Did you know that an estimated 6 billion gallons of water are lost every single day due to leaking pipelines in the U.S.? That adds up to $2.5 trillion spent each year on corroded pipe infrastructure. Luckily, our latest Energy Superhero Doug Jones has just the fix. As the CEO of Global Composite Piping Solutions (GCPS), Doug is working on new ways of manufacturing pipes that are durable, flexible, and lower in maintenance costs.
In this episode, Doug talks about this innovative new piping solution, his company’s crowdfunding campaign, and how GCPS can help accelerate the energy transition by enabling the transport of hydrogen:
- We don’t often think about it, but pipelines carry some of our most important essentials – things like water and fuel. Traditionally, pipes are made out of steel or concrete, which deteriorate over time and are costly to repair and replace. Doug’s company takes the hassle out of pipe maintenance with their thermoplastic, composite-wrapped pipes made for high-pressure fluids.
- Global Composite Piping Solutions is pursuing certification for municipalities and utilities for water applications, as well as for use in the oil and gas industry. When implemented, these new pipes will last twice as long as traditional options without the added cost of maintenance.
- The company is currently undergoing a crowdfunding campaign on Wefunder. Doug was drawn to the platform because it allows everyday individuals to invest in breakthrough tech. The company is also open to receiving venture capital. Raised funds will go toward the pipeline certification process, as well as pipe manufacturing for a project in South America.
- Hydrogen is a main tool in the energy transition, but it can’t be transported using current infrastructure due to the molecule’s small size. GCPS provides a solution, customizing pipes to fit industry needs by using different composite wrappings.
[00:00:00] Peter Perri: Welcome to Energy Superheroes. Today we have Doug Jones and Doug’s company has solved a really big problem. We don’t see them, pipelines are all around us, and they carry water and fuel. And it costs about two and a half trillion dollars a year because the pipes get corrupted. And Doug’s company has come up with a new way of making pipe that doesn’t have that problem.
So it’s a great solution and elegant solution to a really big problem. Welcome to the podcast.
[00:00:31] Doug Jones: Thank you, Peter.
[00:00:33] Peter Perri: So you gotta tell us about how you guys came up with this solution, because I’m sure people have looked for a long time at trying to do pipe and pipelines a better way. How did you guys come up with it?
[00:00:45] Doug Jones: Our founder Terry Schaeffer, has been in the thermoplastic industry for a very long time. He has 41 patents to his name. A lot of them are around valves and fittings couplings, that kind of thing related to the thermoplastic industry for pipelines. He came up with the idea back in 2009.
To do a thermoplastic pipe that has a composite wrap around the pipe to give it strength and rigidity, which would then be able to compete with steel in terms of pressure. H D P pipe has been used in the pipeline industry for a long time, but historically it has not been able to hold any high pressure.
It’s generally used in the market for. Drainage pipelines or sewer pipelines where there’s not a high pressure behind it. Historically, steel concrete have been the two main pipes used for high pressure pipelines in the water industry and the oil and gas industry. Steel is used everywhere for oil and gas in the water industry, it’s steel and P C P, which is a steel pipe that’s wrapped in concrete and has an interior lining with concrete. And the reason they did that on the P C P was steel is highly corrosive. And when you’re pushing water over long distances under high pressure, that friction that’s going through with water, of course water is corrosive to steel creates corrode.
And pipe can corroded from the outside as well as on the inside. So steel pipe was never really a good material to use to transport water. But it was the only type of pipe that could hold the pressure. In the seventies, they came out with P C P pipe, which is the concrete pipe, and that around a lot.
And they thought that might be the solution. So they had the steel. To give it the strength and rigidity and then the concrete to hopefully prevent it from corroding. However concrete is made with water, chemicals, and sand, and over time you bury that in the ground. You run high pressure water through it, it deteriorates as well.
It becomes brittle and it cracks and it splits and it ruptures. And you there, there are pictures out there of huge pipelines that have ruptured in just millions and millions of gallons of water spilled within a couple of days. In the United States alone we have 240,000. Mainline water pipeline ruptures annually and our pipelines leak 6 billion gallons of fresh drinking water every day.
That’s 2.2 trillion gallons of water that we lose in the United States every year. And when you’re out in California and Nevada and Arizona where they’re really struggling for water, that’s a lot of water to be. Was. And it’s all because steel and concrete are not good materials to transport water. Our pipe out of, made out of H D P obviously doesn’t corrode and the way our pipe is made.
