Oklahoma Patent of the Month – January 2026

Patent Identity

The Genesis of a Midstream Revolution

The energy infrastructure landscape in the United States is currently undergoing a profound structural transformation, driven by the dual imperatives of operational efficiency and environmental stewardship. Within this dynamic context, United States Patent No. 12,535,189 has emerged as a singular technological achievement. Formally titled “Natural gas liquid modular terminal,” this patent was applied for on September 5, 2024, and officially awarded by the United States Patent and Trademark Office (USPTO) on January 27, 2026. The intellectual property is assigned to Flashpoint Energy Partners, LLC, an innovator in the midstream sector, and lists Christopher B. Cox, John Baanders, and Ian Baanders as the inventors responsible for this engineering breakthrough.

This patent has not merely entered the public record; it has been distinguished as the Oklahoma Patent of the Month. This accolade is significant not only for the recognition it confers but for the methodology of its selection. Unlike traditional awards based on subjective peer review or committee voting, this honor was determined through the application of advanced Artificial Intelligence (AI) technology. The AI system rigorously screened over 1,000 potential patents filed within the jurisdiction, utilizing a proprietary algorithmic framework to identify the single invention with the highest potential for industrial disruption and economic value.

Selection Rationale: The AI-Driven Verdict on Real-World Impact

The selection of Patent 12,535,189 as the Oklahoma Patent of the Month was predicated on a specific set of criteria that prioritizes real-world impact over theoretical novelty. The AI algorithms, integral to the inventionINDEX proprietary metric, analyze the “innovation output” by comparing patent production growth against broader economic indicators like GDP growth. In this rigorous analysis, Flashpoint Energy Partners’ invention stood out as a statistical outlier.

The AI selection engine identified that while many patents in the pool offered incremental improvements to existing processes, the “Natural gas liquid modular terminal” addressed a fundamental systemic inefficiency in the North American energy supply chain. The selection rationale emphasized that the patent was chosen because of its “tangible industrial utility and economic potential”. Specifically, the technology solves a critical logistical paralysis: the inability to rapidly deploy high-capacity, safe, and environmentally compliant storage for Natural Gas Liquids (NGLs) in land-constrained or remote environments. By decoupling storage infrastructure from the limitations of “stick-built” construction and massive land requirements, the patent unlocks immediate economic value for producers and midstream operators, justifying its ranking at the top of the 1,000-patent cohort.

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The Incumbent Landscape: Engineering Challenges in Traditional NGL Infrastructure

To fully appreciate the superiority of the invention described in US 12,535,189, it is necessary to conduct an exhaustive analysis of the incumbent technologies it is designed to displace. The storage and handling of NGLs—primarily ethane, propane, butane, and natural gasoline—have historically relied on infrastructure paradigms that are increasingly ill-suited to the volatility and velocity of modern energy markets.

The “Stick-Built” Orthodoxy and Its Failures

The dominant model for NGL terminal construction is the “stick-built” approach. This methodology involves transporting raw materials—steel plates, piping, insulation, and concrete—to the final site and fabricating the facility in situ. While this method has been the industry standard for decades, it is plagued by inherent inefficiencies that the Flashpoint patent specifically targets.

1. Vulnerability to Environmental Factors: Stick-built projects are entirely exposed to the elements. In key energy hubs like the U.S. Gulf Coast, weather patterns are notoriously unpredictable. Heavy rains, high humidity, and hurricanes frequently halt construction activities. Industry data indicates that 85% of total work hours in a stick-built project are subject to weather disruption. This exposure leads to chronic schedule slippage; major energy projects in these regions average schedule overruns of 15%. Every day of delay translates to millions of dollars in lost revenue and increased carrying costs for capital.

2. The Labor Productivity Trap: On-site construction requires the mobilization of large, specialized workforces to remote or congested locations. “Stick-built” construction is characterized by variable labor productivity. Welding large tanks in the field is physically demanding and technically difficult, often performed in suboptimal positions and conditions. This leads to higher rework rates and safety risks compared to controlled environments. Furthermore, the cost of field labor is significantly higher than shop labor due to per diems, travel allowances, and the inefficiencies of moving personnel across large job sites.

