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‘Nowaterdeal’: Desal Plant Opponents Will Reach Out to Thousands of Orange County Voters

‘Nowaterdeal’: Desal Plant Opponents Will Reach Out to Thousands of Orange County Voters

By John Earl
Surf City Voice

A growing number of county ratepayers, inspired by the late Gus Ayer, and opposed to a plan by Poseidon Resources Inc. to build an ocean desalination plant in Huntington Beach, have a message for the Municipal Water District of Orange County (MWDOC) and its 28 member agencies:

No more secret negotiations or deals with Poseidon and don’t make us pay an additional $5 billion in local water bills—$8,500 per ratepayer—over the next 30 years for water that we don’t need.

Thirty-years is the time period in which the water agencies that contract with Poseidon would be required to pay for Poseidon’s desalinated water, whether it is needed or not, according to the water purchase agreement (WPA) made public by MWDOC in January.

The buyers “will agree to take (on a ‘take if delivered’ basis) [56,000] acre-feet per year of Product Water (the ‘Committed Amount’),” the WPA states. And if the buyers don’t take that amount of water, they will, “nonetheless pay Seller a per-acre foot charge to be set forth in the Contract…”

The WPA is not final, but it is the culmination of a decade-long relationship between MWDOC, its water agencies, and Poseidon.

The opposition group, heralding online as www.nowaterdeal.com, plans to spend tens-of- thousands of dollars to inform other ratepayers in high propensity voting areas of the county about Poseidon’s proposed “take or pay” contract, asking them to urge their local elected officials not to sign it.

Nowaterdeal is a coalition of members of Residents for Responsible Desal and other local ratepayers, including members of the Surfrider Foundation, League of Conservation Voters, and Orange County Coastkeepers, who at least until now had been fighting an uphill battle against Poseidon’s well financed lobbying efforts and a marketing campaign (largely unquestioned in the county’s major daily newspaper) that depicts its desalination plant as a future fallback point in case of prolonged drought or a natural disaster that would disrupt the flow of water to the public.

Poseidon would risk private investor flight without the guaranteed income, but take or pay would be risky for ratepayers if, as happened in drought drenched Australia, if the desalination plant were to sit idle due to lack of need. Currently, the Metropolitan Water District of Southern California (MWD), which sells water to MWDOC, has more surplus water stored up now (enough for 2.5 years) than ever before—testament to the ability to create backup reliability water without Poseidon.

Ocean desalination’s high maintenance and construction costs—and much higher energy costs—make it too risky, nowaterdeal says. Stuck with higher water rates and an idle desalination plant, ratepayers would fall into a rate trap. “As rates go up, people use less water” and “lower demand results in even higher rates, with fixed costs of the entire system spread over fewer units of water.”

Pimping2

Gus Ayer: MWDOC is pimping for Poseidon and should be eliminated. Photo: John Earl

The high cost-prediction is from information provided by Poseidon in the WPA and factors in conveyance and maintenance costs. With an inflation rate of 3.5 percent factored in, that means an estimated cost of $1,795 per acre foot for the desalinated water, compared to $285 per acre foot for local groundwater and $835 per acre foot for imported water, nowaterdeal says.

Acknowledging the higher cost of desalination, Poseidon VP Scott Maloni recently told the OC Register that Orange County residents have to ask, “What is the value of that reliability to them?”

But the underlying push for desalination plants along the California coast by the desalination industry and other development related business interests is not about drought relief alone, as MWDOC/MWD director Brett Barbre pointed out at a recent MWDOC committee meeting.

Barbre supports the Poseidon project and a smaller, less controversial, desalination project envisioned (but far from certain) for Dana Point in south Orange County. He also thinks that ratepayers throughout the county should have to pay for both projects on the basis that they would benefit everyone, even in water districts that say they don’t want or need the water.

“I believe that desal is not only for reliability. It’s also for growth,” he said. “And there are folks on the environmental side who don’t want any growth and they think if you don’t build water projects you can conserve your way to provide enough water for everybody. And that’s not ever going to happen.”

Although most of Poseidon’s opponents have always been concerned about the environmental effects of ocean desalination, the main focus of their current campaign is economic, while advocating for the development of proven and much cheaper water sources, including the Orange County Water District’s (OCWD) groundwater replenishment system, capturing rainwater, and conservation.

To start, the group will focus on about 50,000 voters in 14 north county cities, including Anaheim, Brea, Buena Park, La Palma, Orange, Newport Beach, Santa Ana, Seal Beach, Tustin and Westminster.

Twenty Orange County water agencies had signed non-binding letters of intent or memorandums of understanding with Poseidon to purchase, cumulatively, over 80,000 acre feet of water each year. Since those non-binding agreements expired in June, 2011, not a single agency has yet to renew.

Correction 02/05/2013: Eighteen agencies have signed Letters of Intent that have no expiration date, according to Karl Seckel, MWDOC’s acting General Manager. Those agencies, with the exception of Fullerton, are slated to participate in “working group discussions” regarding Poseidon during the 2012 fiscal year. Four other agencies are participating in working group discussions but have not signed LOIs. Participation in working group discussions is contingent upon signing a confidentiality agreement with Poseidon, but not all agencies that signed an LOI signed that agreement. The MOUs, which one presumes carried more weight, have all expired.

As Poseidon works to form an agreement with MWDOC and its member agencies, it requires all parties involved in project discussions to pledge absolute secrecy at Poseidon’s whim.

That lack of transparency and the overall elitist/exclusionary attitude at MWDOC and other OC water agencies, including their secret and arguably illegal meetings with Poseidon–all observed by a growing number of citizen spectators at water board meetings, as well as the company’s financial support of an ethically challenged hit piece in the recent Huntington Beach City Council campaign, have inspired Poseidon’s opponents, not only to challenge its political hegemony with a renewed vigor but to question the nature of Orange County water management as whole.

A temporary setback occurred for nowaterdeal when its chief strategist, former Fountain Valley mayor Gus Ayer, a master at crafting successful political campaigns in Orange County, died last week.

