with ๐๏ธ Damian Georgino, Partner at Womble Bond Dickinson
๐ง Womble Bond Dickinson is a leading law firm that provides support to organizations operating within the fast-moving, challenging, and dynamic energy, water, and food nexus.
What we covered:
๐ How Waterโs Rethink needs to happen at the Energy-Water-Food nexus level โ and why
๐ค How this caters perfectly to the private sectorโs abilities
๐ How many countries in the World trust the private sector to manage water โ and how the US may get inspired to follow the track
๐ญ How when you do a water mass balance, you rapidly understand why the right focus is on industrial water
๐ฃ How looking at sustainable water and best value for money inevitably leads to distributed and water fit-for-purpose approaches
๐ฐ How industrial water is the perfect example of a potential private-private partnership leading to win-wins
๐งโ๐ผ Getting capital to work, Finding the best know-how, understanding the value of water in each context, striving for impact, facilitating changeโฆ and more!
๐ฅ โฆ and of course, we concluded with the ๐ง๐๐ฅ๐๐ ๐๐๐ง๐ ๐ฆ๐ช๐๐จ๐ฉ๐๐ค๐ฃ๐จ ๐ฅ
Resources:
โก๏ธ Send your warm regards to Damian on LinkedIn.
โก๏ธ Check out Womble Bond Dickinsonโs website
โก๏ธ A big THANK YOU to Sciens Water for enabling this episode!
is on Linkedin โก๏ธ
Teaser โ How the Private Sector may be the best vector for change in the US Water Sector
Teaser 2 โ How there is a $1 Trillion funding need to solve the US Water Crisis
Teaser 3 โ How we Focus on the Wrong Water by many Factors of 10
Teaser 4 โ Whatโs the Link between Taiwanโs worst drought and the Chip shortage?
Full Video: My conversation with Damian Georgino
Table of contents
- What we covered:
- Resources:
- Teaser โ How the Private Sector may be the best vector for change in the US Water Sector
- Teaser 2 โ How there is a $1 Trillion funding need to solve the US Water Crisis
- Teaser 3 โ How we Focus on the Wrong Water by many Factors of 10
- Teaser 4 โ Whatโs the Link between Taiwanโs worst drought and the Chip shortage?
- Full Video: My conversation with Damian Georgino
- Full Transcript:
- The Rethink has to Happen on the Water-Energy-Food Nexus level
- Thereโs nothing wrong in letting the Private Sector manage Water โ itโs the opposite
- Distributed Water and Water Fit-for-purpose will enable an optimum value for money
- The industrial sector is the highest bang for the buck in distributed water approaches
- Whatโs on the horizon for the American Water Sector?
- Rapid Fire Questions
- Other Episodes:
Full Transcript:
These are computer-generated, so expect some typos ๐
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Antoine Walter: Hi Damian. Welcome to the show. Thank you. Whatโs to rethink in water?
Damian Georgino: The rethinking of water is probably not an answerable question because we have to look at it from a number of different angles. Capital. We need to look at it from talent management. We need to look at it from technology, and you need to look at it, not just municipal water.
The Rethink has to Happen on the Water-Energy-Food Nexus level
We all focus on municipal water, but also industrial. We need to look at the water-energy nexus. The water, energy, agriculture nexus, and so itโs, itโs a very complex problem, maybe even a multi-variable equation or a simultaneous equation. But rethinking it means taking that holistic approach and looking at it with those different counterparts in mind.
We heard the government, EPA and others just talking today about their capital needs. They were silent about where does a private sector fit into this. I think the private sector, when you rethink it, is really where youโre going to get the most change. Cuz the private sector is driven by economics, is driven by market dynamics and.
Driven by a political agenda, thatโs where things get done.
This has to involve the Private Sectorโฆ
Antoine Walter: And how do you get that private sector involvement?
Damian Georgino: Well, you, youโve gotta allow them to be participants. Youโve got to allow them to have projects that do create revenue, that do create returns so that they can get involved and make them more efficient.
I think Rethinking Water includes AI. I think it includes new business methods. You know, the outsourcing, the, , solutions and you know, water as a solution, water as a service. I think itโs all of those. But the private sector has to be involved. The US probably needs a trillion dollars of infrastructure and water.
Southeast Asia, I just heard saw reports. Southeast Asia needs 36 trillion by 2035, I think it is. So that canโt be done by governments alone. And with the advent of infrastructure funds, with the focus now in the investment community on water, I think itโs a nice convergence of capital technology and need. Weโll really accelerate, the growth of the industry, the focus on the sector.
I think itโs wonderful that people are now focusing on it, but now we have to do something about it. Previously we had an opportunity to do something about it, but the focus wasnโt there. With unfortunate events, in the world, weโre getting the focus on it. Now we have to translate that into actionable investments.
โฆ and it will involve the right level of facilitation!
Antoine Walter: Whatโs your role in that nexus ?
