RedOx Final NSF presentation

National Science Foundation Innovation Corps Program May 23, 2012

Red Ox’s Electrochemical Desalination Cell 1. desalinates brine, a waste product from oil & gas and other

industries2. generates electricity quietly and3. produces bulk inorganics that can be sold as commodities.

André Taylor (PI) David Kohn (EL) Tom Livingston (IM)

Total Contacts: 96

2

Problem:Saline brine.

What is it?Water that is saltier than sea water.

It is produced as a waste product of many industrial processes.

Why is it a problem?

Saline brine is:1. Environmentally harmful 2. Heavily regulated3. Costly to treat and dispose of.

4

What we thought

1. Desalination

Photo 1: Kay Bailey Hutchison desalination plant in El Paso Tx.

2. Oil and gas production

Photo 2: a hydraulic fracturing site near Morgantown Pa.

5

What we did:

What we learned:

1. Desalination

Photo 1: Kay Bailey Hutchison desalination plant in El Paso Tx.

2. Oil and gas production

Photo 2: a hydraulic fracturing site near Morgantown Pa.

Key Partners Key Activities

Key Resources

Value Propositions

Customer Relationships

Customer Segments

Channels

Revenue Streams

Cost Structure

-Turns waste cost into revenue-Decreased input costs / volatility-Quiet electricity on-site

-Inland and coastal desalination plants-Industrial brine producers-Hydrofracking operations

-Inland and coastal desalination plants-Industrial brine producers-Hydrofracking operations

-B2B marketing-Service agreements-Licensing arrangements

-Service-Customization-Link to value add in industrial ecosystem-Improve public image

-R & D-Engineering customization

-People-Intellectual property

-Royalties from licenses-Service contracts-Engineering consulting fees-Strategic Partnerships

-Chemical sales-Electricity sales-REC sales-Brine treatment contracts

-People-R & D –Prototyping-Legal fees (IP, Licensing, Regulatory)

-Manufacture / Capital-Operation and maintenance-Sales and Marketing

-Manufacturers-Utilities-Regulators-Utility Commissions

-Learn regulatory landscape-Foster relationships with stakeholders-Hiring & retention

-Chemical distributors-Chemical Producers

-Chemical distributors-Chemical End Users-Chemical Producers

-Utilities-Fuel Cell Mfgs

-Decreased liability-Better public image-Decreased permitting time

-Brand-Relationships with stakeholders and partners

-CO2 sequestration-Energy efficiency-DOESN’T CAUSE EARTHQUAKES

Key Partners Key Activities

Key Resources

Value Propositions

Customer Relationships

Customer Segments

Channels

Revenue Streams

Cost Structure

-Turns waste cost into revenue-Decreased disposal costs-Decreased input costs / volatility-Quiet electricity on-site

-Water Treatment for Hydrofracking (Especially Produced Water)-Inland and coastal desalination plants-Industrial brine producers

-Inland and coastal desalination plants-Industrial brine producers-Hydrofracking operations

-B2B marketing-Possibly distributors/ conferences-Service agreements-Licensing arrangements

-Service-Customization-Link to value add in industrial ecosystem-Improve public image

-R & D-Engineering customization

-People-Intellectual property

-Royalties from licenses-Service contracts-Strategic Partnerships

-Chemical sales-Electricity sales-REC sales-Brine treatment contracts

-People-R & D & Prototyping-Legal fees (IP, Licensing, Regulatory)

-Manufacture / Capital-Operation and maintenance-Sales and Marketing

-Manufacturers -Membrane Mfgs-Utilities-Regulators-Engineering firms

-Know regulatory landscape-Foster relationships with stakeholders-Hiring & retention

-Chem. distributors-Chemical Producers

-Chemical distributors-Chemical End Users-Chemical Producers

- Electric Utilities (for energy efficiency investments)

-Decreased liability-Better public image FOR CLIENTS-Decreased permitting time ?

-Brand-Relationships with stakeholders and partners

-DOESN’T CAUSE EARTHQUAKES

-Other frac water treatment startups

Deep well injection

Photo 4: a small deep well injection rig

Evaporation Pits

Photo 5 : a typical wastewater evaporation pit

Traditional methods to dispose of saline brine include:

Thought: Problem in the Marcellus

Texas:~50,000 Class II Disposal Wells (at least 80% for enhanced recovery)

Pennsylvania: 8 Class II Disposal Wells

Price for water treatment ~60x higher than we thought!

