In Conversation With: Riggs Eckelberry, CEO of OriginClear

The Water Network team had the pleasure to interview Riggs Eckelberry, CEO and president of the OriginClear company, a pure technology company.

OriginOil has developed a unique technology for continuously removing organic contaminants from huge amounts of water, with minimal energy and no use of chemicals, thereby contributing to the goals of sustainability, energy efficiency and water conservation and preservation. In 2015, Biofuels Digest ranked Riggs Eckelberry one of The Top 125 People in the Advanced Bioeconomy. This was the fifth year of this recognition. The Los Angeles Business Journal has named him to the Who’s Who in Los Angeles Business for 2016, while AI Magazine recently named Riggs CEO of the Year for Renewables and The Environment in California.

Q1: Thank you for taking the time to talk to us. We would love to know more about you as a person and your vision behind OriginClear.

I came out of high tech, which is all about disruptive technologies creating whole new markets. First, in the eighties, I was helping small businesses get off paper ledgers and onto small computers.

In the nineties, I experienced a similar technological revolution during the dot-com boom. Today, I see innovation and change coming to the water and wastewater industries.

Many companies are still using outdated water management practices – it’s time for them to embrace technology and improve efficiency.

Why is now the time for water innovation? Water is becoming increasingly more scarce. McKinsey’s Transforming Water Economies forecasts that “without action, global water demand could outstrip supply by up to 40 percent by 2030.” Furthermore, existing water infrastructure in the United States is aging and water loss is increasing.

According to Lux Research, updating our national water infrastructure will require an investment of $270 billion – money that will be hard to pull together for projects that could take decades to complete. Instead of rebuilding our current infrastructure, we can equip water users to treat their own water with small, modular water treatment systems that can be built and installed locally.

I’m fascinated by the disruptive potential of the water industry. We are actually acquiring companies to help industrial water users treat their water themselves, so they can reuse it. We believe those companies are going to grow tremendously because of this “local water” growth trend.

We have spent years developing a breakthrough technology of our own. It was designed originally to harvest algae from water. In 2012, one of our brilliant people realized it was also a great way to make murky water clear! No chemicals, and the energy demand is next to nothing.

We have a pilot unit running on an oil field in California that treats 340 barrels of produced water per day – that’s 14,000 gallons – for just $1.60 per hour in electricity, according to our partner working on that oil field. That’s about half the normal cost, and it gets better as you scale up. Literally, you can power our water process with solar panels. And because no chemicals are involved, operating labor is greatly reduced.

The world knows how to make clean water if it starts out clear. But if it’s full of debris and oil… not so easy. A new project in China to clean black water from landfills came to us because that water clogs every filter and membrane known to the industry. We are able to make water clear, and that’s huge.

So our vision is simple: to enable a new era of clean and socially responsible water treatment solutions.

Q2: OriginClear has developed and patented some revolutionary technologies like the recent announcement about a new breakthrough water cleanup system. Can you tell us more about the system and how it is better than the traditionally available technologies?  

We use electricity to coagulate and float suspended solids and oils out of the water. We call this Electro Water Separation™.

In the final stage called Advanced Oxidation, we take advantage of the electrical fields already generated to remove many dissolved contaminants, such as ammonia, toxic chemicals and the hydrogen sulfide – what gives oil refineries that rotten egg smell – to reduce the value of crude oil by 10%.

So the combined technology is called EWS:AOx. It is energy-efficient, continuous and easy to manage. It fits right into any water treatment process and works ahead of the filters and membranes. Filter manufacturers love us because we make their filters last much longer.

Q3: You have OriginClear Technologies in addition to the OriginClear Group. Can you elaborate on the vision behind acquiring other companies?

For years we invested in our technology. That is the long game. We are now getting commercial traction and think we have a home run with the strategy of acquiring other companies. We are passionate about our technology and it’s making a huge difference where it is being put to work.

A year ago, we realized that our public company could also be a platform for aggregating private companies involved in water treatment. Consequently, we formed the OriginClear Group™ by which we acquire companies with complementary services to offer a complete array of solutions through one provider to any customer anywhere.

In fact, our first acquired company – Dallas-based Progressive Water Treatment Inc. (PWT) – just collaborated with us and the Omaha-based Consolidated Water Solutions to treat wastewater entering steam generators at Otter Tail Power's Coyote Station in North Dakota. PWT's solution cuts operating costs at the facility, decreases the amount of sludge & wastewater produced and improves overall system performance. Consolidating companies like PWT will lead to enormous economies of scale through sharing of best practices, customers and technologies.

The idea is to capitalize on that big trend of water users starting to treat their own water. Whether you are manufacturing chemicals or spare parts or furniture, you’re making dirty water that the local municipality really doesn’t want. Plus, water isn’t free – the ability to reuse water resources is a major benefit. Treating your own water is a fact of life these days, but many companies don’t have the expertise; it’s not their core competency.

So they’re outsourcing to local small companies that can do the job – from designing to building to installing and even operating these water-treatment-systems-in-a-box.

These small companies are starting to take off. We think a billion-dollar company could be built by acquiring progressively larger companies that themselves grow very fast.

Water is home to big public companies that grew through acquisition: American Water Works (chart) ($13B market cap) and Veolia (chart), ($11B market cap) are just a few.

Q4: What are OriginClear’s criteria for acquiring a new company? What benefits does a water company gain by becoming a part of the OriginClear Group?

We have to make accretive acquisitions. Accretive means that the new company has to be profitable, with stability.

