[00:00:00] Speaker A: Our feeling is that there's a wave coming at us. We're just not sure how big that wave is, inflation wise.
I am Rhys Tisdall and this is the Future of Water in which we talk about all the ways which companies, utilities and people are addressing the challenges and opportunities in water.
This is episode 124.
That's a 1, 2, 4. That means there are 123 other ones that you could listen to if you go back in the archives and you haven't done so already. So as far as this one is concerned though, I have a good feeling it's going to be a great one. That's because today, joined by Bluefield Senior Research Director Greg Goodwin, who has recently released some analysis on the US and Canada first half 2025 policy review is what it is for all things water. And as you can imagine, Washington is probably going to be mentioned 1, 2, 3, at least several times, but also giving Canada its well deserved due.
I plan to ask Greg about what's happening north of the border and what that means for the water sector because there is some policy activity happening and I'd like the topic of policy because one, it is one of the key factors that drives the water sector on the municipal side as well as the industrial side of the equation. A couple questions, you know. Will state revolving funds survive reconciliation as part of that big beautiful bill?
And if so, to what extent? What might it mean? Can small systems survive rising costs and limited access to capital? If a lot of these low interest loans and grants disappear, what does that mean? What does it mean for the States?
Will Canada's bold water investments influence opportunities for the water sector supply chain and solutions providers? I would hope so. There's a lot going on. So rather than hear me ask these questions alone, I have to bring Greg in in a little bit. But before we get to Greg, you're going to have to bear with me, Tom, just a little bit because a couple things caught my eye this past week. In fact, I got three and a half things. You could call it four, but I'm going to call it three and a half because that'll keep you on the hook for a little bit longer.
The first being Ver Alto's big bet on water innovation.
Peralto is putting about 20 million euros in the Emerald Technology Ventures Global water Fund too.
This fund, which will launch in October, is expected to raise about 150 to 180 million euros and focus on technologies for water treatment, monitoring, tackling emerging contaminants. So why does this matter. Well, instead of building everything in house, some companies I might add, they strategics in particular, they do build out their own venture funds where they invest in innovation and technologies.
And one that comes to mind is a company like crh who also owns Old Castle, but they've made investments through their own venture fund and that's how they kind of stay ahead of the curve. But a company like Veralto in this case is using venture funds to tap into early stage water tech and accelerate innovation through Emerald, which Emerald already manages more than over a billion if 1.2 billion euros in the water sector and has a strong track record in sustainable industrial technologies.
But for Alto, it's a way of not only staying ahead, but leveraging Emerald's network, their understanding of their early stage company landscape and what this might mean as they go forward. So I think this is super interesting. It's always interesting to watch a company like Emerald, but also Vuralta, who spun out of Danaher not all that long ago. So it's interesting to see the moves that they're making as a standalone water company.
Secondly, Inframark and Azuri are joining forces. So let's talk a little bit about what I would call consolidation or company mergers. And for Mark and Azuria, both backed by New Mountain Capital, have announced plans to merge. For those who are new to the podcast, maybe even new the water sector.
Azuria, formerly known as Agon, they rebranded a year, year and a half ago, I think can't remember the exact date, but they are a big player in the water space, particularly in the US More specifically now because they've sort of retrenched here. Together, these two companies aim to create a water services platform with over $2 billion in revenue and they say 6,000 employees offering everything from O and M or operations and maintenance services to technology enabled solutions. That would be in my mind, trenchless pipe rehabilitation. That's what Azuria does and for Mark is more on the OM side of the equation. The two businesses, I think this is very complimentary. They don't really cross over as far as what they do, but at the same time I think their customer bases in some respects are very similar. So Inframark is going to bring its O and M business to the broader product offering and they operate in over 30 states now. I think a big chunk of their business is in the southern U.S. texas is a big market for them. Azuria, which is nationwide as well, really focuses on aging water pipelines, infrastructure that people like to talk about, aging infrastructure and water leaks, wastewater, pipe rehabilitation, so geographically speaking, I think this may help inform our a little bit more than it will Aegion, but I do think the offering will be interesting. But another question I have is where does this take New Mountain next?
I know that these companies have been acquiring and in the case of Inframark, they've made a couple digital acquisitions. They've made a couple. I think I recently made an engineering focus acquisition.
