Water Recycling and Reuse with General Electric’s Jon Freedman

April 10, 2015

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JOHN SHEGERIAN: Welcome back to Green is Good, and we’re so honored to have with us today Jon Freedman. He’s the Global Government Affairs Leader at General Electric. Welcome to Green is Good, Jon Freedman. JON FREEDMAN: Thank you, John. It’s great to be here. JOHN SHEGERIAN: This is General Electric’s first turn on Green is Good, and we’re so glad you’re going to be doing that turn for General Electric today. Before we talk about all the great and important work you’re doing at GE, I want you to share the Jon Freedman story first with our listeners. JON FREEDMAN: John, my story starts, in many ways, when I went to the Wharton School 27 years ago, and I had absolutely no idea what I wanted to do with my life. I just hoped it would expose me to some opportunities, open some doors and I’d figure things out. As it turns out, my first job was in real estate development. I got to work in Honolulu and then in Northern California, just outside San Francisco. Then I took a job with a real estate company owned by a Paris-based multi-utility called SUEZ Environnement. After about two years at that company, I was selected for their senior leadership program, which grooms high-potential employees for potentially CEO track jobs. As part of that, they wanted me to see the core business, which in SUEZ’s case, was a global water company. That’s how, about 20+ years ago, I ended up getting in the water industry, a completely random course of events. JOHN SHEGERIAN: Got it. Talk a little bit about Global Government Affairs Leader at GE. When did you take on that position? JON FREEDMAN: Right. I joined GE 14 years ago, and I was the Mergers and Acquisitions leader responsible for helping GE create a global water business. It had a big energy business, John. In fact, GE’s installed base of energy technology generates about 25 percent of the world’s electricity. I think you probably, you know that electricity generation is incredible water-intensive, so a lot of our customers, when we install gas turbines or other power generation equipment, would ask if we could also deal with their water treatment needs. GE decided that it would add a water treatment business, and now we have 50,000 water customers in 130 countries around the world. GE generally does things in a pretty significant way, and it did that with water as well as in energy. After leading the acquisition of some companies to help build the water business, my next role was to work in GE corporate headquarters, where I was really fortunate to be the Project Manager responsible for leading the creation of GE’s Global Environmental Initiative, which is now called Ecoimagination. After that role, I got to come to Washington, D.C., where I am right now, to lead Government Affairs for the newly created water business. JOHN SHEGERIAN: Wait a second, Jon. You’re the creator or co-creator of Ecoimagination? JON FREEDMAN: I had the honor of leading a team of many people who created it, including some unbelievable GE leaders and some consultants like Brad Gentry, who’s at Yale University and is quite a good friend of GE’s. JOHN SHEGERIAN: You’re a humble guy, but that’s amazing. Ecoimagination is just so wonderful and all the great work you’re doing. I want to get to that because I know the key topic we’re going to talk about today is water. It’s such a critical topic with regards to sustainability and making a more sustainable planet that we all get to enjoy. For our listeners out there that want to follow along, I’m on your great website right now. It’s www.gewater.com. I have a home and a business that’s based out of Fresno, California. I don’t know, Jon, if there’s a place in America that’s more water challenged right now than Fresno, California. It’s not to diminish anybody else’s needs, but man, it’s the ag belt of the United States, maybe the ag belt of the world right now, and water scarcity is massive there. Can you share a little bit about what we’re seeing in terms of the macro issues on a global basis, and also the micro issues on a California basis, with regards to water scarcity and your view of it all? JON FREEDMAN: Absolutely, John. Let me just say first that I have worked very closely with Fresno State University over the years, Dave Zoldoske in particular, who runs their Water Institute. The Water Institute is the center for the State University system in California, and I’m very familiar with the issues in the Central Valley of California. It’s unbelievable challenges. I think what we’re seeing in California and elsewhere is really a function of this. The global consulting firm, McKinsey & Company, released a study about five years ago, and in this study, they said the world had reached a tipping point, where demand for fresh water exceeds supply. They have some projections, and it shows that gap growing about 40 percent over the next 25 years, unless measures are taken. What I think we’re seeing is that imbalance play out in headlines all over the world. About three weeks ago, there was a front-page story in the New York Times. It said that taps are running dry in Sao Paulo. That’s in Brazil, a country with 13 percent of the world’s fresh water resources. In China, the Ministry of Land and Resources recently released a study, and it said in 60 percent of the cities it’s monitoring, the groundwater is too polluted to drink. In California, you’re now in the fourth year of the worst drought in the last 500 in the state. I think this is a function of there’s a fixed amount of water on Earth, but the population has been growing, we’ve had increased industrialization, and climate change is redistributing that fixed amount of water. We are experiencing scarcity in many, many places. JOHN SHEGERIAN: Is there any simple answer? What can be done, Jon? You do things on a scale basis. You have a fascinating leadership role at GE. GE does things on a scale basis, and you have visibility that’s far beyond just the United States, which is