Catalyst with Shayle Kann - Averting water wars as we decarbonize

Episode Date: September 15, 2022

Don’t miss our live episode of Climavores in New York City on October 20! Sign up here for a night of live audio and networking with top voices in climate journalism.  We designed our power plants, refineries, and other energy infrastructure to depend on water. But not just any kind of water—water that’s available at the right quantity, quality, place and time. When water falls outside of this Goldilocks zone, energy systems can unravel, sometimes in unexpected ways. Low water levels strain hydroelectric and thermal power production and restrict coal shipments by river. Extreme cold freezes water in natural gas infrastructure, causing blackouts. Examples abound. The irony is that the energy system fuels climate change, which in turn fuels water problems for the energy system.  So how do we address these vulnerabilities as we decarbonize? And how can we build a resilient water-energy system in an increasingly chaotic climate? In this episode, Shayle talks to Dr. Michael Webber, author of Thirst for Power: Energy, Water and Human Survival. Michael is a professor of energy resources at the University of Texas-Austin and chief technology officer at Energy Impact Partners, where Shayle is a partner.  They cover topics like: The surprising places we use water in energy, like extracting minerals and natural gas, growing crops for biofuels and sequestering carbon The ways energy improves the quantity and quality of water, allowing us to move water longer distances, reach deeper wells and desalinate water How to avoid exacerbating water problems as we decarbonize Whether cheap, abundant electricity from nuclear fusion will power wide-spread desalination Why the data on water systems is so scarce compared to energy systems How prescient the new Mad Max water-war movies are Resources: Yale University Press: Thirst for Power: Energy, Water and Human Survival The New York Times: Europe’s Scorching Summer Puts Unexpected Strain on Energy Supply The New York Times: China’s Record Drought Is Drying Rivers and Feeding Its Coal Habit   Catalyst is a co-production of Post Script Media and Canary Media. Catalyst is supported by Antenna Group. For 25 years, Antenna has partnered with leading clean-economy innovators to build their brands and accelerate business growth. If you're a startup, investor, enterprise, or innovation ecosystem that's creating positive change, Antenna is ready to power your impact. Visit antennagroup.com to learn more. Solar Power International and Energy Storage International are returning in-person this year as part of RE+. Come join everyone in Anaheim for the largest, B2B clean energy event in North America. Catalyst listeners can receive 15% off a full conference, non-member pass using promo code CANARY15. Register here.

from the studios of PostScript Media and Canary Media. I'm Shale Khan, and this is Catalyst. I worry that we're going to replace oil resource wars with water resource wars. That's something I really am anxious about. But that's where, again, technology and energy might be a solution. If we can use energy to create water abundance, maybe that's a pathway to peace. And avoiding Mad Max, basically. Avoiding Mad Max.

I mean, if you go watch Mad Max, Mad Max looks like it's, onto something. It was, of course, all about oil decades ago, and now the latest versions are about water. And I think that's a hint of what's going on. Once you see it, you can't unsee it. It's the water energy nexus. When utilities need flexible capacity they can count on, they turn to Energy Hub. Energy Hub works with more than 170 utilities, coordinating over 2.5 million devices to manage 3.4 gigawatts of flexibility built for the moments when utilities can't afford uncertainty. Energy Hub builds and operates virtual power plants that utilities actually stake their grid planning on, coordinating EVs, batteries, thermostats, and more through a single platform built for utility scale.

Predictive, verifiable, and designed to perform when it counts. Learn more at energy hub.com. Trillions of dollars are flowing into clean and critical infrastructure, but those investments aren't driven by technology alone. They're shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, and host of a brand new podcast, Critical Capital. Each episode, I talk with people deploying capital, shaping policy and building the clean economy. Tune in as we unpack how progress is actually made. Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts.

I'm Shale Khan. I'm a partner at the venture capital firm Energy Impact Partners. Welcome. So the expression, you don't know what you've got till it's gone. should have been written, in my opinion, about the energy water nexus. It turns out that these two ecosystems, which are both obviously vital to the human population's livelihood into our modern society, are intricately linked in a series of complex and evolving ways, and when one goes wrong, the effects on the other are kind of staggering and terrifying. This is not theoretical.

