it is now for an all-out effort involving a commitment with much of their best attention to this effort.

The initial authorizing legislation enacted by the Congress in 1952

states:

It is the policy of the Congress to provide for the development of practicable low-cost means of producing from sea water, or from other saline waters, water of a quality suitable for agriculture, industrial, municipal, and other beneficial consumptive uses on a scale sufficient to determine the feasibility of the development of such production and distribution on a large-scale basis, for the purpose of conserving and increasing the water resources of the Nation.

When we consider the purposes of the act, it is obvious we also must study who the customers for saline water conversion plants will be. It seems perfectly clear that the ultimate consumer will be the taxpayer. In order to protect the taxpayer from undue risk through municipal investments in uneconomic or unproven water facilities, we consider it our obligation to conduct the development of a desalting method until it is a tried and true process.

We don't believe that any responsible official could honestly recommend desalting as an incremental source of water supply if such recommendation had to be based solely on unsubstantiated feasibility studies. As the Federal Government proves out the gross economics of a desalting process then responsible local officials can precisely determine its potential in meeting their incremental water needs.

It is an accepted fact that water use in the United States will rapidly increase. Just when desalting plants will play a major role in providing a part of this additional water requirement cannot be accurately determined. Thus, industry-and we are not thinking in terms of three or four companies is not able or is unwilling to invest substantial private funds in the development of a process for which a market cannot be clearly determined. Yet when the market does develop, as it surely will, the leadtime needed to develop economical processes could create some critical water-supply situations, and require costly crash programs.

We believe it is absolutely necessary to carry out the development of a process to the point where its economics have been proven in a given size range and type of water. Once this has been established, we are not interested in continuing development of additional processes that would provide fresh water in this same price bracket.

It is essential that desalting technology be developed, and within the policy of the Congress, it is being developed in an orderly manner to be available when and where it will be needed to increase the water resources of the Nation.

Q. In your statement that "it would be unwise for us or anyone else to proceed with plans for large plant construction until additional usable data has been developed," and so forth, what do you mean by "plans" and isn't this statement inconsistent with the Metropolitan Water District and Israel proposals?

A. The plant concepts used as a basis for cost estimates in both the MWD and the Israel studies include engineering assumptions regarding process and equipment performance which represent an extrapolation of the current state of the art. Accordingly, both studies recommend a development program which must be prosecuted in a timely fashion to make possible the proposed construction schedules and the proper operating and cost performance of the plants.

The following is a direct quote from the report of Kaiser Engineers and Catalytic Construction Co. on the engineering feasibility and economic study of the Israel plant:

OSW's planned west coast development station, for testing the multistage flash evaporation process and required components for large plants by means of full-scale modules, would be one location suitable for the testing. The importance of the module testing portion of the development program can be noted from the following:

If the module portion of the program is not implemented, it will be necessary to design more conservatively for the selected plant, and this could add approximately $15 million to the capital cost. If the development program proved successful in all respects, it could result in a savings of approximately $8 million below the current capital cost estimate of the selected plant.

Q. Mr. DiLuzio, in your statement you speak of the President's mandate and the program you have established to translate planning into action and programing into hardware. This gives the impression that the decisions have been made regardless of the new information which may be developed as we go along. Isn't your program flexible enough so that we can call a halt to large expenditures for hardware if new information is developed which indicates a more promising process?

A. Yes. Our program is flexible enough to enable us to call a halt to large expenditures for hardware at any time. At the present time, however, no process is available that could produce fresh water from the sea in a 150-million-gallons-per-day plant at a price comparable to that estimated for the multistage flash distillation process which will be utilized in the MWD plant.

While we do have new processes which appear promising, the time schedule to provide engineering developments and refinements to make them available for commercial production will require several years of intensive engineering effort. New developments are constantly evaluated and made available for commercial plants as quickly as possible. This includes the use of new or improved components and operating techniques as well as completely new processes.

Q. Mr. DiLuzio, how would your program calling for the design and construction of modules be affected by participation in the proposed Metropolitan Water District plant?

