FGD and DeNOx
NEWSLETTER

May 2022

No. 528

Table of Contents

MARKETS

·        Fabric Filter Market Changing Faster Than Any Time Since 1960

·        World Event Impacts on AWE Suppliers

INDUSTRY NEWS

·        Last Coal-Fired Power Plant in Delaware Gets a Reprieve

·        Gwadar’s 300-MW Coal-fired Power Plant to End Electricity Shortfall by 2023

·        Denbury and Nutrien Announce Agreement for Transportation and Storage of CO₂ to be Captured from Nutrien’s Planned Clean Ammonia Project in Geismar, Louisiana

·        Chevron Launches Carbon Capture and Storage Project in San Joaquin Valley

·        bp & Linde Plan Major CCS Project to Advance Decarbonization Efforts Across Texas Gulf Coast

·        Hydrogen Power Plant Proposed for Former Uranium Enrichment Facility in Southern Ohio

·        Nutrien Announces Intention to Build World’s Largest Clean Ammonia Production Facility

·        Could We Achieve Net Zero Carbon Emissions in The Permian Basin

·        Babcock & Wilcox Awarded Installation Services Contract

·        ICF Awarded Multiple Climate Advisory Services Contracts

·        CECO Environmental Acquires Compass Water Solution

·        JERA Americas to Acquire Thermal Power Portfolio in New England

·        Mitsubishi Heavy Industries Achieves Record-Breaking Cash Flow in FY2021 and Plans Increased Dividends

·        Fuel Tech Reports 2022 First Quarter Financial Results

·        Babcock & Wilcox Enterprises Reports First Quarter 2022 Results

MARKETS

Fabric Filter Market Changing Faster Than Any Time Since 1960

In the 1960s pulse cleaned bags rapidly obsolesced shaker bags. New high temperature fabrics were introduced which allowed greater penetration into the power and other markets dominated by precipitators.

The 2020s is going to be equally dynamic in terms of the products, applications, and geographies.

Products: Previously the element designs were primarily bags and cartridges. The cartridges were pleated and mostly cellulose. They were applicable only to light and dry applications. Now new pleated designs with higher temperature fabrics have created a major new category. Because the pleated synthetic media filters are typically less than 8 inches in diameter (the typical paper cartridge is more than 8 inches in diameter), the new segmentation for the pleated filters is labeled “cartridges <8 inches diameter”.

Another development is the ceramic filter. It can operate at very high temperatures. If the gas has to be cooled to 500F in order to be filtered a large amount of energy is wasted. These filters can not only remove the fine particulate but with direct sorbent injection can also remove acid gases. The ceramic filter can also include an embedded catalyst. So one vessel can replace three: the particulate filter, acid gas scrubber and selective catalytic NO_x control unit.

Applications: Biomass combustion followed by carbon sequestration is the most promising carbon negative technology. A coal plant like Drax which switches to this technology takes out as much CO₂ from the atmosphere as it was previously adding. So this is a double digit growth potential for fabric filters.

Geographies:  The Russian invasion is creating expanded markets for fabric filters in Europe. The growth of biomass combustion will offset  use of natural gas. The agricultural disruption will  create a spurt in fertilizer manufacturing plants in ROW. Russa and Belarus combined are the largest potash producer. Russia has large reserves of metals.

Chinese filter bag suppliers have a significant share of the international markets. The COVID shutdown creates a short term crisis. Longer term the autocratic Chinese-Russian coalition could permanently change the market.

The McIlvaine Company is making continuous changes to the Fabric Filter: World Market forecasts. More than 50,000 new forecasts by product type have been added. All the forecasts are being updated every few months in order to reflect the changes.

Information on the report is found at http://home.mcilvainecompany.com/index.php/markets/air/n021-world-fabric-filter-and-element-market

The report provides the foundation for an Evidence Based Sales Strategy. More information on this strategy is available from Bob McIlvaine. He can be reached at 847 226 2391 or rmcilvaine@mcilvainecompany.com

World Event Impacts on AWE Suppliers

Significant events affecting the AWE markets in the past week include the following.

1.     Continued Lockdown in China

Many AWE products made outside China depend on Chinese parts. A number of international suppliers export from manufacturing plants in China. AWE products are also being sold to Chinese manufacturers of chemicals, semiconductors, and power plants. The continued lockdown in China is having significant impact on these markets. The chances that COVID can be controlled by the lockdown are minimal. The cases are temporarily reduced. But as soon as the lockdown is lifted there will be high rates of transmission of this virus. China does not have effective vaccines.
 

With a highly transmissible virus you need a vaccine which is 95% effective. The basic principle is that you have to reach a level where one infected person causes less than one transmission. The lockdown does this temporarily. However, China is interfacing with the world. New sources are introduced from individuals outside the lockdown area.

The only lockdown strategy which will work is permanent isolation of China from the world. China should quickly acquire mRNA vaccines and reach the levels of immunity being achieved in the U.S. and Europe.

