In April 2019, Tom Smith, executive director of the American Society of Civil Engineers, reported on National Public Radio that 240,000 water pipeline breaks occur each year in the U.S. That works out to one incident every two minutes. The numbers are not so surprising given the reality that, in the U.S. and Canada, construction of an underground water infrastructure began in the 19th century.
While those pipelines and other equipment were not all installed at once, much of the equipment is nearing the end of its useful life.
“The piping systems are particularly old and frail,” says Don Bartell, vice president of municipal sales at DeZURIK. At the same time, new innovations are under development. This will be essential going forward since, “The latest pipe and valve technology must be employed to replace those worn-out systems,” he says.
The situation presents enormous challenges to local water utilities struggling with aging, and insufficient piping and valves, while trying to deal with budgets stretched to the limit. Projected costs to bring the water infrastructure system up to what is needed are astronomical. For example, the American Water Works Association estimated $1 trillion will be needed in the next 20 years.
Although this scenario makes headlines because of the sheer size of the water market and the reality that leaks make good headlines, progress is being made in some areas.
According to Thomas Decker, Thomas E. Decker Consulting, the needs of this nation are being met slowly and steadily with more spending going on in the last two years for drinking water than for wastewater.
“In 2018, the volume of freshwater spending grew at twice the rate of wastewater, a full 19% compared to 9% growth [for wastewater],” he says. Meanwhile, “In 2019—on the construction side alone—water grew at about the same pace as wastewater, something that ordinarily doesn’t happen,” he says.
Finding the money to do the work needed is a huge issue. But so is finding sufficient water supplies and getting them where they are needed.
Bartell points out that, as demand for water exceeds local availability, larger and longer pipelines will be required to transport that water. An example of this is the Integrated Pipeline Project in East Texas. This pipeline, which is under construction, will bring water from Lake Palestine to supply water to Tarrant County and the City of Dallas. It is a joint project to enable utilities to bring an additional 350 million gallons per day into the metroplex.
Shelly Hattan, an engineer with the project, says one of the most significant challenges will be to coordinate the manufacture and delivery of the huge valves needed for this type of project. She describes the difficulties they experienced getting one, 108-inch diameter, metal-seated parallel-faced gate valve to Texas from its manufacturing plant. It was so large (oversized and overweight at 117 tons and 40 feet tall), it could not be hauled on many of the planned roads and bridges.
While that is an unusual situation, Hatten points out that coordinating delivery with installation is an issue that often comes into play with pipeline projects.
SERVICING AN AGING SYSTEM
Many challenges arise with the maintenance and repair of aging freshwater systems. According to Dave Johnston, director of SMART infrastructure at Mueller, an obvious problem is how to deal with the reality that most pipelines are buried and difficult to access. That’s a real challenge “for capital spending investment programs. How do you know what [equipment] to replace next [when you can’t see or access it easily]?” he says.
Robert Whritenour, Fluid Control Specialties, Inc., agrees.
“Leak detection and associated technology are becoming more and more important because of the costs” of dealing with aging issues, he says, as well as the catastrophes that have occurred recently. “When these unexpected emergencies happen, facilities must take action to fix the immediate problem,” Whritenour says.
However, dealing with emergencies is reactionary, and according to John Skalla, municipal regional sales manager for DeZURIK, this makes it harder for facilities to plan both financially and technically. At the same time, “There is a benefit in that emergencies give management an increased understanding of the importance of using quality products that meet prevailing standards,” he says. “After witnessing infrastructure failure, facilities are more willing to tighten specifications to get better products,” he adds.
This has resulted in a push not only for better quality products but also for more monitoring of valves, meters and hydrants with leak detection as well as sensors to anticipate issues.
Fortunately, technological advances are making this easier and less expensive, and many valve companies are now adding new products with smart capabilities to expand on monitoring the condition and status of valves.
“Using IoT [Internet of Things] technology and sensors such as pressure or vibration technology sensors, you can see how a system is performing and the condition [of equipment] very quickly,” says Speggen. He points to leak detection technology available today that can relay where a leak is along a pipe within feet.
With pressure-sensing and water quality analysis, it’s also possible to tell within a city block if a leak has occurred or if the pressure is too low, which is important since these situations could allow contaminants and other materials to get into the system.
While this monitoring and gathering of data is helpful, turning that data into a valuable way to problem-solve is key to meeting longer-term needs. “Pressure fluctuations are just numbers unless you know what they mean,” Johnston says.
It’s also important to have many sensors on valves throughout the system. For example, sensors on water quality that measure chlorine levels can indicate how strongly water is able to resist infiltration. Pressure measurements, meanwhile, will indicate whether a required 15 psi level has been met to prevent foreign materials in the environment from coming into the pipe.
The problem is always cost. Johnston suggests that one strategy to minimize outgoing expenditures is to rely on infrastructure already in place. “There are fire hydrants all throughout municipal systems. We can add sensors and communication to them and leverage the current infrastructure,” he explains. There also are points in water distribution networks where something is already set up for measuring factors such as pressure and chlorine levels. “You can tap into all that,” he says.
To accommodate the need for pinpointing problems, Skalla says the industry is beginning to focus on asset management software that monitors systems and equipment.
“These advanced communications protocols can deliver mountains of data; the important aspect will be presenting the data so that facilities have something usable and actionable, for example, predictive maintenance abilities,” he says.
Even with new technology and better ways to analyze data, utilities face another monumental challenge: a dwindling and changing labor force. Kenji Takeuchi, senior vice president of engineering at Mueller, points out that a lot of the tribal knowledge and know-how to do repairs and maintenance is being lost as baby boomers retire.
