Do We Really Know the Cost of Water?

April 10, 2014 at 9:59 am Leave a comment

According to the United Nations, around 1.2 billion people, or almost one-fifth of the world’s population, live in areas of physical water scarcity, and 500 million people are approaching this situation.[i] However, an even more troubling statistic is that another 1.6 billion people, or almost one quarter of the world’s population, face economic water shortage – this is largely due to both severe weather patterns and the infrastructural inability for countries and governments to effectively take water from rivers, aquifers and other sources, and deliver it to the consistently growing list of end users (i.e. household water consumers).

Water Life Cycle Cost Analysis

Much of the inability to properly supply basic water services to the individual consumer rests on monetary costs. Therefore, it is crucial to understand the actual investment required for the entire water supply-demand transaction to take place. If we apply the Life Cycle Cost Analysis (LCCA) to water, we will be exposed to the actual costs involved in bringing water from its source to the individual consumer. This method helps to effectively value water by examining the following:

(1)   the initial costs involved in the acquisition and extraction of water (involves initial capital costs, infrastructure and construction costs)

(2)   fuel costs associated with transporting the water both from its source to treatment facilities as well as to the end user

(3)   the cost of treating the water itself (emphasis on energy costs)

Likewise, we must also consider operation, maintenance and repair costs of all the equipment used throughout these stages.[ii]  Of course, such costs will vary according to the water source itself as well geographic location and proximity to its final destination.

Example: Las Vegas, Nevada: apparent vs. real cost of water

Lake Mead provides an interesting case study for us to explore. This site, created with the construction of the Hoover Dam back in the 1930s, is home to the largest reservoir in the United States in terms of its total water intake capacity at its peak (28.5 million acre-feet or 35 km3).[iii] However, its water supply is dependent on the flow from the Colorado River, a watershed that is currently experiencing a 14 year long drought.


The ‘bathtub ring’ shown above in white, represents the water level once reached at Lake Mead. As it stands today, Lake Mead’s volume is 13,479,170 acre-feet or 16.62631 km3, less than half of its peak capacity. This reality is incredibly troubling for the roughly two million Las Vegas Valley residents that rely on the lake’s water supply to meet 90% of their water demand.[iv] Faced with this predicament, the Southern Nevada Water Authority (SNWA), the governing body responsible for water policies relating to Lake Mead, declared the need for a third water intake pipe the length of 3 miles to be constructed 600 feet below the water surface. This process, which began in 2008 and is still in progress, carries with it a price tag of $817 million.[v]

Let’s examine how much money is really involved here. The $817 million Lake Mead water shortage solution does not include the costs of running a pumping station that will help ensure the steady flow of water to the Las Vegas Valley residents once the pipe is completed. This is estimated to cost taxpayers nearly $250 million.[vi]  Additionally, the research does not discuss whether or not the initial figure considers the energy, labor, and additional costs involved in treating the water collected from Lake Mead, an essential step prior to reaching residents. Even if we take just energy consumption as an example, it is clear that the cost considering operational expenses will be much higher.

To put this specific project into perspective, it helps to briefly consider the cost of an alternative that has been examined extensively. The severe drought conditions have led some leading figures in Southern Nevada to call for the construction of a pipeline which would bring water to the Las Vegas Valley from rural water sources. However, capital expenses are estimated anywhere between $2 billion to just over $15 billion. This bold plan could potentially result in a 150-percent increase in monthly bills to SNWA’s residential customers.[vii] Compare this with the current average of $36.

Let’s face it: water costs more than we think

While other alternatives are being looked at, the reality has not changed: Las Vegas residents are already facing the major consequences of living in an area that is dependent on a slowly drying watershed. By examining water project costs worldwide and amongst varying water bodies, we will better understand the monetary nuances that are involved in supplying adequate amounts of safe potable water to end users. Such figures must represent the entire value chain of water, from access to quality.

Understanding that water and money are fundamentally linked will help us address issues of water availability and access more effectively.









Entry filed under: Cleantech, Water and Carbon, Water Cost, water efficiency, Water Scarcity. Tags: , , , , , , .

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