Supply under pressure as water now dearer than oil

Water for human consumption costs $100 a barrel. A barrel of oil trades at $75, writes BARRY O'HALLORAN

YOU MIGHT not think it if you’ve just been drenched by yet another summer shower, but water is more expensive than oil these days.

Water that’s fit for human consumption, and for use by many businesses, costs about $100 a barrel, according to Peter Brennan, president of the Dublin Chamber of Commerce, while oil has been trading in the mid-$70s lately.

Obviously the stuff you’re wringing out of your clothes or shaking off your umbrella is free, but you wouldn’t drink it and it’s not necessarily suitable for use by industry either.

To get to that point, it has to be captured, stored and treated, all of which costs money, hence the $100 a barrel bill for something many of us take for granted.

Even more surprising to some is the fact that there’s only so much of it to go around. “We don’t realise it, but it’s a finite resource,” Brennan says.

Dublin City Council says supply and demand to the region are balanced on a knife edge. In the greater Dublin region, demand is running at 545 million litres a day, while maximum production stands at 580 million litres a day.

By 2022, it is reckoned that demand will be 621 million litres a day and maximum daily production 627 million litres.

Nine years later, demand will have reached 700 million litres daily while production will have stalled, leaving a lot of people thirsty.

Yesterday State company Bord na Móna presented Dublin City Council with a plan developed by it and consultants RPS and Veolia Water to bring excess water from the Shannon basin to the midlands and east.

The plan involves taking the water from a point just to the north of Lough Derg and piping it to a reservoir at a cutaway bog at Garryhinch, close to Portarlington, Co Laois, where it would be treated and distributed to as many as nine counties stretching from Dublin to Westmeath.

Bord na Móna says the plan is designed to drain excess water, taken when the Shannon is in high flow or in flood, and move it east to meet demand. It would require about 2.5 per cent of the river’s water.

All this would cost €500 million and, between the planning process and construction, it could take up to 10 years to deliver. So if they started now, it would arrive just in time to avert potential disaster.

Brennan says that not expediting the plan would almost certainly lead to water shortages, which would hit everyone, including businesses and industries. That would certainly have a knock-on effect on investment. For many industries, particularly those in key areas such as pharmaceuticals, biotech and brewing, water is just as vital as energy.

IDA Ireland, the agency primarily responsible for shepherding multinational companies into the Republic, says water is one of a number of key resources for many of its clients. This means its availability and cost have an impact on competitiveness.

Biotech and pharmaceutical group Pfizer, one of the biggest employers in its sector in the Republic, puts a lot of effort into controlling and minimising its use of water. Over the last five years it has cut consumption at its site in Grange Castle by 500,000 litres a day through reduction and reuse. The group says it is always reviewing its water use.

While plenty of manufacturers have an obvious need for water, it’s an issue for services as well. A spokesman for IBM Ireland points out that most mobile investors want to locate in cities and a supply of water is something that people expect to be available.

The crunch for any project, Bord na Móna’s or someone else’s, is cost. At €500 million, our rivers don’t run free. In fact, they don’t even run cheap.

In addition, the IDA says charges for energy and water to industry have to be reasonable or they will struggle to bring firms here in the first place. The answer is likely to be universal water charges – imposed both on businesses and households.

Brennan argues that a domestic charge should be imposed above a threshold that would take into account people’s basic needs.

Either way, Bord na Móna chief executive Gabriel D’Arcy said during the week that charges were inevitable. “It’s not a question of if, it’s a question of when.”