The Water Reuse Revolution with GE’s Jon Freedman

August 10, 2015

 
John Shegerian: Welcome to another edition of Green Is Good. This is the IGEL Wharton GE water innovation technology edition of Green Is Good here in beautiful downtown San Francisco, and we’re here with my friend who made this event possible, Jon Freedman. Jon, welcome to Green Is Good, again. Jon Freedman: Thank you, John. It’s great to be here today, again. John Shegerian: Well, you were the one when you kindly and graciously came on Green Is Good some months back and invited me up here today, and we’ve been having just such an interesting time with all the thought leaders that you’ve brought together to this great conference that you’re putting on and GE is hosting. First of all, before we get talking about what we’re doing here today, talk a little bit about Jon Freedman, because we had got today viewers and listeners around the world that missed the first time we did this and I want them to hear a little bit about your background in both innovation and sustainability and the creation – little secret here – of Ecomagination at GE. Jon Freedman: Well, I’ll start with our common connection, the Wharton School. John Shegerian: Thank you. Jon Freedman: And 25 years ago – or whenever it was – when I was a lawyer and not particularly thrilled with that career I thought, “Hey. I hear there’s this school,” and it was kind of like a witness protection program. In other words, you could go and kind of change your identity and that was kind of how I looked at it. I had no idea what I wanted to do, but I thought – like all the other people at Wharton – I’d probably go into investment banking or something like that. John Shegerian: Right. Jon Freedman: I ended up going to a real estate developer, John, and I became Vice President of General Counsel, but it was owned by a French water company called Suez Environment. So I ended up in the water industry. Fast forwarding, when I joined GE, one of the first things I did was I got to be the project leader for the creation of our global environmental sustainability initiative called Ecomagination. John Shegerian: Wow. And so you’re a recovering lawyer. Jon Freedman: Yes. John Shegerian: And you’re a proud Wharton grad. Jon Freedman: MBA in Finance. John Shegerian: MBA in Finance. I mean, my gosh. And now you’re a leader, one of the great leaders of GE Water. And for our listeners out there that want to learn more about GE Water, it’s www.GEwater.com to go learn about what you and your colleagues are creating there and doing in terms of water and technology and innovation to make the world a better place. Jon Freedman: Exactly. And I actually got to put my Wharton degree to work, because when I joined GE 14 years ago, I was initially the mergers and acquisitions leader responsible for building a water business because GE didn’t have a water business at the time. John Shegerian: Wow. And you built it, and now there are approximately 1,000 installations or so around the world? Jon Freedman: First of all, we’re an advanced wastewater treatment technology company and we have 50,000 customers in 130 countries. John Shegerian: Wow. And you’re in charge. I know your office is approximately four blocks from the White House. Jon Freedman: Three blocks. John Shegerian: Three blocks from the White House and you’re in charge of government affairs? Jon Freedman: Yeah. So I’m the Global Government Affairs Leader but also now the Global Partnerships Leader for the business. John Shegerian: Wow. Jon Freedman: So I work with governments around the world but also our kind of largest customers. John Shegerian: So let’s talk about today. You put together this very important conference. We’re here in Northern California in San Francisco very close to Silicon Valley – maybe the ground zero for innovation in the world, potentially, if you want to look at it that way – in California, where the drought is one of the highest nails in the world in terms of water shortages, and we’re in the middle of 2015. Where are we right now in this evolutionary compendium of water, water technology and breakthrough? And with regards to the visibility that you have, to everything that’s out there including the amazing technology that you have at your fingertips at GE? Jon Freedman: Here’s where I think we are: Five years ago McKinsey and Company released a report and they said, “Hey, the world has reached a tipping point where demand for water now exceeds supply,” and I think we’re seeing that play out. Not just here in California, which is in now the fourth year of its worst drought in the past 500, but in places like Brazil, which has 13 percent of the world’s freshwater resources. In Sao Paulo, the taps are running dry. In China. In obvious places like the Middle East. But it’s kind of a global phenomenon, so we are seeing increasing water scarcity. There was a fellow here today from the World Resources Institute who talked about that. So that’s the backdrop, increasing water scarcity because of an imbalance between demand and supply. So that really brings up the question: “What do we do about it?” – and I think there’s a lot we can do about it. I think we can solve the challenge. The first thing is we need to conserve water, and that is happening here in California. Governor Brown recently announced a 25 percent conservation goal, right? You had to reduce consumption by 25 percent. The second thing is desalination. It’s a great option to have particularly if you have coastline like California does. But what’s the problem with desalination? It’s expensive and extremely energy intensive. So it’s not great if you’re living in a carbon-constrained world, which we are. Then the third thing you can do is take wastewater, instead of discharging it into oceans and rivers, dirty treat it further so that it can be reused for things like agriculture, industry and even drinking water. And by the way, it uses about half the energy of desalination