Below is the transcript for the podcast with Jack Keller: Understanding Peak Water
Chris Martenson: Welcome to another PeakProsperity.com podcast. I am your host, of course, Chris Martenson. Today we are speaking with Jack Keller, CEO of Keller-Bliesner Engineering, one of our very own community members here at PeakProsperity.com. In addition to being a regular at the site, Jack also happens to be one of the world’s authorities on water management. Since it is arguably the most precious global resource, we wanted to do a show on water for a while now and so it is a thrill when we can leverage the insight of one our experts from our own community on the subject.
Jack has spent his career as both an entrepreneur and professor and has provided advisory services in irrigated agricultural development and water management in more than 60 countries. Today he and I will explore water and the outlook for its future and future availability.
Jack, welcome, it is a pleasure to be speaking with you today.
Jack Keller: It is a pleasure speaking to you.
Chris Martenson: Well, great. Listen, water is our most precious resource as I mentioned. Some people worry that it is maybe the most poorly managed. What kind of future are we looking at with water supplies here in the U.S.?
Jack Keller: Well, the water supply in the U.S. in the west of the U.S. – and I think people you have to say the west is really west of the Mississippi, not just far west – In many places, it is in perilous condition. We are actually overusing our groundwater resources. That means we are mining them just like we would be taking oil out of the ground. And you know very well, Chris, that everything as you mention is sort of on an exponential function of some sort, and water is one of those things, too, that seems to be on this exponential function. In a finite world, that just cannot continue.
Chris Martenson: So we have two types of water. We have surface water – lakes, ponds, streams. Then there is the groundwater, the aquifers. So you are mentioning that west of the Mississippi there are aquifers that we are drawing down at faster than the recharge rates.
Jack Keller: Correct. You can overuse surface water because it just will not be there if a river dries up. You can overuse it in terms of not leaving enough water for the environmental needs or environmental services provided by surface waters. When you run out, you run out. Groundwater is a different thing because you can tap groundwater that was stored in previous periods of time – years or maybe centuries earlier. This then becomes like mining of any resource. We do have the problem that we have some of our major aquifers, the Ogallala Aquifer, for instance, which is the aquifer that underlies the whole Midwest. It provides maybe 30% of the irrigated waters, I do not know how much, but way up there in the percentage and it is being severely overdrafted. Then the San Joaquin Valley, that is the central valley south of the Sacramento Valley, is being overdrafted seriously also. We have two major agricultural regions with overdrafted groundwater.
Chris Martenson: And if they do not have water to pull from those aquifers at some point or somehow society says we would rather not use this for agriculture, we really need this for – I don’t know – civilian populations, if that day comes what are their options?
Jack Keller: The options are to quit taking it, then, and of course then your question is, what are the options for replacing the food that was being grown with it? There are fortunately some options. However, let me mention a little bit, it is not as simple as that about the fact that as you overdraft the groundwater resource. What happens is it gets further and further down to where it is in the ground, as you would expect.
Chris Martenson: Yep.
Jack Keller: In other words, the level that you are pumping from increases. It gets more and more expensive to extract any amount of water as you deplete the groundwater resource. You have the depletion going on, plus you have an increase in energy cost to get the water out of the ground.
Chris Martenson: I have heard water is heavy; I have it on good authority that water is a heavy substance.
Jack Keller: You are a very good authority on that issue.
Chris Martenson: Right.
Jack Keller: And you know, it is a huge thing, I mean, it takes maybe thousands times more water in weight than any agriculture production you get from it. You have a lot of water to lift to get a bushel of wheat or corn.
Jack Keller: Maybe a thousand times as much as the wheat of the bushel.
Chris Martenson: So a thousand tons of water for a thousand tons of wheat.
Jack Keller: That is right.
Chris Martenson: All right, well, let us talk about the global picture then. We mentioned the Ogallala and the San Joaquin, the couple of aquifers here in the U.S. that are maybe being overdrafted, as you say. What is going on across the world as you look out there?