We can make our pipe any size diameter that you need under any pressure, virtually any pressure that you need to be able to transport the water. So one of the other benefits that we have is we can create a smaller diameter pipe with a higher pressure that moves the same amount of water as say your concrete pipe would do.
Because we can make a higher pressure rating on it. Our pipe then is virtually maintenance free. It’s cheaper to install. It’s long lasting. We anticipate our pipelines will last at least twice as long as steel concrete. It’s a new technology. We believe it’s revolutionary it’s patented and we think it’s gonna change the way pipelines are built.
[00:04:47] Peter Perri: That’s, that is an amazing description. And so I didn’t realize how much water was being wasted. That’s unbelievable. I know water is a huge in huge shortage in some of the western states. Have you guys been able to get the attention of lawmakers and officials that must recognize this as a big problem?
[00:05:06] Doug Jones: Our challenge right now is, We need to get certification on our pipe for it to be utilized in municipals, municipality, and governmental projects for water, if it’s a private transaction, some kind of private, if it’s an oil and gas project that they’re pumping water in to do, you don’t have to have certification.
With utilities and municipalities, we have to have the certifications they require to purchase our pipe. And we’re working on that now. And same thing with oil and gas, an oil and gas pipeline rupture. is devastating. Losing a lot of water is obviously a big problem, but when you have a crude oil or a natural gas pipeline rupture, that’s significant.
So we’re also working on being able to get certified for oil and natural gas because again, steel. Corrodes regardless, there’s always an issue. There’s a nick or something on the outside of the pipe when it’s being installed, and that will eventually corrode and rust. And even though oil and gas companies spend billions of dollars on their cathartic protection and their corrosion protection, it still happens.
We wanna get certified for both, municipalities, utilities for the water side, as well as for the oil and gas side.
[00:06:31] Peter Perri: Gotcha. I’m curious how the municipalities let their steel pipes corrode so bad. Wouldn’t you think they, they should be replacing ’em at some point?
[00:06:41] Doug Jones: Obviously it’s a manner of matter of cost, right?
Municipalities are, government entities that they get their funding from the government as well as from the fees they charge us to deliver water. And they don’t always have it budgeted, for replacements, which is why we have 240,000. Ruptures a year. A year.
They just they don’t have the funds to maintain it the way it needs to be maintained. And if it’s steel, you really got a weird issue. And on the inside of a pipe, when you’re running water through a steel pipeline, little nodules are created. So you actually rust on the inside. You can’t really, you don’t know that it’s there, but it actually builds.
Two, it can be really thick nodules, bumps in there, which creates friction, which increases the pressure and the diameter of the hole. Obviously, shrinks of the pipe obviously shrinks because of all of this corrosion on the inside, and so you’re still trying to deliver the same amount of water you need to deliver, but you have a smaller hole, so the pressure goes up and then that’s when the ruptures happen.
So they don’t really have a way of. Monitoring it appropriately. They don’t have the funds to do it, so it’s just a, when it happens they try and repair it, and that’s basically what they do.
[00:08:05] Peter Perri: That’s interesting. Are there any technologies that you know of that allow for the monitoring of these pipes that you could install in the new pipes?
That you’d have to think with all the sensors. Hardware, technology and internet communications that we have available, they should be able
[00:08:21] Doug Jones: to monitor. They do that in oil and gas pipelines. So they run what they call a pig, a smart pig through the pipelines to check for anomalies, where it’s, there could be thinness in the pipe or corrosion or rust.
And they do that regularly again, because when one of those ruptures, it’s a significant. In the water industry. I’m sure they have technologies available. I just don’t know whether the municipality, they probably know when they have a pressure loss, which they know it’s leaking somewhere.
But I don’t think that they I don’t know for sure, but I don’t know what they do to monitor it. I think they just basically wait until they have to do. .
[00:09:02] Peter Perri: Yeah. And then I’m sure it’s more costly if you wait until you have to do something. Did do you know if in the Inflation reduction Act supposed to be an infrastructure bill, did they put aside any money for trying to help some of these municipalities fix their water problem?
It sounds like a big problem.
[00:09:20] Doug Jones: Yeah, I think I know in the inflation reduction act that there are provisions for infrastructure and pipeline infrastructure. I don’t know what it’s specifically earmarked for, but I also know one of the big things that our pipe does too is reduce emissions. So if you think about making steel.
