see cost reduction between 20 to 45 percent with a payback of no longer than 18 months.

Other owners address irrigation by collecting rainwater and reusing it for irrigation. The process, called rainwater harvesting, is increasingly popular. However, the size of the holding tanks is dependent on the amount of landscaping that needs to be watered and many owners are limited as to how large the holding tanks, or cisterns can be, says Terry Helland, director of architecture for Opus Architects & Engineers.

At the 588,000-square-foot Social Security Administration Center in Birmingham, Ala., a rain cistern was positioned under the parking deck to collect rainwater. The water is used to irrigate the SSA's campus, says Helland, who served as the project's architect.

While these strategies and many others exist for improving water efficiency and management, not all of them make financial sense to a building owner. Owners have to decide on a case-by-case basis whether to invest in new technologies, retrofits, or repairs by determining the up-front costs of improving efficiency with the financial benefits that accrue over time in the form of reduced water, wastewater, and energy bills.

Unfortunately, projections of future costs and benefits of an efficiency investment are usually uncertain because the cost of water, wastewater services, and energy frequently change. Moreover, the performance of newer technologies is still untried.

The challenge of calculating ROI is one of the main reasons why the owners of Butler Square in Minneapolis are being so cautious when it comes to water efficiency and management. The 100-year-old building is being retrofitted to the U.S. Green Building Council's LEED (Leadership in Energy and Environmental Design), says Denise McCormick, a senior property manager with NorthMarq, which manages Butler Square.

Today, McCormick is working with water efficiency experts to determine the best strategies and technology, from new toilets to gray water systems. However, payback and ROI are front and center. "We thought about installing a wastewater system, but the ROI was 15 years, which is a little long for a commercial building," she says. That's why she's working with the city government to obtain incentives and grants for the system.

"The metrics are a little fuzzy for everyone right now," Husebye admits, but points out that determining a return on investment for energy efficiency efforts was nearly impossible 10 years ago. "We're getting to the point where water is just as important as energy, so we're all working on ways to achieve a good ROI with water conservation strategies."

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