AGUA de PATARANTA, not the hard liquor

Foreword

The article ‘AGUA de PATARANTA’ by Tony Cailao talks about the looming water crises faced by developed and developing countries around the world. Read further to learn his take on current events related to the water crisis and climate change.

AGUA de PATARANTA, not the hard liquor

by Tony Cailao, FICD

I read with interest Alex (Da Great) Magno’s 3/30/23 article in The Philippine Star (“Sourcing”) on the looming water crises owing to the overwhelming reliance on a single water source: Angat Damned! This threatening catastrophe has recently been hogging countless column inches in various publications. Jumping on the bandwagon, here is a dousing piece on a serving of “WATER” to soak your erudition on this fountain of life. (Sus triple entendre, so punny).

NASA, “Water creates an environment that sustains and nurtures plants, animals, and humans, making Earth a perfect match for life in general.” 70% of our body is made up of water; and 70% of the earth’s surface is water. Thus, when looking for signs of extraterrestrial life, their mantra is “Follow the water”. As a proxy for life, Da Great hit the nail on the head when he raised his concerns in “Sourcing”.

Unsurprisingly, throughout history, societies bloomed in “river civilizations”: the Tigris and the Euphrates in the Middle East, the River Nile in Egypt; the Indus River in India; and the Yellow and Blue Rivers in China, and more— sabi ni Marito, each of rivers has always two banks, kaya naman daw pala matalino ang mga bankero (not the rowing variety but yung bank board of directors natin). Lol.

Heto na ang cold, distressing facts: Of all the water on our planet, 97.5% is salt water. And 1.75% is frozen in poles as glaciers and permafrost (soil, gravel, and sand permanently bound together by ice), leaving humanity relying on only 0.75% of all the water in our planet as available water. (Sus!). Of this meager 0.75%, a little over half of which, 0.45%, is subterranean groundwater (mostly in aquifers, water-bearing permeable rocks at depths called water tables, withdrawn thru wells and pumps) and the remaining 0.30% (only) on the surface, in rivers, streams, and lakes.

Gulp-pi!

The good news is, water is a renewable resource. It is never really “consumed”, as in “used up and perishes”— it just transforms, alters, or replaces itself into another form. To start with, it is naturally replenished through the Water Cycle—a continuous process where water evaporates from oceans, lakes, and other bodies of water, forms clouds falls as precipitation, and eventually returns to the oceans and other water bodies to complete the cycle. Rainwater can be “harvested” or may seep into the ground to replenish aquifers. Water that evaporates from lakes, rivers, swimming pools, and reservoirs, or water that “transpires”—the exhalation of water vapor through the stomata or pores in leaves in the photosynthetic process—joins the atmosphere and will eventually be recycled. Over 60% of the rain and snow that falls is returned in this way through “evapotranspiration”. Meanwhile, the water that you drank can turn into cells that can enhance body size and weight, or may be excreted as perspiration or waste. The water used to irrigate plants can turn into a tomato or form stems, leaves, or roots. There are a hundred more examples of its transformative configurations— but in the end, it reverts to its water form—renewable. Unlike Silicon Valley Bank, there is always liquidity!

By the middle of the century, more than half of the planet will live in areas of “water stress”, where supplies cannot sustainably meet demand. Lush pastures will turn to barren desert and millions will be forced to flee in search of fresh water.

Where water is available—when, where and in what condition matters hugely.

Be that as it may, the problems relating to this dearth are neither the about the resource itself—it’s renewable, di ba—nor technical, nor financial. It is managerial—how to institute and implement sensible water policies and best practices. Stated otherwise, it is bad management. If water is not managed well, today’s crisis will become a catastrophe.

Thought leaders regard access to water as a fundamental right, arguing that agua should be available on the basis of necessity, rather than the ability or willingness to pay— libre! Kaya lang, the shortcoming of this premise is, this “social wokeness” kindles a moral hazard— it encourages profligate use. Even our conserving Sustainability warriors— prudent in not compromising the ability of future generations to meet their own needs— poorly understand how much water they are using. They are only aware of their quotidian consumption—mostly washing, and if dehin goli, drinking —but unconscious of their “virtual” consumption (a.k.a embedded water) that has gone into the food they eat, the electricity they use and the clothes they wear. Some of the big drivers of this unperceived consumption are the world’s increased desire for grain, meat, manufactured goods, and electricity. Crops, cows, power stations, and factories all need lots of water. People drink only a few liters (average about 2 liters) a day, but putting food on their tables requires floods of the stuff. Por ejemplo, growing one kilogram of wheat takes 1,250 litres of water; fattening a cow to produce the same weight of beef involves 12 times more; it takes around 2,700 litres of water to produce one cotton t-shirt – that's enough for one person to drink for more than three and a half years!

