Regional spotlight: Water security & desalination in US — what's different and why it matters

The United States consumed approximately 322 billion gallons of water per day in 2024, yet the Bureau of Reclamation estimates that by 2030 over 40 of the 50 states will face water shortages under average conditions, a projection that has accelerated federal and state investment in desalination capacity from roughly 1.8 billion gallons per day in 2023 to a planned 2.6 billion gallons per day by 2027. This trajectory positions the US as the second-largest desalination market globally behind Saudi Arabia, but the American context introduces regulatory, financial, and environmental dynamics that differ fundamentally from the Middle Eastern and Mediterranean deployments that dominate international discourse.

Why the US Context Is Different

Global desalination narratives center on Gulf Cooperation Council nations where abundant natural gas, minimal environmental review requirements, and sovereign wealth financing enable rapid deployment of thermal and membrane plants at scales exceeding 100 million gallons per day (MGD). The US reality is structurally different across every dimension that matters for project execution and investment returns.

First, energy costs and carbon constraints reshape project economics. US desalination plants pay wholesale electricity rates averaging $0.04 to $0.09 per kWh depending on region, compared to $0.01 to $0.03 per kWh for subsidized natural gas feedstock in the Gulf. This energy cost differential means that American facilities must achieve specific energy consumption below 3.0 kWh per cubic meter to compete with conventional water supply alternatives, pushing operators toward advanced reverse osmosis (RO) membrane configurations with energy recovery devices that capture 95 to 98% of hydraulic energy from the brine reject stream.

Second, the permitting environment in the US imposes timelines that would be unrecognizable in most international markets. The Carlsbad Desalination Plant in San Diego County required 16 years from initial proposal to commercial operation, navigating California Environmental Quality Act (CEQA) review, California Coastal Commission approvals, and multiple legal challenges. The Huntington Beach Ocean Desalination Project, proposed by Poseidon Water, was ultimately rejected in May 2022 after two decades of review, demonstrating that US regulatory frameworks create project risk profiles fundamentally different from those in the Middle East or Singapore.

Third, the US benefits from an established freshwater infrastructure that makes desalination a supplemental rather than primary supply source. American utilities typically pursue desalination as a drought resilience measure or portfolio diversification strategy, targeting 10 to 25% of total supply rather than the 50 to 90% dependence seen in nations like Israel or the United Arab Emirates. This supplemental positioning changes the financial calculus, because desalinated water must compete on delivered cost with existing conventional sources ranging from $400 to $1,200 per acre-foot, compared to desalination costs of $1,800 to $2,800 per acre-foot for seawater RO and $800 to $1,500 for brackish groundwater RO.

Regulatory Landscape

The US regulatory framework for desalination operates at federal, state, and local levels, creating a layered compliance environment with no single permitting authority.

At the federal level, the Clean Water Act Section 402 requires National Pollutant Discharge Elimination System (NPDES) permits for brine discharge, with the EPA establishing effluent limitations for total dissolved solids, temperature differentials, and chemical additives. The Endangered Species Act may require biological opinions when intake structures or discharge points affect listed marine species. The National Environmental Policy Act (NEPA) applies when federal funding, permits, or land are involved, triggering environmental impact statement requirements that add 18 to 36 months to project timelines.

California represents the most complex state-level regulatory environment. The State Water Resources Control Board's 2015 Ocean Plan Amendment established requirements for subsurface intakes (which avoid impingement and entrainment of marine organisms but increase construction costs by 20 to 40%) and mandated that brine discharge achieve salinity levels no more than 2 parts per thousand above ambient within the mixing zone. These requirements have effectively eliminated open-ocean intake designs for new California facilities, steering all proposed projects toward slant wells, infiltration galleries, or subsurface intake systems.

Texas and Florida present more permitting-friendly environments. The Texas Water Development Board actively promotes desalination through the State Water Plan, identifying 26 recommended brackish groundwater desalination projects with combined capacity of 300 MGD. Florida's 45 operating desalination facilities, predominantly treating brackish groundwater, benefit from streamlined permitting under the Florida Department of Environmental Protection, with typical permit timelines of 12 to 24 months compared to California's 5 to 15 years for seawater facilities.

The Bipartisan Infrastructure Law of 2021 allocated $1 billion over five years for water recycling and desalination projects through the Bureau of Reclamation, representing the largest federal investment in alternative water supply in US history. The Inflation Reduction Act's clean energy provisions indirectly benefit desalination through production tax credits for renewable energy that can reduce operating costs for electrically-driven RO systems.

Market Dynamics and Technology Deployment

The US desalination market in 2025 is bifurcated between mature brackish water treatment and emerging seawater applications, with dramatically different economics and deployment trajectories.

