The Year in Water
Rising Costs, Powerful Civic Opposition, New Investment Pressure, and Stranded Assets
Rising Costs, Powerful Civic Opposition, New Investment Pressure, and Stranded Assets
This year Circle of Blue found that water stresses activated big confrontations over policy, resource supply, and economic stability around the nation and the world.
By Keith Schneider
Circle of Blue – December 21, 2016
The two biggest water stories of the year in the United States in 2016 — the Dakota Access pipeline protests and the lead contamination scandal in Flint — were quests for justice. Citizens in Flint and North Dakota felt disrespected by political decisions that threatened their health and their land yet did not take their concerns into account. Â
The Standing Rock Sioux Tribe drew a line on the North Dakota prairie to stop a big oil pipeline from crossing the Missouri River. Aided by the largest gathering of Native American tribes in history – a gathering that summoned a public resistance that not even the White House could ignore – work on the crossing stopped in December pending completion of a study to assess alternatives to the pipeline route.
The Standing Rock confrontation illustrated how risks to water supply and quality give rise to powerful civic campaigns against polluters. The Dakota Access pipeline blockade also introduced new online organizing tools to galvanize broad support.
Flint’s lead crisis, meanwhile, exposed government failure at every level. The city’s jaw-dropping spike in lead in drinking water and the authorities’ delayed response also revealed inadequacy in government policy. Flint refocused the public debate about how to address a relic of American infrastructure: the more than 7 million lead lines that deliver water to homes. The U.S. Environmental Protection Agency will weigh in with a lead rule revision that is due in summer 2017.
Several other significant developments attracted Circle of Blue’s attention in 2016: the cost of repairing U.S. water infrastructure, financing for big industrial projects, and the grave threat to activists who oppose mining and power plant developments.
The price of water is rising in the United States at rates that outpace inflation. The average price of water climbed 48 percent since 2010. The condition of water infrastructure is deteriorating, prompting engineers to project the cost of repairs at $US 1 trillion or more. A new American social movement has gained influence to deal with both challenges. The nation also contends with water scarcity and contamination that has put groundwater supplies in jeopardy.
In South Africa and elsewhere, we encountered the ultimate cost that environmental and human rights leaders were paying for opposing big projects supported by national governments.
Deep drought was the big international water story in 2016. Persistent dry weather, in many cases accompanied by intolerable heat, delivered body blows to India, Iran, the Mekong River Basin, southern Africa, and Venezuela. In each region drought ruined harvests, caused cuts in electricity supplies, increased joblessness, and contributed to social instability. The social and economic consequences of severe drought are multiplying, a trend that became much clearer in Venezuela’s year of economic turmoil, and in Europe where thousands of refugees from drought-ravaged regions have arrived on the shores of Greece, Italy, and France. To look more deeply at these developments, we launched a podcast series on water and conflict, called HotSpots H2O.
Another of the unambiguous developments around water stress was how public protest spread to the banking industry in the United States and overseas. Lending practices for mammoth water-consuming and water-polluting infrastructure projects in energy, mining, and agriculture were scrutinized as never before. In a growing number of cases big investments were withdrawn from damaging projects.
In North Dakota, Circle of Blue reported on an investigation by Food and Water Watch that identified the 17 banks that loaned most of the money that financed the $US 3.8 billion Dakota Access Pipeline. The disclosures prompted three lenders to divest their equity investments in Energy Transfer Partners, the pipeline’s primary owner. As the year ended the city of Seattle began evaluating a proposal to withdraw the $US 3 billion it holds in accounts with Wells Fargo, which provided a $125 million loan to build the pipeline.
Big development banks from Japan, South Korea, and China withdrew their investments from Bangladesh’s national program to build water-thirsty, coal-fired, power plants.
The growing pressure on the finance industry, coupled with increasingly dire ecological conditions and rising civic rebellion to big projects led to Circle of Blue’s last major area of new reporting: the billions of dollars lost from stranded assets all over the world. Global prices for coal, oil, and minerals tumbled to near-record lows in constant dollars. Coal-fired power plants are being cancelled across Asia. The largest coal companies in the United States are in bankruptcy.
In South Africa, the Medupi and Kusile coal-fired power plants are years overdue, tens of billions over budget, and may not have sufficient supplies of water to operate at full capacity if and when they are completed in the early 2020s. Social conflicts in Peru, principally focused on disruptions to water supplies, have resulted in the indefinite suspension of $US 21.5 billion worth of mining projects since 2010, according to the Peruvian Institute of Economics.
Circle of Blue reported from the national and global frontlines to deliver these and other big water stories to our readers. In 2017 expect more reporting on the fallout from Flint, the drive to reinvest in U.S. water systems, and the collision between megaprojects, bank financing, and civic protest.