Overall, agriculture accounts for more than 70% of global freshwater withdrawals. As the global population rises from 8B to 10B by 2050, agricultural production will have to rise by 60% to fill the world’s bellies. This will put water supplies under huge strain. Farmers produce far more food than finds its way into stomachs. As much as a third of all food never actually makes it to a plate, wasting so much water that was used in its production. Households are responsible for throwing out the largest share of unwanted foodstuffs. And a lot more may never even see the produce that rots on slow, bumpy journeys to market.

Water is vital not only for food and domestic well-being. It is fundamental to economic growth. Scarcity stalls industrial development by squeezing energy supplies. Electricity generation depends upon plentiful quantities of water; nuclear power requires water both for cooling turbines and the reactor core itself. Coal and gas-fired plants cannot function without it. Power generation is a thirsty business. Overall about 41% of America’s withdrawals go towards cooling power stations. On hydroelectric power, the third-largest energy source after coal and natural gas, scarcity is a worry, particularly when dams rely on rivers fed by rainfall, which may be inadequate or delayed. Spikes in energy prices often follow dry periods. Cities endure sporadic blackouts when droughts cripple power generation. As poor countries develop, global demand for electricity from industry is expected to increase by 400% over the first half of the 21st century. The majority of water- intensive industries, such as coal mining, textiles, and chemicals, are found in countries that are particularly prone to water stresses: China, Australia, America, and India. Industry can increase strains on supplies too, by polluting water, making it unfit for human use. Over a third of China’s waterways have been spoiled by industrial effluent and other nasties.

To make matters worse, few places price water properly. Usually, it is artificially cheap, because politicians are scared to charge much for something essential that falls from the sky. This means that consumers have little motivation to conserve it and investors have little incentive to build pipes and other infrastructure to bring it to where it is needed most. In South Africa, for example, households get a lot of water for free. In Sri Lanka, they pay a nominal 5 cents for a cubic meter. By contrast, in Australia—-big parts of which are deserts—they take water conservation seriously, water costs $1.36 per cubic metre. The price is right. Come on down! Lol

Meanwhile, in many countries, people can pump as much water as they like from underground aquifers, because rules are either lax or not enforced. While this has allowed farmers to grow huge amounts of food in places that would otherwise be too dry to support farming, it is unsustainable. Around a fifth of the world’s aquifers are over-exploited, jeopardizing contamination and damaging the layers of sand and clay that hold up aquifers, thereby reducing their capacity to be replenished.

The holy trinity that will drive the continued growth in water demand are population, prosperity, and climate change. By 2050, the global population will increase to 10B. Most of the increase will come in parts of the world—in Africa and Asia—that are already short of water.

People, wealthier with higher standards of living, will be leading more water-intensive lifestyles and move into cities, many of them in places at great risk of water shortage. The biggest uncertainty in projecting future demand lies in estimating how much will be needed for agriculture, which currently accounts for about 70% of water withdrawals, mostly for irrigation. Some forecast a big increase in demand, as food production has to rise to feed a growing population.

Meanwhile, the location of main water sources is highly asymmetrical—just nine of 195 countries account for 60% of all available fresh supplies. China and India have about 36% of the world’s people, but only about 11% of its freshwater. Climate change will exacerbate this inequity.

The most dramatic effects of climate change (read: global warming) have been the increasing number of extreme weather events—storms, hurricanes, (super) typhoons, heatwaves, droughts, wildfires, cyclones, tornadoes, earthquakes — no thanks to the anthropogenic (human-caused) GHG (greenhouse gas) emissions. The rising temperatures are accompanied by rising sea levels—at a rate of about 3mm a year—as the warmer water expands, and as ice at both poles melts. Higher seas bring storm surges that can reach and flood farther inland. And warmer air temperatures mean the atmosphere can hold more moisture that eventually falls as sudden heavy precipitation, causing flash floods. Hydrologists expect that a warming climate will see the cycle of evaporation, condensation, and precipitation speed up. Wet regions will grow wetter and dry ones, drier— sadly, in places that need not be wet nor dry.

Climate change is one of my paborits. Sharing my cynicism, pet peeves actually: (1) Most of the pledges made by the countries, NDC’s or Nationally Determined Commitments, will not be fulfilled until decades later, eg from 2030 to 2050. The leaders making those vows are likely no longer around. Promise ha? Greenwashing! (2) NDC’s have no legal status under international law and are merely goodwill pledges. So easy to come up with a compendium of motherhood. Walang namang penalties nor punitive actions. (3) The rich nations committed to provide US$100 billion a year to help developing countries adapt to climate change and mitigate further rises in temperature. Result: $20B barya lang. No sanctions. (4) Accomplishments, thus accountability too, are difficult to measure; metrics are fiendishly complicated, replete with variabilities. Isa, dalawa, ocho! (5) Finally, big finish, drum roll, please. Lol. The adverse effects of climate change do not direct its wrath on the recalcitrant countries, nor reward the compliant countries. It indiscriminately unleashes its fury on both, on everyone, on the whole planet. So why bother? Weather, weather lang.