“That info is potentially leaving,” he says, “And the younger workforce has two challenges. One is training and getting up to speed on the knowledge and the other is embracing technology and its solutions. A big positive in this is that the younger generation coming in is more comfortable with that technology.”
Takeuchi says a large portion of the research and development going on at his company is geared to working with utilities and other users to get the workforce up to speed on how to work with artificial intelligence, augmented reality and machine learning.
By doing so, those who are learning “will be able to use these tools to help prescribe and have insights into activities that need to be done. Hopefully, this will also help with alleviating the strain from the depleting workforce,” he says.
Providing the technology that can help utilities focus on what needs to be done and finding the needed workforce still require meeting the largest challenge: funding, which has been an issue for a long time. Water supply and treatment are all largely invisible to ratepayers and voters, so unless problems arise, it’s easy to ignore the reality that money must be attributed to these essential services.
So where will this money be found?
Congress provided $1 billion in new funds for waterworks activities in 2018 through the Drinking Water State Revolving Fund (DWSRF) program, which is designed to be a partnership between the states and the federal government to provide communities a permanent, independent source of low-cost financing for infrastructure projects.
“As a result, related equipment manufacturers have seen a large number of expansion projects bid along with refurbishments starting in 2018,” says John Ballun, president and CEO of Val-Matic. Many of these projects were previously delayed from the lack of funding.
However, “it’s difficult to know if the increase in activity is due to the new funds or simply the desperate needs of municipalities,” he adds. “Sadly, most of the project activity is reactive work rather than proactive. In general, federal funding certainly supports our industry, but the impact does not seem significant.”
Skalla notes that his company has seen some examples of public-private funded projects under this initiative.
“For example, we participated in a project where a local brewery and the City [Stevens Points, WI] worked together to change how the brewery’s industrial wastewater was pumped to the wastewater treatment facility because of high biochemical oxygen demand levels in the influent stream,” he says.
Bryan Burns, president and CEO at DeZURIK, points out that federal funding has spurred work before. He cites The Clean Water Act from the 1970s, which created a good deal of business for valve manufacturers. “However, the improvements from that funding are now close to 50 years old,” he adds, “and everyone recognizes that much of our country’s infrastructure is in dire need of repair. There’s been a significant discussion about the need, and there’s bipartisan support for increased funding, but it’s time to move past discussion and take action.”
Whether this funding helps smaller utilities with refurbishing or updating facilities and equipment is yet to be determined. Takeuchi says that what he’s seen so far is that much of the activity has come in the form of very large investments as opposed to improvements in smaller systems. For example, “Houston is building a whole new reclamation system to outfit the growing population there,” he says.
FEDERAL ACTIONS AFFECTING WATER DISTRIBUTION
In January 2020, the Trump administration finalized a rule to strip away environmental protections for streams, wetlands and groundwater. Some people question if this rule will have any effect on municipal water systems, but Takeuchi says it adds a layer of uncertainty.
Meanwhile, Bartell suggests that the new rule could provide a boost for other industrial sectors because the reversal of older regulations allows more gas and oil pipelines to be built by eliminating some of their constraints.
Decker points out that, with the reduction of some of the environmental permitting requirements, more work could get done faster as well. “With the larger complex, big water supply projects, it [removal of constraints] will move projects into design and construction.”
Still, Whritenour notes that city or county regulations prevail in the world of water protection so the new rule shouldn’t have much effect on either the utilities or the valve industry. “For example, the state of Florida has increased regulations because of problems with pesticide runoff, red tide and nutrient pollution associated with urban and agricultural runoff,” he says.
One development from Washington, D.C. that has affected the Integrated Pipeline Project in Texas is trade wars. Tariffs “are slowing things down with ductile and steel,” Hattan says. “Costs also went up because contractors couldn’t get proper quotes and details got delayed.”
Some pressure exists today to explore new business models that vendors to the industry can use to satisfy the needs of municipal water systems.
For example, “A lot of discussion has gone on about business models for OPEX [operating expenditures] or CAPEX [capital expenditures] services,” says Takeuchi. One tool might be services offered through subscriptions such as the provision of sensors and metering. Such a setup would provide a way for utility companies to move funds around where needed.
Speggen also notes that requirements such as Prop 65 in the State of California (which sets specific limits on what can end up in drinking water) could drive additional business in the water industry as utilities and other organizations seek technological solutions for meeting the new limits.
In such a case, “Funding will be heavily weighted to early adopters, like any other kind of technology,” he predicts.
No matter what happens with these new ways of doing business, overall, the municipal valve industry looks to be a growing business.
Bartell says that, despite forecasts of a recession in 2020, the market seems to be steadily improving.
“Last year, the industry as a whole had better-than-average growth,” he points out. “The interplay of industry drivers such as changes in population, regulations, the economy, funding challenges and failures in existing infrastructure will determine growth in the coming years.”
Decker adds that one of the primary sources of funding for public sector water utilities is the municipal bond market, which is solid right now, and that many projects are now being funding by the Water Infrastructure Finance and Innovation Act (WIFIA), the federal law passed in 2014 that has financed over $8 billion in water infrastructure projects.
The WIFIA program, “is only for large projects, providing up to about 49% of the funding through a very low-interest federal loan,” Decker explains. “This has helped a number of projects get started.”
Importantly, for municipalities, these loans don’t interfere with bonding capacity, so that leaves cities and utilities the ability to issue the full bond allotment to finish the funding.
Meanwhile, “Inflation is tame right now, so the rates are held down, and the yields are good, making the investors happy,” Decker adds.
That translates into continued growth for the next year, and Decker expects final numbers for 2019 to reflect double-digit gains.
Bartell agrees that the future looks good right now.
“We reference a wide variety of sources for insight into construction market forecasts that consider all market influences, including government initiatives,” Bartell notes. “They all point to a strong market in 2020.”