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WATER

Poseidon Resources’ Carlsbad Desalination


Plant Is a Bad Deal for Southern California
Fact Sheet • October 2009

I n order to ensure that Southern California is able to meet its future water demand,
environmental and economic needs, public funding should prioritize projects that
support regional independence, greenhouse gas reduction, job creation and consum-
er and environmental health protection. While policymakers and other stakehold-
ers are proposing various solutions that include increased conservation and reuse
projects, low-impact development and repairing leaking infrastructure, Poseidon
Resources, a private company, is seeking public financial support for an expensive,
risky and environmentally damaging desalination project in Carlsbad, California.

Poseidon misrepresents its past, the project’s cost to Poseidon Resources Has a Record
the public and the project’s environmental impacts. Its
proposal is a bad deal for Southern California consum- of Failure
ers and the environment and its public subsidy request Poseidon’s claim that its “experience and expertise allows
should be rejected. for the delivery of quality projects on time and within
budget”1 is not supported by its track record of attempt-
ing to build ocean desalination plants. In fact, the com-
pany’s only major attempt at building a desalination
project — in 1999 in Tampa Bay, Florida — never got off
the ground.2 After Poseidon’s partner declared bankrupt-
cy, Tampa Bay Water, the public water agency, bought
the plant back.3 Since that time, there is no evidence to
suggest that Poseidon has gained any more experience
building large-scale ocean desalination facilities. Back in
Florida, the Tampa Bay desalination plant was $40 mil-
lion over budget and five years late, and it has yet to pro-
duce the 25 million gallons a day (MGD) it promised on a
regular basis.4 Yet Poseidon plans to use the same reverse
osmosis technology used in Tampa Bay in Carlsbad, for a
plant twice the size.5

