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BRINGING INNOVATION TO MARKET

Blue is the New Green

Forget for a moment about carbon emissions. The world is facing a more immediate crisis -- it is running out of clean water. The prospect of widespread shortages is creating a new kind of new economy. Meet 11 entrepreneurs who are ahead of the curve, finding opportunity in the largest emerging market the world has seen in some time.
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First, some numbers. The United Nations estimates that by 2025, two-thirds of the world's population will face periodic and often severe water shortages. And the problem is not limited to the developing world. Here in the U.S., water managers in 36 states are predicting significant shortfalls within the next decade. Even in regions that do have sufficient supplies, aging infrastructure, inadequate treatment facilities, and contamination pose more problems. No surprise, then, that battles over water rights are becoming commonplace, pitting states and sometimes nations against one another in increasingly bitter conflict.

Analysts estimate that the world will need to invest as much as $1 trillion a year on conservation technologies, infrastructure, and sanitation to meet demand through 2030. As in the past, most of the large capital-intensive projects will be done by the usual multinational corporations and engineering firms. But the extent of the problem and the demand for new technology to address it present -- pardon the metaphor -- a kind of perfect storm for entrepreneurs. "Small companies with intellectual property, significant know-how, and a product that's scalable can stake out a niche below the radar of the large companies," says Laura Shenkar, a water expert and consultant in San Francisco. "This is an opportunity that will generate Googles."

In the pages that follow, Inc. examines the emerging water economy and takes a trip along the water trail, from source to sewer. Our guides on this journey: 11 extraordinary entrepreneurs who are creating radical change at every step of the way. Some of their innovations are striking in their simplicity. Mark Sanders's AQUS System uses water from bathroom sinks to fill toilet bowls. Others push at the limits of science and technology. Fatemeh Shirazi, for example, is "training" microorganisms to kill pollutants in water. What they share is a vision, a drive, and an address -- the sweet spot at which blue meets green.

Increasing the Supply

Born in Swaziland, raised in Zimbabwe, and educated in South Africa, Amanda Brock knows what water scarcity looks like. "I have seen and lived through waterborne diseases, childhood mortality, cholera, typhoid," she says. "I have lived the poverty that comes from inadequate access to a fundamental resource like water. And with global warming, it's getting worse."

The desire to do something about it is what led the former Enron executive and water-industry consultant to take the CEO spot at Water Standard, a start-up founded by Florida entrepreneur Andrew Gordon. Water Standard plans to bring water to dry regions in a new way: by installing state-of-the-art desalination plants inside retrofitted tankers and delivering freshwater, via pipeline or by ship, to thirsty cities on the shore.

The ships, which Brock says can be outfitted in less than a year at a cost of about $150 million, will be anchored from one to five miles offshore and will be capable of producing up to 75 million gallons of freshwater a day -- enough to meet the basic residential water needs of a small city. And because they will operate in deep water rather than close to shore, the ship-based plants should promise to virtually eliminate the negative environmental side effects often cited by critics of desalination.

Specially designed intakes will draw seawater from a greater depth and at a slower speed than typical desalination facilities, thus reducing injury to aquatic life, and the concentrated brine produced in the desalination process will be thoroughly and rapidly diluted before it is returned to the sea, far from the more ecologically sensitive zone close to shore. While the ship-based plants will have a carbon footprint -- initially, they will run on marine-gas turbines or new emissions-compliant diesel generators -- Brock hopes eventually to generate energy using ocean-current or wave-action turbines.

Freshwater already is exported via tankers between France and Algeria and Turkey and Israel. And smaller-scale barge-based desalination systems operate in the Middle East and India. Tom Pankratz, a desalination consultant and the editor of Water Desalination Report, expects mobile barge- and ship-mounted systems to play an important role in increasing the supply of freshwater -- whether by addressing site-specific environmental concerns or space limitations, getting facilities up and running faster than the two to seven years it takes to construct a land-based plant, or responding to emergency or temporary needs.

