Desalination Plants Could Divide California Officials

Setting the stage for a potential showdown with the Schwarzenegger administration over desalination, the executive director of the California Coastal Commission laid out his concerns this week about the prospect of private desalting plants along the state’s seashore.

In an interview at the commission’s three-day meeting here, Director Peter Douglas expressed a variety of reservations about private desalination projects and said he thought state policy was effectively pressuring public agencies to consider private proposals.

Douglas spoke as his staff presented a report to the commission outlining a number of environmental and public policy issues surrounding desalination, which is being proposed in more than 20 projects up and down the coast. Some of the biggest plans are coming from private corporations, which are pushing to develop a major share of the seawater desalination market in California.

Douglas said it was wrong to say the commission, which issues permits for coastal plants, would not approve a private operation. “There’s no blanket prohibition against private desalination facilities,” he said.

But the staff’s broad-ranging skepticism on private projects appears to put it at odds with Gov. Arnold Schwarzenegger’s administration, which challenged some of Douglas’ concerns this week.

“We should not let the issue of ownership of desalination facilities -- public, private, or multinational -- discourage us from obtaining the benefits that desalination can provide,” state Resources Secretary Mike Chrisman wrote in a letter to the commission this week. “Various types of ownership may present different issues, but it is nothing that California has not faced in other sectors.

“California would be well served to soon have several full-scale desalination plants operating on our coast so we can monitor and learn about their environmental, engineering and economic consequences before they become more necessary a few decades hence,” the letter continued.

In a telephone interview, Chrisman said he was not pressuring the independent commission to approve desalting projects, but was underscoring the role that desalination could play in the state’s water future. “The bottom line for us is, we view it as an important potential water source to help meet California’s water needs,” he said.

In brief remarks to the commission introducing the staff report Thursday evening, Douglas said there was no dispute that desalinization would be developed on the coast. “In our view it’s clear it’s not a question of if, or whether, there will be desalination projects along the California coast.

“It’s a question of when and where and how they’re going to be developed, and under what terms and conditions and by whom.... We clearly understand that desalination will be part of California’s water future. So, there’s no disagreement about that particular issue.”

In an interview before the staff presentation, Douglas nonetheless repeated a number of concerns about private desalination development. And he said that, as a coastal issue, desalination “is as important as offshore oil.”

He said he opposed giving public subsidies to private desalination projects and believed the quest for private profit would inevitably conflict with the public interest, and he argued that state and local environmental regulations would be vulnerable to challenge by companies citing international trade agreements.

Some of the biggest players in the water industry are multinational corporations. And they, Douglas contended, “can’t help but push that kind of agenda -- to have trade agreements giving them the leverage to address environmental regulation.”

As an example, he cited a letter from a Thames Water official to the European Commission trade directorate. Thames is part of a global water conglomerate that recently bought the parent of a private California water utility that is proposing a 9-million-gallon desalination plant on Monterey Bay.

In the letter, a London-based Thames official said the company was concerned about the length of time it took to get state approvals for the purchase of the utility’s parent company and, more generally, “some of the restrictive conditions that the individual states are attempting to impose on us.”

The commission report cites a number of trade claims by international corporations challenging government decisions in various countries, including the United States. Among them is a pending $970-million claim against the federal government filed by a Canadian manufacturer of the gasoline additive MTBE. The company contends that California’s phase-out of MTBE amounts to a trade barrier under the North American Free Trade Agreement.

On Thursday, an official of California American Water, the German-owned utility that is proposing the Monterey Bay plant, gave the commission a 22-page written rebuttal to the staff report.

“We believe that the draft report’s discussion on public versus private ownership is inappropriate and displays an unwarranted bias against private ownership,” the document stated. “It makes many conclusory statements that are totally unsupported by fact.”

In his letter, Chrisman also tried to defuse the trade challenge issue: “Nothing should be clearer to the public and any advocate for a desalination facility on the coast than California’s continual insistence on any coastal facility meeting strict state environmental and other standards and being subject to the review of all applicable state and local agencies including the Coastal Commission,” he wrote.

Coastal commissioners took no action on the staff report, and commented on it only briefly.

Several said they had concerns about desalination, whether it was a plant’s effect on marine life, the public-versus-private issues or the potential for a new water source to weaken conservation efforts and promote growth in coastal areas.