Threats to Water Availability in Canada
- Publishing Information
- Environment Canada Steering Committee, Production Team, Editors, Authors, External Reviewers
- Threats to Water Availability in Canada - A Perspective
- Short Chapter Summaries
- 1. Water Allocations, Diversion and Export
- 2. Dams, Reservoirs and Flow Regulation
- 3. Droughts
- 4. Floods
- 5. Municipal Water Supply and Urban Development
- 6. Manufacturing and Thermal Energy Demands
- 7. Land Use Practices and Changes - Agriculture
- 8. Land-Use Practices and Changes - Forestry
- 9. Land-Use Practices and Changes - Mining and Petroleum Production
- 10. Climate Variability and Change - Groundwater Resources
- 11. Climate Variability and Change - Rivers and Streams
- 12. Climate Variability and Change - Lakes and Reservoirs
- 13. Climate Variability and Change - Wetlands
- 14. Climate Variability and Change - Crysophere
- 15. Integrated and Cumulative Threats to Water Availability
6. Manufacturing and Thermal Energy Demands
Karl Schaefer,1 Donald Tate,2 Steven Renzetti3 and Chandra Madramootoo4
1 Environment Canada, National Water Research Institute, Burlington, ON
2 GeoEconomics Associates Inc., Kanata, ON
3 Brock University, Department of Economics, St. Catharines, ON
4 McGill University, Department of Agricultural and Biosystems Engineering, Ste-Anne de Bellevue, QC
Water is important to the manufacturing process. Without water to use in processing, to serve in cooling, condensing and steam generation, and to convey waste material, industry would be unable to function; consequently, as in many industrialized countries, manufacturers in Canada use large quantities of this resource. In terms of total withdrawals, thermal power generation dominates, extracting some 28,750 million cubic metres (MCM) per year in 1996--the last year for which national estimates are available (Environment Canada, 2002). Canadian manufacturing industries are next, withdrawing just over 6000 MCM/year in 1996 (Environment Canada, 2002). In comparison, withdrawals in other sectors totalled 5100 MCM/year (municipal), 4000 MCM/year (agriculture), and 364 MCM/year (mining) in 1991 (Statistics Canada, 2000). This chapter deals with water quantity issues in Canada’s manufacturing and thermal power (principally nuclear and coal) sectors; mining, including the oil industry, and the hydroelectric sectors are covered in other chapters.
With such large withdrawal rates, Canadian manufacturing can have a significant impact on water availability, particularly with competing instream and other consumptive uses. Some manufacturing sectors, chiefly the pulp and paper, chemical and metallurgical industries, use large amounts of freshwater, and consequently must dispose of significant amounts of waste. These wastewaters are often released into some of Canada’s most important rivers and lakes, in terms of ecological habitats and other human uses, and can cause significant environmental degradation and restrictions in water availability for downstream users.
Interestingly, manufacturing plants can often be both the primary cause and the injured party of water quantity depletion. Depletion has led, for example, to increased costs of industrial water acquisition, in addition to the need to develop new public water supplies. As part of a reliability study of the Metropolitan Water District in California, researchers estimated the cost of water shortages to users. They reported: "It has been estimated that a 15% shortage to the water sensitive industries in Southern California could cause about $3.5 to $4.0 billion in lost jobs and production" (Rodrigo et al., 1996).
Manufacturing Water Use 1
Water Intake: Nationally, total water withdrawals have been on the decrease since 1981. Paper and allied products, primary metals, chemicals and chemical products industries made up 82% of total water intake in 1996 (Table 1). Ontario accounted for one-half of the total Canadian manufacturing water intake in 1996, followed by Quebec and British Columbia.
Water Intake Relative to Output: For the last two decades, water intake has fallen relative to real manufacturing output. This is most likely a function of changing environmental regulations, technological change and/or changes in other input prices. For example, water quality legislation has curtailed industrial water emissions and, thus, water intake. Similarly, firms’ efforts to conserve energy and raw materials have in some cases led to reductions in water intake (Renzetti, 2003). It is likely not a function of water price increases since most manufacturing use is self-supplied.