Chinese masking policy has been inconsistent. Workers in the lockdown areas have the latest in masks and PPE but masking requirements have not been adequate. In fact, masking can be an extremely effective option. What is lacking is understanding, measurement, and use, based on fitted filter efficiency. McIlvaine was in constant contact with ASTM committee members creating the mask standard which is now available. Agreement was available to standardize on a way to rate efficiency and pressure drop but not fit.

Efficient N95 masks, which have a loose fit, will only filter a portion of the incoming air. The more efficient and resistant the media, the more air will flow around rather than penetrate.

There are very accurate ways to test fitted filter efficiency. These are individual tests and very expensive. McIlvaine proposed that tests be made on five head shapes using plastic molds. This approach creates a stand for ASTM similar to efficiency and pressure drop but much more meaningful. If any live additional testing is needed it can be done with iPhones which will show if masks are improperly worn.

China will need to rely on masking until they can vaccinate everyone with more effective vaccines. The Chinese impact on the world economy will depend on alternative lock down options.

2. Russian Signs of Faltering in Ukraine

Putin did not discuss a war declaration in a May Day speech. He spent time as usual painting Ukrainians as Nazis in partnership with the West to invade Russia. But he did not threaten a full scale mobilization. Some  pundits believe that there would be significant resistance to drafting  conscripts. At the same time, Russia is demonstrating a lack of success in the Ukrainian offensive. Poorly maintained equipment, poor leadership, and poor morale all have been evident in the new campaign in the East. Longer term Russia has 2% of the capability of the West to provide equipment and ammunition. The U.S. howitzers have a longer range than the Russian. The U.S. shoulder-fired drones have had lethal effect. There are more than 10 million Ukrainian  men and women willing to risk their lives. By contrast the 200,000 Russian troops have been reduced by 25% due to injury or death.

The question is now whether Ukraine should strive to completely remove Russia from its soil or settle for a return to the February 24 status.

President Macron of France favors a settlement which would eventually bring Russia into a European community. He points out that the UK is not part of the EU. Therefore it is not imperative to grant Ukraine EU membership. He proposes a European community  which includes the EU countries plus aspiring members and others such as the UK. Russia could be encouraged to adopt a non-aggressive pledge, draw back out of eastern Ukraine, and  gain the benefits of community membership.

This might not happen under a Putin regime, but he is mortal and is even rumored to have cancer.

The various scenarios for ending the war range from nuclear devastation to a prosperous European community. The outcome  will have major impacts on AWE suppliers.

3. Economic Factors

Inflation is tied into the balance between supply and demand. There is a pent-up demand which is backed up by high levels of available cash for homeowners and businesses. The semiconductor demand has outstripped supply. This has caused delays in automobile production. AWE suppliers are unable to obtain all the parts they need. Prices for parts are rising. So AWE product prices are also increasing. The most valuable group would be scrubber and precipitator suppliers.

Most of the revenue comes from large units which are fabricated by local metal fabrication companies rather than the designer. So essentially all the hardware and components are outsourced. Contracts for large systems take months or even years to execute.

It is common for suppliers to provide variable rather than fixed price proposals which allow price adjustments commensurate to the inflation rate.

There is core inflation which is in contrast to temporary factors such as oil prices. Core inflation includes wages and other factors which are not  likely to be reversed.

The high level of savings will be changed if there is a recession. Increases in interest rates will increase the cost of mortgages and will have some effect on demand. In the U.S., the Federal Reserve is increasing rates in 0.5% increments and hopes to slow down inflation without leading the U.S. into a recession.

Europe is greatly impacted by the Russian invasion. Alternative energy supplies are needed. The cost and availability will be major economic factors.

The impact of COVID and new variants remains an unknown variable. Africa and much of Asia remain vulnerable with low vaccination rates. Hundreds of millions of new COVID cases means many new variants. So far, the variants have been more transmissible but so far not more deadly.

INDUSTRY NEWS

Last Coal-Fired Power Plant in Delaware Gets a Reprieve

Regional grid manager PJM has recommended that the last coal-fired unit at the Indian River Power Plant near Millsboro remain open into 2026.

PJM’s recommendation and NRG’s response went to the Federal Energy Regulatory Commission (FERC).

PJM, which manages a grid system in the Mid-Atlantic Region and in portions of the Midwest, determined that the grid in the area around the plant needs to be strengthened before the coal-fired plant is retired.

The plant had been scheduled to close this year after wholesale electricity bids came in below figures that would allow for profitable operation.

PJM calls for the plant to be compensated for its higher costs of operation while PJM works on ways to strengthen the grid in the region.

Also, there is the possibility that the Indian River plant site would be the place where powerlines from the Skipjack offshore wind project would come ashore. No determination has been made, although officials of project developer Ørsted said Delaware is the likely location where electric lines would connect to the grid.

Indian River is the last coal-fired power plant in Delaware.