Poseidon Can’t Be Trusted: Its


Private Project Relies on Public
Funding and Support
Poseidon’s claim that “public water agencies serving the
cities of Carlsbad, Oceanside, San Marcos, San Diego,
Encinitas, Solana Beach, Rancho Santa Fe, Escondido,
Chula Vista, National City and the unincorporated com-
munities of Rainbow, Bonsall and Fallbrook will be the
direct beneficiaries of a new, affordable and reliable water
A desalination plant (not owned by Posiedon). Photo by Irina Belousa/iStockphoto.
supply developed at no expense to the region’s taxpay- such structures destroy 312.9 million pounds of fish each
ers”6 is misleading. Poseidon’s financing relies on public year, a $13.6 million loss to California fishermen.12 The
subsidies and support. Poseidon is currently seeking Clean Water Act requires cooling water intake structures
$250 per acre-foot of water produced from the Metropol- to reflect the best technology available for minimizing
itan Water District of Southern California (MWD), up to adverse environmental impact, which has prompted the
$14 million per year, which could add up to $350 million State Water Resources Control Board to create a draft
over a 25-year period.7 MWD gets its funding from a vari- policy to virtually eliminate the impacts of these struc-
ety of sources, including ratepayers and property taxes.8 tures.13 It is unclear what will happen to the proposed
Poseidon has also applied for $480 million in tax-exempt desalination plant if the cooling intakes are closed.
bonds from the California Debt Limit Allocation Commit-
tee,9 which would reduce financing costs by giving a tax Wastewater from the proposed plant poses further en-
break to bondholders. In effect, this would give Poseidon vironmental risks. Wastewater from desalination plants
a multimillion-dollar federal and state subsidy. contains high concentrations of salt and may contain
toxic chemicals and heavy metals from the industrial
process.14 Changes to water quality and temperature from
Poseidon’s Carlsbad Project such waste products could harm coastal water quality and
Misrepresents Environmental marine life.15 Of the 304 MGD of ocean water the plant
Impacts sucks in, only 50 MGD will come out as drinking water;
57 MGD will become wastewater.16 The wastewater will be
Poseidon’s claim that its “Carlsbad and Huntington mixed with the remaining 197 MGD and discharged back
Beach desalination projects will be the most technologi- into the ocean.17
cally advanced, energy efficient and environmentally
sensitive in the world”10 downplays the potential environ- The proposed plant will also create new demand for
mental damage from its plant, which includes threats to energy at a time when the state is attempting to reduce its
marine life and water quality as well as carbon emissions energy use and greenhouse gas emissions. The proposed
that contribute to global warming. plant will require 274,400 megawatt hours a year (MWh/
yr).18 The typical new house in California uses 7,035
The Carlsbad plant relies on an antiquated once-through kilowatt hours a year (kWh/yr),19 which means that the
cooling system that will suck in 304 MGD of ocean water desalination plant will use the same amount of electricity
to create the projected 50 MGD of drinking water11 — po- as 39,000 such homes. There are currently 31,521 house-
tentially killing large quantities of fish and other aquatic holds in the entire city of Carlsbad.20
life in the process. The U.S. Environmental Protection
Agency estimates that power plants in California using
Questions Remain About Water
Quality from Proposed Desalination
Facility
Poseidon’s statement that “the Carlsbad desalination
Project will provide San Diego County with a locally-
controlled, drought-proof supply of high-quality water
that meets or exceeds all state and federal drinking water
standards”21 implies that desalinated water does not come
along with health safety concerns, when in fact it does.
Seawater can contain regulated and unregulated chemi-
cals as well as endocrine disruptors, pharmaceuticals,
personal care products and toxins from marine algae.22
Some of these contaminants may not be adequately
removed in the reverse osmosis process. For example,
boron is a chemical that may act as an herbicide and pose
human health risks.23 It is found at higher levels in ocean
water than freshwater, and standard reverse osmosis
membranes procedures can only remove 50 to 70 per-
cent of the element.24 The U.S. Environmental Protection
Agency does not regulate boron nationally.25 This means
that water could still locally contain levels of the element
that may pose a health risk. Policymakers should require
Corporation Carlsbad Desalination Project Discharge to the Pacific Ocean
Poseidon to explain how they plan to address the public Via the Encina Power Station Discharge Channel. May 13, 2009 at 1.
safety concerns associated with desalinated water before 12 U.S. Environmental Protection Agency, Phase II—Large existing electric gen-
erating plants, Final Rule, Economic and Benefits Analysis,