So the platform is getting stronger. It's big. This is a big $2 billion of revenues in the water sector as pure plays means that, you know, are they going to do an ipo? IPO market is not so hot these days. Will they package it together and settle it off at some point? It's been, what, about five years since New Mountain has pulled these in? So it'll be.
I'm certainly the industry is watching and it's also a sign of how private equity is shaping U.S. water services and the landscape. When you look at companies like KKR has some investments. We've also got Science Water is another player. You've got Ridgewood is another one. Those are just a couple that come to mind and where they're playing in the water sector. Everything from services and hardware to utility ownership in some cases.
My last newsworthy item, I think, is that offwat gets the act and the big news out of the uk, that is. That's where this is coming from. Offwat is a water regulator and it's being abolished. This follows an independent review that quite honestly slammed the regulator for bailing to rein in these private water companies.
Utilities is what we're talking about.
As I always say, the UK is the most privatized water market in the world.
And they also slammed offwat. The review slammed the regulator because of mounting pollution, soaring bills for the customers and quite honestly, just public outrage. It is in the news every day.
The public is outraged.
So the plan is to replace offwat with a single, more powerful watchdog with hopefully with some teeth this time.
The merges functions from multiple agencies to streamline oversight. Why now? Well, serious pollution incidents in England jumped about 60% last year, reportedly. So that's one. So people can't go to the beach because they can't swim in the water in some cases, although the water's pretty cold. I don't know who's doing it in the uk.
God bless you, Tom. And secondly, Tim's water's on the brink of collapse. Right. We've talked about it on this podcast with my colleague Chloe Meyer several times, but it's come up time and Time again. Tim's Water its debt loads are massive, they've been paying out dividends to investors and public is not happy.
So it'll be interesting to see what happens if the regulator is in fact able to block ownership changes, enforce stronger financial requirements. But the kicker still is what does this mean for customer bills and rates and what that what that might mean. So I like these three topics. I don't typically do three, but what ties these stories together is a simple reality. The water sector is transforming on what I see are three fronts.
Innovation is accelerating through strategic investments like Veralto's.
Scale and integration are definitely a playbook for private equity, but for the sector as a whole, how does scale help deliver better, more efficient solutions as seen with in the case of Inframark and Azuria?
Then lastly the uk. In the uk, the governance is being rewritten and it's not just the uk, we're seeing it in the US for good and bad reasons.
But in the case of ofwat, it's being rewritten to address decades of regulatory failure and shortcomings and at the end of the day, restore public confidence. Isn't that what it's really all about?
We need people to rely on with some comfort and security on their water utilities and systems that they can trust it.
Not only the tap water that they're drinking, but also for their ability.
As I said, it's summertime to be able to go to the beach and swim in the water and not worry about getting sick or ill.
So those are my three news takeaways. I do want to throw one more thing in there. I guess this is the half point. Take it as a half or a full, but Bluefield just released its Europe Industrial forecast. Europe Industrial Water Market Outlook trends Drivers forecast from 2025 to 2030.
The Sensei report is pretty comprehensive. It's well over 100 pages looking at 12 manufacturing verticals.
It provides our transparent methodology. How we did it gives you the numbers, takes a look individually at the markets themselves, the verticals, what's driving growth, what are the opportunities?
And there are some detailed company profiles as well. So this time we're going to be looking just at Europe, the countries across Europe, those key verticals. We've already done it in the us.
The hottest topic to date in the US has been high tech data centers and semiconductors. You've heard from my colleague Amber Walsh, who's been on actually two or three of the last five podcasts we've recorded. So if you're interested in that, we will have the Europe team on probably next, I suspect, since this was just released yesterday. So if you're interested in that, you can always go to bluefieldresearch.com to learn more about it. But also there's a contact Us form. Send us a contact form if you're interested in it.
And with that being said, let's talk to Greg Goodwin about what's happening in policy in the US And Canada.
All right. So I'm joined here by Greg Goodwin. Greg, what's going on?
[00:12:08] Speaker B: Not too much, Reese. It's a summer Friday. Can't complain. Yourself?
[00:12:12] Speaker A: Yeah, it's been a, well, it's going to be a smoker today. I think. Today I biked in and so the afternoon's going to be a little, a little wet going home, I'm afraid. But that's, that's the way it goes. But what I wanted to bring you on for, and it's sort of quick, this came up earlier in the week. We were talking and a couple things. One, there's a lot happening in policy. I know we recorded a podcast several episodes ago, sort of what's happening in Washington. That's the first point. The second being that you have recently worked on a, you know, our. What did we talk about? Is it a semiannual, biannual policy review? What are we calling it these days?
