Market News

 February 13, 2014
Israel Desalination Shows California Not to Fear Drought

 Six decades of providing water in a country that's 60 percent desert have made Israel a technological leader in the field, a model that points the way for drought-stricken California.

Desalination of sea water, reuse of treated sewage for agriculture, software creating an early-warning system for leaks, computerized drip irrigation and careful accounting of every drop have become the norm in Israel, the world's 40th biggest economy. Officials in California, which would be the 10th largest if it were a nation, are paying attention.

North of San Diego, Israel's IDE Technologies Ltd. is helping to build what it says will be the largest seawater desalination plant in the Western Hemisphere. The facility, when finished in 2016, will be able to provide 50 million gallons of potable water a day. Three smaller plants already operate in California, and 15 more have been proposed.

"This is the one supply that San Diego County is investing in that is truly drought-proof," said Peter MacLaggan, senior vice president of privately held Poseidon Resources Corp., which is developing the $922 million plant with IDE. "It does cost more, but it has some reliability benefits that are very important to the regional economy."

'Exceptional' Drought

About two-thirds of California, home to 38 million people, is gripped by "extreme" or "exceptional" drought, the most severe conditions, according to the U.S. Drought Monitor, a federal website. Ten percent of the state -- all in the San Joaquin Valley -- is considered exceptionally dry, according to the website, which was updated Feb. 4, before light to moderate rains fell on much of California. It's the state's most severe drought since at least 1977, according to Jeffrey Kightlinger, general manager of the Metropolitan Water District, which serves 19 million residents of southern California.

Israel has been dealing with such conditions throughout its history. Last month was the driest January on record in a large part of the Jewish state. The climate has forced the country to go to unusual lengths to lower consumption and raise supply, methods it now uses as a matter of routine.

In Israel, desalination now provides about one-quarter of the country's water supply. Each of IDE's three plants in Israel provides roughly double the output anticipated from the facility in Carlsbad, California, MacLaggan said by telephone.

Gap Closing

"We don't have enough water from nature," says Avraham Tenne, head of the Desalination Division at Israel's Water Authority, based in Tel Aviv. "But we are now able to close the gap between the water that nature has given us, and the demand for water. With a touch of a button, we can produce 600 million cubic meters of water."

Desalination, with its relatively high energy consumption and its environmental impact, wasn't the first step that Israel took on its way to increasing supply. It shouldn't be California's either, says Katalyn Voss, a water policy fellow at the University of California's Center for Hydrologic Modeling, based in Irvine.

In reverse-osmosis desalination, the most popular method, seawater is pre-treated before being sent through a series of filtration membranes that remove salt and other impurities. About half of the seawater becomes drinking water. The rest is returned to the ocean with higher concentrations of salt and other minerals. IDE says the brine will blend with ocean water to an untraceable level within 150 feet from the discharge point.

Environmental Concerns

Environmentalists and regulators such as the California Coastal Commission have expressed concern that fish larvae, eggs and invertebrates are killed as plants suck in water from the ocean, and that briny and chemically treated outflow also harms marine life.

Because of the expense and environmental concerns, desalination should be considered in California only after other measures are exhausted, Voss said. These include recycling and careful accounting of both ground and surface water, including limitations on the right of landowners to use their ground water, she said.

"For the immediate first steps, why not go with the less expensive option, and the solutions that we know will work, and will be pretty quick to implement, will be less costly energy-wise, less costly from the environment perspective?" Voss said.

In Israel, 75 percent of the country's sewage is recycled, the highest percentage in the world, according to Mekorot, Israel's national water company. More than 50 percent of water used in agriculture comes from treated sewage, said Avraham Israeli, head of the Israel Water Association. Medjool dates grown in Israel with recycled wastewater are among the most coveted in U.S. food stores.

'Ick' Factor

Sewage from the 2 million residents in the greater Tel Aviv area is recycled and used to irrigate crops in the south of the country, Israeli said. The water is treated to a level that it can be used for all types of crops, he said.

"Imagine if the water from Los Angeles was treated and used for agriculture," Israeli said. "This is a source for a huge amount of water that can be used for irrigation, and frees up regular water."

While use of sewage water might require a cultural adjustment, it would be of significant benefit, Voss said.

"There's still an 'ick' factor where people are kind of wary of having that water for domestic use or for agriculture," she said. "We have a lot of wastewater that just gets pumped out into the ocean or just wasted and it's a huge opportunity."

California's 80,500 farms and ranches received a record $44.7 billion for their output last year, up from $43.3 billion in 2011 and $37.9 billion during 2010. California remained the top state in cash farm receipts with 11 percent of the U.S. total.

Every Drop

Israel has also been able to lower leakage to less than 10 percent, by using technology that monitors water grids and warns suppliers of leaks and pipe bursts, Israeli said. About 25 to 30 percent of the world's water production is wasted because of faults in distribution, according to TaKaDu, an Israeli company that developed technology to minimize leakage.

"The biggest thing is just accounting for every single drop of water," said Voss. "We have no idea how much ground water we have, and how much we are using and that's a pretty significant omission in understanding our water situation."

The San Diego County Water Authority, the utility for 95 percent of the county's 3.2 million residents, will pay Poseidon Resources about $2,000 per acre-foot (about 326,000 gallons) for water produced by the Carlsbad desalination plant, compared with about $1,000 per acre-foot for water it currently imports from other sources, said Ken Weinberg, the agency's water-resources director. Desalinated water will provide about 10 percent of the county's supply, he said by telephone, and add $5 to $7 a month to the average $80 residential water bill.

More Plants

"That's part of the trade-off for a more reliable water supply," Weinberg said. "This is part of the diversification of our resources, hedging the risk to the supply."

Desalination provides a negligible portion of California's water supply, though the state derives a larger share from recycled water, said Ted Thomas, spokesman for the California Department of Water Resources.

New Jersey-based American Water Works Co. (AWK)'s California American Water subsidiary is seeking permits to build a $320 million desalination plant on the Monterey Peninsula. Poseidon Resources also has proposed a facility in Huntington Beach, California, that would generate the same amount of potable water as the one in Carlsbad. In November, the state's Coastal Commission postponed a decision on permitting the plant.

'Game Changer'

California currently has three desalination plants that provide water for general use, said Tom Luster, a Coastal Commission environmental scientist. Fifteen more plants are in "some stage of planning," said Richard Mills, chief of the state Water Resources Department's water recycling and desalination section. Mills said he doesn't know how many of the 15 proposals have been submitted for regulatory approval. Thirteen state and federal agencies must approve any desalination plant, and regional and local agencies also have some degree of oversight, Mills said.

The Carlsbad plant is a "game changer" in desalination in the U.S. and will pave the way to future plants in California, and the U.S. in general, said Mark Lambert, chief executive officer of IDE Americas. IDE is "following actively" other projects that are under development, he said.

In the meantime, Californians should learn to conserve water, Tenne said. Raising prices, education to reduce waste, and cutting back on grassy areas are some of the methods that Israel has used to cut back on consumption, which is currently about 90 cubic meters per year per person, compared with 170 in California.

"We do a lot of things, not just desalination," Tenne said. "These are all things that California can do."