Water Sources: The manufacturing sector obtains 82% of its water supply from self-supplied freshwater surface sources, roughly unchanged from 1991. The remaining 18% comes from public utilities (9%), groundwater (3%), other freshwater (3%), and brackish water (mainly tidewater) (3%). Industry groups dominated by relatively small establishments tend to draw a larger proportion of their water supplies from public utilities, while larger industries (e.g., paper and allied products, primary metals, chemicals and chemical products, petroleum and coal products) withdraw water supplies mostly from private freshwater sources.
Purpose of Water Use: On the whole, manufacturers use 49% of the total intake for process water and 47% for cooling, condensing and steam generation, although there are deviations from this in many sectors (e.g., process water makes up over 75% of that withdrawn by the paper and allied products sector). Sanitary uses make up a very small percentage (2%) of total intake.
Water Reuse: Although reuse rates vary significantly among industrial sectors, on the whole, water reuse rates are up modestly from 1991, reversing the trend from 1986 and 1991 when reuse rates were on the decline. Reuse rates are highest in the plastics, transportation equipment, petroleum and coal, paper and allied products, chemicals and chemical products, rubber and primary metals industries. Lowest reuse rates are in the wood products, beverage, fabricated metals, food and textile products sectors (Table 1). The recent trend toward increased water reuse in general is a positive development, although difficult to explain. As stated above, environmental regulations, technological change and/or changes in other input prices are likely the key influences, and these will be sector, and in many cases, facility specific in nature. Consequently, estimating future reuse trends is problematic.
Wastewater Discharge: Total wastewater discharge is down from 1991, 70% of which is discharged to private surface waters. 16% is discharged to tidewater, 14% to public sewers; and less than 1% to groundwater.
Water Consumption (intake-discharge: refers here to water that is not returned to its original source: i.e., escaped steam or water incorporated into a final product): Nationally, water consumption was 9% of total withdrawals in 1996, up from 7% in 1991. The beverage, wood products, and transportation equipment sectors have the highest rates of consumption (Table 1). In general, water use and consumption rates in the Atlantic Provinces were among the lowest in Canada, a function of water availability and industrial make-up. Use rates for the Prairie Provinces (Saskatchewan and Alberta particularly) were substantially higher than those in the rest of Canada. This reflects the need for greater water recirculation by plants, due largely to a semi-arid climate that requires enhanced water conservation efforts.
Thermal Power Generation Water Use
Intake for thermal power plants (mainly nuclear and coal power plants) totalled 28,750 MCM in 1996 (Table 1). Surface waters are the principal source of intake and discharge for this sector. Reuse rates increased significantly between 1991 and 1996, a possible result of tighter regulations and/or a stronger environmental ethic. Water use in the thermal power sector was concentrated in the regions with the highest recirculation rates and largest establishments--Ontario and the Prairie Provinces.
|Industry Group||Intake||Recycle||Gross Water Use||Use Rate (%)||Discharge||Consumption Rate (%)|
|Paper + Allied Products||2421.3||3105.9||5527.3||228||2207.0||214.3(8.9)|
|Non-metallic Mineral Products||102.3||91.8||194.1||190||83.1||19.2(18.7)|
|Petroleum + Coal Products||370.5||541.4||911.9||246||348.0||22.5(6.1)|
|Chemicals + Chemical Products||1121.3||1353.7||2475.0||221||1030.6||90.7(8.1)|
|Total Thermal Power Generation||28,749||11,655||40,404||140||28,241||508(1.8)|
Use Rate = Gross Water Use as % of Water Intake (the higher the #, the greater the reuse)
Consumption = Intake - Discharge
Consumption Rate = Water Consumption as % of Water Intake
Source: Environment Canada (2002).
