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TSM, Intel fighting over water

Arthur Hanson

Well-known member
Not only are TSM and Intel having a conflict over water in Arizona, TSM is having water problems in Taiwan. With the intellectual power that will be brought to solving the water shortage I see water recycling methods and programs going on steroids to not only solve the challenge for fabs, but for the world in general. I expect to see a whole range of conservation and recycling methods come out of this challenge. There already have been numerous solutions and expect the resources brought to bare on this challenge to solve it in a number of creative and useful ways including methods to cut down water usage dramatically.

 
The Ocotillo golf course didn't grow winter grass this year in the rough. My HOA is now allowing my neighbors to use artificial grass this year. This is outrageous!
 
The Ocotillo golf course didn't grow winter grass this year in the rough. My HOA is now allowing my neighbors to use artificial grass this year. This is outrageous!
Does your HOA allow you to replace the grass with rocks?
 
Not yet, but I am predicting that is coming. I just planted lots of trees on my lawn in anticipation of that happening.
 
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Water use in the west is fascinating to me. AZ sits at one of the lowest seniorities of water rights, meaning they will be cut first and cut deepest, and cut soon. AZ horse-traded seniority to get the CAP in the 1980s, when things were different.

Chips are are a high-value use of water, and will win out over thirsty crops. But farmers have political clout.

There is no honest, frank news about how serious the water seniority sword over AZ head is. They just keep lying to the public about it. Right up until populations get cut off. It was similar in NM when I lived there. All politicians are liars, all the time, to everyone, about water.
 
Water use in the west is fascinating to me. AZ sits at one of the lowest seniorities of water rights, meaning they will be cut first and cut deepest, and cut soon. AZ horse-traded seniority to get the CAP in the 1980s, when things were different.

Chips are are a high-value use of water, and will win out over thirsty crops. But farmers have political clout.

There is no honest, frank news about how serious the water seniority sword over AZ head is. They just keep lying to the public about it. Right up until populations get cut off. It was similar in NM when I lived there. All politicians are liars, all the time, to everyone, about water.
AZ also a habit of greatly subsidizing the cost of water for everyone further reducing the incentive to protect it. It's eventually going to bite them hard.
 
Not only are TSM and Intel having a conflict over water in Arizona,
Bah, there is no such thing. The water situation in Arizona (as in much of the American West) is extremely complex, and has all sorts of byzantine rules and tiers of seniority. Intel and TSMC are major users of water but they have done their homework and so have the local water authorities.
Chips are are a high-value use of water, and will win out over thirsty crops. But farmers have political clout.
The value of the use has nothing to do with it; water rights have everything to do with it. Farmers are stuck with more junior rights to CAP water in Arizona because of historical agreements, not because cropland has less value. Farmers may have political clout in general, but more than 60% of Arizona's registered voters are in Maricopa County (don't remember what % of our legislative districts are here, probably similar as AZ isn't too badly gerrymandered) and farming is of decreasing importance here, as compared to more outlying areas of the state, as farmland is converted mainly to residential use.
AZ also a habit of greatly subsidizing the cost of water for everyone further reducing the incentive to protect it. It's eventually going to bite them hard.
Cite source, please? I don't believe you.

I've done a lot of research on this topic, partially because I wanted to make sure it was safe to move to Arizona, and more recently because it's been misrepresented in some cases by the media and I find it interesting. I don't have time tonight to write much, but ask me nicely and I might write up an article on SemiWiki on the water situation in Arizona one of these months. (not soon, alas.)

Short answer:

The Phoenix area gets its water from three sources:

1. Central Arizona Project (CAP) = "drinking straw" of a canal that leads from the Colorado River to Phoenix and Tucson
2. Salt River Project's reservoirs to the northeast of Phoenix
3. Underground water aquifer, with water flow going in both directions.

The CAP water is the one everyone's worrying about; the Colorado River is over-allocated based on agreements made at a wetter time. But CAP water has a bunch of different seniority levels, and if I recall correctly (I'm 99% sure of this) the farmers outside the metro Phoenix area are lowest, and the cities are fairly high. The most junior water rights lose all of their supply before the next-junior water rights lose even a drop.

