Is algae the solution to the safety concerns surrounding hydraulic fracturing? During today's OnPoint, Riggs Eckelberry, president and CEO of OriginOil, discusses his company's energy production process for harvesting algae and cleaning up oil and gas water. He explains OriginOil's plans to demonstrate the technology in Texas' Eagle Ford Shale and discusses his expectations for algal fuel legislation during the 113th Congress.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Riggs Eckelberry, president and CEO of OriginOil. Riggs, thanks for coming on the show.
Riggs Eckelberry: Thank you, Monica.
Monica Trauzzi: Riggs, OriginOil has developed a breakthrough energy production process, and you've basically discovered that essentially the same technology you use to separate algae from water can also be used to clean oil and other contaminants from water. And you're currently planning on demonstrating this technology in Texas. What is the potential impact on the Eagle Ford Shale play, when you show this in Texas?
Riggs Eckelberry: Well, you know, we have a fracking boom, and it's becoming increasingly important for the country as a national strategy, because we've got, you know, dropping production in the Prudhoe - you know, the whole Trans-Alaska Pipeline is actually in danger of being shut down because of dropping production. So fracking is becoming more and more strategically important to the country. At the same time, it's a very polluting practice, and the oil industry is becoming increasingly aware of the need for reuse and recycling that water.
Monica Trauzzi: And how does this specific technology play into that, then?
Riggs Eckelberry: OK. Well, we discovered originally that we're primarily an algae company that is dealing with the problem of highly dissolved algae, 1,000 to 1 ratio of water to algae, and we've found, in the process of solving that problem, we've found that quite serendipitously, we could solve it for oil and gas frack flow back.
Monica Trauzzi: OK. So there are concerns among some folks in the country about, you mentioned the chemicals in fracking, and the process involved. So how far does this technology actually go in addressing some of those safety concerns, and are you in contact with the oil and gas industry on implementing this technology?
Riggs Eckelberry: Sure. Well, Monica, we're well along in our process of demonstrating this technology in the field, and as you mentioned earlier, we're taking our mobile lab on a road trip down to San Antonio in Houston later this half of the year. At the same time, we've got, for example, up in the Athabasca, we've got tremendous interest in the technology as well. Now what you've got here is a lot of water flowing back out, typically 15, 20 percent of the couple million gallons that are shot in, and it comes out very fast, and there's not a lot of room to store it at the actual well site. So the people just truck stuff off to disposal wells. The hope here is we can do inline, continuous processing of this gunky stuff into, you know, concentrate and water outflow. Our process takes out up to 98 percent of the organics right there, first cut, without any kind of delay or settling.
Monica Trauzzi: And then what happens to that concentrate once that process is done?
Riggs Eckelberry: Well, in a case of an oil fracking situation, it's mostly petroleum, and it goes right back into the petroleum flow. You know, in other words, it's being harvested. If it's chemicals, of course, it then needs to be treated, but at least you've got it separated from that water.
Monica Trauzzi: So under the fiscal cliff legislation that was signed into law earlier this year, biofuels derived from algae is now eligible for the same tax credit that cellulosic was previously receiving. Does this help put algal biofuels on the map, and what are your expectations for how we might see that industry grow with the help of this tax incentive?
Riggs Eckelberry: Well, I like to call it parity, because in fact, you know, algae is, we think, a superior biofuel, but it wasn't even being treated as a biofuel in the eyes of these subsidies. So it kind of levels the playing field. It's been a bipartisan, you know, provision all along. And it's the right time, for it, because at the same time, there's all kinds of help from the DOD and DOE.
Monica Trauzzi: In 2011, there were attempts on both the House and Senate sides of the Hill to move legislation to get algae on the same playing field as other renewable fuels. The current political climate is arguably more difficult than it was in 2011. So in the 113th Congress, where do you see legislation relating to algae going?
Riggs Eckelberry: Monica, I don't think that there's a real partisan issue with algae per se, and the reason is that Department of Defense has made a very strong commitment to a, you know, green fleet. Fifty percent by 2020 of their total fuel requirements is to be met by sustainable fuels, non-food, and where is that going to come from? Obviously, waste, forestry, and algae is a major component. So it's got I think support because of that security requirement.
Monica Trauzzi: Is it possible to produce enough algae to have a significant impact on the transportation sector? I know there was a report last year by the National Academy of Sciences that said that some of the production demands are unsustainable. How do you weigh in on that? I mean, that happened sort of in the fall of last year. So where is the technology now? Where is it going? And does it get more sustainable as time goes on?
Riggs Eckelberry: Sure. Well, you know, there's a fuel agenda, but fuels are not the profitable element of a petrochemical strategy. Chemicals are. And the algae industry itself is moving very rapidly towards biochemical, bio-PVCs, and so forth. And that's where all the investment's happening, for profit reasons. Now on the fuel side, DOD strategy is blending. Algae can add tremendous Btu and petrochemical profile, since it's essentially petroleum, to things like sawdust, that have a very low energy content. So it can be part of a mix. And algae can be increasingly larger percentages of the blend, as it builds out. And that's the strategy.
Monica Trauzzi: All right. A lot left to discover here. We'll end it there. Thank you for coming on the show.
Riggs Eckelberry: Thank you, Monica.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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