Earlier in the month, at a recent joint meeting of MWDOC and OCWD, Ayer praised the latter for its groundwater replenishment program and overall good management, but accused MWDOC of “mission creep” and “pimping for Poseidon.”

He also questioned whether MWDOC should exist.

“It’s time for OCWD to take a very close look at taking over these [MWDOC’s redundant] functions and eliminating MWDOC,” he said. Ayer expanded on that theme in a column written just before his death and published in the Surf City Voice.

Ayer’s untimely death saddened his colleagues but his upbeat attitude continues to motivate them.

“Gus’s last words to me were ‘Give them hell’”, recalled former Huntington Beach mayor Debbie Cook, who, during the past two years, has actively campaigned for greater transparency in water management.

“That was his way of saying that, if we don’t participate in democracy, we deserve the inevitable results. Nobody can replace our friend’s skill set, but he sparked a fire that emboldens us to carry on.”

 

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Posted in Energy, Environment, Headlines, MWD, MWDOC, Poseidon, Water, Water Boarding3 Comments

Water Flash: Poseidon Carlsbad Vote Passes

Meeting in progress to considering voting for or against a water purchase agreement with Poseidon Resources Inc. for desalinated water from its proposed $1 billion project in Carlsbad, San Diego County. Photo: Debbie Cook

Public comments have wrapped up and at the San Diego County Water Authority special board meeting to consider a 30-year water purchase agreement with Poseidon Resources Inc. to supply up to (but as yet unknown) 56,000 acre feet of water for San Diego County by desalinating up to 100 million gallons of ocean water to turn it into 50 million gallons of drinking water each day from off the coast of the city of Carlsbad.

Supporting the $1 billion project: big business interests, politicians, chamber of commerce, labor etc. Opposed: environmentalists, ocean users and activist rate payers. About evenly divided so far. The board room is full, about 160 people in attendance. Locals speaking: former Huntington Beach mayor Debbie Cook, former Fountain Valley mayor Gus Ayer. You can listen to the arguments pro and con and to the subsequent vote online at http://www.sdcwa.org/meetings-and-documents. More later.

Update: Board discussion is underway now. “Direct the General Manager to refer to nine Carlsbad Desalination Rate Structure  Alternatives to the Cost of Service Consultant and return to the Board with a recommended alternative to allocated the cost of the Carlsbad Desalination Project: Staff Recommendation: Approve the submission of nine requested Carlsbad Desalination Rate Structure Alternatives to the Cost of Service Consultant.”

Vote on motion by Director Mudd, 2nd by Boyle: 95.85 % of the vote cast and passes unanimously. Only 2 of the 24 water agencies under the SDCWA umbrella have signed a memorandum of intent to buy water to be produced from the the project.

Under consideration: Adopt resolution approving: 1) Water Purchase Agreement with Poseidon Resources; 2) Design Build Agreement; 3) Agreements necessary to accomplish tax exempt project financing through the California Pollution Control Financing Authority; 4) Adjustments to the Capital Improvement Program Budget; 5) Supporting contracts and contract amendments; 6 Other actions necessary for implementation of the Carlsbad Desalination Project; Staff recommendation: approve.

Discussion ongoing.

Vote taken on Water Purchase Agreement passes with 85 percent of the vote (vote is weighted according to property values in each district).

Document room. Photo: Debbie Cook

 

 

San Diego County Water Authority meeting underway (11/29/12): Photo: Debbie Cook

Artist’s conception of proposed Carlsbad ocean desalination plant.

Posted in Energy, Environment, Headlines, Poseidon, Water4 Comments

Get Desal Permits Quickly by Coordinating Early & Designing a Good Project, State Panelists Say

Get Desal Permits Quickly by Coordinating Early & Designing a Good Project, State Panelists Say

By John Earl
Surf City Voice

How to get more ocean desalination plants built in California despite pesky environmental regulations was the topic of a workshop on Oct. 30 at the 1st Annual Desalination Conference held by CalDesal at the Hyatt hotel in Irvine.

CalDesal is a non-profit lobbying organization started by Mesa Consolidated Water District in Costa Mesa after years of collaboration with various other southern California public water agencies, including the Metropolitan Water District of Southern California and the Municipal Water District of Orange County.

CalDesal promotes desalination on behalf of its 80 or so member organizations, including public water agencies and private water corporations, as well as the private consultants who piggy back on that tightly knit partnership – the foundation of water management.

The raison d’être for CalDesal is the desal industry’s powerful foes, the environmentalists, who, it is said (but never documented), greatly outspend and out lobby the water industry. Due to that imbalance, environmentalists have gone too far with regulations, obstructing what could be an eternal flow of water from the limitless ocean that is needed to feed our (or the water industry’s) insatiable appetite for growth.

In an “Action Alert” issued last spring, CalDesal warned that “There can be in excess of 30 local, state, and federal permits and related approvals and comments involved in reviewing and issuing permits for seawater desalination projects. That often can lead to an inefficient permitting pathway and redundant requirements” putting at risk “critical water supplies for communities.”

CalDesal intended the alert to rally support for “streamlining” legislation, Assembly bill 2595, which proponents hope would set up a so-called one-stop shop to replace the five or six stages of permitting that exists now.

Streamlining advocates insist that their intent is to increase efficiency, not to “fast track” the projects in order to by-pass environmental regulations. But the bill’s opponents say that by diluting the permitting process the bill would undermine fundamental environmental protections.

“There’s no need to streamline ocean desalination regulations,” says Conner Everts, director of the Southern California Watershed. “Projects that comply with existing laws have moved forward. Those that haven’t have been challenged.”

Water agencies want to be exempt from environmental regulations, Everts says. “But this [ocean desalination] is a new technology with huge impacts that is new to California and the United States and [it] deserves to be properly reviewed.”

The bill died in committee, but the fight to streamline lives on through CalDesal, whose members probably ended up hearing a different truth than expected at the generally upbeat but tightly controlled two-day event.