In summary, the following main observations characterize water use in the Canadian manufacturing and thermal power sectors.
- If one measures water use by total withdrawals, the thermal power generation sector, followed by the manufacturing sector, are the largest water users in Canada.
- The vast majority of this water supply is taken from self-supplied, surface freshwater sources. This is particularly the case for large users. Smaller establishments, which constitute by far the largest numbers of Canadian manufacturing establishments, draw much of their water supply from public utilities, largely because economies of scale do not justify dedicated, self-owned water supply facilities.
- The manufacturing sector, as a whole, has the highest water reuse rates relative to the other consumptive sectors (thermal, municipal, agricultural and mining).
- Consequently, if one measures water use by consumption (water that is not returned to its original source), the thermal power and manufacturing sectors are less likely to affect water availability than the municipal and agricultural sectors, although in many regions this may vary.
The paper and allied products sector uses, and recycles, enormous quantities of water in Canada.
In spite of past efforts to define emerging industrial water demands (e.g., Tate, 1985; Tate and Harris, 1999, 2002), the “science” of water demand forecasting involves considerable uncertainty. Water is fundamentally a “derived demand,” and, accordingly, is a function of many other variables, such as population levels, industrial output, water allocation regulations (including water pricing) and technological conditions. Because all these variables are themselves uncertain in terms of their future values, future water demand levels are even more uncertain. While a limited amount of research has been conducted in the past (see Renzetti, 2002, for an overview of these studies), this “uncertainty factor” is still dominant, making water demand projections quite speculative, increasingly so as the forecasting “time horizon” increases.
One approach to partially overcoming this uncertainty has been to formulate a range of possible future conditions, and make demand a function of these “futures.” This has been the predominant methodology used in Canada for production of national-level water demand forecasts--last done in 1985 for the Inquiry on Federal Water Policy (Tate, 1985) 2 . But even the use of sensitivity analysis can be misleading. The above study estimated that manufacturing water intake would range from remaining relatively stable (under the conservation scenario) to increasing over threefold (under the high growth scenario) between the years 1981 and 2011. The available evidence, however, indicates that manufacturing water intake dropped between 1986 and 1996 (Environment Canada, 2002).
Regional projections of manufacturing water use have also been undertaken in Ontario (Tate and Harris, 1999, 2002) as part of a Canada-Ontario-U.S. initiative to develop baseline information required to improve sub-basin level water allocation decisions and better assess the implications of climate change 3 . Water use projections are always limited by a static picture of the economy, rendering this exercise a very uncertain science, and making the task of assessing implications for water availability equally challenging.
Determinants of Industrial Water Use
The limited research indicates that external charges, level of output, state of technology, environmental regulations, and prices of other inputs all play a role in determining water intake levels. For example, Dupont and Renzetti (2001) found that for the Canadian manufacturing sector as a whole, both intake and recirculation rates were sensitive to their respective unit costs with own-price elasticities (i.e., the measure of responsiveness of water demand to price changes) estimated at -0.8 and -0.7, respectively (Dupont and Renzetti, 2001; Renzetti, 1992).
This understanding of the determinants of industrial water use can assist us in explaining recent trends and anticipating future changes. For example, intake relative to output has fallen during 1981-1996. However, since most manufacturing water intake has not faced increasing prices (as it is mostly self-supplied), we must look to other explanations. Interestingly, Dupont and Renzetti (2001) found that technological change over the period 1981-1991 led to increased water intake and decreased recirculation. Given water’s very small share in the costs of production, it is likely that this has been the result of firms’ innovations to conserve on intermediate inputs and energy use rather than being directed at increasing water use per se. On the other hand, research conducted in other jurisdictions indicates that tightened regulations regarding allowable discharges in effluent streams appear to have reduced water intake and encouraged greater internal recirculation (Solley et al., 1999). Still, a number of important features, such as recirculation decisions, remain poorly understood.