The Skipjack and US Wind offshore sites are about 19 miles off the coast of Maryland and Delaware.

Another possibility is additional wind farms off the Delaware Coast. The U.S. Department opened up areas off the coast for wind development

Also entering the picture are larger solar farms that are springing up through Delmarva.

Gwadar’s 300-MW Coal-fired Power Plant to End Electricity Shortfall by 2023

The Gwadar 300 megawatts coal-fired power plant will be completed by October 2023 to end energy scarcity in the country.

An official source while sharing exclusive updates of the project, said that the power plant of an independent power producer is one of the key energy projects under the China Pakistan Economic Corridor.

The project aimed at improving reliability on local power supply that would help gradually solve the problems in current economic development and urban construction in Gwadar region, which is being restricted by the shortage of power.

The power plant is of great significance to deepening the energy cooperation between China and Pakistan, boosting the development of the Belt and Road Initiative, improving the overall power structure of Balochistan.

Meanwhile, people across country are facing continuous power outages as the electricity shortfall has reached 4,743 MW.

According to sources, power generation stands at 20,757 while the demand has been recorded at 25,500 MW.

Reportedly, all major cities are facing 10 to 12 hours of power outages.

On the other hand, Jamaat-e-Islami has announced protests against loadshedding in Karachi. The JI has decided to protest at more than a  hundred locations across the metropolis.

The party has also hinted at staging a sit-in outside K-Electric’s head office if the situation does not improve.

According to the National Weather Forecasting Center, hot and dry weather is expected in most parts of the country, while plain areas will remain under the grip of severe heat wave conditions.

Denbury and Nutrien Announce Agreement for Transportation and Storage of CO₂ to be Captured from Nutrien’s Planned Clean Ammonia Project in Geismar, Louisiana

Denbury Carbon Solutions, LLC, a wholly owned subsidiary of Denbury Inc. and PCS Nitrogen Fertilizer L.P., a wholly owned subsidiary of Nutrien Ltd. announced that the parties have reached a term-sheet agreement under which Denbury would transport and store carbon dioxide (CO₂) captured from Nutrien’s potential new clean ammonia project at its Geismar, Louisiana location.

Nutrien is evaluating its Geismar, Louisiana, ammonia facilities as a potential site for significant new ammonia production to serve growing demand in agriculture, industrial and emerging energy markets. Nutrien is progressing the proposed project to the front-end engineering design phase, with a final investment decision expected to follow in 2023 and, if approved, full production by 2027. The new plant is expected to have annual production capacity of 1.2 million metric tons of clean ammonia, with approximately 1.8 million metric tons per year of CO₂ to be captured. Under the terms of the agreement, Nutrien would pay Denbury for the transportation and sequestration of the associated CO₂ into Denbury’s secure underground containment sites. The initial term of the agreement is 12 years, with up to two extension terms of five years each.

“We are thrilled to expand our successful long-term partnership with Nutrien through this world class project,” said Chris Kendall, Denbury’s President, and Chief Executive Officer. “We believe that CCUS-enabled clean ammonia will be an important source of energy in a lower-carbon future, and we are honored by the confidence and trust that Nutrien has continued to place in Denbury to provide this important service.”

“Nutrien is optimally positioned to supply global emerging clean ammonia markets and grow a pathway for a decarbonized supply chain,” said Raef Sully, Nutrien’s Executive Vice President and CEO of Nitrogen and Phosphate. “We are pleased to partner with Denbury on this initiative given our established track record of cooperation. It is another example of how we are building on our expertise in low-carbon ammonia to decarbonize the agriculture industry while also developing a source of clean energy.”

This new agreement expands the companies’ longstanding efforts to reduce atmospheric emissions by capturing industrial-sourced CO₂ for permanent underground storage. In 2013, Nutrien and Denbury began working together to transport CO₂ captured from Nutrien’s existing nitrogen facilities in Geismar, Louisiana, located less than one mile from Denbury’s CO₂ pipeline infrastructure, for use in Denbury’s enhanced oil recovery operations. Since then, the companies’ collective efforts have resulted in:

Nearly 100% uptime and reliability in CO₂ takeaway;

Permanent underground storage of nearly 3 million metric tons of CO₂ (current rate of 0.3 million metric tons per year);

More than 2 million barrels of carbon-negative or “blue” oil, whereby more CO₂ is injected in the ground to produce a barrel of oil than the Scope 1, 2, and 3 emissions from that related barrel.

This agreement was previously announced by Denbury as part of its earnings release dated May 5, 2022. Inclusive of the agreement between Denbury and Nutrien, the cumulative volume of Denbury’s CO₂ transportation and storage agreements totals approximately seven million metric tons per year. In parallel, Denbury has entered into a number of agreements providing Denbury the exclusive rights to develop secure underground CO₂ sequestration sites in Louisiana, Texas, and Alabama, with total potential capacity of over 1.4 billion metric tons. Denbury’s leadership position in CCUS is supported by over 20 years of experience transporting and injecting CO₂ underground. Denbury is currently moving in excess of 14 million metric tons of CO₂ annually in the United States through its 1,300+ miles of CO₂ pipelines, the largest CO₂ pipeline network in the world.

