In particular, I thought Bill Aulet’s Xconomy post (”The next big thing in energy investing? Let’s Talk Water”) was interesting in the way he identifies the critical link between water and energy from a venture investor’s perspective.

Let me add a little detail to the cooling water use that Bill mentioned. It is remarkable that almost 40% of our water consumption withdrawals currently go into thermoelectric power generation, that is, using various fossil and nuclear fuels to produce steam to drive electric turbines (see clarification below - 05/29/08). Compare that to 13% for home use which includes drinking, showering, watering the lawn and leaving the tap running while you brush your teeth. 41% goes to make stuff we eat. Here’s a great visualization from LLNL of USGS data:

Click on image to enlarge.

Check out LLNL’s full water report and detail by state.

Clarification: It is worth noting the technical difference between “withdrawals” and “consumption”. As an interesting point of reference, let me draw from the DOE’s May08 “20% Wind Energy by 2030″ report (see report website here), which claims that an aggressive wind program can provide an 8% reduction in U.S. water consumption:

In the energy sector, water is used primarily for cooling in steam plants, but it is also used in boilers and in air pollution reduction processes. Several technologies are used to condense steam (EPRI 2002; Feeley et al. 2005):

• Recirculating steam plant cooling: Water is reused to cool steam in a closed loop system using a cooling tower or cooling pond.
• Once-through cooling: Water from a lake, a river, or the ocean is used to condense steam and the water is returned to its source but at a higher temperature.
• Dry cooling: Air cools steam, using far less water than the first two wet cooling technologies. Although dry cooling is not widely used, it can be the cooling technology of choice where water supplies are limited.

Two types of water use are generally considered:

• Water withdrawal: Water is removed from the ground or diverted from a surface source for use.
• Water consumption: Water is withdrawn from a source but not directly returned to the source because it is evaporated, transpired, incorporated into products and crops, or consumed by people or livestock.

In this analysis, water consumption projections were made by applying water consumption rates (gallons per megawatt-hour generated) to projected megawatt-hours of generation for each type of power plant. These calculations were made on a yearly basis for the no new Wind Scenario and the 20% Wind Scenario. Water savings from deploying large amounts of wind-generated electricity are calculated as the difference in water consumption between the two scenarios…

…Displacing large amounts of fossil-fueled power generation with wind energy reduces water consumption. Based on the authors’ estimates, if the current conventional generation mix is expanded to meet electricity needs, approximately 51 trillion gallons of water will be consumed for electricity production from 2007 to 2030. If wind energy deployment gradually increases to 20% of the nation’s electricity over the same time period, however, 47 trillion gallons of water will be consumed. This is a saving of 4 trillion gallons, an 8% reduction in water consumption during that time. Of the 4 trillion gallons of water saved nationally, 29% will be in the West, 41% will be in the Midwest/Great Plains, 14% will be in the Northeast, and 16% will be in the Southeast.

While water consumption is a smaller number than water withdrawals, the environmental impacts should not be underestimated. I remember visiting Diablo Canyon nuclear power plant on the Central Coast of CA for a field trip in my undergrad nuclear engineering course. They were using seawater to cool the reactor and condense steam. The water they returned to the ocean was 10+ degrees warmer and created a foreign ecosystem with tropical fish and everything living in Central CA. They had a full blown marine lab on site to monitor/manage the environment.

In discussing all these links between energy and water, a friend quipped that you would probably save more water if you turned off the lights when you brush your teeth than if you turned off the faucet…