1. July 2007 AMTA Event Type “Theme” Location - Date Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology ©AMTA1 Technological and Economic Improvements in Seawater Desalination Peter Waldron The Maritime Alliance Symposium San Diego, CA January 28, 2011

2. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 2 Outline Background Seawater Desalination Technology Improvements SWRO Costs Summary

3. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 3 Background How did we get here? Population demand 30 Million more people in past 10 years Most growth has been along our coasts Agricultural demand Lack of available freshwater Less than 1% of the water covering the earth is available Drought

4. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 4 Drought – Lake Mead

5. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 5 Drought – Lake Mead

6. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 6 Background What’s been done so far? Water Conservation Reduced the per capita usage Water Rationing Water Reuse Wastewater for irrigation Non-potable applications Salt water intrusion into aquifers

7. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 7 Background Membrane Desalination Brackish Water Reverse Osmosis Any source from 500 ppm to 10,000 ppm TDS High color or organic content Seawater Reverse Osmosis San Simeon, Catalina Island, Morro Bay Santa Barbara – 1992 Sand City – 600,000 gpd - 2010 Carlsbad - ??????

8. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Santa Barbara 8 6.7 MGD SWRO Desalination Facility

9. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 9 Barriers to Seawater Desalination Capital Costs Operating Costs Energy Consumption Environmentalists

10. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Capital Costs Rule of Thumb Process Equipment $3 per gallon per day Permitting, Site Preparation, Intake, Outfall $2 per gallon per day Total of $5 per gallon per day Example – Santa Barbara - $35M 10

11. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Capital Costs Economies of Scale Projects have gotten larger (Magtaa, Algeria – 125 MGD) Increased Competition 11

12. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Capital Costs Project Delivery Method BOO – Build, Own, Operate DBO – Design, Build, Operate EPC – Engineering, Procurement, Construction Transfer of Risk Financing Global economic downturn 12

13. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 13 Desalination Costs Capital Expense 43% Capital Expense 43% Operating Expense 57% Operating Expense 57%

14. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Operating Cost - Breakdown 14 Chemical / Consumables 9% Power 41% Power 41% Parts Replacement 13% Parts Replacement 13% Operating Margin 17% Operating Margin 17% Office 3% Membranes 8% Labor, G&A 9% Labor, G&A 9% Perth Seawater Desalination Plant 2008

15. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Power Use Breakdown - SWRO 15 Source: Affordable Desalination Collaboration, 2008 Pre-filtration 8% Permeate Treatment 1% Permeate Distribution 7% Reverse Osmosis Process 68% Reverse Osmosis Process 68% Intake 15% Intake 15% RO power consumption is approximately 20% (up to 45%) of total SWRO cost

16. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology 16 Technology Advancements Energy recovery devices (ERDs) RO Elements Pressure Vessels Pumps Antiscalents Pretreatment

17. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Development of ERDs 17 Pelton Turbine Turbocharger Piston Exchanger Francis Turbine Dyprex Rotary Exchanger 1980 1990 20002010

18. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Affect of Power Consumption 18 No ERD Francis Turbine Pelton Wheel Isobaric Device kWh / m 3 0 1 2 3 4 5 6 7 8 19802000 2009 Jeddah I Las Palmas Trinidad Perth

19. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology First Pass RO Energy Consumption 19 Other Energy Improvements 0 1 2 3 4 5 6 7 8 kWh/m3 Thermodynamic Minimum Future Improvements Energy Recovery Baseline

20. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology RO Membrane Improvements Salt Rejection 99.8% Surface Area 440 sq. ft. Operating Pressures 850 – 900 psi 20

21. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology High Pressure Pump Improvements Efficiency > 90% Materials of Construction Super Duplex Alloys Zeron 100 AL6XN 21

22. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Pressure Vessel Improvements Side Port Vessels Eliminated J-bends Simplified assembly Large diameter ports 3” and 4” Further cost reduction 22 Advanced Design Traditional Design

23. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Pressure Vessels 23

24. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Chemicals Antiscalents, Biocides Reduction of fouling Longer membrane life Cleaners Restore performance to like new condition Environmentally friendly 24

25. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Pretreatment Membrane Pretreatment Ultrafiltration (UF) Microfiltration (MF) 25

26. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Desalination Prices 26

27. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Landmark Projects Year 1 Pricing 27 ProjectLocationYearPrice (kgal) AshkelonIsrael2000$2.00 Tuas ISingapore2004$1.78 MagtaaAlgeria2009$1.74 Tuas II*Singapore2012$1.10 *Not yet awarded

28. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Desalination Pricing Average transfer price of $2.00 per kgal $0.002 per gallon Cost of bottled water $1 per pint Equivalent to $8 per gallon 28

29. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Desalination in the U.S. What will it take? 29

30. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Summary SWRO costs are comparable with development of new water sources SWRO is an important part of any long term water management program Global examples of how it works 30

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33. Improving America’s Water Through Membrane Filtration & Desalting America’s Authority in Membrane Technology Thank you for your time! Questions? 33