Energy and Water: Preliminary Observations on the Links between Water and Biofuels and Electricity Production
Published: 2009-07-09T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Water and energy are inexorably linked--energy is needed to pump, treat, and transport water and large quantities of water are needed to support the development of energy. However, both water and energy may face serious constraints as demand for these vital resources continues to rise. Two examples that demonstrate the link between water and energy are the cultivation and conversion of feedstocks, such as corn, switchgrass, and algae, into biofuels; and the production of electricity by thermoelectric power plants, which rely on large quantities of water for cooling during electricity generation. At the request of this committee, GAO has undertaken three ongoing studies focusing on the water-energy nexus related to (1) biofuels and water, (2) thermoelectric power plants and water, and (3) oil shale and water. For this testimony, GAO is providing key themes that have emerged from its work to date on the research and development and data needs with regard to the production of biofuels and electricity and their linkage with water. GAO's work on oil shale is in its preliminary stages and further information will be available on this aspect of the energy-water nexus later this year.
section_title: What GAO Found
paragraphs: While the effects of producing corn-based ethanol on water supply and water quality are fairly well understood, less is known about the effects of the next generation of biofuel feedstocks. Corn cultivation for ethanol production can require from 7 to 321 gallons of water per gallon of ethanol produced, depending on where it is grown and how much irrigation is needed. Corn is also a relatively resource-intensive crop, requiring higher rates of fertilizer and pesticides than many other crops. In contrast, little is known about the effects of large-scale cultivation of next generation feedstocks, such as cellulosic crops. Since these feedstocks have not been grown commercially to date, there are little data on the cumulative water, nutrient, and pesticide needs of these crops and on the amount of these crops that could be harvested as a biofuel feedstock without compromising soil and water quality. Uncertainty also exists regarding the water supply impacts of converting cellulosic feedstocks into biofuels. While water usage in the corn-based ethanol conversion process has been declining and is currently estimated at 3 gallons of water per gallon of ethanol, the amount of water consumed in the conversion of cellulosic feedstocks is less defined and will depend on the process and on technological advancements that improve the efficiency with which water is used. Finally, additional research is needed on the storage and distribution of biofuels. For example, to overcome incompatibility issues between the ethanol and the current fueling and distribution infrastructure, research is needed on conversion technologies that can be used to produce renewable fuels capable of being used in the existing infrastructure. With regard to power plants, GAO has found that key efforts to reduce use of freshwater at power plants are under way but may not be fully captured in existing federal data. In particular, advanced cooling technologies that use air, not water, for cooling the plant, can sharply reduce or even eliminate the use of freshwater, thereby reducing the costs associated with procuring water. However, plants using these technologies may cost more to build and witness lower net electricity output--especially in hot, dry conditions. Nevertheless, a number of power plant developers in the United States have adopted advanced cooling technologies, but current federal data collection efforts may not fully document this emerging trend. Similarly, plants can use alternative water supplies such as treated waste water from municipal sewage plants to sharply reduce their use of freshwater. Use of these alternative water sources can also lower the costs associated with obtaining and using freshwater when freshwater is expensive, but pose other challenges, including requiring special treatment to avoid adverse effects on cooling equipment. Alternative water sources play an increasingly important role in reducing power plant reliance on freshwater, but federal data collection efforts do not systematically collect data on the use of these water sources by power plants. To help improve the use of alternatives to freshwater, in 2008, the Department of Energy awarded about $9 million to examine among other things, improving the performance of advanced cooling technologies. Such research is needed to help identify cost effective alternatives to traditional cooling technologies.

section_title: Letter
paragraphs: I am pleased to be here today to participate in your hearing on technology  research and development for the energy-water linkage often referred to as  the energy-water nexus. As you know, water and energy are inexorably  linked, mutually dependant, and each affects the other’s availability. Energy  is needed to pump, treat, and transport water, and large quantities of water  are needed to support the development of energy. Production of biofuels  that may help reduce our dependency on oil, and the cooling of power  plants that today provide the electricity we use, represent two examples  where water supply is tied directly to our ability to provide energy.
However, both water and energy are facing serious supply constraints.  Freshwater is increasingly in demand to meet the needs of municipalities,  farmers, industries, and the environment. Likewise, rising demand for  energy—fueled by both population growth and expanding uses of  energy—may soon outstrip our ability to supply it with existing resources.  Looking just at electricity, according to the Energy Information  Administration’s (EIA) most recent Annual Energy Outlook, 259 gigawatts  of new generating capacity—the equivalent of 259 large coal-fired power  plants—will be needed between 2007 and 2030. As the country’s energy  needs grow along with its population, additional pressure will likely be put  on our water resources.