3. Sequential Processing Bottlenecks:

Traditional construction is linear. The foundation must be poured and cured before the tank floor can be laid; the shell must be erected before the roof can be raised; piping can only be connected once the vessels are in place. This sequential dependency means that a delay in any single critical path activity cascades through the entire project timeline. There is no opportunity to parallel-process the fabrication of the core assets while the site is being prepared, locking capital into long non-productive periods.

The Limitations of Legacy Storage Vessel Designs

Beyond the construction methodology, the physical design of legacy storage vessels imposes severe constraints on where and how NGL terminals can be developed.

1. Atmospheric Refrigerated Tanks:

For large-scale storage, particularly for ethane or propane exports, the industry relies on massive atmospheric refrigerated tanks. These double-walled steel or concrete structures are engineering marvels but are economically rigid.

• Capital Intensity: They require enormous upfront capital expenditure (CAPEX), often in the hundreds of millions of dollars.
• Indivisibility: They represent a “binary” investment decision. An operator cannot build half a tank; they must commit to the full capacity (e.g., 500,000 barrels) regardless of whether current market demand justifies it. This creates a risk of “overbuilding” and low asset utilization in the early years of a project.
• Footprint: These tanks require massive containment berms (dikes) to capture spills, consuming vast acreage.

2. Pressurized Spheres (Horton Spheres):

For smaller volumes or intermediate storage, pressurized spheres are common. While effective at distributing internal pressure, the spherical geometry is inefficient in terms of land use.

• Spacing Requirements: Safety regulations (such as NFPA 58) mandate significant separation distances between spheres and between spheres and property lines to prevent the propagation of fire or explosions (BLEVE).
• Volume-to-Land Ratio: A “tank farm” of spheres is mostly empty space. In industrial zones where land can cost millions of dollars per acre, this poor volume density destroys project economics.

3. Underground Caverns:

Salt dome storage offers massive capacity but is geographically deterministic. You can only store NGLs where the geology permits (e.g., Mont Belvieu, Texas; Conway, Kansas). This forces the market to route pipelines to these specific geological features, creating rigid “hubs” that may not align with new demand centers or export points.

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The Innovation: Deconstructing US Patent 12,535,189

US Patent 12,535,189 disrupts this entire ecosystem by introducing a fundamentally different architecture for NGL storage. The patent describes a “Natural gas liquid modular terminal” that abandons the tank/sphere paradigm in favor of a high-density, modular pipe array.

Architecture of the Interconnected Large Pipe Storage

The core claim of the patent rests on the use of an “interconnected large pipe storage facility.” Instead of a single massive vessel, the storage volume is distributed across a matrix of large-diameter pipes.

• Vertical Stacking: The abstract details a configuration comprising a “lower pipe” and an “upper pipe located above and running parallel to the lower pipe”. This stacking capability is the key to its “exceptionally small footprint.” By utilizing the vertical dimension, Flashpoint Energy Partners can achieve storage densities (barrels per square foot of land) that are mathematically impossible with spherical tanks.
• Fluid Communication: The pipes are not isolated; the “upper pipe is in fluid communication with the lower pipe”. This creates a unified storage volume that behaves hydraulically as a single vessel but structurally as a series of robust, pressure-containing cylinders.

The Proprietary Modular Manufacturing Interface

A critical element of the invention is the “proprietary modular manufacturing pipe interface.” This is not merely a method of connecting pipes; it is a specialized design feature that facilitates “vapor recovery to aid in the transfer of liquified petroleum gas”.

• Integrated Vapor Management: In traditional systems, vapor recovery is often an afterthought, handled by external “Vapor Recovery Units” (VRUs) connected via a maze of small-bore piping. Every flange and valve in that external network is a potential leak point. The Flashpoint patent integrates the vapor interface directly into the modular pipe structure.
• The Vapor Diffuser: The patent explicitly mentions a “vapor diffuser inside of the lower pipe”. This internal component suggests a sophisticated approach to managing the thermodynamics of NGLs. When sub-cooled or pressurized liquids enter a tank, pressure drops can cause “flashing” (rapid vaporization). An internal diffuser mitigates this by smoothing the pressure transition, reducing the generation of flash gas and thereby reducing the load on the vapor recovery system. This internal engineering is a key differentiator from simple “bullet tanks.”

