I accept that I was wrong.
I think I finally understand why. My issue was Conversation of Energy. I couldn't see how such a small addition of potential energy in the form the additional water could cause such a massive increase in pressure throughout the system.
What I think I was missing is that pressure is not a measure of the energy in a system. The work that can be performed by the pressure is ultimately determined by the volume over which it will apply. If the volume of water in your 30m pipe to the surface is 2 liters, then yes the absolute pressure at the bottom of the 10m tank is 5bar. But there's so little energy that it could only push the walls back enough to cause a 2 liter increase in the volume of the tank before it drops to 2 bar. Make the pipe wide enough to hold 1 million liters and the tank has to increase in volume by 1 million liters to get to the same end pressure.
This explains the standpipe versus water tank example as well. The standpipe will produce the same initial pressure as a water tank of the same height, but the pressure will drop much faster if you can't fully replenish it with pumps.
BTW, this is what happened to Chicago's Water Tower during the Great Fire of 1871. Despite the name, the tower actually housed a 3' diameter standpipe. The tower building survived the fire, but the pumps that supplied it failed and the remaining water quickly drained.
Well, actually pressure IS a form of potential energy.
The amount of energy contained in 1 kg of water at pressure p is p/rho, where rho is water density (1000 kg/m3).
So, if at the bottom of your reservor you place a nozzle spraying the kg of water on a Pelton turbine, which drives an alternator, you get a triple energy conversion:
1) the nozzle converts potential energy to kinetic energy (p/rho=>1/2×v^2)
2) the Pelton turbine converts kinetic energy into mechanical labour (torque × crank rotation angle)
3) the alternator converts the mechanical labour in electric energy (J)
Of course each of these conversions involves some losses.
And yes, after you spilled out that kg of water towards the turbine, the pressure in the reservoir drops. So, after spilling a small amount of water, your pressurising pipe is empty and the pressure is back at 2 bars.
If now you measure the energy spent for pumping water up for filling the pipe, you will find that the gravitational potential energy spent (g×z) is slightly more than the energy recovered by the turbine-alternator.
Still the efficiency is very high, more than 90% of the energy spent on the pump is recovered by the turbine.
This explains why here in Italy we make large use of pumped hydropower storage.
During night we buy nuclear energy from France at very low price and we use it for pumping water in our reservoirs on Alps, filling the artificial lakes.
During daily peak hours we use that pressurised water for feeding turbines, injecting back energy onto the electrical grid, and selling it at three times the cost.
As the energy losses are less than 10%, you can understand how this trick is profitable!
In conclusion, you are not wrong considering pressure a form of energy storage.
And yes, the energy conservation principle applies perfectly to hydrostatics, and, with some losses, also to hydrodynamics.
