Category Archives: Poseidon

Desal Bailout?

By John Earl
Surf City Voice

Originally published March 17, 2009 as part 1 of a three part series on desalination.

Poseidon Resources Inc. and the four Huntington Beach city council members who voted in 2006 to approve the company’s request to build a desalination plant in the city’s southeast section promised that the project would be paid for with private funds-at no cost to the city’s taxpayers.

Poseidon's puppets?
Poseidon's City Council Allies: Don Hansen, Keith Bohr, Gill Coerper, Cathy Green

But Poseidon, a multi-national equity investor and developer of privatized water systems, currently controlled by “zombie” bank, Citigroup (which is being bailed out by federal tax funds), could directly and indirectly benefit from $1 billion in public funds, about 70 percent of that courtesy of taxpayers in Los Angeles, Orange and San Diego counties and the rest paid for by taxpayers across America through the American Recovery and Reinvestment Act (ARRA) signed into law recently by President Barack Obama.

The subsidies would also be directed at a nearly identical Poseidon desalination plant in the city of Carlsbad and would help ensure but not guarantee that both plants are cost effective for Poseidon to build and to operate. Under the city approved plan, Poseidon would build the desalination plant in Huntington Beach next to the AES power generating station at Beach and Newland streets. Poseidon’s plant would suck in 127 million gallons of seawater per day through existing AES cooling pipes to create 50 million gallons of per day or 56,000 acre feet of drinking water each year.

Poseidon would sell 3.2 million gallons of converted seawater per day to the city, a small fraction of its total daily water usage from other source, at five percent less than it pays the Municipal Water District of Orange County (MWDOC) for water. The other 47.8 million gallons per day would go to MWDOC’s member districts at government subsidized prices. Jobs would be created by the building and operation of the plant and the city’s tax base would go up, according to predictions made by Poseidon and city staff.

Councilmember Don Hansen summed up the council majority’s view three years ago when he reassured hundreds of city residents packed into the council chambers that the desalination plant was “born purely on private investment dollars” to be spent at Poseidon’s risk, not the taxpayers’. Continue reading Desal Bailout?

Desal Debacle: What if Poseidon fails again?

By John Earl
Surf City Voice

Originally published March 18, 2009. Part II of a three part series.

Huntington Beach City Councilmember Don Hansen reassured the public. “I’m actually pretty comfortable having a private company potentially evaluate the dedication of a source for our future water supply,” he said.

That was three years ago at a city council meeting when Hansen and three other council members, Cathy Green, Gil Coerper and Keith Bohr (now Mayor Bohr) voted to allow Poseidon Resources Inc. to build a desalination plant at the corner of Newland and Beach avenues in southeast Huntington Beach.

If all goes according to plan, the facility would convert 127 million gallons of seawater into 50 million gallons of fresh drinking water every day of the year.  The city would have the option of buying up to 3.5 million gallons of that water at a discount compared to the cost of imported water (two-thirds of the city’s water comes from ground wells, its cheapest source of water). The rest would be distributed throughout the Municipal Water District of Orange County (MWDOC), in theory, to provide a guaranteed water source to help offset drought conditions in the state.

The plant still needs approval from the State Lands Commission and the California Coastal Commission and Poseidon still lacks the private and public financing needed to build and operate, although Poseidon officials say that all are forthcoming (see Part 1). Continue reading Desal Debacle: What if Poseidon fails again?

‘No Cost’ Desal Costs A Lot: How your tax dollars created the desalination industry

By John Earl
Surf City Voice

Part III of a series. Originally published May 5, 2009

Poseidon Resources Inc.’s website claims that the desalination plant it wants to build in southeast Huntington Beach, at Newland and Beach avenues, will be a “cost-effective solution to provide residents with a safe and reliable water supply by using existing structures—at no cost to taxpayers.”

Elected officials who voted to approve the desalination plant three years ago have consistently echoed Poseidon’s claim: Poseidon would privately own and operate the plant for its own profit and for its investors—a strictly free market affair with no taxpayer investment or risk, they said.

City council representative Don Hansen praised the project’s supposed free market values to a crowded city council chamber before he gave Poseidon his vote along with three other council members, Keith Bohr, Gil Coerper and Cathy Green.

John F. Kennedy
President John F. Kennedy supported research and development for desalination.

“My belief is that the market is going to drive the majority of these decisions. I truly believe that,” Hansen said.

If the Poseidon desalination plant is not profitable, he added, it “will never see the light of day. And it’s purely born on private investment dollars, the risk that they [Poseidon] are going to take.”

In a candidates’ debate last year, Hansen warned that “We’re going to need the water” and reassured again that “It’s not us building the plant. It’s all private investment.”

If all goes well for Poseidon, its Huntington Beach plant will produce 50 million gallons of drinking water per day by sometime in 2011. It still needs to obtain additional government permits and must work out a franchise agreement with the city first.

Poseidon plans to build an almost identical desalination plant in the city of Carlsbad. That project is further along in the permit process and if financing comes through it could start construction this summer. Poseidon’s CEOs dream of building large desalination plants at other California coastal locations as well.

Hansen’s appeal to the free market instincts of the voters is persuasive in a city where the call for smaller government is almost a religious doctrine. But attributing either Poseidon project to to free-market karma is misleading because the company could benefit from as much as $1 billion in taxpayer supplied subsidies that would make it easier for Poseidon to attract the private sector financing that it also needs but still lacks in order to build and operate the two plants. Continue reading ‘No Cost’ Desal Costs A Lot: How your tax dollars created the desalination industry