Chevron Launches Carbon Capture and Storage Project in San Joaquin Valley

Chevron U.S.A. Inc., through its Chevron New Energies division, announced it is launching a carbon capture and storage (CCS) project aimed at reducing the carbon intensity of its operations in San Joaquin Valley, California.

Chevron aims to reduce its carbon intensity — the amount of carbon dioxide CO₂) emitted per unit of energy produced —by installing CO₂ post-combustion capture equipment, capturing the CO_2, and then safely storing it thousands of feet underground. This CCS initiative would begin at Chevron’s Kern River Eastridge cogeneration plant in Kern County, California.

“At Chevron, we believe the future of energy is lower carbon. Reducing the carbon intensity of the energy people rely on day-in and day-out is well-aligned with the ambitions of the Paris Agreement,” said Chris Powers, vice president of Carbon Capture, Utilization, and Storage (CCUS) for Chevron New Energies. “We are excited about the opportunity to collaborate and progress this CCS initiative in San Joaquin Valley, a region where we have lived and worked for over a century.”

Chevron has applied to obtain a Conditional Use Permit with the Planning and Natural Resources Department of Kern County and will continue to work with appropriate regulators throughout the process.

In addition to the Eastridge cogeneration project, Chevron is currently evaluating and deploying multiple carbon capture technology demonstrations to mature more efficient and cost-effective capture solutions, potentially enabling future projects, not only for Chevron, but for other industries.

“As Chevron advances to a lower carbon future, we’re identifying ways to advance our operations as well, so we can continue to provide local jobs, support the local economy, and generate local government revenue that supports critical community services,” said Molly Laegeler, vice president, San Joaquin Valley (SJV), Chevron. “We are excited about this Chevron New Energies project and fostering continued collaboration with local regulators throughout this process, not only to position the region to benefit from these lower carbon solutions, but that we continue to protect people and the environment. We believe this project has the potential to benefit the region on many levels and that Kern County is an ideal location for carbon capture and storage.”

An August 2020 report by the Lawrence Livermore National Laboratory that highlighted opportunities for California to become carbon neutral noted, “there are various options for geologic storage sites in the state, but we have identified the most promising first candidates in San Joaquin County and in Kern County,” due to the regions’ geologic and subsurface characteristics, as well as the existing oil and natural gas production.

Chevron is also actively exploring additional opportunities to lower the carbon intensity of its SJV operations, including the blending of hydrogen with natural gas in combustion, and the potential use of other emerging lower carbon technologies, such as geothermal.

bp & Linde Plan Major CCS Project to Advance Decarbonization Efforts Across Texas Gulf Coast

bp and Linde announced plans to advance a major carbon capture and storage (CCS) project in Texas that will enable low carbon hydrogen production at Linde's existing facilities. The development will also support the storage of carbon dioxide (CO₂) captured from other industrial facilities — paving the way for large-scale decarbonization of the Texas Gulf Coast industrial corridor.

Upon completion, the project will capture and store CO₂ from Linde's hydrogen production facilities in the greater Houston area — and potentially from its other Texas facilities — to produce low carbon hydrogen for the region. The low carbon hydrogen will be sold to customers along Linde's hydrogen pipeline network under long-term contracts to enable production of low carbon chemicals and fuels.

As part of the project, bp will appraise, develop, and permit the geological storage sites for permanent sequestration of the CO₂. bp's trading and shipping business aims to bring custom low carbon solutions to the project, including renewable power and certified natural gas, along with commodity trading and price risk management expertise.

Linde will use its proprietary technology and operational expertise to capture and compress the CO₂ from its hydrogen production facilities for the project. Together with its extensive infrastructure of hydrogen production facilities and its storage cavern connected through its pipeline network across the Texas Gulf Coast, this project will enable Linde to supply cost-effective, reliable low carbon hydrogen and, together with bp, provide carbon capture and storage solutions.

Dave Lawler, chairperson, and president of bp America, said: "The energy expertise in Texas and strong supply chains have been generations in the making. This new low carbon energy project will help us leverage those strengths for the next chapter of the energy transition. In particular, it can help decarbonize hard-to-abate industries for the greatest potential impact on emissions while protecting jobs. bp is proud to support this project as we continue delivering on our own strategy and net zero ambition."

The project will be a further important step in the development of bp's low carbon business. bp is evaluating large scale CCS and hydrogen projects for industrial clusters in the US and already is in action on Teesside, the industrial heart of the United Kingdom. ‎

"Linde is committed to lowering absolute carbon emissions 35% by 2035 and reaching climate neutrality by 2050. Capturing the CO₂ from our hydrogen production plants in the Houston area will be a significant step towards achieving these goals," added Dan Yankowski, President Linde Gases North America.

