TODAY’S STUDY: HOW WATER WILL CHANGE ENERGY

Water Constraints on Energy Production: Altering our Current Collision Course

Melissa Whited, Frank Ackerman, & Sarah Jackson, September 12, 2013 (Synapse Energy Economics for the Civil Society Institute)

Executive Summary

Today’s electric power system was built on traditional, water-intensive thermoelectric and hydroelectric generators. The water requirements of this energy system are enormous. Large fossil fuel and nuclear power plants with once-through cooling systems withdraw staggeringly large quantities of water from rivers, lakes, and estuaries; plants with recirculating cooling systems withdraw less water, but actually consume more via evaporation.

Water supply issues are already forcing thermoelectric power plants in some regions to shut down under dry and hot conditions—a problem that will only worsen as populations grow and climate change increases the frequency and duration of droughts and heat waves. The repercussions of forced shut-downs include reliability impacts and higher electric rates linked to costly replacement power purchases and investments in water-supply infrastructure.

At the same time, power plant operations and production of fuels for electricity generation carry serious risks for water quality. Energy impacts on water include pollution risks from fracking in gas-producing states, fish kills, thermal pollution, polluted effluent, and coal ash spills at power plants. The need to address water quality impacts will become even more urgent if domestic fracking for shale gas grows at the rate anticipated by the U.S. Energy Information Administration (EIA).

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This study undertakes a comprehensive review of the many water-related problems and constraints related to the electricity sector. The issues we address include:

• Water supply shortages, especially in the West, where major river systems are overstressed, groundwater aquifers are being depleted, and agriculture is dependent on water for irrigation

• Water demand crises, even in naturally wet regions such as the Southeast, where rapid population growth and traditional, inefficient patterns of water use, such as once-through power plant cooling, have strained the available supplies

• Upstream impacts of fossil-fuel production, such as the water pollution hazards created by coal mining and by fracking in the oil and gas industry

• Hydropower production losses caused by reduced or more volatile flows in major rivers

• Impacts of power plant operation on water quality, including impacts on fish and other aquatic life by cooling water intakes, thermal impacts of heated water discharge, and pollution from power plant effluent

• Waste disposal risks, such as water pollution and ash spill risks from coal ash disposal

The key findings and recommendations of this study are presented below.

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A. Water Quantity Constraints

The amount of water available to serve diverse needs is a growing concern across the country, from the arid western states to the seemingly water-rich Southeast. Currently, 97 percent of the nation’s electricity comes from thermoelectric or hydroelectric generators, which rely on vast quantities of water to produce electricity.

Thermoelectric plants are major water users; they withdraw 41 percent of the nation’s fresh water—more than any other sector. On an average day, water withdrawals across the nation amount to an estimated 85 billion gallons for coal plants, 45 billion gallons for nuclear plants, and 7 billion gallons for natural gas plants. Significant amounts of water are also required for fossil fuel extraction, refining and processing, and transportation. Coal mining consumes between 70 million and 260 million gallons of water per day, and natural gas fracking requires between 2 and 6 million gallons of water per well for injection purposes. In contrast, many renewable resources such as wind and solar photovoltaics (PV) require little to no water.

The EIA projects that use of thermoelectric power plants will continue to increase to meet the electricity needs of a U.S. population expected to grow by another 100 million by 2060.

If current trends continue, water supplies will simply be unable to keep up with our growing demands.

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Factors that are likely to exacerbate this problem include the following:

• Carbon capture and sequestration (CCS): The wholesale conversion of coal and natural gas plants to CCS would result in dramatic increases in the amounts of water withdrawn and consumed by thermoelectric plants in the United States. Though not yet common, CCS may become widely adopted to comply with new environmental regulations. CCS increases the water usage of coal and natural gas-fired power plants substantially, increasing consumption rates by 83 percent for existing coal plants, or by 58 percent for new integrated gasification units. CCS is projected to nearly double natural gas water consumption rates, causing a 91 percent increase. As water resources become scarcer in many parts of the country, this may limit the ability of plants with CCS to operate, particularly during heat waves or droughts.