Titled “Desalination Permitting – the intersection of Science & Policy,” the workshop brought together representatives from the state agencies that handle permitting for desalination projects, including the California Natural Resources Agency, California State Water Board, California Coastal Commission, California State Lands Commission and California Department of Fish and Game, to explain permitting basics to CalDesal’s members.

The overriding message was clear: follow the proper procedures from the start; if your project is worthy, it will be approved in a matter of months. But if you don’t follow the proper procedures, expect delays.

Building a desalination plant is “an extremely daunting process,” explained Catherine Kuhlman of the Natural Resources Agency, which monitors the state’s natural, cultural and historical resources, including marine protection areas. “We also know that desal is a necessary component of our water supply in the future.”

Kuhlman said that there are three key permits to get, from the Lands Commission, Coastal Commission and the State Water Board. Those agencies work together to avoid permitting conflicts, she said, and they are committed to ensuring that desalination is part of the state’s “water portfolio.”

Coordinating early with the permitting agencies is “hugely important,” she said, but “pitting the agencies against each other isn’t going to be an effective strategy. It will result in a delay.”

Tom Luster of the Coastal Commission explained the role of state agencies in upholding the Public Trust Doctrine, which is embedded in centuries of Western law and the California Constitution.

The Public Trust Doctrine protects the public’s right to water resources for the common good rather than strictly for private profit and underlies what each state permitting agency does in its own way, he explained, so desalination projects must conform to its principles.

Tom Luster

Tom Luster speaks to CalDesal members about faster permitting. Photo: Surf City Voice

To help streamline the permitting process for ocean desalination projects, Luster suggested submitting applications to the State Lands Commission early on because that agency serves as the lead for determining compliance with the California Environmental Quality Act, which sets the protocol used by state and local agencies for analyzing and disclosing environmental impacts of local projects and it thoroughly analyzes Public Trust Doctrine issues as part of that process.

Adhering to the California Coastal Act, which provides the structure by which the Coastal Commission protects coastal resources, is also paramount, Luster said. “The better the proposed project incorporates all the Costal Act policies and the other state requirements, the more likely it’s going to have a smoother ride through the permit process.”

The main concern, Luster said, is to determine the least environmentally damaging way of creating the water supply after considering all the alternatives, including different approaches to desalination or sources other than desalination.

“Part of the consideration should be, are there water efficiency or conversation measures that can be put into place? Are there additional recycling opportunities that you would put into place before going to the desal? If those options have provided the [water] supply with less environmental damage those would be evaluated as part of our assessment of the project,” Luster said.

Luster listed specific issues that the Coastal Commission will look at during its review of an ocean desalination project, including the pros and cons of co-locating with a power plant for ocean intake, as Poseidon Resources Inc. plans to do with the AES power plant in southeast Huntington Beach in order to suck in 100 million gallons or more of seawater each day and produce 50 million gallons of potable water.

That intake process, referred to as once through cooling (OTC) because seawater is passed through pipes to cool the power plant, decreases capital costs but kills virtually all marine life (larvae) that come through the intake process.

The State Water Board has virtually eliminated the use of OTC for power plants by 2020 but will decide how to apply the new marine protection standards to ocean desalination plants in next two years.

Although Poseidon claims that the amount of ocean marine life that would be killed by the Huntington Beach plant is miniscule, the actual harm done goes beyond any single ocean desalination plant, Luster pointed out.

There are 12 ocean desalination plants envisioned or planned along the coast between Tijuana and Santa Barbara that would draw in marine life from overlapping areas, including some designated to protect marine life, which would have a significant cumulative effect.

“Co-location should not just be considered a default choice of facility,” Luster said, a factor that he also said would be considered in the Commission’s project analysis.

Other desalination permitting issues mentioned by Luster:

  • How much water is needed and can it come from multiple sources?
  • Will the water go to one defined location where water conservation plays a key role or to an area without an effective conservation program?
  • Does the project fit with the Local Coastal Plan and anticipate population growth?
  • Is the site located in a protected or sensitive habitat area?
  • Does the project use subsurface intake (thus eliminating the problems caused by once-through-cooling)?
  • Is it close to the shoreline or away from the shoreline?
  • Will it be a publicly or privately owned facility?
  • Did developers coordinate early and extensively with public agencies and other stakeholders?

Three months was the shortest time for full permitting of an ocean desalination project, Luster said. That was a relatively small facility in Sand City that produces 330 acre feet of water per year (Poseidon’s proposed Huntington Beach plant would produce 56,000af). The average length of time so far has been 7 months, according to Luster.

“If you have a well designed and planned facility the permitting process shouldn’t be any problem at all,” Luster said.

Poseidon’s Huntington Beach plant still hasn’t finished its permitting process after 10 years. Environmental Impact Report issues remain for the Coastal Commission, the final permitting stop, to resolve, but for the past five years the company has repeatedly failed to comply with the commission’s requests for information about the project. Also, the project’s opponents have filed an appeal with the commission over a 2010 Local Coastal Plan permit given by the city.

Those issues could be resolved by the commission sometime in 2013. But given unresolved financing and contractual issues, when or if the plant will ever be built is still an open question.

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Posted in Energy, Environment, Headlines, Poseidon, Water, Water Boarding0 Comments

Election Changes: Poseidon Desalination Plan Isn’t Popular With New Huntington Beach City Council

Election Changes: Poseidon Desalination Plan Isn’t Popular With New Huntington Beach City Council

By John Earl
Surf City Voice

Poseidon, the God of the Sea, might have suffered a tsunami headache after seeing the results of the Nov. 6 election for the Huntington Beach City Council.

That’s because in December, when three newly elected city council members are sworn into office, the current 5 – 2 majority of the faithful will become a solid 5-2 majority of non-believers in Poseidon Resources Inc.’s nearly $1 billion ocean desalination plant proposed for the southeast corner of Huntington Beach.

Since 2004, the council has approved city permits and certifications for the desalination project regardless of incomplete environmental impact reports, threats to a fragile marine eco-system, the need to dig up local streets for a 10-mile-long pipeline, and skyrocketing cost increases ($150 million to nearly $1 billion).

