Opportunities for Government to Influence Technology Innovation In the Water Industry

Tuesday, October 18, 2011: 12:30 PM
200 F (Minneapolis Convention Center)
Jeffrey Q. Adams, National Risk Management Research Laboratory, US EPA, Cincinnati, OH

Opportunities for Government to Influence Technology Innovation in the Water Industry



This presentation will discuss recent activities initiated by  EPA’s National Risk Management Research Laboratory to collaborate with numerous organizations including Federal and State regulatory and permitting agencies, water utilities & communities, water treatment manufacturers & vendors, engineering/science community, and business/venture capital sectors to promote technology innovation and markets focusing on the drinking water industry.

Ongoing environmental science research provides guidance for the development Federal and State water supply policies and regulations which become major industry drivers for what role certain environmental services and technology applications will play in the water supply business and markets. The Federal government often sets the initial framework for defining water policy, issues, and needs. This presentation will explore some scenarios on what government can do with limited resources to influence and promote technology innovation and help streamline the complex technological and institutional hurdles that must be confronted as new emerging tools and water treatment applications move across the research continuum from bench concept to market-ready penetration and sustainable deployment.

On April 27, 2011, the Obama Administration released a national “Clean Water Framework” which affirms a comprehensive commitment to protecting the nation’s waters. The framework emphasizes the use of partnerships among States, tribes, local governments, and diverse stakeholders to promote innovative approaches for achieving sustainable water supplies. It directs the use of the latest science and research to improve water regulations/policies and identify and address emerging pollution challenges. This complements EPA’s new set of strategies for managing drinking water policy issues including: addressing water contaminants as groups as much as feasible rather than one at a time; fostering development on new drinking water technologies by utilizing private innovators and small business; using the authority of multiple statutes to protect water supplies; partner with States to develop shared access to all public water systems monitoring data.

On the forefront of consideration for regulatory groups of contaminants to manage are numerous selected carcinogenic Volatile Organic Chemicals (VOCs), several Nitrosamines, and numerous chlorination Disinfection Byproducts (DBPs). Other groups that may emerge include: Perfluorinated compounds, Organophosphate Pesticides, Carbamate Pesticides, Triazine Pesticides, Chloroacetanilides, and Cyanotoxins. Various individual chemicals receiving renewed interest include Fluoride, Chromium-VI, and Perchlorate, and various microbials and chemicals from the Contaminant Candidate List-3 (CCL3). In addition, initiatives to shift from defining drinking water MCLs  from micrograms/L to nanograms/L will have an impact on regulatory policy consideration as the industry grapples with new analytical methods, how to determine health impacts at such low levels of exposure, and determining cost-effective treatment applications.

In conjunction with regulatory drivers, business market dynamics play a role in stimulating the development of innovative technology applications.  In 2010, it was estimated that global venture capital investment in the water sector represented only 2% of all cleantech industry investments with the U.S. share of global investments under 30%.  The estimated total U.S. water equipment market (excluding engineering/operator services and chemical consumables) was about $28 billion across drinking water, wastewater, and industrial water. The drinking water equipment market segment alone was estimated at about $12 billion, and an analysis indicated the additional available market innovation opportunity in this sector was only $1.2 billion. Factors contributing to the weak investment in water technology include the low profit potential for an industry that does not utilize full cost pricing policies for water production and distribution and the difficulties encountered with federal, state, local government regulatory, permitting, and procurement policies. The analysis indicated that facing competition from well-financed global competitors, U.S. innovators would benefit from technology test-beds and incubators, particularly those sponsored by government,  providing demonstration of technology performance within the framework of  current regulatory policies or that stimulate reformation of policies.

EPA’s Office of Water develops policies and regulatory guidance that influences State decision-making for technology review/permitting/acceptance. Federal guidance often lists technology applications and associated treatment credits for various applications.  However, if an innovative technology is developed that does not fit within the current guidance framework, it may be difficult to get States approval to use it. Though this may be an unintended consequence, State regulatory agencies are reluctant to permit technologies that do not have a credible record of performance, or technologies that are designed/configured/operated in a manner that falls outside of the expertise of a State’s review staff or cannot be assessed under current federal guidance procedures. These technologies may very well be innovative and prove to be sustainable solutions down-the-road but are viewed as black-box devices that are difficult to evaluate under a current framework.

Several efforts initiated by EPA’s National Risk Management Research Laboratory to promote and support technology innovation in the water industry will be discussed. These include providing technology development test-beds at EPA facilities thru equipment vendor partnerships thru CRADA mechanisms,  field and lab performance testing of  various types of  market-ready water treatment technologies under the Environmental Technology Verification (ETV) Program, fifty full-scale demonstration studies of new and innovative arsenic removal technologies deployed at operating water utilities, early-phase testing of new technologies under the SBIR Program, collaborations with the Water Research Foundation, and Water Environment Research Foundation, and EPA’s collaboration with a Water Technology Innovation Cluster (WTIC).

These programs allow the government to act as a catalyst to support independent credible evaluation /verification of various technologies thru third-party partnerships and collaborators. Funding for testing studies varies across different programs ranging from complete government funding, partial vendor subsidy with other collaborator funding, to complete vendor cost coverage of the testing.  Testing protocols have been developed thru a stakeholder process that allows feedback from regulatory, science/engineering, water utility/user community, and technology manufacturer/vendor viewpoints. The independent performance testing results can offer many contributions to technology innovation. Results may inform future regulatory policy reform. Testing results provide manufacturers with identification of strengths and weaknesses of their specific products to foster improvements in their design and operation based on lessons learned. These programs have provided State and local government permitting and procurement staff with credible data in standardized reports to inform decision-making. Efforts have provided protocols for the basis of standardized testing in the scientific/engineering community and stimulation of NSF-type Certification programs to help streamline State approval confidence of innovative technologies. Test-bed studies on market-ready equipment have in some cases provided positive market outcomes for vendors in achieving market penetration and States permitting advantages.  Under these EPA programs, study results and lessons learned have been communicated to federal and State regulatory Agency staff and various stakeholder groups thru numerous EPA sponsored Workshops and Webinars in recent years.

 Under the WTIC effort, EPA’s role is a catalyst to collaborate with other organizations within a regional technology innovation cluster framework in the Ohio, Kentucky, Indiana  tri-state region.  The Cluster is a geographic concentration of interconnected firms - businesses, suppliers, and service providers - and supporting institutions - local government, business chambers, universities, investors, and others - that work together in an organized manner to promote economic growth and technological innovation, in this case associated with the water technology sector. The mission of WTIC is to develop and commercialize innovative technologies to solve environmental challenges and spur sustainable economic development and job creation.


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