Algeria’s Water Scarcity Challenge

Courtesy of STRATFOR (subscription required), detailed analysis of Algeria’s water scarcity challenge:

Considering that the Sahara Desert covers most of Algeria, it comes as no surprise that the country is a water-scarce nation. Beyond the severity of its climate and geography, however, overexploitation is degrading Algeria’s naturally available water resources to an alarming extent. To support a growing and rapidly urbanizing population, Algiers hopes to employ technological solutions to maximize the country’s limited water supplies.

Desalination plants and large water conveyance projects involving tunneling, channeling and pipelines offer a potential fix, but there will be an associated increase in production costs. Water infrastructure maintenance will also become more expensive as a result. Low oil prices, coupled with the political need to maintain social spending ahead of a transition of government, are straining the Algerian budget. As a result, public-private partnerships are vital to assuring — if not improving — access to water throughout the country.

Analysis

Algeria’s per capita water availability is less than 300 cubic meters per year, which puts the country well below the threshold for the U.N. definition of water poverty. By comparison, Mexico’s per capita water availability is roughly 3,700 cubic meters per year, and Egypt’s is approximately 700 cubic meters per year.

It doesn’t help that Algeria’s water is unevenly distributed. Most of the country’s surface water resources, in the form of rivers and lakes, are concentrated in the country’s north, along with the bulk of Algeria’s population. Desalination production accounted for approximately 7 percent of water consumed in 2012, but this still favors the north, which has access to the limited shoreline. Growing desalination capacity has helped increase water availability in the coastal cities, but as much as 30 percent of general supply is lost as it is distributed through Algeria’s aging, leaking water transportation infrastructure. Many citizens simply do not have daily access to running water.

There is water in the sparsely populated central and southern parts of the country, but it is primarily groundwater — and it is at risk. Not only are the aquifers beneath Algeria’s desert very slow to recharge, the non-renewable water drawn from them is sometimes called fossil water because it has sat undisturbed in the aquifers for millennia. As well as suffering from declining quality — increased salinity, nitrate contamination — the slowly draining aquifers have resulted in dry wells in some regions. Algerian groundwater withdrawals are roughly double the annual recharge rate: Approximately 3 billion cubic meters are withdrawn, but only 1.5 billion cubic meters are renewed each year. And the problem is spreading: Even aquifers farther north, on the Moroccan border near the Mediterranean, are showing signs of diminishing quantity and quality.

The vast Northwestern Sahara Aquifer System that lies beneath most of Algeria’s interior is already showing signs of decline. Exploitation of the aquifer has increased significantly over the past several decades, and withdrawals now are estimated to be more than 2.5 billion cubic meters per year. Recharge rates, however, are only estimated at around 1 billion cubic meters per year. Unfortunately for Algeria, withdrawals from this aquifer system will only increase, contributing to the decline of water supplies and quality overall. In 2006, the government attempted to enumerate the amount of wells and boreholes in the nation’s aquifer systems to get a better idea of how much water was being extracted. Algiers hopes to regulate usage more effectively, but illegal drilling — potentially in the order of tens of thousands of illegal boreholes — has made estimating and regulating water use nearly impossible. Because of overexploitation and illegal drilling, wells have to be drilled deeper, which raises the cost of access and contributes to environmental damage.

As Algeria’s population grows and urbanizes, less water will be available per person. In the 1960s, Algeria’s annual per capita availability was more than 1,000 cubic meters. Now it is 292 cubic meters. In contrast to availability, the volume of pumped water increased by 525 percent over the second half of the 20th century. Algeria’s annual water consumption is now approximately 67 percent of its renewable resources, or about 8.4 billion cubic meters out of 11.7 billion cubic meters. By comparison,Turkmenistan and Azerbaijan — both energy-producing countries with per capita GDPs comparable to Algeria’s — consume 113 percent and 35 percent of their total renewable water resources respectively. Both countries also have much higher per capita water availability than Algeria does.

