Someday, Chicago may proudly lay claim to the title "the Saudi Arabia of Sewage."

Next week at the Water Innovations Alliance in Chicago, Mark Shannon, Director of the NSF STC WaterCAMPWS at the University of Illinois, will sketch out a vision for a new type of water purification system that will convert sewage into re-useable water, methane and a sludge of minerals that can be sold to manufacturers or brick makers.

"The dirtier the better," he said.

The idea behind the system is help ameliorate three of the world's major looming crises – global warming, water scarcity and mounds of environmental hazards – in a way that will give entrepreneurs and governments economic incentives to actually install them. Although VCs and politician regularly discuss the water crisis, tangible strategies and plans are often stymied because water upgrades are seen through one lens: How much projects will cost.

"If you can show people they can make money from purifying water, they will beat a path to your door," he said.

And make no mistake: The water crisis is real. Australia, China and parts of North America have been hit hard by prolonged droughts. El Paso, Texas invested in a desalination system to clean salts out of its groundwater. If a 6.8 earthquake knocks out the canals in central California, getting fresh water to L.A. and San Francisco (and keeping sea water out) will be a problem within hours.

Water conservation techniques can help, but they won't provide a complete answer. Even if humans reduce consumption by 60 percent and agriculture and industry reduced water consumption by 20 percent each, the world's water supply would have to grow by 30 percent to meet demand by 2030, he said. At current consumption rates, the water supply would have to grow by 45 percent.

Out of that void comes the increasingly popular concept of water recycling, or taking sewage and cleaning it up.

"The whole concept of recycled water is going to happen. It is inevitable," said Spike Narayan, functional manager, science & technology, at IBM's Almaden Research Center, which is developing materials for purification membranes, in an interview last week. "We need to figure out inexpensive ways to do it."

Singapore, which imports half of its water from neighboring Malaysia, already has a sewage recovery system.

Shannon's system revolves around an anaerobic digester – i.e., a tank sealed from the atmosphere filled with bacteria and membranes. Microorganisms would be killed and filtered out while solids, water and organic waste would be isolated and ultimately sold separately.

The water out of such a system could be used for any purpose but for drinking, eating and bathing. Technically, it could be used for those purposes, but why push people's tolerance, Shannon figures. Instead, deliver it to agribusiness.

"You could quadruple the amount of saleable water," he said

The organic waste could be harvested for methane. Chicago's wastewater now contains about 6 megajoules of energy for every cubic meter. It takes about 9 megajoules to purify it with chemicals, leading to an energy loss of 15 megajoules of energy for every cubic meter.

If you harvested for methane, the city could harvest 5 megajoules per cubic meter, leading to a net energy gain from the sewer. Chicago has a sewage outflow of 283 cubic meters a second. (And yes, we do go to the bathroom a lot – Mexico has an outflow of 325 cubic meters a second.)

Shannon is currently in the midst of raising funds to build a prototype that would work with 20 liters at a time. The Solara in New York's Battery Park neighborhood has a 580 water recovery units that work aerobically.

The minerals recovered include magnesium, boron, fly ash and lithium. Simbol Mining, a startup spun out of Lawrence Livermore, has a technique for extracting lithium from water. Right now, cities pay to have the stuff stored. El Paso, for instance, re-injects the salts and minerals from its desalination system back into the ground when it could conceivably sell them.

Although Shannon is only in the process of testing his idea, communities are already in contact with him.

We won't be at the conference but will be covering it.