Example one, China is currently experiencing the worst drought on record. the Yangtze River is at its lowest level for this time of years since recorded history. And in the Sichuan province, which is home to a big hydropower resource, threats of power cuts are impacting manufacturers, including Foxconn and VW, but also suppliers of key materials for the energy transition, ranging from aluminum for EVs to polysilicon for solar panels to lithium for batteries. Closer to home, where I live in California, we just narrowly avoided rolling blackouts last week when a heat wave coincided with our own drought and below normal hydropower reserves.

And hydropower is just the tip of the iceberg, so to speak. There are many ways in which water and energy are intertwined and so many impacts of that interconnectedness on both markets individually. For me, once I started seeing the connections, it was a bit like suddenly being able to read the matrix. Just call me Neo. And in that analogy, Dr. Michael Weber is my Morpheus. Michael is many things, among them, the Josie Centennial Professor in Energy Resources at UT Austin,

and the author of a bunch of really incredible books, the first of which, notably, was called Thirst for Power. So you can imagine the relevance here. But most important among his many titles, in my humble opinion, is that he is also our chief technology officer at EIP where I work. Here's Michael. Michael, welcome to Catalyst. Thanks. It's good to be here. Glad to finally have you.

All right, so you wrote a book called Thirst for Power, which we can guess what that book is about, given the topic of this conversation. And when did you publish it? Like 2016, is that right? 2016 is when the book was officially published, yes. All right. And so what was the premise? Like when you pitched your publisher, you were like, this is the biggest thing that nobody talks about. Was that the basic idea?

Basically, yeah. I went to the publisher and said, I study energy and water. They're important. people aren't talking about it, I want to write a book. And for them, they said, well, this is great. We've got a lot of books on water and a lot of books on energy, but no one that sort of brings them both together. So they were pretty interested in. And then, do you feel like since then, so that's what six years ago now, you feel like in the intervening six years since you published the book? Like, has the world woken up more to the intricacies of the energy water nexus, or

is it still under the radar in your mind? I feel like the world has woken up to it. It's still under the radar for maybe a sort of common person who doesn't spend all day thinking about this. But the world of water and the world of energy is all over it. And I would say one measure of this might be funding for research from federal agencies. And there's now a lot of funding from the National Science Foundation and the Department of Energy and groups like that on this topic. And there wasn't that kind of funding a decade ago. So it feels like, at least from the research world, from the analytical or analyst world, there's a lot more discussion today than there used to be. And presumably there will be more and more as we talk about in the future, the nexus becomes increasingly problematic, possibly, existential, maybe at some point in some places.

We're getting daily reminders that it's important, so it's starting to sort of trickle into the popular consciousness that this is a relevant subject for sure. Yeah. All right. So I think our goals here are let's start by talking about what exists at the nexus of energy and water, the ways in which energy and water are, are intertwined with each other in our modern economy. And then we talk about what that means for the world. What could be good about that? What could be bad about that? What are we seeing happen today as it affects that? And like, what are we going to see out in the future? So let's start with that first point. So you've framed it in a way that I like, which is there are a bunch of ways in which

we use energy for water, and there are a bunch of ways in which we use water for energy. So let's take those in order. So first, what are the ways in which we use energy for water? And that's a great way to think about as this nexus means we're using one for the other, and it's both ways. And so we got to start with an inventory, so to speak, of what are the different ways they're related to each other? And then we can think in the future, what does this mean moving forward? We use energy for water in a variety of ways. We use it to pump water, usually uphill, out of a river or a lake or a well or wherever it is.

Water tends to fall by gravity to lower elevations, and we tend to live at higher elevations, even if it's just a few feet. And so we have to use energy to lift it to where we are. And that's one of the first and most important uses of energy for water. But we also use energy to treat the water, to pump at long distances, to chill it, pressurize it, refrigerate it, deionize it, you name it. We use water in a lot of ways. And we need the water to be at a very particular quality and a particular quantity at a particular

time. And that means we use energy to get it there. In the old days, it might be a person pulling a bucket in a round, rope from a well or a horse turning in a circle to elevate water with scoops out of a river or an Archimedes screw or something like that that is raising the water. And today it's big electric pumps that are massive that require a lot of power just to lift the water. And then all those other steps might be pumps or lights for treatment or then refrigerators or chillers or heaters or whatever it is. So there's all these devices along the supply chain of water that

