New Water Desalination Investments – Beyond Bushes Buying Paraguay

Water 20151030

Citigroup’s top economist Willem Buitler said that the water market will soon be hotter the oil market

“Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals.”

In its recent Water Investment Conference, Citigroup has identified top 10 trends in the water sector, as follows:

1. Desalination systems
2. Water reuse technologies
3. Produced water / water utilities
4. Membranes for filtration
5. Ultraviolet (UV) disinfection
6. Ballast-water treatment technologies
7. Forward osmosis used in desalination
8. Water-efficiency technologies and products
9. Point-of-use treatment systems
10. Chinese competitors in water

Specifically, a lucrative opportunity in water is in hydraulic fracturing (or fracking), as it generates massive demand for water and water services. Each oil well developed requires 3 to 5 million gallons of water, and 80% of this water cannot be reused because it’s three to 10 times saltier than seawater. Citigroup recommends water-rights owners sell water to fracking companies instead of to farmers because water for fracking can be sold for as much as $3,000 per acre-foot instead of only $50 per acre/foot to farmers.

The ballast-water treatment sector, currently at $1.35 billion annually, is estimated to reach $30 to $50 billion soon. The water-filtration market is expected to outgrow the water-equipment market: Dow estimates it to be a $5 billion market annually instead of only $1 billion now.

Citigroup is aggressively raising funds for its war chest to participate in the coming tidal wave of infrastructure privatization: in 2007 it established a new unit called Citi Infrastructure Investors through its Citi Alternative Investments unit. According to Reuters, Citigroup “assembled some of the biggest names in the infrastructure business at the same time it is building a $3 billion fund, including $500 million of its own capital. The fund, according to a person familiar with the situation, will have only a handful of outside investors and will be focused on assets in developed markets” (May 16, 2007). Citigroup initially sought only U.S.$3 billion for its first infrastructure fund but was seeking U.S.$5 billion in April 2008 (Bloomberg, April 7, 2008).

Citigroup partnered with HSBC Bank, Prudential, and other minor partners to acquire U.K.’s water utility Kelda (Yorkshire Water) in November 2007. This week, Citigroup signed a 99-year lease with the City of Chicago for Chicago’s Midway Airport (it partnered with John Hancock Life Insurance Company and a Canadian private airport operator). Insiders said that Citigroup is among those bidding for the state-owned company Letiste Praha which operates the Prague Airport in the Czech Republic (Bloomberg, February 7, 2008).

NFC 2015 and Beyond

NFC 2015

2015 was an inflection point for the usage of mobile phones for NFC-enabled in-store payment, as it will be the first year in which the multiple prerequisites for mainstream adoption – satisfying financial institutions, merchants, consumers, technology vendors and carriers – are sufficiently addressed.

By end-2015, five percent of the base of 600-650 million near-field communication (NFC) equipped phones will be used at least once a month to make contactless in-store payments at retail outlets. This compares with monthly usage by less than 0.5 percent of the 450-500 million NFC-phone owners as of mid-2014. Contactless mobile payment will not be mainstream by end-2015, but niche adoption will be a major progression from near nil in prior years.

The core advantage with any contactless smartphone transactions is the potential for greater security, when payments are made with phones featuring either built-in (via hardware or software) or SIM-based tokenization capability. When someone pays using an NFC-device, the tokenization facility creates a unique code (known as a token) which is sent from the device to the merchant’s NFC-enabled till. The credit card number is not transferred which means in the event of a breach, only card information used for traditional transactions would be exposed. The card information is either stored with the issuing networks (such as Visa or MasterCard), or is stored in the cloud (HCE), or in a secure element on the phone. The token is only good for a single transaction and unusable otherwise. A fraudster who intercepted the transaction would only get access to the single-use token but not the card details.

Using a fingerprint, an eye scan or a heart rate sensor as an additional form of authentication makes the payment more secure still. The combination of biometric authentication, an embedded secure element and tokenization may provide more robust security than card swipes or chip and PIN.

We expect the volume of NFC-smartphone transactions and the range of spend value to increase steadily over time as consumers become more familiar with the process, and more banks and merchants in more markets accept this form of transaction. However, contactless mobile payments will likely co-exist for some time with all other means of payment, from contactless credit cards to cash. It will be a long while before the majority of us can jettison our physical wallets.