SRP's reservoirs are much better. This year is a wet year, and quite recently SRP had to send water over the Granite Reef Dam into the Salt River for the first time in a couple of years, so that they could make room for spring snowmelt. Since we don't have to compete against California like we do for Colorado River water rights, and the SRP reservoir customers are more localized in the Phoenix area (more urban use than the CAP water), overuse of SRP-sourced water is much less of a concern.

Underground water -- this is capacity, not net flow; obviously you can't keep drawing groundwater. (Rural areas of AZ have done this and the water table goes down, the ground subsides, and there are earth fissures.) The cities in the Phoenix area have been banking a net amount of water into the ground for (excuse the pun) a rainy day, so that if there is a dry year, it is an available short-term source.

TSMC's purchase of AZ State Trust Land in North Phoenix came specifically with CAP water rights transferred from the State of Arizona.

I live in Chandler, and I sleep well at night. I worry about the heat and climate change more than I do the water.
 
Water use in the west is fascinating to me. AZ sits at one of the lowest seniorities of water rights, meaning they will be cut first and cut deepest, and cut soon. AZ horse-traded seniority to get the CAP in the 1980s, when things were different.

Chips are are a high-value use of water, and will win out over thirsty crops. But farmers have political clout.

There is no honest, frank news about how serious the water seniority sword over AZ head is. They just keep lying to the public about it. Right up until populations get cut off. It was similar in NM when I lived there. All politicians are liars, all the time, to everyone, about water.

I used to think politicians are liars. But in recent years I started thinking the voters or citizens actually encourage them to lie. Gradually there is no or little consequences when a politician lies.
 
Bah, there is no such thing. The water situation in Arizona (as in much of the American West) is extremely complex, and has all sorts of byzantine rules and tiers of seniority. Intel and TSMC are major users of water but they have done their homework and so have the local water authorities.

The value of the use has nothing to do with it; water rights have everything to do with it. Farmers are stuck with more junior rights to CAP water in Arizona because of historical agreements, not because cropland has less value. Farmers may have political clout in general, but more than 60% of Arizona's registered voters are in Maricopa County (don't remember what % of our legislative districts are here, probably similar as AZ isn't too badly gerrymandered) and farming is of decreasing importance here, as compared to more outlying areas of the state, as farmland is converted mainly to residential use.

Cite source, please? I don't believe you.

I've done a lot of research on this topic, partially because I wanted to make sure it was safe to move to Arizona, and more recently because it's been misrepresented in some cases by the media and I find it interesting. I don't have time tonight to write much, but ask me nicely and I might write up an article on SemiWiki on the water situation in Arizona one of these months. (not soon, alas.)

Short answer:

The Phoenix area gets its water from three sources:

1. Central Arizona Project (CAP) = "drinking straw" of a canal that leads from the Colorado River to Phoenix and Tucson
2. Salt River Project's reservoirs to the northeast of Phoenix
3. Underground water aquifer, with water flow going in both directions.

The CAP water is the one everyone's worrying about; the Colorado River is over-allocated based on agreements made at a wetter time. But CAP water has a bunch of different seniority levels, and if I recall correctly (I'm 99% sure of this) the farmers outside the metro Phoenix area are lowest, and the cities are fairly high. The most junior water rights lose all of their supply before the next-junior water rights lose even a drop.

SRP's reservoirs are much better. This year is a wet year, and quite recently SRP had to send water over the Granite Reef Dam into the Salt River for the first time in a couple of years, so that they could make room for spring snowmelt. Since we don't have to compete against California like we do for Colorado River water rights, and the SRP reservoir customers are more localized in the Phoenix area (more urban use than the CAP water), overuse of SRP-sourced water is much less of a concern.

Underground water -- this is capacity, not net flow; obviously you can't keep drawing groundwater. (Rural areas of AZ have done this and the water table goes down, the ground subsides, and there are earth fissures.) The cities in the Phoenix area have been banking a net amount of water into the ground for (excuse the pun) a rainy day, so that if there is a dry year, it is an available short-term source.

