defined. A new metallic materials test loop has been constructed to permit more detailed study of these variables.

Electrochemical techniques for predicting alloy performance in marine environments have led to significant recommendations for use of aluminum alloys. From these studies, a revised galvanic series has been developed to show the relative behavior of metals under many conditions typical of desalting plants. An important supplement to the investigative program on corrosion resistant materials is the inspection program now in effect at all OSW installations. The resistance of materials subjected to the aggressive environment of a desalination plant and their deterioration with time are evaluated periodically. The data accumulated may offer a solution to many operating problems in the marine environment.

Development

The Office of Saline Water, during fiscal year 1972, placed under construction two large effects employing the new horizontal tube concept. From previous studies, this concept has indicated that it will be economically competitive with other distillation processes. Previous testing of a pilot plant using this concept dictated this new developmental step. Operation of these effects will be initiated during April.

Studies and experimental investigations for desalting geothermal brines are now underway. A small scale pilot plant designed for this specific purpose is now operating at Wrightsville Beach, North Carolina. This unit will be moved to an operating geothermal well in the Imperial Valley region later this year. In addition to the on-site test operations, investigations are also underway on brine chemistry, scale control, and other problems associated with desalting high temperature saline geothermal brines. The OSW geothermal desalting effort is fully coordinated with the Bureau of Reclamation.

The conceptual design of a 645,000 gpd high recovery membrane test bed designed to recover 95% of the incoming feed water as fresh water, has been completed and action is underway for preparation of detail design and specifications leading to issuance of a construction contract prior to the end of fiscal year 1972. Mr. Chairman, as you may recall, we had planned to initiate construction of a sea water reverse osmosis test bed in FY 1972. This plan was based on the assumption that the plant would be constructed as a two-pass system. During this past year, however, we have made a significant advance in single-pass sea water desalting. A hollow fine fiber single-pass membrane has been on test for more than six months, and it has consistently produced potable water containing less than 500 ppm total dissolved solids from the sea water. We have also made progress in developing spiral and tubular designs for two-pass sea water desalination. In light of these developments, our initial plan for the construction of a sea water RO test bed is being re-evaluated to determine the best approach to establish the competitive position of these three configurations and the need for additional system development.

The hollow fine fiber technology has also reached a high level of development in desalting natural brackish waters. Long-term tests have shown that such membranes have flux levels of from 2-3 times higher than those presently commercially available. Additionally, fibers have been developed which yield high fluxes at low pressures so that pumping and component costs can be further reduced.

In order that further reductions in the cost of water can be achieved through the use of reverse osmosis, large membrane assemblies of spiral design have been developed with design capacities over 30,000 gpd. Field tests have been underway for extended periods to show that such units can maintain their capacities over extended periods.

Major strides are being made in the development of two new freezing processes. Not only did bench scale investigations establish the feasibility of component operation as applied to both of these processes, but detail design was initiated on a 75,000 gpd pilot plant emloying nontoxic secondary refrigerants. With the advent of new approaches to the process, it now appears that freezing offers a competitive position in the desalting of sea water in intermediate-plant sizes. During fiscal year 1973, it is planned to initiate construction of a pilot plant employing one such freezing process and to have it in operation prior to the end of that fiscal year.

Investigations have been made on the application of desalting processes to concentrate brines and also in studying improved methods of disposing of brines at both inland and coastal sites. Based on previous design studies of diffusers for coastal brine disposal, model studies were conducted in conjunction with the

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Corps of Engineers at their Vicksburg Test Facility. The diffusion characteristics of brine effluents were established for various typical coastal sites. For inland locations, preliminary experimental data were developed on enhancement of evaporation rates of solar ponds by spray techniques. Also, various methods were investigated for the ultimate disposal of inland brines, including ponding, evaporation to dry salts, permanent containment of dry residues in the earth, and pipeline transport of concentrated slurries. Both distillation and membrane techniques were also employed to investigate concentration of waste brines. It was demonstrated that concentrated brines can be taken to dryness by means of a fluid bed evaporator or that by use of the electrodialysis process, brines can be concentrated to levels higher than 200,000 ppm, about 20% by weight, thus, greatly reducing the amount of waste brine handled.

