FISCAL YEAR 1973 SALINE WATER CONVERSION

AUTHORIZATION

TUESDAY, FEBRUARY 8, 1972

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON IRRIGATION AND RECLAMATION,

OF THE COMMITTEE ON INTERIOR AND INSULAR AFFAIRS,

Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 1324, Longworth House Office Building, Hon. Harold T. Johnson (chairman of the subcommittee) presiding.

Mr. JOHNSON. The Subcommittee on Reclamation and Irrigation will come to order. We will continue our hearings on the bill H.R. 12749.

The witness before us yesterday was the only witness to appear. We asked Mr. O'Meara to come back this morning and be with us again for further questioning. Also prior to the adjournment yesterday he was asked for certain information for the record by Mr. Casey, consultant to the committee, and he was also asked a series of questions by Mr. Sigler, the Counsel for the Full Committee. Mr. Sigler's was on the matter of the patent provisions. If you will come forward, Mr. O'Meara, with your people, we will allow you to present the information that was requested yesterday, and if you have anything further on the patent provisions of the bill, we would like to hear that at this time.

STATEMENT OF J. W. O'MEARA, ACCOMPANIED BY DR. W. SHERMAN GILLAM, WILLIAM F. SAVAGE, JOHN W. HEINTZ, J. J. STROBEL, MANUEL LOPEZ, CHANDLER TOWNSEND-Resumed

Mr. O'MEARA. Thank you, Mr. Chairman.

In response to the question raised yesterday concerning cost of proposed geothermal and freezing pilot plants for fiscal year 1973, we have currently operating a small three-stage pilot plant at our Wrightsville Beach facility for the specific purpose of developing a plant for desalting the geothermal waters.

After performances tests are completed during fiscal year 1972, it is our plan to move this plant to the Imperial Valley for testing on actual geothermal waters for a period of about 9 months. The estimated cost for operating this pilot plant for fiscal year 1973 is $150,000.

Data accumulated during this testing period will be used to design a full system pilot plant that will be proposed for construction in fiscal year 1974.

The costs for the design of this full system pilot plant is $70,000

and this is the amount we have in our current budget request for the geothermal pilot plant operation.

We believe that this provides us a sequential development program to obtain data on a reasonable basis that can be applied to the problem of desalting geothermal waters and as the entire geothermal water program develops, we will be moving toward the full answers as the answers are required.

The freezing pilot plant proposed for fiscal 1973 requires $175.000 for design and construction. An additional $25,000 would be required for operations with full scale operations planned for early 1974.

Technical evaluations of the freezing process are encouraging. Recent developments at the bench scale level have added substantially to the potential of the process.

I recognize that the history or the development of the freezing process has been spotty but I believe we now have a new momentum that will rapidly bring this process to commercial application.

It is a process that we think fits into an area that will provide water where other processes will not work too well and this is in the area where we have waters with high scale forming constituents which are difficult for the distillation processs to handle. It limits the operating temperatures of the distillation process and for the reverse osmosis process, substantial retreatment is required in order to handle these waters with high scale formation tendencies for example the waters that we have at Roswell, N. Mex.

The freezing process is insensitive to the scale formers. It operates without any problem on the scale forming waters and in such areas, we think freezing would have a greater potential than any other processes we are developing at this time and we think it is imperative, with the date that we have now that we process to develop it to commercial application.

Mr. JOHNSON. Does that satisfy your questions, Mr. Casey?
Mr. CASEY. Yes, thank you, Mr. Chairman.

Mr. O'MEARA. Also, Mr. Chairman, in response to the question posed at the hearing yesterday morning by Representative Hosmer, our plans for construction of future prototype plants, I mentioned our studies for a 40 million gallon per day plant in California and a a 8 million gallon per day plant at Brownsville, Tex., and the possibility of constructing a large reverse osmosis prototype to desalt inland brackish waters.

I failed to mention our plans to expand the Orange County VTE/ MSF module to a prototype at some future date when the results of the testing of module had been completed.

In that regard, I would like to state to the committee that we have. received excellent cooperation from the Orange County Water District as well as other State and local entities that are involved in that project. We especially appreciate the assistance of the Southern California Edison Co.

Mr. JOHNSON. In connection with the project that is underway now; that is, the plant that is now being built-is it sized for three and a half million gallons at this time?

Mr. O'MEARA. Approximately 3 million gallons, Mr. Chairman. Mr. JOHNSON. Three million? And that can be expanded, if proven successful, up to about 17 million?

Mr. O'MEARA. In the range of 12 and a half to 15 million gallons based on the developments that we have in the operation of the module. Mr. JOHNSON. Twelve and a half to 15?

Mr. O'MEARA. Yes, sir.

