Stamford, Conn.-based Poseidon Resources develops alternative water sources

Most cruise ships today have desalination equipment and more than 90 percent of the water in Arabian Peninsula countries comes from seawater desalting plants.

If you've ever sailed on a cruise ship or traveled in the Middle East, chances are you drank seawater that had the salt removed. Most cruise ships today have desalination equipment and more than 90 percent of the water in Arabian Peninsula countries comes from seawater desalting plants.

Stamford-based Poseidon Resources Corp. is one company -- among a burgeoning industry in the United States and worldwide -- that is developing alternative water sources as drought, population growth and a dearth of locations for new reservoirs creates chronic shortages of fresh water.

In one of its projects, privately owned Poseidon developed a plant that removes salt from Gulf of Mexico water and produces 25 million gallons of fresh water per day for the Tampa Bay region.

The Apollo Beach, Fla., facility is the nation's largest desalination plant. It was completed last year and is slated for further expansion over several years, said Andrew Kingman, Poseidon Resources' chief executive officer.

As U.S. demand for potable water exceeds supply for the foreseeable future, Poseidon Resources plans to build additional desalination plants in Southern California, Texas and undisclosed Southeastern states over the next several years. The company also develops, invest in and manages water and wastewater treatment facilities in the United States and Mexico.

Poseidon Resources operates an experimental desalination plant in Carlsbad, Calif., that makes 40,000 gallons of fresh water daily. The purpose of the San Diego County plant is to show local residents and others how salt removal works.

Because the county has to import 90 percent of its fresh water from Northern California and the Colorado River through pipelines, Poseidon Resources believes the Pacific Ocean is a reliable and seemingly endless third source.

"Desalinated water is the only supply of drinking water that is drought-proof," said Walter Winrow, president, chief operating officer and a co-founder of Poseidon Resources, adding that conservation and better water storage are the other components to ensuring a dependable water supply in Southern California.

"Southern California gets half its water from the Colorado River, which has a lot of other straws in it," he said. "Desalination isn't the silver bullet, but it is a necessary component in a diversified portfolio."

But desalination is distrusted by some environmental and concerned citizens' groups, who question the possible effects of two massive desalination plants that Poseidon Resources has proposed for the region. They worry that desalination, which puts the removed salt back into the sea, could have detrimental ecological consequences.

In addition to environmental pressure, the higher cost of desalinated water is an obstacle for Poseidon Resources and other companies in the industry.

Local water utilities typically pay $2.50 to $3 per 1,000 gallons for desalted seawater produced at large plants, said Doug Brown, chief executive officer of Watertown, Mass.-based Ionics Inc. The publicly traded company designs and builds desalting plants and is involved in other water and wastewater treatment systems.

Poseidon estimates that desalinated water would cost San Diego about $2.70 per 1,000 gallons, vs. $2 per 1,000 gallons for water from the county's current sources. Subsidies that Poseidon expects to receive from the California and Texas state governments for its future plants would make the price for desalted and fresh water from natural sources almost equal, Kingman said.

In fact, desalinated water is cheaper today than it once was. Manufacturing processes for equipment that removes the salt molecules have become more efficient, and today's filtering membranes can handle higher volumes of water, Brown said.

Ionics makes membranes for reverse-osmosis desalination, the process Poseidon uses in its seawater treatment plants. The Massachusetts company is a potential provider of reverse osmosis systems for Poseidon's proposed plants in Southern California, Kingman said.

Hydraunatics, an Oceanside, Calif.-based company that made reverse-osmosis membranes for the Tampa Bay plant, is another contender. Reverse osmosis occurs when pressure forces water to move across a permeable membrane. Once it crosses the membrane, the water contains fewer solid particles.

During reverse osmosis desalting, ocean water flows into a plant where two filtration steps remove dirt and other larger particles. After a third filtration step removes microscopic particles, the water is pressurized to 900 pounds per square inch, which is powerful enough to create a 2,000-foot high geyser.