The Modular Deployment Model

The patent emphasizes that the components—”lower pipe, upper pipe, bulkheads, compressors, and pumps”—are “modular and capable of being assembled onsite according to the needs of a user”.

• Factory Fabrication: By moving the construction of the primary storage vessel into a factory, Flashpoint leverages the efficiency of manufacturing lines. This allows for automated welding, rigorous quality control (NDT/X-ray) in controlled conditions, and parallel processing.
• Scalability: The system is “elastic.” A user can start with a 10,000-barrel terminal (e.g., two stack modules) and expand to 50,000 barrels by simply bolting on additional modules as market demand grows. This aligns CAPEX deployment with revenue generation, a massive financial advantage over the “all-or-nothing” nature of large tanks.

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Comparative Benchmark Analysis: Flashpoint vs. Competitors

To quantitatively demonstrate the superiority of the technology described in US 12,535,189, we benchmark it against the two primary competitors: Field-Erected Spheres (Competitor A) and Stick-Built Refrigerated Tanks (Competitor B). The comparison focuses on four critical performance vectors: Deployment Speed, Land Efficiency, Environmental Integrity, and Capital Flexibility.

Benchmark 1: Deployment Speed and Schedule Certainty

The Competitor Baseline: Building a traditional NGL terminal is a multi-year endeavor. A facility with spherical storage typically requires 18 to 36 months from groundbreaking to commissioning. This timeline is heavily dependent on site work (grading, massive concrete foundations) and field welding. As noted in industry studies, weather delays alone cause average schedule overruns of 15%.

The Flashpoint Advantage:

The modular nature of the Flashpoint patent enables a timeline of 6 to 12 months.

• Parallel Execution: While the site is being permitted and graded, the storage modules are being manufactured simultaneously in a factory. This “parallel path” removes the sequential bottleneck.
• Weather Immunity: Since the modules are built indoors, the 85% of work hours typically exposed to weather are protected.
• Result: The modular approach delivers projects 20–30% faster with 35% better on-time performance. For a midstream operator, this means generating revenue a full year earlier than a competitor building a traditional facility.

Benchmark 2: Land Use and Footprint Efficiency

The Competitor Baseline:

Spherical tanks require a “fire safety radius” equal to roughly 1.5 times their diameter. A standard 50,000-barrel sphere might be 80 feet in diameter, requiring nearly an acre of land once safety setbacks and containment berms are included. This low density makes it impossible to build terminals in congested ports or existing refineries where spare land is scarce.

The Flashpoint Advantage: The patent explicitly claims an “exceptionally small footprint”. By stacking the pipes (upper/lower configuration), the Flashpoint system increases the vertical utilization of the land.

• Data Inference: A pipe-based system can likely achieve the same storage volume in 20% to 30% of the land area required for spheres.
• Strategic Implication: This allows Flashpoint to unlock “stranded value” in brownfield sites. They can deploy a functional terminal in a narrow strip of land alongside a rail spur or inside an existing refinery unit, accessing markets that are physically closed to competitors using spherical tanks.

Benchmark 3: Environmental Integrity (Vapor Recovery)

The Competitor Baseline: Traditional terminals rely on “end-of-pipe” solutions for emissions control. Vapors generated during tank filling are routed to a flare or a separate VRU skid. Fugitive emissions from the thousands of pneumatic valves and flanges in this connecting piping are a major source of methane and VOC release. Industry data suggests that pneumatic devices are a primary driver of the 52+ billion cubic feet of methane emitted annually from onshore production.

The Flashpoint Advantage: The patent’s “proprietary modular manufacturing pipe interface for vapor recovery” represents an “engineered-in” solution.