Well OwnerService

Providers(Fracking,

Onsite recycling)

Technology Developers / Vendors

Regulators(Water Rights,

Disposal, Permitting)

Primary Treatment

Facility

Secondary Treatment Contractor

Engineering Firms

Disposal Companies

Produced Water

Reuse to Frac

Another Well

Disposal

Discharge

Primary Treatment

Tertiary Treatment

Dilution with

Freshwater

Must be drinking

water quality

How high can they

go?

Current state of the art are evaporators

and crystallizers

This is where we fit in

Flowback Water

First 30 days of production

Medium TDS

~5-20 % of injected

Produced Water

Produced over well’s

operating life (4-30 years)

Very high TDS (usually

100,000 ppm or higher)

~5-20 % of injected

Drilling Water

Water from drilling muds used to drill

well

High TSS

Small quantity, weird stuff in it

Class II Wells

Primary and

Tertiary Treatmen

t

Cost of Disposal ($/bbl)

0.50-1.50 10.00-12.00

5.00-6.00

Transport Cost

($/bbl)

4.00-16.00 2.00-4.00 1.00-4.00

Total($/bbl)

4.50-17.50 12.00-16.00

6.00-10.00

“Moe! don’t throw out that brine!”

North American Produced Water

MarketTAM: $5 bn/yrSAM: $3 bn

Target: $0.5 bn

Our projections:~ $21 million/year revenues from one 10,000 barrel per day plant<5% of current treatment and disposal in PA

Produced Water

Reuse to Frac

Another Well

Disposal

Discharge

Primary Treatment

Tertiary Treatment

Dilution with

Freshwater

= ~$1/bbl/hr

Storage

Treatment

Salt Processin

g

Drop-Off

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1. Market risk: increasing reuse lowers disposal rate

2. Technology risk 3. Unable to sell into chemical markets

Risks

Key Partners Key Activities

Key Resources

Value Propositions

Customer Relationships

Customer Segments

Channels

Revenue Streams

Cost Structure

-Turns waste cost into revenue-Decreased disposal costs and volume-Decreased transport costs-Decreased input costs / volatility and freshwater volume-Quiet electricity

-Water Treatment for Oil and Gas (Especially Produced Water)-Service Providers for Oil and Gas-Oil and Gas Owner/Operators

-Hydrofracking operations-Service providers for oil and gas industry-Oil and Gas Owner/Operators

-B2B marketing-Possibly distributors/ conferences-Oil &gas well service providers/ manufacturers

-R & D-Engineering customization

-People-Intellectual property

-Royalties from licenses-Service contracts-Strategic Partnerships

-Chemical sales-Electricity sales-REC sales-Brine treatment contracts

-People-R & D & Prototyping-Legal fees (IP, Licensing, Regulatory)

-Manufacture / Capital-Operation and maintenance-Sales and Marketing

-Manufacturers -Integrators-Membrane Mfgs-Engineering firms

-Know regulatory landscape-Foster relationships with stakeholders-Hiring & retention

-Chemical distributors-Chemical End Users-Chemical Producers

-Better public image for clients-Decreased permitting time

-Brand -Relationships with stakeholders and partners

-Doesn’t Cause Earthquakes

-Other frac water treatment startups

-Make it easy for them to get rid of their waste-Brand = good PR

-Environmental Groups/Regulators

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Key Partners Key Activities

Key Resources

Value Propositions

Customer Relationships

Customer Segments

Channels

Revenue Streams

Cost Structure

-Decreased disposal costs and volume-Decreased transport costs-Valuable Coproducts-Quiet electricity

-Service Providers for Oil and GasWater Treatment for Oil and Gas (Especially Produced Water)-Oil and Gas Owner/Operators

-Service providers for oil and gas industry-Oil and Gas Owner/Operators RESEACH ARMS

-Chemical Distributors-Oil &gas well service providers and water treatment companies

-R & D-Engineering customization

-People-Intellectual property

-Royalties from licenses-Service contracts-Strategic Partnerships

-Chemical sales-Electricity sales-REC sales-Brine treatment contracts

-People-R & D & Prototyping-Legal fees (IP, Licensing, Regulatory)

-Manufacture / Capital-Operation and maintenance-Sales and Marketing

-Manufacturers -Membrane Mfgs-Engineering firms

-Know regulatory landscape-Foster relationships with stakeholders-Hiring & retention

-Chemical distributors-Chemical End Users-Chemical Producers

-Better public image for clients-Decreased permitting time

-Brand -Relationships with stakeholders and partners

-Doesn’t Cause Earthquakes

- Produced Water Treatment companies

-Make it easy for them to get rid of their waste-Brand = good PR

-Environmental Groups/Regulators