TSMC's purchase of AZ State Trust Land in North Phoenix came specifically with CAP water rights transferred from the State of Arizona.

I live in Chandler, and I sleep well at night. I worry about the heat and climate change more than I do the water.

1. Could it be one of the reasons that TSMC campus is incorporated into the Phoenix City limit for the purpose of securing the water supply and water right?

2. Do you know the percentages for the City of Phoenix from each of the three water sources you mentioned?
 
I used to think politicians are liars. But in recent years I started thinking the voters or citizens actually encourage them to lie. Gradually there is no or little consequences when a politician lies.
I don't disagree with you here; I don't believe in politicians. That's why I look at real sources of information like the water resource plans for Phoenix.

1. Could it be one of the reasons that TSMC campus is incorporated into the Phoenix City limit for the purpose of securing the water supply and water right?
No. Phoenix didn't change its city limits; the land TSMC purchased was already incorporated within Phoenix. The city of Phoenix is huge; quoting Wikipedia, 517.9 square miles (1,341 km2). If you are driving north from Phoenix on I-17, you drive past AZ 303 and AZ 74; TSMC's land is in between those. Phoenix city limits include land another 10km past it.

The area TSMC located in was identified several decades ago as a place for industrial development: From the Phoenix water services website:
CAP Allocated for State Trust Lands in Phoenix

A 12,000 acre-foot portion of the municipal and industrial-priority CAP supplies allocated to the Arizona State Land Department was identified for use on State Trust lands located in Phoenix north of Jomax Road. Phoenix's original CAP subcontract envisioned Jomax Road as the City's northern boundary. Based on a 1986 commitment from the State Land Commissioner, this allocation will be transferred to Phoenix as State Trust lands in the area north of Jomax Road are developed.
But it certainly didn't hurt to develop there.
2. Do you know the percentages for the City of Phoenix from each of the three water sources you mentioned?
From the water resource plan I linked to above, CAP is 38%, SRP is 52%, reclaimed water is 8%, groundwater is 2% (although I'm pretty sure groundwater recharge going the other direction exceeds this). I forgot about reclaimed water, you see that a lot in landscaping (lots of NO BEBER signs).
1680443423328.png
 
If Lake Mead goes deadpool, which is a risk within 2 years, there will be no water flowing downstream. No water flowing to the CAP, or California, or Mexico. Just an empty dry bed where water used to be.


And yes, no water for TSMC’s fab which will be just starting to operate in 2025.
 
If Lake Mead goes deadpool, which is a risk within 2 years, there will be no water flowing downstream. No water flowing to the CAP, or California, or Mexico.
I have no illusions about the Colorado River; today's usage isn't sustainable unless we somehow magically have more long-term rainfall in the watershed. This year's heavy snowstorms in the Upper Colorado Watershed may buy us a little bit of time.

But for deadpool to occur and remain, what would have to happen is continued drawdown of Lake Mead and for all of the upper Colorado River watershed flow above it to be utilized by Nevada/Utah/Colorado/Wyoming so that there is no net flow into Lake Mead.

What will happen if the levels continue to drop, is that despite the fact that the lower Colorado recipients (AZ/NV/CA/Mexico) want to draw X amount of water and they have rights to draw X amount of water according to the present Colorado River compact, the harsh reality is that they will only be able to draw Y from the river, where Y is the amount that goes into Lake Mead (minus evaporation losses). Y is less than X. But Y is not zero, unless the Colorado River is all used up above Lake Mead. (Edit: yes, we would lose the reservoir's ability to buffer water capacity over the year, which is a big deal. But we'd have to get there first; see the DCP below.)

From a March 2019 New York Times article, it appears that X = 10.2 million acre-feet per year, but Y = 9 million acre-feet per year.

Brad Udall, a senior scientist at Colorado State University and an expert on water supplies in the West, told a congressional panel last month that the lower basin uses about 10.2 million acre-feet of water from the river each year, while upstream flows provide just nine million. (An acre-foot is the volume of one foot of water over one acre, about 325,000 gallons.)