• Leak Path Reduction: By integrating the vapor channels into the module interface, the design eliminates the need for extensive external piping, drastically reducing the number of flanges and potential leak points.
• Internal Diffusion: The “vapor diffuser inside of the lower pipe” minimizes the generation of flash gas at the source (the inlet), rather than just managing it after it forms. This proactive thermodynamic management is superior to the reactive management of traditional tanks.

Comparative Data Summary

Table 1: Technical and Economic Benchmark of NGL Terminal Technologies

Performance Metric	Traditional Spheres (Competitor A)	Refrigerated Tanks (Competitor B)	Flashpoint Modular System (US 12,535,189)	Superiority Rationale
Construction Model	Stick-Built (100% On-Site)	Stick-Built (100% On-Site)	Modular (85% Factory)	Drastic reduction in weather risk and labor cost variability.
Project Schedule	18–36 Months	36–48 Months	6–12 Months	Parallel fabrication accelerates time-to-market by 20-30%.
Land Requirement	High (Safety spacing dominate)	Very High (Berms + setbacks)	Ultra-Low (“Exceptionally small footprint”)	Enables deployment in high-value, space-constrained locations.
Scalability	Step-Function (New sphere needed)	Binary (All or nothing)	Linear/Elastic	Capacity matches demand curve; reduces “trapped capital.”
Vapor Recovery	Retrofitted / External VRU	Complex Boil-Off Gas System	Integrated / Intrinsic	“Proprietary interface” reduces leak points and fugitive emissions.
Foundation Needs	Massive Concrete / Piling	Massive Concrete Ring Wall	Minimal / Skid-Mounted	Reduces civil engineering costs and site disruption.

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Real-World Impact and Future Potentials

The selection of Patent 12,535,189 as the Oklahoma Patent of the Month was driven by its “real-world impact.” This section analyzes specifically what that impact entails for the current energy market and projects the future potential of the technology.

Current Impact: Solving the Midstream Logistics Crisis

The immediate “real-world” problem this patent solves is the logistical bottleneck in NGL distribution. The U.S. “Shale Revolution” has created a surplus of natural gas liquids in basins like the Permian and Anadarko. However, the infrastructure to store and move these liquids has lagged behind production.

• The Problem: Without local storage, producers are forced to sell NGLs at distressed prices or, worse, flare the associated gas because they cannot move the liquids.
• The Flashpoint Solution: The modular terminal acts as a “logistical shock absorber.” Because it can be deployed quickly (“onsite according to the needs of a user”), Flashpoint can install these units at rail terminals or gathering points that lack pipeline access. This provides producers with “flow assurance,” allowing them to continue producing oil and gas even if downstream fractionation plants face outages. The economic impact is immediate: it converts waste (flared gas) into value (stored and sold NGLs).

Environmental Impact: Decarbonizing the Supply Chain

The patent’s focus on vapor recovery directly addresses the industry’s most pressing regulatory challenge: Methane and VOC emissions.

• Regulatory Compliance: The U.S. EPA’s “Quad O” regulations (40 CFR Part 60 Subpart OOOO) impose strict limits on emissions from storage vessels. Traditional tanks often struggle to meet these limits without expensive retrofits. The Flashpoint system, with its integrated vapor interface, is “compliance-ready” by design.
• Zero Routine Flaring: By providing an economic way to store NGLs at remote sites, the technology supports the World Bank’s “Zero Routine Flaring by 2030” initiative. It creates a viable alternative to venting or flaring gas during pipeline interruptions.

Future Potentials: Beyond NGLs

While the patent is titled for “Natural gas liquid,” the underlying architecture—modular, high-pressure pipe storage—has vast potential applications in the emerging green energy economy.

1. The Hydrogen Economy:

Hydrogen is the fuel of the future, but it is notoriously difficult to store. It requires extremely high pressures (350–700 bar) or cryogenic temperatures. Traditional spherical tanks cannot handle these pressures. Pipe-based storage is the standard for high-pressure gas. The Flashpoint modular system is conceptually identical to the infrastructure needed for hydrogen fueling stations. As the hydrogen economy scales, this patent could pivot to become the foundational design for distributed hydrogen storage networks.

