MPWMD BOARD MEETING--AUG 31, 2006 FINAL MINUTES

FINAL MINUTES

Public Presentation on Seawater Conversion Vessels by PBS&J

Board of Directors Special Meeting

Monterey Peninsula Water Management District

August 31, 2006

WELCOME/INTRODUCTIONS

The meeting was called to order at 7:05 PM in the Boardroom of the Monterey Regional Water Pollution Control Agency offices. Chair Michelle Knight introduced Board members in attendance and General Manager Berger. The speakers were introduced by Mr. Berger.

Board Members present: Board Members absent:

Michelle Knight, Chair – Division 4 Alvin Edwards -- Division 1

Judi Lehman, Vice Chair – Division 2 David Potter – Monterey County Board of Supervisors

Kristi Markey – Division 3

Larry Foy – Division 5

David Pendergrass – Mayoral Representative

General Manager present: David A. Berger District Counsel present: David C. Laredo

Speakers:

Charles “Skip” Griffin – Western Regional Environment Services Manager/Senior Vice President of PBS&J

Andrew Gordon – Founder and Chief Executive Officer for Water Standard Company

Danny Hutchison – GE Energy, Commercial Marine Sales Group

PLEDGE OF ALLEGIANCE

The assembly recited the Pledge of Allegiance

ORAL COMMUNICATIONS

No comments were presented by members of the audience during Oral Communications. At the close of the meeting, Director Foy stated that he heard a presentation on Seawater Conversion Vessel technology more than 10 years ago. He noted that the technology has advanced significantly during that time. His concern is how to address the additional storage required and modifications to the water distribution system that will be needed for a land-based or ocean-based desalination facility.

PRESENTATION OF SEAWATER CONVERSION VESSELS BY PBS&J

Mr. Griffin spoke on the off-shore, ship based desalination technology jointly developed by PBS&J, Water Standard Company and GE Energy. A summary of his presentation is on file at the District office and on the District’s website.

QUESTION AND ANSWER PERIOD

Members of the audience posed questions to the speakers about the seawater conversion vessel proposal. A list of questions and responses given by the project proponents is provided as Attachment 1.

In response to a question from the audience, General Manager Berger explained that the District has not analyzed the proposal nor identified this proposal as a water supply option. He observed a presentation by PBS&J on the Seawater Conversion Technology and then asked them to make a presentation to the Board. At the September 18, 2006 Board meeting an update to the Matrix of Water Supply Alternatives will be presented and the Board could decide to add the Seawater Conversion Vessel proposal to the Matrix. The Board will discuss long-term water supply options at the September 25, 2006 Strategic Planning Retreat.

ADJOURNMENT

The meeting was adjourned at 8:55 PM.

__________________________________

David A. Berger, Secretary to the Board

ATTACHMENT 1 Summary of Questions and Answers August 31, 2006 Public Presentation on Seawater Conversion Vessels by PBS&J
	Question	Response
1.	Describe the visual impacts of the ship.	Ship would operate 5 to 10 miles from shore. At night, shuttle ships would deliver desalinated water to the docking station for off-loading.
2.	Is there an off-shore, ship based desalination facility such as you are proposing in operation currently?	No. There are a few similar facilities that produce 1 million gallons per day (MGD) but no vessels that are capable of producing the larger quantity of water that would be needed on the Monterey Peninsula.
3.	Do you currently have a contract for construction and operation of a project the size that would be needed for the Monterey Peninsula?	No. This type of project is not in existence anywhere. Some projects are planned, but none have been built. If a project were to be constructed on the Monterey Peninsula, PBS&J would obtain a performance bond so there would be no risk to the local project developer.
3.	How are the ships re-fueled?	Refueling vessels are sent out to the ship based facility to re-supply it with fuel and provisions for the crew.
4.	What type of fuel is used by the ships?	Bio-diesel and marine gas oil will be used. The primary fuel to be used is bio-diesel that is derived from soybeans or rapeseed.
5.	How much desalinated water can be produced by one ship?	Approximately 200 MGD or more, which is about 2,000 acre-feet per year. Envision 25,000 acre-feet per year for Monterey Peninsula project.
6.	Can the process be shut down and started-up again as needed? For example, more water would be needed in the summer months than in the winter.	The more water you produce with the same facility, the cheaper it is to operate. Envision that you would contract with other agencies for purchase of the water. Sell water to other agencies in California any time of year when you don’t need it.
7.	Has California American Water (Cal Am) been apprised of the technology you are proposing?	A shorter version of the presentation was given to Steve Leonard of Cal Am.
8.	How many trips would the shuttle ships make each day in order to off-load the desalinated water.	Each shuttle ship has a capacity of 10 to 30 million gallons. It takes about 10 hours to offload a shuttle ship. The shuttles could offload about every 2 or 3 days and only in the evening. A 500 foot long shuttle ship has a capacity of approximately 15 to 18 million gallons.
9.	Would the commercial docks in Monterey be able to accommodate the shuttle ships?	Yes. The offloading arms could be installed and constructed there.
10.	Has this proposal been presented to the National Marine Sanctuary (NMS)?	No. Preliminary review of their rules indicates the project would be allowed by the NMS. However, need clarification of the rules from the NMS. Refer to slide 71 and 72.
11.	Can the brine discharge be offloaded to another ship and disposed of at another location?	Yes, that might be advisable in the National Marine Sanctuary boundaries. The intent is to operate outside of the Sanctuary boundaries. So there would be no need to dispose of the brine at another location.