"We are excited to bring Linde's leading technology portfolio and infrastructure to support this project and make low carbon hydrogen available to our customers in the Gulf Coast. More broadly Linde is well positioned to enable similar projects, be it in the Gulf Coast where we operate two hydrogen pipelines and a hydrogen storage cavern, or elsewhere in the U.S."

The overall development, expected to be operational as early as 2026, will also enable capture and storage of CO₂ from other large industrial facilities in the region and could ultimately store up to 15 million metric tons per year across multiple onshore geologic storage sites — the equivalent of taking approximately three million cars off the road each year.

Hydrogen Power Plant Proposed for Former Uranium Enrichment Facility in Southern Ohio

A hydrogen-fueled power plant is being proposed for the site of the toxic Portsmouth Gaseous Diffusion Plant in the southern Ohio community of Piketon.

The Southern Ohio Diversification Initiative, an economic development group working with Ohio University and the Texas company Newpoint Gas, hopes the project will produce clean energy and replace some of the jobs lost when the uranium enrichment facility shuttered in 2001.

The Texas gas producer has signed a letter of intent to buy the property, which the economic development group owns, the organization said.

The facility would generate 300 megawatts of power, employ at least 500 people, and provide hydrogen needed to manufacture products like cement and ammonia, which have a carbon-heavy production process, said Newpoint Gas CEO Wiley Rhodes.

Newpoint Gas will procure hydrogen from natural gas and wants to get the facility online by the beginning of 2027, he said. He noted some details have not been worked out.

Economists and environmentalists have questioned the cost-effectiveness of hydrogen power. Critics point to studies suggesting the money needed to procure hydrogen is better spent on solar and wind power.

“It's feasible but it has to be done at a very large scale,” Rhodes said.

The power generation, in concert with the hydrogen sold to manufacturers, will make the facility sustainable, he said.

The Piketon plant closed after an investigation logged years of lax safety practices. The facility produced the raw materials needed for nuclear bombs, and the surrounding communities still experience higher-than-usual rates of cancer.

The Southern Ohio Diversification Initiative took over the property from the federal government, and the Ohio EPA had to certify that the property was safe before it approved the transfer, said Kevin Shoemaker, the organization’s in-house counsel.

Community organizations that represent Piketon-area residents voiced support for the proposal early this week.

"We as a community have supported the reindustrialization efforts for a very long time," said Jennifer Chandler, councilwoman for the village of Piketon and the president of the Scioto Valley-Piketon Area Council of Governments. But she said officials seek to better understand the project.

"Of course, we are always concerned about what does a project mean in terms of emissions or wastewater discharges, and we want to understand what risks are associated with the processes that will be employed," Chandler said.

Hydrogen power is a controversial weapon in the fight against climate change. While hydrogen itself gives off no emissions, it is most commonly procured from planet-warming natural gas through carbon capture, and some critics say it contributes to global warming and perpetuates fossil fuel use.

Hydrogen power produces 20% more emissions than fossil fuels because extracting hydrogen requires so much energy, according to a study from researchers at Stanford and Cornell Universities last year.

Supporters of hydrogen power dispute the study’s findings. The Midwest Hydrogen Alliance, a coalition of businesses, universities, and public agencies, said the research underestimated the effectiveness of carbon capture and overestimated the probability of methane leaks. The Stanford and Cornell researchers have defended their work.

“It’s going to be as green as possible,” Rhodes said of the proposed hydrogen plant.

He noted that the technology needed to capture hydrogen is decades old.

"They're all proven processes that can be implemented and maintained in a very reliable way," Rhodes said.

Nutrien Announces Intention to Build World’s Largest Clean Ammonia Production Facility

Nutrien Ltd. announced that it is evaluating Geismar, LA as the site to build the world’s largest clean ammonia facility. Building on the company’s expertise in low-carbon ammonia production, clean ammonia will be manufactured using innovative technology to achieve at least a 90 percent reduction in CO₂ emissions. The project will proceed to the front-end engineering design (FEED) phase, with a final investment decision expected to follow in 2023. If approved, construction of the approximately US$2 billion facility would begin in 2024 with full production expected by 2027.

The new clean ammonia plant would leverage low-cost natural gas, tidewater access to world markets, and high-quality carbon capture and sequestration infrastructure at its existing Geismar, LA facility to serve growing demand in agriculture, industrial and emerging energy markets. The plant is expected to have an annual production capacity of 1.2 million metric tonnes of clean ammonia and capture at least 90 percent of CO₂ emissions, permanently sequestering more than 1.8 million metric tonnes of CO₂ in dedicated geological storage per annum. The new plant will use auto thermal reforming technology to achieve the lowest carbon footprint of any plant at this scale and has the potential to transition to net-zero emissions with future modifications.

