(Links Occasionally Updated)
EDITORS NOTE: Since the original posting of this commentary more than two-years ago, July 19, 1998, Stone and Webster, the Tampa Bay desal plant development "Team Leader" and supposed possessor of a technological "Rosetta Stone" to magically convert historically cost prohibitive, Perrier-priced desal water into something more affordable, has declared bankruptcy. According to the Wall Street Journal, Stone and Webster's financial woes stemmed from a “consistent inability to accurately project costs on major projects”.
Oil, the bellwether indicator of energy cost in general (as in electricity etc.) has skyrocketed from $23.00 per barrel in '98 to around $34 per barrel - a 41% increase and the highest energy price in 10 years. This is a matter of major concern as seawater desal plants are voracious consumers of electricity. It is logical to assume that there is some mechanism extant in the agreements between the would-be developers of a Tampa Bay desal plant, and the Tampa Bay Water Authority, which would allow for increases in the cost of desal water in the face of such recent (and unprecedented) energy cost run-ups.
by an estimated $30-$60 billions of dollars in anticipated future direct U.S.
support (i.e. bribes) for accepting a regional peace deal, the Israelis now
seem poised to bite the
desal bullet and begin development of a seawater plant at Ashkelon on the
Mediterranean. The similarly arid and Israel-like coastal region of Texas is
now also said to be considering
a desal facility; driven in
large part, ironically, by the chimerical and wholly unrealized
"breakthrough" desal cost projections for a now bankrupt Stone
& Webster’s non-existent Tampa Bay facility.
Note: The author appreciates that both Gulf and Tampa bay locations are being considered as sites for the subject regional desalination facility. The term Tampa Bay as used herein is applied generically in an inclusive, regional context and refers to all potential area desalination sites (bay or gulf front) presently under consideration.
In 1996, Michael Molligan, then water district spokesman for Southwest Florida Water Management District's (SWFWMD) Manatee county region was quoted in the Bradenton Herald,`` Once saltwater intrusion has occurred, we can never recover the water resource except through desalination. Desalination, the process of removing salt from salt water to make drinking water, costs two to three times more than the cost to process drinking water from fresh water surface or groundwater sources." Fair enough so far, with one exception; some experienced, world-class number crunchers say that seawater desalination costs are higher - much higher!
According to 1996 World Bank figures (a global lender and credit guarantor to nations with major infrastructure needs) the actual cost of seawater desalination ranges from $1.60 to $2.70 (U.S.) per cubic meter (219.973 U.S. Gallons) -- given existing (1996) technology and energy sources (oil around $23 per barrel at '96 year-end). Although manufacturers of desalination equipment claim lower costs, World Bank experts maintain that manufacturers' estimates are consistently incomplete and do not consider all the "hidden costs."
Proponents of desalination argue that the present cost of potable desalinated water is likely to decline due to advances in technology. World Bank experts dismiss these assertions as being "unlikely "because the substantial energy costs to desalinate are subject to rise in the next two decades. It is also unlikely, they contend, that technology advances can be economically adapted to already existing desalination facilities.
The table below compares the 1996 World Bank's desalination cost projection ranges with Hillsborough county's present, cheap and conventionally produced (aquifer & groundwater) potable water cost.
In October of 1996, after exhaustive study, the water starved and notoriously frugal nation of Israel concluded that a mammoth, state-of-the-art plant to supply about 250 mcm/yr of desalinated seawater (66,050,198,150 gallons) would require around a $1 billion investment -- about .0151 cents per gallon. In addition, Israeli experts identified additional costs consisting of:
In consideration of the "unacceptable economic consequences,” spokesmen for Mekorot, Israel's national water company, ruled that all large scale desalination projects be delayed and considered only as a "last resort."
Historically, desalinated seawater has been so costly that there have been only three "true" commercial seawater desalination operations in the United States; and only one, the relatively insignificant Catalina Island, Calif. plant, remains in limited use.
The desalination plant(s) being pushed for the Tampa bay region, featuring the typical vastly divergent and virtually meaningless cost estimates characteristic of all local government's supposedly "economic" undertakings, will cost (so we are now told) between $70,000,000 and $100,000,000 and produce around 20,000,000 gallons per day of desalinated water. It is, however, unclear what costs are included in the anticipated plant price. Assuming an extremely aggressive operating cycle of 365 days per year, annual water production could reach 7,300,000,000 gallons (7.3 billion gallons). In any event, it would be the largest and most expensive desalination plant in America, and it is this fact that raises certain economic questions.
By a factor of almost 10-times, the 1996 Israeli studies referenced earlier were based on a significantly larger desalination production facility. Consequently, the massive Israeli plant could reasonably be expected to enjoy efficiencies-of-scale, i.e. lower construction and operating costs than Tampa Bay.
Conservatively applying the estimated cost of constructing the larger Israeli facility, at its reduced construction costs of scale (1.51 cents per gallon) to the 7.3 billion-gal/year Tampa Bay facility produces an "inferred" Tampa Bay facilities construction cost of $109,500,000. This number, albeit conservatively derived, is still $9,500,000 greater than the current $100,000,000 Tampa Bay plant "upset" price represented to the community by desalination proponents. Also, higher American wages, stringent safety concerns, largely undefined environmental impact & mitigation issues and most of the additional cost factors considered by the Israelis, are certain to bloat the final cost of the Tampa Bay facility - i.e. providing large chunks of sea shore for the plant, a permanent dependence on "imported" energy and vast amounts of clean seawater required for dumping the brine by-products of the desalination process.