Given the importance of water and energy, both the federal government and  state governments play key roles in monitoring, regulating, collecting  information, and supporting research on energy and water issues. In  general, state governments play a central role in overseeing water  availability and use by evaluating water supplies and permitting water uses.  However, while much of the authority governing water supply and  distribution lies with state and local governments, the federal government  also has a role in helping the country meet its energy needs without  damaging or depleting our supplies of freshwater. For example, federal  agencies, including the Department of Energy (DOE), have provided data  and analysis about water use for energy production, as well as funded  related research and development. These activities are important to further  our understanding of how to more efficiently use such critical resources.
At the request of this committee, GAO currently has work under way  related to three aspects of the energy-water nexus—water use in the  production of biofuels, water use at thermoelectric power plants, and  water use in the extraction of oil from shale. We expect to release reports  on biofuels and thermoelectric power plants later this year. For each  study, the committee asked us to identify technologies that could help  reduce the amount of water needed to produce energy from these sources.  My testimony today discusses key themes we have identified during our  work to date on the two ongoing energy-water nexus jobs that are furthest  along, specifically (1) biofuels and water use and (2) thermoelectric power  plants and water use. Our work on oil shale is in its very preliminary  stages and we will have further information to share with the committee  on this aspect of the energy-water nexus later this year.
To identify the effects of biofuel cultivation, conversion, and storage on  water supply and water quality, we are conducting a review of relevant  scientific articles and key federal and state government reports. In addition,  in consultation with the National Academy of Sciences, we identified and  spoke with a number of experts who have published research analyzing the  water supply requirements of one or more biofuel feedstocks and the  implications of increased biofuel cultivation and conversion on water  quality. Furthermore, we are interviewing officials from DOE, the  Environmental Protection Agency (EPA), and the Department of Agriculture  (USDA) about impacts on water supply and water quality during the  cultivation of biofuel feedstocks and the conversion and storage of the  finished biofuels. To identify the relationship of thermoelectric plants and  water, we are reviewing selected reports, interviewing federal officials and  experts, and examining relevant energy and water data. In particular, we are  examining reports on alternative cooling technologies and water supplies  and the impact they can have on water use at power plants. We are also  interviewing officials from DOE, EPA, and the Department of Interior’s U.S.  Geological Survey, as well as state water regulators and water and energy  experts at national energy laboratories and universities. In addition, we are  interviewing representatives from electric power producers, sellers of  electric power plant equipment, cooling technology companies, and  engineering firms that design new power plants. Finally, we are examining  power plant data on water source, use, consumption, and cooling  technology types collected by EIA and data collected and reported by the  U.S. Geological Survey. Our work is being conducted in accordance with  generally accepted government accounting standards. Those standards  require that we plan and perform the audit to obtain sufficient, appropriate  evidence to provide a reasonable basis for our findings and conclusions  based on our audit objectives. We believe that the evidence obtained  provides a reasonable basis for our findings and conclusions based on our  audit objectives.
subsections: section_title: Background
paragraphs: Biofuels are an alternative to petroleum-based transportation fuels and  derived from renewable resources. Currently, most biofuels are derived  from corn and soybeans. Ethanol is the most commonly produced biofuel  in the United States, and about 98 percent of it is made from corn that is  grown primarily in the Midwest. Corn is converted to ethanol at  biorefineries through a fermentation process and requires water inputs  and outputs at various stages of the production process—from growth of  the feedstock to conversion into ethanol. While ethanol is primarily  produced from corn grains, next generation biofuels, such as cellulosic  ethanol and algae-based fuels, are being promoted for various reasons  including their potential to boost the nation’s energy independence and  lessen environmental impacts, including on water. Cellulosic feedstocks  include annual or perennial energy crops such as switchgrass, forage  sorghum, and miscanthus; agricultural residues such as corn stover (the  cobs, stalks, leaves, and husks of corn plants); and forest residues such as  forest thinnings or chips from lumber mills. Some small biorefineries have  begun to process cellulosic feedstocks on a pilot-scale basis; however, no  commercial-scale facilities are currently operating in the United States. In  light of the federal renewable fuel standard’s requirements for cellulosic  ethanol starting in 2010, DOE is providing $272 million to support the cost  of constructing four small biorefineries that will process cellulosic  feedstocks. In addition, in recent years, researchers have begun to explore  the use of algae as a biofuel feedstock. Algae produce oil that can be  extracted and refined into biodiesel and has a potential yield per acre that  is estimated to be 10 to 20 times higher than the next closest quality  feedstock. Algae can be cultivated in open ponds or in closed systems  using large raceways of plastic bags containing water and algae.