All that in order to give water to Orange County residents that will cost them about three times as much as water from other sources and for a project that eschews sustainable water and energy management, including conservation, in favor of unlimited exploitation of natural resources for maximum corporate profit, regardless of the long-term consequences of urban sprawl and global warming.

Two of the newly elected Poseidon opponents, Jill Hardy and Dave Sullivan, return to the council after two previous terms ending in 2010 in which they voted repeatedly against the project. The third, newcomer James Katapodis, supported Poseidon in his previous unsuccessful election attempt but changed his position after meetings with local Poseidon opponents.

They will join incumbents Connie Boardman and Joe Shaw to form a new anti-Poseidon city council majority.

In desperation, Poseidon helped fund three sleazy anti-Hardy mailers that portrayed her as “anti-children” and all but a child molester for opposing a lift on the city’s ban on fireworks.

But that plan seemed to backfire.

Polling conducted a few weeks prior to the mailers showed Hardy coming in second behind Dave Sullivan, with pro Poseidon candidate Barbara Degleize next. But Hardy finished with over 2,000 votes more than Katapodis and Sullivan who finished second and third respectively.

Whether the new anti-Poseidon city council will be able to stop Poseidon’s ocean desalination dream from becoming reality seems doubtful but not impossible.

First, the Municipal Water District of Orange County is pondering the purchase of Poseidon’s water for resale to its 28 member agencies in Orange County (as opposed to the current strategy of separate agreements between the company and each agency). That would give the city a vote on whether MWDOC should enter into an agreement with Poseidon or not, in which case the new council would be inclined to vote no.

Second, Poseidon’s Coastal Development permit is under appeal before the Coastal Commission. The issue is whether the city violated its own Local Coastal Plan. Depending on how the Coastal Commission rules, the permit could be sent back to the city council for another vote.

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Posted in Energy, Environment, Headlines, MWDOC, Poseidon, Water3 Comments

Advertising: Are You Buying It?

Advertising: Are You Buying It?

By Sarah (Steve) Mosko
Special to the Surf City Voice

Here’s an inescapable reality: There are only two ways to be rich – make more or want less. This is known as “Rimo’s Rule,” though that’s beside the point.

Rather, the point here is to recognize, in our consumer-based, advertising-saturated society, how very hard it is to want less materially yet why we must to do so anyway. While it’s intuitive that most people – both the “99 percent” and the “1 percent” – could achieve greater contentment in life by better appreciating the non-material and material riches they already have, there are far-reaching, global consequences of which path to richness a society as a whole chooses.

Consider an often repeated fact, that Americans make up less than five percent of the world’s population but consume 20 to 25 percent of the world’s resources (like food, fresh water, wood, minerals and energy). This means that, on average, Americans consume five to seven times the resources per capita as the rest of humanity combined.

Renowned ecologist and agronomist David Pimentel of Cornell Universityhas calculated that the Earth’s resources could sustain a population of only two billion if everyone had the current average standard of living in the United States. His detailed analysis was published in the journal Human Ecology in 2010.

The world population is already at seven billion, and the latest United Nations projection is that the head count will reach 10 billion well before 2100. For all 10 billion to enjoy the American standard of living, Pimentel’s data imply that it would take four additional Earth planets to supply the necessary natural resources.

Even if that calculation is off by, say, a whole planet, it’s evident that the American lifestyle – with big homes, plasma TVs, multiple cars running on fossil fuels – is not a sustainable model. Serious threats to the environment, like global climate change, water shortages and pollution from industrial chemicals, continue to mount up, and well over half of humanity is already malnourished, according to the World Health Organization.

Our consumer culture is based on a belief that happiness derives from having more stuff, and advertising is the driving engine of consumerism. The primary aim of much advertising is to create need where none previously existed. Whatever is being marketed, the message boils down to either you gotta have one if you don’t already or, if you already own one, you need a better one.

Through his whimsical characters and rhymes, Dr. Seuss warned way back in his 1971 children’s book “The Lorax” of the threat to the environment when greed compels corporations to fabricate needs: Environmental devastation ensued when the book’s inhabitants were convinced they had to have “the needs, which nobody needs.” An animated film adaptation of the “The Lorax” is in theaters now. Continue Reading

Posted in Energy, Environment, Headlines1 Comment

Meat Lovers Guide to a Friendlier Climate Change Diet

Meat Lovers Guide to a Friendlier Climate Change Diet

By Sarah (Steve) Mosko
Special to the Voice

A plant based diet beats a traditional meat based diet hands down when it comes to trimming one’s contribution to greenhouse gases, but not everyone is willing to plunge headlong into a life of tofu dogs and bean burgers.

No doubt there are even plenty self proclaimed vegetarians out there who guiltily sneak in some fried chicken, pork chops or a tuna melt from time to time and face self-recriminations afterward for satisfying such cravings at the expense of a warming planet.

The good news for either lapsed vegetarians or meat eaters with an environmental conscience is that meats and dairy products are not all created equal when it comes to the quantity of greenhouse gases (GHG) produced. In fact, a study just released by the non profit organization Environmental Working Group (EWG) and titled “Meat Eater’s Guide to Climate Change + Health” reveals that by avoiding just the three worst GHG offenders – lamb, beef and cheese – even hardcore meat eaters can make a sizable dent in their diet’s climate change footprint.

EWG, in partnership with CleanMetrics, an environmental analysis firm, examined the “cradle to grave” lifecycle, from farm to retail to plate to disposal, of 20 popular foods in four categories – meats, fish, dairy and vegetable protein – and compared the GHG produced by each. Continue Reading

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Time to Air Your Clean Laundry in Public

Time to Air Your Clean Laundry in Public

By Sarah (Steve) Mosko
Special to the Voice

Under a loosely-worded Huntington Beach “nuisance” code ordinance, a clothesline could be considered a public nuisance if “unsightly by reason of its condition or location.” A resident’s complaint would trigger assessment by a code enforcement officer who would determine whether a clothesline was in violation. Editor

During the Leave It to Beaver era of the late 1950s, most homes certainly had a clothesline and probably no one thought much about whether it offended their neighbors. It’s a safe assumption that June Cleaver, the perfect homemaker, would have taken issue with anyone even hinting her clothesline was an eyesore.