Investors seem to like the idea. In March, Water Standard secured $250 million in venture funding, one of the largest investments to date for a water start-up. The company's first vessel -- a tanker that's currently used to transport vegetable oil -- should be ready to sail sometime in 2009. And thanks to recent regulations requiring that oil tankers be double hulled, there is an abundance of older single-hulled ships that are perfectly suited to join the fleet. Brock has spent much of the past year meeting with investors and potential customers in the Middle East, Chile, Cyprus, India, and China.

Whether based on land or at sea, almost all desalination plants built after 2000 use a technology called reverse osmosis, or RO, to get the salt out. Water is pushed at high pressure through a membrane that lets freshwater pass through but blocks salt and contaminants. RO technology is generally more efficient than other desalination methods that use heat to evaporate and distill water, but it still requires a lot of energy -- at seawater plants, almost half the costs are for the electricity required to push water through the membranes. This makes desalination one of the most expensive ways to produce freshwater: The cost of producing 1 cubic meter (264 gallons) of desalinated water ranges from about $1 to $1.50, compared with 10 cents to 20 cents to obtain water from a reservoir or well. (Average U.S. daily household use is about 350 gallons.)

The Los Angeles-based start-up NanoH2O is working on a way to make the process a lot more efficient. The company was founded in late 2005 by Robert Burk, an engineer with extensive experience on water and wastewater projects, and current CEO Jeff Green. It is now ramping up for mass production of a nanocomposite membrane based on technology developed by researchers at UCLA led by Eric Hoek, a professor of civil and environmental engineering. In pilot studies, it has proved nearly twice as productive as existing membranes -- meaning you can get almost twice as much water with the same energy input or the same amount of water for half the energy -- and has the potential to reduce the total expense of desalinated water as much as 25 percent. That would make it a far more attractive proposition for communities looking to diversify their water portfolio.

Unlike traditional RO membranes, which are just filters made of a dense polymer, NanoH2O's polymers interact with "thirsty" nanoparticles to draw in water and repel salt and contaminants as well as the organic materials and bacteria that tend to adhere to conventional membranes and decrease efficiency over time. The technology was an academic research project when Burk and Green, a serial entrepreneur who previously founded the software start-ups Stamps.com and Archive Inc., came across it in their search for a water-related technology to build a company around.

Why water? It's where the action is, Green says. Software, he believes, has largely become commoditized. With water, on the other hand, "core technology and intellectual property are still differentiators," he says. "As an entrepreneur, when you see the scarcity issues, and you see that technology can make a difference and that it's still a little early on the curve, all those factors led to a decision that it would be a good time to start to look into this."

Green and Burk moved quickly to secure the intellectual property through UCLA's tech transfer program and closed a seed round to speed up work. In 2007, the company received $5 million from Khosla Ventures, the clean-tech investment group led by Sun Microsystems co-founder Vinod Khosla. In August, it got $15 million more from Khosla and Oak Investment Partners. Now, with 11 employees and several prototypes being tested in the field, NanoH2O is in the process of shifting from a research and development venture to an operating company, with the goal of bringing a product to market by the end of next year. The market for RO membranes is dominated by big players -- including Dow, General Electric, Koch Industries, and the Japanese companies Nitto Denko and Toray. But Green is unfazed. "As big as Dow or GE are, they don't apply all their energies to reverse osmosis -- if you have the resources to stay independent, you can compete for that segment," he says. "For me as an entrepreneur, it's an exciting place to be."