and it costs about half as much on average. So that is really the thing to focus on as we search for solutions. John Shegerian: Reuse and recycling because you – GE – has now membrane technology that allow reuse and recycling in both grey and blackwater to be used for everything like as you say commercial, industrial and even home use. Jon Freedman: Absolutely. You can recover 99 percent of wastewater through the existing technology. John Shegerian: I just want you to frame this up for our viewers and listeners. This is so important. You shared this with me the last time you came on the show. When you look at the recycling rates – and I want you to share the recycling rates in Israel and Singapore versus California and the U.S. – from a macro level, how does that frame up? Jon Freedman: Globally, the world is reusing about 3 to 4 percent of its wastewater. John Shegerian: OK. Jon Freedman: In the U.S., it’s 6 to 8 percent and here in California it’s 8 to 10 percent – although, I have seen some studies that say as high as 13 percent. John Shegerian: OK. Jon Freedman: That’s the U.S. This is good news. Why? Because it means that we have this huge opportunity we can capitalize on to address scarcity, which we’re now seeing. So that’s great. Israel – where they’ve had scarcity forever – they’re reusing 85 to 90 percent of their wastewater today. John Shegerian: Wow. Jon Freedman: So that tells you where we can go. Singapore is reusing 30 percent of their water. Why? They want to be water independent of Malaysia. They punch way above their weight in terms of water reuse policies and technologies so they’re doing a great job. Saudi Arabia has announced a plan to go from about 60 percent reuse today to 65 percent. China is mandating water reuse for cites and for certain industries. So it’s kind of – I think – taking root globally. John Shegerian: Singapore 30. Like you say they punch way above their weight. They – as you shared on the last show – have a clear path for that number to even go up higher. Jon Freedman: Absolutely. And, John, the reason is not just because the technology they’re using is different from what we can use here in California. John Shegerian: Right. Jon Freedman: It’s not. It’s because they put policies in place that are driving more rapid and widespread adoption of these reuse technologies. John Shegerian: If that’s the case – a couple of points – you just said we’re trending higher than the world rate here in California. Jon Freedman: Absolutely. John Shegerian: But lower than some of the better paradigms that are out there now – let’s just look at Israel and Singapore as two that we just discussed. So given that you are the policy person, you are Government Affairs and in charge of partnerships. Jon Freedman: Right. John Shegerian: You are literally at the cross-section of where all the action is going to be happening in terms of taking the technologies that exist today – the technologies that GE has and other great companies and iconic brands like GE – and getting it into the hands of governments, municipalities, cities, countries to deploy, to create another Singapore situation, another Israel situation and not be down at 3 or 4 percent recycling and reuse. Is this correct? Jon Freedman: Exactly. Exactly right. And you know today I just want to commend Mike Connors, the Deputy Secretary of the Department of Interior for the United States who is here at this event in San Francisco. Mike also used to be the Commissioner for the Bureau of Reclamation, which has responsibility for insuring adequate supplies of water in the 17 western states. Now the Bureau of Reclamation reports to him in his more elevated role. There is a lot of interest on seeing that the United States actually does reuse more water, and it starts in Washington and it filters down here to California, where by the way from a policy standpoint – you said from a technology standpoint California is ahead of the rest of the country, well, they are from a policy standpoint too. So we are absolutely on trajectory where I do think we will see much more reuse. And by the way, when more wastewater is being reused, you’ve effectively sustainably increased the supply of water forever. John Shegerian: I want to hear your vision, though. Since the technology exists, but it’s just all about getting that technology into the hands of the users and convincing them that it’s compelling and giving them a sense of urgency to deploy this, what’s your vision of bridging that gap in the years ahead, so we can get ahead of these problems instead of behind? Jon Freedman: So I think there are some barriers to adoption of reuse technologies today otherwise you’d see it being used more broadly here in the U.S. like you see it in Singapore and Israel. If you ask me those barriers are things like concern about whether reused water is safe for things like agriculture and drinking water. It’s a lack of clear standards, so a lot of industries don’t know if they can treat wastewater and use it to do something like, for example, wash their chickens in a poultry processing plant. They don’t know because there aren’t clear standards in many cases telling them what is allowable. Then the third thing – and I think probably the biggest of all – is economics. In other words, it’s cheaper to take water from the ground or river or even a potable municipal system, where it’s almost universally underpriced, than it is to implement reuse technologies. So you have to address these barriers, and that’s where I think policy comes into play. John Shegerian: Let’s go back to, though, the first thing that you brought up. The first data point. Safety. Your membrane technology – that is a slam dunk, that is a layup now, the safety is there. The technology is there to make the water from grey to drinkable, from black to drinkable now. Jon Freedman: That is absolutely correct, because it’s a physical barrier. You are physically separating the H20 molecules from