The ocean may eventually become the source of fresh drinking water for area residents as the City Council on Tuesday gave the OK to an environmental study of a proposed desalination project.

The council unanimously approved hiring consultants Dudeck and Associates under a $323,045 agreement to carry out the yearlong study of a project proposed by Poseidon Resources.

Poseidon, which will pay the costs of the study, wants to build a plant adjacent to the Encina power plant on the edge of Agua Hedionda Lagoon with the capacity to produce about 50 million gallons per day of drinking water from filtered sea water.

The plant could be expanded in the future to turn out 100 million gallons per day.

Officials said the study will focus on a variety of potential impacts, including pipeline construction, compliance of the project with the South Carlsbad Coastal Redevelopment Plan, compliance with the city's Agua Hedionda Land Use Plan and potential impacts of the concentrated brine that would be released to the ocean from the plant.

Councilwoman Ann Kulchin said the study is needed to answer many questions the city will have before it can OK the project.

"Can it be built there? Will it have a negative impact?" she said.

She said the city has eyed the possibility of desalination for many years.

"We really believe water is going to be a problem in the future," she said. "For years people have said, 'You've got all that water out there (in the ocean), can't you do something with it?' And along comes Poseidon and says, 'Yes, you can.'"

Carlsbad and almost all other cities in the region are dependent on water imported from Northern California and the Colorado River.

Councilman Matt Hall said the plant would not only offer an alternative water source, "it's a very high quality water source."

"Anything we can do to add to the county water supply will benefit the entire region," he said.

The Carlsbad study will mean the plant is receiving double scrutiny.

The San Diego County Water Authority last year began its own environmental impact study of virtually the same project.

Regional water agency officials were hoping to cut their own deal with Poseidon to build and operate the plant, but the agency's desalination subcommittee is recommending the agency suspend negotiations with Poseidon until further studies are done of the economics and planning issues.

City officials said that regardless of what the authority does, Carlsbad is obligated under state law to order its own study. That's because Poseidon and the power plant owner, Cabrillo Power, have submitted applications with the city for what is known as a precise development plan for the power plant and a plan modification to allow the desalination plant.

The power plant was built by San Diego Gas & Electric in the early 1950s before a development plan was required and this will bring the plant into compliance with city regulations, officials said.