Wednesday, October 03, 2007

A $274 Billion Dollar Makeover of our Water Works System

This Op-Ed author wants to treat different water differently. He wants water we drink to be quite clean while he isn't too bothered about water quality when we use the water to flush a toliet. So, he appears to say we need more water quality variance. How much would it cost to have such "21st Century" infrastructure? The EPA is claiming that it will cost upwards of $274 billion to upgrade our urban water infrastructure. If the Boston Big Dig project is any indicator, I would think this will be a lower bound.

Returning to the old question of public contracts for large infrastructure projects, if you were the Mayor of a big city --- how would you design the procurement contracts to make sure that you get a high quality water distribution system for relatively low price? What parts of the system could be put out for competitive bidding through an auction? How would you avoid holdup problems? How would you write an arrow-debreu contract to share risks with the construction crew? How would you incentivize them to not shirk and pad union wages and the union payroll?

I would like to see a study on average cost of public service provision across U.S cities; for services ranging from policing to fire, to providing a water quality system; which cities deliver high quality services at low per-capita cost? Is it simply the cities where unions aren't strong? I thought that Richard Freeman argued that unions raise productivity --- this might be a test.

In which cities is the threat of "outsourcing" away from unions credible, do they have a lower cost of service provision? I do not mean to beat on unions in this blog entry --- instead I want to know what are the key determinants concerning the ability of the public sector to provide high quality services, cheaply to local residents. People might be willing to pay higher taxes if they thought they were getting their money's worth but which cities are "efficient" and why are they efficient?

New York Times
October 3, 2007
Op-Ed Contributor
Pipe Dreams

IN a time when we endlessly scrutinize the ingredients of our food and insist on pesticide-free peaches, why are we still mixing carcinogens into our children’s lemonade? From herbicides to arsenic, the Environmental Protection Agency has set standards for 80 different chemicals, specifying how much of each should be allowed in our drinking water. Yet no regulations exist for thousands of other contaminants that make their way into our drinking water.

These unregulated contaminants include industrial byproducts, agricultural chemicals, drugs and even most of the toxic compounds that are formed when we add chlorine for disinfection. The combined effect of these contaminants has never been evaluated.

There is nothing we ingest in greater quantities than water. In light of this, here’s a radical concept. Our drinking water should be water. Nothing more. Paradoxically, the best way to make that happen is to purify less of it. Here’s why.

The technology exists to remove all of these chemicals from our water. But the E.P.A. balks at insisting on the elimination of all hazardous chemicals and microbes from the 10 trillion gallons of water we use every year because the cost would be so great.

Merely maintaining our water systems will cost $274 billion over the next 20 years, according to the E.P.A. Upgrading our water supply to eliminate all public health risks from chemicals and microbes in our drinking water would be far more expensive.

But money is an obstacle to clean drinking water only because the E.P.A.’s assumptions rely on old ways of thinking. Our water infrastructure is old and decayed, and so are the fundamental ideas behind it.

Every drop of water produced by water treatment plants must meet E.P.A. standards for drinking-water quality. But we drink less than 1 percent of that water. Most of it goes down toilets, into washing machines, onto our lawns or down the drain.

The largest single consumer of water in most cities is not a consumer at all. Water pipes, often more than 100 years old, leak millions of gallons per day in every major city in the United States. Because of damage from Hurricane Katrina, the water pipes in New Orleans alone now leak 50 million gallons each day.

Right now, improving the quality of the water we drink requires extraordinary expense to improve the quality of the water we flush. This adds enormous costs to any effort to improve the quality of our drinking water and forces us to tolerate the presence of chemicals in our water that we would ban if they were food additives. It forces New Yorkers to drink unfiltered water even though 114 wastewater treatment plants dump treated sewage into the city’s water supply.

The underlying systems for our water supplies were laid out more than 100 years ago. Over the past century we have made incremental improvements to these systems, adjusting their design and operation as new threats to our health were identified. We now have terrific water for irrigating lawns and washing cars. Our drinking water, however, falls short.

To improve the quality of our drinking water, we need to rethink our entire approach to providing it. Our drinking water should have a different status from the water used to flush toilets.

Pure water will require filters in restaurants and workplaces and at the tap where children fill their glasses. Millions of homes already have these filters, but they are installed haphazardly. To avoid a two-tiered water supply in which safe water goes only to those who can afford it, these filters must become a universal, integral part of the water supply system.

Utilities should select, install and maintain point-of-use water filters. Design improvements can make the filters more effective. These changes are possible and affordable. Americans already spend more than $15 billion each year for bottled water.

The need to replace aging pipes and equipment over the next two decades offers an opportunity to reinvent the way we deliver our drinking water. We cannot allow the water we don’t drink to prevent us from purifying the water we do.

Robert D. Morris is the author of “The Blue Death: Disease, Disaster and the Water We Drink.”