NEWS RELEASE                                   MARCH 2004

Rapidly Evolving Air Pollution Monitoring Market Offers Multi Billion Dollar Opportunity

New opportunities representing billions of dollars per year in revenue are being created in the evolving world air pollution monitoring industry.  Opportunities for sales of analyzers, gases, software, and consulting are quantified in a continually updated report from the McIlvaine Company entitled, Air Pollution Monitoring and Sampling: World Markets.

Some of these new opportunities are immediate and easily identified.  Rules to reduce mercury from power plants in the U.S. are likely to be promulgated late this year. They will result in hardware (continuous emissions monitors) valued at more than $200,000,000.  In addition, more than $50 million/yr. in additional testing services will be required.

Asia, with its severe air pollution problems, is investing in monitoring systems to continuously track ambient pollutant levels.  The world market for ambient systems and testing will exceed $450 million by 2007.

The biggest opportunities, according to Bob McIlvaine, president of McIlvaine, are in better quantification of emissions from sources which are already monitored.  Stack monitoring started with smoke inspectors in 13th century London who classified emissions by the color of the plume.  This method provided only a rough gauge of dust emissions and none for acid gas emissions.  The erroneous assumption is that we have progressed to where we now quantify all these emissions to within a few percent.

The truth is that dust emission accuracy based on yearly quantities is plus or minus 50 percent and acid gas accuracy is plus or minus 15 percent.  These levels of inaccuracy are going to be unacceptable from a regulatory view point.  More importantly, they will be unacceptable as the basis for emission trading.  Emission trading has started in the U.S. and is spreading to other countries.  The system allows sources with high reduction costs to buy allowances from sources that can more inexpensively reduce emissions.  Sulfur dioxide is the most widely traded pollutant to date. However, each ton of emissions is worth only a few hundred dollars.  As the program progresses and allowances are reduced, the price could easily reach $1000/ton.  A source which measures its emissions as 10,000 tons per year but is not sure whether the real level is 8500 or 11500 tons per year will have to assume its emissions are the higher number.  Thus the excess cost could be 3000 x $1,000 or $3,000,000 per year.

The cost for inaccurate monitoring will even be higher for mercury.  EPA estimates the trading value will exceed $35,000 per pound or $70 million per ton.  Laxity and ignorance on the part of enforcement officials have allowed inaccuracies to be tolerated. However, the financial community will not be so forgiving.  Sources that under report emissions will impact the profits of those who trade emissions.  Therefore, according to McIlvaine, there will be effective self policing of the system.

The cost of inaccurate measurement for the average power plant will be millions of dollars per year.  Since there are 1000 large fossil-fired boilers in the U.S., the potential market for improved monitoring accuracy is more than $1 billion/yr.  This is just the U.S. The potential worldwide is several billion dollars per year.

McIlvaine has identified some of the products and services which will improve the accuracy.

  1. Redundant analyzers and instrumentation
  2. Redundant flow monitors
  3. Automated flow calibration rather than manual
  4. More reliable protocol gases
  5. Coordinating more extensive stack testing with CEMs
  6. Semi continuous mercury testing to supplement CEMs
  7. Semi continuous PM2.5 testing to supplement opacity or mass monitors
  8. More sophisticated tracking of the relationship between process changes and emissions.
  9. Development of the ability to measure the combined toxic quotient of a large number of toxic metals

Those companies best suited to take advantage of these opportunities are those with both service and product capability.  Thermo Electron is one such company.  GE is another with its acquisition of both CEM and stack testing firms.  Several of the large architect/engineering firms are also well positioned.  For smaller companies the biggest opportunity is in the development of better analyzers.  A significant opportunity lies with those companies with financial resources to assume some of the measurement risks along with providing the measurements themselves.

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