Thermoelectric power plants use a fuel source—for example, coal, natural  gas, nuclear material such as uranium, or the sun— to boil water to produce  steam. The steam turns a turbine connected to a generator that produces  electricity. Traditionally, water has been withdrawn from a river or other  water source to cool the steam back into liquid so it may be reused to  produce additional electricity. Most of the water used by a traditional  thermoelectric power plant is for this cooling process, but water may also  be needed for other purposes in the plant such as for pollution control  equipment. In 2000, thermoelectric power plants accounted for 39 percent  of total U.S. freshwater withdrawals. EIA annually reports data on the  water withdrawals, consumption and discharges of power plants of a  certain size, as well as some information on water source and cooling  technology type. These data are used by federal agencies and other  researchers in estimating the overall power plant water use and determining  how this use has and will continue to change.
section_title: Information Is Limited on the Water Supply and Water Quality Impacts of the Next Generation of Biofuels
paragraphs: Our work to date indicates that while the water supply and water quality  effects of producing corn-based ethanol are fairly well understood, less is  known about the effects of the next generation of feedstocks and fuels.  The cultivation of corn for ethanol production can require substantial  quantities of water—from 7 to 321 gallons per gallon of ethanol  produced—depending on where it is grown and how much irrigation water  is used.  Furthermore, corn is a relatively resource-intensive crop,  requiring higher rates of fertilizer and pesticide applications than many  other crops; some experts believe that additional corn production for  biofuels conversion will lead to an increase in fertilizer and sediment  runoff and in the number of impaired streams and other water bodies.  Some researchers and conservation officials have told us that the impact  of corn-based ethanol on water supply and water quality could be  mitigated through research into developing additional drought-tolerant  and more nutrient-efficient crop varieties thereby decreasing the amount  of water needed for irrigation and the amount of fertilizer that needs to be  applied. Furthermore, experts also mentioned the need for additional data  on current aquifer water supplies and research on the potential of biofuel  cultivation to strain these water sources.
In contrast to corn-based ethanol, our work to date indicates that much  less is known about the effects that large-scale cultivation of cellulosic  feedstocks will have on water supplies and water quality. Since potential  cellulosic feedstocks have not been grown commercially to date, there is  little information on the cumulative water, nutrient, and pesticide needs of  these crops, and it is not yet known what agricultural practices will  actually be used to cultivate these feedstocks on a commercial scale. For  example, while some experts assume that perennial feedstocks will be  rainfed, other experts have pointed out that to achieve maximum yields  for cellulosic crops, farmers may need to irrigate these crops.  Furthermore, because water supplies vary regionally, additional research  is needed to better understand geographical influences on feedstock  production. For example, the additional withdrawals in states relying  heavily on irrigation for agriculture, such as Nebraska, may place new  demands on the Ogallala Aquifer, an already strained resource from which  eight states draw water. In addition, if agricultural residues—such as corn  stover—are to be used, this could negatively affect soil quality, increase  the need for fertilizer, and lead to increased sediment runoff to waterways.  Considerable uncertainty exists regarding the maximum amount of  residue that can be removed for biofuels production while maintaining soil  and water quality. USDA, DOE, and some academic researchers are  attempting to develop new projections on how much residue can be  removed without compromising soil quality, but sufficient data are not yet  available to inform their efforts, and it may take several years to  accumulate such data and disseminate it to farmers for implementation.  Experts we spoke with generally agree that more research on how to  produce cellulosic feedstocks in a sustainable way is needed.
Our work also indicates that even less is known about newer biofuels  feedstocks such as algae. Algae have the added advantage of being able to  use lower-quality water for cultivation, according to experts. However, the  impact on water supply and water quality will ultimately depend on which  cultivation methods are determined to be the most viable. Therefore,  research is needed on how best to cultivate this feedstock in order to  maximize its potential as a biofuel feedstock and limit its potential impacts  on water resources. Other areas we have identified that relate to water and  algae cultivation in need of additional research include:    Oil extraction. Additional research is needed on how to extract the oil  from the algal cell in such a way as to preserve the water contained in the  cell along with the oil, thereby allowing some of that water to be recycled  back into the cultivation process.
Contaminants. Information is needed on how to manage the contaminants  that are found in the algal cultivation water and how any resulting  wastewater should be handled.