Damian Georgino: Thatโs a great question. Iโve been involved in the water space for more than 25 years as a lawyer with Womble Bond, Dickinson, head of the Water, global water practice for us. Iโve been founding management, three public companies that are all faced, focused on water.
Iโve been, an investor with private equity. Iโve seen, the whole gamut of whatโs going on in the water space. So my role is to help those companies that want to be involved and deploy capital deployed efficiently deployed effectively and provide the legal framework and grounding to help them through it.
Thereโs nothing wrong in letting the Private Sector manage Water โ itโs the opposite
Antoine Walter: You mentioned all these experiences and you told me that you were involved in 500 water projects worldwide. What is the recurring issue which you, you keep seeing and which annoys you when you are thinking, oh, thereโs so much better ways to do exactly that.
Damian Georgino: Well, I think you need to start with, we need to figure out what the value of water is. I think thatโs one issue that we avoid. How do you value water? Is it a PUC driven return on capital or is it something else? Is it, should it be more market driven? Around the world, we find that it is more market driven and we are okay with private ownership, of water utilities, UK, Manila, you know, just go around the world.
Us, I think weโre somewhat afraid to attack that issue, but what is the value of water? I mean, Iโve heard people say, The value of water should be free. Iโve heard people say the value of water is the same as the value of life. You know, somewhere in between is the right answer. The market will find that, but weโll have price discovery through markets.
Looking at the Nexus youโll understand that you have to start with Industrial Water
I think thatโs the first thing we need to understand and appreciate. What are we trying to solve right now? I think we just donโt address that question adequately. We need to also look at , as I mentioned, the various nexus. When you look at water usage, the largest single water user is agriculture by a factor of 10 to the next largest user, which is energy and by a factor of 10.
Next is industrial, and then by a factor, 10 less is residential users. So we focus on residential to fix the problem. Maybe there are some other ways to look at it that can fix the bigger use problem.
Antoine Walter: So what youโre saying is that I can pee in the shower as much as I want, itโs not gonna solve the problem.
Damian Georgino: No, and we, we penalize California. 8% of all the water used in California goes to residential, and theyโre the ones that are being pinched right now.
Distributed Water and Water Fit-for-purpose will enable an optimum value for money
Antoine Walter: We are looking here at Rethinking Water from a utility standpoint and from a collective way to treat it in the us. Right now, the shift is ongoing and I think next year or in two years, depending on the projections, there will be more water spent on bottled water than on utility water.
Is that a threat for the sector?
Damian Georgino: At some point, the real question is how should you deliver? How should water be delivered? There are a number of opportunities out there that are called distributed water where water is made locally. One of the issues utilities have, and by the way, the largest single cost of a utility is energy.
A water utility is energy. Yet we have this one pass system. You bring water in, you treat it, youโre in New York City. It comes from how many hundred miles away. You pump it up, a 50 story building, it comes down and goes out into the river. You treat it and goes out into the river. Thatโs really inefficient.
You know these tall 50 story buildings are. Our small municipalities in a lot of areas, we need to think about treating locally and recycling locally. That gets you away from a lot of these other negative attributes of big systems. Interestingly, and this is a very abstract concept, but when you look at the, energy grid from about 15 or so years ago, if you need more power, you built, , bigger power stations or more power stations and bigger distribution lines.
Water shall follow the Energy Sectorโs proven track
Then all of a sudden with the advent of technology and deregulation, you ended up with micro grids that then turned into distributed energy. If you look at whatโs going on right now, and you used AI to get there, but right now the water systems are unknowing.
Not that theyโre not intelligently designed. Itโs just you donโt know whatโs going on and thereโs nobody converting that information into actionable information that you can use to change your system. Youโre now getting to the point where you can take that and push it to a distributed water model with AI and with other, technologies that are coming out out so that you can actually create a model that doesnโt rely on mega systems.
Antoine Walter: Donโt take me wrong. Iโm a big proponent of distributed systems. But when I listen to the keynotes by Seth Siegel this morning, who explains how thereโs 52,000 water utilities and the solution might be to go distributed, that might be resulting in even more facilities, even more infrastructures, not the big pipes in between but more smaller scale solutions on the local scene. Arenโt we running into more problems if we go distributed? The system is already pretty fractioned and we would be fractioning the fractioned system.
The industrial sector is the highest bang for the buck in distributed water approaches
Damian Georgino: Well, again, go back to when I look at distributed water, youโre focusing entire , on residential and heโs talking about residential.
The 53,000 are in municipal systems. Again, most of the water may be in industrial, you know, look how much water is used in food and beverage in farming. So when you look at it from that standpoint, itโs a little bit different lens. Absolutely. That youโre looking. So what if your only focus is municipal?
Youโre missing the largest piece from a volume standpoint, right? So, uh, you know, again, it depends on which way you wanna go. You look where the, a lot of the pollution is coming from. I think from a municipal waste system, we actually do a pretty good job. Thereโs some, the systems need upgraded and there are new technologies to help maintain those systems.
But thatโs not the volume. And you look at where the wastes are coming from. Some of the wastes are not coming from a municipal system, the agriculture system.
