Sewer mining is defined as the process of tapping into a sewer (before or after it reaches the sewage-treatment plant) and extracting the sewage so that it can be treated in a separate treatment facility and put to another use as recycled water (Sydney Water, How to Establish a Sewer Mining Operation, May 2006).^[14] Although the production and supply of recycled water could be undertaken by the sewerage service provider, sewer mining is normally associated with third-party access by persons who either use the recycled water for their own purposes or supply it to others. In that sense, sewer miners are a subset of a wider class, known as third-party access seekers. Sewer miners engage in sewer mining by virtue of a contractual agreement with the public water infrastructure owner (for example, Sydney Water).

To date, sewer miners have established sewer-mining operations either over or adjacent to the sewer main on their own land. They have recycled the sewage at that venue and then piped the recycled water to the point of usage.^[15] Several schemes of this nature are located on golf courses, where there is a demand for the product and enough space to build sewer-mining operations sufficiently distant from residents.^[16] Nevertheless, sewer mining, particularly on a large scale, is still in its infancy despite the sewage farms begun at Botany Bay in the 1960s and the Werribbee Treatment Plant, noted by Dingle in Chapter 1.

Sewer mining does not involve third parties using the infrastructure owner’s sewerage pipes to provide a competing sewage-removal service by transporting wastewater. Hence, a sewer miner would not contract directly with the incumbent’s customers for the provision of a sewerage service, whereas the third-party access seeker who becomes a competitive service provider will do so. Accordingly, the third-party sewerage service competitor will be responsible for extracting a designated volume of sewage from the sewerage network commensurate with the input of the customers with whom the third-party has contracted to supply sewerage services. The extraction proportion is likely to be calculated on the basis of the third-party access seeker’s proportion of all sewage at a given time or alternatively on the basis of an agreed volume, extracted at a fixed rate (Sydney Water Network Access Agreement, August 2007, cl 8.1).^[17] Either way, the alternative sewerage-service provider may not vary, at will, the amount of sewage taken from the system. Further, the provider will be responsible for treating and disposing of its sewage share according to approved standards. Technically, third-party access seekers could provide a sewage-removal service without also engaging in recycling. However, we suspect that the potential profits of water recycling would be a substantial incentive for third-party access seekers endeavouring to gain access to provide a competing sewerage service.

There may also be other attractions to becoming a competing sewerage-service provider. Although the infrastructure owner must be able to maintain adequate flows in the sewerage system for both the competing service provider and the sewer miner, the amount of sewage available to the sewer miner is more variable. Minimum operational flow requirements, the diurnal flow pattern of the system and existing commitments to the extraction of sewage up or down stream will determine how much sewage is available for the sewer miner to extract.^[18] The available sewage will then be allocated on a first-come-first-served basis, giving sewer miners some security of resource access to their operation (Sydney Water, How to Establish a Sewer Mining Operation: August 2007: 1). However, Sydney Water offers no guarantee of the quantity or quality of the sewage available for sewer mining.

Accordingly, in the context of the wastewater industry, a third-party access seeker may compete with the incumbent service provider in the upstream market (sewage removal) or the downstream markets (sewage treatment and supply of recycled water). In the Sydney context, the sewer miner operates in the downstream markets and has not been seen as a direct competitor of the incumbent service provider, Sydney Water. This is probably because the supply of recycled water is a relatively new and small market and the sewer miners have assisted Sydney Water by saving sewage-treatment costs and supplying recycled water to displace demand for treated drinking water. However, the company, Services Sydney, sought third-party access to compete with Sydney Water in the established upstream market for sewage removal as well as the downstream markets of sewage treatment and, eventually, the supply of recycled water. This evoked a very different response from Sydney Water, perhaps because the proposal threatens its control of the newly perceived resource — sewage.