Desalination, of course, is well and good for communities that are close to the ocean and that can afford relatively expensive water. In the villages of sub-Saharan Africa, that's not the case. Forty-two percent of the region's population lacks access to a safe water supply, and the impact of waterborne diseases on public health is staggering: Of the 396 million cases of malaria every year, the majority are in sub-Saharan Africa; 90 percent of those who die from the disease are children under 5. About 100 million Africans are infected with the parasitic disease schistosomiasis, which kills tens of thousands annually, also mostly children. The death toll from diarrheal diseases is probably much higher. What's more, a lack of reliable, clean water precludes meaningful economic development. By one estimate, some 40 billion hours a year are spent collecting water in sub-Saharan Africa -- or roughly a year's labor for the entire work force of France. The work usually falls to women and children, who are left with little time for things like growing food or going to school.

Moving Water Industries, an 82-year-old, family-owned manufacturer of water pumps based in Deerfield Beach, Florida, has been selling portable pumps for irrigation and flood protection in Nigeria for more than 30 years. But its mission in Africa has taken on a new focus: addressing the problem of safe drinking water in rural villages. The company's solution is the SolarPedalFlo, a solar- and pedal-powered pump that can provide filtered and chlorinated water for thousands of people a day -- three to four times the amount that can be produced from a borehole equipped with a hand pump. Each unit costs about $15,000.

Working with local governments, nongovernmental organizations, and the U.S. Agency for International Development, MWI has been able to install hundreds of the pumps in 12 African countries. The company is just introducing the technology in Central and South America and has one unit installed in the Philippines. With the hopes of speeding adaptation in Africa, it is in discussions with Green WiFi, a U.S.-based volunteer group that is working to install solar-powered Wi-Fi networks in the developing world. Together, the companies would be able to offer a compelling infrastructure two-for-one: clean water and Internet access powered by the same set of solar panels. William Bucknam, MWI's vice president and point man in Africa, hopes that pressure to meet the U.N.'s Millennium Development Goals -- decreasing the number of people without access to safe drinking water by half by 2015 -- will encourage more of the public-private partnerships that will be needed for the technology to spread. "It's a huge problem," he says, "and we believe we have the answer."

Treating It

In spring 2007, the Department of Homeland Security issued an alert about a new terrorist threat: chlorine truck bombs. At least five had been exploded in Iraq, killing scores of people and injuring many more who inhaled toxic fumes. The insurgents who carried out the attacks probably stole the chlorine from water-purification and sewage treatment plants, which use the chemical for disinfection. Authorities here worried about the 2,000 or so U.S. water systems that store Environmental Protection Agency -- regulated quantities of chlorine. More than 100 treatment facilities are in densely populated areas, where an explosion could expose more than a million people to toxic gases.

Some say the threat was overrated. But the underlying facts were real -- and for at least one company, the heightened awareness was good news. MIOX, an Albuquerque-based outfit founded in 1994, makes compact generators that allow water treatment facilities to produce a liquid chlorine -- based solution on-site, using only water, salt, and electricity, eliminating the need to store or transport hazardous chemicals. (The company also makes a hand-held battery-powered version of its generator, used by backpackers and military personnel.)

The gold standard of disinfection for more than 100 years, chlorine kills bacteria, viruses, and other pathogens, and it has played a key role in eliminating diseases such as typhoid and cholera in the U.S. And chlorine's benefits in water are twofold: it not only disinfects but also remains at a residual level in the water, preventing reinfection by viruses or bacteria during transport, storage, and distribution. For that reason, the EPA and state regulators require that all municipal drinking water contain a measurable chlorine residual. So even as new disinfection methods, such as using ozone and UV light, gain popularity, they continue to be used with some kind of chlorine-based treatment.

Safety and security alone might have been sufficient drivers to propel MIOX's technology. But since joining the company as CEO in 2005, Carlos Perea, a veteran of the semiconductor and telecom industries, has been highlighting other benefits. Water quality is one: Using freshly generated chemicals helps avoid the development of undesirable chlorine byproducts. And because the MIOX generator can produce a "mixed oxidant" (hence the company name) that disinfects water with less chlorine, treated water has less chemical taste and odor, and there is less buildup of biofilm and algae in the treatment system. But cost and carbon savings are an even bigger selling point. "It doesn't make sense to transport chemicals when you can generate them yourself at a fraction of the cost and a fraction of the impact," Perea says.