Then fast forward a half century to the present where the majority of Americans have abandoned the clothesline in favor of electric or gas dryers and homeowners associations (HOAs) routinely prohibit clotheslines or impose such restrictions as to effectively ban them. One can only guess what June would have said to that, even absent her knowing about the threats from global climate change and the pressing need to reduce America’s dependence on fossil fuels.

Few today will dispute that tossing a load of wet clothes into a clothes dryer is more convenient than pinning up clothes, one by one, and surveys confirm that most people living in communities governed by HOAs have no problem abiding by the restrictions on clotheslines from the standpoint of curb appeal or property values.

However, interest in reducing the oversized energy footprint of Americans – twice that of people living in the European Union – has given rise in a handful of states to so-called “right-to-dry” laws that rein in restrictions HOAs or other entities can impose on residents’ freedom to use clotheslines. California is not among them, however, despite its sunny weather and reputation for environmental progressiveness. Continue Reading

Posted in Energy, Environment, Headlines3 Comments

Commentary: Why Desalination is Dead in California

Commentary: Why Desalination is Dead in California

By Conner Everts
Desal Response Group

Drinking water from the Sea?

Sounds like a great idea. JFK once said that it would be a greater achievement than putting a man on the moon, and most polls have shown a 70 percent acceptance rate of the idea.

So what is the problem?

The corollary to JFK’s statement would be “when economically and environmentally feasible” and therein is the challenge.  However, the first question that should be asked is do we need ocean water desalination (often called desal) in California and would it hurt or harm the environment compared to its alternatives?

In 2006 there were 29 proposals for ocean desal projects along the California coast, with many attached to old coastal power plants, now there are only nine.  While industry proponents blame California’s protective environmental regulations and a few environmentalists’ opposition, there were three main issues that stalled the proposals.

First, despite the State Desal Task Force convened by legislation, there is no consensus on a regulatory order or state-wide direction. So each proposal lumbered through the multi-agency process.

That’s as it should be because if there is a large scale desal plant built in California it will be the first on the Pacific coast and largest in the Western Hemisphere.  The first proponent out of the gate was Poseidon, a private corporation from Connecticut that failed with its first desal project – the largest in the nation at 25 million gallons a day – in  Tampa Bay, Florida, and then proposed two more plants, each with twice that capacity, one in Huntington Beach in Orange County and the other in Carlsbad in north San Diego county.

While working hard to gather political support for its southern California desal projects, Poseidon failed to respond to repeated information requests by the Coastal Commission or to follow its permitting guidelines. Meanwhile, local opposition grew and water agencies weighed into issues of the marine environment, which they little understood, and were forced to navigate California’s complex and arcane water supply laws as well.

Second, conceived in a time of drought, the most recent crop of desal proposals depended on a fear of limited water supply while demand was high for new development. This was especially true where desal plants were proposed on the coast, thus allowing entry points for previously undeveloped areas with limited water supply.

With the collapse of the global economy, developments now sit idle and the need for desal as a redundant water supply for more growth is being questioned.  Promoted as an offset to water pumped over the Tehachapis and therefore reducing greenhouse gas emissions, the opposite is true. The Metropolitan Water District of Southern California (MWD) states in its subsidy contract that the water produced by desal would not curtail deliveries of any imported water source.  Rather blood would be let on the floors of the MWD boardroom before anyone at MWD would give up any sacrosanct water rights.

Furthermore, the promises that these proposed desal plants would offset water taken from the SF Bay Delta turned out to be false. Given the long history of getting water back to fish and the environment, there is no regulatory process to make that happen. Just look at the 20 years of litigation that has taken place over Mono Lake.

Third: first things first. There are untapped and cost-effective local water resources that must be developed and that have environmental benefits, unlike desal, such as maximizing serious water conservation and water reclamation, capturing and treating urban and storm-water runoff, expanding now legal greywater and rainwater cistern systems, and fixing leaky infrastructure or pipes.

Combine that with a systems approach with watershed management and we begin to get to the point that Australia, Spain, and Israel did before they invested in desal – which meant reducing per capita water demand to 30-50 gallons per day. Compare that to 174 gallons for California as a whole and 121 gallons for Los Angeles.

Many areas across the state, including Los Angeles and Long Beach, have had serious reductions in water demand and eliminated the need for desal—it’s not in Los Angeles’ 20 year supply plan and Long Beach is reconsidering after careful research.

California spent $50 million of Prop. 50 water bond monies on researching this issue and while not all the grant results have been revealed the emerging consensus is that proponents’ promise of a technological breakthrough that makes desal feasible or necessary hasn’t been realized. This is a case of its not the technology, stupid, it is the lack economic considerations and available capital.

And then it rain, and rained, and continues to rain.  Reservoirs filled and spilled.  Snow pack reached record levels in the Rockies, from where a portion of our imported supply originates.  If we had only realized the potential to capture rainwater and redistribute stormwater back into our depleted underground aquifers, this would have been a great winter to replenish the bank of locally stored water.

A quick historical perspective shows that ocean water desal plans come and go in California.  In the 60s and 70s it was twin nuclear power plant islands to be built offshore and provide all the water we needed and a small plant that was sent from the navel base in Point Loma to Guantanamo in Cuba.

In the 80s and 90s it was the Santa Barbara plant that was built in the middle of the six-year drought and was idled before it ever was connected by El  Niño spring. While it is still being paid for it is more cost effective not to run it.

At Catalina Island in the late 80s a small plant was built as a back up to allow a developer to build condos.  It sat idle for many years until Southern California Edison took it over, and in the only place where they sell water it takes 70 percent of the island’s electricity to produce 20 percent of its water.