Plasma Arc Turning Garbage into Energy

 

FROM THE HIGHWAY, one of the biggest landfills in the US doesn’t look at all like a dump. It’s more like a misplaced mesa. Only when you drive closer to the center of operations at the 700-acre Columbia Ridge Landfill in Arlington, Oregon, does the function of this place become clear. Some 35,000 tons of mostly household trash arrive here weekly by train from Seattle and by truck from Portland.

Dump trucks inch up the gravel road to the top of the heap, where they tip their cargo of dirty diapers, discarded furniture, lemon rinds, spent lightbulbs, Styrofoam peanuts, and all the rest onto a carefully flattened blanket of dirt. At night, more dump trucks spread another layer of dirt over the day’s deposits, preventing trash from escaping on the breeze.

But as of November, not all the trash arriving at Columbia Ridge has ended up buried. On the southwest side of the landfill, bus-sized containers of gas connect to ribbons of piping, which run into a building that looks like an airplane hangar with a loading dock. Here, dump trucks also offload refuse. This trash, however, is destined for a special kind of treatment—one that could redefine how we think about trash.

In an era when it’s getting more and more confusing to determine where to toss your paper coffee cup—compost? recycle? trash? arrrgh!—and when no one seems to have a viable solution to the problem of humanity’s ever-expanding rubbish pile, this plant represents a step toward radical simplification. It uses plasma gasification, a technology that turns trash into a fuel without producing emissions. In other words: a guilt-free solution to our waste problems.

Recycling is all well and good. But it hardly addresses the real problem we have with our household waste: We throw two-thirds of it in landfills while somehow managing to feel virtuous that we put last night’s empty wine bottle in the recycling bin. Surely we could do better, environmentally and economically.

There is, in fact, value in trash—if you can unlock it. That’s what this facility in northern Oregon is designed to do. Run by a startup called S4 Energy Solutions, it’s the first commercial plant in the US to use plasma gasification to convert municipal household garbage into gas products like hydrogen and carbon monoxide, which can in turn be burned as fuel or sold to industry for other applications. (Hydrogen, for example, is used to make ammonia and fertilizers.)

Here’s how it works: The household waste delivered into this hangar will get shredded, then travel via conveyer to the top of a large tank. From there it falls into a furnace that’s heated to 1,500 degrees Fahrenheit and mixes with oxygen and steam. The resulting chemical reaction vaporizes 75 to 85 percent of the waste, transforming it into a blend of gases known as syngas (so called because they can be used to create synthetic natural gas). The syngas is piped out of the system and segregated. The remaining substances, still chemically intact, descend into a second vessel that’s roughly the size of a Volkswagen Beetle.

This cauldron makes the one above sound lukewarm by comparison. Inside, two electrodes aimed toward the middle of the vessel create an electric arc that, at 18,000 degrees, is almost as hot as lightning. This intense, sustained energy becomes so hot that it transforms materials into their constituent atomic elements. The reactions take place at more than 2,700 degrees, which means this isn’t incineration—this is emission-free molecular deconstruction. (The small amount of waste material that survives falls to the bottom of the chamber, where it’s trapped in molten glass that later hardens into inert blocks.)

The seemingly sci-fi transformation occurs because the trash is blasted apart by plasma—the forgotten-stepsister state of matter. Plasma is like gas in that you can’t grip or pour it. But because extreme heat ionizes some atoms (adding or subtracting electrons), causing conductivity, it behaves in ways that are distinct from gas.

Dozens of firms are racing to find the right formula to use plasma to blast garbage into gas. Yet despite incremental improvements in the technology, plasma gasification has proved too energy- and capital-intensive for real-world use on everyday trash. If the value of the syngas produced doesn’t offset the amount of energy required to power the furnaces and melt the trash, what’s the point?

Now S4 cofounder Jeff Surma may have finally solved that problem. (S4, by the way, refers to the fourth state of matter: plasma.) The 52-year-old chemical engineer is convinced that he can transform garbage from something we toss into something we value—and get it to work on a vast scale. He has already made enough advances with the technology to attract millions of dollars in backing from Waste Management, the $12.5 billion trash hauling, recycling, and disposal behemoth, which owns the landfill here in Arlington.

Still, it’s a long shot. The US generates about 250 million tons of trash a year. Even with recycling and composting facilities tackling an estimated 85 million tons of refuse per year, it would take thousands of new plants much bigger than this one (and another S4 facility being constructed in McCarran, Nevada) to handle the nation’s municipal trash output. That’s a lot of plasma.