Brackish groundwater desalination dominates US installed capacity, accounting for approximately 75% of the 1.8 billion GPD total. The El Paso Water Utilities Kay Bailey Hutchison Desalination Plant, operating since 2007 at 27.5 MGD capacity, produces water at roughly $1.10 per thousand gallons, competitive with conventional groundwater in water-stressed regions. The plant treats brackish aquifer water with total dissolved solids of 1,500 to 3,000 mg/L, requiring significantly less energy than seawater treatment (0.5 to 1.5 kWh/m3 versus 2.5 to 4.0 kWh/m3).

Seawater desalination remains limited but growing. The Carlsbad plant, operated by Poseidon Water and producing 50 MGD for the San Diego County Water Authority, delivers approximately 10% of the region's supply at a contracted rate of approximately $2,300 per acre-foot, adjusted annually. IDE Technologies supplied the membrane systems, incorporating pressure exchanger energy recovery devices from Energy Recovery Inc. that reduce specific energy consumption to approximately 2.9 kWh/m3. The plant's 30-year water purchase agreement with San Diego County Water Authority, structured as a take-or-pay contract, provides revenue certainty that enabled project financing through tax-exempt municipal bonds.

Emerging technology deployment in the US focuses on three areas. First, closed-circuit reverse osmosis (CCRO) systems from companies like Desalitech (now part of DuPont Water Solutions) achieve recovery rates of 92 to 98% for brackish water, compared to 75 to 85% for conventional RO, reducing brine volumes and associated disposal costs. Second, forward osmosis and osmotically assisted reverse osmosis technologies from Trevi Systems and Porifera target high-salinity produced water from oil and gas operations, a uniquely American application given the scale of hydraulic fracturing operations. Third, electrodialysis reversal systems from companies like Evoqua Water Technologies (acquired by Xylem in 2023 for $7.5 billion) address selective ion removal for agricultural drainage water treatment in California's Central Valley.

What Sets the US Apart: Investment and Institutional Structure

The institutional structure of US water utilities creates both opportunities and constraints for desalination deployment that differ from international models.

Over 50,000 community water systems serve the US population, with the vast majority operated by local government entities subject to public rate-setting processes. This fragmented structure means that desalination projects must survive public scrutiny of rate impacts, often facing opposition when projected water rate increases exceed 5 to 10%. The Metropolitan Water District of Southern California's Regional Recycled Water Program, a $3.4 billion advanced purification project expected to produce 150 MGD, illustrates how indirect potable reuse competes with and sometimes displaces desalination investment, because purified recycled water can be produced at $1,500 to $2,000 per acre-foot, below seawater desalination costs.

Private sector participation follows a design-build-operate (DBO) or public-private partnership (P3) model rather than the fully private ownership common in Gulf states. Poseidon Water's model at Carlsbad, where the private entity owns the plant and sells water to the public authority under a long-term contract, remains the exception rather than the rule. More typical is the Tampa Bay Seawater Desalination Plant, owned by Tampa Bay Water (a regional utility) but operated under contract by Acciona Agua, producing 25 MGD at approximately $3.50 per thousand gallons.

Venture capital and growth equity investment in US water technology reached $2.1 billion in 2024, according to BlueTech Research, with significant allocations to desalination-adjacent technologies including advanced membranes, brine mining, and digital water management platforms. Notably, US investors increasingly evaluate desalination technologies through a circular economy lens, asking whether brine byproducts (lithium, magnesium, sodium chloride) can generate revenue streams that offset treatment costs. Energy Recovery Inc., publicly traded on NASDAQ, exemplifies this trend with its PX Pressure Exchanger technology capturing 60% global market share in seawater RO energy recovery.

KPIs for US Desalination Projects

Metric	Below Average	Average	Above Average	Top Quartile
Specific Energy Consumption (seawater RO)	>3.5 kWh/m3	3.0-3.5 kWh/m3	2.5-3.0 kWh/m3	<2.5 kWh/m3
Specific Energy Consumption (brackish RO)	>1.5 kWh/m3	1.0-1.5 kWh/m3	0.5-1.0 kWh/m3	<0.5 kWh/m3
Water Recovery Rate (seawater)	<40%	40-45%	45-50%	>50%
Water Recovery Rate (brackish)	<80%	80-85%	85-92%	>92%
Delivered Water Cost (seawater)	>$2,800/AF	$2,200-2,800/AF	$1,800-2,200/AF	<$1,800/AF
Delivered Water Cost (brackish)	>$1,200/AF	$900-1,200/AF	$600-900/AF	<$600/AF
Permitting Timeline (California seawater)	>10 years	7-10 years	5-7 years	<5 years
Membrane Replacement Frequency	<4 years	4-5 years	5-7 years	>7 years

What's Working

Brackish Groundwater Desalination in Texas

The Texas Water Development Board's strategic commitment to brackish desalination has produced measurable results. The Southmost Regional Water Authority in Brownsville expanded its brackish RO capacity to 10 MGD in 2024, serving a growing border population at delivered costs below $1.00 per thousand gallons. The Permian Basin's produced water treatment facilities, driven by regulatory pressure and water scarcity, have created a commercial market for mobile and modular desalination systems supplied by companies like Encore Green Environmental and Saltworks Technologies.