“Our commitment to the development and use of both low-carbon and clean ammonia is prominent in our strategy to provide solutions that will help meet the world’s decarbonization goals, while sustainably addressing global food insecurity. Leadership in clean ammonia production will play a key role in achieving our 2030 Scope 1 and 2 emissions reduction goals, as part of our Feeding the Future Plan,” said Ken Seitz, Nutrien’s Interim President, and CEO.

Nutrien has signed a term sheet with Denbury Inc., a trusted partner for nearly a decade, which would allow for expansion of the existing volume of carbon sequestration capability in the immediate vicinity of its Geismar facility, if selected as the final site of construction.

“Nutrien is optimally positioned to supply global emerging clean ammonia markets and grow a pathway for a decarbonized supply chain,” said Raef Sully, Nutrien’s Executive Vice President and CEO of Nitrogen and Phosphate. “We are pleased to partner with Denbury on this initiative given our established track record of cooperation. It is another example of how we are building on our expertise in low-carbon ammonia to decarbonize the agriculture industry while helping to sustainably feed and fuel the future.”

Nutrien has also signed a Letter of Intent to collaborate with Mitsubishi Corporation for offtake of up to 40 percent of expected production from the plant to deliver to the Asian fuel market, including Japan, once construction is complete.

Nutrien is committed to leading the development of low carbon and clean ammonia to rapidly accelerate the decarbonization of hard-to-abate sectors such as agriculture, industrial use of ammonia, power generation, and maritime fuel. As one of the world’s largest ammonia traders by marine transportation, Nutrien announced in 2021 a collaboration agreement with EXMAR to jointly develop and build one of the first low-carbon, ammonia-fueled maritime vessels to help decarbonize shipping. Nutrien is also involved with the U.S. Department of Energy and other partners to explore flexible clean ammonia production using air, water, and variable renewable electricity.

Could We Achieve Net Zero Carbon Emissions in The Permian Basin

In an article recently published in the journal ACS Engineering Au, researchers discussed the possibility of decarbonizing shale gas in the Permian Basin.

The natural gas (NG) industry in the United States has grown dramatically in the last 20 years. Given the abundance of NG and natural gas liquids (NGLs) in the United States, it's worth thinking about how these resources could be leveraged to address immediate energy requirements while laying the groundwork for decarbonized energy future.

One possibility is to employ NGLs to make hydrocarbon transportation fuels, which might fill in the gaps as refineries migrate away from liquid fuels. However, in the short run, the usage of these fossil fuels would not contribute to decarbonization. In the NG/NGL supply chain, methane is also released during liquids unloading, flaring, well drilling, and equipment venting and leaking.

If NGLs are considered a liquid fuel feedstock, conversion of natural gas to CO₂ and hydrogen by steam methane reforming is one way to potentially achieve net-zero shale basin product emissions at a system level, depending on how the CO₂ and H2 produced are used.

The investigation considers methane steam reforming and CO₂ sequestration  https://www.azom.com/news.aspx?newsID=5892 

Babcock & Wilcox Awarded Installation Services Contract

Babcock & Wilcox (B&W) announced that Babcock & Wilcox Construction Co., LLC (BWCC) has been awarded a contract for approximately $68 million to provide construction and installation services for a power plant maintenance project in North America.

“BWCC provides experienced, efficient and safety-focused construction and installation services for customers in a wide range of industries, including utilities, manufacturing, oil & gas, pulp & paper, renewable energy and more,” said B&W Executive Vice President and Chief Operating Officer Jimmy Morgan. “Maintaining the efficiency and reliability of power infrastructure is critical to energy security, and we are pleased to be a part of this project.”

BWCC Vice President and General Manager Mike Hidas emphasized the critical importance of performing work safely and reliably on every BWCC project. “We look forward to executing this project with a strong emphasis on our Target Zero safety culture, with a goal of zero lost-time incidents from start to finish,” Hidas said. “We have already started with project planning and look forward to successfully delivering this project to our customer.”

BWCC is a single-source turnkey supplier of a full range of field construction, construction management and maintenance services. BWCC’s experience ranges from large, complex projects to small, quick turnaround repair needs.

ICF Awarded Multiple Climate Advisory Services Contracts

ICF, a global consulting and digital services provider, was recently awarded multiple new and recompete contracts and contract modifications to provide climate advisory services to a number of public sector and commercial clients. The contracts were awarded in the first quarter of 2022.

The recent agreements fall into two main service categories: climate resilience and decarbonization. Examples of climate resilience project work include helping make energy systems resilient to extreme weather, strengthening transportation infrastructures, and developing climate action plans. Examples of decarbonization project work include supporting clean energy and alternative transportation fuels and measuring and reducing greenhouse gas emissions. Clients include various U.S. state and local government agencies, several of the nation's largest utilities and global commercial clients.

