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California’s Water Woes not high on the list for tech startups

RDC: Welcome back to The Costa Report. I’m Rebecca Costa, and Luis Alvarez, the CEO the Alvarez Technology Group has joined us again. Welcome to the program Luis!

LA: Thank you Rebecca

RDC: So I understand you have some new light to shed on our guest in the first hour, Bill Richardson?

LA: That’s right, Rebecca. Actually, last week, my wife Ronni and I stayed home one night and decided to watch one of my favorite movies of all time, Chinatown, starring Jack Nicholson and Faye Dunaway. We were inspired to watch the movie because of the talk recently about the severity of California’s drought. If you remember the movie, it chronicled the so-called “Water Wars” of the early 20th Century that secured Los Angeles the water it needed to continue growing – which reminds me that California’s water problems are often much more political than practical. The drought the state is presently experiencing is only the latest in a long line of drought periods.

RDC: Yes, we have certainly faced this problem before.

LA: Whenever I talk about the water problem, I’m shocked by the fact that many people I know don’t seem too worried about the threat of the California drought because they are putting their faith in our state’s history of innovation and technology development to come up with some hi-tech solution. The problem with this thinking is that technology can’t create more water from nothing – nor is there much interest by tech companies to even get involved.

RDC: Though I will say I have read about innovators who have designed water systems which grab and condense water out of the air and such – but that said – it is in very small amounts and at survival levels. . but back to your point Luis about the movie ChinaTown – we seem to have short memories don’t we?

LA: You are right about short memories! In fact, the last time California along with rest of the western U.S. suffered a severe drought was in the middle of the last decade, right before the 2008 elections when your guest today, Governor Bill Richardson was running for president. Did you know that Richardson actually campaigned on a promise that he would find a way to transfer water from the North-eastern part of the country to the Southwest to help those states suffering from drought at the time. Needless to say, Richardson did not go on to becomes President, but his was just one of the many extreme ideas that water shortages seem to bring out of the woodwork. Imagine the billions of dollars it would cost and the technology challenges of building a series of cross-country pipelines to shuttle water all the way from the East Coast. Plus, I’m not sure if the states in that area would be too keen to give up their water.

RDC: Not to mention the environmental studies required to figure out where to put that pipeline and the impact it would have the wildlife and ecosystems. . .it would takes years and years to assess. . let alone to get approvals for.

LA: Good point. One other thing, at the present moment, California seems to be the epicenter of the conversation about water, but the fact is that the entire Pacific Northwest is in crisis mode. Washington State, which we always picture as having constant rain, has received 70% less snow than usual this winter and Oregon is even in worse shape, with less than a quarter of the snow they usually experience. The reality is that climate change is real, and it’s impacting the water supply not just for California but the entire planet.

RDC: Yes, it is more widespread than the media has reported but that also includes droughts and massive flooding which are occurring outside the United States too.

LA: Finding fresh water for the world’s growing population is going to be a big problem over the next few decades –and the fact that technology companies aren’t all that interested in tackling the problem at this point is not a good sign. And if you ask me why I would have to say that it’s largely because there’s not a lot of money to made. Water is still cheap. And even where it’s scarce, it is cheap.

RDC: So are there ANY technology companies that are trying to get on top of the issue?

LA: Those few tech companies that are working on water issues tend to be focusing on the two big areas: new sources of water, which largely revolves around desalination – which is a very expensive option right now. And at the other end of the spectrum, you have tools and technology to make water use more efficient and effective. Interestingly enough, most of the companies on the cutting edge of water technology are foreign tech startups located in the Middle East, where water problems have been around for a hundred years. For example, desalination has been the primary source of water for Israel, Saudi Arabia and many others so they’ve honed that technology and are exporting it around the world. There’s one company that proposes converting large oil tankers to mobile desal platforms that could be parked in the Pacific Ocean off shore of the West Coast and generate large quantities of fresh water on demand without hurting the fragile coastal habitats.

RDC: It’s hard to imagine a day when water may be brought to citizens by tankers or portable floating desal plants. .

LA: I agree. . it is hard to imagine. And I also wanted to mention that there is an Israeli company called TaKaDu which provides a cloud-based software service that enables water utility companies to monitor their water network to detect leaks and bursts in pipes, inefficiencies or problems with other equipment, and operational issues — all in real-time. They are already working with many water utilities in Australia, which has suffered through its own droughts off and on since 1995.

RDC: Well you know what they say about necessity being the mother of invention. .

LA: I think the water shortages facing the world is slowly starting to attract the attention of tech companies in the US, especially in Silicon Valley since the drought in California has brought the problem home to many of them. We’re seeing the amount of venture capital investment in water-related technology start-ups starting to tick up, particular those that are working to help innovate in the agriculture sector, because agriculture is responsible for the vast majority of water consumption in the state. We’ll have to wait and see if it helps in the long term but in the short run, the bottom line is that tech isn’t going to be much help with the current drought.

RDC: Well, I’m afraid that is our technology segment today – we are all out of time. But thank you for joining the show again. . .

LA: Thank you Rebecca. This is Luis Alvarez from the Alvarez Technology Group reminding you that when it comes to technology, forewarned, is forearmed!

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