If necessity is the mother of invention, Justine Chow and Jake Rudulph might be its godparents.

Chow and Rudulph are 2012 Nicholas School graduates who lead a young company called BaseTrace. Operating on a modest budget out of a 200-square-foot lab in Research Triangle Park that doubles as their corporate office, they’re working to develop and market the world’s first synthetic-DNA- based tracer specifically designed to detect if fluids used in a controversial natural gas extraction process called hydraulic fracturing, or fracking, end up in drinking water.

Because the DNA can be synthesized in a near-endless variety of sequences, the tracer could make the fluids used at each individual gas well identifiable, ending disputes about the source of any subsequent contamination in nearby water supplies. Use tracers and other best management practices, he notes. Voluntarily complying with—or exceeding—these safe- guards would demonstrate a company’s commitment to environmental stewardship, and help it address regulatory and community concerns. This could be especially valuable for firms seeking access to drilling leases where there are local barriers to entry due to groundwater concerns.

It’s an ambitious undertaking for a small start-up, but Chow and Rudulph are confident their team can pull it off.

“We’re completing lab tests on a tracer prototype now, and aim to conduct field testing with an industry partner and roll this out commercially before the end of 2013,” says Chow, 25, who has served as BaseTrace’s chief executive officer since she, Rudulph and

three fellow Nicholas School Master of Environmental Management (MEM) students—Adam Rigel, David Roche and Paul-Harvey Weiner—launched the company last summer.

In fracking, large volumes of water, sand and chemicals are injected deep underground into gas wells at high pressure to crack open hydrocarbon-rich layers of shale rock and extract embedded natural gas. Shale gas comprises about 23 percent of natural gas produced in the United States today. The federal Energy Information Administration estimates it will make up almost half of the nation’s gas production by 2035.

As the pace and geographic extent of shale gas production grows, so too have disputes whether fracking fluids and flowback water from well sites are contaminating nearby drinking water supplies.

And that, the BaseTrace team say, is where their tracer comes in.

“By showing if groundwater contamination is, or isn’t, due to fracking fluids from a specific company’s well or wells, our tracer can help protect communities and companies alike,” says Rudulph, 25, BaseTrace’s chief technology officer. “We believe it can be a real game changer in the fracking debate, at a time when more states are moving to legalize the process but state budgets for water monitoring are shrinking.”

Part of the technology’s appeal is its simplicity. Production and drilling companies would simply have to order a tracer containing a unique synthesized DNA sequence and mix it into their fracking fluid before the fluid is pumped down a new gas well.

“A thimble-full of the tracer will remain detectable, even when mixed with millions of gallons of fluid,” says Chow. “By creating a DNA signature for each individual well, we’re essentially creating a fingerprint that allows us to track and identify any contamination from it. We can even track multiple wells at the same time.”

Samples of flowback water extracted out of a well after it’s been fracked would be collected by independent field testing contractors and sent back to BaseTrace for analysis, to verify that the production company has mixed the tracer into its fluid.

Nearby groundwater samples could then be collected and analyzed to determine if the frack fluid is migrating into water supplies.

Drilling and production companies would pay a subscription fee to Base-Trace for the service, along with a fee for each test that’s conducted. Others—including regulatory agencies, environmental NGOs or landowners—could also hire out the testing service “for a very nominal fee,” Chow says.

“We’re not taking sides,” Rudulph emphasizes. “We believe our technology provides an accountability and liability tool that benefits everyone.”

A growing number of states require or strongly encourage companies to

“In states where hydraulic fracturing is already occurring, there’s a lot of enthusiasm for this technology,” Rudulph says.

BaseTrace’s work has been backed by a $20,000 investment from Raleigh-based Cherokee Investment Partners, as well as $10,000 from the Nicholas School’s Environmental Innovation and Entrepreneurship Program and $5,000 from the Duke Startup Challenge.

In 2012, the company was invited to present its technology at the Council for Entrepreneurial Development’s Tech Venture Conference in Research Triangle Park, and at the South by Southwest Eco Conference in Austin, Texas, where it won an Innovation to Inspiration Award recognizing it as “a promising start-up that has the potential to change the world.”

Influential science reporter Andy Revkin of The New York Times is watching with interest, too. He spot- lighted BaseTrace’s DNA-based tracer, along with a nanoparticle-based tracer under development at Rice University, in his widely read blog, “Dot Earth,” this January. Revkin wrote, “... the most promising new concept I’ve seen on the water-pollution front is introducing a well-specific tracer in fracking fluid ... It’s great to see young innovators pushing hard to turn great ideas into businesses.”