Jack Keller: Well, the same problem is going on in India in a big way, in China in a big way, probably. Throughout the Middle East, North Africa particularly in a big way. To some extent Canada. When you get all that together, it is a very, very large amount of our total food production is depending on a diminishing supply of water.
So it is not as trivial a problem as a very serious problem to address, and the question is, water is so scattered and such a low intensity in terms of financial intensity resource that it is very difficult to have a very strong management system because it is lateral spread.
Chris Martenson: Is this an issue of maybe just needing to move the water around to where it is needed? I guess the Great Lakes are full of quite a lot of water; the southwest seems to be a light bit light on water. Tell us how water is managed and whether or not it is a realistic idea to just say we will take it from where it is and move it to where it is needed.
Jack Keller: Well, there certainly are plans in various parts of the world to do it. For instance we have a plan here that has been in place, has been talked about since maybe the 1960’s of moving water from Canada down in to the southwest of the U.S. It is a huge, very, very expensive proposition. When we think of moving oil around that is a big proposition, but the amount of water you would be moving is many times greater than the amount of oil you are moving around because its economic density, you might say, is much, much lower in today’s world.
In other words, the value of a barrel of water and the value of a barrel of oil are very, very different. You have a very low-cost item that is heavy that is hard to move. You do have more water in some places, like as you mentioned, in your part of the country, you have more water than you need and you theoretically could move that water to Kansas. Or you can move water from Canada to Kansas or to Nebraska. That is where the Ogallala aquifer is and you could take care of that. It is a very, very large expense. Then you have the expense of all the energy it takes to do it. you sort of get in to this natural resource bind or physical resource bind that we are kind of encroaching on with the exponential increase in energy use and water use. Besides that, you need a lot of metals to put pipes together, perhaps a lot of materials of one sort or another. It becomes a very difficult issue and becomes more expensive. It was expensive 60 years ago, it is more expensive today, and it will be more expensive tomorrow in terms of resources, as the resources get more and more strategically used up.
Chris Martenson: There was just a big article in Wall Street Journal I believe yesterday, and they were talking about mining companies. Of course, they were talking about them from the commodity side of the angle thing. Wow, if China ends up having a decline or collapse of some sort here, commodities are really going to take a hit. However, buried in that story they were talking about the idea that the mining companies had been experiencing inflation for running their operations in both energy and in the machinery. I look at the machinery as sort of a proxy for energy because it is made out of a lot of steel. They were experiencing inflation of over 11% per year for about the last decade. That is what they are experiencing. I am translating now and thinking if you wanted to build something that could move water at a scale necessary to deliver useful amounts for agriculture, irrigation. I am imagining we are talking enormous quantities of water. These would be either extremely enormous pipes of some sort of very, very large culverts that might as well be rivers. Of course, we are moving this across geography sometimes against gravity so there are pumps involved and there is energy involved in that. Fill us in as best you can. What is the reality of moving a big amount of water from one place to another.
Jack Keller: Well, you just laid it out very nicely. The reality is it takes huge works to do it. One of the irrigation projects that I have become very familiar with because I have worked there a lot as a consultant and that is the Imperial Irrigation District of Southern California, which happens to be the largest irrigation contiguous irrigation piece of land in the district in the U.S. It has in acreage terms they have around five hundred thousand acres of land. They bring their water in from the Colorado River through what is called the All American Canal, which is all-American because it is all on the American side of the border between Mexico and U.S. Their largest canal is considered a very good-sized river back in the East. It takes seven days to get the release of the water from the Boulder Dam up near Las Vegas down the river and then to the irrigation district. Then another day to get the water from that irrigation district to the last part of the irrigation district. You get a feeling for the scope of this thing. The canal that is an open canal that is the biggest of the three major canals on the project, or the district, is what we call three thousand cubic feet per second.