In August, the 77-employee company received $19 million in Series C funding from several venture capital firms, including DCM, Sierra Ventures, and Flywheel Ventures. Water utilities in Santa Fe, New Mexico, and other cities now use MIOX generators. The U.S. Navy also uses them on some of its ships. For some large beverage makers, MIOX equipment is the first disinfection step in their bottling processes. Other industrial and commercial customers are looking to use the system as a component in self-contained water recycling systems to disinfect water before it is reused for, say, landscape maintenance or cooling. "Moving water is so power intensive, such a huge energy user, that it doesn't make sense to continue to treat it one place, pump it, live with losses and degradation, and move it someplace else to dispose of it," says Perea. "If you have a swimming pool, you don't fill it up and dump it out every time that you use it; it just wouldn't make sense."

In a developing country like India, the ability to treat one's own water at home can be a matter of life and death. According to a 2002 World Health Organization study, 782,000 deaths, or 7.5 percent of all deaths in India that year, were caused by diseases related to unclean water. Even in places where municipal tap water is available, quality is unreliable, and the water runs for only part of the day. Much of the population gets drinking water from vendors who sell it from tanker trucks.

Those with limited means often purify water by boiling it or mixing it with iodine tablets. Those who can afford it use home water-purification systems. One of the companies capitalizing on demand for such systems is Eureka Forbes, India's largest manufacturer of home water-purification systems. And since 2006, a Bothell, Washington, company, HaloSource, has played an integral part in Eureka Forbes's effort to make such systems much more affordable.

HaloSource manufactures a sort of turbocharged version of the cartridge that goes in your Brita pitcher at home. But whereas the Brita cartridge merely filters water, thus improving appearance and taste and removing some contaminants, the HaloPure biocidal cartridge -- packed with tiny polystyrene beads that have bromine ions chemically bonded to their surface -- disinfects it, eliminating viruses and bacteria.

Eureka Forbes is using HaloPure cartridges in gravity-fed countertop water purifiers that let a family treat and store up to 6.5 gallons of water at a time. Unlike ultraviolet purifiers, countertop water purifiers don't require electricity to work, and their lower cost -- $40 to $60, versus $200 to $300 -- puts them within reach of India's burgeoning middle class.

HaloSource also manufactures products used for recreational water treatment and storm-water management, as well as antimicrobial coatings for textiles. But the company, which has annual revenue of more than $10 million, sees its biggest opportunities in water purification. HaloSource has partnered with the Brazilian consumer-device maker Everest, which will use HaloPure cartridges in countertop water purifiers, and the Chinese manufacturer Chanitex, which uses them as a component in reverse-osmosis purifiers for homes and businesses. HaloSource now has manufacturing facilities in Bangalore and Shanghai, as well as in Washington State.

In 2007, the company secured $15 million in funding from the Abu Dhabi-based Masdar Clean Tech Fund. "In China and India combined, you've got close to three billion people who will be looking for consumer-product solutions to problems they've dealt with for generations," says Andrew Clews, HaloSource's vice president of marketing and business development. "Access to clean, safe drinking water is certainly one of those issues."

Storing It

It's nice to imagine that water flows magically from a pristine reservoir or spring to your home faucet, but that's simply not the case. As we have seen, it is disinfected and pumped along through a sprawling network of water mains and pipes. The U.S. water network, much of it built in the 1950s and '60s, will require some $277 billion worth of construction, upgrades, and replacement in the next 20 years, according to EPA estimates. With scarcity driving water agencies to fix leaks -- by some estimates, about six billion gallons per day in the U.S. are lost through literal cracks in the system -- companies making high-tech metering and leak-detection technologies are doing well for themselves.