Cuts will have to occur somehow; this is just basic physics. In 2019 all seven Colorado River states signed a Drought Contingency Plan. (Presumably Mexico has to agree with the US through some international negotiation, and is going to get screwed. Hmm. See edit below.) For the Lower Colorado states, the Drought Contingency Plan puts certain cuts into place for each state once Lake Mead drops to a certain level at the beginning of each calendar year.

1680498918939.png

In 2023, we're in a Tier 2a shortage.

Arizona bears the brunt of the pain, and California hasn't had to cut any of their usage, but if we get below 1045 feet, California gets hit too, and we're real close. (So far the officially-measured low has been 1043 feet in Nov 2022, but it's crept back up to 1047 feet as of Feb 2023.) If we do reach 1025 feet, total cuts to lower Colorado usage will be 1.1 million acre-feet per year. You'll notice that if X = 10.2 million acre-feet prior to the 2019 DCP and Y = 9 million (using the NY Times numbers), that would need a 1.2 million acre-feet per year cut to reach balance. (For those of you with a control systems background, this sort of works like an integral controller: the lake level is the integral of the net inflow, and outflow is gradually decreased as the water level decreases.) In the event we continue to have dry weather, the cuts will continue. In the event we get wet weather and the lake level rises, those cuts lessen.

If we get below DCP Tier 3 (1025 feet) there will need to be further cuts. There was an attempt this year to reach a new agreement, and all the states except California got there. Will the federal government have to put a gun to our heads to agree on one? Who knows.

Deadpool is at 895 feet, at which time basic physics will be doing the cuts, but that's another 130 feet below the Tier 3 threshold.

Arizona farmers are getting screwed, but the major municipalities that rely on CAP aren't having to give up much, and neither are the AZ Native American tribes, who have the potential to earn a lot of money to let someone use their CAP allotments, if it comes to that.

1680499082406.png

Aha, apparently there is an agreement with Mexico too, the so-called "Minute 323 Binational Water Scarcity Contingency Plan"... I haven't looked for the official copy, but here's what CAP's fact sheet shows:

1680500108921.png
 
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In the meantime, CAP and SRP and Phoenix-area municipalities are working towards an SRP-CAP interconnection facility (SCIF) that would allow SRP service area water to be pumped into the CAP. There is already a CSIF connection in the other direction, which is kind of ironic, given the present situation. I'm not sure how long it will take to construct, but I'd be willing to bet money it will happen before the Colorado River usage gets a new interstate agreement.

This also would not help Arizona farmers, who are getting screwed, but it would help Phoenix-area municipalities including for projects like TSMC's fabs.

From https://municipalwaterleader.com/the-value-of-partnerships/ : (not sure when that was published, sometime after 2019)
-----

Since the CSIF was first used in 1990, a total of 3.4 million acre-feet of CAP water has been transported through it. More than half—1.8 million acre-feet—has been recharged underground for future use at three recharge facilities operated by SRP. While most of the remaining 1.6 million acre-feet has been transported to city water treatment plants and put to other municipal uses, some of the water has been exchanged between SRP and CAP during times of extreme drought or system maintenance.

From 2000 to 2004, a time of extreme drought in the Salt and Verde watersheds, SRP was faced with the prospect of empty reservoirs despite having reduced water allocations. This dire situation was avoided through the purchase and exchange of more than 600,000 acre-feet of CAP water to supplement SRP’s water supplies from 2000 to 2004.

In 2019, SRP was able to reciprocate by supporting CAP during a major system maintenance project. In that year, the Salt River siphon, which moves CAP water under the Salt River, needed to be drained so that its lining could be inspected and repaired. Since the siphon is located upstream of the CSIF, any CAP water orders that would normally be delivered via the CSIF could not be made unless CAP and SRP worked together. In preparation for the siphon outage, SRP and CAP operational staff collaborated on a plan by which SRP would take delivery of additional CAP water prior to the siphon outage and then would be able to maintain delivery of CAP water orders during the siphon outage. The collaboration was a great success.