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• Climate change: Climate models show unequivocal evidence that average temperatures worldwide are rising, and that water resources will be significantly impacted. Likely impacts on water resources for power production include:

o Substantial shifts in where and how precipitation will occur, with certain regions, especially the Mountain West and Southwest, expected to become more arid and experience less runoff.

o Precipitation will likely become less frequent but more intense, with heavy downpours increasing and greater precipitation falling in the form of rain as opposed to snow, thus decreasing mountain snowpack and runoff while making stream flows more intense and more variable.

o Seasonal flows in rivers will become more erratic and experience shifts in timing of high and low flows, with likely reductions in flows during the summer months.

o Hotter temperatures will increase electricity use due to higher air conditioning loads, while causing power plants to operate less efficiently and require more water for cooling.

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Such impacts imply that when loads are highest—on hot summer days—less energy will be available from water-intensive hydroelectric and thermoelectric power plants.

• Water shortages: Declining availability of water resources (due to climate change or other causes) may threaten power generation reliability. Already, lack of sufficient water has constrained power production in numerous cases, particularly during times of drought.

These situations have resulted in increased costs to consumers, both for high-cost replacement power, and for infrastructure projects intended to increase water supplies, such as a 17-mile pipeline for a coal plant in Wyoming.

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Water shortages can also pit users in one sector against another, even when users hold formal water rights. Legal battles arise when water rights are ill-defined or over-allocated; these battles may extend for years, jeopardizing the timely construction of new generation capacity. In times of drought, thermoelectric generators may face even greater uncertainty regarding their water rights. The North American Electric Reliability Corporation estimates that electric generators totaling 9,000 MW capacity are “at risk of curtailment if their water rights are recalled to allow the available water to be used for other purposes.”

Failure to address these constraints now is bound to lead to further intersectoral conflicts and forced plant shutdowns that jeopardize electricity production and constrain economic growth.

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B. Energy’s Impacts on Water Quality

Electric-sector impacts on water quality are significant, and are likely to increase if the United States continues to rely heavily on thermoelectric power plants to meet energy needs. Many of the costs associated with these impacts are currently borne by the communities located near the resources, not by energy producers or consumers; this makes thermoelectric power appear to be much cheaper than it truly is.

Water quality impacts associated with fossil fuel and uranium production include the following:

Coal mining: Mining, transporting, processing, and burning of coal, along with coal ash disposal, are important causes of human and ecological harms. Elevated levels of arsenic and other heavy metals have been found in drinking water in coal mining areas, often exceeding safe drinking water standards. Coal mining has been associated with numerous human health problems. Studies discussed in this report have found strong correlations between coal mining and: total, cancer, and respiratory mortality rates; chronic cardiovascular disease mortality rates; higher levels of birth defects; and poor physical and mental health. In heavily mined areas, streams display less diverse populations of aquatic life, with the effects extending far downstream from the mining areas. These problems can persist for years; some mines reclaimed nearly 20 years earlier continue to degrade water quality. In Appalachia, more than 2,000 km of streams have been buried under mining overburden, devastating freshwater habitats in the region.

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Uranium mining and milling: Since 1980, domestic production of uranium has sharply declined. However, recent increases in uranium prices have led to renewed interest in uranium mining in the United States, a scenario that calls for renewed concern about water quality impacts. Uranium mining and milling create vast quantities of tailings; runoff from these tailings can contaminate both surface and groundwater. Contaminants include not only uranium and other radioactive materials, but also toxic heavy metals. The radioactive and other toxic impacts of uranium mine and mill tailings are extremely long lasting; improper disposal and handling in the past continue to cause harm in the present.

Natural gas production: Technological advancements in hydraulic fracturing (fracking) have enabled massive expansion in the production of unconventional gas. The process involves many known risks to ground- and surface-water quality.

• During fracking, fractures in the rock may create pathways for the migration of methane or fracking fluid into overlying aquifers, contaminating groundwater with explosive levels of natural gas. Faulty well construction can also lead to migration of gas from wells into groundwater. An estimated 3 to 7 percent of wells have compromised structural integrity, a problem that could enable methane to seep into groundwater.

• Seepage of fracking fluids into groundwater has contaminated drinking water with toxic chemicals such as benzene. Only a portion of fracking fluids are recovered in the “flowback water” from a well; the remainder is left deep within the earth, potentially leading to groundwater contamination.

• Concern over water supply contamination is intensified by the fact that many fracking chemicals are not currently regulated by the Safe Drinking Water Act, and the precise mix of chemicals used in fracking is often kept secret.

