Foreign Relations of the United States, 1964–1968, Volume XXXIV, Energy Diplomacy and Global Issues

173. Action Memorandum From the Under Secretary of State for Political Affairs (Rostow) to Secretary of State Rusk ¹

Washington, November 29, 1968.

SUBJECT

• Mr. George D. Woods’ Proposal on an Israeli Desalting Plant

Discussion:

In a memorandum to you dated November 8, 1968, (Tab C),² Mr. Walt W. Rostow requested you to draw together for the President the positions of the agencies involved in Mr. Woods’ proposal to construct a desalting plant of reduced size in Israel.³

The subject has been under discussion within the United States Government for almost five years. It has not proved possible to reach agreement on the feasibility of financing the original proposal to construct a 100 million-gallon-per-day (MGD) desalting plant. That plant would have required a subsidy of from $60–$70 million, only about 50 per cent of which could have been justified as a grant for the advancement of technology.

Mr. Woods has now proposed the construction of a smaller plant that would still be large enough to give promise of significant increases in our experience with large-scale desalting operation. Its cost appears to be within the range of available financing. The proposal is both practical and attractive as a logical next step in large-scale desalting, and would be a first step toward larger-scale installations which may be needed later. I believe that the Department should endorse the Woods proposal under the conditions set forth in the attached memoranda. While the Department of the Interior is in agreement with this recommendation,⁴ the Atomic Energy Commission is not.⁵

Recommendation:

That you approve transmittal of the attached memorandum (Tab A) to Mr. Walt W. Rostow.⁶ This memorandum summarizes the positions of the Department of State, Interior, AEC, and AID and transmits as enclosures expanded statements of these positions prepared in the respective agencies (Tabs B–F).⁷

1. Source: National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, E 11–3 ISRAEL. Confidential; Exdis. Drafted by Dean Peterson and T. Childs (M/WP) and cleared by Davies (NEA), Torbert (H), Gaud (AID), and Pollack.
2. Not printed.
3. The first draft of Woods’ proposal submitted for comment is attached to a November 5 memorandum from Saunders to Hornig and Clark. (National Archives and Records Administration, RG 359, Office of Science and Technology History, E—Water Resources) The final version of his report is filed under cover of a November 12 letter to the President. (Johnson Library, National Security File, Subject File, Desalting Projects, Vol. I)
4. Udall wrote to Rusk on November 15 that “we believe that the proposal by Mr. Woods is both feasible and appropriate. All of the water resources interests of the Department of Interior are strongly concerned here. Beyond this, the interests of the United States government are involved in providing technology for low-cost water for world-wide use.” (National Archives and Records Administration, RG 59, Records of the Department of State, Central Files, 1967–69, E 11–3 ISRAEL)
5. Seaborg wrote to Rusk on November 18 that “while we do not question the technical feasibility of constructing a 40 million gallon per day desalting plant in Israel, we do not agree that the proposed course of action is appropriate or realistic.” Seaborg argued that Congressional approval would be more difficult if the project failed to utilize nuclear technology. He explained that “our disagreements with the conclusions and recommendations of the report relate particularly to whether the desalting plant should make use of nuclear or conventional energy sources, with the size suggested for the proposed plant, and with the method proposed for securing Congressional appropriations.” (Letter from Seaborg to Rusk, November 18; ibid.) The problems stemmed from the cost of nuclear power plants and their competitiveness. As Rostow explained to the President: “prices this spring in the nuclear desalting field have jumped sharply. At the same time, the price of fuel oil has gone down, making oil-fueled desalting more competitive. Our large planned plant in California is up in the air until we can reconcile problems created by these increased costs.” (Memorandum from Rostow to Johnson, July 2; Johnson Library, National Security File, Subject File, Desalting Projects, Vol. II)
6. Not attached. A copy of the memorandum from Read to Rostow, November 29, is ibid.
7. Not printed. Rusk initialed his approval on November 29.