Implications for Water Availability
Sector Pressures: As the nation’s economy continues to shift towards knowledge-based manufacturing (e.g., computers and electronics, biotechnology, and pharmaceuticals) and service-oriented industries, there will likely be a demand for higher quality water, and these industries may invest significant amounts of money in their plants to produce ultra-pure water. Further, one might expect the demand for water to shift from a small number of large industrial self-supplied users to a growing number of smaller manufacturers more reliant on municipal water systems for their supply. This presents a real threat to Canadian industry given the deterioration in municipal water infrastructure documented over the last two decades (FCM, 1985; NRTEE, 1996). Beyond this speculation though, there is little documented analysis on the implications of this shift for water availability.
Regional Impacts: The major water consuming industries, and largest withdrawals, are still within the Great Lakes - St. Lawrence River basin. There are significant water quality issues here, due to contamination from municipal and industrial point sources and agricultural non-point sources. While point and non-point pollution also occur in the other basins in Canada, the magnitude is not as significant and extensive as in this basin. Interestingly, manufacturing plants are often both the primary causes and the injured parties of this water quality depletion. Depletion has led, for example, to increased costs of industrial water acquisition, in addition to the need to develop new public water supplies.
Smaller Watershed Impacts: Manufacturing withdrawals from smaller tributaries and rivers could have more severe ecological impacts. The hydrologic characteristics of smaller rivers are such that they exhibit large fluctuations of high and low flows between the spring snowmelt period and the summer. The summer low flow period is quite critical in that there may not be sufficient water available to meet the demands of all economic sectors. Furthermore, instream ecological requirements should first be met, before other withdrawals can be considered. Some provincial governments in Canada (e.g., Alberta, Ontario, Quebec) have responded to this need by re-evaluating their regulations governing the issuance of withdrawal permits.
Seasonal Impacts: Manufacturing withdrawals are typically less of a threat during low flow periods. Aside from the agri-food processing industry, the manufacturing sector’s water use is largely consistent throughout the year. Municipal water use, on the other hand, usually has a daily peak and a summer withdrawal rate that can be two to three times higher than the annual average flow.
Infrastructure Impacts: Based on experiences with municipal water treatment plants, it is possible that zebra mussels might clog the intakes of industrial plants. Further, there are likely to be problems with the outfalls or disposal of wastewater from industries because they could stir up the sediment from channel and lake beds. The resuspension of chemical-laden sediment may also affect water quality. Jay and Simenstad (1996) have noted that water withdrawals can affect downstream aquatic habitats and the fluvial regimes of sensitive ecosystems. Similar concerns have been noted by Boyce et al. (1993) concerning the impacts of water withdrawals and discharges for industrial and municipal cooling purposes.
Recycling and Water Quality: Recycling of water by manufacturers is slowly increasing. While there is a benefit in the form of reduced freshwater withdrawals, higher recirculation rates within the industrial process may generate higher concentrations of pollutants, eventually discharged into receiving waters. This could affect freshwater availability for other downstream uses.
Deregulation of the Electricity Market: The deregulation of the market for electricity generation and sales holds the potential for significant impacts on water use in Canada. There are several reasons for this. First, thermal and hydroelectric power plants use enormous quantities of water. Second, changes in the electricity market may change the temporal pattern of withdrawals by plants: that is, changes in electricity market conditions could make it necessary for plants, once used predominantly for base-load generation, to switch to supplying peak-load power (and the reverse). Third, depending on relative costs of production, there may be significant changes in the desired level of output from different plants, with some increasing output while others decrease or even cease production. Finally, pressures stemming from the implementation of the Kyoto Treaty and externalities associated with coal-powered power production may imply a long-term shift away from thermal production and toward hydroelectric power generations. All these factors and their implications for industrial water use in Canada are poorly understood but are of potentially local and national significance.