• As wells begin to produce gas, additional water originally present in the surrounding rock formation mixes with the fracking fluid and surfaces as “produced water.” This water may contain salts, metals, oil, grease, benzene, toluene, radioactive materials naturally occurring in the rocks, and chemicals used in fracking.

• In the Marcellus Shale region, fracking wastewater is either reused, or sent to municipal wastewater treatment facilities where it is treated and discharged into local surface waters. These municipal facilities are not designed to deal with the contaminants that are found in fracking wastewater. High concentrations of salts and naturally occurring radioactive material cannot be removed by these facilities, and are passed through to local water bodies. Similarly, cuttings from the well may be sent to landfills, where the radioactive material can migrate into water that is then treated and released by wastewater facilities incapable of adequately handling the waste.

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Power plant waste disposal is another major source of water quality impacts. Wastewater discharges from power plants currently account for 50 to 60 percent of all toxic pollutants discharged to surface waters by all industrial sources regulated by the EPA. Water quality impacts from the operation of thermoelectric power plants include the following:

Flue gas desulfurization (FGD) wastewater: Coal fired power plants produce wastewater through a number of processes, including from FGD systems (scrubbers), which reduce sulfur emissions. The slurry produced by a scrubber contains high levels of arsenic, mercury, aluminum, selenium, cadmium, and iron. Most plants using scrubber discharge their wastewater to settling ponds. After a certain amount of residence time in the pond, the wastewater is generally discharged to local surface waters. Although this process may effectively reduce total suspended solids and other particulate pollutants, it does not reduce the potentially significant amounts of dissolved metals in the wastewater. Thus several pollutants—such as boron, manganese, and selenium—can be discharged untreated into the environment.

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Coal combustion residuals (CCR): Coal-fired plants produce vast amounts of fly ash, bottom ash, and boiler slag, known as coal combustion residuals. Typically, CCR contains heavy metals and radioactive material. An estimated 131 million tons of CCR were produced in 2007, of which about 43 percent was recycled; the rest remains in surface impoundments near the plants, or was dried and landfilled. EPA lists over 670 coal processing waste and CCR sites, of which 45 have been identified as “high hazard” sites. The potential impacts to water from CCRs include leaching of pollution from impoundments and landfills into groundwater, and structural failures of impoundments leading to spills. During the past several decades, there have been several documented cases of ground or surface water contamination. A 2007 draft risk assessment for EPA found significant human health risks for people living near clay-lined and unlined sites from contaminants including arsenic, boron, cadmium, lead, and thallium. To date, CCR has been exempt from federal regulation and has been regulated at the state level. Following a devastating spill in Tennessee in 2010, the EPA proposed to regulate CCR impoundments for the first time ever under the Resource Conservation and Recovery Act, but the rule has yet to be finalized.

Thermal pollution: In once-through cooling systems, large quantities of water are withdrawn from rivers, lakes, or other water bodies, used for cooling, and then discharged at a much higher temperature. Thermal discharges from power plants can alter the populations of phytoplankton; increase the likelihood of algal blooms; accelerate the growth of bacteria; increase mortality of copepods,2 snails, and crabs; and alter fish habitats, with uncertain results. Thermal pollution regulations can limit the ability of power plants with once-through cooling systems to operate during heat waves, which may become more common under climate change. If the incoming river, lake, or ocean water is too warm, it will cool the power plant less efficiently, and the outflow from the plant may exceed the allowable temperature limits for thermal discharge. This can lead to the need to purchase high-cost replacement power, which affects electricity rates paid by consumers.

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C. The Information Gap: Data Needs for Sustainable Energy Planning

This study has identified several information gaps that need to be filled in order to support energy planning, regulations, and policymaking that fully account for water constraints and impacts.

Critical data deficiencies are summarized below.

Power plant data collection and reporting: Although average water usage by thermoelectric technologies has been studied and documented, plant-level water usage data is of insufficient quality and detail. Many power plants do not report their water use to the EIA; outdated forms used by the EIA have resulted in reporting inaccuracies; and U.S. Geological Survey data—an essential source for water planning—have several critical shortcomings. These data deficiencies limit the ability of government agencies and industry analysts to identify trends in water use and looming intersectoral conflicts. On a national level, water availability and use has not been comprehensively assessed in more than 30 years. Directed by the SECURE Water Act of 2009, the USGS has begun an assessment (or census) of water availability, but the final product will likely not be available for many years.