A. As we mentioned earlier, the MWD plant is contingent on the engineering data we will obtain from the design, construction and operation of the 17-million-gallon-per-day module. Part of the design criteria for the module is based on the results obtained from the conceptual studies, but much of the design will be devised to provide the engineering data that still must be developed for large plant construction as indicated by the MWD and Israeli reports.

Q. Mr. DiLuzio, you don't expect our approval, do you, of the first module until we have detailed information with respect to design and cost and justification?

A. No, sir. Consistent with the congressional mandate, we have awarded a small design study contract. When this design study and cost estimate is completed it will then be submitted to the proper congressional committee for review, and, if approved, the OSW will proceed with preparation of contracts and bid packages, including plans and specifications.

Q. What are the unusual possibilities offered by the United States-Mexican study which you refer to?

A. The unusual possibilities offered by the United States-MexicoIAEA study are discussed on pages 28 and 29 in my statement of February 28 before the Interior and Insular Affairs Committee.

The MWD and the Israeli studies have optimized power and water production, but the Mexican study will maximize power and water production. The economics of scale-up associated with this study will produce water at lower cost than the MWD plant because it will enable us to take advantage of maximum power production and relate that production to markets.

In its initial phases, no restraints have been placed on the study. The members of the study group will consider the combined water requirements for all purposes over a relatively large area. When these requirements have been ascertained, an economic study of a plant sized to meet these needs will be conducted in order to estimate the cost of desalted water produced by a dual purpose plant of this capacity. This cost, together with distribution costs, will then be studied to determine the possibility of economically utilizing this water to meet existing and anticipated needs in the study area.

From this study we may establish the position that desalted water for this type of application is out of the question for decades, or we may find that maximum production of power and water brings desalted water into the realm of practicality as agricultural water for blending purposes or for specialized crops.

Q. Mr. DiLuzio, or Secretary Holum, the justification for large dual-plant construction seems to be based upon a decision that we must have a certain capability in desalination by 1975. Why? Why must we have this capability by 1975? You seem to be approaching this like the Defense Department approaches the development of planes or weapons in order that there will not be a gap in our capability to provide national security. Can you jus tify the same approach in view of the questionable market situation and alternative sources of water?

A. It is difficult to compare the development of desalting process to the Defense Department's approach of developing planes or weapons in order that there will not be a gap in our capability of providing for the national security. It is a little bit like comparing peaches and peanuts.

Desalted water is an incremental or alternate source of supply. There is no alternate method of providing for the national security. Increases in water use through the 1975-80 time period, as projected by the U.S. Geological Survey, the BDSA of the U.S. Department of Commerce, and others, are a basis of serious concern to all water resource planners and responsible officials. Desalting is not a panacea for all our water ills nor will it provide all of the incremental water we will require in the years ahead. Additional water can be made available for the U.S. requirments in the 1975 time period, but the unanswered question is: What is the best method of economically providing a reliable source of quality supply at that time? There are many ways of reducing consumption to conserve our available sources of supply, not the least of which, unpopular as it may be, is to increase the price of water to the consumer.

We believe that it is imperative for us to proceed as rapidly as possible to prove out the economics of desalting in order to acquire

solid information which can serve as a dependable basis for precise planning and responsible decisions. There is a long timelag between water resource planning and water resource development; therefore, if desalted water is to be available for beneficial consumptive purposes in the 1975-80 time period, economic data must soon be made available to planners and decisionmakers in order that it may be considered and its potential contribution properly evaluated.

Q. Mr. DiLuzio, what do you know about the International Hydrological Decade project sponsored by UNESCO? Are you familiar with the work of Spain in the desalting field? Your statement includes a brief reference. I understand that Spain has several desalting plants in operation and I am interested in the process or processes which they are using.

A. The International Hydrological Decade, for the period 1965-74, is a worldwide enterprise of scientific cooperation among nations. This concerted effort of nations in the domain of hydrology has been organized because hydrology, the science of water, has lagged behind the needs of the 20th century and has not made full application of modern scientific methods to water-resource studies. The international program is intended to advance the science by stimulating education and training, to widen the application of hydrology, and to encourage intensified research.