Industrial Water is changing and is looked at differently
Antoine Walter: The difficult beast to catch because itโs 70% of the, of the water usage worldwide, but itโs also the water, which is quite hard to recycle and to reuse.
So letโs look at the 20% in between. So the industrial water, for a long time, treating waste water for industrials would be a cost to be in business. You had to do it because of regulations. And now with the water scar in your real. An economy of scale. I mean, this improved resiliency in the system when youโre starting to deal with your water in a positive manner and that creates the business model You were alluding to the water as a service, wastewater as a service.
How far are we in that transformation of the industrial sector when it comes to water?
Damian Georgino: I think it is be, it is accelerating. Pick an industrial system. I donโt care if itโs. A chip manufacturer, which by the way, we, we worry about chips. 60% of the chips come from Taiwan. Theyโre having their worst drought in 60 years. Wonder why thereโs a chip issue.
Industrials have capital โ water companies the knowledge. That could be a win-win!
When you look at the industrial side of it, it is accelerating, and you need to think of it this way. A, an industrial user can deploy capital for its wastewater system, but itโs wastewater system is oftentimes a cost. And they have to comply with their permit, their affluent, , discharge permit.
And so youโre negotiating with what that discharge permit limits are, but your solution is probably a low cost solution. I just want to be able to meet my permit levels. When you now look at industrial outsourcing, for example, when you can take a whole system, how much ever capital is I I recall that 15% of a chip plant , is in water.
You take that capital off of their table, put it on somebody elseโs. And they run their system for you. You donโt have to worry about deploying that capital. Itโs now an operating expense on a long-term contracted basis. You take it away from, I have to worry about this system from an operating standpoint to a CFO type decision as far as whether to outsource or not.
And I use outsourcing generically. I mean, you can call it integration, you can call it EPC, you can call it anything you want, but itโs taking assets, which would normally be inside the fence and turning it into a, a third party contracted.
Whatโs on the horizon for the American Water Sector?
Antoine Walter: To round up that discussion, I have a bit of a crystal ball question, which is, if youโre looking now into the future in five years, in 10 years, what will tell you that we have been rethinking water the right way so that we created an impact?
Damian Georgino: If we have looked at it in that broader sense? I started with originally. The impact I think you will see in a more efficient use of water. The impact will be in technology being deployed in, in a smart manner. It will come from people realizing the value of water no longer taking a bottle of Evian with, uh, and Iโve been to the Evian Plant on Lake Geneva, delivering that here in the US with a horrible carbon footprint.
Itโs not just a French, itโs you. Uh, Voss in Scandinavia, you know, or, or Fiji. That just drives me crazy, the carbon footprints associated with that. But looking at water differently and realizing that water is not energy, water is not. Ag Water is all of that. Every company can impact your water footprint.
We need to better grasp the impact of Water
Every human has an opportunity, and when we realize that and get away from government who says, hereโs what we want to do, and put in the hands of people who can actually do something about it, that transforms it, I think that that will be where we see the result. The result will be more thinking about water.
Not just hereโs a glass of water, but understanding how it got here, understanding the usage of water, and making clothes, understanding the usage of water when youโre making chips, understanding where water comes into play with agriculture.
I, I donโt think we, we think that way. I think we think in episodic terms right now, Jackson, Mississippi, Puerto Rico, uh, you know, a storm in Puerto.
We donโt need to think of it as an episode that, oh my God, this is the big issue. It is a continuum, and that continuum in the next five years hopefully, will make people recognize and understand what it takes to get water or what it takes to manufacture anything from clothes to chips, brilliance, .
Antoine Walter: Well, to conclude, I have a couple of rapid-fire questions for you.
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Rapid Fire Questions
So the first one is, what is the most exciting project youโve been working on and why?
Damian Georgino: Boy, Iโve got a, as a lawyer, I see a lot of projects are all very interesting, the most exciting one. Now hereโs, hereโs something for you going back to the textile industry. Uh, Iโve got a client right now who rejuvenates.
Textiles fibers, turns them back in, uh, in divergent most, uh, textile manufacturing and clothing manufacturers, very water intensive, her recycling, and itโs a 360 closed loop system. Uses 96% less water. Wow. And 90, 90% less energy. So if you wanna look at the future of water, itโs not just water as delivery, itโs what about everybody elseโs use of water.
Sheโs using 96% less water. So thatโs, I really am excited about that project.
Antoine Walter: What is the trend to watch out for in the water sector?
Damian Georgino: Integrators, you may have your own proprietary. But you bring in everybody elseโs and you sit on top of it and finance it and have a monthly fee thatโs a long, on a long-term contracted basis.
I think thatโs a very exciting part. Itโs, uh, as one manager told me it was, instead of having to deal with all these different pieces of equipment that have to be coordinated and one person blaming the other, this is the old, uh, one throat to choke.
Antoine Walter: Damian, itโs been a pleasure. Thanks a lot and enjoy the rest of the conference,
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