Perhaps a revealing insight and understanding of the consistent historic imprecision of government’s attempt to predict the costs and revenues of large, politically motivated infrastructure projects can be gained from this link detailing horrendous cost overruns and historic operating failure of other large-scale government projects; Rail Mass Transit in particular -- another of government's "mythic" obsessions threatening the "wealth" of Tampa bay area and Florida residents.
From California Coastal Commission (CCC) data, discussed in further detail below, we gain insight into a range of possible annual production (operating ) costs for the proposed Tampa Bay facility. According to the CCC, excluding capital costs, most seawater desalination plants in California would produce potable water in the range of $1,000 to $2,200 per acre-foot (1992 cost basis) and consume 2,500 to 29,500 kilowatt hours per acre-foot (kWh/AF) of electricity. For the purpose of analysis, the CCC defines one acre-foot (AF) as being approximately 326,000 gallons. One acre-foot represents the CCC's estimate of the annual water requirements for "two or three California households." Applying this formula to the Tampa Bay facility's annual production of 7.3 billion gallons yields 22,393 annual AF (Acre-Feet). Thus:
DRIVING THE DESALINATION "TRAIN" -- POWER MONOPOLY & TAMPA BAY GOVERNMENTS
Desalination is a big time, energy intense (electricity/fossil fuel) undertaking. This fact affords insight into why seawater desalination for the Tampa Bay area is being pushed by the powerful and expensive lobbyists and senior officials of the area's electric monopolies -- Tampa Electric Company and Florida Progress. Energy, lots of electric energy, that's the ticket! An indication of just how much energy can be gained from the operating experiences of California State.
THE CALIFORNIA COASTAL COMMISSION (CCC)
Among other things, the California Coastal Commission (CCC) is responsible for determining the impact of desalination operations on their coastline. They have conducted extensive desal research complete with its own specialized and somewhat arcane operating terminology. As described earlier, in "CCC speak, " one acre-foot (AF) equals approximately 326,000 gallons; the amount, according to the CCC, required to satisfy the annual water consumption requirements of "two or three California households." Other units of capacity are :
According to the CCC, most seawater desalination plants in California produce potable water in a range of costs from $1,000 to $2,200 per acre-foot (1992 cost basis) and consume 2,500 to 29,500 kilowatt hours of electric power per acre-foot (kWh/AF). Extrapolating from the CCC findings, the table below details a possible range of annual electricity consumption costs for the proposed Tampa Bay salt water desalination plant, assuming a modestly subsidized(?), electricity rate of six cents per kilowatt hour (kWh).
The apparent variance in electric power consumption evinced in the chart below is a function of the salinity of the water source being processed. The higher the salinity, ocean salt water vs. brackish water say, the greater the electric power consumption for desalination. The Tampa bay plant will be processing bay seawater-- water that is only slightly less saline than open Gulf seawater. Thus, it is logical to conclude that the Tampa desal plant will consume electric power -- Kilowatt Hours -- at the upper end of desal processing cost projections and will thus be a more costly "seawater" desalination process. And, as the Israeli and World Bank studies conclude, when energy prices inevitably increase (i.e. the price of oil, natural gas or coal) desalination process costs that are wholly dependent upon electric power production will escalate dramatically. For instance, the oil price per barrel was in the $16-$20 U.S. dollars range during the time of the 1992 CCC electricity consumption cost projections below.
It is obvious that whichever of the two Tampa bay power monopolies win, the Tampa Bay area's desalination power "sucker" is a slam-dunk to consume (buy) lots of electricity for decades. Thus the mystery of why Florida Progress and TECO are the saltwater desalination project's major champions is solved. And if TECO should win, they will perhaps reap an additional windfall by selling or leasing a virtually worthless industrial property for the desalination plant site, and perhaps sell water pipeline right-of-way access on existing TECO power line easements. What with outages and rolling brown-outs an increasingly common local phenomenon during summer and winter high electricity demand periods, you can be certain that soon after the opening of the Tampa Bay desal power sucker, captive area electricity consumers will hear the chant of the power shortage mantra: "there is an immediate need to build new production capacity, funded, of course, by increased consumer electric rates. "
And, local governments won't object; posture yes, object never. Why should they? After all, they've never complained about power monopolists’ rates before. The nasty little secret is that government, in exchange for having created the anachronistic, regional power monopolies in the first place, quietly receive their monthly monopoly "protection payoff" via ever increasing clandestine taxes -- monopoly franchise fees and taxes assessed on the gross amount of the area's captive energy consumers' electric bills! Under this paradigm, the more consumers pay for electricity, the more money flows into government coffers.
Forget for the moment the obvious reasons for the irresistible attraction of Politicals to power monopolists -- the implied understandings and unspoken promises of generous political campaign contributions and support-- the larger your electric bill, the more revenue government receives, avoiding the unpleasant task of having to return to the voters for permission -- limitless, unaccountable increases! Too, the power monopolies historically have functioned as virtual governmental "safe houses" providing cushy executive havens (and perks) for the politically favoured while lavishing funding and political support on government friends, and providing seed money and financing for government's politically favoured "pet" projects; undertakings that taxpayers given the opportunity would most likely reject. After all, why would any politician upset the precedent established through such a long-standing relationship; historically, a smooth and efficiently running engine of political plunder that otherwise distracted citizens barely understand?