Steel consumes a lot of energy, and releases a lot of emissions to make carbon fiber steel. Think of the smelting machines and everything that goes into making a piece of steel pipe. So we know the Inflation reduction Act addresses reducing emissions. Our pipe produces very little emissions.
When we make our pipe, we don’t have big smelting machines. We melt. H d p pellets, but it doesn’t consume a lot of power. It doesn’t obviously release any emissions. And when we make our pipe we have virtually no waste. Each segment of pipe is made on our patented design manufacturing equipment that is also mobile, so we can move our equip.
to the job site or close to the job site where the project is and manufacture the pipe on site or near site. That reduces tremendous amount of truckloads. So if you think about a large diameter pipe being hauled from the manufacturing facility, to the job site. You could have potentially thousands and thousands of trucks, flatbed trailers, hauling the pipe, specifically large diameter pipes.
Some of these large diameter pipes. You can only get, two pieces of pipe on the trailer. So you could have thousands of trucks crossing the country to deliver the pipe. To make the pipeline with us. We would set up right there at the. And manufacture the pipe right on site, and you don’t have all that emissions.
And there’s a lot of, obviously transportation safety with not having as many flatbed trucks on the road. So we bring a lot of value in the emissions reduction as well as safety with our mobile manufacturing. And I know that’s addressed in the IRA is what we call it.
[00:11:37] Peter Perri: Wow. So that’s a big reduction in carbon footprint compared with existing solutions because you’re saving on the steel and you’re also saving on the CO2 emissions from the transport
[00:11:48] Doug Jones: costs.
Yes. It’s a significant savings. Yeah.
[00:11:52] Peter Perri: I’m curious, some of these big pipeline companies, I know they have emissions reductions, goals, GHG goals, all that. Seems like this would be a good solution if one of the bigger pipeline companies could deploy it.
[00:12:06] Doug Jones: Yeah, and again, I think once we have our certifications that we need to be able to sell into the US market it will be a game changer across all the industries because it will, provide all the benefits that we’ve described.
There may be legislation that says, Hey, we gotta, there, there’s no reason to continue to use steel and concrete pipe, which are environmentally not good as they corrode in the ground and as they rupture. So we anticipate once we’re certified that we will have lots of the pipeline companies, both oil and gas and the utilities that will want.
We do have a big project that we’re working on in South America. It’s a large diameter pipeline water pipeline. It’s a private deal, which is why we can do it without certification. And it’s a big project and I think once we launch that and get that going and we can bring people down to see the project and how we make the pipe and.
You know how it works. It’s gonna be it’ll change a lot of people’s opinions on HDPE pipe.
[00:13:12] Peter Perri: Sure. How long do you think it’ll be before you get certified and when is this project in South America supposed to be done?
[00:13:18] Doug Jones: We hope that the South American project kicks off next year. It’s, they’ve been working on the project for about a decade.
And I can’t go into a lot of details cause we have a ca with them, but it’s a very large agricultural development and they’ve spent, like I said, about a decade working on it. It’s private equity backed. And pretty much we think we’ve we’re down to the stage of them determining the right of way and how they’re going to lay the pipe, where it’s gonna go from, we know where the water source is, we know where the development is.
We’ve just gotta figure out, they have to figure out where they’re going to lay the pipe. And there’s, you gotta figure out how to pump the water and all of that. And so we’ve been working with them on that. In terms of the certification, it takes about a year from the time you start your certification process to get certified.
There’s a lot of procedures that go into that, a lot of different testing requirements that goes into that. And we’re hoping again, to start that process sometime next. .
[00:14:20] Peter Perri: Gotcha. And I’m sure it’s very costly. Is it very expensive to do that
[00:14:24] Doug Jones: certification? No, not really. Basically you make a lot of test pipe and then you go through different phases of how you test it under pressure.
You want to know where the rupture point is. So you will pressurize, you put it underwater, you pressurize it up until it ruptures, so you know what kind of pressure it’ll. And then you have to do it where you run it under high pressure for a long period of time so that they several thousands of hours, to make sure it doesn’t ever lose its strength during that timeframe.
It’s not a particularly expensive process, it’s just a very time consuming process because you can’t just go in and say, Hey it’ll go up to 1500 psi before it, it ruptures and. That certifies it, it has to be also done over a long period
[00:15:14] Peter Perri: of time. Gotcha. No, that makes sense. You, I noticed from your website, you guys are raising money right now?
