Desalination: Israel Hopes to Tap a Global Market

Israel has become known for it's high-tech economy.  But this small desert nation surrounded by often hostile neighbors is working on what it hopes will be it's next wave of success: water.

Almost one-third of Israel's drinking water is now desalinated straight from the Mediterranean Sea.  We were able to get a close up look, following the path from the shining sea to the contents of a plastic cup.

We visited the new plant in Ashkelon, which supplies 13 percent of Israel's drinking water.  That's no small feat for a thirsty desert nation.  The desalination business generates about $40 billion dollars a year and that's growing quickly as developing nations like China and India demand new sources of water.

Israel's IDE runs the plant in Ashkelon, it is the biggest in the world, right now.  IDE has contracts with nations all over the globe to make the promise of desalination a reality, giving water to the thirsty from the Arab world to the Middle East.  Several big name companies like General Electric have made significant efforts to get in on the lucrative water business.

While the IDE makes drinkable water, it's neighbors ten miles south in Gaza have put the plant in Ashkelon high on it's target list.  So far, no direct hits but the plant is prepared with shelters for workers to run to.  Ashkelon has been hit several times.  Among the victims, a next door neighbor of Israel's Security Minister and the Carlsberg beer plant also in this beach-side but industrial city.

Israel has become a center for Research and Development.  While many high-tech companies come out of Israel, they're often sold outside the country, leaving a small but successful Israel high-tech workforce.  But with water, Israel's government is hoping to not only take a global lead, but to have water lead to steady and gainful employment. They're putting a lot of hope into this relatively new technology.

In IDE's case, the Ashkelon plant uses SWRO, salt-water reverse osmosis.  Pressure is used to push seawater through special cannisters designed to let water pass, while blocking salt, minerals, fish, you name it.

In fact so many minerals are taken out and the water becomes so pure, in order to make it taste familiar, minerals including limestone are adding back in, in the final phase, before it makes it into pipes leading to thousands of homes.

© 2009 CNBC.com