Valve Magazine - Fall 2008

“Call it what you want, but there is a water drought,” Decker declared.

One way states are reacting is to put restrictions on development. In California and Colorado, for example, jurisdictions are requiring documentation that a development will have 20 years of water supply before construction can begin, Decker said.

The next Jeopardy answer was: “The Gay ‘90s, the Roaring ‘20s, Post-WWII, and That ‘70s Show.” The question revealed a problem in the United States (as well as some of the developed nations): When was much of the nation’s water infrastructure built?

“None of that is terribly recent, is it?” Decker asked the audience. In this nation, there are 72,000 water miles that are greater than 80 years old— several decades beyond their normal life expectancy, he said. New York City itself loses 36 million gallons a day from its water system on the way from the reservoir to the city; and a third of the national publicly owned treatment works are currently subject to Environmental Protection Agency enforcement actions because of equipment malfunctions, Decker pointed out.

The next answer was: “$500 billion.” The question revealed where a big part of the industry’s problem lies: How much is needed just to keep our systems up to snuff?

In the ’70s, Decker said, the government was paying for about 78% of water/wastewater infrastructure improvements, but that number has fallen to just 10%. Meanwhile, the burden falls on local municipalities, which are receiving some help from states that face their own set of financial woes. While privatization is part of the answer (more than $10 billion has been raised for private equity infrastructure) and public-private partnerships are starting to blossom: “This is a slow-moving train,” Decker observed.

will play a greater role in bringing it to people. The best opportunities are on the wastewater side of the industry because market growth will slow a bit on the water side.

POWER GENERATION

Coal Wanes, Other Markets Strengthen

The long-term energy market has remained strong for more than 25 years, and it will remain strong going forward as energy demands around the world increase, said Howard A. Russell, vice president and regional general manager for the Power Business of Black and Veatch Corporation.

The power industry continues to see expansion and while there aren’t currently a lot of new project awards being announced, “there is still growth, and

Costs of Renewable Energies

Solar PV

Solar Thermal

Wave

Marine Current

Biomass

Wind

Hydro

Geothermal

Landfill Gas

Gas, Coal, & Nuclear

it’s not going to slow down,” said Russell.

Yet, “there are challenges, and certainly the market cycles will go up and down” for end users like the valve and actuator industries, he said.

As with the rest of industry, power companies are seeing costs rise and resources become scarcer, particularly in the skilled crafts, such as engineering, he pointed out.

“This country is short about 1 million skilled craft workers,” Russell said, citing a recent study.

Elsewhere in the world, growth will come from the needs of developing countries. “If we are going to pull poor people out of their status, it requires more energy, not less,” Russell pointed out.

As far as specific markets, Russell said the coal industry is in a major decline (Russell downgraded his forecast for the next five years from $25 billion in capital spent—2007’s forecast—to $10 billion), while the nuclear industry is seeing major advances and interest. The nuclear industry is benefiting from increased consumer acceptance, new support from environmental groups, and a world focusing on carbon sequestering and global warming. This means opportunity for those who build valves and pumps, Russell told the audience.

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DECKER’S FORECAST: The water/ wastewater market will grow 4% to 5% in 2008/2009. Desalination will play a greater role in creating drinkable, usable water and alternative delivery systems