This new and additional work builds on ICF's longstanding work with the federal government supporting key climate programs such as the Environmental Protection Agency's (EPA) annual Inventory of U.S. Greenhouse Gas Emissions and Sinks, EPA's ENERGY STAR^® program and the U.S. Global Change Research Program in coordinating the National Climate Assessment.

"These wins demonstrate how we are successfully leveraging our industry-leading climate expertise, advanced data analytics services and commitment to reducing greenhouse gas emissions to help new and existing clients address climate risks," said Anne Choate, ICF executive vice president and energy, environment, and infrastructure lead. "This new business builds on our decades of experience helping our clients achieve their climate goals."

ICF is home to one of the world's largest science-based climate consultancies. ICF's 2000+ climate, energy and environment experts work full-time to help organizations use their resources more efficiently, reduce costs and accelerate mission accomplishment. The company works with business, government, and nonprofit organizations to design and implement programs and policies that drive low-emission transitions and build resilience against the effects of climate change.

CECO Environmental Acquires Compass Water Solution

CECO Environmental Corp., a leading environmentally focused, diversified industrial company whose solutions protect people, the environment, and industrial equipment, today announced it has acquired Compass Water Solutions, Inc. ("Compass") a leading global supplier of membrane-based industrial water and wastewater treatment systems that help customers achieve regulatory compliance of water discharge at the lowest lifecycle cost. The transaction adds to CECO's growing industrial water technologies, which is anchored by its Peerless-Skimovex^® brand.

Compass generated approximately $11 million of revenue in 2021 with double-digit EBITDA margins. The total purchase price was $12.5 million and funded by a mix of cash and debt. Approximately 70 percent was paid at closing with the balance to be paid over a two-year period. CECO expects the acquisition to be accretive to total company EBITDA margins, earnings per share, and free cash flows in 2022.

With this acquisition, CECO expands its addressable industrial water technology market by over $250 million, with expected growth rates over six percent CAGR through 2025 for industrial oily-water and seawater reverse osmosis applications. CECO expects the Compass acquisition to unlock greater value by leveraging CECO's international sales resources, existing US Navy expertise, and global engineering and production footprint. In addition to market growth rates, the expected stricter water discharge regulations coupled with hard-to-attain international certifications are expected to drive higher sales. Compass' installed base of over 8,000 systems worldwide has created a robust aftermarket parts and services business that represents approximately 40 percent of current revenues. Finally, with an average order size of less than $250,000, Compass increases CECO's short-cycle business mix to approximately $100 million, or 30 percent, of total company 2021 revenue.

"Compass adds critical engineered solutions, and an experienced leadership team, to our growing industrial water capabilities, and we are excited to welcome them to the CECO organization," said Todd Gleason, CEO of CECO Environmental. "CECO has completed three industrial water acquisitions in 2022 and each share our common mission to protect people, the environment, and industrial equipment. We expect that these businesses, when coupled with our global footprint and leading brands, will continue to drive strong revenue and income growth in this strategic market," added Mr. Gleason.

JERA Americas to Acquire Thermal Power Portfolio in New England

JERA Americas, the Houston-based subsidiary of global energy leader JERA, has entered into an agreement to acquire a 1,633 megawatt (MW) thermal power portfolio in New England from Stonepeak.

The portfolio consists of four thermal power generating facilities—Canal 1 (566 MW), Canal 2 (559 MW) and Canal 3 (333 MW) in Sandwich, Massachusetts on Cape Cod and Bucksport (175 MW) in Bucksport, Maine. The financial terms of the transaction were not disclosed. Stonepeak was advised by J.P. Morgan Securities LLC.

“The transition to net zero CO₂ emissions energy is a multi-step process demanding emission reductions on many fronts with several different technologies. Securing these assets will allow us to reduce CO₂ emissions from the existing facilities and use these locations as a foothold for supporting largescale renewable energy facilities and technologies,” said Steven Winn, JERA Americas Chief Executive Officer. “These facilities remain critical to ensuring grid stability and providing power to the New England market during high demand periods. We plan to use these units to supply needed energy with a view toward reducing emissions as we expand renewable energy and other CO₂ emission reducing technologies.”

JERA Americas is committed to transitioning the existing units to greener forms of energy as well as employing the attributes of the sites to enable renewable energy development in New England. The company is pursuing commercially viable decarbonization paths including low carbon biofuels in place of traditional fuels, as well as large scale renewable projects, blending hydrogen in gas turbines, and energy storage solutions.

“In the past, these assets would be valued purely on their ability to provide electricity to the market,” continued Winn. “JERA Americas takes a broader view — one of taking traditional thermal energy sites and implementing constructive changes that support net zero CO₂ emissions goals.”

JERA Americas, and its parent company JERA, plan to achieve net zero CO₂ emission electricity by 2050 and have accelerated progress toward that goal. In the past nine months, JERA Americas has announced construction of a 300 MW wind power project in Texas and hydrogen blending projects at two natural gas generation facilities in the northeastern US. Last September, JERA Americas took an ownership interest in Hydrogenious LOHC Technologies, a company focused on providing safe hydrogen storage and transportation solutions, to help spur the growth of hydrogen as a zero carbon fuel to reduce carbon emissions at fossil fuel plants globally.

