By Neil D. Berlant

Intro
Arsenic in drinking water is becoming an increasingly troublesome and expensive problem for the nation. At the same time, it is becoming an extraordinary business opportunity for the progressive and technologically qualified companies that offer treatment solutions for this growing area.

History and facts
Known best as a deadly poison, arsenic actually has some medical benefits when delivered in small doses. It is difficult to detect as it is generally odorless and flavorless, meaning that people have very little idea when it is around. The name arsenic comes from the Greek work for potent. Through the ages, arsenic was a common means of homicide. It is used in combination with other materials in pigments, poison gases and insecticides (such as Paris Green, calcium arsenate and lead arsenate) and is well known from former use as a rat poison.

Arsenic is used in ammunition manufacturing because it helps to create harder and rounder bullets; it is used in small quantities in semi-conductor manufacturing as well. A preservative in tanning and taxidermy, arsenic is part of deck and playground materials. In short, though arsenic is an extremely poisonous substance, it has numerous industrial applications and has been used widely for many years.

Arsenic is the 20th most abundant element in the earth’s crust and frequently occurs in rock formations of the Southwestern United States. When water comes in contact with arsenic-bearing rock, it can dissolve it and carry it as it flows, even below the land surface. Arsenic concentrations in water can vary tremendously. In the US, concentrations in ground water are generally highest in the Western states, especially in areas with geothermal activity.

Drinking water represents the route of most hazardous exposure. A dose of more than 60 mg of arsenic (which is slightly more than 1/5 the weight of a common aspirin tablet) can be lethal. By comparison, the amount of arsenic in nearly all drinking water sources is very small and health effects are the result of many years of consuming water that contains arsenic.

Arsenic is a known carcinogen and long term ingestion may increase the risk cancer. Studies suggest that long-term, low-concentration exposure to inorganic arsenic leads to cancers of the skin, bladder, lung, kidney, nasal passages, liver and prostate. Direct skin contact may cause redness and swelling at high concentration. It may also affect the nervous and circulatory system and may be associated with cardiovascular diseases. Skin disorders, such as hyperpigmentation, depigmentation and keratosis, suspected to be caused by chronic consumption of water containing arsenic.

Risks and removal
Globally, millions of people are at risk for the adverse effects of arsenic exposure. The majority of harmful exposure comes from drinking water from wells drilled through arsenic-bearing sediments. The other major sources of exposure are through food, soil, and air. Bangladesh and West Bengal are among the worst contaminated areas in the world. Some reports say that more than 500 million people are at risk of chronic arsenic poisoning. According to the World Health Organization (WHO), this is, “the worst mass poisoning in history.” Large areas of China also face severe arsenic exposure from groundwater contamination, with more than three million people affected. Other countries with arsenic-rich groundwaters include Argentina, Chile, Mexico, Cambodia, Vietnam, Thailand, Nepal and Ghana.

Beginning this year, public water systems in the US must meet new federal maximum contaminant level (MCL) rules for contaminants including arsenic. Many of the small public water systems are struggling to meet these requirements. The pressure to meet increasingly demanding quality requirements is adding to the consolidation of the water utility industry. Companies like Aqua America have been at the forefront of this consolidation, acquiring many small, independent water utilities.

New rule effects
A key element associated with the new arsenic rule is that POU devices are an approved Small System Compliance Technology. In other words, you can use POU to meet the water quality and treatment requirements. However, a condition is that the devices must be owned, controlled, and maintained by the public utility. Therefore, the responsibility of operating and maintaining the devices cannot be passed to the customer. This is a very significant development and opportunity for companies that manufacture and sell POU devices. This also represents a considerable new business area for water utilities in these quality-compromised areas. Companies such as Pentair, Watts Water Technologies, Pall Corporation and Aquacell Water, to name a few, are vigorously pursing this explosive market niche. These companies and many others, are facing the potential for a good number of high-growth years.

About the author
Since 1968, Neil D. Berlant has been continuously involved in the investment banking industry, either as a principal, officer, or founder of several firms. He has supervised and initiated the publication of numerous investment research reports on the water industry and conducted conferences directed towards top corporate management, the investment community and venture capitalists. Berlant has been a speaker at conferences on topics ranging from financing, to business and investment opportunities in the water industry. In addition, he has been a consultant to Fortune 500 companies and participated in negotiations concerning mergers, acquisitions and venture capital investments. Berlant is quoted frequently in newspapers including the Wall Street Journal, The New York Times, Los Angeles Times, Investor’s Business Daily and many others. Prior to joining The Seidler Companies, he was a Senior Vice President at Wells Fargo Investments, First Vice President of Investments with PaineWebber Incorporated and co-founder and Senior Vice President of the Amdec portion of Seidler Amdec Securities. Berlant received his Bachelor’s degree in finance from the California State University in Los Angeles. He can be reached at (213) 683-4625; (800) 840-1090; (213) 955-4990 fax; (310) 283-2668 cell or [email protected].

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