172. Letter From the Coordinator of the Israeli Power and Desalting Project (Woods) to the President’s Special Assistant (Rostow)1

I will be in New York on September 9, and expect to meet in Washington during that week or the following one with Messrs. Peterson, MacAvoy and probably Chase2—all of whom were with me in Israel during the week of August 12. They are digesting and pulling together the facts and impressions we collected and expect to be prepared to discuss them with me when we meet.

Meanwhile, a few highly tentative thoughts:

It seems to me almost certain that the cost of nuclear power and desalting equipment will make a viable, economically justifiable project impossible at this point of time in the development of dual purpose plants. Use of fossil fuel would not appreciably change this fact.3
Too much time is being spent—and has been consumed in the past—trying to estimate “cost of water to the farmer.” Nothing will come of these exercises because there are too many variables and it is not possible to make meaningful guesses about the several variables in the mid-seventies.
Highest priority should be given to the technical problems of economically desalting sea water. Intensive development of processes [Page 307] for distilling sea water at reducing costs should continue. Experiments looking toward other methods of desalting should be encouraged and increased.
The efforts to finance and build large desalting plants in California and in Israel should continue. It may be that a third large plant to be located in Libya should be added to the program.
I am advised that considerable desalting research is underway in West Germany, Italy and, to a lesser extent, France. Italy is particularly interested, I am told, because of the future need for water in developing the southern part of the country. Through State Department channels, these activities should be identified. Some mechanism for coordinating them should be created. U.K. produces nuclear power units and interest in desalting processes in that country should also be inquired into.
I am inclined to think—subject to further examination of figures—that the most effective procedure for the future should contemplate straightforward research and development projects which hopefully will produce great rewards in the future but would not be expected to yield immediate direct returns. I doubt the advisability of presenting desalting projects as good business undertakings based on estimates of future income under present conditions.
I begin to visualize a group of industrialized countries joining in a consortium (vaguely along Indus River lines) and authorizing a substantial sum (to be disbursed over a period of years) for assisting in financing research and development, including construction of experimental plants, of processes for desalting sea water. (U.S., Germany, Japan, France, U.K., Italy, Canada, for example.)
Such a consortium would confine its activities to developing countries where the entire local currency expenditure or a minimum of 50% of the aggregate expenditures, whichever is greater, could and would be the responsibility of the host country. (Israel, Libya, Saudi Arabia, for example.)
In my thinking, the capital and operating cost of that segment of dual purpose desalting plants relating to the production of electric power needed to satisfy normal requirements of the host country for power, would be excluded from the calculation of the amounts to be shared by any such consortium with the host country.

Please do not circulate this rough and preliminary memo beyond Harold Saunders. It is written as I would talk to you over a luncheon table, and I will look forward to pursuing it further when I see you. The Israel situation is extremely interesting, and everything I learned there confirms the importance of widespread activity on desalting. While it is highly important for Israel, its implications for the Middle [Page 308] East are vast, and I am sure some way of lifting it out of the context of “Israel” is necessary.

G.D. Woods 4
  1. Source: Johnson Library, National Security File, Subject File, Desalting Projects, Vol. I. Personal and Confidential. A covering memorandum from Saunders to Rostow, September 20, reads: “As you will see on rereading the attached, George Woods has come around to the view that we should put aside much of our effort to make the Israeli desalting plant look economical and frankly admit that it would be a research and development project. He is even thinking about the possibility of an Indus type international consortium to finance such experimentation. This fresh approach is probably healthy although the economic work is still necessary, since we will have to determine costs whatever we do. The operational question is whether the time has come to put this up to the President as a recommendation and to begin discussing procedures with the Israelis so that the President might frame a proposal for Congress in their departing legislative program.”
  2. Dean F. Peterson was Director of the State Department’s Water for Peace Office, Professor Paul W. MacAvoy was Associate Professor of Economics at the Massachusetts Institute of Technology, and Milton Chase of the Department of the Interior was chairman of the U.S. part of the U.S.-Israel Joint Board.
  3. The word “Iran” is handwritten and circled by Woods in the margin next to this sentence.
  4. Printed from a copy that indicates Woods signed the original.