An oil refinery secures an essential material: Water

Eve Troeh Aug 21, 2012

An oil refinery secures an essential material: Water

Eve Troeh Aug 21, 2012

Stacey Vanek Smith: An 11 mile stretch of the river has been closed because of low water levels. The Midwestern drought has hurt many companies that ship goods down the Mississippi. And that has many industries taking a closer look at where their water comes from.

From the Marketplace Sustainability Desk, Eve Troeh reports.

Eve Troeh: To turn crude oil into car-ready gas, you need a lot of water.

How much? Well, your shower uses about three gallons a minute. The vast BP oil refinery in south Los Angeles uses thousands of gallons a minute, 24 hours a day.

Ken Letwin: You can see it looks like it’s raining, inside there.

Troeh: It’s kind of a torrential downpour.

Senior engineer Ken Letwin shows me one of the giant towers where water sprays down to cool chemical vapor into liquid gasoline. This plant was built in the 1920s, when Southern California was bursting with water.

Letwin: If you just poked a hole in the ground pretty much any place, water came out.

But BP’s wells have mostly run dry. So it switched to tap water — the same stuff people drink. Now, the state has a goal to cut back on that water by 20 percent in the next few years. Ken Letwin says using 20 percent less water at oil refineries would mean:

Letwin: Reduction in gasoline production and a spike in prices.

He says cutting back’s not an option. But using different water is.

Letwin: The sewage water that’s being treated and pumped out into the ocean is a very very large supply.

A local water agency now diverts some of that water on its way to the sea, and sends it to BP.

Letwin: In fact, in that cooling tower right there, about 75 percent of it is recycled water.

BP pays a bit more for this recycled water — worth it for the secure supply. Since one else needs it, no agency will tell the company to use less of it. Lots of industries that rely on water are also shoring up their sources.

Zoe Tcholak-Antitch: Power generation, oil and gas, mining, semiconductor manufacturing, pharmaceuticals, chemicals and food and beverage companies.

That’s Zoe Tcholak-Antitch with the Carbon Disclosure Project, a nonprofit that tracks environmental risk for business. Two years ago, it started tracking water. She says water risk doesn’t show up in, say, stock price or earnings, because right now it’s so cheap.

Tcholak-Antitch: The cost of water doesn’t really reflect its value to business.

To get companies to value water, she says, you have to get them thinking: What would happen if the tap ran dry?

I’m Eve Troeh for Marketplace.

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