[00:12:57] Speaker B: I think either semi or biannual would fit once every six months, basically, once.
[00:13:03] Speaker A: Every six months we're taking a look at the policies in the US And Canada. What's happening, what are the, the main things that are shaping the market. We're also doing it in Europe, as an aside, but in your case, you've been more involved in the U.S. so we've just released it. I believe it just hit the sort of the wire in the last day or two. One of the things, and I'll just start with the one thing that jumped out at me was, was Canada.
So in all due respect to Canada and giving them the credit they deserve, we're going to give Canada headline news and, and talk a little bit about their policy. So what's happening in Canada and what. Why does it matter?
[00:13:48] Speaker B: Sure. So I think in the past year or so, and particularly last six months, there have been a number of initiatives in Canada to address both things that are related to, you know, internal kind of water quality that is always a perennial issue, but also kind of the evolving relationship with the United States. So one thing is last year they did create a new agency called the Canada Water Agency, which I think is meant to kind of house some of the water quality issues under like one's singular sort of federal organ.
So there's 650 million Canadian dollars that are sort of committed to a freshwater action plan to restore water bodies within the country. So they're sort of getting that on the off the ground right now in terms of sort of organizing how water quality is treated in a single agency as opposed to across maybe a couple of different agencies that have similar types of purviews. So you know, a national freshwater data strategy and funding programs feeds into that creates pretty significant opportunities for, you know, tech and consulting firms that are adjacent to that type of work as that sort of builds out becomes more of kind of a robust programming initiative in the within the Canadian government.
Another would be some. Some PFAS crackdowns that are, you know, similar to I guess kind of the U.S. stance. So there's mandatory reporting as of January of 2025 at 30 nanograms per liter for 25 PFOS compounds. So that's more expansive than the U.S. we're at 6 right now. That might soon be 2, depending on how that sort of evolves going forward. But obviously the opportunity around remediation for PFAS as important sort of early indicator and sort of driver in the regulatory front.
So there's some larger overall things as well in terms of infrastructure as a whole. So certain areas of the country, Ontario specifically has a bit of a housing crunch that's been building over the last many years. So there's multiple initiatives that are being introduced or have been introduced to try to address the housing shortage. So the province of Ontario introduced a billion dollar housing enabling water infrastructure loan program which is internal to the province initiative to try to alleviate some of that housing stress that has been a perennial challenge At a larger national level. There is inaugurated last year. They're really starting to put money in it. I think this year. It's called the Canada housing infrastructure fund C. HIF and that's a 10 year federal provincial cost share program.
I think sort of similar to the structure of the SRF program in the United States where there's, you know, Ottawa has a certain amount of money that's allocated and then the provincial capitals sort of share in terms of how that gets distributed. But essentially it's a 10 year program to try to, you know, update and modernize and get new infrastructure on the water and wastewater infrastructure side to support new housing developments. So there's about 6 billion Canadian dollars I think that have been sort of injected into this system that are going to be laid out year by year for the next decade or so.
And then I guess I would say just sort of. Lastly and most broadly, there is a law that was passed recently, this year called the Build Canada act, which has I think a number of different objectives.
It is a plan to prioritize and accelerate large national Canadian developed projects by streamlining interprovincial commerce and labor mobility agreements and basically grease the skids. It's definitely driven in part by the developing relationship with the United States. All the concerns about trade and certain rhetoric that has occurred over the last six months or so with the goal of being able to be more flexible, accelerate projects as necessary, kind of a, you know, there's a national security element to it for sure. So it's intended to kind of move things forward out of, out of Ottawa quicker than, you know, the, the status quo prior. So that's kind of, I think those are the major things that we've kind of seen in the last say six to 12 months on the Canadian side.
[00:18:25] Speaker A: Yeah, I mean there's a lot there, I think, you know, obviously the, the freshwater action plan, looking at sort of surface or water bodies. The PFAS crackdown I think, as you put it, is definitely of note. I think, you know, we've talked about it internally. The US has been kind of at the forefront maybe because there's just more PFAS here. But for regulatory wise, over the past five years, whether it be included in the Infrastructure Investment Jobs act, but even at the state level we've seen a lot of activity, but now we're seeing that happening more broadly or internationally outside of the U.S. you know, Canada is, to your point, you know, setting standards, targets. We've seen more activity in Europe, a lot of interest in that space as well, and then I think Australia as well.
