Is our water future sustainable? Competition for scarce water resources Jeff Fulgham CSO Banyan Water

2 Today Water scarcity, bills, damage growing Property owners underserved by fragmented vendors Tomorrow Water Steward: software & service for smart, remote mgmt. Unique: Team of industry leaders Solution: 1 st layer, smart grid for irrigation Pipeline for rapid growth Water will become the single most important physical-commodity-based asset class Citigroup GE to Banyan Water?

3 Todays focus Global Water Challenges Sustainability = risk mitigation Water Sustainability Enablers Sustainable Examples

4 Assuring sustainable quantity Improving water quality Reducing energy consumption Global water challenges Can we change the outcome?

5 Assuring sustainable quantity Improving water quality Reducing energy consumption Global water challenges Can we change the outcome?

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7 0 1,000 2,000 3,000 4,000 5,000 6, ,500 Available supply Billion m3 Global water withdrawals ,800 Gap Demand >>> Supply Decreasedemand Increasesupply

8 Assuring sustainable quantity Improving water quality Reducing energy consumption Global water challenges Can we change the outcome?

9 Quality TDS TSS Hg Se As P N

10 Assuring sustainable quantity Improving water quality Reducing energy consumption Global water challenges Can we change the outcome?

11 Energy Unconventional Gas Oil Sands Mining Power production Energy production is thirsty!

12 Alternate energy sources … carbon-water tradeoff?

13 Public concern over environmental issues Low High Water availability Frac water Produced water Truck traffic Venting or flaring from completions/ workovers Regional ozone attainment Quantity Water rights Land clearing Wastewater treatment/ disposal * Relative to conventional gas development Water useAir qualityLand disturbanceRelated to frac process Degree of public scrutiny* Water issues take forefront of national debate Chemical composition of frac fluid Source

14 Global water scarcity is one emerging risk that all companies should be focused on – and one about which investors need information. The combination of rising global populations, rapid economic growth in developing countries, and climate change is triggering enormous water availability challenges around the world. Electric power generators, food producers, and other water-intensive industries are especially vulnerable, both in their operations and their extensive supply chains.

15 risk Water risk factors

16 Regulatory risks Water rights Tariffs Discharge options Stringent regulations Ash ponds Waste disposal Permitting Emerging pollutants Wastewater reuse Se, As, Hg removal Zero Liquid Discharge Cooling tower reuse Water stewardship Biological control Wastewater reuse Se, As, Hg removal Zero Liquid Discharge Cooling tower reuse Water stewardship Biological control

17 Physical/Operational risks Availability Quality Demand Access/ Allocations Efficiency Knowledge gaps Outage impacts Shift from air to water Alternate sources of supply Wastewater reuse Desal … brackish, seawater Muni/industrial wastewater reuse … BOO Greywater expertise Cooling water treatment automation & control Alternate sources of supply Wastewater reuse Desal … brackish, seawater Muni/industrial wastewater reuse … BOO Greywater expertise Cooling water treatment automation & control

18 Reputational/Social risks Brand impact Media sensitivity Supply chain Compliance violations Employee impact Long-term fate Site-specific water sustainability plan CSR support Metrics & monitoring Remote monitoring & diagnostics Environmental stewardship Aqueduct project consortium Credit for reuse Site-specific water sustainability plan CSR support Metrics & monitoring Remote monitoring & diagnostics Environmental stewardship Aqueduct project consortium Credit for reuse

19 Financial risks Direct costs Indirect costs Energy costs Water pricing Bond rating Waste treatment Next best alternative Incentives Broader approach Build, Own, Operate options Value Generation Process Water reuse Integrated Water Services Alternate/renewable energy Waste to Value projects Broader approach Build, Own, Operate options Value Generation Process Water reuse Integrated Water Services Alternate/renewable energy Waste to Value projects

20 Water sustainability enablers Technology Economics Policy

21 Water sustainability enablers Technology Economics Policy

22 Human Hair (80 m) Removing contaminants from water Relative particle size 1 m 10 m H2OH2ONa+SucroseHemoglobin Influenza Virus Pseudomonas Bacteria Staphylococcus Bacteria 100nm 10nm1nm0.1nm 10 m 100 m Conventional Filtration Microfiltration Ultrafiltration Reverse Osmosis 1 m 10 m 100nm 10nm1nm0.1nm Membrane technologies

23 Extracting value from wastewater Increasing Value for Recovery Water priced at true cost to supply, encouraging reuse Energy and materials cost expected to trend upward What Drives Reuse? Past: Water scarcity and environmental regulation Future: Value recovery & continued regulation Waste Ponds Disposal Well Waste stream Efficient separations MetalsEnergy Water SaltsNutrients

24 Water recovery & energy reduction Produced Water 70-85% Recovery98% RecoveryBeneficial Use Membrane Based Systems Thermal Evaporation, Crystallization, Bio Polishing Waste Water Recovery systems Wastewater to value

Cost/m RO processes 2012 New elements 2016 Waste heat water recovery 2020 Nano high flux membranes Advanced desalination roadmap … Continued cost reduction

26 Water sustainability enablers Technology Economics Policy

27 price value Does the price of water reflect its true economic value? Renewable water resources per capita Total water + wastewater cost per m3 by country High scarcity, low cost … where is the motivation to conserve?

28 Water sustainability enablers Technology Economics Policy

29 Incentives & policy can drive change Alberta: 70-90% reuse by 2012 Beijing: 100% reuse by 2015 Israel: 85% reuse today 90% by 2016 Saudi Arabia: 11% reuse today … 65% by 2016 Many countries taking action … US currently stalled Spain: 11% reuse today … 40% by 2015 Water data source: GWI Renewables data source: REN21

30 We never know the worth of water till the well is dry. ~Thomas Fuller