Internationally, where there is often no other choice, limits have been reached but with a price. Australia is now deeply indebted for billions for plants that sit idle and have been flooded.  Even the Middle East is having problems with desal with huge demands for energy and subsidized water in Saudi Arabia and discharge levels that increase salinity and therefore energy demands in enclosed areas.

Ocean desal is promoted heavily by a cabal of membrane manufacturers, including GE, power plants operators hoping to keep their old fish-killing machines operating, water agencies looking for large capital projects built with some else’s money, engineering consultants and even Las Vegas.

But the bloom is off the issue. It looks good on the outside but once you delve into the inside there are problems, like fast food might sound good at the moment of hunger but the results of eating it are negative.  Investing in the current crop of desal plants is like buying an old Hummer with today’s gas prices.

Concerned citizens who organized statewide and locally to inform the public and fight the desalination surge can now declare victory and focus back on appropriate multi-benefit local water resources.  It does not mean we won’t continue to monitor these projects but to focus on only the fight would validate an issue that, once again, has passed away. After ten years, this time, we should celebrate a successful fight that brought this to the light of day and the fact that California is not ready for ocean desal and it is not ready for us.

There are many other issues around desal including energy intensity, huge marine and fishery impacts and the alternatives, drinking water quality, sea-level rise with industrializing the coast and the true costs of water. Go to the website www.desalresponsegroup.org for more than you would want to know and links to the many references made in this article.

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Water Privatization & Desalination: Lessons from Australia

Water Privatization & Desalination: Lessons from Australia

By Ian Douglas
Special to the Surf City Voice

Australians are battling to come to terms with the impacts of the oft-criticized process of national water reform. The ongoing, abrasive debate surrounding the Basin Plan being drafted by the Murray-Darling Basin Authority, outrage over the spiraling costs of currently redundant desalination plants and public protests about sky-rocketing water charges typify the predicament.

Australian water reform was conceived in 1994 by the Council of Australian Governments; nurtured by the prevailing mantra that free-market exposure was the ultimate panacea for undercapitalized and inefficient public utilities. COAG went one giant leap further, in deciding to establish a national water market; arguing that this would direct water to its most productive use.

In the years since these sweeping changes were announced, the wisdom of applying free market principles to the management of an essential natural resource has been largely discredited by events overseas: In the water-supply sector, major corporate players have been accused and, in more than a few instances, convicted of price-gouging, anti-competitive behavior, corrupt practice and fraud. On all continents there are moves to wrest control from private corporations. Globally, more than 90 per cent of water services are now publicly owned.

In Australia there are valid concerns that water reform is leaving crucial decisions, with respect to the “where”, “when” and “how” of water distribution, in the hands of entities whose priority is profit rather than socially and environmentally responsible water use. Questions are being raised as to why our governments have been prepared to implement these radical policies without seeking and obtaining prior electoral mandate and in the absence of adequate constitutional protection of water.

The unbundling of water rights from land title has been the lynchpin of water reform, enabling water entitlements to be leased, treated as equity, bequeathed or permanently traded. In less than three years’ time, there will be no limit on the volume of water access entitlements that can be traded permanently between hydrologically connected irrigation districts anywhere in Australia.

Australian water is now effectively commoditized: allocated to whoever is willing to pay the going price. The market cares not whether you intend to drip-irrigate vegetables, cultivate cotton by flood irrigation, water golf courses – or merely hold your allocation as an investment for a rainy, or not so rainy, day. We are told that water trading will promote the allocation of water to “high value” uses, but the concept of “value” is far from precise. Large-scale agribusiness enterprises may reap high returns from the water they are well positioned to acquire, but their profits are largely internalized, increasingly to overseas interests, minimizing benefit to local communities.  More traditional farming may result in lower profit at the farm gate, but is believed to have a more marked flow-on effect on local economies.

In 2008-9, water trades totalled 2.74 billion dollars. In the same year, whilst urban water users faced severe restrictions, water use for irrigated agriculture increased 3 per cent on the previous year, but the gross value of production from irrigation fell by 358 million dollars.In that year, following localised inflows into the northern Darling catchment, but whilst the vast majority of the Basin was enduring the peak of the worst drought in living memory, the cultivation of cotton and rice consumed 981 gigalitres of water.

This figure equates to the combined water consumption of Sydney, Melbourne and Adelaide (990 gigalitres) over the same period, to produce a crop with a combined value of less than 650 million dollars, in a year when the gross value of national agricultural production was in excess of $46 billion.

In consuming around 850 gigalitres of water, 23 per cent of the total volume diverted for irrigation in the Murray-Darling Basin, the 2008-9 cotton crop contributed only 4 per cent to the total value of agricultural production in the Basin. Our self-sufficiency in terms of food production also suffered: while the value of the cotton crop increased by 198 per cent over the previous year, irrigated vegetable production fell by over 350 million dollars.

Lou Correa and Scott Maloni

Sen. Lou Correa cuddles up to Poseidon CEO Scott Maloni to support desalination plant in Huntington Beach. Photo Arturo Tolenttino for SCV.

Unrestrained exploitation effectively hamstrung the Murray-Darling Basin Authority, and its predecessor the Murray-Darling Basin Commission, in its statutory responsibility to manage the Basin’s water resources in the national interest, and dramatically impaired the inherent ability of the Murray-Darling river system to resist the effects of prolonged drought.

In 2005, Wendy Craik, Chief Executive of the Murray-Darling Basin Commission, confirmed the impotence of her organisation admitting, “We just have to hope it pours with rain”. Two years later, then Prime Minister, John Howard, refusing to deviate from market-based water management and resisting calls to invoke emergency powers, urged the nation to pray for rain. For eight long years, the nation’s most vital river was not allowed to flow to the sea.

The water market conspicuously failed to live up to the expectations of the National Water Initiative, driving down water storages in the Murray-Darling Basin to critically low levels at a time when conservation should have been paramount. The dire consequences for the environment, communities and economy of the Basin were clear for all to see.