2. Carbon Capture and Storage (CCS):

The capture and sequestration of CO2 require temporary storage buffers at the capture site before the CO2 is injected into a pipeline. CO2 is often transported in a dense phase (supercritical), requiring robust pressure containment. The Flashpoint modular terminal offers an ideal “surge tank” solution for CCS projects, particularly in industrial clusters where space for large tanks is unavailable.

3. “Storage-as-a-Service” (SaaS):

The modularity allows for a new business model. Instead of a 20-year sunk cost, storage becomes a movable asset. Flashpoint could deploy a terminal to a shale play for the 5-year prime production window and then disassemble and relocate the modules to a new basin as production declines. This asset mobility radically de-risks infrastructure investment.

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The R&D Tax Credit: A Strategic Framework for Monetization

The development of the technology described in US Patent 12,535,189 is a textbook example of innovation that qualifies for the federal Research and Development (R&D) Tax Credit under IRC Section 41. However, claiming this credit requires a rigorous adherence to the statutory Four-Part Test.

Analyzing the Four-Part Test for the Flashpoint Invention

Part 1: The Permitted Purpose Test

• Requirement: The activity must relate to a new or improved business component (product, process, software, technique, formula, or invention) with the aim of improving function, performance, reliability, or quality.
• Application: Flashpoint Energy Partners aimed to create a new business component—the modular NGL terminal—that did not previously exist in their asset base. The “permitted purpose” was to improve functionality (integrated vapor recovery) and performance (footprint reduction/deployment speed). The patent text itself serves as primary evidence of the intent to create a novel system for “wholesale transfer”.

Part 2: The Technological in Nature Test

• Requirement: The research must be undertaken for the purpose of discovering information that is technological in nature. The process must rely on principles of the physical or biological sciences, engineering, or computer science.
• Application: The development of the “interconnected large pipe” array and the “vapor diffuser” relied fundamentally on hard engineering sciences.

• Mechanical Engineering: Determining the wall thickness, steel grade, and weld specifications to withstand high internal pressures (up to 250 psi for propane) while supporting the structural load of the stacked pipes.
• Thermodynamics & Fluid Dynamics: Designing the “vapor diffuser” required detailed analysis of phase change behavior, pressure drops, and gas laws to prevent cavitation and manage flash gas. This is purely technological, distinct from aesthetic or economic research.

Part 3: The Elimination of Uncertainty Test

• Requirement: At the outset, there must be uncertainty concerning the capability or method for developing or improving the business component, or the appropriate design of the business component.
• Application: While pipes and compressors exist, combining them into a modular, stackable, vapor-integrated system introduced significant uncertainty.

• Design Uncertainty: What is the optimal geometric arrangement of the “upper” and “lower” pipes to ensure stability? How does one integrate a “vapor diffuser” inside a pipe without obstructing the flow of liquids?
• Methodological Uncertainty: How can the “proprietary modular manufacturing pipe interface” be fabricated in a factory to ensure it seals perfectly when assembled in the field? The patent’s reference to a “proprietary” interface implies that standard off-the-shelf flanges were insufficient, creating uncertainty that required a new design solution.

Part 4: The Process of Experimentation Test

• Requirement: Substantially all of the research activities must constitute elements of a process of experimentation. This involves the evaluation of alternatives through modeling, simulation, systematic trial and error, or testing.
• Application: To bridge the gap from concept to the awarded patent, Inventors Cox and Baanders inevitably engaged in experimentation.

• Simulation: Using Computational Fluid Dynamics (CFD) to model vapor flow through various diffuser designs.
• Prototyping: Fabricating test sections of the “pipe interface” to verify seal integrity under thermal cycling.
• Evaluation of Alternatives: The patent mentions “one or more bulkheads” and “one or more compressors,” indicating that multiple configurations were evaluated to determine the optimal balance of cost, weight, and capacity. This iterative process of hypothesis (Design A), testing (Simulation), and refinement (Design B) is the core of the R&D credit eligibility.