My hunch that is that those markets, because of their one regulatory frameworks, the role of governments and more top down approaches, they're going to move ahead.
So ultimately those may be maybe not the scale, but they may be better markets of opportunity when it comes to that.
Maybe I don't want to get out of line, but I think that might ultimately be the case because in the US which is obviously where we are in giving the state of policy in Washington, sort of to your last point, it feels like we're a sandcastle on the beach to some extent, policy wise and regulatory wise, where things are eroding at the edges.
[00:20:09] Speaker B: Right. I mean the signal's a little bit blurry at the moment. And then I think to your Point before the probably the announcements of available funding to when it hits the ground may likely be quicker in some of these other countries that have more of a top down approach and smaller populations and maybe less red tape to go through in terms of actually getting a project up the ground.
Yeah.
[00:20:32] Speaker A: And I think you know, the Build Canada act and if I understand this correctly, I mean it's basically a way of, you know, sort of like build American, buy American. That's the inverse of that. Right. It's hey, let's solidify our own supply chains or solutions. Am I correct in saying that it's.
[00:20:51] Speaker B: Definitely a response in some ways to Baba and then probably at least somewhat to some of the 51st state rhetoric.
[00:21:02] Speaker A: Around.
[00:21:05] Speaker B: Curtailing some of the processes and red tape that have to occur across different stakeholders at different levels of government within Canada to actually get things done. But it does sort of give more of a command stance from the position of Ottawa for certain projects. I mean I think they have a certain it needs to be designated as national security XYZ or something. But the way that that's actually done seems fairly open and broad. So it could probably be used for a lot of different things.
[00:21:38] Speaker A: Yeah. And I don't want to speak out of turn here and I think you know a little bit about this. You know we talk a lot about the role of or impacts of executive orders and tariffs obviously and we have a lot of clients who are interested in that. We've had a lot of conversations with teams, groups, but also individuals as they're trying to read the tea leaves. You know, what are project pipelines look like, what do you to price, what does pricing look like, what are the impacts? And feeling is that there's a wave coming at us. We're just not sure how big that wave is inflation wise and impacts. But I think what I'm really getting at is in the case of Canada we do we know of a couple instances at least with this gets less play. And where I'm going with this is there are Canadian companies, they've resource or source products, equipment solutions from the US to Canada. And I know there are a couple of instances where they, the Canadian company has said, you know, we don't want to deal with this crap.
Up till now it's been sort of what we would call free flowing, free trade if you will and now they can just source it in Canada. That I'm correct in saying that, right?
[00:22:54] Speaker B: Yeah. I think anecdotally we know of a few folks that we've worked in on sort of the consulting side who have made those types of comments of maybe a long standing project or contract that existed between West Coast US and say British Columbia, they will no longer. I mean just because the uncertainty is probably the biggest thing there of we don't want to deal with is this going to cost X, Y or Z based on what tariff announcements come out sort of piecemeal.
We'd rather just go with what we know internally to Canadian business. And there's no uncertainty there. Even if it's maybe a slightly higher price in the immediate term, long term it might be cheaper. So it's definitely an ingredient that's making business decisions more complicated and shifting relationships based on how things have developed in the last six months.
[00:23:54] Speaker A: So let's change gears a little bit.
Let's go south of the border that is of Canada and let's look at, let's look at Washington for a second. I think a big topic of conversation obviously is the status of the triple B, the big beautiful bill and what that means for water.
I know there's a lot to do before there's any determination of exactly what it means, but what's our. Do we have a quick position or take on what it may or may not mean and where are water related dollars exposed to this?
[00:24:35] Speaker B: Sure. So that specific reconciliation bill passed on the 4th of July, it's obviously a symbolic move there. I mean overall it's a very sweeping bill that has more to do with kind of tax structure and a lot of sort of social spending.
When it comes to the water side, I think the things that are probably most relevant is the stance on energy and incentives for.