require a lot of energy. So how much energy are we talking about? Of all of the energy that we use, like how much of that is going toward moving water, cleaning water, doing something to water? If you look at the United States as an example, we use about 100 quads of energy, 100 quadrillion BTU of energy, a BTU is a British thermal unit of energy. About 13% of that energy is for water and steam. So it's not zero, but it's not half. It's a six or something like that, a seventh. And a third of that, like four percent of national energy consumption is just water heating in our homes and our businesses, just to get water to a comfortable temperature for our long hot showers or for washing dishes and clothes. And that's a lot of energy. That 4% of national energy consumption

in water heating is bigger than what Switzerland and Sweden use for all purposes combined in a year. So just imagine two rich countries are using less energy combined over a year than we use just for water heating. So that's one example. And that's really the direct use of energy for water, including the treatment and the chilling and everything else. That's also including the steam for industry, but it is not including the energy going to make steam in the power sector, which is about a third or more of our energy consumption. So like a third of our energy consumption in the United States

just goes to boil water to make steam in power plants. Well, so that's the flip, right? So we're talking about the ways that we use, we basically use energy to get us the water that we need, where we need it, when we need it, at the temperature that we need it. So that's the 13%. Now, let's flip it and talk about all the ways in which we use water to get us the energy that we need,

which I think, at least from just having read what you've written about it, between the two, this seems like the bigger deal to me, the amount of water that is used to get us our energy. So talk about the ways that we do that. Yeah, so the energy system is very dependent on water, just like the water systems, very dependent on energy. And we use water in a variety of ways for energy. We use water to make electricity. For example, at hydroelectric dams, when the water falls, it spins turbines to make electricity. We use water to make steam, which I was talking about earlier about all the energy that goes in to boiling water to make steam.

And that steam spins steam turbines, again, to make electricity. We use water to grow fuels, like biofuels. We use water to extract oil and gas with water flooding or hydraulic fracturing. We use water to extract critical minerals, maybe some of the metals we need or the critical rare earth. elements for renewables, but also for uranium. We use water for dust control at the mines or to leach out the minerals we need. Now these days, we even talk about extracting lithium from brine solutions, so the water is a source of the energy. And then we use water to move energy to market through barges and ships, maybe a barge carrying coal or a tinker ship moving gasoline or other

refined products, or these large ships across the oceans carrying crude oil or lichified natural gas. So we use water to move the energy to market. And that's what we're seeing in the news these days. where you have low rivers means barges can't move. And if barges can't move, they can't carry coal. You can't carry coal, then you can't run the coal power plant, and then you get an energy problem because you had a water problem. Yeah, I mean, we're going to come back to all the risks and what we're seeing in the news right now,

because we're currently in a kind of a global drought that is exposing a bunch of these challenges. But since you allude to that one in particular, can you be more specific? Like, what's actually happening? Where do we have rivers causing barges not be able to deliver coal? It seems like we have drought everywhere, just everywhere. But right now in Germany with the Rhine and also in China,

we have rivers so low that barges either can't carry a full load of coal, or they can't carry coal at all. Like, just there's enough water for the ships to move. And these coal plants in the old days, maybe stored 60 days worth their coal on site. These days, they store like 15 to 30 days. And so they don't have a lot of backup at the river stay low for months at a time, which is starting to happen.

And so today it feels like Germany and China is where the news is, but that happened on the Mississippi River in the United States, not that long ago either. So we have plenty of examples from around the world on that. All right, so we'll come back to some of the other things that are in the news right now. But to just level set on this, using water for energy bit, you mentioned all the different ways in which we use water to get energy. Contextualize that.

How much of our energy is using water? A lot of it. So if we look at the water for the energy sector, I mentioned the ways we use water to grow fuels or spin turbines. we also use water to cool power plants. In particular, we use water to cool thermal power plants. Thermal power plants are the ones that use heat, nuclear, coal, natural gas, and they often use water cooling, which could be a large reservoir, a pond, or lake, or river, or cooling

towers, depending on the design. And about 40% of all the water withdrawals in the United States every day are just to cool power plants, and a water withdrawal is withdrawing water from a lake or river, using it to cool your power plant, and returning that water to that river or lake, but it's warm. when you return it. Those water withdrawals are a big use of energy. It's the number one, our big use of water. It's the number one use of water in America. It's just water for power plant cooling. All right. So I just want to double click on that for one second. You're saying that the amount of water that we withdraw and use to cool power plants exceed the amount of water that we use, for example,