Uncertainty also exists regarding the water supply impacts of converting  feedstocks into biofuels. Biorefineries require water for processing the  fuel and need to draw from existing water resources. Water consumed in  the corn-ethanol conversion process has declined over time with improved  equipment and energy efficient design, according to a 2009 Argonne  National Laboratory study, and is currently estimated at 3 gallons of water  required for each gallon of ethanol produced. However, the primary  source of freshwater for most existing corn ethanol plants is from local  groundwater aquifers and some of these aquifers are not readily  replenished. For the conversion of cellulosic feedstocks, the amount of  water consumed is less defined and will depend on the process and on  technological advancements that improve the efficiency with which water  is used. Current estimates range from 1.9 to 5.9 gallons of water,  depending on the technology used. Some experts we spoke with said that  greater research is needed on how to manage the full water needs of  biorefineries and reduce these needs further. Similar to current and next  generation feedstock cultivation, additional research is also needed to  better understand the impact of biorefinery withdrawals on aquifers and to  consider potential resource strains when siting these facilities.
Our work to date also indicates that additional research is needed on the  storage and distribution of biofuels. Ethanol is highly corrosive and poses  a risk of damage to pipelines, and underground and above-ground storage  tanks, which could in turn lead to releases to the environment that may  contaminate groundwater, among other issues. These leaks can be the  result of biofuel blends being stored in incompatible tank systems—those  that have not been certified to handle fuel blends containing more than 10  percent ethanol. While EPA currently has some research under way,  additional study is needed into the compatibility of higher fuel blends,  such as those containing 15 percent ethanol, with the existing fueling  infrastructure. To overcome potential compatibility issues, future research  is needed on other conversion technologies that can be used to produce  renewable and advanced fuels that are capable of being used in the  existing infrastructure.
section_title: Key Efforts to Reduce Use of Freshwater at Power Plants May Not Be Fully Captured in Existing Federal Data
paragraphs: In our work to date, we have found (1) the use of advanced cooling  technologies can reduce freshwater use at thermoelectric power plants,  but federal data may not fully capture this industry change; (2) the use of  alternative water sources can also reduce freshwater use, but federal data  may not systematically capture this change; and (3) federal research under  way is focused on examining efforts to reduce the use of freshwater in  thermoelectric power plants.
Advanced cooling technologies offer the promise to reduce freshwater use  by thermoelectric power plants. Unlike traditional cooling technologies  that use water to cool the steam in power plants, advanced cooling  technologies carry out all or part of the cooling process using air.  According to power plant developers, they consider using these water- conserving technologies in new plants, particularly in areas with limited  available water supplies. While these technologies can significantly reduce  the amount of water used in a plant—and in some cases eliminate the use  of water for cooling—their use entails a number of challenges. For  example, plants using advanced cooling technologies may cost more to  build and operate; require more land; and, because these technologies can  consume a significant amount of energy themselves, witness lower net  electricity output—especially in hot, dry conditions. However, eliminating  or minimizing freshwater use by incorporating an advanced cooling  technology provides a number of potential benefits to plant developers,  including minimizing the costs associated with acquiring, transporting, and  treating water, as well as eliminating impacts on the environment  associated with water withdrawals, consumption, and discharge. In  addition, the use of these advanced cooling technologies may provide the  flexibility to build power plants in locations not near a source of water.
For these reasons, a number of power plant developers in the United  States and across the world have adopted advanced cooling technologies,  but according to EIA officials, the agency’s forms have not been designed  to collect information on the use of advanced cooling technologies.  Moreover, the instruments the agency uses to collect these data were  developed many years ago and have not been recently updated. EIA  officials have told us that while some plants may choose to report this  information, they may not do so consistently or in such a way that allows  comprehensive identification of the universe of plants using advanced  cooling technologies. Water experts and federal agencies we spoke to  during the course of our work identified value in the annual EIA data on  cooling technologies, but some explained that not having data on  advanced cooling technologies limits public understanding of their  prevalence and analysis of the extent to which their adoption results in a  significant reduction in freshwater use. According to EIA officials, the  agency is currently redesigning the instrument it uses to collect these data  and expects to begin using the revised instrument in 2011. In addition,  during the course of our work we noted that in 2002, EIA discontinued  reporting water-related data for nuclear power plants, including water use  and cooling technology. As we develop our final report, we will be looking  at various suggestions that we can make to DOE to improve its data  collection efforts.