In recent months, the raft of resignations from the Murray-Darling Basin Authority – including both the Chair and CEO – the distancing of recently appointed Chair and the Federal Water Minister from the Guide to the Draft Basin Plan, and the current Senate Inquiry into the Provisions of the 2007 Water Act, are further indications of the resolve of proponents of market-driven water reform.

The pressure being exerted by pro-marketeers was reconfirmed just last week, with the disclosure that the Authority is expected to recommend a paltry 2,800 gigalitre increase in environmental water allocation; prompting the Wentworth Group of Concerned Scientists to pull out of the Basin Plan consultation process, stating that it did not wish to be associated with an initiative which was destined to fail and waste billions of dollars.

The number of offshore players active in Australia’s water market bears testament to the rich pickings to be made speculating on the nation’s water reserves. It is believed than around 300 million dollars worth of water licences are currently in the hands of investors and this amount is steadily increasing. However it is impossible to confirm the precise figure: the National Water Commission has advised Fair Water Use that the Water Act prohibits public access to details on water entitlement holders.

Unlike the majority of our traditional farmers, investors are typically guided by global market trends and not merely the prevailing cost of Australian water. There are genuine concerns that, as more speculators, multinational agribusinesses and financial institutions enter the market, the inherent variability in water prices will be potentiated, particularly during drought; threatening the viability of previously profitable rural businesses and increasing pressure on rural communities.

The website of one such organization, US-based, Summit Global Management, contains the following observation: “Water is the most essential life-sustaining substance on earth and the most critical industrial input to the world’s economy. Demand for clean water has expanded unrelentingly as populations soar and societies modernize, and we now face crisis-level shortages for this most basic and necessary resource.”

In 2009, Summit Global’s chief marketing officer, Matt Dickerson, famously stated “There are few areas where we can execute our strategy, but Australia is one of them”. Summit, which in 2009 acquired at least 20 million dollars worth of permanent entitlements to Australian water, last month announced, through its Adelaide-based agent Blue Sky Water Partners, that it is seeking an additional 100 million dollars worth of water rights, focused on main systems such as the Murray-Darling.

In 2010, Australian-based Causeway Asset Management commenced a global drive to raise 100 million dollars of investment capital, to be used to acquire permanent entitlements to Murray-Darling water, stating: “There is a chronic supply/demand imbalance for Australian water which will result in higher water prices. Owning Australian Water Entitlements provides investors with direct exposure to water prices”.

It is clear that such investors are targeting the high returns to be made under leaseback arrangements during periods of water scarcity – an all too regular occurrence in this country. Where is the fundamental national benefit of exposing our water to such activity? What will be the impacts on the farming community, public water supplies and the environment?

In a statement on urban water policy released last month, the Chair of the National Water Commission, the statutory body responsible for driving the process of water reform, urged further deregulation and the construction of more desalination plants and dams – but tellingly made no mention of initiatives to reduce consumption in a country which, in 2004, was rated as the third largest per capita user of water in the world.

This blind commitment to growth, which also suffuses the policy platforms of the major parties, is being used to justify public-private partnerships and the construction of ill-conceived and untenably costly water infrastructure, most notoriously desalination plants. Our governments appear quite comfortable entering into public-private partnerships with multinationals whose track record in terms of corporate responsibility on the global stage is, at best, in-glorious.

In July last year, the Water Services Association projected that increased urban water consumption through to 2025, as a result of a 47 per cent hike in Australia’s population, to 31 million, could largely be met by the combined output of existing desalination plants and those currently under construction. Australians continue to be massaged into accepting this high tech, but inefficient and environmentally toxic industry; governments insisting that desalination is necessary to ensure water security, whilst largely ignoring the potential of “greener” and more efficient alternatives.

It is highly significant that the Productivity Commission itself has recently criticized the move towards desalination plants on economic grounds alone, irrespective of the environmental costs.

Following the change of government in Victoria, it has been revealed that the water bills of Victorian households are set to double over the next five years, as a direct result of costs associated with the Wonthaggi desalination plant. Irrespective of whether the plant is required to operate, Victorian taxpayers face a bill of close to 20 billion dollars over the next thirty years. When former premier Steve Bracks first announced the plant in June 2007, Victorians were informed that it would cost $3.1 billion.

In December last year, the South Australian Water Minister, Paul Caica, confirmed that operational costs of the Port Stanvac desalination plant are projected to total $130 million per year. This figure is additional to construction costs of $1.8 billion. It bears stating that the Government could currently acquire permanent water licenses for 100 gigalitres, the maximum output of the plant, for around $150 million.

In attempts to stave-off persistent criticism of “white-elephant” infrastructure, it is probable that conservation of urban water supplies will continue to be a low government priority, other than during periods of severe drought.

Last year, Mr Caica was also quoted as stating, “I have always said that we will consider lifting the restrictions when the desal plant comes online”.

In 2007, the value of state-owned water assets was estimated at 70 billion dollars: clearly a major temptation for state-governments seeking to balance their budgets.

Nationwide, the corporatization of water utilities has resulted in price hikes and an accent on fixed rather than consumption-based charging; stimulating concerted public protests, such as those currently taking place in south-east Queensland, amid fears that corporatization is a precursor to privatization.

To date, South Australia is the only state to have dabbled with privatization of water supplies – and Adelaide consumers have literally been paying the price: last year the State Government announced that it would not be renewing its contract with United Water, a wholly owned subsidiary of Paris-based, water colossus Veolia Environment, due to allegations of over-charging, to the tune of tens of millions of dollars. Nonetheless, publications such as that released by Deloittes in March 2010 seem to be priming Australians for the progressive sell-off of public water utilities.

It bears repeating that the stated aim of water reform is “to implement a strategic framework to achieve an efficient and sustainable water industry“: but on whose terms? – and to whose benefit?

Despite the fact that polling has indicated that at least 70% of Australians are opposed to it, water privatization is being imposed on the nation, under the guise of water reform; as a result of a closed-door agreement made, nearly twenty years ago, by the then Prime Minister, State Premiers, Territory Chief Ministers and the President of the Australian Local Government Association.

