Troubled waters

27 May 2010 | Article

IUCN's magazine World Conservation looks at how climate change is affecting the energy sector and why energy producers need to pay greater attention to natural resource management.

It’s true that we generally don’t value something until it’s gone. But how can we neglect something as fundamental as water? With climate change leading to rapidly dwindling fresh water supplies and competition between users intensifying, all sectors of society need to pay attention to sustainable natural resource management. And this includes energy companies.

Energy security in terms of generation and distribution depends on healthy ecosystems. Lakes, rivers, marshes and coastal lands deliver a wide range of services that support energy production. Natural river flows are critical to hydropower production, thermoelectric cooling, extraction and refining of oil and, increasingly, biofuel production. Other services provided by nature such as climate regulation, coastal protection and flood control are also important to the energy sector, protecting infrastructure such as power plants, pipelines and electricity cables.

“These ecosystem services are not being properly valued or factored into decision making about water use,” says Nadine McCormick of IUCN’s Energy, Ecosystems and Livelihoods Initiative. “But energy companies are starting to see their vulnerability to climate change. Each unit of energy is becoming increasingly water intensive with the expansion of unconventional oil extraction and renewable options such as hydropower and biofuels. Meanwhile, many countries already face severe water scarcity.”

Climate change increases the risk of disruption to energy generation as well as reduced output. Changes in rainfall patterns affect growth rates of crops used for biofuels and cause fluctuations in hydropower. The efficiency of hydropower generation can also be reduced through dam siltation caused by increased run-off from deforested land, and other poor land use practices.

Problems also arise when energy production alters local conditions and contravenes environmental regulations. Electricité de France (EDF) came close to disconnecting one of its nuclear plants from the Rhone River as the temperature of the water discharged by the reactor cooling system exceeded 25ºC, the maximum allowed under France’s environmental laws. In Canada restrictions have been placed on the amount of water that oil sand developers can take from the Athabasca River. In the US, several communities have stalled the development of ethanol plants due to their high water demands in areas where aquifers are already threatened. And on the Tana wetland in Kenya, a bioethanol development has been stopped because of concerns about unsustainable water extraction affecting wildlife and livelihoods.

The environmental community is urging energy companies to see themselves as part of the ‘bigger picture’ and play an active role in integrated water resource management. Joppe Cramwinckel, Sustainable Development Lead at Shell International says his company recognizes the intricate relationship between energy, water and climate change. “The increase in global energy demand is putting an ever-greater strain on the world’s ecosystems and water supplies. The challenge is to generate the data and analysis tools to manage these risks and make smarter strategic decisions. For example, wetlands and peatlands sequester considerable amounts of CO2  act as a sponge to store water but we need  be able to quantify these services and incorporate them into decision making.” He says Shell is building in-house capacity to assess the risks that climate change presents to investment opportunities and has looked at issues such as future ice conditions in the Arctic, the future tropical cyclone risk in Oman and future water level of the Caspian Sea.

Nigel Jollands, Head of the Energy Efficiency Unit at the International Energy Agency (IEA) says that one of the most cost-effective means of reducing the environmental impact of energy supply and demand is through energy efficiency. “The IEA is urging all countries to significantly upscale their activities to promote energy efficiency. And to help countries in these efforts, the IEA has identified 25 priority policy measures. What is needed is urgent worldwide implementation of these measures.”

Troubled waters lie ahead unless the multiple demands placed on natural resources are recognized and valued. This includes the increasing water needs of the energy sector as well as ecological demands necessary to maintain the overall sustainability of the water system. Innovative solutions from energy companies based on lessons from nature can help ensure that we leave enough water in the global well for future generations to draw on.