Our work to date also indicates that the use of alternative water sources can  substantially reduce or eliminate the need to use freshwater for power plant  cooling at an individual plant. Alternative water sources that may be usable  for power plant cooling include treated effluent from sewage treatment  plants; groundwater that is unsuitable for drinking or irrigation because it is  high in salts or other impurities; industrial water, such as water generated  when extracting minerals like oil, gas, and coal; and others. Use of these  alternative water sources can ease the development process where  freshwater sources are in short supply and lower the costs associated with  obtaining and using freshwater when freshwater is expensive. Because of  these advantages, alternative water sources play an increasingly important  role in reducing power plant reliance on freshwater, but can pose  challenges, including requiring special treatment to avoid adverse effects on  cooling equipment, requiring additional efforts to comply with relevant  regulations, and limiting the potential locations of power plants to those  nearby an alternative water source. These challenges are similar to those  faced by power plants that use freshwater, but they may be exacerbated by  the lower quality of alternative water sources.
Power plant developers we spoke with told us they routinely consider use  of alternative water sources when developing their power plant proposals.  Moreover, a 2007 report by Argonne National Laboratory indicates that the  use of treated municipal wastewater at power plants has become more  common, with 38 percent of power plants after 2000 using reclaimed  water. EIA collects annual data from power plants on their water use and  water source. However, according to EIA officials, while some plants  report using an alternative water source, many may not be reporting such  information since EIA’s data collection form was not designed to collect  data on these freshwater alternatives. One expert we spoke with told us  that not having data on the use of alternative water sources at power  plants limits public understanding of these trends and the extent to which  these approaches are effective in reducing freshwater use. As we develop  our final report, we plan to also develop suggestions for DOE that can  improve this data gathering process.
Power plant developers may choose to reduce their use of freshwater for a  number of reasons, such as when freshwater is unavailable or costly to  obtain, to comply with regulatory requirements, or to address public  concern. However, a developer’s decision to deploy an advanced cooling  technology or an alternative water source depends on an evaluation of the  tradeoffs between the water savings and other benefits these alternatives  offer and the cost involved. For example, where water is unavailable or  prohibitively expensive, power plant developers may determine that  despite the challenges, advanced cooling technologies or alternative water  sources offer the best option for getting a potentially profitable plant built  in a specific area.
While private developers make key decisions on what types of power  plants to build and where to build them, and how to cool them based on  their views of the costs and benefits of various alternatives, government  research and development can be a tool to further the use of alternative  cooling technologies and alternative water supplies. In this regard, the  Department of Energy’s National Energy Technology Laboratory (NETL)  plays a central role in DOE’s research and development effort. In recent  years, NETL has funded research and development projects through its  Innovations for Existing Plants program aimed at minimizing the  challenges of deploying advanced cooling technologies and using  alternative water sources at existing plants, among other things. In 2008,  DOE awarded about $9 million to support research and development of  projects that, among other things, could improve the performance of  advanced cooling technologies, recover water used to reduce emissions of  air pollutants at coal plants for reuse, and facilitate the use of alternative  water sources such as polluted water for cooling. Such research  endeavors, if successful, could alter the trade-off analysis power plant  developers conduct in favor of nontraditional alternatives to cooling.
section_title: Concluding Observations
paragraphs: Ensuring sufficient supplies of energy and water will be essential to  meeting the demands of the 21st century. This task will be particularly  difficult, given the interdependency between energy production and water  supply and water quality and the strains that both these resources  currently face. DOE, together with other federal agencies, has a key role to  play in providing key information, helping to identify ways to improve the  productivity of both energy and water, partnering with industry to develop  technologies that can lower costs, and analyzing what progress has been  made along the way. While we recognize that DOE currently has a number  of ongoing research efforts to develop information and technologies that  will address various aspects of the energy-water nexus, our work indicates  that there are a number of areas to focus future research and development  efforts. Investments in these areas will provide information to help ensure  that we are balancing energy independence and security with effective  management of our freshwater resources.
Mr. Chairman that concludes my prepared statement, I would be happy to  respond to any questions that you or other Members of the Subcommittee  might have.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information on this testimony, please contact me at 202-512- 3841 or mittala@gao.gov. Key staff contributors to this testimony were Jon  Ludwigson, Assistant Director; Elizabeth Erdmann, Assistant Director;  Scott Clayton; Paige Gilbreath; Miriam Hill; Randy Jones; Micah McMillan;  Nicole Rishel; Swati Thomas; Lisa Vojta; and Rebecca Wilson. Contact  points for our Office of Congressional Relations and Public Affairs may be  found on the last page of this statement.
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