so wonderful to have you on the show. What can we do? Because this is truly, besides climate change, one of the most pressing issues of today. JON FREEDMAN: There are three things you can do to address scarcity. The first is conserve water. If you think about California, I don’t know the exact number, John, but there are probably 20 or 30 blue ribbon panels and commissions right now, and they’re all looking at different ways to use water more efficiently. That’s important and it’s the first step, but it only gets you so far. Then, you can desalinate water, particularly if you have coastline or brackish groundwater reserves. In California, they’re now building a 50-million-gallon-a-day desalination plant in Carlsbad, in Southern California, just north of San Diego. We will see more desalination, but the problem with desalination is it’s expensive and energy-intensive. The third thing you can do, and really what makes the most sense, is reuse wastewater. In other words, you treat wastewater in a way that you strip out the H2O molecule so you can use it for agriculture, for industrial cooling water and, yes, even for drinking water. JOHN SHEGERIAN: Does that last thing go back to what we just saw recently in the media with Bill Gates going around with his poop water? Is that part of the solution? JON FREEDMAN: I haven’t looked deeply into the Bill Gates issue, but I did see the article. I think what we’re seeing is that at the end of the day, what you want is the H2O molecule, and you can extract it from any source of water. If you have the technology, you’re good to go. JOHN SHEGERIAN: Does the technology exist to make wastewater safe enough so it can be reused? JON FREEDMAN: Absolutely. You can take advanced chemistries and membranes, and you can recover 70-85 percent of wastewater. You can take evaporation and crystallization technologies and recover 99-plus percent. The technology exists, absolutely. JOHN SHEGERIAN: Are we seeing a trend towards recycling and reuse around the world, or is that part of what you’re doing with GE, pushing that trend and educating people towards that kind of opportunity? JON FREEDMAN: Here’s the thing. We live in a world where there are 1.2 billion people, according to CSI in Washington, people living in 43 countries in areas of chronic scarcity. But if you look globally, the world is reusing 3-4 percent of its wastewater today, just scratching the surface. Here in the U.S., the number is more like 6-8 percent, and in California, John, in the fourth year of this drought, they’re probably only reusing 8-10 percemt. We’re only scratching the surface of what can be done. JOHN SHEGERIAN: But when you have really smart governors, like Governor Brown, and I’m not here to get political or anything, but you have a guy that was the youngest governor in California history, and now the oldest governor, and he’s been doing a great job on so many issues. How come he just doesn’t engage with a great company like yours and just say, “We’re going to solve this problem right here, right now, and we’re going to bring the best water recycling technology to California, and we’re going to get that number from 8-10 percent to 50 percent or 60 percent.” Tell me what the mechanics are. What’s the gap in the void that I’m missing in between? Where’s the disconnect? JON FREEDMAN: First of all, California would be considered, even though it’s only at 8-10 percent reuse, one of the world’s leaders in reuse because, again, we’re all just scratching the surface. California has been doing a very good job, but they could do a lot more. Here’s what I would say. There are certain barriers to reuse. Those barriers are present in California and they’re present pretty much everywhere. In short, there’s a lack of clear standards as to what level of treatment is required, what level of reuse of the water. So if you want to use it for agriculture, how high do you have to treat it? If you look here in the U.S., there are no federal standards saying that. It’s left to each of the 50 states. Out of 50 states, 25 have regulations that are all over the board, 16 have non-binding guidelines and nine have nothing at all. It’s very hard for communities, for industry, to know what type of treatment they can use. The other thing, and I think the bigger issue, is economics. It is simply cheaper to take water from the ground or a river or even a potable municipal system, where by the way, water is almost universally underpriced, than it is to buy and implement reuse technologies. We have these barriers, and we need to work to overcome them. California is probably farther ahead on that path than many others. JOHN SHEGERIAN: From also curb appeal, are people freaked out when they’re being asked to use recycled water, or is that an issue that through education and other forms you’re able to overcome? JON FREEDMAN: I think it breaks down like this. I think you and I and most other people would be freaked out drinking treated wastewater, but as it turns out, it’s perfectly safe to do. What’s happened is there are a number of governments who have taken steps, like you said, in education and outreach, to make people comfortable with this concept. The world leader in that is almost certainly Singapore, which today treats 30 percent of its wastewater for reuse. They actually take treated wastewater and a quarter of the water in their drinking water reservoirs is now made up of treated wastewater. The government of Singapore was smart. They realized people would be unsettled by that, even though it’s perfectly safe. So they embarked on an education and outreach campaign, and they invented something called New Water, a brand of bottled drinking water, and the government leaders actually took this treated wastewater in these bottles and drank it in public settings. Singapore is really leading the way for the rest of the world. JOHN SHEGERIAN: What did you say their recycling rate is of recycled water? That’s fascinating. JON FREEDMAN: Thirty percent of all the wastewater in Singapore is treated and recycled. In part, it’s just driven