Water covers over 70 percent of the Earth’s surface, yet it is one of our most scarce and valuable resources. We know we need it for our own personal survival, but how often is it considered in the survival of a business? Make no mistake, water is big business from both the resource commodity side and the corporate consumer side. Being mindful of its use and cost is especially critical when evaluating where to relocate or expand operations.
Key criteria in site selection decisions nearly always includes line items for electricity, water, and sewer costs. The availability, reliability and cost of energy are a few of the factors that weigh heavily in the corporate location decision making process. Beyond the line item costs, a comprehensive utility plan, that include plans for future growth, should be developed to gain understanding on how operations will impact the local services, including time of day or year that certain volumes may fluctuate. If a company has future expansion plans, understanding the change in water needs is a key factor to consider in choosing a site. Beyond basics costs, knowledge of a state or community’s plans for maintaining, upgrading and sustaining its water infrastructure could be important. Often times, coordinating with the service providers in communities under consideration can create long-term savings for the utility provider and the company.
One of the most utility-intensive industries is manufacturing. The necessity of water in manufacturing is evident through the industry’s use of the water for cooling (transferring heat away from machinery), processing, cleaning, sanitation, steam generation and even inclusion as an ingredient in products.
Take into account the following facts:
Industry accounts for about 20% of worldwide water consumption (worldometer.com)
The United States boasts the highest water footprint in the world, using around 656,000 gallons per capita annually (Urban Land Institute, Ernst & Young, 2010).
Manufacturing makes up a little over 12% of the Gross Domestic Product (GDP) of the United States.
A little over 30% of the GDP for Indiana is derived from manufacturing.
According to the Economic Policy Institute (January 2015), Indiana is the top manufacturing state in the Midwest by employment, 7th in the United States based on total employees in manufacturing, and holds the top congressional district, Indiana’s 3rd Congressional District, for manufacturing’s share of district employment (23.3%). This adds up to an easy correlation between Indiana’s manufacturing strength and its abundant natural resource, water.
Just a little over 1% of the land in Indiana is covered in water; 36,240 square miles according to water.usgs.gov. Indiana’s great advantage lies in its access to the over 95,000 additional square miles of water residing in the Great Lakes and the largest tributary of the Mississippi that creates the state’s southern border, the Ohio River. The dependable availability of water in Indiana has helped shaped the manufacturing powerhouse it is, but also must be protected carefully to ensure the future of the resource and the state’s economic base.
In 2006, Senate Bill 369 was passed to create the Water Shortage Task Force (WSTF). This ten-member group was tasked with the development and implementation of an effective plan intended to serve as a tool to guide the state in the continued conservation of and use and management of water in the event of a drought. A six-month study commissioned by the Indiana Chamber of Commerce was released in August of 2014, showing Indiana ranking first in the country in the percentage of its economy that depends on water.
Water resources are dependent upon natural conditions from place to place and fluctuates throughout any given year. Putting in place policies and plans to safeguard water are on-going in Indiana. As an example, the Indiana General Assembly and state administration are continuing their efforts to plan and protect the state’s water resources for generations to come. Though Indiana is fortunate to have an adequate supply of water today, planning for the infrastructure and sustainability will take substantial investment over many years to ensure we protect this resource and the economy that depends on it. This important work must move forward to ensure that Indiana continues to prosper.
Larry Gigerich serves as Managing Director of Ginovus.