A few hundred yards from the Pacific, at the end of a labyrinth of blue pipes and filters, Peter MacLaggan fills a plastic cup with water. This, he hopes, is his company's future.
It is purified seawater, stripped of its salts and ready for the tap. MacLaggan's firm, Poseidon Resources, is one of several companies that want to sell Californians tens of millions of gallons a day of desalinated water.
Their sea-to-tap schemes reflect the state's renewed interest in ocean desalination, which planners say could provide more than 1.5 million Californians with drinking water by 2030.
Although there remain financial and environmental obstacles to desalination, more than 20 desalting proposals are now under consideration on the California coast. Most are from public agencies, including the Los Angeles Department of Water and Power, the city of Santa Cruz and the Municipal Water District of Orange County.
But the most ambitious and potentially controversial are from the private sector, which, with the help of public subsidies, wants to play a major role in developing a new water supply -- a responsibility borne largely by the government for the past century.
Poseidon, a small, privately held company based in Connecticut, proposes to build the biggest ocean desalination plants in the Western Hemisphere on the Southern California coast -- one in Huntington Beach and one in Carlsbad. Each would be capable of producing 50 million gallons of drinking water a day.
To the north, California-American Water Co., a private utility owned by a German conglomerate, is proposing a 9 million-gallon desalination facility at Moss Landing on Monterey Bay, while a consortium of private engineering companies is floating plans for a 5 million-gallon desalination plant on the shores of Morro Bay.
The private plans have stirred concerns among some public officials and advocacy groups, who worry that a public resource, seawater, would be exploited for private profit and sold to the highest bidder. They further warn that multinational companies could try to use international trade agreements to get around local and state environmental regulation of coastal plants.
Proponents say the public's interests would be protected by long-term contracts with private water companies. They note that private water utilities have operated in California since its infancy and today provide about a fifth of the state's drinking water. They argue that in an era of government budget cuts and monster deficits, it makes sense for private investors to shoulder the financial risks of getting new technology up and running.
"We need to get creative," said MacLaggan, a senior vice president of Poseidon who joined the company three years ago and previously worked in water-supply planning for the San Diego County Water Authority. "I don't think you can say: Because it's private, it's bad. If we're meeting [quality and quantity] specifications for the life of a contract, it doesn't matter how you get the water there."
Behind MacLaggan hummed the small reverse-osmosis demonstration project Poseidon has run in Carlsbad for the past year next to the Encina power station. A mini-version of what Poseidon proposes to do, the operation takes seawater from the power plant's cooling stream and pumps it through a series of sand filters and synthetic membranes with billions of holes a fraction of the width of a human hair. The holes are big enough for a water molecule to slip through, but not salts or contaminants. Carbon dioxide and minute amounts of lime are added to counter the water's corrosiveness.
Advances in desalting technology, pressure on Southern California to reduce its take of Colorado River water and the demands of an ever-expanding population have turned the state's gaze to the sea.
"This is a potentially limitless supply of water," observed Charles Keene, executive officer of the state Water Desalination Task Force, which concluded last year that desalination could play a meaningful, if limited, role in meeting California's water needs.
The task force acknowledged that private desalination operations raised "unique issues," but it did not discount private involvement.
"You may be able to say that, philosophically, [seawater] is a public resource and should not be exploited for profit," Keene said. "But if you want to look at it pragmatically, at water shortages in the future, and say, 'I don't have the financing to bring in additional supplies,' you may wish to look at partnering with private agencies that could amass financing."
Despite a drop in desalination costs over the past decade, desalinated seawater remains at least twice as expensive as conventional water supplies in Southern California.
To develop the market, the Metropolitan Water District of Southern California, the region's largest water supplier, plans to offer subsidies to member agencies. The public water districts could use the money to offset the costs of producing desalinated water themselves or to buy water from a private producer.
A national alliance of water agencies, which includes the MWD and the parent company of California-American, is also lobbying for congressional authorization of hundreds of millions of dollars in federal energy grants to offset production costs.
Poseidon is counting on the MWD subsidies to make its water more attractive to public customers. It also needs the approval of local authorities and the state Coastal Commission, neither of which is proving an easy sell.
Environmentalists say the plants would promote population growth by creating an additional water source, threaten marine life with high-salinity discharges and consume large amounts of energy.
Poseidon says it can deal with the environmental issues and will continue to push both projects. But it still has to overcome the skepticism of the Coastal Commission.
In a draft report last year, the commission staff outlined a potential clash between the private sale of purified seawater and the state's Coastal Act, which considers ocean water a public resource to be protected. The document also pointed to several publicized cases in which multinational companies pursuing projects in the United States or elsewhere have filed claims under international trade treaties challenging government decisions that they say hurt their business.
"Right now, we're just asking questions. Right now, we don't have the answers," said Tom Luster, an environmental scientist and lead staff member on the report.
The Coastal Commission's concerns echo a worldwide debate over the privatization of public services, particularly water utilities.
"When private corporations get in the business, it's in their best interest to sell more [water] and to then even create the problem of demand that needs the technological answer," said Maude Barlow of the Council of Canadians, a Canadian public-interest group that campaigns against privatization. "They're only in it to make money."
But water is already a commodity, argued Adrian Moore, vice president of the Reason Foundation, a think tank in Los Angeles. "It is a thing we buy now. It's not something we're given for free. We have just as much of a right to food, and we don't believe government should be in the food business."