The leadership of both SRP and CAP realized a long time ago that they could help each other both in times of severe dry periods and when water was in abundance and do it in an efficient and cost-effective way. In order to facilitate expanded delivery and to enhance the resiliency of the Salt River Valley’s water supplies, the construction of a new SRP-CAP interconnection facility (SCIF) has been proposed. This interconnection would flow in the opposite direction of the existing CSIF, and much like that facility, it would be a critical component of the valley’s water delivery infrastructure. The purpose of the SCIF would be to push water to areas where it’s needed in central Arizona.

One use for the SCIF would be to deliver water held in the 287,000 acre-feet of storage capacity in the New Conservation Space (NCS) at SRP’s largest reservoir, Roosevelt Lake. NCS water is stored at the dam by the cities of Chandler, Glendale, Mesa, Phoenix, Scottsdale, and Tempe and is intended for use outside SRP’s service area. Using the SCIF would eliminate the need for additional infrastructure to move this water outside SRP’s service area.

With the SCIF in place, NCS water and other water supplies could be delivered directly to city water treatment plants located along the CAP canal. The parties involved would coordinate operations to facilitate the use of the CAP canal without affecting other CAP deliveries, likely providing additional operational flexibility. “The SCIF will provide significant operational and water reliability benefits for water users served by both CAP and SRP,” says Mr. Dent.

Perhaps most importantly, the SCIF will enable the recovery of water stored underground at recharge facilities located within SRP’s water service area. Like the surface water stored in SRP’s reservoirs, recovered well water can currently only be delivered using SRP’s delivery system. That presents a problem, considering that the vast majority of this water is intended to meet needs outside SRP’s service area, including those related to future growth or shortage conditions. With the new interconnection in place, cities like Phoenix, which holds credits for more than 200,000 acre-feet of water stored underground within SRP’s service area, can arrange to use SRP’s wells for recovery. One or more wells would pump Phoenix’s stored water and deliver it to SRP customers in place of the SRP water they would normally receive.
 
There's also the possibility of building a water pipeline from another state such as California and piping it inland.

More costly and will need Arizona to send some payments to another State's government/stakeholders as compensation.

But it will be a lot more stable then depending entirely on local geography.
 
There's also the possibility of building a water pipeline from another state such as California and piping it inland.

More costly and will need Arizona to send some payments to another State's government/stakeholders as compensation.

As an Arizona taxpayer, I suspect it would be far cheaper to negotiate a deal with Imperial Valley farmers in California (who use 80% of California's Colorado River allotment, more than Arizona's) and provide money and resources to upgrade to drip irrigation systems, in exchange for, say, extinguishing 20% of their water rights and transfering of another 20% to Arizona via the CAP.

Just for some engineering sanity, let's use the 10,000 acre-feet (10KAF) TSMC is expected to use each year for one of its Arizona fabs as a unit... 10KAF = 12,330,000 cubic meters = 12.33 billion liters, weighing approx 12.33 billion kg.

To lift 10KAF of water one meter, requires mgh = 12.33 billion kg * 9.81 m/s^2 * 1m = 121 billion joules = 33600 kWh = 33.6 MWh. Pumping efficiency can be very high; one source says 87%, another says 0.88 * 0.97 = 85%. Let's give this the benefit of the doubt and say we can pump at 90% efficiency: that puts us at 33.6MWh / 0.9 = 37.3MWh.

Electricity prices for AZ's Palo Verde nuclear plant (which exports power to southern CA) are tracked by commodity exchanges; I can't seem to find the most recent yearly averages, but here's a graph from January 2023; let's just say it's $100 / MWh wholesale prices => $3700 to pump the 10KAF water up one meter.
1680878168407.png

Downtown Phoenix is about 1250 feet above sea level; the area TSMC is building on, in North Phoenix, between AZ highways 303 and 74, is about 1600 feet above sea level = about 488 meters.

$3700/meter * 488 meters = $1.8 million each year. Probably more because my calculations have been generous.