Chris Martenson: Wow.
Jack Keller: Of water flow. Many Americans would not think what is a cubic foot per second, well that is four hundred and fifty gallons a minute is a cubic foot per second. I have not done the math, but quickly, three thousand times four fifty, you can see it is very large flow of water when you think about it.
Chris Martenson: Yeah. Is that all gravity-fed?
Jack Keller: That is all gravity-fed, but to put that in a pipe and run it uphill and downhill and all those kinds of things is a huge undertaking. That is just one piece of an irrigation district. To move huge amounts of water in open canals, first of all, probably try to do in open canals and then you have to go in to pipes to get it uphill anywhere of course or pipes to get it underneath something. In other words we have kind of inverted siphons we call them that is really not a very good word for it, but it is kind of a U-tube. It goes underneath something and comes back up on the other side because water seeks its elevation again. The works are just gigantic. And you have exactly what you said about the mining issue, and that is, you think things are expensive now and you say we will be able to do it in the future when water becomes a little bit more expensive. Then everything else is more expensive to do it with. It is kind of something you never can get your arms around again.
Chris Martenson: It sounds like the shale oil place. It is a very similar thing.
Jack Keller: It is the same thing as the mining type issue you mentioned in China for instance and that is the cost of all of the things you need to mine is going up pretty fast.
Chris Martenson: Yep.
Jack Keller: Because all of these things are also probably things that are being mined somewhere else if you think about it.
Chris Martenson: Yep. It all hinges off of energy at some point. Let us think, the U.N. has said by 2050 they sort of projected that maybe the world kind of needs to double its food output to account for the fact that we are looking at a 25% to 50% increase in population and living standards seem to be going up. A huge portion of our green revolution, a lot of people think that was high technology with fancy plant breeding and maybe some genetically modified this or that or something really more clever. A huge portion of those gains over the past 50 years were from irrigation.
Jack Keller: Well you are exactly on there. What happened is they were from genetic, normal genetic manipulation through plant breeding. They really did it just with plant breeding, and that meant taking superior plants and crossing with superior plants and no genetic modification in terms of manipulation of genes and stuff like that and in terms of directly manipulating. They produced plants that were highly production providing they were well fertilized and well watered. What they did is, indigenous food plants all over were more adapted to low fertility, low water, whatever happened kind of situations. If you gave those indigenous plants a lot of water and a lot of fertilizer they really did not do that much better. However, these new plants did a whole lot better. That really solved the problem, because you could have plants, crops that produced way more with getting good water and good fertilizer. However, the whole thing was a triad of inputs, and that was the different seed, more fertility and more water.
Chris Martenson: Well, as you look across the world, how much of a role, let me put it this way, how much can we really expand irrigation at this point? Are there big aquifers that have not yet been tapped? Are there bodies of water that have not yet been run? I mean this is kind of globally. I know there are big issues with a whole portion of China, their main aquifer that they have been using has been drawn down so severely they are down a thousand feet chasing this stuff. Sometimes in some cases a thousand meters. It is incredible how far they have gone in drawing these pieces down. I am just wondering, as you survey the water assets that exist and remain in the world, how much of an opportunity are we going to have to sort of repeat that green revolution at least with respect to irrigation as we go forward?
Jack Keller: Unfortunately, we are sort of near the end of our string. We do have opportunity with some better methods of irrigation, some methods, I think the thing we call drip or trickle, that is the irrigation where there is a little pipeline running down every row with water oozing out or dripping out of outlets that are close to each plant. With this kind of close irrigation and high-performing irrigation, I would say we do get a bit more productivity out of the same amount of water. Actually the thing that is really perplexing to most people, and they do not seem to get it and our politicians do not seem to get it too well, because they like to hear there is a magic bullet to everything, that is that when we apply water in agriculture, really the only water that is missing after we do it is the water that evaporated from the ground or was transpired and that transpiration is the word we use for the water that passes through the root zone and up through the leaves of the crop. That is the water that is missing. The water that is put on excess in irrigation that is not consumed by either evaporation or transpiration of the plants themselves really is still in the system somewhere.