San Rafael, California-based PAX Water Technologies, founded in 2006, is focusing elsewhere, on a relatively overlooked niche in the distribution chain: water storage tanks. Though the numbers are hard to tally, there may be as many as 400,000 storage tanks in use in the U.S. today, according to PAX Water's vice president of marketing, Jason Oppenheimer, who came to the company after nearly a decade of working on water infrastructure projects as a civil engineer.

After being treated, drinking water can spend as long as 100 days in the distribution system before reaching an end user. That's not necessarily a bad thing, but when water sits in a tank too long, it begins to stagnate and settle into layers of different temperatures, as in a lake. In warmer layers at the top, the disinfectants used in treatment are burned off, which increases the potential for contamination. Even when the water is being used, poor tank design can create an uneven distribution of disinfectant and encourage uneven aging, allowing water at the bottom of a tank to be replenished more quickly than water at the top.

The traditional solution is to dump more disinfecting chemicals into the holding system, which has environmental and economic costs and can lead to the formation of chemical byproducts. Water agencies also use energy-intensive "operational cycling" -- basically pumping moving water around from tank to tank -- or even dump some water at the end of the line to allow fresher water to flow into a stagnating system.

The energy-efficient, inexpensive, and elegant solution proposed by PAX Water is called the Lily impeller. Featured in a 2008 design exhibit at New York City's Museum of Modern Art, the Lily -- a spiral propeller whose shape calls to mind a calla lily -- is not just pretty but powerful. When installed on the bottom of a storage tank, the impeller, which weighs less than 70 pounds, can mix up to seven million gallons of water while drawing the same amount of energy as three 100-watt bulbs. Mimicking natural convection currents, the mixer evenly circulates water in the tank, thus reducing or eliminating the need to add disinfectant. Several states require new and retrofitted storage tanks to include some of kind of mixing system -- a potential boon for PAX Water.

The water mixer came to market in 2007 and won the People's Choice Award in the New Product Technology Showcase at the American Water Works Association convention. The same year, PAX Water launched a beta program in California. That helped open up the market, and by mid-2008, the company had about 25 of the $30,000 units installed in municipal storage tanks. Dan Heimel, a water quality specialist in Redwood City, California, which participated in the pilot study and subsequently purchased a mixer for a troublesome water tank, says the system solved the city's thermal stratification problem.

But for Oppenheimer, storage tanks are just the beginning. A floating solar-powered impeller, for example, could improve surface water to be treated for drinking or even provide basic wastewater remediation in an off-grid environment. "We think that our technology has huge potential to help natural remediation of water bodies and all sorts of applications around the world," he says.

Conserving It

As a kid, Mark Sanders hated brushing his teeth with cold water. But watching all that clean, drinkable water run down the drain as it warmed up bugged him. So at the age of 9, he began thinking about ways to capture it and save it for some other purpose -- say, flushing the toilet. Three decades later, during a visit with his wife's family in drought-stricken Oklahoma in 2000, he took up the problem again with a newfound sense of urgency.

On the plane ride home to Louisville, he made a sketch of a water recycling system that would take used water from the bathroom sink, disinfect it, and reroute it to the toilet tank for flushing. Back home, he took the drawing to a friend who did home remodeling, and two weeks later -- with a hot glue gun, some PVC pipe, and a Tupperware container -- the friend had a prototype working in his own home. Sanders, a CPA by trade and at the time the CEO of a large medical practice, patented the system, built a basic website, and began touting the system to anyone he thought might be interested. The result: thousands of hits for the site and affirmation that the interest was out there.

In 2003, Sanders left the medical practice and founded WaterSaver Technologies; he picked up a partner, Tom Reynolds, along the way. After the two spent a couple of years raising money and testing prototypes, the system, dubbed AQUS, made its big-time debut at a water-industry trade show in 2006. Sanders describes the response as "incredible," especially from water companies in the increasingly parched South and Southwest, excited at the prospect of adding another water-saving device to the arsenal of products for which customers already receive rebates.