As it happens, in a recent landmark report by the Intergovernmental Panel on Climate Change, it stated, unsurprisingly, that the lofty goal of holding average global temperature rises to 1.5°C is beyond reach. Welcome 2°C degraded target, but at the rate things are going, even that is at risk. Let’s bring our Mitigation and Adaptation bag of tricks ready…

Water stressed countries, notably the rich ones, have demonstrated that impressive infrastructure can be built with money and consistent political support, e.g. desalination plants. They convert seawater to drinking water, but at a cost that can induce tears, both in terms of capital expenditure as well as the huge energy needed to operate it. Unsurprisingly, most of the biggest facilities are oil (energy) rich sovereigns in the Middle East—Saudi Arabia, United Arab Emirates, Kuwait, and Qatar, Israel, to name a few. Note however that desalinated water is far too expensive for irrigation, as earlier pointed out— the highest single use of water at 70%. Other drawbacks of desalination: (1) For non-coastal regions, with the sea as feedstock, it will be too costly to transport desalinated water over long distances inland. (2) It requires enormous amounts of energy

—typically between one-half and two-thirds of the cost of desalinated water, which explains why most of the existing facilities are located in high-income and energy rich countries. (3) Taking out the salt from seawater produces salty sludge known as brine, at volumes more than freshwater produced, at a 1.5:1 ratio—142 million cubic metres of brine a day. The uncontrolled discharge of brine increases the ocean’s salinity, depleting oxygen in places called dead zones a.k.a hypoxia, causing die-offs of fish, shellfish, corals, and aquatic plants—not to mention the toxic chemicals used in the treatment process, all resulting in marine life damage.

Twenty years of three decades of my banking career were spent overseas. I worked and lived in Singapore, twice over. Singapore is a small island state (728 square kilometers), with barely any natural resources. I should make special mention that it was one of the most water stressed countries in the world. It used to import water from its rival neighbor, Malaysia, then started to build desalination plants in 1965, now numbering five. But more awe-inspiring, Singapore’s Public Utility Board operates the planet’s most modern water recycling system, harvesting waste water from sewers. Because land is in short supply in Singapore, its treatment facilities operate below ground, 25 stories deep! The result is water branded “NEWater” which is not only clean, safe, and drinkable but also ultra clean that the biggest users are wafer fabrication plants, which require water quality that is even more stringent than water for drinking.

This, to me, is one of the awesome paragons of Resiliency—absorbing shock and catastrophe and emerging stronger; and Circularity—recycling, re-using, and regeneration. Ok lah!

Haba na ito. Isa na lang. Another wow moment—-Many rivers on our planet flow thru several countries. Closest to us is the Mekong River in Asia, flowing in six countries: China, Myanmar, Thailand, Lao PDR, Cambodia, and Viet Nam. In Egypt, the Nile runs through or along the borders of 10 other African countries. The Amazon (Marito not the provider of cloud computing and ChatGpt) and its tributaries flow through six Latin American countries. The Congo River flows through seven African conga dancing countries. Lol. Marami pa. Against this backdrop, let me acquaint you with the concept of water and riparian rights. In essence, water rights refer to legal rights to use water resources. These rights can be granted by the government or through private agreements (can be sold and traded), and they typically allow the holder to use water for various purposes, such as irrigation, industrial processes, or domestic consumption. Owners of these rights need not be domiciled along river banks. On the other hand, riparian rights are legal rights that give landowners the ability to use water from a stream, river, or other waterway that flows through or borders their property— like water rights. But these rights are based on the concept that those who own land along a waterway have a NATURAL right to use the water for reasonable and beneficial purposes, such as watering livestock, irrigating crops, or providing drinking water to their households. Both rights do not grant “ownership” of the rivers nor its flows. If my ancient memory serves me right, in my commercial law subjects in college, both rights are similar to “ usufruct”- the right to use and benefit from an asset, say the water itself or its surface, while the ownership of which belongs to another party—except in our situation of rivers flowing thru countries, there are a number of “usufructuaries”, the party enjoying the usufruct. This presents a number of complications and complexities arising from rivers flowing thru several countries, which I will not dwell on. Too many, too long, and drawn out. I will instead give you an expository glimpse, just one situation—and like the arcane quantum theory, allow your imagination to ponder on the “entanglement”. Google it - lol. Closer to home again, in the Mekong River, the following are the countries that built hydroelectric plants along the Mekong River, with the corresponding percentage of hydro power in their national energy mix; Burma 62%, Laos 51%, Cambodia 41% and Vietnam 30%. These are big operators of hydro power plants. Exercising their riparian rights, they can upset, stop, constrain, contaminate (e.g. bacterial pollution) the upstream and downstream flows and even vice versa because the Mekong River swells and as such it is the ONLY river in the world that goes both ways (Akala ko only Jupiter and Mercury lang ang meron retrograde! Lol) —to the detriment of others. Note: Similar to our boss RSA’s BESS (Battery Energy Storage System), hydro electric plants can store energy by pumping water in a reservoir upstream during off-peak hours, unforgivably detain it there like Mam Leila de Lima (!) and only release it down during peak demand. Sadly, even if the downstream offer ransom money, there is no guarantee of restored normal flow. And that is only in the Mekong River. Small wonder conflicts about water rights have caused ruinous wars. Ang gulo talaga.

