Water purification firm MIOX Corp. is diving deep into the bowels of the oil and gas industry.
The Albuquerque company, whose purification systems are used worldwide to clean water for municipalities and commercial businesses, will apply its technology for the first time to reduce toxicity and improve the efficiency of fluids that oil and gas companies use for hydraulic fracturing to crack open deep underground reservoirs. It also will purify the dirty water that comes back up during fracking operations.
To do that, MIOX has teamed up with Schlumberger, a global, $40 billion company that bills itself as the world’s leading supplier of technology products and services for the oil and gas industry. MIOX will work directly with M-I SWACO, a Houston-based subsidiary of Schlumberger that supplies drilling fluid systems worldwide.
“We have an agreement with them to commercialize our technology in the oil and gas industry, providing green technology for fracking,” said MIOX President and CEO Craig Beckman. “They have a pilot unit currently deployed in the field in Texas.”
Schlumberger now has an equity stake in MIOX, a privately held company, but Beckman declined to disclose how much Schlumberger has invested.
MIOX also hired a new manager, Charles Mowrey, to help build the company’s oil and gas customer base from an office in Houston. Mowrey is an industry veteran who previously directed Halliburton’s drilling fluid services in the Asia Pacific region.
‘A great opportunity’
“I think MIOX has a great opportunity to give oil and gas operators something that’s green, effective and inexpensive compared to other technologies out there,” Mowrey said.
The industry is under increasing pressure to employ more environmentally benign ingredients in fracturing fluids, and to clean up contaminated water used in hydraulic fracturing, especially in places where fracturing operations are rapidly spreading, such as Pennsylvania.
Reverse osmosis and other technologies to desalinate and decontaminate water are widely available, but most of those systems are expensive, Mowrey said.
“Between two and four billion barrels of water were used last year in fracking operations, so even if a water treatment system adds just one-half cent more or less than another technology to clean a barrel of water, it’s a lot of money we’re talking about,” Mowrey said. “MIOX offers green technology with a much smaller impact on budgets.”
MIOX lowers customer costs by producing chloride on site to sterilize water. That eliminates costs for trucking, storing and managing hazardous chemicals used in many traditional water purification systems.
MIOX’s proprietary process uses a mix of water and salt shot with an electric current to treat drinking water. The electric mix helps separate salt into its component parts, sodium and chloride. The resulting oxidant solution is poured into water, where the chloride destroys common pathogens, eliminating the need for chemicals used in other systems.
Change in strategy
MIOX, which formed in 1994, has received about $50 million in venture capital. It operates at a 64,000-square-foot manufacturing facility near Albuquerque’s Balloon Fiesta Park.
The company makes a broad range of purifiers, from a pen-sized system for outdoors people to medium-sized purifiers for food and beverage operations and huge systems for municipalities. Its technology is currently deployed in 30 countries.
Entrance into the oil and gas industry, however, marks a sharp change in MIOX’s marketing strategy. Until now, the company has focused on direct sales to customers to treat drinking and waste water, often with distribution partners who help build markets.
But last year, MIOX began to forge a new type of partnership with companies that can help adapt MIOX systems for use in new industry sectors, said Carlos Perea, MIOX board chair, and until last April, company president and CEO.
“What we’ve historically done is replace chlorine in drinking water or pools and so forth, but there are thousands of uses of chlorine in many industries, so we’re looking at all those other uses to see where MIOX can bring more value,” Perea said. “Our partnerships have been distributive in nature, but now we’re co-branding and integrating our technology with that of other companies to enter new industries.”
MIOX can incorporate different salts in its systems to create a variety of disinfectants to replace toxic materials used by many industries. “We can custom-make better disinfectants,” Beckman said.
Examining dairy industry
The company is also exploring partnerships in the dairy industry to replace things like iodine, which is often sprayed directly on cows. That can irritate cows’ skin, and it’s frequently not powerful enough to kill all bacteria.
In the oil and gas industry, MIOX is exploring various applications, starting with fracturing operations. That makes it the second venture-backed company in New Mexico that is applying homegrown technology to resolve water-related issues in hydraulic fracturing.
MIOX and M-I SWACO will offer to replace some chemicals in fracturing fluids, such as glutaraldehyde. That’s used to kill bacteria, but it often increases hydrogen sulfide gas in water – the stuff that sometimes emits an egglike odor. Hydrogen sulfide “sours” oil and natural gas wells because fuel comes up more acidic. That causes erosion damage and stress on refineries that process it, lowering the price operators get for their product, Mowrey said.
In addition, glutaraldehyde can be toxic, causing severe eye, throat, nose and lung irritation.
“We’re creating a green biocide that can be produced on site to replace glutaraldehyde and other chemicals pumped down wells,” Beckman said. “We’ll also treat water when it comes back up.”
Beckman is a veteran of the water purification industry who previously held management positions in General Electric’s water division. He joined MIOX in August 2011 as vice president for business development to help design the company’s new marketing strategy. He replaced Perea as president and CEO last April.
“I believe MIOX has outstanding technology that just needs broader market exposure,” Beckman said.