Cadiz CEO Scott Slater on Sirius XM’s Wharton Business Radio
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Cadiz CEO Scott Slater on Sirius XM’s Wharton Business Radio

Cadiz CEO Scott Slater on Sirius XM’s Wharton Business Radio

 

On October 6, 2021, Cadiz Inc. CEO Scott Slater was interviewed on Sirius XM Channel 132’s Wharton Business Radio program by host Dan Loney. The interview focused on California’s ongoing water challenge and solutions being contemplated to innovate and address these issues. Scott was invited to discuss Cadiz’s water solutions and plans to repurpose oil and gas lines for water conveyance.   Listen here:

 

 

LONEY:
California has been in a drought for the better part of the last decade but it’s not only California dealing with the drought many other parts of the West as well as other parts of the country are having to figure out ways to deal with drought. So, what can be done to help ease the pain that some of these areas are feeling. Scott Slater is the CEO of Cadiz, a natural resources company which is working in California to do what they can to try and ease some of these issues.  Scott, welcome to the show, thanks for a few moments.

SLATER:
Thank you. Good to be here.

LONEY:
Let’s start with where the drought in California is right now in terms of severity.

SLATER:
The drought in California, is really representative I think of a new baseline or a new paradigm. This is the driest year in the last 100 in portions of the state. And in terms of its severity, there’s no water in Lake Folsom very little water in our massive Lake Oroville, and the Colorado River and Lake Mead are crashing so I don’t think we’ve experienced the breadth and depth of this kind of drought in a very, very long time.

LONEY:
So the work that you’re trying to do there in California, what is it based around?

SLATER:
Well, if you look at, Really, that the condition of the drought, as I alluded to, it’s really a form of a new baseline.  This generated by changes in our precipitation pattern. If you think about it, with California and, and, in particular the northern part of the state, would have a wet or average year seven out of nine, or ten years and we’d have two or three years of drought.  That has actually inverted itself, and so we’re now seeing sort of a flood or incredibly dry paradigm where you are always operating at extremes. And so we are seeing two out of a nine year period being super wet, floods, and the balance of the cycle being dry.  So while total precipitation may not have changed, how, where and when the precipitation falls to the Earth has changed, and as a consequence, we need to better be able to address those super wet periods, conserve and save what we can get, and then be able to normalize conditions through the combination of storage and conveyance.  Specifically, what we’re working on at Cadiz is trying to put a large groundwater aquifer, which has immense capacity to store water in wet years. into service and connect that storage unit to the marketplace through conveyance facilities.  We’ve been intrigued by something that’s getting a lot of press now, which is the concept of refurbishing repurposing, natural gas and petroleum pipelines to be able to bring that water from where it is to where it’s needed.

LONEY:
Yeah, when I read that I was intrigued by it, what would be really the process to be able to retrofit or repurpose as you say, all of these old pipelines to be able to use them for the purpose of transporting water.

SLATER:
We have to sort of understand the basket of opportunity.  There’s about 1.6 million miles of natural gas pipelines alone, aside from the petroleum lines, in the United States.  About 300,000 miles of that is characterized as transmission lines.  That number hasn’t really changed since 1990. So what that tells you is that those lines are getting a little long in the tooth and need some care. There is an overarching regulatory element which is: replace and update for safety reasons that are unique really to petroleum products running through the lines. And there is a regulatory overlay that’s associated with the economics of that, that useful life of a pipeline and then and then taking it out of service and replacing it. So of those 300,000 miles of natural gas pipeline, those are all steel and the process to put those into service is really a simple cleaning process that that doesn’t generally require any form of lining it’s just cleaning it, running water through the line, disposing of the water safely, and changing some of the miniscule elements of relief valves.  Also recognizing that you’re not going to be able to apply the same type of pressures for water that you can for natural gas and also recognizing that natural gas can be pushed in highly pressurized and more accelerated volumes.  The key thing is waters a lot heavier than natural gas and so while we’re not talking about these feasibly moving water from the Mississippi River to California you can see over a couple 100 miles were water on a steel pipe that’s been built to convey either natural gas or petroleum products is able to convey water.

LONEY:
It’s certainly a heavier component but obviously a less potentially destructive component as well. When you’re talking about having a natural gas leak or an explosion of some kind. So the element of bringing this forward I think is interesting when you talk about, as you said, the areas to which you can potentially bring this with all of these pipelines that are out there and not being used.  i know you’ve also talked about the issue of equitable distribution as a component here.

SLATER:
Yeah, I think we all recognize that there’s an important demand that’s not being met in all places and not equally. So, we have portions of the state, and really in the west, where you have fewer options and fewer supply sources that can be made available to specific communities.  Poor, impoverished, disadvantaged communities lack access to clean, reliable water.  With the emphasis on reliability, if you have a single source of supply you’re heavily dependent on localized climate conditions – whether there’s rain in a specific year, you don’t have a backup supply, you don’t have protection against seismic activity.  There are instances in which communities in California go weeks months without a main source of supply that that serves their community.  So redundancy is key where you have such wide variability in the climate and in access to water.  Having more sources of supply, having more conveyance is in an important feature to be able to match up supply with demand. And, as I said, with 300,000 miles of transmission lines and a bunch more of distribution lines, you don’t need to be moving water for 400,000 to 500,000 people to make a difference.  Pipelines that can distribute water for 1000s of people can be really important to rural America.

LONEY:
Scott, thanks very much for your time today, all the best with your work there.

SLATER:
Thank you very much, appreciate you having me.

LONEY:
Thank you Scott Slater, who is the CEO of Cadiz.

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