[00:15:22] Doug Jones: Yes, we are. Yeah. We we have a crowdfunding campaign that we’re working on through we funder and Trying to raise funds for a couple of reasons. One, primarily is to go to the certification process. We want to get the equipment to start making the test pipe, to do the certification prior to launching the project in South America.
That’s our ideal situation is to be able to do that. And then once we make the test pipe and start the testing, we can ship the equipment down to South America for that project when it launches. Yeah, we’re trying to raise the capital to do that. And we think that once we do that, it’s gonna, it will really change the industry
[00:16:03] Peter Perri: no.
Sounds great. How can they find your campaign on Wefunder?
[00:16:08] Doug Jones: You can just do a search on Wefunder for g p s and it’ll pull up our page and there’s a lot of information on there, some great video. Of ruptures big rupture down in California, near the UCLA campus. We got a great video on that where it ruptured and flooded the streets and parking garages and all of that.
There’s a lot of detail on the we funder of our
[00:16:31] Peter Perri: technology there. No, that’s great. On Wefunder, what made you decide to go with the crowd funding? We hear a lot of folks do crowdfund. , how’s that experience been? Would you consider it to be a success so far? And how did you decide to go that route versus the more traditional institutional route, which I know you’re
[00:16:53] Doug Jones: familiar with.
Yes. Yeah, you’re right. As I was an investment banker previously for a long time, so I’ve done the traditional route of raising capital through venture capitalists and private equity groups and they’re obviously great sources of capital. And when I heard about the crowdfunding platform, I found it very interesting.
I, I was not familiar with it. And so I thought, wow, this is a great opportunity. Unaccredited investors. So just your everyday normal person who wants to invest in a transaction or a company. Historically, they were never allowed to. The only way a company like gcps could raise funds was the institutional route that you mentioned with VCs and private equity.
Or we could do a RegD offering as it’s described, which is for accredited investors. So you had to meet. Requirements by the s e c to be determined to be an accredited investor. And then you could raise capital from accredited investors, which are generally a higher net worth individual. But your regular investor never had access to a transaction like ours until very recently when the SCC changed the rules and allowed companies like ours to to file an offering.
Individuals to invest in a company like ours. And I thought that was a fantastic outcome to allow people that would otherwise never have a opportunity to invest in a company like ours to be able to go in and invest in it. And hopefully you get to, everybody hears about these returns.
You hear from venture capital and private equity. These guys make, 10, 20, 50, a hundred times their money. Why do they get all of that? And why don’t the regular investors have that opportunity With crowdfunding, they do. So now, if you invest in our company and we perform and hopefully do as well as we expect we will.
Those opportunities are available to individual investors to get those huge home run returns.
[00:18:58] Peter Perri: Yeah, it’s an amazing democratization of everything. And this is just another area. Where the average person has access to things that they didn’t used to have access to. In the days of before the internet, it was hard to get access to information.
So now you have access to information and you have access to investments that you didn’t have before. It’s very interesting. Has the we funder experience been good for.
[00:19:23] Doug Jones: It’s been okay. It hasn’t gone as well as we had hoped. And I don’t know, I don’t understand why don’t really have any feedback from investors or individuals or we funder, they don’t really, they don’t really provide any feedback.
There’s, I’ve seen some companies go on Wefunder and max out at 5 million. You can max out at five. Under a traditional crowdfunding offering. And they maxed out. And I look at the company and I think, wow. That’s amazing. They raised the money because it’s, to me, I don’t see the upside like I see in our company.
I think our company is going to the problem that we’re solving is. The water crisis around the world is unbelievable. It’s a multi-trillion dollar industry and the water resources have been depleting for a long time. So when you look at countries like Saudi Arabia, all of their water comes from desal plants.
And I think in the US we’re gonna start having, there’s been lots of proposals for desalination plants to. Water to communities like in California, Nevada, Arizona, where they’re desperate now. But when you look at building a desal plant, you gotta look long term. And if you’ve gotta build a desal plant and pump the water through a steel pipe, you’re gonna have problems in about five to seven to 10 years where you’re gonna have to address the pipe and you’re gonna be tearing up segments and putting in new pipe, and you’re shutting down, production and so on.
So with our pipe, I think it makes a desal plant significantly more viable than using steel or concrete that they’re looking at now. I just think that our opportunity is going to be tremendous. And I’m just surprised honestly, that we haven’t gotten the traction on we under we
[00:21:10] Peter Perri: thought we would understand.