Climate Change Impacts: Little research exists on effects of climate change on industry and consequences for water use. Higher ambient temperatures imply greater cooling requirements at industrial plants, and, accordingly, increased water demands, particularly during the summer season. This increased demand may lead to increased competition among sectors for available water supplies. Should climate change mean decreased water flows or levels, these problems would be exacerbated. On the whole, predicting impacts on this sector is extremely difficult because climate change itself will alter the demand for some products, which changes the water needs of the individual manufacturer. What is known is that climate change will affect both the supply and demand for water, and therefore heighten the need for institutions and regulations to be sufficiently flexible and more efficient with respect to allocating water.
Bottled Water Industry: The Canadian bottled water industry has been growing rapidly in recent years. Output has grown at an annual rate of 9% since 1995. Still, by international standards, Canadians drink relatively little bottled water. The average Canadian drank approximately 20 litres in 1997 while the average per capita consumption level in Europe was between 100-140 litres. In addition, the bottled water industry is still quite small with a total annual output in 2000 of less than 1 million cubic metres (Dupont et al., 2002). Thus, this industry is not a major water user component of the manufacturing sector; however, it is one to monitor because of its rapid growth and potential for localized effects on aquifers.
“New Economy” Industries: Deteriorating water quality can substantially raise water treatment costs for some industries. Many require high quality water, even for cooling purposes. The so-called “new economy” industries (e.g., computer chip manufacturers) require water of high purity for their process operations. Thus, water quality degradation problems, often caused by industry, pose threats to other industries, and, more generally, to the population as well as the ecosystem. The impact on water supplies from a growing service sector in Canada, such as the local impact from large hotels in remote areas, remains poorly understood.
Data: Data on water withdrawals, consumption, recycling, etc., are needed to quantify accurately how much freshwater is being used by industries, particularly at the watershed and sub-watershed levels. This need would indicate that national Industrial Water Use Surveys should continue.
Models: To reduce potential conflicts among various water users, especially during drought and low-flow periods, it is necessary to develop biophysical water allocation models that take ecosystem requirements into account. Ongoing initiatives in the Great Lakes basin to develop baseline information required to improve sub-basin water allocation decisions should be supported and encouraged elsewhere. Research on ecological water requirements is therefore important. It is also necessary to develop econometric models that better explain industrial water demands and recirculation decisions.
Monitoring: Impacts of wastewater disposal from major industries on downstream water availability should be monitored and assessed, and monitoring of effluent quality should be increased. Also, the quality of effluent from plants using significant amounts of recycled water should be continually monitored to help establish linkages between recycled water quantity and quality. The results of such a monitoring program will determine whether specific measures should be put in place to handle concentrated/polluted recycled water.
Technology Development: Development of water conservation technologies and water efficient manufacturing processes should be continuously encouraged.
Mapping Sensitive Ecosystems: There is a need for better understanding, knowledge and mapping of sensitive aquatic ecosystems in regions where large industrial water users are located. This will allow us to assess if and how aquatic organisms are likely to change as freshwater is withdrawn and wastewater is discharged into aquatic environments--identified as a priority by a study on the ecological impacts associated with Great Lakes water withdrawals (Limno-Tech, Inc., 2002).
Understanding Industrial Water Use: Relatively little is known regarding a number of features of industrial water use including factors influencing reuse decisions, the relationship between water and other inputs, the interaction between firms’ decisions regarding water intake and water quality, and the value of alternative industrial applications of water.
Water Pricing: In Canada, most provinces do not have fees on water withdrawals for water consuming sectors. The perception that Canada is still a water-rich nation slows any institutional response to this, with obvious benefits for industry in the form of relatively assured and cheap water supplies. However, it also has a significant “downside,” namely that almost no attention is paid to the nature of demands made upon the resource. There is some evidence that charging for water withdrawals helps encourage conservation while having relatively little impact on industry costs (Dupont and Renzetti, 1999; Tate et al., 1992).