In other words, it goes back in the ground and it seeks its way back, often runs out, and becomes somebody else’s water supply. People think that if we make irrigation more efficient, in other words, more of it gets evaporated and transpired, and then we will have a lot of extra water left over. The problem is that is not the case because the water that was not consumed by evapo-transpiration – and we combine the evaporation where it is in the transpiration to a single word – that water that was not consume by evapo-transpiration is still in the system somewhere. It may be degraded in terms of having picked up some pollutants, the main pollutant being mineral salts that it is not as good in terms of producing crops again, or maybe it is not even drinkable. It is still there somewhere. Improving irrigation efficiency does not get the gains that many people think might be out there. We are really lost, we are lost for how to really make our water go further except just to manage it very carefully. However, we get relatively small gains out of that.
Chris Martenson: So let me ask you this question: you mentioned the mineral salts. I am intrigued by that idea because a lot of the groundwater I know comes in various flavors of salty – mildly salty to very salty. There is stuff that is almost brine that comes out when they are chasing certain oil finds. As we look at that, if we think about sustainable agriculture, maybe this is off your reservation a little bit; I want to focus on the water part. Here we are, we have this giant aquifer we are pumping water out, we are irrigating with it. Is that a thousand-year sustainable plan? In Mesopotamia, they had that golden triangle where they were growing all kinds of stuff and ended up salting their fields, I believe largely through a process of irrigating with very salty water. How big of a problem is that, and is irrigation really sort of something that works for a few decades? Or is it something that really could be managed and would work well forever?
Jack Keller: It can be managed and work well forever, fortunately.
Chris Martenson: Good.
Jack Keller: What that requires is just like if you are washing your clothes, you cannot keep washing the clothes in the same dirty water. If you continuously flush the dirty water out, you can keep the washing machine washing clothes cleanly again. The same thing would be true in water. Maybe not the best of examples, but this is sort of what you would have. We can provide a way to get rid of the salty water, or the salted water. Theoretically, if you had enough energy, you could take the salt back out of that water and use it again even if it got quite salty. That then becomes an energy sink.
We can keep an agricultural system, we have the other side of agriculture irrigation is drainage. We often call it irrigation and drainage. In fact, we talk about the water industry in terms of agriculture’s being irrigation and drainage, and we sort of put those in the same sentence, often because we realize we need to pay attention to the drainage and keeping the salts out of there. The other thing in Mesopotamia happened is not only did you have the salts in the water, but you had the groundwater getting it if you keep putting surface water on, which they were doing in those days because they did not have a means for doing a lot of groundwater pumping. They kept putting water on and the water table you might say came to the surface itself. Not only did they have salinity probably, but they also had what we call water-logging. In other words, the plants cannot grow when the water table is at the surface because the roots do not get any air.
Chris Martenson: As we look across the world, you say that we have sort of hit some limits, there may be no big giant unexploited bodies of water for us to really go after. In some regions of the world, obviously this is a really serious deal, Mideast being an obvious area. Any arid area already is dealing with these issues. In your mind, what should we be doing either at the national or the global level right now that we are not doing when it comes to water?
Jack Keller: I think at the national level where we have a strong legal system, we do have regulations that have the capability of curtailing the use of groundwater. We do have a legal system and a property rights system called water rights that can be used to curtail the overuse of our groundwater resources. Little by little this is being implemented and everywhere that the water is over drafted. For instance in the central valley of California, they still do not have water law that restricts the extraction of the groundwater from underneath the San Joaquin Valley. They do in California and let me back off a second. Water in the U.S. is a State’s rights issue. In other words, the law of how to use water is an issue that each State has the right to do their own way. Every one of our States, our 50 States, has a different water law. There are more or less the same in the West and the East, but they are not exactly the same in the West and the East. The water laws include what do to with surface water and with groundwater. Most all the water laws of every State will have some difference between the two systems of supply.