It’s a, we’re in a technical industry, so sometimes it’s hard to get people’s attention. We hear that a lot in the energy sector. If it’s something like a Tesla, it’s a car, people get it, but pipes are invisible. They’re under the ground and people don’t see ’em. A lot of. But if you Google the US Pipeline network, you can see how many pipelines there are that bring us everything and they bring us the essentials.
So I like things that are essential, like fuel and water because you need it. When you said desal, just for the audience, I know what it is, but you mean desalinization. And so people would take, for example, a prime moving equipment, like a gas turbine, and then use it to power a process to take salt water and make it into fresh water.
Is that right?
[00:22:00] Doug Jones: Yeah, that’s correct. Yeah. Basically a desalination plan is set up on a coastline and they pull water from the. The ocean, or, in, in Saudi from the the big seas around the country, they’ll pull the water in, treat it, take the salt water, and treat it and make it fresh, drinking water.
And then they pipe it to communities. So all of Saudi Arabia’s water. For all of their residents, all comes from desalination plants. We’re not as familiar with them here in the US because we have large reservoirs of water that we tap into underground. But those are being depleted pretty rapidly.
And lake Mead for example, is, if you see pictures of that it’s devastating how low that water is. And there are areas in Arizona and Nevada. California where they basically told them you’re not getting water anymore. It’s not a there’s one place I read about that I think in Arizona, that they literally have shut ’em off from water.
You’re not getting any water and it’s not to not water your lawn, it’s to run through your faucets. You’re not getting any water. It’s a huge problem and it’s in the US it’s going to become an even more significant problem because we have depleted our resources pretty dramatically.
[00:23:27] Peter Perri: huge problem. And you go out there to the Middle East, Saudi Arabia, Dubai, and Qatar, where the World Cup is right now. Of course, they use a lot of desalinization plants because they’re effectively in the middle of the desert, so they have to be. Get water from somewhere. And so they do a lot of those plants and I’ve been out there and the plants are five or 10 times the size of a power plant over here.
They’re enormous. Those plants. Your point is a good one though. If you’re, if you make the water fresh and the pipelines rupture and that’s a big part of your cost, that’s a problem. And then the plant doesn’t pencil out economically anymore, cuz you’ve gotta factor in replacing the pipeline. Have you talked to parties in the, in that part of the world about your solution?
I imagine it would be interesting.
[00:24:16] Doug Jones: I’m glad you brought that up, . When we first received our patents we had one of our advisory board members recommend that we apply for the Vision 2030 program that the Crown Prince of Saudi Arabia had instituted to bring new technologies into the kingdom. He wanted to diversify away from crude oil, which is their main driver of their economy, and bring in new technologies to bring up their middle class to diversify away from crude oil being their sole economic.
Driver, and it was a really brilliant idea. And the Saudi government, if you went through the hoops and you were chosen to go through the process and you graduated as they called it, which mentioned went through all the diligence and were approved, then the Saudi Industrial Development Fund would fund you to come.
And set up operations over there. So in 2018 we started that process. We were one of about there were about 750 companies that applied for the program around the globe. They chose about 20 of us. We were one of the 20 that were selected to go through the process. We went through rigorous due diligence with Aramco, which is the oil company in Saudi and sabic, which is the chemical company.
Over there that makes resin hdp resin. And then at Kearney was the the third party consulting firm. So we went through over a year of due diligence with those guys on our technology. They all It gave us passing marks. I would say. They all wrote letters of recommendation to the Saudi Industrial Development Fund that they approved us and that we should move forward with the financing.
About that time covid hit and shut everything down for several months. We continued to talk to the S I D F, but wasn’t a lot of progress being made during covid and then crude oil prices during that time. Really crater. And it was a two-prong effect. S I D F wasn’t doing any work.
And then when the crude oil prices dropped, the funding, I believe the funding behind doing all of these, bringing these technologies to the kingdom evaporated. And they ended up not funding any of the 20 companies. It was a big disappointment. We spent about two and a half years on that to bring our technology over there and it didn’t work out.
Now I know Aramco was very positive. SABIC was very positive. And so we may end up going back over there and if they develop another big desal plant, it may be a good opportunity for us, but we’re not actively pursuing anything over
[00:27:06] Peter Perri: there. . Gotcha. Wow. That’s a story. And those, and I’ll tell you now, the crude oil prices are back up again.
