Executive viewpoint

JOEL GAY, President and CEO, Energy Recovery Inc.

In December 2015, leaders from across the globe gathered in the suburbs of Paris to discuss the potential implications of climate change and, most critically, the corresponding role that society should play in addressing it. This ongoing discussion is focused squarely on the energy our society uses and its impacts on our world. The stakes are enormous.

Modern civilization is not rich because of gold or diamonds, or the latest in financial innovations in New York or London. More than any other development, it is energy that has driven the dramatic improvements in the quality of life that modern society affords. Continual innovation in both energy sources and their applications has brought light to the dark night, heat to the cold winter home, speed to modern transportation, and power to humanity’s ability to manufacture high-quality, low-cost products for consumers around the globe.

Since humankind first harnessed fire, this innovation has not ceased. And while the ultimate outcome of the climate talks in Paris is far from certain, it is certain that innovation in energy and its applications will continue to drive improvement in the quality of life of all—the wealth of nations, of companies and of individuals.

The focus on this basic truth is what drives our company and the innovations that we have brought to market in the upstream and midstream oil and gas sectors, and to the global desalination market. Greater efficiency breeds greater productivity. With this in mind, Energy Recovery has spent more than two decades developing and improving products to better harness otherwise untapped energy in industrial systems and put that energy to use. We have assembled a world-class team of engineers who continually develop new ideas and better technology to make industrial processes more profitable, more efficient and safer, while allowing for a smaller footprint.

Energy savings allow for smaller equipment footprint. How does all of this translate into the real world? A case in point includes the benefits derived from our IsoBoost turbocharger-based system (see the article titled “Optimize amine process design using liquid-phase turbochargers” in the November/December 2015 issue of Gas Processing). By recycling pressure energy in gas processing during amine treatment, the IsoBoost system takes some of the burden off of pumps, allowing plants to use smaller pumps. With an elegantly simple design, we have been able to elevate performance, diminish operational downtime, and save roughly 50% of the electrical energy traditionally consumed in the acid gas removal unit.

The bottom line accounts for a more profitable business. In addition to saving energy, IsoBoost reduces operational risk by simplifying industrial systems in gas processing, and improves the reliability, availability and maintainability at gas processing plants, offering a hydraulic system that operates with three times the life of a traditional pump. Our earliest installation of IsoBoost is in the Jackalope plant run by Energy Transfer Partners in Hebronville, Texas, where it has run without interruption for the past seven years.

Our IsoGen turbogenerator system also captures otherwise wasted pressure energy and converts it to electricity, thereby allowing operators to reduce the power they need to draw from external sources. This also offers the option of generating additional electricity that can go into power grids. The system is installed in parallel with the existing pressure control station and offers a unique approach to utilizing renewable energy, as well as the ability to generate additional power without adding risk to the operation.

In 2015, we commissioned our first IsoGen system with Saudi Aramco, which installed a pilot test of the hydraulic turbogenerator system at its Hawiyah gas plant in Saudi Arabia. The IsoGen system recovered more than 1 GWh of electricity over the six-month pilot test. Moreover, the core technology employed in the IsoGen system has been proven to be robust and able to withstand the challenging conditions found in amine sweetening applications.

The acid gas removal process is energy intensive and commonly used to remove hydrogen sulfide and carbon dioxide from natural gas streams. Following this successful test, the IsoGen system has proven to be another viable technology ready for deployment in gas processing applications and further utilized by Saudi Aramco.

Technology adoption in other oil and gas sectors. While the value proposition of recovering pressure energy resonates widely in large-scale capital projects, we see additional opportunity across other sectors in oil and gas. The upstream sector has traditionally been the early adopter when it comes to new technology, most easily seen in the recent and rapid advances achieved in hydraulic fracturing. Our VorTeq system uses a rotary-type pressure exchanger system to save high-pressure frac pumps from recurring failure caused by sand. In October 2015, we announced an exclusive deal with Schlumberger to begin utilizing this energy recovery technology across its global onshore fracing fleets.

In other sectors, the adoption of new technology happens at a slower pace. Since gas processing has traditionally focused on mitigating downtime, this sector can be risk-averse due to existing plant infrastructure needs, therefore delaying implementation of new technology and advancements. However, the number-one point of failure for these facilities has typically been pumps, which is why our midstream solutions are engineered for both energy savings and reliability.

As we witness a historic destruction of global oil and gas commodity prices, the need to realize maximum value along every link in the energy production process becomes ever more acute. The industry stands ready to overcome these challenges through new innovations. While the energy industry may have “taken it on the chin” when it comes to the perceived environmental impact debate, some engineering accomplishments—such as solutions that tap into the otherwise wasted resource of pressure energy—help advance our industry amid this debate by improving efficiency and shrinking carbon footprint, while helping drive profitability and operational efficiency.

The more that midstream companies can embrace these new technologies, which would be self-serving to their bottom lines, the more they can advance their business goals while rising to the energy challenges of modern society. The evolution at hand is our ability to hone and implement cutting-edge advancements, improve on our solid energy practice and glean even greater performance and value. GP

JOEL GAY was named the president and CEO of Energy Recovery Inc. in April 2015, and is a member of the company’s board of directors. Mr. Gay joined Energy Recovery in January 2012 and has held several positions at the company, including CFO. Prior to joining Energy Recovery, Mr. Gay held various roles at Aegion Corp., most notably as the CFO of the largest division (North America). He has also held several positions within the service master companies, and began his career in entrepreneurial finance, where he led a startup to a successful liquidity event. Mr. Gay brings more than a decade of experience in leading multiple corporate disciplines in global small-cap and large-cap companies with innovative and quantitatively rigorous discipline. In addition to his role as CEO of Energy Recovery, he serves on the board of GDG Constructors as an executive director and chair of the Audit Committee. Mr. Gay holds an MBA degree from the University of Chicago Booth School of Business and a BA degree from St. Thomas University.