It's definitely a shift away from clean energy initiatives that have happened over the last 10, 15 years and back towards traditional extractive industries, oil and gas, even coal. There's incentives to try to revive and sort of push those forward. So I would say certainly like within what we look at for industrial water, there's a lot of money and sort of incentives thrown in for getting rare earth minerals and other sort of extraction for both defense and industry that are within that. So those industries will definitely see some money kind of getting funneled their way. So we might see an expansion in sort of how those develop and obviously all sort of the add on water needs that are part of those industries that we look at.
One interesting thing around the industrial vertical specifically I would say we had semiconductors. So there was an investment tax credit I think as part of the Chips act that was for 25% for building the plant before the end of 20, 26, that's been bumped up to 35%. So there's definitely incentives for that production of plant facilities to move before the end of next year. So you might see a bump on some of that planning and sort of siting and movement to kind of get things going there. Probably not siting. That's way too far back in the timeline. But anyway, there's movement to kind of get that going forward.
[00:26:30] Speaker A: Yeah. One thing just to interject for a second, I was just looking at the news yesterday. I think even intel had announced that it was pulling investments out of Europe and focusing more on the US and that may be part of it. So they can, to the extent they can, accelerate activities in the US to benefit from that. I hadn't really thought about it until you just said that.
[00:26:52] Speaker B: Yeah, I mean, it's one of the probably not super common things within sort of some of the maybe Biden administration legislation that's being put forward and actually sort of intensified in a way in terms of sort of some of those tax incentives. So. But then I'd say on the, on the municipal side, this particular bill doesn't have a ton that touches the EPA directly. That will be those fights will occur in the next say, like two months as we reach the end of the federal fiscal.
So those will be part of separate appropriations bills. And there's an opening card that's kind of been put on the table with that. So the House Interior and Environment Appropriation Subcommittee has a proposal that's been released around budget priorities. And so within that would be epa, and that's obviously, you know, that would have to go through multiple committees and get through the whole process. But what they've proposed basically is a 23% cut to the overall EPA budget. And Then within that, 15.5% cut to state and tribal assistance grants, 31.5% cut to the SRF programs. That's probably the biggest one for what we talk about.
And then 41% cut to the Environmental and Programs management account. So pretty draconian cuts to a lot of the sort of funding and sources of research and disbursement of funds that feeds into the municipal sector in the US from kind of the federal government. So obviously that is far from passing. But that's sort of a signal from what the, you know, at least sort of the Republican side of the House is thinking right now.
[00:28:32] Speaker A: Yeah. I mean, if anything, it says how they feel about it and you know how they feel. And I think that was a risk when we did the white paper a Year or two ago. I mean, there's a real concern for the epa, the state revolving funds. I mean, that is the one.
I should have a better term for this. But it is the one well established, long standing channel of federal funds into the individual states. And it's left up to the states to kind of manage those. And they do vary wildly. You know, we've just, I think we're about to release our most recent infrastructure investment Jobs act analysis, funding analysis on state revolving fund programs. And you know, it's as you can imagine, there's some states that perennially do poorly as far as their disbursements go and some do really well. So. But it's left up to localities. Really what I'm getting at is now the feds are kind of pulling back saying hey, there are other. Now whether that money, where does that money go if they cut from there? Is it for this tax bill?
Yeah, I mean it's basically to give others tax cuts while cutting, you know, a key channel of dollars from these programs. So in brief, any quick takes on what the cuts to SRF state revolving funds might mean for utilities in the market as a whole?
[00:30:01] Speaker B: I think overall, if there's dependence on forgiveness or grants that are part of those projects, those are probably certainly more at risk than the ones that are more on the match.
I think probably the award process will become more competitive overall as there's less money to go around.
Utilities will probably lean more on bond markets or other sources of funding. It will just basically be an overall squeeze.
As with a lot of things that we see within water, it will fall probably disproportionately more on the smaller and more vulnerable systems that have less of the administrative capacity to really kind of, you know, search for and secure funding. So that may lead to, you know, higher rates at a more accelerated timeline for some of those smaller systems overall, just in terms of those dynamics.
And then I think we were talking the other day, Rhys, with some other colleagues that we've looked at how some of that IIJ funding has been dispersed, the timing of it. And I think we're really starting to see now that that's slowing down in terms of the disbursement speed and what's happening and sort of the overall amounts. Those are things that get updated quarterly. So there's sort of a back looking part of the money that gets added on that is not always accounted for, but the amount of the drop is enough that it definitely seems that some of the early administrative impoundments or attempts to rescind some of the funding are having effect on how that program is playing out. We're now in year four of five and how that was actually legislated. So I think we'd expect to see it be as efficient as you'd think before the expiration date. And it's not necessarily playing out that way right now. Yeah.