Indeed, utilities have found that offering customers rebates for things such as low-flow showerheads and toilets and efficient front-loading clothes washers has been a reliable and cost-effective way to curb water use -- and the related cost of energy to supply and treat water and wastewater. (In California in 2005, for example, about 19 percent of electricity use, 30 percent of natural gas consumption, and 88 million gallons of diesel fuel were used to move and treat water.) Thanks to such efforts, total U.S. per capita water use has declined from a high of 1,950 gallons per day in 1977 to 1,480 gallons per day in 2000, according to the Pacific Institute, a nonprofit research group.

The AQUS System -- named one of the 100 best innovations of 2007 by Popular Science magazine -- uses standard plumbing parts and can be installed by a professional plumber in about two hours. Priced at $395 (before rebates), it can save up to 6,000 gallons of water a year in a two-person household. Cutting-edge green architects use AQUS in their home designs, and Sloan Valve -- the world's leading manufacturer of water-efficient plumbing devices -- recently agreed to distribute the product. "People are just now beginning to be aware of the value of water and the dollar savings they can achieve," says Jim Allen, head of Sloan's water-efficiency division. Sanders and Reynolds -- who remain the company's only employees for now -- aim to sell 5,000 to 10,000 units in the first year of the Sloan deal, ramping up to as many as 300,000 after five years. Allen expects the market to swell as more states mandate water-efficient technologies.

That kind of regulation -- coupled with compelling economics -- has already helped Falcon Waterfree Technologies, another pioneer in restroom efficiency. If you are male, and you have recently heeded nature's call at Dodger Stadium, the Hollywood Bowl, the "Bird's Nest" at the Beijing Olympics, or the Taj Mahal, you may be familiar with its product. Falcon, founded in 2000, claims about 90 percent of the worldwide market for water-free urinals and revenue of more than $15 million a year.

Like WaterSaver, Falcon, headquartered in Los Angeles and Grand Rapids, Michigan, piggybacks on the existing sales and distribution networks of established partners in the sanitary equipment industry (it, too, has a partnership with Sloan in the U.S.). "In many respects -- on a significantly smaller scale -- we're really not unlike Intel," says James Krug, Falcon's CEO. "We are the technology that powers the urinals."

Here's how it works: Urinal manufacturers create the "bowl with a hole" -- a porcelain or metal unit designed with a smooth, easy-to-clean surface. A stainless-steel housing provides a perfect seal between the opening and a patented cartridge containing a biodegradable liquid with a specific gravity lighter than water. As soon as urine passes through the cartridge, this lighter liquid covers it and creates an airtight seal, blocking any escaping odor of urine and sewer gases. Unlike with conventional urinals, there is no "flush plume" to spread bacteria and no moving parts that require maintenance; cartridges just need to be replaced every 7,000 uses or so. "Pound for pound, our system is probably the most effective water-conservation device out there," Krug likes to brag. "It doesn't reduce water use by 10, 20, or 30 percent -- it's a 100 percent reduction. Each urinal saves about 40,000 gallons of water a year."

Falcon is backed by some very heavy hitters. Its founder and lead investor is Marc Nathanson, a cable entrepreneur and chairman of Voice of America in the Clinton administration. In 2006, Capricorn Management, an investment group founded by Jeff Skoll, eBay's first president, bought 25 percent of Falcon. And its board of advisers includes Al Gore, Richard Gephardt, and former Los Angeles mayor Richard Riordan.

Acceptance of a waterless urinal was once the challenge. Now the challenge is competition, including new rivals such as Kohler and Zurn. Still, Krug believes that by continuing to invest heavily in R&D, he is keeping ahead of the curve. And competition has its advantages, too. "When everyone else joins in," he says, "you know you've gone from fringe to mainstream."