The pressurized water is then shot through reverse osmosis membranes so small that they let water molecules through but keep out salt molecules. One reverse osmosis plant that Poseidon plans to develop by 2007 in Carlsbad would produce 50 million gallons of desalted water a day, enough to serve 400,000 to 500,000 people. It would cost $270 million to build and Poseidon would finance the cost.

Poseidon also has proposed a $250 million facility of similar size that would open three years from now in Huntington Beach, Calif., in Orange County. The plants depend on receipt of numerous regulatory and environmental approvals.

One reason for the environmental roadblocks is concern about a biproduct of desalination. Reverse osmosis yields 50 million gallons of extra-salty water for every 50 million gallons of fresh water that are produced, Kingman said.

Ocean water contains about 3 percent salt. The water that returns to the ocean after the desalination process contains 6 to 7 percent salt, but returns to normal salinity soon after ocean waters dilute it, Kingman said. The recycled water has minimal effect on ocean salinity because of the ocean's size, he said. Sharing seawater with nearby electric power plants helps dilute the water, too, Kingman said.

In Carlsbad, a power plant that now circulates 500 million gallons of seawater a day to cool its turbines would give 100 million gallons daily to Poseidon's planned desalination plant. Of that 100 million gallons, Poseidon would produce 50 million gallons of fresh water and 50 million gallons of water that is about 6 percent salt, Kingman said.

The ultra-salty water would blend with 400 million gallons of seawater that the Encina Power Station in Carlsbad sends back to the Pacific Ocean each day, he said. The water would reach the sea at 3.3 percent salinity, which would dilute quickly and not hurt marine life, Kingman said.

The Tampa Bay desalination plant, which Poseidon no longer owns or manages, also blends its leftover water with power plant discharge water, Kingman said.

For the past 10 years, Poseidon Resources has developed, financed and invested in $2.5 billion with of water and wastewater projects and other infrastructure developments.

Three former GE Capital executives, Winrow, Poseidon Resources Chairman Jacek Makowski and Walt Howard founded the company Resources in Stamford in 1994. Howard is now with GE Infrastructure Water & Process Technologies.

Poseidon chose Stamford for its headquarters because it is close to airports and to New York City-based Warburg Pincus, a primary shareholder in the company, said Kingman, who had also worked for GE Capital. Poseidon employs seven people in Stamford and 36 companywide. It also has offices in San Diego and Long Beach, Calif.

The company entered the desalination field in 1997. Before that, it had developed six industrial water treatment plants in Mexico and upgraded a wastewater treatment plant in Cranston, R.I.

Winrow said Poseidon expects to increase revenues three- to four-fold over the next five years, largely through desalination projects. The company does not disclose revenues, but Winrow said it produces earnings for its private shareholders.

While the Middle East has been using desalination since the 1950s, the desalination industry is quite small in the United States, said Thomas Pankratz, a board member of the Topsfield, Mass.-based International Desalination Association.

Four billion gallons a day, or less than 1 percent of the fresh water used in the United States, comes from desalting facilities, Pankratz said. He also is a vice president with Denver-based CH2M Hill, which designs and operates desalination plants.

Worldwide, desalination plants produce about 8.5 billion gallons of fresh water a day, mostly in the Middle East, Pankratz said. Countries that process seawater include Saudi Arabia, United Arab Emirates, Spain, Greece, Portugal, several Caribbean nations, China, India and Australia, according to Poseidon Resources.

The world has about 11,000 to 12,000 desalination plants, said Pankratz, co-author of a book called "" (Lone Oak Publishing). In the United States, about 20 plants desalt seawater, he said. Most of this country's 1,900 desalination plants process brackish groundwater, which gets salty when rain mixes with salts in rocks and soil, Pankratz said.

The desalination industry is growing as conventional water sources such as underground aquifers are overused, he said. About 20 large-scale (more than 10 million gallons a day) desalination plants for seawater have been proposed in the United States, most of which are in California, Texas and Florida, Pankratz said.

"Seawater desal is not a panacea," he said. "It still is expensive, but in many parts of the world, including the United States, there simply is no alternative."