They ought to be coming back and revisiting that. Cause it sounds like it was a great opportunity, but it was just the bad timing. Cause I remember crude oil prices at one point on the futures exchange were negative. My fiance said buy some. And I said, okay, I will. And I bought some and then it went up a little bit and I sold it and I said I did really good.
And she, she reminds me often. That I gave up a lot of upside by not holding because boy, the crude oil price really recovered a lot. And it’s still quite high. I think it’s about 20% off its peak now, but it’s still high.
[00:27:49] Doug Jones: Yeah during the pandemic and with all the regulation changes and everything that went in drilling, slowed down tremendously.
But our demand has gone back up supply and demand. We need the crude oil, we need the gasoline, but you’ve got to, you have to be drilling two years prior to meet the demand of today, and they weren’t drilling during the pandemic. So it’ll balance out eventually and gas prices will come back down and crude oil prices will stabilize.
But the oil and gas industry, which is where my back. Was in investment banking. It goes through cycles all the time. It’s up and down all the time. So it, it’ll stabilize, it’ll come back down. It’ll go back up. But your point on going back to Saudi is a great one. I I think after we do this project in South America, I think we’ll probably be targeting the Middle East as well as the US a lot more cuz there is significant opportunity as well as India.
India for the water market. It’s unbelievable how poor their infrastructure is. They have cities of 8 million people, the size of New York and India that have no fresh drinking. Being delivered to them. It’s really unbelievable and they need pipelines desperately to bring water to these communities.
That’ll be another target market for us.
[00:29:16] Peter Perri: That makes a lot of sense. There’s an article in the Wall Street Journal a couple weeks ago about the rapid growth in India. I didn’t realize they’re gonna surpass China as being the largest country in the world in terms of population, and it seems like they’re entering a secular bull market.
I’m a huge fan of India as a investment play. It just aligns with how I feel about democracy, freedom, and capitalism. And you go over to India and it’s. And you go to China and everything’s clean and perfect, but capitalism is messy. And I think there’s, you’re seeing some incredible innovations come out of India as a result of it just being that type of an innovative country.
And it seems like it’s a place that’s ti whose time has now come and will probably benefit over the next 10 or 20 years from a big growth.
[00:30:05] Doug Jones: Yeah, I agree. And like I said, in order for that to happen, they’re gonna have to really develop their infrastructure, pipeline infrastructure as well as their roadways and all of that.
And I think that it, as people start investing in that, like you said, it’s gonna be the largest country. I thought it had already passed China, but it’s gotta be getting close. And there will be a lot of investment into the. It just has to happen. We think that it’s gonna be a very big market for our pipe as well.
[00:30:37] Peter Perri: No, makes a lot of sense. So would you guys entertain offers from venture capitalists or, and, or, I think maybe you’re a little early stage for private equity, but for from institutional venture capitalists at this point, are you purely on the crowdfunding slash self-funding train at this.
[00:30:55] Doug Jones: we would be interested in visiting with venture capital or high net worth individuals that that like our story and understand our technology. And would like to participate. The crowd funding was a great way to allow individuals to come in, but we’re at the stage where I would like to bring in the capital to launch our testing that we want to do, so that we can get certified and we’re gonna need a bigger SL of capital to do that.
Venture capital or high net worth individuals that are interested, we would be very interested in visiting.
[00:31:27] Peter Perri: That makes a lot of sense. And there’s more and more venture capital funds now that are focused on energy transition. And we’re of course seeing that in our investment banking practice.
There’s just so many more funds than there used to be. And there’s also so much talent going from the tech world to the energy world, and this certainly fits within that. Even though it isn’t specifically that you’re making energy, you’re enabling energy and you’re enabling the energy transit. And water, of course, is a huge, big part of that.
So I see this as an important enabling technology for all the things that people want to do when it comes to energy transition. I wanted to ask you about new fuels. So we get involved a lot in next generation fuels like hydrogen and biofuels and those kind of things. Does your pipe play any sort of role in enabling the midstream component of that even co.
Is something that they’re building pipelines for now?
[00:32:21] Doug Jones: Yeah, great question and I’m glad you asked that cuz it reminded me to point out that one of the other great benefits of our technology is we can customize our pipe to the specific project so we can use different resins to address the issue.
We can use different composite. Wrapping to address the specific project. We don’t make pipe and say, Hey, here’s our pipe, come buy it. We got 42, 48, inch pipe, like the steel manufacturer. They make to one spec and that’s it. And if it’s more than you need, then you’re overpaying.