Renewable Energy Integration

The convergence of declining solar energy costs (below $0.03/kWh for utility-scale PV in favorable US locations) and desalination energy requirements is creating economically viable solar-powered desalination configurations. The Brackish Groundwater National Desalination Research Facility in Alamogordo, New Mexico, operated by the Bureau of Reclamation, has demonstrated solar-powered RO systems achieving water production costs of $0.60 to $0.80 per cubic meter, competitive with conventional supplies in arid regions. Privately, companies like WaterGen and Source Global (formerly Zero Mass Water) are deploying atmospheric water generation and solar-powered purification at distributed scales targeting off-grid communities.

Brine Minimization and Resource Recovery

US regulatory pressure on brine disposal has catalyzed innovation in zero-liquid discharge (ZLD) and minimal-liquid discharge (MLD) technologies. The Palo Verde Nuclear Generating Station's ZLD system, treating cooling tower blowdown, demonstrates that US industrial users are willing to pay premium costs ($10 to $25 per cubic meter) when disposal alternatives are unavailable or restricted. Startups including Gradiant Corporation and BrineRefinery are commercializing selective brine mining technologies that extract lithium carbonate, magnesium hydroxide, and food-grade sodium chloride from desalination concentrate, potentially converting a waste stream into a $300 to $800 per acre-foot revenue credit.

What's Not Working

Seawater Desalination Permitting in California

Despite being the state with the greatest need for drought-resilient supply, California's regulatory framework has effectively stalled new seawater desalination construction. The rejection of the Huntington Beach project in 2022 signaled that the California Coastal Commission applies precautionary standards for marine impacts that few proposed designs can satisfy. The Doheny Ocean Desalination Project in Dana Point, using subsurface slant well intake to avoid marine organism impacts, has advanced further but still faces a projected 2028 operational date, more than a decade after initial planning.

Inland Brine Disposal

For inland brackish desalination plants distant from ocean discharge points, brine disposal remains the binding constraint. Deep well injection, the most common inland disposal method, faces increasing regulatory scrutiny following seismicity concerns in Oklahoma and Texas. Evaporation ponds require significant land area and face opposition in populated areas. These constraints limit inland desalination expansion in states like Arizona, Nevada, and New Mexico despite abundant brackish groundwater resources.

Fragmented Utility Decision-Making

The decentralized structure of US water utilities means that desalination investment decisions are made by thousands of independent entities, many lacking the technical staff or financial capacity to evaluate complex treatment technologies. Regional collaboration models like Tampa Bay Water demonstrate the benefits of consolidated decision-making, but replicating this model faces political barriers in most US metropolitan areas where water supply remains a jealously guarded local prerogative.

Action Checklist

• Evaluate brackish groundwater availability and quality before considering seawater desalination, as brackish treatment costs are typically 40 to 60% lower
• Engage early with state permitting agencies (especially California Coastal Commission and State Water Board) to understand intake and discharge requirements before committing to project design
• Model delivered water costs against alternative supply options including indirect potable reuse, stormwater capture, and conservation programs
• Assess renewable energy integration potential to reduce long-term operating costs and satisfy carbon reporting requirements
• Investigate brine resource recovery opportunities, particularly lithium and mineral extraction, as potential revenue offsets
• Structure water purchase agreements with inflation-adjusted pricing and minimum take-or-pay provisions to support project financing
• Engage community stakeholders early regarding rate impacts, environmental safeguards, and supply reliability benefits
• Monitor federal funding opportunities through the Bureau of Reclamation's Title XVI and Bipartisan Infrastructure Law programs

Sources

• Bureau of Reclamation. (2025). Desalination and Water Purification Research Program: Annual Report. Washington, DC: US Department of the Interior.
• California State Water Resources Control Board. (2024). Ocean Plan Amendment: Implementation Status Report. Sacramento, CA.
• Texas Water Development Board. (2025). 2027 State Water Plan: Alternative Water Supply Strategies. Austin, TX: TWDB.
• BlueTech Research. (2025). US Water Technology Investment Report 2024. Cork, Ireland: BlueTech Research.
• International Desalination Association. (2025). IDA Desalination Yearbook 2024-2025. Topsfield, MA: IDA.
• San Diego County Water Authority. (2024). Carlsbad Desalination Plant: Performance and Financial Review. San Diego, CA.
• US Environmental Protection Agency. (2025). Drinking Water Infrastructure Needs Survey and Assessment: Seventh Report to Congress. Washington, DC: EPA.