I would especially like to commend publicly the cooperation of the Southern California Edison Co. for allowing the Orange County Water District to use their existing water intake facilities and for granting an easement for the sea water intake line that will serve that plant.

I also mentioned yesterday that we will terminate our operations at the San Diego Gas-Electric Co. facility in Chula Vista near San Diego in 1974 and I think it is incumbent on me to report to this committee that the San Diego Gas-Electric Co. has been most cooperative to us during the time that we have used the property for our test facility.

Our decision to terminate activities there is based on technical developments and in no way is to indicate that we have had any problem with the San Diego Gas and Electric Co. Quite the contrary, they have been an excellent company to work with.

Mr. HALEY. Mr. Chairman

Mr. JOHNSON. We have Mr. Haley, who would like to ask a question at this particular point.

Mr. HALEY. Thank you, Mr. Chairman.

Mr. O'Meara, I believe the chairman of the subcommittee has partially answered that question-the Navy is operating this plant at Guantanamo Bay, is that correct?

Mr. O'MEARA. Yes, sir.

Mr. HALEY. What is the capacity of that plant?

Mr. O'MEARA. That plant has a capacity of 2.1 million gallons a day.
Mr. HALEY. Originally, that plant was installed at San Diego.
Is that correct?

Mr. O'MEARA. Yes, sir.

Mr. HALEY. When the Navy took this plant over, did they reimburse this agency for the cost of that plant?

Mr. O'MEARA. Yes, sir.

The plant cost us approximately $1 million. At the time of the transfer we had operated it somewhat over a year. In our negotiations with the Navy, it was turned over to them for a value of $600,000. Mr. HALEY. And the Navy itself is paying for the operation and none of the funds you are requesting here will go to the operation of that plant?

Mr. O'MEARA. That is correct. We have no financial commitment to that plant whatsoever.

We do obtain data from the Navy on their operating experience. Mr. HALEY. Thank you, Mr. Chairman.

Mr. JOHNSON. Do you have anything further you would like to say before we go on?

Mr. O'MEARA. At the hearing yesterday, Mr. Chairman, there were a considerable number of questions concerning the request of the office to delete a section 6(d) referring to patents that are in our legislation. Mr. Sigler brought before the committee and to our attention yesterday, the suggestion that we prepare specific patent legislation in lieu of asking for the deletion. We certainly have no objection to specific patent legislation but at this point, there is not time to prepare

that kind of legislation and submit it to the Committee for their consideration.

Coming under the Government patent policy as delineated in the President's memorandum of August 23, 1971, does however have the virtue of making OSW's policy uniform with that of most other Government agencies. This policy was formulated by the Committee on Government Patent Policy of the Federal Council of Science and Technology and was based on studies and experience of Government research and development programs over many years.

OSW patent policy has been a source of confusion and controversy over the years. Uniformity with other Government agencies would tend to eliminate that problem. The principal bone of contention relating to the present policy concerns background rights to avoid the possibility of a contractor denying the public the use of a foreground patent by refusing to license his background patents.

OSW only enters into a contract where the contractor agrees that he will license his background patents to our qualified applicants at reasonable terms for the desalinization of saline water.

Many industries and universities feel this interpretation is contrary to the spirit of the law which states that it shall not be so construed as to deprive the owner of any background patent relating thereto or of such rights he may have thereunder.

Nonetheless, such an interpretation has been in effect for 10 years and while other interpretations may be possible, it seems more forthright to eliminate the ambiguity by deleting the clause in question so that we can operate under the Government-wide policy.

The two principal objectives we wish to achieve are one, the ability to contract with organizations having strong background positions without necessarily requiring them to compromise their background position as a precondition to participating in the program and two, the authority to encourage private risk capital to desalinization by granting a limited period of exclusively on Government-owned inventions where necessary to achieve utilization or where equitable circumstances would justify such allocation of rights.

I think one thing that should be pointed out is the development. of and the granting of a patent is only part of the development sequence. Once a patent has been obtained, a company still must make a considerable investment to transfer that patent technology into marketable equipment. If they go through that investment sequence, then they should have some use of the rights that the Government has seen fit to establish the Patent Office for in the first place.

We felt it has been the desire of this committee-and we think we are correct that if we are to develop a strong or viable industrial organization for the application of the technology that we are developing, the best way to do this is to give industry some fiscal incentive for investment rather than telling them that they have no fiscal incentive or no protection for the work they have done.

Mr. HOSMER. Mr. Chairman, at this point I would like to ask the witness if he will in his own language say what the patent situation is now and what it would be if the amendment is passed.

As far as I am concerned, I am totally in the dark about everything thus far that has been said about it and if you understand it and can explain it and give us some reasons, I think it would be very helpful at this point.