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Planet-Profit Report, reporting on sustainable development in the Western United States.

Cleantech Spotlight: Veritek

A promise of cheaper cleaning of coal impurities

THE COMPANY:Veritek Coal Processing

STORY IN BRIEF:Wondrous in its abundance, horrible in the repercussions from its burning, coal is a pickle. Can the sulfur, mercury, and other pollutants unleashed into the atmosphere from its burning be removed more easily? Veritek proclaims a breakthrough process in which the impurities can be removed prior to burning. It would seem that coal-producers and electrical utilities would be beating a path to the door of Veritek’s Denver-area offices. But the company first has to move the technology from the laboratory into a pilot-scale demonstration. To accomplish that, it seeks $1 million from investors.

THE PROBLEM:The foundation for our modern quality of life, coal provides about half of our electricity, and is the basis for steel-making and as a source fo ingredients used in everything from aspirin ot the kidney dialysis machine. But it has 25 impurities, including sulfur, mercury and arsenic, not including the carbon dioxide produced when it is burned. A recent Harvard Medical School study estimated 2008 emissions of air pollutants cost society up to $187.5 billion in health and other impacts. while mercury cost impacts may have cost up to $29.3 billion. The Clean Air Act requires utilities to take steps to reduce emissions of these impurities. Many impurities can be removed through extremely expensive scrubbers that filter emissions before exhausts are released into the atmosphere.

THE SOLUTION:Veritek founder and chief technology officer Jim Wilkinson, an engineer, had a laboratory experiment that went awry, but with interesting results: a nanotechnology process that uses low-energy electrogmagnetic fields to rearrange the molecular structure of the coal, aggregating the impurities that can then be extracted from the carbon, but without sullying the energy values of the coal. CEO Dale E. Zink (watch an interview) says that scrubbers to clean emissions from a 350-megawatt coal-fired plant would cost $74 million for installation plus $24 million to operate annually, not including disposal of the arsenic-laced coal ash. Veritek claims it can accomplish the same thing for $9.7 million in upfront costs and $4.6 million in annual operations.

BUSINESS PLAN:The company needs to prove the technique in real-world application, starting with a pilot demonstration project involving a specialty coal producer. Veritek then wants to work with coal producers such as Peabody, Arch, and Rio Tinto, at the companies’ mining sites in Wyoming’s Powder River Basin and other locations. The efficacy of Veritek’s process will be tested at Standard Laboratories in Casper, Wyo. “There will be a stampede to our door when the next-generation machine is completed,” says Zink. It has a provisional patent filed, 13 patents in process, and seven professed trade secrets.

MARKET CHALLENGES:Proving the technology – and then scaling up. “After awhile you get skeptical,” said one evaluator at the CREED Finance Accelerator “pitch night” held in Denver in late August. He said he had heard what seemed like several dozen presentations over the years from entrepreneurs who professed new and better ways to process coal.

THE TEAM: Wilkinson, the inventor, had a hand in creating the map-light technology found in cars. Zink had a background in accounting but six years ago joined a firm that gave him a broad exposure to electrical utilities. Others include: Shashi Kanth, a department head in the South Dakota School of Mines and Technology; J. Hessenbruch, a geologist; and Robert Martin, a former ombudsman for the Environmental Protection Agency, plus a chemist, a geologic and a statistician.

FINANCING:Veritek seeks $1 million from investors who can stay with the project for five to seven years. “That’s really when the revenue hits the road,” says Zink.