Of course, all water to begin with was part of the commons, was in nature somewhere, and people then tapped it and used it. In the West, the concept was the first person in line to use it has the prior authority to continue using what they had developed. It was protecting its first in time first in right sort of concept. That is a typical Western water law. In the East, they had riparian rights for water in general sense, in your part of the country particularly, that said that we could use water but we could not deplete water. They really did not allow much depletion of water. You had the right if you were near a stream there to use the water for your benefit. I assume it depleted, but in a way you really do not deplete that much unless you start irrigating, because most of what you do ends up going back in to the system again somewhere.
In other words, people downstream literally do drink the sewage from the people upstream. That is just a fact of life, in a sense. We have these water laws and the two are sort of separate. The surface water law is definitely there in most every place in the West. It is pretty closely tied to the first in use, first in right. The question then is, what is considered beneficial use because we tack another word on it for the use being beneficial, you just cannot take it, you have to use it beneficially. That makes a whole legal system of water in every place. The U.S. government enters the picture when it is an interstate dispute. Within a State it is all in the State, but between States it becomes an interstate issue, and then it becomes the Federal issue of what to do about people that are arguing over the right to water.
Chris Martenson: Well, beneficial, I was in Phoenix recently and it was well over a hundred degrees every day I was there, and this was pretty late Fall. I see that their definition of beneficial includes a lot of golf courses. I assume that is Colorado River water or something coming down and putting that there. As you look at a place like Phoenix and you see how they are using their water, what sort of issues come up in your mind over the long term?
Jack Keller: If you forget about climate change, I think you have to, in long-term thinking, you have to say climate seems to be changing. There is all this argument about it, but what is hard to dispute is it seems to be different, creeping along of path different conditions as time goes on. All of our water systems that we have put in place and developed are based on the rearview mirror. In other words, we expect the future to be like it was in the past. If you have a place like Phoenix and if we do not have any change in the way the Colorado River functions which is part of a big piece of their water supply, they can continue the way they are. They cannot continue in a growth concept, that they are going to keep getting bigger and bigger and more people moving there and doing the same thing they have always done.
In other words, having more golf courses and more of everything else because as you point out so well in your discussions and seminars, that is an exponential growth and it reaches its limits. They are at their limit already. Now, if we have climate change on top of that – in other words, if there are some long droughts coming, they are going to not only not grow, they are going to have to back off. Backing off creates a huge amount of disruption economically and politically and socially. The longer-range future for a place like Phoenix assuming we do not have a drought will be leveling off and bumping along where they are. However, things will just keep getting more expensive in terms of moving the water around. If there is climate change, they are going to be in a world of hurt in terms of having to back off and shut down some of the golf courses, quite irrigating lawns and stuff like that.
Chris Martenson: Sure. The climate does shift and where I am sitting in Massachusetts, ten thousand years ago, there was about a mile of ice here. I am reasonably certain that things change over time. I note that this was, I believe, the hottest, driest set of summer for Arizona, Texas, New Mexico. And they had wildfires and they had all kinds of water issues. To their great benefit, I believe, the snow pack was just incredible up to the north of them in the Rockies where a lot of their water originates as it comes down the surface waterways. They got a little lucky on that one there.
As I look at that whole scene, I just see that the growth path that Phoenix is – I say it is unsustainable; obviously you cannot keep exponentially growing anything forever. The particular model that they have pursued, which is very water intensive in that particular region, seems to me like a place I would not want to put legacy, family, heirloom money in to something like real estate. I am not quite clear on what happens there as that part of the world goes forward. It is not clear to me from the outside. I do not spend a lot of time on it. And if you do, do they have a plan, does somebody have a plan, you see a set of plans that particular speak to maybe the drier areas of the southwest that you could point to and say that could work.