Preliminary desalting investigations, assessments, and cost studies, in cooperation with governmental and other entities, have developed information on future needs and insured greater use of available and developing desalting technology. Thus, needs for desalting for water supply as well as costs of desalting, by various processes and combinations, and in different applications are obtained. By these means, desalting is being related to various aspects of state, regional, and national water resources planning so that the impact of desalting technology as a source of water supply for current and future national needs becomes increasingly recognized.

A model has been developed analyzing where and in what amounts future uses of desalting for water supply fit into projected fresh water needs. This tool, using computer techniques, can simulate various future situations and project overall desalting requirements in various U.S. regions having present and future fresh water shortages in areas where saline waters are available.

Development programs are continuing at the San Diego Test Facility on the multi-stage flash module, the Clair Engle Plant, the high temperature 1A effect, and the lime magnesium carbonate pretreatment system, all directed toward improving the distillation process. A thorough review of the developmental schedules for this equipment has indicated that necessary operations will be completed in the first quarter of fiscal year 1974. The lease with San Diego Gas and Electric expires in 1975, and current plans call for discontinuing operations by that time.

PROPOSED FISCAL YEAR 1973 LEGISLATION

Legislative program for fiscal year 1973 requests that $26,871,000 be authorized to be appropriated for fiscal year 1973. Additionally, we are proposing that Section 6(d), covering patents, be deleted so that we may operate under the current Government-wide patent policy.

The amount requested to be appropriated for fiscal year 1973 amounts to approximately $57.000 less than the amount available for 1972; however, the amount for fiscal year 1973 represents an actual net increase of approximately $2.4 million. The 1972 budget included funds for two RO test beds and modifications, amounting to $2.5 million. These items are nonrecurring and when subtracted from the amount available for fiscal year 1972 represents an increase.

Research expense

The amount requested for fiscal year 1973 is $5.850,000 and represents about an 8% increase over the current fiscal year.

During the coming fiscal year greater emphasis will be placed on the development of techniques for the investigation of features within and adjacent to membranes and metallic surfaces, including the relationships of these features to rates of flux, rejection, deterioration, scaling, and corrosive reaction.

Recently a dry process for preparing cellulose acetate membranes has been developed. The method promises process economies, improved quality control, improved performance, and wet-dry reversibility (easy storage, shipping, etc.). This work will be accelerated and evaluated for noncellulosic systems. The effort proposed in the sea water desalting research area will be aimed at developing a new and improved sea water membrane, e.g., ultrathin film composite type, and a porous tubular support, for use at elevated pressures equal to or greater than 100 psi.

Recent studies indicate the possibility of significant improvements in crystallizers, wash columns, and to a lesser extent, other components of crystallization processes. Further work is required to bring these to practical fruition, but results to date and the inherent process advantages of freezing dictate a markedly accelerated program.

Geothermal brines differ from most saline feed waters in that they contain different dissolved gases, and have silica and silicates rather than calcium and magnesium compounds as principal scaling constituents. Research in this field will include investigations on and disposal of dissolved gases, control of precipitation of silica and siliceous materials from brines, and disposal of salt solutions. Investigations will be made on amounts and types of major constituents, reactions of troublesome minor constituents, chemical attack on materials of construction, and phase rule relationships. The objective of this effort is to dispose of plant effluents and brines without adversely affecting the environment.

Development expense

The amount requested is $12,131,000, an increase of approximately $2 million over the 1972 level.

Based on the effort conducted in fiscal year 1972, the major thrust for fiscal year 1973 in the distillation area will be directed toward operation of large modules and components which are under construction and testing of pilot plants and test beds to improve methods of scale control, evaluate materials in actual plant environment, and to improve overall heat transfer and system hydraulics. In particular, development testing will be initiated on the VTE/MSF module in California and on the two large horizontal tube effects which are now nearing completion. Operation of the Freeport Test Bed will continue to establish system performance. An aluminum pilot plant, modified to the VTE/MSF configuration, will develop life data on aluminum in desalting service and the feasibility of a new process employing aluminum will be established through pilot plant construction and operation. Additionally, operation of the small scale geothermal pilot plant and supporting investigations on pre-treatment and post-treatment of brines will lead to a full size pilot plant design during fiscal year 1973. The full size pilot plant is directed toward establishing total system feasibility in desalting actual geothermal brines.