to drink and shower and all this other stuff? By far. Yeah, the amount of water we withdraw to drink and shower is a few percent. It's not a big deal at all. The biggest users are really power plants and agriculture, at least in terms of withdrawals, the amount of water we withdraw. Now, the difference is for the water we drink, we've consumed it, like we use it and they go somewhere else, and then agriculture consumes the water. With the power sector, it mostly does not consume the water. It takes the water from the Laker River. It uses it to cool the power plant, and then mostly returns the water. Now, if it's a cooling tower, it actually evaporates the water, goes the atmosphere. It comes down as rain a few states over or in a different country,

depending on where you are. But that power plant usage of water for cooling exceeds the amount of water withdrawn every day for agriculture. And then municipalities are third on the list. Those are the cities, the water we use for drinking and washing. If you look at consumption, how much water is consumed, agriculture is the biggest consumer, then cities, then the power sector. So you kind of have to look at it based on how much water is used versus how much is actually consumed. Okay, so this one is obviously a very big deal. We need a lot of water to produce the energy, to cool the power plants, to produce steam for industrial facilities, for whatever other purpose. So let's talk about what's good about all this interrelatedness between water and energy. Then we'll talk about what the challenges are that we're seeing today and that we might see in the future. What's the good news in your mind? The good news is that using water for the energy system really improves the productivity and the efficiency. By using water to irrigate our crops, we get more food productivity, or if it's bioenergy crops, we get better energy productivity.

If we use water to enhance oil production through water flooding or hydraulic fracturing, we get more oil and gas out of the well. So with water inputs, we get much greater energy output, or if we use water to cool our power plants, we get much greater efficiency. If you cool a power plant with water, it lowers the temperature at the back end of the steam turbines. it improves a thermodynamic cycle, you just get more output. So this is really great. By adding water to the energy system, we improve the ability for the whole system to perform. We improve the productivity, the throughput, the efficiency, and the ability to move energy from where you produce it,

maybe in West Texas to where you need it, say France and Germany, if they're trying to get off Russian gas, for example. What about, I guess here's a different way to ask this question. Of the energy that we use to move water around, Is it mostly electricity or is it thermal energy? It's great. And I didn't really answer the question of how we use energy to prove the water system. We use water to improve the efficiency of energy,

but we use energy to improve the quality of the water and the quantity. We can use energy to get more water from deeper water tables, from a deeper well. We can move that water longer distances. It might be dry in Phoenix, but wet somewhere else, if you see it's over, we can maybe pump the water there. We can desalinate the water. Maybe we have abundant salt water if you're near an ocean or something, You can use that energy to get it to the right quality for drinking. So there's a lot of inputs where it's really good for us.

The energy in gives us better water, and the water in gives us better energy. So that's kind of the good news on that is better availability, better reliability, if designed the right way, better throughput. What portion of the cost stack, I guess in both directions, right? Like, what portion of our, the cost of delivering water? This is obviously going to be highly variable depending on the situation. But the cost, what proportion of like delivered water cost for an agricultural purpose or something like that comes from the energy cost of pumping it to that location? Is it substantial or is it de minimis? It is substantial. Rule of thumbs, about half. Depends on where you are. So your water bill, it depends on where you are. My water bill in Austin, Texas is about $100 a month. It's a lot cheaper in other parts of the United States because water is scarce in Texas so it's expensive. About half of that's usually the energy bill, just the pumping and the treatment.

There are some places where the water is gravity-fed. New York has cheaper water. The water is fed to New York City by gravity, so you don't need energy for pumping in. But you still need energy for the treatment to get it to the right quality, and then for the wastewater. So the energy bills are non-trivial. And then if you're in a place that uses a lot of expensive fuels, say natural gas for heating, you might notice your water heating bills, especially if you're a refinery or a hospital or someplace that uses a lot of hot water, you will really notice that.

So the energy bills are pretty substantial. The water bill for energy is not substantial. Usually the water is cheap. So if you're producing oil and gas, the amount of extra money you pay for water, it's something you notice. It might be 50 cents a barrel or a dollar a barrel, something like that. But then you get a barrel of oil, which is worth $50 to $100. So the water inputs to energy are pretty cheap, and they improve the efficiency or productivity a lot. The energy inputs to water are not cheap and they're substantial.

And most of that energy is electricity, except when you get to water heating. It might be propane, natural gas. fuel oil or something like that. So that then strikes me that one of the other pieces of potentially good, potentially bad news, but potentially good news is if we are successful in lowering the cost of electricity, I mean, we want to decarbonize electricity, but if we are successful and in the process also lowering the cost of that electricity, one knock-on effect should be substantially lower cost of water.