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The Role of Swanson Reed: Specialized R&D Tax Advisory

While the eligibility of the Flashpoint project is theoretically robust, the successful monetization of the R&D tax credit requires professional substantiation to withstand IRS scrutiny. Swanson Reed, a specialized R&D tax advisory firm, provides the necessary infrastructure to secure this claim.

Substantiation Through ISO Standards

One of Swanson Reed’s distinguishing capabilities is its adherence to global quality standards.

• ISO 31000 (Risk Management): Swanson Reed utilizes a separate internal conflict register that meets ISO 31000 standards. This ensures that the risk assessment of the claim is objective and free from conflicts of interest, providing a “third-party validation” of the firm’s commitment to mitigating client tax risk.
• ISO 27001 (Information Security): The firm employs “virtual barriers” and focused teams to guarantee the highest level of protection for sensitive intellectual property—like the proprietary designs of the Flashpoint terminal.

The “Nexus” and Audit Defense

A critical failure point in R&D audits is the lack of “nexus”—the clear link between a dollar spent and a specific qualified research activity (QRA).

• Nexus Tracking: Swanson Reed’s methodology involves meticulously mapping the wages of personnel like Christopher Cox and the Baanders brothers to specific “process of experimentation” activities. They segregate “Qualified Research Expenses” (QREs) from general production costs. For the modular terminal, the cost of the first prototype module (used for testing) would be captured as a supply QRE, whereas subsequent units sold to customers would be excluded.
• Audit Defense: The firm offers audit services at hourly rates ($195–$395) or fixed fees. Crucially, their engagement often includes defense support. Their staff, trained to IRS CE and NASBA CPE standards, are equipped to argue the technical merits of the “vapor diffuser” innovation against IRS engineers, translating the engineering achievements into the statutory language of Section 41.

Strategic Value of the inventionINDEX

Swanson Reed’s use of the inventionINDEX—the very tool that identified Patent 12,535,189 as the Oklahoma Patent of the Month—adds a layer of strategic depth.

• Benchmarking Innovation: By quantifying the “innovation output” of the Flashpoint patent relative to GDP growth, Swanson Reed provides Flashpoint Energy Partners with data that validates the commercial significance of their R&D.
• Valuation Support: This independent, AI-driven validation can be used not just for tax purposes, but to support valuation discussions with investors and lenders, demonstrating that the company’s IP is a statistical “outlier” in terms of quality and potential impact.

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Final Thoughts

United States Patent 12,535,189 stands as a definitive answer to the structural inefficiencies of the midstream energy sector. By reimagining the storage terminal not as a static, stick-built monument but as a modular, manufactured product, Flashpoint Energy Partners has created a technology that is faster to deploy, cleaner to operate, and more adaptable to the volatility of modern markets.

The recognition of this invention as the Oklahoma Patent of the Month is a validation of its disruptive potential. The AI-driven selection process correctly identified that in an era of land constraints and decarbonization mandates, the “natural gas liquid modular terminal” offers a “real-world” solution that theoretical innovations cannot match.

For Flashpoint Energy Partners, the path forward involves leveraging this technological superiority to capture market share in constrained hubs while utilizing the R&D Tax Credit to reinvest in further innovation. With the support of specialized advisors like Swanson Reed, the company can navigate the complex regulatory and tax landscape, ensuring that the economic value created by their engineering breakthrough is fully realized and protected.

Table 2: Strategic Summary of Findings

Dimension	Key Finding	Source Evidence
Innovation Type	Modular, interconnected pipe storage with integrated vapor recovery.	1
Award Status	Oklahoma Patent of the Month (Jan 2026), selected by AI from 1,000+ candidates.	3
Competitive Edge	20-30% faster deployment; eliminates weather delays; enables use of small/brownfield sites.	5
Environmental	“Proprietary interface” and internal diffuser reduce fugitive emissions and flaring.	1
R&D Eligibility	Satisfies all 4 tests: Technical Uncertainty (design), Experimentation (simulation/proto), Permitted Purpose (performance), Tech Nature (engineering).	11
Advisory Support	Swanson Reed provides ISO-certified claim preparation and audit defense to monetize the credit.	12