APTwater Urging Innovation In Water Treatment

David Stanton, CEO of APTwater, sat down with Water Online Radio for this live interview from the show floor at WEFTEC 2011 in Los Angeles. Stanton spoke about the company’s mission, its biggest challenge, and ARoNite — a new treatment process for nitrate removal. Listen or read on to learn more.

Todd Schnick: We are back, broadcasting live from the Los Angeles Convention Center and the WEFTEC tradeshow floor. I am Todd Schnick, joined by my co-host, Todd Youngblood.

Todd, we’re starting hour three. So far, so good.

Todd Youngblood: It cannot possibly be hour three. I feel like I just got here. It’s something when you’re having fun, time flies. It’s a cliché, but son of a gun, it’s panning out to be true today.

Todd Schnick: We are having a good time. Starting us off on hour three is the CEO of APTwater. Welcome to Water Online Radio, David Stanton.

David: Thank you very much.

Todd Schnick: Before we get into our conversation, why don’t you take a few minutes and tell us a little about yourself and about APTwater?

David: Okay. My name is David Stanton. I’m the CEO of APTwater and I’ve been in the water industry for about 20 years now, attending these WEF exhibitions all over the country. I can appreciate how three solid hours of talking about WEF can be an exhausting adventure for anybody.

I started out in a startup technology innovation company 20 years ago, and the business was sold to a large conglomerate and swallowed up in a whirlwind of consolidation.

Just about two years ago, we decided to get back into technology startup mode and innovate and bring new products and services to the industry. That’s what APTwater is all about.

Todd Schnick: Are you national? International? Do you just cover the southwest? What is your geographic reach?

David: We’re headquartered in California with offices in Long Beach and Oakland. Most of our large clients are in California; however, we have a project base in the southeast and really all over the country.

We are working on our first European contract right now in Switzerland and we’ve got a lot of inquiries in Asia, but we’re really not an Asian company just yet.

Todd Schnick: David, I would think a guy in your position, there has to be all kinds of things that keep you up at night. What do you view as the two or three biggest challenges coming at you in the next five to 10 years?

David: Our type of company innovates new technologies. We’re very focused on reusing and recovering water for our clients. The biggest challenge we face from an industry point of view tends to be how quickly we can get our clients to adopt our solutions.

We know they work. We’ve proven them out. We’ve used them elsewhere, but the industry itself is very slow to adopt new technology. At APT, we’re not only focused on new technology, but also the service delivery model.

We will actually go in and operate and run our plants for our clients and sell them water-by-the-gallon service, or some kind of treatment technology service, rather than just try to be in the capital technology sales.

Frankly, if we were going to try to do that, it’s almost impossible to innovate in this industry, just doing that.

Todd Schnick: We talked about your international reach, but let’s focus on the southwest for a moment. What do you see as the biggest challenges to meeting increased demand in the southwest over the next 10 years?

David: We’ve already exceeded the supply and demand equation. People don’t talk about it a lot, but the amount of water that’s been allocated to consumers and industry in the southwest has already exceeded the supply.

This dynamic isn’t going to change anytime soon. There’s no question that there needs to be new water found in the southwest. Just to sustain economic growth returning to the region, we would absolutely need more water.

We’ve studied this problem, not just for the southwest, but for other water stressed areas like China, southeast Asia, and the southeast. We’ve decided that the real first step to solving the problem is just to recover and to reclaim the water that’s available to you for reuse. In southern California alone, I think I’ve heard numbers as low as 20% and as high as 30% of all the power consumed in the state is used to pump water.

We look at that water as being pumped to the right place, in the right location, where the demand is. Then in southern California, where it could be one of the largest once-used water markets in the world, we just use that water then flush it down the drain, out to the ocean.

Our goal is to start recovering that water, getting it back into either direct potable water reuse or replacement of direct potable water reuse.

Todd Schnick: Who are you selling to? Is it public, private, or is it municipal?

