Site Selection Strategies for Water-Intensive Industrial Users

Water is a finite resource that can severely impact site selection for those exorbitant users. Therefore, raw water sources such as rivers, lakes, streams, and oceans drive certain types of industrial success. Corporations planning water-intensive site selection projects must navigate a daunting path of regulation, public perception, and technical considerations. Site Selection Group (SSG), a full-service location advisory, economic incentives, and real estate services firm, provides unparalleled location advisory services to help navigate these challenges.

Industries competing for water resources

Raw water is crucial for many industries with substantial water needs. Power generation depends on rivers and lakes to cool thermoelectric plants, claiming nearly 48% of total U.S. water withdrawals, according to the U.S. Geological Survey (USGS). Chemical manufacturing draws on surface water or groundwater for processing and cooling. Steel production relies on river withdrawals for intensive cooling systems. Even data centers, frequently absent from water debates, gulp significant volumes to keep servers at optimal temperatures.

The U.S. Department of Energy (DOE) notes that cooling consumes up to 40% of a data center’s electric demand. Liquid cooling slashes electricity use by up to 27%, according to The American Society of Mechanical Engineers, reducing demand for scarce electric capacities. Data centers also burden municipal water systems, draining millions of gallons daily. Increasingly, data centers are turning to raw water to ease that burden and go green. European data centers, such as Google’s Hamina facility in Finland (seawater), Equinix AM3 in the Netherlands (groundwater), and Digital Realty’s MRS2 in France (river water), have embraced these methods for some time. North American operators are now following suit.

Other sectors also need raw water. Aquaculture, most notably Recirculating Aquaculture Systems (RAS), which raises aquatic animals indoors, sources water from lakes, rivers and oceans for sustainable fish farming. Industrial agriculture channels raw water into large-scale irrigation. Each industry carries distinct water demands, yet all hinge on raw water. These resources abound but face tightening regulations.

Navigating the permitting maze

Securing raw water for industrial use requires navigating a complex regulatory landscape. Federal laws, such as the Clean Water Act, and state-specific rules, enforced by agencies like the U.S. Environmental Protection Agency (EPA), dictate compliance. Many states have delegated authority from the EPA, which streamlines the process while others not only do not manage federal programs but also add additional regulations requiring public input and additional studies such as Environmental Impact Assessments (EIAs) before issuing permits. Still, others mandate concurrence from multiple agencies, adding layers of complexity. The time required for permit approval varies significantly. For example, in California, EIAs are a prerequisite for securing a water withdrawal permit, requiring multiple studies and stakeholder input, which significantly extends the approval process. 

Some states process permits in a matter of months and have few requirements, whereas others can take years due to extensive regulatory reviews and stakeholder engagement. In California, securing a water withdrawal permit can take several years due to strict environmental regulations, extensive public comment periods, and multiple agency approvals. In contrast, Texas offers a more streamlined process, allowing some withdrawals with nearly no regulatory hurdles. 

Regulatory challenges often lead to public opposition. In Michigan, for instance, Nestlé received 80,945 public comments against its groundwater withdrawal permit, ultimately leading to project cancellation. Public concerns about overuse, contamination risks, and long-term sustainability frequently arise during EIAs, further complicating permitting. These regulatory complexities and community resistance create risks that derail projects. The following section identifies three keys to minimizing these risks.

Keys to site selection success: Strategy, planning, and relationships

Success in raw water use rests on three foundations: early engagement with regulators, proactive environmental planning, and community involvement.

Early Engagement with Regulators

Forging ties with regulatory agencies sets the stage for success. This can help clarify expectations, boost communication, build trust, and streamline the permitting process. This is extremely important in states with multiple agencies and myriad requirements like California. 

Proactive Environmental Planning

Proactive planning paves the way for smooth permitting and lower risks. A robust plan signals to regulators that the company has considered water conservation, ecosystem impacts, and community concerns. Laying out a clear strategy early sidesteps surprises by tackling regulatory and public concerns head-on. Statutory review periods will remain, but smart planning nips delays in the bud by resolving issues early and avoiding rework.

Community Involvement

Transparent stakeholder engagement builds trust and softens opposition. The U.S. Water Alliance stresses early outreach: “By opening lines of communication with the community early on, we can seek input and provide updates throughout the process, ensuring that the final product is one that promotes well-being for all.” Projects that involve locals from day one dodge resistance and forge lasting partnerships, bolstering project viability. Firms prioritizing candid talks and responsiveness to local worries gain an edge, cementing credibility and easing execution.

Comparing regional water availability and permitting challenges

Raw water availability differs across regions, reaching beyond coasts to rivers and vast aquifers. In the U.S., the Pacific Northwest and the Midwest offer many rivers and lakes. The Mississippi River Basin and Ogallala Aquifer zones also offer robust water supplies. Site selection hinges on weighing water access, regulatory intricacy, and infrastructure fit. One area may offer great access to water with high regulations or vice versa. The trick is to find a good balance. Some examples follow.

Consider surface water

Washington State pulls three-quarters of its freshwater from surface sources, per the Washington State Department of Ecology. Steady, ample supply is attractive to the industry. However, factors such as water rights management, environmental considerations, including protections for migrating salmon, and environmental activism introduce potential permitting complexities that must be carefully navigated. 

By comparison, Wisconsin offers significant raw water opportunities through surface water withdrawal or wells (multiple sources). The state benefits from access to the Great Lakes and the Mississippi River as well as numerous smaller lakes and streams. Wisconsin manages withdrawals with a clear and streamlined framework, balancing sustainability and industrial needs. Its efficient permitting outpaces states with heavier requirements, making it a draw for high-capacity users.

Groundwater sources can be advantageous

To this point, the focus has been on surface water withdrawal; however, many users prefer to source their water from underground aquifers via wells. Groundwater extracted via wells offers several advantages over surface water withdrawal, including greater reliability during drought conditions, reduced exposure to surface contaminants, and often lower treatment costs. Wells tap into deep aquifers that can provide a consistent water supply, making them an attractive option for industries that require long-term water security.

Permitting wells for industrial use varies significantly between states. Arkansas keeps it simple for industrial groundwater wells. The Arkansas Natural Resources Commission (ANRC) tracks usage with a registry and encourages conservation, but most uses do not need permits. This makes well development and operation a breeze for industries needing water fast. Minnesota, on the other hand, is stricter. The Minnesota Department of Natural Resources (DNR) demands detailed permit applications and environmental reviews for uses requiring just 10,000 gallons per day to protect aquifers and ecosystems. These contrasts matter for industrial planning. Arkansas offers easy access while Minnesota prioritizes environmental concerns. 

Conclusion

Raw water is more than a resource. It provides a competitive advantage for industrial growth. Corporations that understand their requirements, where to best find quality and abundant raw water, and how to navigate regulatory processes and potential community opposition, can fully leverage this resource without delays or added costs. Industrial projects with high-capacity needs require strategic raw water utilization and expert navigation. Site Selection Group is well-versed in these needs and helps many companies each year find optimal sites by balancing water access, regulatory compliance, and sustainability.