Improved Incentives for Efficient Use: Although water reuse rates in Canadian manufacturing were up between 1991 and 1996, intake levels are still high compared to those of many other nations, largely because incentives for recirculation are weak or non-existent (Kollar and MacAuley, 1980). In many cases, elevated intake levels by industry have led to pressures on adjunct uses. Cheap water means little push for conservation measures, and other technological changes. Stronger efficiency-oriented incentives can have considerable impact on industrial water use.
Economic Instruments to Allocate Water Better: Water allocation issues involve the distribution of rights to use available water supplies. These issues can become critical in times of constrained water supplies. Throughout Canada, water allocation systems are quite primitive, involving administrative and economically free permitting systems, and enumeration of arbitrary lists of priority uses to be employed in periods of water shortage. There have recently been tentative first steps to develop water markets in Alberta, which would use economic mechanisms to influence water allocation (Horbulyk and Lo, 1998). These initiatives are modelled on water marketing arrangements now in operation in the southwestern United States. (Interested readers may consult the volume in which the Horbulyk and Lo chapter appears for further analysis of water markets.)
Promote Technological Innovation: Industries located in water-short regions face periodic, largely seasonal constraints on their water supplies. In the short term, this may translate into reduced production although there is widespread evidence that industries adapt to water shortages quickly through technological substitution, such as adoption of water recirculation and other measures aimed toward conservation (Hansen, 1994). For instance, in developing initial capital for plants in water-short regions, many industries design processes aimed at conserving water. A prime Canadian example is the Miller pulp and paper mill located in Meadow Lake, Saskatchewan, which has zero discharge of water, very high levels of recirculation and in-plant waste treatment, and withdrawal of only small amounts of water to make up for evaporative losses (Evans, 1994).
Technologies used by manufacturers to conserve water are too vast for description here. Some U.S. states have developed sector-specific water conservation guides (California Department of Water Resources, 1994; North Carolina Department of Environment and Natural Resources, 1998). In Canada, industry groups and governments at all levels have fostered water conservation typically through pollution prevention programs. Nevertheless, sharing of industry-specific, water-conserving, technological knowledge and innovation demands continued vigilance to garner further attention and action.
In summary, although the thermal power generation and manufacturing sectors withdraw large amounts of freshwater in Canada, they consume (water that is not returned to its original source) relatively less than some other sectors such as agriculture, although in many regions this may vary. Large industrial withdrawals from small rivers and streams are likely to be the greatest immediate threat to water availability.
Estimating future water demand in these sectors is fraught with uncertainty since so many factors (level of output, state of technology, environmental regulations, prices of other inputs) play a role in determining water intake levels. Electricity deregulation (which could result in some thermal and hydroelectric plants using more water to increase their peak-load production) and climate change (which may result in higher water use in response to greater cooling requirements in many manufacturing industries) are two emerging issues that warrant attention. The bottled water industry in Canada while currently not a major water user also requires monitoring because of its recent and continued rapid growth potential, which could have localized effects on aquifers.
Water withdrawal and consumption data to identify potential biophysical and socio-economic impacts and a better understanding of factors influencing industrial water use are critical data and research needs. Also, more attention is needed to send appropriate pricing signals when permitting water withdrawals, if technological innovation and improved water efficiency are to be encouraged. Currently, in many provinces, no fees or very small fees are charged for direct withdrawal of water (typically by large self-supplied thermal hydroelectric facilities and manufacturing plants). Finally, the role of economic instruments to allocate water more effectively requires investigation.
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1 Canada is one of the few countries with a regular survey of industrial water use. Information on manufacturing and thermal water use for this report comes from Environment Canada’s 1996 Survey of Industrial Water Use (Environment Canada, 2002), and is compared with previous estimates and research in Tate and Scharf (1995, 1992), Tate (1983, 1977), and Dupont and Renzetti (2001). RETURN
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