I don’t if I just need a 500 psi pipe, but I’m buying a steel pipe that’s rated to seven 50, I’m over. We make our pipe specific to the project. So to your point, yes, we can make a pipe that would transport hydrogen. We would use a different resin to do that than we would for a water pipeline.
Same with co2. So hydrogen is a very small molecule. You’ve gotta have a higher density plastic when you make that. And we can customize it to address co2, to address hydrogen, to address biofuels, to address diesel, or whatever’s flowing through it. We’re our, the way we make our pipe is specific, it’s project based and it’s all customized.
So you need a 500 psi pipe, we’re gonna make it to spec out for 500 psi, and you’re not gonna pay for a 750 psi pipe. And so yes we’re able to address any market, any product that is going to flow through a pipeline, we can address it.
[00:34:05] Peter Perri: Yeah, that’s unbelievable. I people call hydrogen the devil’s molecule.
I’ve heard that. And of course there’s a lot of naysayers. I’m a big believer in the hydrogen revolution. I have been for a long time. There’s a lot of naysayers online that say, hydrogen’s great, but you can’t. Because it’s such a small mo cure, it won’t work in the pipelines. And of course you got utilities up in Canada, gas utilities that are talking about blending hydrogen into their existing pipelines.
And of course there’s questions about what percentage can you blend and so on. Cuz it’s a big play for energy transition. So if you guys are able to enable that midstream, the movement of hydrogen, the movement of co2, those are. Enormous commodities in the energy transition. So I think you guys are a big enabler of that.
[00:34:53] Doug Jones: Yeah, I agree. And It’s not a huge focus on it for us right now because of the markets of water and crude oil are a lot larger, specifically water. But yes we’re very aware of all of the different opportunities that are out there. And hydrogen there is, we know of a big project in South America that we’ve been talking to.
And so we’re very aware of the hydrogen specifically. Opportunities.
[00:35:20] Peter Perri: Yeah, it’s exciting. And we’re looking at different solutions. For example, hydrogen liquifaction one of our clients is in that market and it’s very exciting because if you don’t have a way to move that, it can be a zero emissions fuel, which is great, but if you can’t get it to where it has to go, it’s not gonna be able to compete.
So the midstream we actually see as a bigger problem then the actual generation of it, which is, it’s a problem in and of itself. But Midstreams a huge area for next generation fuels.
[00:35:52] Doug Jones: Yeah. Yeah, I agree with you.
[00:35:54] Peter Perri: Yeah, it’s good stuff. So we didn’t talk at all about your background. We, we didn’t, you took the exact opposite route that I did.
So I was an entrepreneur. Now I’m an investment. You were an investment banker and now you’re running a company. So tell me about your background and how you ended up here.
[00:36:11] Doug Jones: Yeah. Okay. So yeah, I was previously in the investment banking field advising primarily oil and gas companies on IPOs, mergers and acquisitions capital raising, like we’ve talked about.
And did that. Almost 20 years. And then actually joined one of my clients, which was a pipeline construction, maintenance, testing, and integrity company that built pipelines for the oil and gas industry to transport crude oil and natural gas. And we did all the maintenance, we did all the testing and integrity services that we talked about and did the construction.
And so I became very familiar with the pipeline industry. I was the CFO of the company there. We grew the company from about a hundred million in revenue to about 750 million in revenue in about two and a half years. And then we did a a private equity transaction where we sold a majority interest to to JP Morgan’s in-house private equity.
And that was back in 2013. I stayed there for about a year after the transaction and then left and went and back into what I would call structured finance to provide financing to oil and gas producers and created a a finance group within a company called Munich Re, which is the largest reinsurance company in the world.
And we were doing transactions to help fund oil and gas. And then this opportunity came along with global Composite Piping Solutions. I joined right in the middle of the vision 2030 program that they were going through, and really to help them through the process of all the diligence all the diligence with the S I D F and I invested in the.
And and Terry, our founder, is a very strong technical person, but uh, he recognized he needed help leading the company. And so I joined really to help lead the company to the next phase.
[00:38:17] Peter Perri: Oh, that’s great. And you’ve got the background for it, and you’ve already had a successful exit leading a company.
So that, I would say that’s a huge. We see all types of entrepreneurs, but if they’ve had an exit before, I feel like that’s a good sign that they can do it again.
