A Wave of Desalination Proposals
More than 20 projects to make seawater fit for the tap are being
considered in the state. Those from private firms stir debate over
By Bettina Boxall
Times Staff Writer
March 14, 2004
CARLSBAD, Calif. - A few hundred yards from the Pacific Ocean, at the end
of a labyrinth of blue pipes and filters, Peter MacLaggan fills a plastic
cup with water. This, he hopes, is his company's future.
It's purified seawater, stripped of its salts and ready for the tap.
MacLaggan's firm, Poseidon Resources, is one of a handful of private
companies that want to sell Californians tens of millions of gallons a day
of desalinated water just like it.
Their sea-to-tap schemes reflect the state's renewed interest in ocean
desalination, which planners say could provide more than 1.5 million
Californians with drinking water by 2030.
Though there remain financial and environmental obstacles to desalination,
more than 20 desalting proposals are now under consideration on the
California coast. Most are from public agencies, including the Los Angeles
Department of Water and Power, the city of Santa Cruz and the Municipal
Water District of Orange County.
But the most ambitious and potentially controversial are from the private
sector, which, with the help of public subsidies, wants to play a major
role in developing a new water supply for the state - a responsibility
borne largely by the government for the past century.
Poseidon, a small, privately held company based in Connecticut, proposes
to build the biggest ocean desalination plants in the Western Hemisphere
on the Southern California coast, one in Huntington Beach and one in
Carlsbad. Each would be capable of producing 50 million gallons of
drinking water a day.
To the north, California-American Water Co., a private utility owned by a
German conglomerate, is proposing a 9-million-gallon desalination facility
at Moss Landing on Monterey Bay, while a consortium of private
engineering companies is floating plans for a 5-million-gallon
desalination plant on the shores of Morro Bay.
The private plans have stirred concerns among some public officials and
advocacy groups, who worry that a public resource, seawater, will be
exploited for private profit and sold to the highest bidder. They further
warn that multinational companies could try to use international trade
agreements to get around local and state environmental regulation.
Proponents say the public's interests would be protected by long-term
contracts with private water companies. They note that private water
utilities have operated in California since its infancy and today provide
about a fifth of the state's drinking water. And they argue that in an era
of government budget cuts and monster deficits, it makes sense for private
investors to shoulder the financial risks of getting new technology up and
"We need to get creative," said MacLaggan, a senior vice president of
Poseidon who joined the company three years ago and previously worked in
water supply planning for the San Diego County Water Authority. "I don't
think you can say [that] because it's private, it's bad. If we're meeting
[quality and quantity] specifications for the life of a contract, it
doesn't matter how you get the water there."
Behind MacLaggan hummed the small reverse osmosis demonstration project
Poseidon has run in Carlsbad for the last year next to the Encina power
A mini-version of what Poseidon proposes to do, the operation takes
seawater from the power plant's cooling stream and pumps it under high
pressure through a series of sand filters and synthetic membranes laced
with billions of holes a fraction of the width of a human hair. The holes
are big enough for a water molecule to slip through, but not salts or
contaminants. The whole process takes about 20 minutes. Then carbon
dioxide and minute amounts of lime are added to counter the water's
MacLaggan gives a visitor the plastic cup. The contents are clear and
flavorless, save for a mild mineral aftertaste.
Advances in desalting technology, pressure on Southern California to
reduce its take of Colorado River water and the demands of an ever
expanding population have turned the state's gaze to the sea.
"This is a potentially limitless supply of water," observed Charles Keene,
executive officer of the state Water Desalination Task Force, which
concluded last year that desalination could play a meaningful, if limited,
role in meeting California's water needs. The task force acknowledged that
private desalination operations raised "unique issues," but did not
discount private involvement.
"You may be able to say that, philosophically, [seawater] is a public
resource and should not be exploited for profit," Keene said. "But if you
want to look at it pragmatically, at water shortages in the future, and
say, 'I don't have the financing to bring in additional supplies,' you may
wish to look at partnering with private agencies that could amass
Despite a drop in desalination costs over the last decade, desalinated
seawater remains at least twice as expensive as conventional water
supplies in Southern California.
