The Soaring Market for Frack Water Treatment



Published on Nov 12, 2014

OriginOil (OOil) – Breakthrough Water Cleanup Technology for Oil and Gas

A recent study forecasts that the market for water treatment and reuse of frack water will triple between now and 2020, taking the percentage of reuse to nearly 30% of all contaminated water by that time. In a time of dropping oil prices, the savings, which could total $1.40 per barrel of water treated, will provide a major motivation for operators.

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OriginOil CEO, Riggs Eckelberry with Bob “Sully” Sullivan on the Big Biz Show:

Sully: Riggs, fracking is very controversial. You folks seem to have come up with a technology that is agnostic. Regardless of whether you are a believer in fracking or not, fracking is here to stay, and it is a big money industry is it not.

0:34 Riggs: Fracking is huge. 90% of all gas wells in America are being fracked today. Not only that, but the rest of the world is catching up. The Middle East, China, these places are taking off. Why because it’s a superior technology for the oil industry. The real question is about the water.

Sully: We’re basically talking about gray water, dirty water used in the fracking process.

Riggs: Correct. The oil industry uses a billion barrels per year, of which half is returned contaminated. That’s waste water. So that’s roughly 22 billion gallons of water.

Sully: Where does it go now?

1:32 Riggs: Back in these huge salt water disposal wells, old wells that got tapped out or big salt domes. And it’s going way down below and they’re making absolutely sure it doesn’t all come out, and that’s good. But it’s being wasted. People don’t realize that the oil industry is a water handling industry that happens to harvest oil. Because for every barrel of oil they get, they also get eight barrels of water.

2:09 Riggs: Now there’s a brand new research out from Bluefield Research; that just came out a few days ago, and sure enough it confirms what we know, which is that the oil industry is spending 66% of its water budget, which is almost 7 billion dollars a year in North America alone, on transport and disposal and only 2% on treatment. However, when they treat, they save $1.40 for every barrel of water. Multiply that by how many barrels of water they use, that’s a lot of savings. So they should start treating.

3:14 Riggs: And what I’m trying to tell you is that that’s all great but industry really is concerned about its costs at the end of the day. And what this research shows is that they can save a lot of money by treating instead of disposing. Which is why this research also predicts that the frack water treatment market will triple over the next six years. That’s huge blow up, absolutely.

Sully: Is there a dollar amount on that?

3:46 Riggs: Yes. Well, it’s relatively low, so it’s going to go from about $150 million dollars to about $600 million dollars over the six years because it’s a tiny piece of that $6 billion dollar number. But I love being in a market where you’re so small that each doubling represents huge growth for you and yet it’s only a small piece of it. So there’s a huge amount of slack to be made up. The industry I believe will be…in fact the numbers say it right here—reuse is going from 14% to 27% in this period. So 1 out of 3 barrels is going to be reused by 2020. That is an opportunity for us. Now why are we a key player in that respect? Well, we have this transformative technology which takes care of the heavy lifting up front. Getting the oil out and all the suspended solids that clog up the stuff—those nano filtration systems, the membranes, and so forth, that makes it so expensive. Because when your membranes are getting clogged up all the time and having to be replaced all the time, that is a huge expense. So our technology—Electro Water Separation—takes that first stage and removes that stuff so that you basically have clear water going into the final stages. And that’s such a revolution, that it makes it possible for reuse to happen.

5:26 Riggs: You know it comes back to our business model. Our business model is like Google/Android, right? Which you can license on phones everywhere. At the same time, Google makes a Nexus phone which is a showcase of what an Android phone should be like. So we have a similar model. We license out like crazy—and we just did a big deal in the Caribbean, for example. At the same time, we are selling machines. Our new licensee in Oman just bought a seven figure machine from us because they wanted to get up and running and not have to sit around and manufacture. So that’s our business model—is to rapidly license it out and get the technology out there.


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