[00:31:56] Speaker A: So as you were talking and I hadn't really thought about this, I just pulled up the deck that our team has been working on. So every quarter we go through the the awards, IJ awards and sort of look to see how many dollars have gone through. And so I'm hopefully not drag this out too long but when you look at say revolving funds, there were I think about $43 billion appropriated at the beginning of the program and that was what, November 2021 and so that was appropriated to date it's been about 7.8, $7.9 billion have sort of gotten down to the sub award level, sort of getting closer to the street.
But what's interesting I think to your point and this what made me think of it and that is when you look at the awards, the project level awards over time it's steadily grown since you know, really Q2, 2022 and it's kind of been there have been a couple lumps or bumps here and there. And this includes clean water, state revolving funds, drinking water, state revolving funds. These are general supplemental. This also includes lead service lines, emerging contaminants and then 604B grants not to get to in the weeds. But really the story is I would say when you compare Q1 and Q2 so those respective quarters to the same quarters and prior year so Q1 awards were 49% less than they were in Q1 2024 and then when you look at Q2, they were 55% less. So that's not really my question to the team was is this a tariff question or is this something else? And it seem really be more along the lines of executive orders in a slowdown uncertainty. What does that mean where the you know, slowing things down, staffing cuts. So there's you know, a lack of staffing. Whether it be in Washington. There have been voluntary retirements.
There have been now may have a question for you in a minute about layoffs or cuts and then just general regulatory uncertainty. So there has been a lag, you know, and one could argue well there's a lag and our data shows this as time goes on and we look at subsequent periods, we do see dollars being backfilled into Those either not reported or not demonstrated in the data that we collect from the government.
But the average difference between of that backfill is 19%. But right for the first half of 2025 we're looking at 49 and 55% for the first two quarters 1 and 2. So there's definitely some impacts we're seeing there. I don't know how to state it otherwise hopefully I'd like to, I hope we're wrong in this case, but the data doesn't tell us that. So it'll be interesting to see how this plays out. I know. And for anybody who's interested that deck the data is already published to clients, so clients already have access to that. But for anybody else it's a quick report sort of the status and update of what's happening with IJ well, so real quickly, and I know I said this is going to be brief, so I think maybe I'll make this my last question for you, Greg. And that is epa, EPA layoffs.
The EPA is the Office of Research and Development has just taken a big hit. It sounds like if you're reading the news, any, any word on that, what that might mean.
[00:35:39] Speaker B: Yeah, so I know that was something that was discussed early on in sort of the new administration. It sounds like they've found a way to cut it pretty significantly. So I think it's about 750 million as a layoff there and then reduction from 16,000 plus to 12 and a half thousand.
So I mean the ORD is obviously kind of the internal science arm of the EPA and the people doing sort of the, the real work around regulations, formulating them and sort of operationalizing what, what needs to happen. So I mean that seems to me to be kind of an important cut in terms of capacity to do all sort of the scientific research that's necessary for air, water, chemicals, et cetera. So I mean it raises the question of whether will some of that be privatized to some degree or will it just be cut completely?
Like it's probably the latter there, but it doesn't seem like a good development for the pushing out of some of the regulatory frameworks that inform how we look at sort of water quality and you know, particularly around things like pfas and other emerging contaminants and so forth. So I think there had been a general consensus that that sort of stuff was lagging time wise to begin with. So additional cuts would, would probably not be beneficial and moving the ball forward there for dealing with water quality issues.
[00:37:08] Speaker A: In the U.S.
yeah, you know, science is the enemy, I suppose. But yeah, I think to that point, you know, you're cutting that. Sorry. And as you're thinking, I was looking back recently at kind of federal priorities, water spend over time. And one of the things I was looking at was what was federal government spend according to, I think the source Congressional Budget Office, could be General Accountability Office, I don't remember. But in what was it, 2021?
I think that was the number I was looking at. The federal government put about 3.2 billion into the pipeline and that's used in a number of different ways. But comparatively, defense spending was 756 billion that same year. Transportation was 105 billion.
And space exploration, who seems to have just fallen on one company now was 23 billion. So it was sort of, I was looking at it, admittedly, somewhat cynically to say, why don't we care about water?