Water reform need not and should not equate to privatization, a process largely incompatible with the protection of water as a public good. Australians have the right to indicate which path they wish to follow, via state-by-state plebiscite if necessary.

Free-trade agreements, which have laid out the welcome mat to overseas speculators, should be renegotiated or scrapped, at least insofar as they apply to water.  This is consistent with data released by the Productivity Commission last month revealing that the benefits of free-trade agreements are oversold, creating unrealistic expectations and resulting in only small increases in national income.

Socially responsible water reform cannot proceed in the absence of sound legislated protection of water as a common good.  In 2009, the High Court of Australia found that there was “a common law notion that water, like light and air, is common property not especially amenable to private ownership and best vested in a sovereign state”. First drafted over a century ago, our Constitution does not refer to water rights other than related in very general terms to navigation, conservation and irrigation. Section 100 requires amendment if the nation’s water is to be adequately protected in the 21st century and beyond.

Irrespective of whether the 1994 vintage of COAG had a full understanding of the implications of its decision, sincere governments would now admit that water reform is privatizing an all-too-finite and easily abused natural resource – and, by so-doing, poses a serious threat to Australia’s water future.

Ian Douglas is national coordinator of Fair Water Use (Australia). He is currently national coordinator of Fair Water Use (Australia), an independent and national lobby group, formed in early 2008 by Australians who share the vision of a revived Murray-Darling basin and the sustainable environmental, community and economic benefits that would flow from its recovery.

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Carlsbad Desal Buyout Likely – Min Taxpayer Cost: $640 Million

Carlsbad Desal Buyout Likely – Min Taxpayer Cost: $640 Million

By David Rosenfeld
DC Bureau
Wednesday, 06 April 2011

When it comes to the future of desalinated water in California, San Diego County is facing a reality check. In agreements signed years ago, nine local water agencies brokered sweetheart deals with Poseidon Resources, an investor-owned Connecticut company that has been planning to build and operate a desalination plant in Carlsbad for the past 12 years.

The agreements guaranteed those nine agencies would not pay the true cost of desalinated ocean water – the most costly form of tap water on the planet – until the costs of imported water was even greater. And at that time, they would split the difference for up to 30 years once the plant was up and running.

But those contracts, as they appeared, were too good to be true. They were so good, in fact, for the water agencies that it made the project financially unfeasible, resulting in a near junk bond rating last year as Poseidon prepared to float $530 million in tax-exempt private activity bonds.

So the bond sales were put on hold and the contracts were renegotiated with Poseidon asking the San Diego County Water Authority for an additional subsidy and possibly to buy the nearly $700 million plant if there are future problems. (Poseidon had trouble with their desalination plant in Tampa Bay, Floridaand the Tampa Bay Water Authority had to take over that project.)

Rather than pass-through millions of dollars in subsidies, including up to $350 million from the regional wholesaler Metropolitan Water District of Southern California, the Water Authority is brokering its own deal with Poseidon to purchase the water directly.

“Those (local) agencies wanted to purchase the desalinated water at a price that was never more than buying water from the Water Authority, and that’s not possible. That was not financially viable,” said Ken Weinberg, director of water resources for the San Diego County Water Authority. “Discussions we’re having now is about paying the actual cost of production and distribution of that water.” 

The maximum price would be set at $1,600 per acre-foot in today’s dollars compared to around $800 for imported water currently. Exactly how much desalinated water the Water Authority will agree to buy from Poseidon – to then resell to local agencies – is still being negotiated in closed-door meetings. Poseidon spokesman Scott Maloni did not return repeated requests for comment.

Based on the average price of desalinated water around the globe at around $3,000 to $4,000, Poseidon may be still underestimating.

The new deal will certainly be more favorable to Poseidon’s equity investors – which change frequently and have included Warburg Pincus, Citi Sustainable and GE Capital.

The deal will undoubtedly be worse, however, for Southern California ratepayers, who increasingly find themselves at a disadvantage when it comes to what they will pay for life’s most essential resource.

“The Water Authority will have to raise its rates to cover additional costs of desalination,” said Glenn Pruim, utilities director for Carlsbad Regional Water District.  “It’s definitely in the best interest of the investors. This is a really good deal for Poseidon. It’s a good deal for the Water Authority because they are securing a regional source of water and it could be a good deal for Carlsbad. We just hope they are as good at negotiating deals as they are at making water.” 

Eight of the nine local water agencies that had deals with Poseidon – all but Carlsbad – have agreed to rip up their contracts and let the Water Authority proceed. Carlsbad is holding out for an agreement that guarantees a portion of the tax revenues the city would lose if the Water Authority ever exercised its right to buy the plant. Pruim said the two parties will likely reach an accord soon.

“Poseidon’s business plan doesn’t really make sense except that they get bought out by a public agency,” said Conner Everts, director of Desal Response Group, which would prefer more conservation measures before beginning desalination efforts. “We don’t really think they are there to honestly be a company producing water. We think they are there to buy permits and then get bought out.”

The Water Authority along with Poseidon and its investors are betting that the price of imported water will soon exceed the astronomical price of desalinated water. Various experts interviewed for this series believe it could be anywhere from 10 to 20 years. Yet Poseidon reportedly believes it could take less than five years.

“I don’t know how practical that is,” Pruim said. “Part of it is just reality. Poseidon isn’t manipulating the price of water. It is what it is. They are taking advantage of that in a way. The only thing that could go wrong is if Poseidon can’t produce it and they go bankrupt.”

An analysis by the Public Education Center’s DCBureau.org published last year showed that while private equity and bonds would be used for upfront construction, southern Californians would pay at least $640 million over 30 years for the project, including as much as $374 million in public subsidies. Those subsidies are largely still in place as Poseidon looks to forge a new agreement and finally break ground later this year to start producing water by 2015.

In Poseidon’s latest legal victory, California’s 4th District Court of Appeal rejected a claim by San Diego Coastkeeper to conduct additional environmental studies. 

DC Bureau is staffed by award-winning journalists dedicated to bringing you in-depth stories covering the Environment and National Security.



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