Climate change impacts and uncertainty: The inadequacy of information about the impacts of climate change stems primarily from the complexity of the climate problem. Despite the massive and ever-expanding body of research, crucial questions about the pace of climate change remain uncertain, perhaps inescapably so. The long-term pace at which the global average temperature is rising remains uncertain, and downscaling of global forecasts to regional levels introduces additional uncertainty. Dissemination of information on climate impacts and sensible discussion of climate policy are further constrained by vociferous opposition from groups and individuals who are committed to denying the overwhelming scientific consensus about the reality of the climate threat.

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Groundwater unknowns: Groundwater provides about 40 percent of the nation’s public water supply, and a significant portion of its irrigation water. As additional water supplies are sought to provide water for power plants, coal mines, and natural gas wells, groundwater aquifers will suffer faster rates of depletion and may quickly be exhausted. The overdraft of aquifers is enabled in part by inadequate monitoring of aquifer levels and a virtual dearth of pumping regulations. The absence of a national groundwater-level network with a unified objective and reporting protocols makes interstate groundwater resources exceedingly difficult to manage, precluding accurate assessments of groundwater availability, rates of use, and sustainability.

Water rights uncertainty: Several factors—including poorly understood surface water variability, groundwater movement, and climate change impacts—are combining to erode the security of users’ water rights. Moreover, no agreements (or insufficiently clear and detailed agreements) are in place to deal with water shortages in countless river basins and aquifers. As water shortages loom on the horizon, policymakers need access to the most accurate information available regarding water flows. Lack of comprehensive agreements has already led to protracted legal battles, and will likely lead to more in the future unless policymakers make the resolution of this issue a priority.

Reporting of chemicals used in fracking: Gas producers often designate the identities of the fracking chemicals they use as “proprietary information” or “trade secrets.” Many known toxins and carcinogens are used in fracking, but determining which chemicals are used in any particular well is a challenge. A few states require some disclosure regarding fracking chemicals; however, more than half of the states with fracking activity currently have no disclosure requirements at all. The Natural Resources Defense Council found that only six states allow disclosure of trade secret information to health care providers who are treating patients exposed to fracking fluid. FGD wastewater treatment effectiveness: The quality of data measuring the effectiveness of FGD wastewater treatment is inadequate across the power plant sector, due to inconsistent definitions of what is considered “wastewater” across the industry, and the varying levels of treatment systems used.

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D. Recommendations

The energy sector’s dependence on and unsustainable use of water threatens the reliability of our nation’s energy system and the health of our water supplies. To address these risks, we must fill the information gaps present in our understanding of the issues, and account for water-related risks in energy planning, regulations, and policies.

At a minimum, we recommend that regulators and policymakers:

• Conduct long-term water resource planning on a regional basis and across sectors, including projections of future water needs and the possible impacts of droughts and climate change on water availability.

• Require entities proposing to construct new power plants or retrofit existing plants to conduct water resource adequacy assessments, as well as incorporate the future opportunity cost of water in a power plant’s cost estimates.

• Perform electric generation risk assessments related to the ability of power plants to continue operation during heat waves and extended droughts.

• Encourage existing power plants to explore alternative cooling technologies and water sources, such as using reclaimed or brackish water, using thermal discharges to desalinate water, or using air cooling systems.

• Incorporate the costs of alternative cooling technologies, the water sources required to operate them, and anticipated carbon prices in analyses of the economic viability of thermoelectric plants in an increasingly water- and climate-constrained world.

• Encourage investments in energy efficiency and renewable technologies that require little water.

• Review all federal and state water subsidies and continue to provide subsidies only if they are supported by a thorough assessment of the social and economic impacts of water supply on all sectors, including agricultural, municipal, industrial, and indigenous tribal users of water, as well as the energy sector.

In addition, information about and regulation of the water quality impacts of fuel extraction and wastewater disposal must be strengthened. In particular:

• More information is needed regarding the chemicals present in treated wastewater and fracking fluids.

• Regulations regarding the use and storage of such chemicals must be tightened.

• Mine reclamation needs to be held to high standards, restoring or replacing the previously existing ecosystems.

• Any renewal of uranium mining needs to be carefully regulated to control the dangers of radioactive contamination.

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