In the membrane process development area, construction of the brackish water high recovery test bed will be completed in fiscal year 1973. Sea water pilot plant operations will be conducted to establish component and overall system performance. Also during fiscal year 1973 development will be initiated on second generation membrane assemblies for both low-pressure brackish water and for sea water application. Associated with the component development program will be design studies and experimental investigations of membrane supports automatic control systems, system inter-connections, and pressure vessels. Since pumps are the prime mover for reverse osmosis systems, new designs are under development and tests are underway to determine high efficiency and pump life. Additionally, development effort will be continued on energy recovery devices applicable to both sea water and high recovery brackish water systems so that overall operating costs will be reduced.

During fiscal year 1973, the investigation of spray evaporation techniques for solar ponds will be completed and investigations of the efficacy of removing copper ions from distillation plant effluent undertaken. New developments in the ion exchange area have resulted in the requirement to conduct both bench-scale studies and field operations to establish the economic potential of this process. There are a number of low salinity waters which are above the acceptable range where ion exchange may be applied economically, and it is necessary that the competitive position of new developments in this process be established.

Other programs include desalting and engineering studies, and an increase in the field support activity, principally brought about by the requirements of the National Environmental Policy Act of 1969.

An important study activity planned for fiscal year 1973 is in cooperation with the Bureau of Reclamation in its program on Colorado River water quality improvement. Preliminary investigations will be undertaken to determine potential applications of desalting for salinity reduction at various sources. Those sources include irrigation drainage canals and saline springs in the area. Another major activity is continuation of studies with state water planning agencies in determining how desalting may fit into their long-range state water plans. Particular interest is in western states and those cooperating in developing the Western U.S. Water Plan. Economic studies for determining desalting costs will be continued to update these. Work will be continued with the planning model which has been developed to project future U.S. desalting needs.

Test bed and facilities

The amount requested is $5,085,000, a decrease of about $2.2 million. The decrease is due to the authorization of two reverse osmosis test beds and modifications to existing plants amounting to $2,500,000 last year. Increases are required for first-year operation of the two test beds, increased maintenance and operating cost, and modernization of facilities that have been operating for as long as nine years.

Modules

Funds requested are $1,085,000, to a decrease of $0.3 million. The reduction is due to reduced operating funds for the multi-stage flash module at San Diego.

Administration

The amount requested is $2,730,000, an increase of $100.000 principally to cover the 1971 pay increase. We are not requesting additional staff and will continue to hold administrative costs to the absolute minimum.

DELETION OF PATENT CLAUSE

It is believed that using the Government-wide patent policy instead of our more restrictive one will measurably benefit the Program. Certain industrial organizations have refused to work with OSW and several universities have signed grants with serious reservations. These organizations are the very ones needed by the Desalting Program because of their expertise and established background.

Comprehensive studies have been made to evaluate the effectiveness of Government patent policy in achieving policy objectives. In 1968 Harbridge House, Inc. of Boston funded by Federal Council of Science and Technology reported on such a Government-wide study which included illustrative case histories, ten of which specifically related to OSW.

The conclusions in each of the 10 cases studied are summarized in the selected quotations given below (the numbers are from the report and are not consecutive because cases not dealing with OSW are omitted):

2. The university accepted the grant because the principal investigator was quite certain that no inventions would result from the research effort. 4. Approximately two and one-half months were lost on the project because of the patent issues raised and the negotiations required to settle them.

9. OSW was pointedly advised that Government support had not been sought because the university did not wish to compromise the integrity of those patents.

10. Negotiations continued for another six months before they were terminated.

11. The university finally refused to accept the proposed grant agreement primarily because the principal investigator was shocked and outraged by the OSW patent philosophy.

12. A final contract was executed by both parties after some 17 months of negotiations.

...