I can tell you we can live without space exploration, but honestly, we can live without transportation.
Defense spending. We can live. You could kind of go dark and say we couldn't live without defense, but we can't live without water. So I thought that was interesting from a federal government perspective where they're putting their money. So that speaks loudly to me at least. So these layoffs are just another indication of that. So that being said, Greg, what else you working on?
What, what's of note in the rest of the world of water? Make it happy if you can.
[00:38:53] Speaker B: That's a tall order at the moment. Let's see.
No, I mean we're doing a lot of stuff around water quality remediation in terms of research projects and different business models for setting that up, whether it be capital sales or looking into rentals or sort of long term, you know, sort of cost and revenue sharing options. There's a lot of different sort of innovative ways that some of these water treatment companies that are both industrial and municipal are sort of approaching the space both in a financial and sort of project delivery perspective. So that's one thing that's going on right now. And then obviously, you know, there's a lot that hasn't happened yet with what will happen eventually for fiscal year 2026 spend. So we'll try to stay on top of what the developments are in terms of any negotiations or how this plays out, because it could be a shutdown, it could be a series of small continuing resolutions, it could be an actual budget agreement.
There's a wide range, but it'll be important to stay on top of going forward.
[00:40:03] Speaker A: Yeah, that'll be interesting. Like Said, I think earlier you were saying they're, they're supposed to work on this over the next, you know, six, eight, 10 weeks. I know that Congress is quickly or suddenly on vacation for five.
[00:40:18] Speaker B: Well, at least the House is. Maybe the Senate can, can discuss things. But, but, yeah, I'll just leave it there.
[00:40:26] Speaker A: Yeah, no, I'm with you. So I think, you know, maybe to end on a positive note, go Canada.
We started, we started on a positive note for Canada. They're doing what they got to do. So if you're in the water sector, definitely an interesting market worth looking at.
And yeah, that's the way it goes, but that's what we're here for. We're here to help companies and decision makers sort of wade through the morass of water policy. But also to your last point, business strategies and opportunities and business models within the water sector. So all super interesting. There's upside, downside of all this, and it's not just the water sector.
It cuts in a lot of different ways. So. All right, Greg, I said I'd make this quick and I've kept you a lot longer than I thought. So thanks, man, for jumping on and we will talk again soon.
[00:41:23] Speaker B: Thanks, Rhys. Have a good one.
[00:41:26] Speaker A: All right, that's it for today's breakdown. If you want more intel from people like Greg Goodwin and Bluefield Research's team of water experts, head over. I guess first stop is head to bluefieldresearch.com and learn more about what we do and how we help companies. You can also see some of the companies we're helping on our website.
So with that, you know, thanks for being part of the journey. This is turning out to be an interesting 2025. We're, we're more than halfway home and look forward to seeing what happens on the Future Water podcast for the next almost five months.
So before we sign off, I don't say this enough, I want to thank all the people involved in making this podcast as well as the Water Values podcast with Dave McGimpsey. We collaborate closely with him. In fact, I think I'm talking to him next week for a mid summer, end of July discussion. Got to figure out what that topic is going to be, but I look forward to that.
Do that every month with Dave. But he has great outside guests, not just Bluefield research analysts like Future Water.
But I do want to thank Mike Gaylor, Ryan Sullivan, Kelly Talbot, Steph Aldock for helping.
Not me, but just Bluefield. Pull all this together.
It's a big help and they deserve a lot of recognition for making the me talk to you. Or making me sound better is a better way to put it. Otherwise, like I always say, I'd be talking to myself, which I do all the time. But I'd be talking to myself, not you.
If you're in Boston, Barcelona, New York, Chicago, San Francisco, Paris, let Bluefield Research know we'd enjoy the opportunity for a meeting. That's where we are physically.
Send us a Note to water expertsluefieldresearch.com Any ideas you would like us to discuss. We're doing this for you. That's water expertsluefieldresearch.com lastly, tell a friend about it. That's what I do. I do it on LinkedIn every time we record a podcast. That's how I tell my professional friends. But I also tell my friends and tell them what I'm up to, so you should do the same.
With that being said, I am Rhys Tisdall and I'll catch you next time as we keep watching the water sector one signal at a time. This podcast and these water industry insights have been brought to you by the one and only Bluefield Research. Learn more about us.
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[email protected] until we talk again. Be well, be safe, and take care of.