by a very farsighted government. Singapore punches above its weight not only in commerce, but policy. JOHN SHEGERIAN: Do you, then, take that paradigm? Because you travel and you get to touch so many countries, cities, states. Do you actually take that New Water with you and go give seminars or examples like that to other world leaders or politicians and say, “Hey, Singapore did this. You can do this too?” JON FREEDMAN: Even better, I take leaders from Singapore, the head of policy for their public utility board, on trips. For example, the Director of Policy came with me to Riyadh, Saudi Arabia, three years ago, and shared Singapore’s policy experience with, obviously, a very water scarce country, and gave the Saudis ideas on how they could use water. By the way, I just got back from Saudi Arabia three weeks ago, where GE released a white paper highlighting many of the positive things the Saudis are doing, but offering additional examples from around the world as well. It was extremely well received. The Saudis should be commended, by the way, for all they’re doing. The other thing that GE did, John, is we developed a menu of policy options that governments can use to address water reuse. We essentially said there are four things they can do. One is the education and outreach we were talking about. Second is remove barriers, in other words, if there are unclear guidelines, develop clear guidelines. Third is provide incentives, and that’s how you overcome the economic challenge. In the wind world or the solar world, there are tax credits. You can do the same thing for water reuse. Finally, you can simply mandate reuse and say, “Hey, we don’t have enough water to go around. You have to reuse it.” We’ve seen examples of that all over the world that we do share with other governments. JOHN SHEGERIAN: You mentioned a little while ago that Carlsbad desalination plant going in right now. Is that your technology or a competitor’s technology? Is desalination part of the future of our water scarcity issue? JON FREEDMAN: It’s a competitor’s technology going in in Carlsbad, but there doesn’t tend to be much differentiation among the various technologies these days. I would say that GE is much more focused on water reuse. The reason is that on average, it’s 50 percent the cost of desalination and 50 percent the energy consumption. It’s really a better model for society. If there’s no choice, it’s great to have desalination. It ensures survival, but given an option, it would be somewhere after conservation and water reuse. JOHN SHEGERIAN: So really, when you’re doing a takeoff and you’re helping governmental entities or others make decisions, the ROI on desalination is much lower than the ROI on recycling. JON FREEDMAN: That’s right. Recycling is definitely the way to go. A lot of times, it’s just a question of lining up policies. By the way, we’re seeing a number of governments around the world take the lead in this area. Israel, for example, is reusing about 85-90 percent of its wastewater today. You can say necessity is the mother of all invention. They’re in a very arid place, but those policies can be adopted by other countries as well. JOHN SHEGERIAN: That’s awesome. We have about four minutes left. We’ve talked about a lot of different things. Talk about companies. We have a lot of listeners, company leaders around the world that listen to this show. What can companies do to be part of the solution here and recycle and reuse more water? JON FREEDMAN: John, when I think about what can drive more reuse, it can be outright regulation and mandates, or it can be incentives, or the other thing I’m seeing is corporate sustainability programs. The one I’ll talk about now is GE’s Ecoimagination program, which we talked about at the outset of the show. In 2008, we set a goal of using 25 percent less water between 2008 and 2015. What do we have today? Three months into 2015, and we’ve already reduced our global water consumption by 45 percent. Never would have happened if we hadn’t created a corporate sustainability program and set a goal. I think there are a lot of other companies around the world that are doing exactly the same thing. I think that’s a very positive development. The other thing I’m seeing is that companies are banding together with NGOs, with think tanks, with universities like Fresno State, to do things collectively that are better for society. Again, my examples are GE-focused, but that’s where I work. GE and Goldman Sachs got together three years ago, and they co-founded, along with the World Resources Institute, something called Aqueduct. Aqueduct is an online water risk atlas that divides the world into 15,000 sub-water catchment basins. That’s a pretty good deal of granularity. As I said, it’s online, but it’s an open resource available for everyone. Governments can use it. Businesses can use it. It will shed light on scarcity so you can take action to use water more efficiently. JOHN SHEGERIAN: Jon, talk about constructive collaboration and partnerships. I know we’re about to end the show, but I also want to bring up you are an important member of Wharton’s IGEL board, and I met you because of Joanne Spigonardo and all the great work that’s going on there. Talk a little bit about what that means to you and GE. JON FREEDMAN: It’s such an honor for me to affiliate with Wharton, John, especially after all these years. I teach a class at Penn called The Future of Water. Joanne Spigonardo is an outstanding leader of the initiative for Global Environmental Leadership. In fact, I’m going to be meeting with a Wharton professor Thursday morning to talk about leadership and change. JOHN SHEGERIAN: Jon, I’m so honored that you came on today. I’m going to have you come back to Green is Good to continue this discussion. Again, if you want to learn more about all the great work that Jon is doing at General Electric, please go to www.gewater.com. Thank you, Jon Freedman, for being a sustainability superstar. You are truly living proof that green is good.

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