Omni Water Rides Out Energy Price Drop Focusing on Other Industries

The downturn in the oil and gas market has sent Austin, TX’s Omni Water Solutions back to its roots in developing drinking water.

“Low prices have begat low activity,” says Warren Sumner, the company’s CEO. “That’s been a challenge.”

To adapt, the company has expanded into other industrial applications where water treatment is needed. This week, Omni announced a partnership with Rain for Rent, an 80-year-old water treatment company with locations nationwide.

“We’ve gone back to our roots,” Sumner says. The company originally had set its target on making drinking water from contaminated sources “up to the salinity of seawater,” he explains.

While Omni will continue to seek customers in oil and gas, Sumner says the company has begun to look beyond energy and into projects such as humanitarian initiatives to provide drinking water in Africa. Omni has developed three systems geared toward decontaminating and filtering water.

“We call ourselves Omni Water,” he says. “We’ve always intended to be in multiple industrial markets that need clean water.”

Upon the company’s founding five years ago, the energy market was booming—especially in activities related to fracking. And that meant that Omni executives focused on oil and gas customers. “We’re fortunate that some of the applications that we’ve developed for drinking water is what our oilfield customers needed as well,” Sumner says.

Until energy prices began their slide last year, Omni had an eager set of customers in energy companies that were struggling to obtain the large amounts of water needed to carry out fracking operations. Millions of gallons of water—typically laced with sand and chemicals to make drilling easier—are used to break apart rock and find oil and gas deposits. All of that activity has also generated tons of wastewater containing toxic fracking chemicals—water that would need to be treated before it could be reused in future fracking jobs.

Omni Water isn’t the only company to find opportunity in supplying water to thirsty energy companies. In fact, in Massachusetts, a water innovation cluster has formed. The cluster includes Sourcewater, which was founded last year in Boston and designed as an online exchange–think eBay for water–for owners of water to connect with those wanting to buy it. Potential buyers bid on what they’re willing to pay. Desalitech, also based in the Boston area, says it’s developed a more efficient system for treating wastewater that improves the conventional reverse osmosis technology.

Milwaukee, WI, is also home to a startup accelerator founded by that city’s Water Council.

Looking forward, Sumner says the water market must eventually reconcile its scarcity with its current low price. “Certainly in the next decade, we will wake up to the fact that we’ve underpriced water and are inefficient in the use of water,” he says. “The challenge, as a business, is being in the right place at the right time when markets wake up.”

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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