Jack Keller: I am afraid I do not think there is a plan, and there is so much political, there is so much resistance to having a plan that the politics are practically impossible. We probably have to go into crisis, and then after crisis you develop a plan to deal with the crisis. In terms of pre-planning before the crisis, the absolute crisis, I do not think anybody, I do not think people will have the capacity to do that in the way the political system works and the money system.
Chris Martenson: If it does not exist in the political system I do trust then that there are entrepreneurs or businesses or companies or individuals who are out looking around who see the opportunities here. I know that people say that investing in water is a great idea and maybe it makes sense in some portfolios, what does that mean to invest in water, and how is that being done today?
Jack Keller: Investing in water is kind of a messy and difficult thing in my view. I personally tried to figure out how to invest in water, and I really am not quite sure how to do it. The only way that I know to directly own water because water is a property, and usually it is tied to land, is to own irrigated land that has water rights. The water that is not on irrigated land, a golf course in effect could be an irrigated, you could think of that as an irrigated land. If you have the water right to irrigate your golf course, then you have a water right. A city has water rights, but that is usually already in the public domain if it is a city water right. The one way to own directly water like owning an oil patch or something like that is to own a piece of agriculture land with a water right on it.
The next thing you can own is like you can kind of think of it as mining. You could own the mineral resource or you could own a farm in Kansas that really they do have groundwater rights there now established. You own the right to take water out of the ground like mining. The next thing you could own is you could own things that move the water like pumps and pipes and things like that so you could invest in water infrastructure hardware. That would be a place to invest in water. That includes both from the domestic side all the stuff that goes to making municipal city urban water systems. From the farm, side the people that make irrigation equipment as being on the frame side of owning the infrastructure. The people that make the infrastructure, the hardware for using and moving water. Those are kind of the two places you would be. Maybe you could be in a third place that would be something I do not know, maybe you could own a bottling company that has spring water rights that they had and you could own water that way instead of farmland. I do not really know that business well enough to even comment on it except to say it must be a possibility.
Chris Martenson: Certainly it sounds like efficiently is clearly one of the easiest, lowest-hanging pieces of fruit. You mentioned one at the beginning, drip irrigation seems to be more efficient. We all saw our toilets change in the past two decades from higher flow to lower flow, a more efficient model. Perhaps efficiency and I look at water and it is the same message and story I hear around energy, which is that it is not very sexy, but the easiest thing to do as a whole is to save some rather than figure out how to get more.
Jack Keller: Let me caution everybody on this efficiency issue. That is a low-flush toilet that is in a toilet that is upstream somewhere in the system in the basin, does not make any more water for the basin. It reduces the amount of water the city that has the toilet, has to clean up because we literally use our drinking water, in our cities, we have the same kind of water in our toilets as we drink. It reduces that pressure on the city to acquire and clean up water. The discharge from the sewage treatment plant of that city is part of the supply downstream. Unless that city is on the coast, there is really not a big water savings by being more efficient with the toilet. The same thing is true in agriculture. The efficiency becomes – did you really get more done with the amount of water you consumed, as opposed to did you just deliver and did you reduce your delivery but you used to take most of your delivery and turn it back to the system again after you used it and cleaned it up.
Chris Martenson: Right. I looked at the statistics briefly. It turns out residential use of water is actually very low down on the list. It is fairly nominal compared to agriculture obviously being a big one. This was a surprising one to me was power generation. Power plants seem to be extraordinarily huge consumers of water.
Jack Keller: The thermal type power plants evaporate a lot of water in their cooling system. That is where they consume water.
Chris Martenson: Billions and billions of gallons. I mean it is a lot.
Jack Keller: It is a lot. It is a big chunk of water, it is a big, big piece of water. That is the consumption of water, the boiling off the water and power plants could probably do with less water by doing more straight air-cooling. That would mean bigger, more expensive coolers to get by without so much water. There are some things you could do