Mcilvaine Insights


No. 204   July 19, 2022


·        Supreme Court CO2 Decision is Not Radical

·        SCR Could be Widely Deployed with The New EPA GNP

·        $750 Billion Gas and Liquid Control and Treat Market

·        Insights from Recent McIlvaine Feature Articles

Supreme Court CO2 Decision is Not Radical

Congress, not EPA chose the 188 air toxics to regulate. It delegates the actual numbers to EPA but only within a framework which Congress sets.

People are citing the CO2 decision by the Supreme Court along with Roe vs. Wade as examples of radicalization.

The abortion decision reversed 50 years of precedent. The CO2 decision was in line with the authority Congress has always exercised. McIlvaine was contracted by EPA  to testify before two senate sub committees prior to the passage of the 1990 Clean Air Act revision. EPA had submitted copious research, and everyone expected a requirement for scrubbers at all plants as per the Mitchell plan.

All of this effort was suddenly obsolesced by the concept of a nationwide trading scheme for SO2, The authority of Congress to make this decision was not disputed but the wisdom certainly was.

Time will tell but at this point there is no evidence that the Supreme Court would or could deprive Congress of this legislative power. (A two page analysis on this subject appeared in the Utility E Alert last week)


SCR Could be Widely Deployed With The New EPA GNP


The Good Neighbor Plan (GNP) is the latest version of the U.S. federal plan to clean up air pollution that travels from one state to another, as required by the Clean Air Act (CAA). It is an expansion of its predecessor, the Cross-State Air Pollution Rule (CSAPR).

With reference to the previous article and worries that the Supreme Court could cripple CAA legislation, the fact that pollution travels from state to state and needs to be regulated nationally is well established.


The plan includes installation of controls such as SCR for NOx reduction at many industrial sources in 23 upwind states. This is still only an EPA proposal. Even if  a law is enacted in could be reversed by a Republican Congress.


The odds of passage are increased by the growing understanding of the dangers of NOx. It was of no concern until about 40 years ago when it was realized that its reaction in the ambient air with other elements results in very fine particulate and is  a significant cause of lung damage and death. (An extensive analysis of the GNP appeared in the Utility E Alert last week)



$750 Billion Gas and Liquid Control and Treat Market


When you aggregate the  market forecasts in all the McIlvaine air, water, and energy reports the revenue total is $750 billion. It is a fertile field for acquisitions and organic growth due to the synergies of applications and customers. It would be nice to claim that this was by design but instead it was a natural evolution. The filter market research led to cleanroom products. The scrubber system research led to pump and centrifuge analyses. Air pollution monitoring led to   the present IIoT and Remote O&M. The evolution has taken 45 years. One of the early assignments was for Brown Boveri to evaluate certain Asea products. The subsequent merged company became ABB.


There are few examples of organic growth players in this  $750 billion market.  W.L Gore is one of the few examples of organic growth. In general innovations are nurtured by small companies who reach revenues of $50 million and then are acquired by larger companies or private equity firms.


McIlvaine has been working with both buyers and sellers. Some of the work is through management consulting sub contracts. The big challenge is to find “the next best fit” which McIlvaine has addressed with an umbrella report  and three step program

Acquisition and Expansion Guide in Air, Water, and Energy



Insights from Recent McIlvaine Feature Articles


·        Filtration: Tom Reinauer developed pulse jet cleaning for  a machinery company in 1958 After many changes of ownership  MikroPul  is now part of Nederman based in Europe with sales of over $400 million. Dean Spatz started rolling RO membranes in his garage in 1969  and then sold Osmonics to GE In 2002 when revenues reached $200 million. GE sold to Veolia with revenues of $30 billion. Veolia merged with Suez earlier this year.  With the exception of W.L. Gore most successful large filter companies are the result of many acquisitions.


·        Valves: The demand for subsea valves is increasing due to the elevated prices of oil and gas. Over the next few years prices are likely to remain high due to the world political situation. Increases in subsea production are underway but one constraint is the long period between project start and completion. There are also uncertainties about the quality and accessibility of the reserves.

·        Pumps:  Due to the Russian invasion of Ukraine, and the Chinese lockdown the pump markets are rapidly changing. So continuous forecasts are necessary. The most profitable market can be a large number of small niches. IDEX is an example of a company with close to 30% EBITA and fairly large volume. However, the company consists of a number of independent divisions each pursuing a unique niche. Identifying these profitable niches requires much more detailed market analysis than is typically available.


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