12.	If public ownership of the project is desired, are your ships for sale?	We don’t need to make a profit from sale of the water. If you want to purchase the ships, we will sell them to you and then service the units. You could get low-cost public financing to purchase the units. Initially we could bring in crews to set up the equipment, operate the ships and eventually render all operations to you. We do have global intellectual rights to the technology. We do not charge a royalty.
13.	What is the timeline for development of the project?	After financing is approved and all permits are issued for the project, it would take 18 months for the project to be built and operational.
14.	Have you analyzed the California permitting process for this project?	In California it is advantageous for a public agency to apply for permits and to own the water rights. It could take 18 to 20 months, assuming a public agency is leading the effort. We hope it is a public/private partnership. Slides 73 through 79 describe the fatal-flaw analysis that was conducted on the proposal.
15.	Are the on-shore facilities included in the cost estimate?	A side-by-side capital cost comparison of a ship-based system and a land-based system that was not co-located show that the ship-based system capital cost is generally 25% to 30% lower than a land-based plant. For a 50 MGD project the cost for a ship-based system is 15% to 20% lower than land-based. That is twice the size that would be needed on the Monterey Peninsula. With a land-based plant you must consider the cost to integrate the finished water into your municipal systems. There are significant daily operating costs for a ship based plant. Power needed to operate the desalination facility is produced on board. Approximately $30,000 per day cost in power generation. The crew size for a conversion vessel is 24 to 26 persons. The cost for an American crew would be approximately $19,000 per day, which includes maintenance of the ship, food, medical and health care, and travel costs for workers to visit their families. The cost for a dedicated supply ship to service the vessel is $900 per day. The patented technology they propose not only assumes lower capital costs than a land-based project, it is also focused on minimizing entrapment, entrainment and impingement.
16.	How much fuel is required for one round-trip by a shuttle vessel?	The bio-fuel could cost $597 per metric ton minus a 30% federal tax credit. So the cost could be $700 to $1,000 per trip. Could use 1 to 4 metric tons a day depending on distance traveled. The ships are powered by electricity, measured in kilowatts. So the number you requested will need to be calculated.
17.	Explain how seawater conversion technology results in lower levels of entrapment and entrainment than with other methods.	The process will be located at least 10 miles from shore. The water quality is better there which will minimize entrapment and entrainment. Intake pipes will be 10 feet in diameter and the velocity will be one-half a second. Slots on the well screens will be sized at one millimeter. Intake will be set below sunlight penetration level which is 40 to 4,400 feet depths.
18.	Do you have examples of cost and viability for projects that have been developed by other agencies?	We are working with Metropolitan Water District of Southern California. They concluded the process was technically feasible with no fatal flaws. They have not decided if Metropolitan or a member agency should build the conversion vessel. In your case, there could be a two-phased project. We could build the facility and then in 1 to 3 years transfer it to you. There would be a performance bond.

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