[00:38:36] Doug Jones: Yeah. Yeah. I agree. And I’d been advising on transactions like that for a long time and learned a lot through that. How to take the company from, from a family owned business general.
To being an institutional business. So when I joined the Pipeline construction company, I brought all of that expertise in and really changed the mindset of the company to become more of a, what I always called a privately held public companies. So we created mdna, we wrote reports to our banks.
We provided full. Detailed financial statements to the banks. And by the time we were ready to go to market to do a private equity transaction we were very far ahead of what a traditional private company would do to go to market to try and raise capital. And so we were very well received in the market when we went to, to do our.
[00:39:39] Peter Perri: No, that makes sense. Having that background in finance is really helpful for running a company. There’s no doubt about it. Doug we’ve talked about a lot of subjects. Is there anything I missed that you wanna get out to the audience? And is there anything that you’d like to pitch people on in terms of reaching out and contacting you?
Go for it and tell our audience what you’d like ‘
[00:39:59] Doug Jones: em. Yeah. Okay. Thank you. We’ve touched on a lot of it. I think we have a honestly a what we call a disruptive technology that’s been used a lot that term in the industry. We really have something that is a game changer for the pipeline industry.
I We know, everyone knows in the industry the problems with steel and concrete. Everyone who buys pipe, who installs pipe, they know what the problems are and there’s never been, for decades an alternative. And a traditional H D P would’ve been a great alternative, but it couldn’t hold pressure. Our pipe does that now.
We have all the benefits of steel in terms of. We have all the benefits of H D P E, which is non-corrosive. It’s flexible. It works well in, areas of that are earthquake prone, for example. We never touched on that, but when you install a pipe in California and there’s an earthquake if it’s steel, and it moves, you’re gonna have cracks.
And it could be a stress crack that eventually turns into a rupture. Obviously our pipe is flexible and would move with it and not have any issues. The customization, which we talked about, I think is huge for our clients to be able to make a pipe specifically for that project. And the mobile manufacturing also is significant to be able to, we can pack up our equipment and go anywhere in the world and set.
And make the pipe on site. And you just can’t do that with anything else. You can’t take a steel manufacturing facility and go make steel pipe on site. So we have huge competitive advantages over all those companies. We’re much cheaper to install. We last longer. And the other thing I like to point out is, hey, we bring.
Great benefits to local economies. So when we go set up in an area to manufacture the pipe, we’re gonna bring our expertise and we’re gonna bring, oversight and supervision. But we’re gonna hire local people during the project. And if we stay after the project, we’re gonna be employing a lot of people and in the US.
It’s gonna be us. It’s a us. Making us pipe. We’re not shipping in Chinese steel pipe to make our pipelines. And that’s a big, if you’re if you believe in us made that’s a huge benefit for our pipe and what we’re doing. And so I just think that. The upside of our company, the market potential is tremendous both in oil and gas and water and as you mentioned, other products that could flow through pipelines.
We just need to get launched. To be honest. We need to get our certification process. And I believe once we’re certified it’s really gonna be a game changer for the industry. We know, because we’ve talked to a lot of people I know because I was in the in, I’ve been in the industry for a long time.
I know what the problems are and we believe our pipe is gonna solve all the problems of corrosion and ruptures and leaking pipes that are costing, billions of dollars a year to the different industries. That’s my pitch.
[00:43:17] Peter Perri: Doug, that was a great pitch and I’m a believer in it.
Cuz we, we see it with so many of the companies we’re talking to too in the industry that are doing things like hydrogen, but also around water. And then also the big mega trend that we did cover was the onshoring of manufacturing. So that’s a huge area that I hadn’t thought of, that it’s all made right here in the USA.
Pipelines are important also from a national security standpoint as we’ve seen. So the fact that you’re able to make it right here and have complete control over the supply chain is a big deal. So Doug, I’m really pleased to have been to have you on the show today. It’s been great.
This has been Energy Superhero and we’ve been with Doug Jones from Global Composite Piping Solutions and they have solution for a really, Problem. So you guys should make sure, Google them, reach out and get in touch both venture capitalists that might be interested in the company as well as individuals that might want to take a look at the crowd funding opportunity.
And of course, full disclaimer, we’re not making any endorsements, but this is a phenomenal company and definitely worth a second look. Thanks for being on Doug.
[00:44:29] Doug Jones: Yeah, thank you, Peter.
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