the bad stuff. John Shegerian: So now it comes down to public/private partnerships working in conjunction to right-size the policies. Jon Freedman: I think it’s waiting for water prices to move up – which they are – because as water prices move up then investing in reuse technologies is going to be more cost competitive. I think it’s seeing more communities doing education and outreach like San Diego is doing right now because San Diego is doing a pilot program for direct potable reuse, and as a part of that, they’re not just piloting the technology, they are doing extensive outreach to make sure the community is comfortable with this concept. John Shegerian: Got you. So is this part of your grand plan of putting together important conferences like today with the thought leaders that you’ve amassed in terms of further messaging this and getting this out as much as possible to the consumers out there? Jon Freedman: We are absolutely committed to playing the role as a thought leader. We certainly want to be a convener to bring together people who make policies but also people who implement them, and there are a number of general managers of large wastewater agencies here today who are doing an absolutely stellar job. They’re on the frontlines of leading this kind of reuse revolution. There is a guy here named Mike Marcus who is the General Manager of Orange County Water District. He is treating 100 million gallons a day of wastewater and injecting it into the ground to replenish the groundwater supply. It’s the largest indirect potable reuse project in the world. So there are a lot of guys here who are doing incredible work and we’re trying to support their efforts and also help be a voice for policies that will help them reuse more water. John Shegerian: From a recycling perspective, Jon, in terms of recycling electronics, food, textiles, the national movement has sort of abdicated the role to cities right now, and we’ve seen that in our industry and I’ve seen that also in composting and with regards to textiles. When it comes to water, is more policy going to come out of D.C. on water that is going to then be pushed down and going to help effectuate change here in this country? Or is it going to come from the ground up from the great city leaders that we have like Rahm and like Nutter and De Blasio and Garcetti and the new generation of mayors and other city leaders that want sustainable cities, that want resilient cities? Which way is it going to come? Top down or bottom up or both? Jon Freedman: It’s both because you have leaders like Mike Connor, who is here today – as I mentioned – from the Department of Interior. You have the U.S. EPA. You have other federal agencies involved who are leading because they’re using their bully pulpits but also they’re creating incentives to promote greater water reuse. You see that through the U.S. Bureau of Reclamations Title 16 incentive program. You see it through EPA’s Clean Water State Revolving Loan Funds which also go to wastewater agencies in part for water reuse. But you’re also seeing the real new regulations coming out at the state level because there is no federal regulation around water reuse. So states like California are actually leading the way. John Shegerian: Got you. With regards to, I love the story you shared with me in terms of how do you convince others to do the right thing and you shared with me the story of sometimes in your travels, or when you are trying to use a successful paradigm to show off, you actually bring some leadership from Singapore with you to specific regions of the world or meetings and things of that such. Can you share with our listeners and our viewers a little bit about how you use success stories to foster future success? Jon Freedman: How do you remember this stuff? That’s great. So yeah, I’m happy to do that. Let me just start by saying, as part of our global sustainability initiative called Ecomagination, I also think we lead by example. We have a story to tell about what we did in GE that I think can be example for other companies as well. And you know, John, in terms of water just by virtue of setting a goal – we said, “Hey, we’re going to try to reduce our water consumption by 25 percent” – we have now reduced it by 45 percent. John Shegerian: Wow. Jon Freedman: And absent this sustainability initiative, that never would have happened. John Shegerian: Right. Jon Freedman: So I think there is more that we can all do individually, but also we do convene events in places around the world. We’ve done it in Shanghai. We did it in Riyadh. We did it in Crotonville, New York. We have the global training facility. And now here in San Francisco. And we have brought the director of water policy from Singapore because they are the world leader. We brought a professor of the water resources economics from Cal-Berkley to Saudi Arabia and we’ve brought the Executive Director of the Water Reuse Association to China. So the idea is to get these thought leaders out there who can truly share best practices in creating policies that will allow for a great reuse of water. John Shegerian: That’s awesome. Well, I’ll leave any last thoughts before I let you go back to the conference, which you are hosting today. Any last thoughts for our listeners or viewers out there on water, technology, innovation or the great brand – GE – that you represent in such fine fashion? Jon Freedman: I would just say Green Is Good is the best show on radio, John. Thank you very much. John Shegerian: Oh that’s so nice of you. And again this is the IGEL Wharton GE edition of Green Is Good in downtown San Francisco. We’ve got Jon Freedman, who is also my friend. He is the Head of Global Partnerships and Governmental Affairs for GE, and to learn more about what GE Water is doing – and GE is doing – please go to www.GEwater.com. Jon Freedman, you are truly living proof that Green Is Good. Thank you so much for everything. Jon Freedman: You are a great host.