15. The negotiations thus concluded on November 16 set the stage for the next round on a related proposal. During the next five months, the parties negotiated their differences over five subsidiary patent issues and reached agreement on a contract.

16. Offers and counter-offers continued through June of 1962, when it became apparent that a stalemate existed.

20. The pilot plant remained idle until May 1967; and, according to OSW, the program experienced a serious setback. The Government had invested $1,222,050 on the process since 1960 and Kemco (code name for Koppers Corporation) had invested $495,000 when negotiations with Kemco terminated.

22. The contract was executed in March 1965, after a delay of four months.

The study indicated a key question was whether permitting firms to retain exclusive rights will, on balance, promote utilization better than acquisition of title by the Government. The study data indicated an affirmative answer in at least certain circumstances, including:

"Where the invention is commercially oriented but requires substantial private development to perfect it, applies to a small market, or is in a field

occupied by patent sensitive firms and its market potential is not alone sufficient to bring about utilization. Inventions in this category may arise with any agency and may have had only limited Government development toward a commercial application."

The most serious difficulty relates to concern about background patent rights. The Harbridge House report states:

"Industry's main concern about participating in Government research has has been the compromise of private investment in research and invention. Frequent objection was made to the 'peephole' effect of Government programs, whereby the Government receives rights in the accumulated results of private work. . .

"The reach of the contract has been extended in some programs to background patents owned by the contractor at the time of contracting. This practice causes the sharpest industry reaction of all because firms feel caught between their wish to participate in Government programs and the need to protect their private investment and competitive position."

Section 6(d) of Saline Water Conversion Act, Public Law 92-60 requires all "information, uses, products, processes, patents and other developments resulting from such (Saline Water) research . . . be available to the general public". It states further that:

"This subsection shall not be so construed as to deprive the owner of any background patent relating thereto of such rights as he may have thereunder". The phrase "available to the general public" has been interpreted by the Solicitor of the Department, after an exhaustive analysis of the legislative history, as meaning available to the public free of charge.

To avoid the possibility of contractor denying the public the use of a foreground patent by refusing to license his background, OSW only enters into a contract where the contractor agrees that he will license his background patents to all qualified applicants at reasonable terms for the desalination of saline water.

Many contractors feel they are thus deprived of their background patent rights the counter argument being that an agreement voluntarily entered into is not seen to deprive the owner of a background patent of any of his rights therein.

Based upon efforts of a Patent Advisory Panel and a Committee on Gov: ernment Patent Policy established by the Federal Council of Science and Technology, the Executive Branch has issued a Memorandum of August 23, 1971 on Government Patent Policy, which has as a primary objective the effective utilization of Government-sponsored inventions for the public good. This policy generally follows that recommended by the previous Harbridge House study, and is Government-wide "subject to specific statutes".

It is to be emphasized that the requested deletion is not to put OSW in a special category with regard to patent policy, but rather to remove it from a special category. This request is based on the data and results of comprehensive studies on patent policy, and is in accord with their recommendations based on exhaustive analyses. This is particularly to be desired because the present policy tends to penalize and exclude those whose background makes them a particular asset to the OSW program. As stated in a recent letter from Dr. Alan S. Michaels, President of Amicon Corporation:

"My discussion with Ernie (Assistant Solicitor, Branch of Patents, Department of the Interior) regrettably confirmed my concern that existing OSW contracting policy would militate against Amicon's engaging in OSWsupported membrane-development work. There are two compelling factors obstructing such involvement by Amicon: Firstly, the OSW's position with respect to "Subject Inventions" would make it difficult or impossible for Amicon to utilize its present extensive membrane-expertise to the OSW's advantage, yet protect the rights of its present industrial partners and licensees against free use of this proprietary technology by their and our competition. Secondly, the OSW's position with respect to "Background Inventions" is at variance with existing license-obligations of Amicon to others; the execution by Amicon of a contract for membrane-development with the OSW would at worst be legally barred to us, and at best, result in virtually complete loss to Amicon of its royalty-income from its existing membrane inventions.

"The frustration and tragedy of this situation lies in the fact that the very reasons which make Amicon an attractive development-arm to the OSW and the OSW an equally attractive outlet for Amicon's technical capabilities are