That's correct, yeah. So if you can lower the cost of energy, you can lower the cost of water. The correction to that might be if you lower the cost of energy, if you lower the cost of water, energy, you might end up pursuing more energy-intensive forms of water like desalination, so it might end up settling out at about the same price. In effect, that's what we see in many places, is that cheaper energy means you can access less traditional sources that require more energy. And this is kind of like, is it Jevon's paradox or Javon's paradox?

I never know. But the same kind of concept shows up in the water world. But theoretically, if you have more energy, if you had infinite energy, you'd have infinite water. Like, you would not be limited. You could get water from anywhere in the world. You could desalt the oceans, but energy is not infinite and it's not free, so we have some limits. Well, this is where, I mean, to get way out into the future, right?

Like one of the things, so you talked to real strong nuclear fusion proponents, for example, right? And we've talked about this. One of the things is nuclear fusion, very exciting. We all hope it happens. You know, it's not inherently true that it's going to deliver the cheapest electricity that is available in the market, even if it is fusion. And that doesn't mean that it's cheap because you could have very expensive capital costs to build a fusion plant that have to be amortized over the production of the facility and so on. One of the applications that people talk about when they're sort of thinking 20, 30 years out into the future for nuclear fusion is just massive nuclear fusion to run massive desalination plants and produce a ton of potable water.

Is that like a horizon you can envision? Or do you think that there's a reason that doesn't make sense? Yes and no. So if we had unlimited really affordable energy, we would use it for high value purposes. And one of the high value purposes is to get water, primarily for irrigation for food, but also for drinking and for all our uses at home. But that water ends up being expensive. So we probably wouldn't want to use that water just for golf courses or for our lawn. So there might be some sorting and stacking of what our water priorities are.

And we don't have to wait for the far future for desalination. It's already happening today in Israel and parts of California and inland, Texas. Israel and Australia. So places that are water scarce already do some desalination, even if the electricity is not cheap, just because they need the water so badly. So for your basic human needs, it doesn't matter the price. But for the luxurious needs, it does matter the price. And so if you need water to drink, you'll pay whatever it takes because you'll die without it. But maybe for your lawn or your swimming pool, you'll be more mindful and thoughtful about that price. If we have fusion or whatever it is, it gives us more energy at a lower price, then we might have more luxurious

uses. Now, I wouldn't call this luxurious, but restoring the ecosystem would be a pretty good purpose of water. And so we could think about getting water and recharging aquifers or putting water and ecosystem flows back into the rivers. And the rivers have run dry many places because we've used so much water. We've taken so much water out of the aquifers. The water tables have fallen. The springs don't flow. The water does a flow. Maybe we could imagine reclaiming and restoring some of these water systems. Well, that takes a lot of water. You're not going to do it unless you have a lot of energy first. Virtual power plants are becoming a reliable way for utilities to manage capacity, but enrolling

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delivering 3.4 gigawatts of flexible capacity. See what that looks like at energyhub.com. We're living through a profound economic shift, and energy sits at the center of all of it. Trillions of dollars are flowing into power plants, transmission lines, battery factories, data centers, but the future of energy isn't shaped by technology alone. It's shaped by markets, by policy, by capital, and by the institutions that connect them. I'm Alfred Johnson, CEO of Crux, the capital platform for the clean economy. Join me for my brand new show, Critical Capital, as I talk with people deploying capital, shaping policy and building projects. Together, we unpack how risk is priced, how incentives are structured, and how progress is actually made.

Listen to Critical Capital on Spotify, Apple, or wherever you get your podcasts. All right. So that gets us to the downside of all these interconnections, the vulnerabilities. Let's start with the sort of immediate thing. We're seeing this pop up in the news in various places this year in particular. So give us a quick tour of like what's been happening in 2022 and what's causing it. it's really like partly a good news story that the energy system depending on water yields better productivity, throughput, and efficiency, but also creates all these incredible vulnerabilities.

