Water Industry Background

What follows is my attempt to describe a categorization scheme for the water industry in an effort to help direct the discussion at Green LAVA.

First is broad segmentation between (i) input water and (ii) waste water.

I. Input Water

Input water includes water, in various degrees of “clean” used for irrigation, households, industrial processes among others. The level of “clean” needed for irrigation is different from that used for industrial use such as soft drink production or semiconductor processing. Even with these differences, each type requires a level of processing which takes time and some investment in equipment.

Processing of input water is often categorized as (i) physical or (ii) chemical.

Physical Filtration

Physical filtration is used to separate out from the water, the particles which may be dirt, metals, organic items which are suspended in the water. These particles, colloidal or suspended in the water, are measured as “turbidity” of the water, its cloudiness.

Physical filtration uses one or more processes including
(i) settling and flotation tanks (letting gravity or buoyancy separate material from water),
(ii) multimedia filters (using fine grain substances such as sand),
(iii) porous membrane filters,
(iv) porous “bags” (think of a vacuum cleaner bag), and
(v) newer techniques such as reverse osmosis.
Each technique takes energy to force the water through the physical filter and typically requires some cleaning process (think backwash on a pool filter).

I believe there is an opportunity to develop new, low cost, easy to operate methods of physical filtration which would permit use nearer to the end user or in locations where big facilities with trained staffs are infeasible as in developing countries.

Some communities along the ocean, Orange County for example, are investing in technology such as reverse osmosis to convert salt water to fresh water. Historically, reverse osmosis has been very expensive in its energy cost. There is substantial progress being made to reduce the cost of reverse osmosis with many S. Cal companies and universities leading the way.

Chemical Filtration

Typically, once particulates have been removed, chemical filtration is applied to reduce the toxic organic elements that are too small to be eliminated by physical filtration. Chemical filtration may include (i) ultraviolet light and (ii) disinfectants. While water may look clean after physical filtration, the recent contamination problem at the Playboy Mansion pool which caused several partygoers to get sick from exposure to the pool water, proves that physical filtration is not sufficient. Chemical treatment, however, costs money and may leave some residue in the water.

In Orange County, Sail Ventures has backed a company with a simple, rugged UV light filtration system for operation in less developed countries.


Most of us take for granted that water will flow from our faucet when we turn on the tap. Our water, however, travelled some distance in addition to receiving some level of processing. As we’re regularly reminded, we in Southern Cal get most of our water from a watershed in Northern California. This water is moved miles before it gets to processing plants in S Cal then further on to our homes and businesses. Since water is heavy, moving water is expensive. Pumps require energy and the entire transport system requires regular cleaning and maintenance. Last year’s spate of water main breaks throughout S. Cal suggests that even if our water transport system is “out of sight, out of mind”, it requires investment to maintain.

Technology to test and repair our water transport system in place are being developed but more can be done. In the US alone, most of the water distribution system dates from the early 1900’s and has received little substantial updating over the years.

Some communities in S Cal have been able to rely on well water which requires some level of pumping and processing to make
usable but less transport cost. Many of these communities are finding that their well water levels are decreasing and becoming more salty. They are increasingly forced to buy water from the government utilities which transport “state water” from N. Cal.

There is also an opportunity to develop low cost and easy to operate equipment to process well water.

II. Waste Water

Waste water, often called grey water or sewage, comes from households, businesses and even rainwater runoff. The level of pollution contained in waste water depends on its source. Industrial waste water may contain highly toxic chemicals while rainwater may contain traces of lawn chemicals.


The level of processing of waste water varies by location. Industrial waste water typically must meet a standard before being added to the community waste stream. Businesses which produce waste water recognize water processing as a necessary cost to maintain their operations and have, therefore, been relatively quick to adopt whatever is the most cost effective technique to achieve the standard needed to add waste water to the community stream.

The community waste water stream from industry, households and rain runoff is processed by governmental utilities to a level which can be delivered to the next level of waste stream which, in S. Cal, may be the Pacific Ocean.

Processing waste water involves many of the same techniques of physical and chemical filtration used to process input water. The standards of processing waste water, however, have been lower than those for processing input water but it’s feasible to make waste water standards equal to input water standards. While still controversial, recycling waste water back into the input water stream may become a necessity in S. Cal. Until the populace embraces complete recycling of waste water into input water, we let nature complete this last step.


The cost of transporting waste water to processing plants is high due to the danger of contamination if the waste water leaks into the environment. In S. Cal, our heavy rains occasionally cause sewers to overflow which pollutes our beaches.

Community waste water treatment facilities are considered unsanitary and are typically placed in relatively isolated locations which increases the transport cost. Developing lower cost, “sanitary”, local processing someday may change this element.
Who Provides the Input Water and Handles the Waste?

Water is primarily provided by governmental utilities, such as LA’s Department of Water and Power (DWP) with only a small number of S. Cal communities sourcing water from private companies. The large governmental utilities are bureaucratic and increasingly political, witness the funding and rate increase battle last year between the LA City Council and the DWP.

Water is a necessary element to support community growth and has been provided to users at a subsidized cost to support community growth. S Cal’s history includes famous figures, such as Mulholland, who secured a supply of water to facilitate the growth of S Cal to the detriment of other areas of California.

In my opinion, the philosophy that inexpensive clean water is a right of citizenry to be provided by government utilities has eliminated the market mechanism from action. S. Cal’s water users have not paid the actual cost of providing water and have developed wasteful habits of water use. The governmental utilities have not adequately invested in maintenance or new technology preferring to defer expenditures.

In the current government fiscal environment, there are many competing demands for funds. Water, while having a very large constituency, suffers from having a very passive one. Governments may find that it is more politically expedient to outsource or privatize water processing to private companies which can obtain capital through the capital markets rather than through the political process. The power utility business may serve as a model for the water utility industry in this regard.

The water industry, in my opinion, has been slow to accept new technology preferring instead the “tried and true”. As long as the water industry is dominated by large bureaucratic governmental institutions, the acceptance of new technology will likely be slow much to the frustration of entrepreneurs and their funding sources.


While there are several means to categorize the water industry, this presents one common format. Please feel free to contact me with your questions or comments.

Dennis McCarthy