The company also needs to be on a growth path and have dynamic management with an expert team that’s going to stick around. Unlike many companies that destroy the companies they acquire, we keep their core management team and they function on their own with our guidance.

That stems from my own experience being acquired three times in my career, each time seeing my hard work thrown away. Sure, we made money, but what’s the point? Many entrepreneurs feel the same way, and we offer an opportunity for them to capitalize on their hard won success without destroying it in the process.

We do help our acquired companies as well. With our first acquisition we put an e-commerce process in place that is driving not only product sales, but generating big ticket leads – right from the Internet.

Q5: Describe your experience acquiring your first company (I assume it was Progressive Water Treatment – PWT).

Marc Stevens became excited about our technology and our vision, and we were able to quickly agree on a deal to acquire his company. That was a big win!

Progressive Water Treatment (PWT) is stable, growing rapidly and has a fantastic reputation with its clients. The management, sales and engineering teams are dynamic. Marc is dedicated to helping us build the OriginClear Group, too.

We have learned a lot about the acquisition process after a year with PWT, and we are excited to announce our next deal to the world.

Q6: OriginClear made incredible revenue increases in 2015 – nearly 6 times to previous years. How did the company achieve this growth? And what's the future plan for the company?

Our technology is making revenue, but licensing is where we have discovered real value. Royalties are a great income stream, but they take a while to ramp up. The addition of PWT made our revenue take off and brought us that much closer to profitability.

The OriginClear Technology team is currently closing some very large deals, so we think they will be contributing significant revenue in the second half of 2016. PWT is growing as well. Each acquisition will make our revenues jump and could ultimately make us very profitable.

Since we have already made the investment in the technology, these profits will directly drive more acquisitions, and ultimately, shareholder value – what Wall Street values most!

Q7: Tell us something about OriginClear’s partnership with California State University at Bakersfield. Which sector will get help through this partnership and how?

We met Dr. Luis Cabrales at California State University Bakersfield (CSUB) over a year ago and he was excited to turn his students into lab workers. This gives us a force of 22 helpers, during the school year, to run a series of tests and many experiments. It also helps our visibility with the local oil industry community and I feel it’s led directly to the demonstration scale pilot we are currently helping a licensee operate in Bakersfield.

The university also invited us to speak at the Produced Water Conference it held in August in Bakersfield. They are highly supportive.

As a side benefit, oil workers laid off in the recent downturn are finding new skills in water treatment, an industry that is hardly likely to see a downturn!

We fully expect to restart with the CSUB in September as the new school year begins and are excited to learn new things about oil water treatment together.

Q8: We read that OriginClear sees a huge opportunity in Malaysia with palm oil waste. Can you tell us how palm oil affects the environment? And how can OriginClear address the problem?

Palm Oil Mill Effluent (POME) is the byproduct of harvesting palm oil. It’s said to be 100 times worse than domestic sewage. It is a thick brown sludge that can be incredibly harmful to the environment if not properly treated and disposed of.

Due to its high acidity and biological oxygen demand (BOD), POME can be harmful to aquatic communities and cause algal blooms on the water’s surface. This can suffocate aquatic populations living in deep-water environments. POME is sometimes released into open-air ponds for remediation, but when left open to the air POME releases carbon dioxide, methane and hydrogen sulfide – all major contributors to global climate change.

EWS:AOx can uniquely clear up this oily sludge at high speed with zero chemicals and minimal energy requirements.

Recently, OriginClear formed a joint venture with Malaysia-based Osmocell, headed by two GE Water veterans, to clean up POME in the region. It’s called OriginClear Water Solutions, and already it has a seven-figure pipeline of business.

We want to take on tough challenges like these, because this is where we can make a real difference.

Q9: OriginClear also has a significant presence in China's market, what is your experience working in the Asian water sector?

China has committed a third of a trillion dollars to water projects. Commercially, they are highly decisive and are motivated to change things fast. We created a master licensee in Hong Kong through which we are setting up joint ventures throughout the region.

Our most interesting project in the works is a system to clean up the “black water” from a landfill – that will clean about 2000 tons of leachate per day! This is terrible water, and it fouls up all the existing filters and membranes. We can make that water clear!

We think that China will be a major focus for the company over the next five years. Yes, piracy is a concern, but the Chinese are less interested in buying copies these days. They want the real thing, whether it’s a Bentley or an OriginClear water system!

Q10: How can OriginClear map out its impact on the water sector? And what's the future plan of the company? The world water market is doubling to a trillion dollars by 2020. It’s this century’s “blue gold.”

We can have a major impact in two ways.

First, by licensing our technology broadly, we can provide an economically-viable solution for users to clean their tough water problems without the use of chemicals. This will greatly improve the economic feasibility of water treatment, especially in the field – as we are demonstrating in Bakersfield.

Second, by acquiring a series of companies to which American industry is outsourcing its water problems, we will directly help bring about the decentralization revolution for water. That is huge.

Our plan is simple: continue to roll out our well-proven technology, and meanwhile, acquire fast-growing, profitable companies.

We are excited to be helping to clean the most important commodity in the world: water.

Q11: What would you like to say to the technology companies and professionals present at The Water Network? How can they reach out to you if they have a breakthrough technology and sustainable running business model?

If you have a big water cleanup challenge, let us show you how we can handle it. If you are interested in adding killer technology to your own product line, contact us to become a licensee or start a joint venture.

And finally, if you are a water systems integrator in the USA, you owe it to yourself to check out OriginClear, the new success in water technology and solutions.

Just select the appropriate drop-down in our contact form, and tell us how we can work together. We’re expecting to hear from you!

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