Because the energy system is so dependent on water, that water has to be available at the right quantity, at the right quality, at the right place, at the right time. And it's possible for us to have too much water or too little water or water that's too hot or too cold. And if it's not in this Goldilocks sweet spot of just the right amount at just the right temperature, when we need it where we need it, then the whole system can fall apart. And the examples we see today in 2022 are droughts causing water levels to fall. And if the water levels fall, you cannot get the water you need to move your barge of coal. You cannot get the water you need to cool your nuclear power plants in France so they are dialing back or turning off. You cannot get the water you need to

extract the minerals or oil and gas or grow the crops you need if it's biofuels or something like that. So the water constraint, the water shortage or drought is a huge problem on the energy system. But we also see floods. If you have too much water, it will flood the energy system, and it will force refineries to turn off. Or there are power plants that get surrounded by water. They have to turn off for safety reasons. Or if that water is too hot because of the heat wave, then you can't use that water safely to cool your nuclear power plant. Or if it's too cold, you get ice formations and your power plants will fail like happened in Texas in February 2021. So there's just so many ways they can go wrong. And there's so many examples around the world

every day, but every year there's some dramatic event where people die because the energy system failed, and a lot of that's because of the water system. So in the sort of, as we look forward into a world in which climate change is running rampant and continues to do so, does the, presumably, I mean, I think the expectation would be we're going to see more drought, we're going to see more flooding, like, you know, just more extremes that make the Goldilocks scenario of getting the water at the right time and the right place and the right volume and the right temperature and so on and so on, more and more difficult. So are we going to be finding ourselves in a situation where this interconnected web we've created

is like really problematic as climate change progresses? Yes. I think you said a great, but exactly. And I think it will just become more intense because we've designed our energy system for this sweet spot. And now we're moving out of the sweet spot. So we have power plants operating out of their design conditions. They design it for a different weather and a different kind of water availability, for example. and then if the weather gets too cold or too hot or whatever, it's outside that range,

they're outside of spec, they can't operate safely. And it goes the other way around as well. We've designed our water system, assuming energy is available. And if you have a power outage, like we had in Texas a year and a half ago, we have in different spots around the world, the energy's cut off or the power is cut off to the water and wastewater treatment plants. This becomes a public health crisis. So it's both ways.

And we had that in Texas where we first had a power outage, 10 million people without power, we had 14 million people under a boil water notification because the water wasn't safe to drink because the water and wastewater treatment plants didn't have energy. So this is a huge crisis. It's already happening. It feels like it's picking up its pace. And part of that is one of the deep ironies of the energy water nexus is that the energy system helps create climate change through the radiative forcing of the emissions from the fuels we use. And the way climate change manifests itself is through changes to the water systems through acceleration or intensification of the hydrological cycle, which, as you said, means more intense and frequent droughts and

more intense and frequent floods, and those droughts and floods are a huge strain on the energy system. So energy gives us water problems, which gives us energy problems. It's all one big accelerating loop. Right. Which is sort of depressing. I guess the other question, though, is so as we then try to combat climate change and transform predominantly our energy system and replace, for example, a bunch of coal and natural gas plants with non-thermal generation of one kind or another, are we going to be solving the problem or replacing it with a different problem?

For example, we could add more nuclear, that uses a lot of water. We could produce a bunch of green hydrogen by electrolyzing water. Is that going to increase the total amount of water required in the energy system? What is the balance going to be? As the energy transition progresses, are we going to become more reliant on more Goldilocks water or less?

Your question really captures the complex nuance of it, which is, well, it depends and depends on what decisions we make. Because if you really care about carbon, you might decarbonize with water-lean options like wind and solar, which are really great. They're great from a carbon perspective, and they're great from a water perspective. Maybe not so great from a land perspective, depending on how you count the land. But some of the low-carbon options, like traditional nuclear, 1970s nuclear with big water cooling, very water-intensive, carbon capture systems are very water-intensive, bioenergy crops are very water-intensive.

So it kind of depends on what we build. But if that nuclear is a small module reactor that's air-cooled, sounds great. If it is not a carbon-capture system that's water-based, but some other method, then we might be fine. So really have to be thoughtful about it. And it's possible for us to focus on one problem, the carbon cycle while maybe making worse another cycle, the nitrogen cycle or the water cycle,

something like that. I think we should have all of this in mind so that we're not so focused on one, we make the others worse. So you and I are technologists of a different sort. I mean, you're an actual technologist. I just pretend to be one and invest in them day to day. What are the technological solutions, innovations that can make a difference in terms of either minimizing the amount of water we need for energy or the amount of energy we need for water, or just delinking the more vulnerable aspects of the nexus. That's a key thing. We have to ask, do we want to delink or not? And the answer is we want them to be linked where it's good for us, but delinked where it's bad for us. And so how do we sort that out? And there are some technologies.