Oh, but we have to get the water first, and there are no extra sources of fresh water for Arizona. We're already using the reservoirs and the Colorado River. California doesn't have any nearby to spare (remember, they import about 4.4 million acre-feet each year from the Colorado River), and New Mexico is not exactly a wet state either --- otherwise we would have been importing water from them --- so we've got to turn to desalinization, most likely from the Sea of Cortez, assuming we can get cooperation from the Mexican government, and they don't charge us anything. The state of Texas estimates $3.60 - $5.80 per 1000 gallons of seawater... let's be generous again and use $3.60 / 1000 gallons. An acre-foot is about 325,850 gallons, so that should cost us $1173 per acre-foot... our 10KAF is going to cost $11.7 million each year.

$11.7 million for desalinization and $1.8 million for pumping 10KAF = $13.5 million. ($1350 per acre-foot)

Nope.

CAP water from the Colorado River is expected to cost $217 - $281 per acre-foot over the next few years, for municipal and industrial customers. Much cheaper to conserve what we have now.

Let's spend the money and buy drip irrigation for the Imperial Valley farmers, so we can use the Colorado River water elsewhere.
 
Hey, look at that:


The Gila River tribe will get $83 million for the pipeline project to reuse about 20,000 acre-feet of water per year, and $50 million per year over three years not to use 125,000 acre-feet per year of water currently stored at Lake Mead. The latter is part of a broader effort to get Colorado River water users to substantially lower their water use. An acre-foot of water is enough to cover an acre of land 1 foot deep, or about enough to serve two average households per year.

That's $400 per acre-feet. More expensive than CAP water but far cheaper than desalinization.

Thursday’s announcement comes days before the Bureau of Reclamation, the federal agency that controls water flows on the river, is expected to outline plans for all seven Colorado River basin states — Arizona, California, Nevada, Colorado, Utah, New Mexico and Wyoming — to use less water. The states, together, are allocated 15 million acre-feet per year, and Mexico is allocated another 1.5 million acre-feet. U.S. Bureau of Reclamation Commissioner Camille Touton called on the states last year to collectively cut up to 4 million acre-feet of use, but the number has proven elusive.

The Gila River tribe, by comparison, is allocated 653,000 acre-feet per year. It committed to give up about one-fifth of its allocation until 2025. In all, 22 of 30 federally recognized tribes in the Colorado River basin have recognized rights to 3.2 million acre-feet (3.9 billion cubic meters) annually, or up to 26% of the basin’s current annual flow, according to a 2021 policy paper by the Getches-Wilkinson Center for Natural Resources, Energy and the Environment at the University of Colorado.

The Gila River Indian Community (GRIC) directly abuts the west side of Intel's Ocotillo campus, which has Fab 42 as well as the new Fabs 52 and 62 under construction, and is in close proximity to I-10. Aside from the land ownership issues --- technically the title is held by the United States Government in trust for the tribes, and cannot be sold or transferred without permission from the United States Government --- and cultural issues around land, GRIC's location and water rights could make it an attractive place to start another fab, if there were interest by the tribe in leasing their land, and if they found an interested partner (TSMC/Intel/other) to run it. Certainly more financially lucrative than the irrigated alfalfa fields they operate now. Or perhaps they could just sell some of their water to Intel or the City of Chandler.

1680886925260.png
 
Hey, look at that:




That's $400 per acre-feet. More expensive than CAP water but far cheaper than desalinization.



The Gila River Indian Community (GRIC) directly abuts the west side of Intel's Ocotillo campus, which has Fab 42 as well as the new Fabs 52 and 62 under construction, and is in close proximity to I-10. Aside from the land ownership issues --- technically the title is held by the United States Government in trust for the tribes, and cannot be sold or transferred without permission from the United States Government --- and cultural issues around land, GRIC's location and water rights could make it an attractive place to start another fab, if there were interest by the tribe in leasing their land, and if they found an interested partner (TSMC/Intel/other) to run it. Certainly more financially lucrative than the irrigated alfalfa fields they operate now. Or perhaps they could just sell some of their water to Intel or the City of Chandler.

View attachment 1118

Intel has the New Albany Ohio location to expand with plenty of water and land available.
 
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