moving forward with any desalination plant. Summary of Current Losses Due to I&E. EPA-821-R-04-005. February
2004, located at http://www.epa.gov/waterscience/316b/phase2/econben-
efits/final/c2.pdf
Conclusion 13 California State Water Resources Control Board. “Draft Policy on the Use
of Coastal and Estuarine Waters for Power Plant Cooling.” Posted June 30,
2009.
Given its track record of failure and misleading rhetoric, 14 Cooley, Heather, Gleick, Peter and Wolff, Gary. “Desalination, with a grain of
policymakers should not trust Poseidon Resources with salt.” Pacific Institute, Oakland, California, June 2006 at 59-61.
15 Cooley, Heather, Gleick, Peter and Wolff, Gary. “Desalination, with a grain of
our water future. Rather than subsidizing Poseidon’s salt.” Pacific Institute, Oakland, California, June 2006 at 59-61.
costly project, public dollars should be invested in smart 16 California Regional Water Quality Control Board, San Diego Region. Order
No. R9-2009-0038 Amending Order No. R9-2006-0065 (NPDES No.
regional water solutions that will help us meet our future CA0109223) Waste Discharge Requirements for the Poseidon Resources
water, environmental and economic needs. Corporation Carlsbad Desalination Project Discharge to the Pacific Ocean
Via the Encina Power Station Discharge Channel. May 13, 2009 at 1.
17 California Regional Water Quality Control Board, San Diego Region. Order
No. R9-2009-0038 Amending Order No. R9-2006-0065 (NPDES No.
CA0109223) Waste Discharge Requirements for the Poseidon Resources
Endnotes Corporation Carlsbad Desalination Project Discharge to the Pacific Ocean
1 Poseidon Resources. [Website]. “About Us.” Available at www.poseidonre- Via the Encina Power Station Discharge Channel. May 13, 2009 at 1.
sources.com/about_us.html. Accessed on Oct 22, 2009. 18 Poseidon Resources. “Carlsbad Seawater Desalination Project Energy Mini-
2 Cooley, Heather, Gleick, Peter and Wolff, Gary. “Desalination, with a grain of mization and Greenhouse Gas Reduction Plan.” July 3, 2008 at 6.
salt.” Pacific Institute, Oakland, California, June 2006. Appendix C. 19 KEMA-XENERGY , Itron and RoperASW. Prepared for California Energy
3 Cooley, Heather, Gleick, Peter and Wolff, Gary. “Desalination, with a grain of Commission. “California Statewide Residential Appliance Saturation Study.”
salt.” Pacific Institute, Oakland, California, June 2006. Appendix C. Vol 2, Study Results Final Report. June 2004 at 10.
4 Pittman, Craig. “More trouble at desal plant.” St. Petersburg Times. March 20 United States Census Bureau. State and County Quick Facts. Carlsbad, CA.
16, 2009. 2000. Available at quickfacts.census.gov/qfd/states, accessed October 26,
5 Tampa Bay plant: 25mgd; Barnett, Cynthia. “Salty Solution” Florida Trend 2009.
Magazine, May 1, 2007. Carlsbad plant: 50mgd; California Regional Water 21 Poseidon Resources. [Website] “Carlsbad Desalination Project.” Available at
Quality Control Board, San Diego Region. Order No. R9-2009-0038 Amend- www.carlsbad-desal.com/default.asp. Accessed on October 22, 2009.
ing Order No. R9-2006-0065 (NPDES No. CA0109223) Waste Discharge 22 Cooley, Heather, Gleick, Peter and Wolff, Gary. “Desalination, with a grain of
Requirements for the Poseidon Resources Corporation Carlsbad Desalina- salt.” Pacific Institute. June 2006 at 53.
tion Project Discharge to the Pacific Ocean Via the Encina Power Station 23 See Food and Water Watch. “Desalination: An Ocean of Problems.” February
Discharge Channel. May 13, 2009 at 1. 2009 at 8-9.
6 Poseidon Resources. [Website] “Carlsbad Desalination Project.” Available at 24 Cooley, Heather, Gleick, Peter and Wolff, Gary. “Desalination, with a grain of
www.carlsbad-desal.com/default.asp. Accessed on October 22, 2009. salt.” Pacific Institute. June 2006 at 53.
7 Arakawa, Stephen and Jeffrey Kightlinger. [Letter] Letter to Board of Direc- 25 73 Fed. Reg. 44251. “Drinking Water: Regulatory Determinations Regarding
tors of the Water Planning and Stewardship Committee of the Metropolitan Contaminants on the Second Drinking Water Contaminant Candidate List.”
Water District of Southern California. October 13, 2009. Environmental Protection Agency. July 30, 2008.
8 Metropolitan Water District of Southern California. “Challenges and Break-
throughs: Annual Financial Report 2007-2008.” Financial Highlights. June
30, 2008 at XVIII.
9 California Debt Limit Allocation Committee. Application for an allocation For more information:
of the state ceiling on qualified private activity bonds for an exempt facility
project. Borrower: Poseidon Resources. Revised May 2007. web: www.foodandwaterwatch.org
10 Poseidon Resources. “Environmental Stewardship.” Available at www. email: info@fwwatch.org
poseidonresources.com/environmental_stewardship. Accessed on October
22, 2009. phone: (202) 683-2500 (DC) • (415) 293-9900 (CA)
11 California Regional Water Quality Control Board, San Diego Region. Order
No. R9-2009-0038 Amending Order No. R9-2006-0065 (NPDES No.
CA0109223) Waste Discharge Requirements for the Poseidon Resources Copyright © October 2009 Food & Water Watch