If we just look at power plant thermal cooling, we have these sort of old school heat exchangers and wet cooling systems that were built decades ago. Well, there's a lot of advanced work we can do on the materials or the heat transfer research that goes into the design of the heat exchanger so that we need less water. There's hybrid air cooling towers. You use air and water, so they use less water overall. You only use water when you really need it. Use air most of the time. And actually, air cooling works okay, but it takes a lot more air to cool the heat compared to water. Like, imagine you burn your hand. If you burn your hand, do you want to put it in front of a fan or put it under a tap of water? You'd rather put it under a tap of water. But if you don't have water,

you'll put it in front of the fan, but it takes a lot more air to get the same cooling effect as water. But we can work on that and develop better air cooling systems to make that a little more efficient. There's some deep technologies on that. And then on the energy for water side, thinking of better membranes or better techniques to do desalination or water treatment, so it's not nearly as energy intensive as is today. So we can look for water-lean energy options and energy-lean water options. And a lot of that surround efficiency, these technologies that improve the throughput. But I think the primary choice is ultimately on the energy side, fuel choice has a bigger impact than improving the heat exchangers.

What do you see as opportunity? I mean, this is a really complicated set of markets that are connected to each other and impact each other's pricing and volumes and availability and supply. Where have we seen interesting business model innovation around this world? There are some business model innovations. I would say there's more room for innovation on the water. side because it's further behind. You mentioned markets. We have a lot of markets for energy. We have power markets, oil markets, gas markets, futures markets. We have information released every 15 minutes about the power markets and every week on oil, storage and prices from the

EIA or whoever it is. We have a lot of data and a lot of sophistication on the energy side. The water side is much less sophisticated. The information about water quantities that are used in United States are released every five or 10 years. Same with water withdrawals. Like this is not 15-minute real-time information the way you might expect for energy. So the water information is just much lumpier and released on a much less frequent timeline. And the markets tend not to be markets at all. Very, very heavily regulated. The water in many places, especially the western part of the United States, was allocated like 100 years ago, a huge problem for the Colorado River today because the allocations for Arizona and Nevada and California were made 100 years ago when it was a wet decade. And now that water is not there,

but there's no market mechanism to exchange the water. So we don't really have water markets. But there is some business model innovation there where you see some people coming in in buying farms in California, not because they want the farm or they want the pastacios or almonds. They want the water rights.

Then they will buy that farm, put a lot of money into water efficiency instead of flood irrigation, maybe doing center pivot irrigation or drip irrigation, something that uses less water. And that frees up some water they can then use for oil and

or industry or some higher value purpose. So there are some groups that are acquiring water rights, investing in efficiency, and then they have more water they can sell or use for other purposes and make some other money. That's happening kind of in the western part of the United States where water is scarce. In the eastern part of the United States, water is still abundant enough. People aren't too freaked out by it. So they haven't really developed the markets. Some of this has also happened in Australia where they developed markets to trade water. And that's what you need for a market. You You need some way to trade, but also you need some scarcity, other else you don't really have a market.

Why is it just, historically speaking, one of the things that's happened to me over my career where I've spent, you know, basically all of it doing something in energy or related to energy, and I know it's highly regulated and it's complex and it's a tough market to operate in and all that. And then once in a while, somebody suggests that I look at something in water and it's like intimidating because it's even worse. as bad as energy is, as a market to try to build something in and scale something fast and get past regulatory hurdles and all that. Water seems to be on a whole other level.

I've never totally understood how it ended up being that way. Why don't we have markets for water? Why don't we have data for water and we do for energy? What's different? It's a great question, and I don't really know the answer other than our history was complex with how water was allocated. And there's two different types of water, first of all, to keep in mind. One is the surface water, the lakes in the rivers, the water on the surface. And then the groundwater, the water below ground in the aquifers and places that we can't see

very easily. And I want to say some of it came from just the fact that we couldn't see the water below very well. We're kind of blind to the water. And so the laws are mysterious in places like Texas where they treat the water below ground as part of the occult or something like that. So it was regulated in very funny ways. It was allocated to farmers in agriculture, then cities next.

And then industry comes along later and says, hey, we want the water too. it's just so locked up with these water rights where people were given the water or assigned the water 100 years ago before we anticipated what the future would be. And so now it's hard to get that water released. And it's only really possible if you have a real crisis.

