Ian Barbour (IB): It’s interesting – I think generally, at a macro level, everyone is becoming more aware of water quality issues, and I think that is a global phenomenon. But then, when you segregate it down to emerging geographies versus established markets, you realise that that awareness means very different things.

Awareness in India, for example, is about people beginning to understand that the water quality they have is not safe, whereas in countries like the United States, awareness is not about people realising that their water quality is not safe but becoming aware of health impact, and there is a little less trust in the municipal systems, and people want to drive their own control over that. So I think there is awareness but we’re dealing with two different ends of the spectrum – culpability in the emerging geographies and just more awareness of quality and health benefits at the other end.

 

WWW: There is a lot of news – especially in the US – about drugs getting into the water supplied by municipal systems. Yet in India, the news is about the basic quality of the water itself. How is Dow dealing with this?

 

IB: The Indian government realised that a lot of people were dying from water-borne diseases and they wanted to solve that problem and developed wells so that people were avoiding the bacteria. What they didn’t realise at the time was that they were introducing another problem, which was contamination of the groundwater with arsenic and fluoride, so now you have this problem of people drinking contaminated water. We are working in India with several NGOs, and we are also an investor in a company called Water Health International, which puts in systems which treats these specific water quality issues. I toured many of the areas that were affected by the tsunami, and a lot of that groundwater is now saline, because it sat under the ocean for a while. So we’re seeing growth in reverse osmosis because of those issues. Even if the water is safe to drink, it may not taste very good and so people, as their disposable income becomes higher, are becoming more willing to pay to have better tasting water. We’re seeing growth in residential supplies, and the the small community opportunity, and we’re engaged in both of those.

 

WWW: Are you adjusting your price structure to deal with the different economic situation in developing countries?

 

IB: We get into this debate a lot because people often say that our technologies are really expensive and it’s really not true! It just depends how you deploy those technologies and what business models you use. So in the case of the small communities systems in India, you’re using RO technologies, you’re putting in a small system which needs to be financed – these things can cost thousands of dollars, depending on the size and the water quality – by traditional finance or microfinance, and the villagers will end up owning that system and they pay for the water for a period of time, until they own that system, but the price they pay for that water on a daily basis is very low – and is at a price point that they can afford. And that’s fundamental, to be able to do that. So we haven’t had to adjust the price of the product itself, but how you deploy that technology, in order to make the financing available.

 

WWW: With desalination, it takes so much energy to produce water. In developing countries you have less regular energy sources and in developed countries you just have the sheer cost. What is Dow doing about this situation?

 

IB: The costs of desalinating seawater are going up as a result of two things: energy, because you need energy to desalinate with membranes and with thermal technology; and the cost of materials for construction. Stainless steel is needed to build a plant and the cost of that is going through the roof. These are drivers we can’t really control, but what we can do is continue to focus our R&D efforts on low energy membranes. The price of commodities and energy are what they are but we can still drive the technologies that can be deployed to lower the cost of energy.

 

 We’ve seen tremendous decreases in the cost of desalination as a result of the introduction of really efficient energy recovery devices. The other thing about reverse osmosis desalination is that the module does not care where the electron came from, so while there are sustainable sources of electricity and as they become further developed, I think they will really support reverse osmosis using membranes.

 

WWW: How are you dealing with some of the adverse public reaction to desalination works, especially in areas such as Australia?

 

IB:  Australia has had some huge desal plants that work with RO, and I think they are dealing with the issues. The Perth plant is an excellent example of a sustainable desal plant. A lot of study was done there – they’re using wind energy and their intakes were studied exhaustively to make sure that they didn’t impinge on the marine environment. Their outflows were studied, the diffusion of the concentrated brine was studied in Cockburn sound to make sure it didn’t impact the marine environment, and I think that’s a great example of a project that has dealt effectively with the perceptions and, in some cases, the misperceptions of the public around desalination.

 

Necessity is the mother of invention, and these water crises are becoming more significant. People are being faced with tough choices, and I think that a lot of this will die down when people realise that it is a reasonable way to develop new water resources, and that it can be done with minimal impact to the environment. I don’t think the general public really understands some of the realities of desalinated water and that it is a valid alternative. Any time you have to pump water any significant distance, you’re using tremendous amounts of energy. In California they’re pumping water from the north to the south which takes a lot of energy.

Are you planning any other plants modelled on the Perth plant?

 

I think you will see those types of precautions taken as new plants begin. Sydney has been announced, and you will see more of their learning and their care going into plants as they are being built.

 

WWW: Dow has recently set up the a water centre in Tarragona, Spain. Could you tell us about the investment you’ve made and what you’re hoping to develop from it?

 

The investment is about $15million, and I think we’ll have about 25 people there. The reason for the research centre is to give us better real world experience with the performance of our products. We make the modules in Minneapolis and we can test them individually, but what we lack is long term performance data in a real world system with real world water, like our customers experience.

 

The way we have been getting that in the past is to work with our customers, who will share data with us on what they’ve been experiencing, but we find that in order to really accelerate our product development we would like to have more direct control of that information in order to speed up our own development. So what we have in Tarragona is a centre that has access to multiple water qualities – sea water, brackish water, wastewater, and we can test our products in real life conditions over the long term.

 

The Mediterranean basin seemed like the logical location for our centre. The Spanish have been very supportive with research subsidies and that is because they have a huge issue with water and they are keen on developing new technology, including the new FilmTec membranes. We have the capability to test our 16" modules there, which we hope will become the new standard in sea water desal. It has 4.3 times the active area of an 8" module, and the advantage of that is that it allows the customer to invest less capital as there is a less of a footprint, so less steel is needed. But this is new, and we want to make sure that it performs, so we are testing them against the 8" module to make sure we get the performance we think we’ll get. We have are doing testing and have modules in use at the PUB in Singapore which are treating wastewater and have been going for a year. We are making 4.3 times as much water with this size compared directly to the 8", which is exactly what we’d expect.

 

WWW: Some other complaints about desalination are related to land use – by necessity they have to be by the coast and take up a fair amount of space. Would the different module size have less of a land impact?

 

IB: Possibly. We look at the footprint which is required and it definitely can be seen that there is a smaller footprint, which translates to less land use. And less land is obviously a benefit.

 

WWW: Tell us about Dow’s 2015 sustainability goals.

 

IB: Dow is committed to solving – through capabilities and technologies – fundamental challenges that the world faces, such as a shortage of housing and food and clean water. Dow is a significant user of water and we’ve been quite public with our commitment to solve those challenges and report on our own activities, such as how much water we use. A lot of the investments we make are in support of these goals. We are building awareness of the issue, letting the world know about technologies available to solve the issues.

 

WWW: What developments do you have with the industrial water side of the business?

 

IB: We bought Omex in 2006, after looking at the water scarcity challenges around the world. We saw desalination and water reuse as fundamental solutions that were going to be deployed. We were a leader in reverse osmosis but we did not have a position in low pressure membranes, which are an enabler for water reuse and membrane bioreactors. Now our UF membranes are being sold for water reuse applications, for pre-treatment for desal and brackish water applications. Before, when we were competing for projects we could offer ion exchange and reverse osmosis, but we now have UF and EDI, so we’re able to offer a broad portfolio of solutions. The membrane side is growing the fastest and UF is being increasingly adopted to replace traditional filtration technology; this will continue as the technologies get better and more cost competitive.

 

What we hope will happen is that we will see the same kind of growth that we saw in reverse osmosis. UF and RO are complementary and we have excellent science to drive this transformation, and continue to help with water issues around the world.