Here's a fact: According to the American Water Works Association, 58 percent of urban water goes to landscape irrigation. And as much as half of that is lost or wasted because of evaporation, wind, or improper irrigation design, installation, maintenance, and scheduling.

Chris Spain, co-founder and chairman of Petaluma, California-based HydroPoint Data Systems, saw an opportunity in those lost 3.5 billion gallons. After selling a software start-up in 2000, Spain and two partners began plotting their next move. Water was especially attractive. "One, it seemed to be a huge issue that a variety of macro trends were driving to a crisis point," says Spain. "And two, there seemed to be a huge absence of focus, investment, and innovation."

They came across a company in Petaluma that had patented a compelling technology -- a system that used live weather data, rather than preset timers, to tell sprinklers when and how much to water crops, lawns, and commercial landscapes. They acquired the company, raised funds from angel investors, and went to work upgrading the technology. Now known as WeatherTRAK, the system uses data retrieved from the National Oceanic and Atmospheric Administration satellites that gather information from 40,000 weather stations across the country. WeatherTRAK's database and servers can accurately map weather conditions -- wind, humidity, and temperature -- for any given square kilometer in the U.S. Subscribers to the system (commercial users pay $225 per year) need only set a sprinkler controller with some information about the plants and topography of their site, and the system takes over, sending weather updates via satellite to automatically adjust watering needs to real conditions on the ground.

There are some 45 million irrigation controllers nationwide, and according to a survey by the American Water Works Association, most still have the same settings they had when they left the factory. The result: overwatering, often accompanied by runoff into neighboring surface waters. By watering landscapes just enough, the WeatherTRAK system cuts water use up to 59 percent.

Agriculture would seem to be an obvious market. But long-term contracts for purchasing water give farmers extremely low prices, so they generally have little incentive to invest in conservation. So HydroPoint has focused on commercial and institutional clients. Among its 15,000 subscribers: Wal-Mart, Coca-Cola, Google, Lowe's, and the cities of Newport Beach, California, and Charleston, South Carolina. In 2007, those 15,000 customers saved a combined 6.7 billion gallons of water. Lockheed Martin estimates it saves $1 million a year using WeatherTRAK at its two Silicon Valley campuses.

Keeping It Clean

Though drought is one of the more obvious consequences of climate change, water experts are equally worried about the problems caused by extreme storms and flooding that many, if not most, scientists believe are another consequence of global warming. Long underregulated and undermanaged, storm-water runoff has become a concern for its effect on surface and ground water, as well as the additional burden that it puts on already creaky wastewater treatment facilities when it is treated.

Glenn Rink, founder and CEO of Scottsdale, Arizona-based AbTech Industries, first used his Smart Sponges -- made from a synthetic polymer -- in 1997 to clean up oil spills from tankers at sea. In 1999, when he turned his attention to storm water, most regulation was focused on runoff from new construction. "No one was really doing anything about dealing with the billions of gallons of rain that come down on the roads and go into our flood-control devices and are contaminated on the way through," he says. So Rink figured out how to mold the sponge material into different shapes that would fit into street-level storm drains and catch basins, soaking up oil and debris and letting clean water pass through. Later, he developed a way to coat the sponges with an antimicrobial agent so they would disinfect water as well. The next iteration will add the ability to capture heavy metals, herbicides, and pesticides.

Long Beach, California, installed 2,000 AbTech filters in June 2004. Tom Leary, the city's storm-water compliance officer, was primarily concerned with cutting bacterial pollution at beaches. Tests showed the Smart Sponges effectively eliminated bacteria. And in the unusually rainy year following the sponges' installation, they also caught almost 92,000 pounds of trash and debris and 3,600 gallons of waste oil. Leary likes the technology, because unlike UV treatment or mechanical debris catchers, "it's not outrageously expensive, and it's easy to move around. You don't smell them, hear them, or see them."