Everywhere, water is devilishly difficult to manage but as I said in my preface, the problems are neither water itself nor technical nor financial, it is managerial.

There is no single solution to the world’s water crisis. There are many schemes around the world to meet assorted objectives but so far these tend to be implemented piecemeal rather than in co-ordinated efforts.

I thought concluding this with a “mic drop” moment by inundating this space with sensible recommendations to combat water stress —like undertaking multilateral (international) initiatives, maybe under UN auspices but more granular and episodic than Goal 6 (Ensure access to water and sanitation) of its 17 SDG’s or Sustainable Development Goals—but that task is overweeningly ambitious for a pun(n)y earthling like moi. Hence, I will leave that to the experts whom I hope can muster their collective wherewithal to prevent a catastrophic scene from the movie “Mad Max”, where heavily armed gangs race around desert landscapes, fiercely fighting and pitifully dying for water. I pray that its creators will keep it the way they intended such dystopian scenario to be — a fiction.

Yan na!

Be well y’all.

AMC

4/6/23

Disclaimer

The information in the article represents the view and opinion of the author and does not reflect the position of the Institute. The publication of the article is not an endorsement by the Institute nor its affiliates. The content provided by the author is of their opinion and is not intended to malign any religion, ethnic group, club, organization, company, or individual.

About the Author

Antonio Cailao’s international banker career straddled more than 30 years and four continents, living and working in Hong Kong, Korea, Venezuela, Vietnam and Singapore; and in the Philippines where he commenced his banking career in Citibank Manila in 1973 as an Executive Trainee. His main businesses included local, regional and international corporate banking, investment banking, global trade, cash management and e-commerce. His career highlights included being instrumental in the establishment of the Consumer Banking and Electronic Banking businesses in Citibank Manila, Asian regional trade and cash management, rationalization of world corporate businesses in both Asia and Latin America, established Citibank presence and branches in Vietnam, and Asia Regional Head of Pan-Asian Corporations’ business in all of Asia, initiated e-commerce business in a US bank in Singapore and the rehabilitation of a local bank in Manila.

Back in Manila, he re-invented himself as an energy person as Chairman of the world’s second largest geothermal company, President and CEO of Philippine National Oil Company, established a renewable energy corporation, he led the privatization of PNOC EDC and Petron, both the largest privatization transactions in the country at that time.

His past board memberships include RCBC Savings Bank, PNOC-Energy Development Corporation, PNOC, Goodyear Tire and Rubber Company, Philippine Mining and Development Corporation, Philippine Bayanihan Society (Singapore), Gulf Oil Philippines, Inc, Board Observer in Energy Development Corporation and Petron. Currently Independent Director in Petron Malaysia Refining and Marketing Berhad (Malaysia). Board Adviser of Bank of Commerce.

His volunteer work included parish church charity work in Seoul, Korea, established skills training for Filipino overseas workers in Singapore, micro financing training to farmers in southern Luzon, tree planting in Rizal province and relief goods donation and distribution in various disaster areas.

In his college days in UP, he established AIESEC in the Philippines, an international youth non profit organization that provides leadership development, international internship and volunteer experience, and in 2011, was inducted in the AIESEC Hall of Fame during its international congress in Nairobi, Kenya. In 2001, he was on the very first batch of Ten Most Outstanding Alumni Award of UP College of Business Administration.

His education were business college and masters degree from the University of the Philippines and Executive Management Courses in Columbia University. He is a Fellow and Teaching Faculty of the Institute of Corporate Directors. He was also keynote speaker and panelist on energy and petroleum in various major Oil and Gas councils and organizations in Asia and Europe.

Tony loves to read, golf, swim and travel.