Algeria’s Expensive Water Strategy

Algiers’ water management strategy focuses on making the most of existing water resources through redistribution, increased storage capacity and enhanced desalination capacity. The Algerian water distribution network stretches more than 58,000 kilometers (roughly 36,000 miles) and can move over 3 billion cubic meters of water per year. In terms of storage, there are already more than 70 large dams in Algeria, but increasing storage capacity is an important part of the capital’s water strategy. When it comes to desalination production capacity, growth has skyrocketed from less than 50,000 cubic meters per day in 2002 to more than 2 million cubic meters per day in 2015. The Magtaa plant, which began operations in 2014, has a capacity of half a million cubic meters per day — enough to provide adequate drinking water for 5 million citizens. There are plans to expand desalination capacity for seawater and brackish groundwater in the near future.

For a country with some of the lowest water prices in the region, Algeria relies heavily on expensive water management solutions. Even with recent revisions to the water pricing system, the cost of water is so low that it does not encourage conservation. In fact, prices do not even cover production and maintenance costs, let alone treatment of wastewater. Moving a comparatively heavily liquid such as water from its point of origin to point of consumption entails significant costs, both for the initial construction of the infrastructure and for operations and maintenance thereafter. A large-scale transfer project to move water from Ain Salah to Tamanrasset (completed in 2011) cost roughly $2.5 billion, not including the ongoing operation and maintenance expenses. Desalination operations are even more energy intensive and costly than water conveyance. Water produced at desalination plants in the Arab region costs between 50 cents and 60 cents per cubic meter — compared to around 5 cents per cubic meter for groundwater, and 20-50 cents per cubic meter for surface water. Although energy is a factor in the higher price of water from desalination plants, more than half of the cost is attributed to factors other than energy, such as labor and chemicals.

Without investment from the government — not just in big nameplate projects but also in routine maintenance and efforts to improve efficiency and regulation — the availability and quality of Algeria’s water supply will keep declining. However, the government cannot foot the bill alone. Private investment will be necessary to safeguard the country’s water supply. Public-private partnerships in the water sector are partly responsible for the recent surge in desalination capacity. In addition, private organizations are responsible for water management in some of the country’s largest cities, including Algiers, Annaba, Oran and Constantine.

Algeria’s 2015-2019 Development Plan earmarked nearly $18 billion for water infrastructure projects. But throughout 2015 and into 2016, low oil prices have put a burden on the government’s budget. Algiers’ top spending priority will be security services, especially for energy assets. Furthermore, the country has a history of using social spending to quell civil unrest. President Abdel Aziz Bouteflika used public spending campaigns to fend off protests after the Arab Spring brought down other leaders in the region. Even with low oil prices straining Algiers’ finances, the government is more likely to spend its reserves on subsidies than risk unrest. Whatever government takes power following the upcoming transition, it will likely continue with that strategy because Algiers and the populace remain wary of political unrest, a legacy of the country’s decadelong civil war (1991-2002).

Water’s Role in Algeria’s Future

Because oil prices are expected to remain low for a while, Algiers is searching for new sources of revenue. Algeria’s vast potential shale reserves are one such source. However, water security was a common theme during recent protests regarding shale extraction, and concerns about water scarcity could hinder the development of Algerian shale over the next five to seven years. Technological solutions that limit or eliminate water’s role in hydraulic fracturing could allow Algeria to exploit its shale reserves in the long term, although given the protest culture of the country and region, demonstrations against hydraulic fracturing could still occur even if water use is addressed.

There is little doubt that water is part of a circle of causation and control: It remains a key factor in keeping Algeria’s security situation manageable, which is vital to keeping the country attractive to foreign investment, which in turn is crucial to maintaining the water supply. The protest culture in Algeria means that subsidies that benefit the population cannot be rolled back easily. Therefore, water prices will remain low and foreign investment will still be needed to maintain or improve Algerians’ access to water.

Climate changes — specifically, higher temperatures and less rain — are predicted for the coming decades in Algeria and the wider region. At the same time, the population is expanding and urbanizing, consuming more water than ever before. This adds to the stress on the country’s already scarce water resources. Greater desalination capacity, improvements to existing infrastructure and additional water conveyance projects — created through cooperation between the public and private sectors — could alleviate some supply concerns, especially in urban areas. But, if short-term budgetary problems lead Algiers to neglect the country’s water infrastructure, the longer-term implications are dire. Declining quality, infrequent availability or more dependence on expensive water from desalination plants will contribute to the potential for social unrest. As overexploitation creates more obvious environmental degradation and further reduces water supplies, dissent will become a greater threat to the government.