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How Is Oil Cleanup Like Baking Soda?

From: Riggs Eckelberry
Los Angeles, April 19, 2012

From: Riggs Eckelberry
Los Angeles, April 19, 2012

Good morning!

Early this month, I strolled into our lab, where the research team was playing with a sample of West Texas flowback water.

They were playing with a one trillion dollar market.

Cleaning oil and gas water worldwide

Flowback is what comes out of a well when you inject a bunch of water. Done right, the water comes back up heavily loaded up with petroleum. (In the case of gas, with the chemicals that were sent down.)

You want to reclaim the petroleum, and clean up the water. Here’s a great presentation on what it takes.

And yes, that cleanup is potentially worth up to one trillion dollars per year worldwide*.

A historic photo in our labs

So I watched the team run this black water through our Algae Appliance™ test unit, and lo and behold, the petroleum went to the surface!

You can see it in this photo, which I took on April 3rd.

On that day, we learned that what we developed for algae harvesting seems to work great for cleaning that injected water.

It makes sense. After all, petroleum is mostly fossilized algae. And it often comes out of the ground dissolved in a large amount of water. Which is the same problem we solve in algae harvesting.

How is algae harvesting like baking soda?

So… what does this do to our business model? It’s like baking soda. Which, of course, is for baking.

When Arm & Hammer found many more other uses for it (in your fridge, in your washing machine), they made baking soda much more valuable.

In this diagram, we remain focused on algae harvesting, while finding other uses that make it much more valuable — first by proving it works, then by licensing it out.

Just as we’re doing with algae.

The petroleum industry needs the help to clean up all that water, and they are throwing a lot of money at the problem.

And so, oil and gas industry cleanup could end up paying for algae industry development!

Algae in France’s number one newspaper

Meanwhile, our project in France continues to capture the interest of the French media.

Here’s an article in Le Figaro, the country’s largest newspaper. You can see our colleagues in Australia, and a snapshot the reporter took of me on a Paris street back in October ;-)

The showcase project at La Défense is going great, and more on this very soon.

Enjoy your weekend!

Riggs and team

Riggs Eckelberry
President & CEO
OriginOil, Inc. (OOIL)

* Here’s how I came up with a one trillion dollar potential market:

  1. World oil demand is roughly 85,000,000 barrels per day. (see chart).
  2. For every barrel of oil produced globally, an average of three barrels of contaminated water is produced. This is the global WOR, or water-oil ratio. In the worst cases, the WOR reaches 50 to 1. (U.S. Department of Energy)
  3. Energy companies pay between $3 – $12 to dispose of each barrel of produced water (Greentech Media).

Multiply world oil demand by global WOR by disposal cost, and you get about 300 billion dollars at the low end, and a trillion dollars at the high end.

Safe Harbor Statement:

Matters discussed in this update contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this update, the words "anticipate," "believe," "estimate," "may," "intend," "expect" and similar expressions identify such forward-looking statements. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements contained herein, and while expected, there is no guarantee that we will attain the aforementioned anticipated developmental milestones. These forward-looking statements are based largely on the expectations of the Company and are subject to a number of risks and uncertainties. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, product, and distributor performance, the impact on the national and local economies resulting from terrorist actions, and U.S. actions subsequently; and other factors detailed in reports filed by the Company.

 
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