Desalination plants sustain the needs of 300 million people worldwide, and their number keeps going up as water scarcity increases. However, desalination plants release brine, a salty water affecting marine ecosystems.
Enviro Water Minerals (EWM) built a process capable of eliminating brine rejections while increasing desalination plants revenues. We reached out to EWM’s co-founder, Hubble Hausman, to learn more about the company’s work with the potentially biggest desalination plant in the world.
In your own words, how would you describe your company?
Enviro Water Minerals (EWM) is a water technology company and inventor of Full Recovery Desalination®. EWM develops treatment schemes that desalinate water and make beneficial use of the salts and other constituents in the water, thereby eliminating liquid and solid waste streams. EWM’s business model is to generate revenue by performing consulting and design services in the short-term while working to sell high-profit licenses for customers for the use of EWM’s process technology.
What inspired you to take the leap and start this company?
When co-founder Paul Wallace first showed me his integrated technical and commercial solution to addressing water scarcity issues, I knew it represented a paradigm shift in how we use the earth’s precious resources. By sequentially removing basic elements from salty waters as high-purity commodity products (such as common bases and acids), sufficient revenue can be generated to cover the cost of the plant and turn a profit – and in many cases, the water itself can be considered a byproduct. Traditional desalination is expensive, energy-intensive, and generates a waste stream that needs to be carefully managed to prevent degradation of localized plant and animal life and adds expense. Paul’s solution addresses all these issues.
Industrial complexes are built worldwide to manufacture the chemicals and minerals that can be extracted from seawater and brackish water. In a circular economy, those products should be jointly produced with potable-quality water instead of being manufactured separately with multiple waste streams and inefficiencies. Currently, both water desalination and mineral/chemical creation create waste. When put together, both can be made with Full Recover Desalination® without waste. This is more economical and environmentally friendly.
The solutions Paul develops use only commercially proven technologies – meaning he didn’t invent a new “black box” that bends the laws of physics or creates a new piece of machinery. Similar to an oil refinery using heat, chemical, and electro transformations (such as distillation, ion exchange, and electrolysis), Paul’s “water refinery” integrates existing equipment and systems innovatively to target the desired products. Multiple treatment schemes could produce the same products. Still, Paul’s genius lies not just in identifying the most valuable product slate but in developing the most efficient treatment scheme that minimizes capital and operating expenses, including making the most efficient use of energy. EWM has process patents on the treatment processes Paul has developed less efficient schemes as a defensive moat.
Not having a technical background, I hired world-renowned desalination and waste brine expert Dr. Mike Mickley to perform an independent evaluation of the technology and its prospects. He spent several months doing a deep dive into the technology and reported that it was “ingenious, perhaps brilliant in some ways” and recommended that we move forward and file patents on the processes. This is when EWM was established. After spending several months unsuccessfully trying to identify and recruit a high-caliber CEO, we decided to launch the company with me as the CEO (interim).
How did Sue Snyder join your company and what is her leadership style as a CEO?
We first met Sue when she was a partner in the environmental section of Vinson & Elkins, concentrating on water projects. EWM hired her to assist in contract negotiations and drafting. She had been recommended to us by one of our other lawyers as the premier lawyer in the sector. We worked with her for several months, and the whole team was thoroughly impressed with her knowledge, skills, and professionalism.
At the time, EWM was spending substantial resources on legal services for various services, including contract negotiations, compliance, patents, and general corporate purposes. We presented Sue with an opportunity to join a small, exciting water technology that was trying to change the world in a capacity that included legal operations and other corporate functions, and we were excited that she accepted. In addition to working as a lawyer, Sue also has a background in operational roles at Fortune 500 companies and also has an engineering undergraduate degree in environmental engineering.
We’ve worked as a team for several years and have a shared vision for EWM’s success. At this stage, EWM’s success depends on its ability to convert current discussions and contract negotiations into paying customers and to find new potential customers. Sue’s business development skills are far superior to mine, so I’m very pleased that Sue is functioning as a customer-focused CEO.
What are the differences in terms of capital costs, operational costs, revenues and profits between your desalination technology and traditional technologies?
A plant using EWM’s Full Recovery Desalination® technology is a highly efficient chemical/minerals manufacturing facility and desalination plant combined. Versus a traditional desalination plant, these plants can generate 30x more revenue. Typical desalination plants are only marginally profitable, whereas Full Recovery Desalination® plants have a high upfront capital cost but can operate with profit margins of around 75%. Even though the capital expenditures to construct the plants are estimated to be ten times more than a traditional desalination plant, the high profitability drives a payback period of around four years. Hence, the economics are better than traditional methods, and the environmental benefits are an added benefit. (Note: these metrics are based on a large-scale seawater plant.)
Who are your current and potential customers?
We began our company focused on desalinating brackish water. A brackish water plant processes much more dilute salty water and can be built at significantly less cost than a seawater plant. After completing engineering studies and pilots, a plant was built. The plant is still in commissioning, having been transferred in ownership two times due to equipment and other issues.
After this plant was built, we were hired to consult on the potential largest desalination seawater plant in the world. We consulted on this for about two years, and a world-leading engineering company similarly confirmed the design.
We have since been contacted by oil and gas-produced water sources and have a distribution contract with a large entity to work toward projects in the MENA area. We have also been contacted by mining companies that produce mine tailing streams that are salty waste streams needing disposal to treat these streams with no waste. We see other potential customers in the future, including industries, power plants, cooling water, etc.
How much revenue can you get per contract and what would the revenue timelines look like?
Our business model calls for three types of revenue:
1) fees generated from consulting and design work to help clients evaluate applications of our technology to their specific circumstances,
2) license and royalty fees from selling licenses to use our technology and
3) royalty fees based on the revenues generated at the plants using our technology.
The goal of the consulting fees is to cover near-term costs while we work towards selling technology design packages that include a license to use our patents and a royalty. Our consulting fees are typically priced on a lump sum basis for easily defined tasks (such as a feasibility study) or on a time and materials basis. The design phase of a large-scale plant can last several years. Given the significant capital expenditures required for a plant using our technology, charging a small percentage (e.g., 2-5%) of the cost would generate tens of millions of dollars of revenue (and profitability if the company is at least breakeven from consulting contracts). Collecting royalty fees will further enhance returns.
If we talk again in 12 months, which milestones will you have achieved?
For the next 12 months, the milestones we hope to reach include continuing in seawater desalination with a new project and starting projects in the produced water and mining sectors; any additional projects would be bonuses.