We are familiar with the scope and the objectives of the International Hydrological Decade. As a matter of fact, the First International Symposium on Water Desalination was considered to be a major contribution to that program.

We have established a working liaison with the Spanish Institute of Hydrology, which has enabled us to become well informed of the activities of the Spanish Government in desalting. We reviewed the specifications and offered comments and suggestions to the Spanish Government for the 2.5-million-gallon-per-day plant they are planning to build at Los Palma. Engineering representatives of the Spanish Institute of Hydrology have visited OSW for assistance in reviewing the bids received for this plant. They are also planning to conduct some solar distillation experiments and we have provided them with suggestions for organizing that type of program.

Q. Mr. DiLuzio, what is the extent of the work your Office has done in connection with the President's directive that you study the possibility of desalting in the northeast as a means of the drought-proofing highly populated and industrialized areas— manpower and dollars?

A. The primary involvement of the Office of Saline Water in the northeast study was to provide data on the economics of desalting in that area. Our costs are as follows:

Technical and clerical (8 man-months)

Technical consulting service (Ralph M. Parsons Co.).

Duplication of reports__.

Travel and miscellaneous__.

Total

$9,000

61, 000

890

925

71, 815

Q. Mr. DiLuzio, do you know whether any of the funds appropriated under the foreign aid program have been used to assist other nations in the construction of desalting plants. If so, what nations and how much money is involved?

A. According to information we have been provided by the Department of State, a $2.4 million AID development loan was granted to the State of Israel in fiscal year 1963 covering the construction of a dualpurpose plant which included a 1-million-gallon-per-day desalting plant at Elath. This plant was constructed by Baldwin-Lima-Hamilton of Philadelphia, Pa.

Q. What will be the size and location of the two reverse osmosis pilot plants to be built this year, and where will the larger prototype or test bed plant be located?

A. Two west coast firms have been awarded contracts for the construction of reverse osmosis pilot plants. A contract awarded to General Atomic Division of General Dynamics Corp., is for a 10,000gallon-per-day plant. A contract awarded to Aerojet General Corp., is for a 50,000-gallon-per-day plant. Both of these plans will be skid or trailer mounted so that they may be moved from location to location to obtain operating data on various types of brackish and other mineralized or chemically charged waters.

No prototype or test bed plants are under active consideration at this time. The location of a prototype plant would be dependent upon the cooperating user, a test bed plant would be located at an Office of Saline Water facility.

Q. Mr. DiLuzio, you refer to the sizable expansion of the program "to carry out the wishes of the President and the directive of the Congress." This prompts me to ask whether these two requirements are consistent. In other words, are the wishes of the President consistent with the statutory policy?

A. We feel that the wishes of the President and the directive of the Congress are consistent in that the end result of this program is to economically meet the need for incremental water supplies. There may be some differences of opinion on how this end result may best be achieved, but they are not inconsistent with statutory policy.

Q. Mr. DiLuzio, on the basis of plant operations, what are the figures on cost per 1,000 gallons for all of the demonstration plants?

A. In a discussion of economic costs of processes undergoing development, the basis on which these costs are developed and presented should be thoroughly understood. In the case of the demonstration plants, the original intent was to demonstrate the current state of desalting technology. Emphasis was placed on trying to demonstrate reliability by obtaining a high level of production. In recent years, the plants are being used more as test bed vehicles to derive knowledge and produce technology rather than low-cost water. Thus, the actual cost of water now being produced by these plants has no true meaning and does not reflect the cost for which water could be produced with the technology that is developed. To show these variations, in the attached cost tables for the four demonstration plants, three different costs are given. Actual costs are inclusive, total costs actually incurred by the Government in the operation of these plants. Adjusted demonstration plant costs are extrapolated costs, based on actual demonstration plant experience, which are derived by assuming 90 percent onstream operation and eliminating those costs not directly related to