In Australia, they found a way to create markets for water and water innovation because they had such a severe drought about a decade ago. They had these tragedy. It was just a disaster of like a farmer a week committing suicide because their crops wouldn't grow.

It was just horrible. And finally they said, okay, we've got to rethink this. Let's develop a market system where people can actually trade water and invest in innovation. We're not quite at that point in the United States or elsewhere. So we haven't had the desperation, but it feels like we're knocking on the door of it, and we'll get there soon. All right.

So it's 20-36, 20-year anniversary of Thirst for Power of your book, and you're writing an update. What's your prediction as to what changes? What's the water energy nexus going to look like in 15 years? I guess it's 14 years from now. It will be partly a celebration. Like, hey, we did it. We really reduced the water intensity of the energy sector. This is great news.

We should all celebrate. But there'll be a doom and gloom part. It's like, yeah, but nature is working against us anyway. So we had to do it because the droughts and floods were so intense. And so we might have solved some of the water vulnerabilities of the energy system, but we still have the water vulnerabilities of society as a whole. And one way we'll solve that is with more energy use. If your water gets tainted because of the flood, you need more energy to treat it.

If you have water scarcity because of drought, you're either going to have to move the people to the water or move the water to the people. And that means more energy to move the water there. And so I think there'll be some celebration of how the process of decarbonization reduced our water intensity overall, but we're still going to have some pretty severe strains we have to deal with. What's the book going to be called? Thirstyer for power. Thirstyier, more powerful and thirsty. Yeah, I've got to think about that. Yeah, so there was thirst for power, energy, water, and human survival.

And I guess we can hopefully say at that point, we survived. So now it's kind of a look back. I don't have to think about that one. But I worry that we're going to replace oil resource wars or what we're seeing today, natural gas resource wars with water resource wars. There have been water wars in the past. I'm worried that we'll have more water wars. That's something I really am anxious about.

But that's where, again, technology and energy might be a solution. If we can use energy to create water abundance, maybe that's a pathway to peace. And avoiding Mad Max. Avoiding Mad Max. If you go watch Mad Max, Mad Max looks like it's onto something. It was, of course, all about oil decades ago. And now the latest versions are about water. And I think that's a hint of what's going on.

Yeah. All right, Michael. Well, you know, I think the more I learn about the energy water nexus, the more terrifying it is. That's generally my impression the more they learn about it, which is, I don't know, probably good that I know about it, but I sort of wish that I didn't. Nonetheless, going to look for cool opportunities to do things that help us either D-Link or at least become more efficient with the way that we use these two incredibly vital resources in our modern economy. And I think you said it with your closing comment just now that there are a lot of reasons to be afraid, but there are some reasons for hope and optimism that we can solve this. And you just said efficiency.

And that's one of the key benefits of the energy-water nexus is that saving energy saves water whether you're meant to or not. and saving water saves energy, whether you're meant to or not. There's a lot of cross-cutting efficiency and conservation benefits. So we might as well do our best to avoid the use in the first place and reduce use, and then we'll get these other benefits we didn't even intend. And that's a big part of the solution that people forget about. All right, Michael. We'll talk about it again when Thirst for Power 2 comes out.

But in the meantime, thank you so much for joining. Thank you so much for having me. Michael Weber is the CTO at Energy Impact Partners, and also a professor in energy resources at UT Austin. What did you think? What did we miss? Did we miss a bunch of linkages

between energy and water, water and energy? Let us know. Find the show on Twitter at At CatalystPod. You can find me there too. If you like the show, as always,

go over to Spotify or Apple Podcast and leave us a rating and review. The show is a co-production of PostScript Media and Canary Media. You can head over to canarymedia.com to find links to Michael's book, Thirst for Power,

as well as his other books, which I recommend, and more info on today's episode and this general topic. And as always, PostScript is supported by Prelude Ventures, the venture capital firm that partners with entrepreneurs to address climate change across a range of sectors, including advanced energy, food and agriculture, transportation and logistics, advanced materials and manufacturing,

and advanced computing. Donde estal Agua, Prelude. Donde estada. This episode was produced by Daniel Waldorf and Dalvin Abouaji, mixing by Greg Vilfrank and Sean Marquan, theme song by Sean Marquand. Our managing producer is Cecily Maza Martinez.

I'm Shail Khan, and this is Catalyst.