Yes and we do. In 2007 in Orange County, California, they piloted the first program to use recycled water. They were purifying the water to standard and some of the water was being pumped down into the ground water table and the other water was being added to the aquifers and recycled back into the general water supply. It has also been tested and used in other area like San Diego, CA.
The Orange County Water district utilizes Indirect Potable Reuse (where wastewater is treated biologically and chemically and inject back into an underground aquifer where it further purifies and is eventually absorbed back into the municipal reservoir). Direct Potable Reuse is where wastewater is treated and can be immediately used as a source of drinking water. This tends to be a controversial method of recycling water (it’s often branded negatively as “toilet to tap”) but is one of the most efficient methods of water reuse, particularly in water scarce areas. Windhoek in Nambia is one of the only regions to fully implement direct potable reuse as part of its municipal water policy.
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