To develop the market, the Metropolitan Water District of Southern
California, the region's largest water supplier, plans to offer subsidies
to member agencies. The public water districts could use the money to
offset the costs of producing desalinated water themselves or to buy water
from a private producer.
A national alliance of water agencies, which includes the MWD and the
parent company of California-American, is also lobbying for congressional
authorization of hundreds of millions of dollars in federal energy grants
to offset production costs.
Poseidon is counting on the MWD subsidies to make its water more
attractive to public clients. It also needs approval from local
authorities and the state Coastal Commission, neither of which is proving
an easy sell.
In January, the San Diego County Water Authority broke off talks with
Poseidon over the Carlsbad proposal, saying it objected to a
noncompetitive clause that would have barred the authority from developing
a desalination plant with any other firm at the Encina site.
And in December, the Huntington Beach City Council voted down the
company's proposal to build a $240-million desalination plant next to the
AES power station there. The council maintained that Poseidon had not
adequately addressed the possible environmental impacts of a coastal
Environmentalists say the plants will promote population growth by
creating another water source, threaten marine life with high-salinity
discharges and consume large amounts of energy. Poseidon says it can deal
with the environmental issues and will keep pushing both projects. But it
still has to overcome the skepticism of the Coastal Commission.
In a draft report last year, the commission staff outlined a potential
clash between the private sale of purified seawater and the state's
Coastal Act, which considers ocean water a public resource to be
protected. The document also pointed to several publicized cases in which
multinational companies pursuing projects in the U.S. or elsewhere had
filed claims under international trade treaties challenging government
decisions they said hurt their business.
"Right now we're just asking questions. Right now we don't have the
answers," said Tom Luster, an environmental scientist and lead staffer on
Poseidon, formed in 1994 by a group of investors with backgrounds in
energy and water development, could contract with international companies
to help develop its California projects.
But MacLaggan scoffed at the trade arguments. "It's just ludicrous that
we'll be able to say we're a multinational corporation and don't have to
comply with the laws of the United States," he said.
The Coastal Commission concerns echo a worldwide debate over the
privatization of public services, particularly water utilities.
"When private corporations get in the business, it's in their best
interest to sell more [water] and to then even create the problem of
demand that needs the technological answer," maintained Maude Barlow of
the Council of Canadians, an public interest group that campaigns against
privatization. "They're only in it to make money."
But water is already a commodity, argued Adrian Moore, vice president of
the Reason Foundation, a think tank in Los Angeles.
"It is a thing we buy now. It's not something we're given for free. We
have just as much of a right to food, and we don't believe government
should be in the food business," Moore said.
But what would protect the economic interest of the public agencies buying
"If Poseidon is going to venture their capital and we agree to buy water
at a certain rate and define what the rules of the game are, I don't see
the risk," said John Schatz, general manager of the Santa Margarita Water
District. The agency has a tentative agreement to buy half the output of
the Huntington Beach plant.
Still, other officials say they sense public unease with private water
"I think the public is very uncomfortable with the privatization of
something as essential as water, especially after the energy crisis and
[how] we saw the manipulation of energy," said Huntington Beach
Councilwoman Debbie Cook, who voted against the Poseidon project and was a
member of the state Water Desalination Task Force.
In Florida, where Poseidon developed a 25-million-gallon-a-day
desalination facility for the Tampa Bay Water Authority, the public agency
bought out the company's interest after two bankruptcy filings - one by
Poseidon's original design and construction partner and the second by the
parent of the firm that Poseidon then lined up to construct the plant.
"On the front end [Poseidon] brought business acumen and permitting
expertise that helped make it possible," said Jerry Maxwell, the Tampa
water agency's general manager. "I'm grateful for that contribution. I
think at the end we found [that] some things they attempted to do, we were
in a better position to do."
The largest seawater desalination facility built to date in the U.S., the
Tampa plant began producing water a year ago but has experienced ongoing
start-up problems with clogged filters.
Within the water industry, it was seen as a groundbreaking development
that would throw open the U.S. market for private desalination efforts.
"The private sector thought they were going to open the market in five
years," said Virginia Grebbien, general manager of the Orange County Water
District and a former Poseidon executive. "I think it's a 30-year
process.. I think the public is more willing to trust the public sector to
be good stewards."