Today, AbTech has 13,000 installations in 36 states and seven countries, and its 2008 revenue is expected to be 2,000 percent higher than last year's. Seventy percent of its business is with municipal customers. But private developers and commercial entities are increasingly part of the mix. British grocery giant Tesco recently installed an AbTech system to treat runoff at a new 88-acre facility in Riverside, California. Smaller operators are employing the technology to solve niche problems -- in bus depots and fast-food drive-throughs, to cite two examples. Airports, too: The ones in Newark, New Jersey, and New York's Westchester County are among those that have installed AbTech sponges, which typically need to be replaced every two to four years; used sponges are sent to waste-energy plants and burned as fuel.

Road runoff is one problem. But pollutants from other sources are even more insidious. Hundreds of U.S. water utilities, for example, are dealing with high levels of the chemical perchlorate, a rocket-fuel ingredient that has been found in the lower Colorado River, which provides water for more than 15 million people in the Southwest, and in dozens of ground-water wells throughout California. Though the EPA has yet to set a drinking-water standard for perchlorate, Massachusetts and California have, citing health risks to developing fetuses. The gasoline additive MTBE is another troublesome ground-water pollutant, as is nitrate, a common agricultural contaminant, which at high enough levels in water causes serious illness or death in infants.

A new technology being commercialized by a company called Microvi Biotech literally eats these pollutants up.

Eliminating challenging pollutants from water has traditionally involved using mechanical filters or chemicals. Recently, researchers have experimented with using genetically modified organisms to degrade water pollutants. But until now, all these methods have had at least one major drawback: the production of a secondary waste stream of concentrated pollutants or sludge that must be incinerated or otherwise disposed of. In eliminating one kind of pollution, they create another.

Microvi's founder, Fatemeh Shirazi, has developed what she and others believe is a safer, more efficient, and cleaner method -- using so-called biological reactors that house colonies of natural microorganisms "trained" to feed off particular pollutants in water. Inside the reactor, Shirazi explains, microorganisms are "packaged" in materials and configurations that protect them from the die-off common in other treatment methods. Most remarkably, the system is self-cleaning -- when the microbe population reaches a critical stage, it stops growing and cleans house, with living organisms feeding off dead ones. As a result, there is no fouling and buildup inside the reactor and no waste to dispose of -- all that comes out is clean water.

"It's unique," says Michael Dimitriou, president of the consulting firm WaterInnovations. He discovered Shirazi's work when he was asked to review it for a multinational water company. "It does something that's been tried before but no one could do." Shirazi has developed reactors that target about eight specific pollutants, including PCE, a chemical used in dry-cleaning and other industries, MTBE, perchlorate, and nitrates. The novelty of her technology was recognized with a first prize in the water category at the 2007 California Clean Tech Open competition.

Shirazi earned her Ph.D. in environmental engineering from Oklahoma State University, got her first U.S. patent in 2002, and incorporated Microvi in 2004 in Overland Park, Kansas. With $1.8 million in grants from agencies including the National Institutes of Health, she worked to troubleshoot issues with the technology. Now headquartered in Union City, California, the company has 11 employees and is beginning its first large-scale implementations. In addition to working with public water and wastewater facilities to treat emerging pollutants, Shirazi anticipates a market in treating water discharged by various industries -- including the paper industry, which produces wastewater high in toxic chlorinated phenols, and the food and beverage industry, which discharges water high in organic pollutants and nitrate.

"We are in such a big mess today partly because we never thought about the consequences of discharging water that was full of pollutants," says Shirazi. "It never made sense to me that in the name of cleaning up those pollutants, we've kept coming up with solutions that also have a negative impact on the environment. The idea of using biotechnology -- using concepts from nature -- to do this is very appealing."

Adam Bluestein is a Burlington, Vermont-based freelance writer.

Last updated: Oct 1, 2008

ADAM BLUESTEIN

Adam Bluestein is a frequent contributor to Inc., writing about health care, innovation, and new technology. He lives with his wife and two children in Burlington, Vermont.




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