Bulk Water Companies Face Challenges Before Shipments Start From Alaska

S2C Global and its partner are trying to pioneer bulk water shipments, a venture in which many companies have failed.

Photo via CC by Harvery McCool.

By Brett Walton
Circle of Blue

UPDATE FROM JULY 11,2010: S2C Global Systems–one of two companies involved in exporting bulk water in tankers from Sitka, Alaska to India– is facing significant hurdles before exports commence.

In its press release, S2C claimed that water distribution from the hub would begin within six to eight months. However, a ship-to-shore component still needs to be constructed at the Sawmill Cove port in Sitka. Acquiring building permits from the city, state and U.S. Army Corps of Engineers could take as much as six months, said Garry White, director of the Sitka Economic Development Association. White said floating a pipe from the shore to a tanker could start relatively soon, but a permanent structure would take much longer.

S2C’s president Rod Bartlett has declined to provide any information beyond what is given in the company’s press releases.

Despite S2C’s announcement, there are concerns about whether the company and its partner, True Alaska Bottling, have the resources to complete their export plans.

S2C is a small company with five employees, and its stock is considered a penny stock and traded with restrictions on what are known as ‘over the counter’ boards. Penny stocks are loosely defined as companies with small market capitalizations that sell at less than $5 per share on lesser-known markets. These companies are considered riskier investments and have trading restrictions placed on them by the Securities and Exchange Commission.

The company began in 2001 as Sun Vacation Club, but after no activity it changed its name to United Athletes one year later. In 2005 after a reverse merger with S2C Global Systems, a private Canadian business, the new company was incorporated in Nevada and British Columbia, and began to focus on technologies to reduce the cost as well as the carbon footprint of water distribution. S2C owns intellectual property rights to the AquaDuct water vending system, which reduces labor costs in water distribution, but it is unclear if it will play a role in the water hub.

In 2008 the company launched its bulk water division by forming Alaska Resource Management in partnership with True Alaska Bottling, a private company. TAB used to bottle water from Sitka’s Blue Lake under the True Alaska label until 2008, when it couldn’t make lease and utility payments. As a result, the company transferred its assets to its financer, Oregon-based Cove Partners LLC, which has resumed bottling, said plant owner Greg Miller.

TAB has kept its bulk water export contract with Sitka, but it must move 50 million gallons by the end of the year or face a possible contract termination. Meanwhile the Sitka assembly has extended this deadline for TAB two times.

According to its first quarter 2010 SEC filings, S2C estimates that building the water hub will cost $45 million. The company is in discussions with lenders about how to raise the money.

So far S2C has financed most of its business through equity and debt securities and sale of future earnings. According to its 2009 annual filings with the SEC, S2C is operating at a loss of $5.2 million dollars since it became incorporated in 2004. The company earned just $1,848 in revenue during the same time period and had no revenue at all in the 12 months to December 31, 2009. No sales were recorded by Alaska Resource Management either, which lost $100,000 in 2009.

S2C’s executives come from a range of business backgrounds. Its president Rod Bartlett has spent more than 30 years in business and real estate development with stints as chief executive of Resorts Management Unlimited and Quest Oil, while the company’s chief financial officer Joseph F. Dickson has been the chief operating officer for Innovation Fuels and Integrated Defense Systems as well as the director of entrepreneurship at Syracuse University. S2C vice president for business development Shahhid Vohra began his career in the shipping industry in 1975 with Sai Shipping with a head office in Mumbai and developed his own yacht building and sales company Platinum Super Yachts.

All three men are also members of the management team for TransAct Energy, a company focusing on geothermal power projects in the Middle East, South Asia, Brazil and Canada.

Read more about bulk water exports in Alaska and globally on Circle of Blue.

Brett Walton

Brett writes about agriculture, energy, infrastructure, and the politics and economics of water in the United States. He also writes the Federal Water Tap, Circle of Blue’s weekly digest of U.S. government water news. He is the winner of two Society of Environmental Journalists reporting awards, one of the top honors in American environmental journalism: first place for explanatory reporting for a series on septic system pollution in the United States(2016) and third place for beat reporting in a small market (2014). He received the Sierra Club’s Distinguished Service Award in 2018. Brett lives in Seattle, where he hikes the mountains and bakes pies. Contact Brett Walton