Canada should charge industry a little bit more for water in order to net some big savings in its use, says a national panel.
The National Round Table on the Environment and the Economy, a think-tank that advises the federal government on environmental issues, released a report last week on how to encourage conservation by industry by putting a price on water.
Access to water is one of the few competitive advantages Canada has, says Mark Parent, the group's vice-president, and we want to hold onto it in the future. Since the natural resources sector accounts for some 86 per cent of our water use, it makes sense to focus attention on it.
In addition to the creation of a national federal water use forecast and a move towards watershed-based management, the report recommends that governments put a volume-based price on water used by industry.
"We're talking about a very small price," Parent says, equivalent to a one-per-cent rise in industry's total costs. "A small increase might be a viable means of encouraging [industry] to do the right thing."
The natural resource industry's water intake in Canada will rise three per cent by 2030 despite efficiency improvements, the report found. If this sector was charged an additional $0.55 per cubic metre of water, it could prompt further improvements and change this into a 40-per-cent reduction.
St. Albert resident Frank Vagi, former president of the North Saskatchewan Watershed Alliance, says Alberta needs to put a price on water if it is to have any chance of meeting its conservation goals under Water for Life, which calls for a 30-per-cent reduction in water use by 2015.
"They're not achieving it, and they're never going to achieve it until they put a price on water," he says.
Conservation for cheap
The natural resource sector takes in about 36 cubic kilometres of water a year, according to the report — enough to flood St. Albert to a depth of a little more than a kilometre — about 78 per cent of which goes towards electricity. The oil and gas sector accounts for just 0.6 per cent of this intake, but that was set to jump by about 96 per cent by 2030 due to rapid expansion.
Industry is getting water pretty cheaply, Parent says — farmers pay as little as $0.05 cents per cubic metre, according to the report, or about 32 times less than what homeowners pay for water from Epcor.
Industry takes in millions of cubic metres of water a year, Vagi says, so charging as little as a dollar a cubic metre can justify big spending on efficiency. "There's definitely a lot of technology out there for waterless cooling," he says as an example, and higher prices would push companies to invest in it.
This higher price could come in as a royalty fee or as part of a licensing scheme like Alberta's, Parent says. Any cash collected by this water price must be set aside for water conservation efforts, he adds, lest it be just another tax grab.
John Thompson, an economist with Watrecon Consulting who helped draft Alberta's Water Act, argues that Alberta's system of tradable water permits already encourages plenty of water conservation, and that bringing in an additional water price would unnecessarily punish farmers.
"There is a place for water pricing. It just isn't necessarily here."
Vagi disagrees, arguing that a continuous charge for water encourages more conservation than a one-time purchase of water rights.
"By putting just a dollar a cubic metre on there, that generates an incentive."
A price on water would have little effect on economic growth, Parent said — Canada's economy would still be 1.5 times bigger in 2030 even with a price of 55 cents per cubic metre on water, the report found. "We don't foresee there to be any effect on the bottom line."
Vagi argues most oil companies can afford the investment, saying they have billions in revenues but toss just millions at water conservation. "That's a paltry sum for something that critical."
The report is available at nrtee-trnee.ca.
