Few companies have either energy or water strategies, and fewer still have integrated energy-water strategies -- "a glaring omission" -- according to a white paper issued Tuesday by a pair of independent advisers to Deloitte LLP.

"The interrelationship between water and energy goes around and around," Joseph A. Stanislaw and Will Sarni wrote in "No Water, No Energy; No Energy, No Water," which was released at the Deloitte Energy Conference in Washington, DC. "Increasing demands on water from the private and public sectors are impacting the world's ability to meet its energy needs. In parallel, the need for more and more water for agricultural, industrial and domestic uses requires more energy. A constraint in either resource limits the other, and this nexus of supply and demand poses substantial risks for virtually every government and every type of business."

The world isn't running out of energy resources, "just the most easily accessible ones." At the same time, "water scarcity is becoming a significant risk." The energy industry is particularly dependent on a reliable water supply -- to turn hydropower turbines, cool thermal power generation facilities, clean and process coal, and in hydraulic fracturing operations, for example.

Meeting future energy and water needs "is expected to require a radical rethinking of how to use resources," Stanislaw and Sarni said.

On the energy side of the equation the solution involves reducing water consumption in traditional energy production and a move toward energy sources that are inherently less water-intensive, they said.

"New methods of 'dry cooling,' which uses air-cooled condensers instead of conventional cooling towers, and water re-use and recycle schemes are giving traditional power producers new opportunities to reduce the quantity of water they need to withdraw, as well as improve its quality prior to discharge or evaporation."

Establishing a "water stewardship strategy" is vital for organizations that want to reduce risks of water shortfalls, Stanislaw and Sarni said.

"Such a strategy goes beyond simply managing water as a resource, to safeguarding it for all impacted stakeholders over the long term." The top three actions of such a stewardship would include tracking water use against energy use, developing an understanding of water footprint and water risk within a watershed, and engaging stakeholders within the watershed to develop a water and energy conservation and management program.

Stanislaw and Sarni also recommended viewing energy development and power generation within the context of local watersheds ("watershed-scale thinking"), and considering renewables for watersheds experiencing water scarcity.

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