Like many great ideas, BaseTrace’s decision to use synthetic DNA for its tracer was born of necessity.

As an MEM student, Chow had pursued her interest in green energy development by founding the Duke Drilling, Environment and Economics Network and doing a summer internship with the Environmental Working Group on landowner issues related to hydraulic fracturing. But when she decided to focus her Masters Project on a comparative analysis of the hydraulic fracturing fluid tracers being used by companies—a topic that seemed to her “to be central to the whole fracking debate”—she ran into an unexpected roadblock.

“There were none,” she recalls. “Not even one. I was stunned.”

Determined to salvage at least part of her Masters Project premise, she scoured the scientific literature for suitable alternatives and eventually zeroed in on a DNA-based hydrology tracer that had been developed in the Netherlands.

“It was being used for a different purpose, but it struck me as promising,” she says.

After graduation, Chow, who has a background in wet lab biology and economic policy, recruited Rudulph, Rigel, Roche and Weiner to launch a start-up and pursue the technology. Each team member brought a different and vital expertise—Rudulph in global information systems (GIS) and systems modeling; Rigel in start-up management; Roche in environmental law; and Weiner in sustainable business operations.

They developed their own DNA tracer and tested it using samples of fracking fluid and flowback water.

The tests confirmed Chow’s hunch that, after some proprietary high-tech tweaking to alter its structure and render it inert, synthetic DNA would make a reliable and resilient base material for a hydraulic fracturing fluid tracer.

Since then, subsequent tests at BaseTrace’s lab in Research Triangle Park’s First Flight Venture Center, an incubator for early-stage startups, have further validated the choice. The tracer, which requires only a few short strands of DNA, is inexpensive to produce and easy to track. It can withstand the extreme underground conditions associated with fracking and drilling, including high temperatures, shear, increased salinity and exposure to high concentrations of heavy metal ions. It also can survive for up to two months when exposed to ultraviolet light levels that simulate those found in surface impoundment ponds where companies typically store flowback water for recycling.

Acing the lab tests, however, is only the first hurdle the BaseTrace team must clear before its hard work starts to pay environmental and economic dividends. It next has to prove the tracer works in the real world. Make-or-break field tests, to be conducted with an industry partner, are slated for later this year.

There’s also the not-so-little matter of money.

Scaling up production and marketing a new product requires capital. Lots of it. Investment pitches, fundraising and grant-writing occupy much of the team’s time these days, and belts are being worn tightly to stretch BaseTrace’s seed money as far as possible. They’ve become adept at finding lab equipment on clearance or, when necessary, making it themselves. “You wouldn’t believe what the catalogs charge for this stuff,” Rudulph says, as he demonstrates a homemade, but fully functional, stir plate he fashioned from salvaged computer parts and other assorted odds and ends for just $6.

By mutual agreement, neither Chow nor Rudulph, who work full-time at the company, nor their three co-founders, who currently work part-time, draws a salary yet.

“But hopefully soon,” Chow says, with a flicker of a smile in Rudulph’s direction. “I have full confidence in our team.”

Rigel, who will graduate with dual MEM and Master of Business Administration 91s in 2013, is BaseTrace’s chief operating officer. He brings real-world business experience, gained through prior work in weather market start-ups and the renewable energy sector, and a summer internship as a business development analyst at industry giant SunEdison.

Roche, who will graduate with dual MEM and Law 91s in 2013, is BaseTrace’s chief regulatory officer. He deals with the regulatory side of things, interpreting fracking legislation state by state. He’s worked as a legal intern at Environmental Defense Fund and Earthjustice, and is editor-in-chief of the Duke Environmental Law and Policy Forum.

Weiner, who graduated in 2012 with dual MEM and Master of Engineering Management 91s, has extensive experience in developing sustainable business operations, grant writing, and identifying new technologies to reduce private sector environmental impacts in a cost-effective manner. He serves as the company’s chief financial officer.

“This time a year ago, none of us—except maybe Justine—imagined we’d be leading a startup to develop a hydraulic fracturing fluid tracer,” says Rudulph, who, in addition to his GIS and systems modeling skills, also has experience in biogeochemistry, climate science and hydrology.

“I was a career-track academic and happy about it,” he says. “But when you have this type of idea popping up, it would be foolish not to jump in and go with it.”