What I want to hear at the American Water Summit
Published November 9th, 2017
The US water market has become pretty perplexing this year. There is a lot going on, but in contradictory directions. On the one hand, the official statistics on market spend look extremely grim, but on the other hand, traded companies are reporting pretty buoyant results. We have seen a return to fashion of water pure-plays on the equipment side (with Evoqua’s IPO and Pentair’s decision to spin off its non-core assets), set against the absorption of large specialist engineering firms into much larger groups. In Washington there is still talk of using private finance to drive infrastructure investment, but this week, Congress has been debating a tax bill which makes it impossible for the private sector to compete on a level playing field with the public sector by restricting access to tax-exempt finance. On the industrial side, most sectors apart from oil and gas are reporting growth, but from a water perspective, that market is looking pretty strong. It makes life very difficult for anyone working on a budget for next year – and for me, because I am due to give a webinar to WaterData subscribers next Tuesday outlining what the market can expect. Our research staff have pulled together some pretty good material, but really I would prefer to be giving the presentation after the American Water Summit.
We finalised the line-up for the opening session this week, and these are the issues I am hoping to see addressed:
- Infrastructure finance remains the single biggest issue for the US water sector, and Washington policy is the single biggest determinant of the outcome. The man in the engine-room of policy-making is Alex Herrgott, who takes responsibility for infrastructure on the White House Council on Environmental Quality. I want to explore his vision for the future of water finance.
- The US engineering sector has been roiled by consolidation these past five years. Stantec’s Marshall Davert is one of those to come out on top: he is now responsible for the world’s largest water design-build business. I want to know whether all this corporate activity is driven by the dismal logic of buying backlog and hacking out overheads, or whether there is a coherent vision for a new approach to delivering water infrastructure that can only be made to work if engineering firms grow to a titanic scale.
- This year’s hurricane season has thrust stormwater management right to the top of the political agenda. The woman in the eye of it all is Yvonne Forrest from the City of Houston’s Department of Public Works and Engineering. I want to understand how the experience of Hurricane Harvey will change the outlook and strategy of the city, and what it means for the rest of the US.
- Water has now gone midstream in the oil and gas industry. Water pipelines are now as important as oil and gas pipelines in keeping the money flowing in the Permian Basin and other active shale plays. It is a change of paradigm which opens the way to centralised treatment and reuse. The man who is driving this revolution is William Zartler. His Solaris Energy Capital has emerged as the leading investor in water’s midstream. I want to understand how he sees the future of water management in the shale plays, and what it means for the rest of the water industry.
- The National Association of Clean Water Agencies is supporting this year’s American Water Summit. The Association represents the country’s largest – and most forward-thinking – wastewater utilities. Cathy Gerali, who runs the Denver Metro Wastewater Reclamation District, is the president of NACWA, and I would like to hear how partnerships with the private sector fit into the Association’s vision for supporting its members.
The person who I am relying on to get answers out of all these people is Debra Coy, who is chairing the opening session. She a partner with XPV Water Partners, the largest water-focused growth equity fund in the US, having previously been the most respected voice on Wall Street talking about water. It is up to her to uncover where the value lies in all of this.