David: Interestingly, it’s about half and half. Half our business is to some form of a water agency or district and the other half is some kind of industry that has a distressed source of water that we can tap into.

Todd Schnick: David, you very clearly have a global perspective. How important is it, first of all? Secondly, how do you keep up with the different perspectives? You mentioned China and the southwestern United States – very different places. How much knowledge transfer is there? How does that all work?

David: We’re developing advanced technology and solving very difficult-to-solve problems. When you look at the needs of the world, they range dramatically. For example, in southern California we are very focused on recovering nitric contaminated wells with one of our new technologies.

When we go to China, they’re probably not going to be talking about that problem for another 20 years because their rivers look like our wastewater plant. So there, we focus much more on our oxidation processes that are bold first-step treatments, skip the last 20 years of technology and jump to some processes that can do more bulk treatment of water, not refined water.

We have to actually develop technologies that meet these market needs, and we have a portfolio coming together that we can make and market in the developing world, as well as the western world.

Todd Schnick: I want to ask you about something called ARoNite. Tell the audience what that’s all about.

David: Sure. ARoNite is a product we’re commercializing right now. It is an autotrophic reduction process, which is a lot of big words. Basically, it is a biological process that, instead of feeding the biology oxygen, we’re feeding the biology hydrogen.

It’s using the hydrogen as an electron source to reduce contaminates in the water. The first contaminate that we are targeting is nitrate. Nitrate is the number one contaminate in our drinking water supplies in North America. What’s nice about our process is it uses hydrogen fed to the biology, and the biology actually destroys the nitrates.

Most of the competing solutions concentrate or shift the nitrate problem to another waste stream. We deal with it in-place, in the water stream with biology.

Interestingly, we’re developing a process to get the hydrogen out of natural gas. Natural gas can be broken into hydrogen and CO2, largely. We use the CO2 for pH control and the hydrogen to feed our biology, so the ultimate goal of our system is that you put this kit in, hook it up to some natural gas, and you’ll be treating the nitrates in your water supply.

Todd Schnick: What are the economics of employing ARoNite? Is it an expensive thing to get into place? What kind of ROIs are coming back out of it?

David: Right now, we can already compete with things like RO and ion exchange, particularly when they have problems dealing with the waste streams that come out of those processes.

If they can just dump into the ocean, ion exchange might be cheaper than us, but, typically, they have to somehow deal with the waste stream that comes out.

Already in our development curve, we’re competitive, but we’re just beginning. We’re building our first commercial plant now. We’re scaling up production of our core process units. We think we will be driving the market price for the next 10 or 20 years in this technology.

Todd Schnick: If I’m one of your stockholders, I think I like the sound of that … this new technology. I was going to say product, but it’s bigger than a product: it’s a technology that has that sort of economic payback this early in the lifecycle.

David: That’s right. We have a strong philosophy at APT that you never subsidize your customer base, because nine out of 10 times, the government is behind it and you do not want private industry subsidizing the government.

We’ve set as an internal goal that all of our products will deliver return on investment, make money, and be productive long-term service products for our clients and our shareholders.

Todd Schnick: APT is exhibiting here at WEFTEC? What are you hoping to achieve? Is it about lead generation, launching a new product, market education, identifying new partners? What are your goals here?

David: We have one commercial product already. It’s an advance oxidation process and it is already being installed in municipalities and in industry around the country.

We are launching the ARoNite process at the show. We are also rolling out our service model where we do this for our clients more on a water-by-the-gallon basis, to reduce their need to deliver capital to deploy our technology.

We’re just trying to get the word out. We want to talk to customers. We like talking to the engineering community and we’re hoping we get a good customer turnout at the show.

Todd Schnick: Good luck to you. We’re out of time. Before we let you go, share with the audience how they can contact your organization and learn more about your work.

David: The best way to find us is on the web. We are at www.aptwater.com. All the information you need is there worldwide to find out how to do business with us is on the site.

Todd Schnick: Outstanding. David Stanton with APT, it was a pleasure having you. Thanks for joining us.

David: Thank you, guys.