Mitsubishi Heavy Industries Achieves Record-Breaking Cash Flow in FY2021 and Plans Increased Dividends

Mitsubishi Heavy Industries (MHI) announced that order intake rose 21.9% year-over-year to ¥4,067.7 billion in the period ended March 31, 2022. Revenue rose 4.3% to ¥3,860.2 billion year-over-year, resulting in business profit (¹) of ¥160.2 billion, a 196.3% increase from the previous fiscal year, which represents a profit margin of 4.2%. Net profit was ¥113.5 billion, an increase of 179.4% year-over-year, with a profit margin of 2.9%. ROE was 7.7%, an increase of 4.6 percentage points year-over-year. EBITDA was ¥292.4 billion, a 51.3% increase from FY2020, with an EBITDA margin of 7.6%, up 2.4 percentage points year-over-year. Free cash flow was ¥301.8 billion, a company record high and an increase of ¥579 billion year-over-year.

(1)    Profit before finance income, finance expenses, and income taxes

                 (billion yen, except where otherwise stated)

Underpinning the FY2021 results was strong revenue in the Gas Turbine Combined Cycle (GTCC) business (Energy Systems), which increased 15% year-over-year, in part due to shipments of the latest, high-efficiency JAC model. Nuclear Power (Energy Systems) continues to show strong performance, with revenue growing steadily over the past five years. Another notable achievement was the recovery of revenue in the Logistics, Thermal & Drive Systems segment to pre-COVID (FY2019) levels. The large increase in orders booked year-over-year is attributed to pull-ins of some FY2022 projects (Defense & Space), booming demand for steelmaking machinery (Metals Machinery, a Plants & Infrastructure Systems segment business), and the securing of several Biomass Power projects (Energy Systems).

FY2022 Guidance:

MHI also announced its guidance for the period ending March 31, 2023. Revenue is projected to increase year-over-year driven by high revenue in Logistics, Thermal & Drive Systems. Recovery in Energy Systems is expected to lead to an increase in business profit. Another increase in dividends, this time to ¥120 per share, is also planned. Risks to profitability include materials and logistics cost inflation, semiconductor shortages, and geopolitical factors. However, the company is preparing aggressive countermeasures, including price negotiations, and retooling supply chains, to mitigate these potential effects and achieve full-year targets. MHI will experience a year-over-year decrease in free cash flow as it continues to make necessary investments in Carbon Neutrality as a part of its MISSION NET ZERO initiative. However, this is well within the range of normal business operations, and profitability remains strong, as evidenced by a projected double-digit increase in EBITDA year-over-year.

CFO Message:

“FY2021 was a remarkable year for MHI Group in many ways,” said Hisato Kozawa, Member of the Board, Executive Vice President, and Chief Financial Officer of MHI. “We made improvements in all major financial indicators while achieving record-breaking free cash flow and increasing shareholder returns. All of this in a period when difficult market conditions such as soaring materials and logistics costs as well as semiconductor shortages put pressure on our bottom line. I believe that our success is a testament to the resilience of our businesses and the health of MHI’s financial fundamentals, which will only improve in FY2022. The surety of our financials will enable us to make marked progress toward achievement of our 2021 Medium-Term Business Plan targets in FY2023.”

Fuel Tech Reports 2022 First Quarter Financial Results

Fuel Tech, Inc., a technology company providing advanced engineering solutions for the optimization of combustion systems, emissions control, and water treatment in utility and industrial applications, reported financial results for the first quarter ended March 31, 2022.

“Revenues increased by 10% during the first quarter of 2022, our second consecutive quarter of quarter-over-quarter revenue growth,” said Vincent J. Arnone, President and CEO. “Selling, general and administrative expenses declined slightly, our operating loss narrowed, and we ended the first quarter with $35.2 million in total cash and no debt. Our consolidated backlog on March 31, 2022, improved to $9.6 million from $9.1 million on December 31, 2021, and included $5.3 million of previously announced domestic and international Air Pollution Control awards. We continue to pursue a global sales pipeline of $50-75 million addressing emission protocols across a variety of fuel sources and are confident that total revenues for 2022 will show a modest improvement from 2021. We are also making substantive progress advancing towards the commercialization of our Dissolved Gas Infusion (DGI^TM) technology initiative to address the water pollution control and treatment market.”

Q1 2022 Consolidated Results Overview

Consolidated revenues for the first quarter ended March 31, 2022 (“Q1 2022”) rose to $5.5 million from $5.0 million in the first quarter of 2021 (“Q1 2021”), reflecting a $1.3 million increase at APC, driven by the timing of project execution and new APC orders, partially offset by a $0.8 million decline in revenues at FUEL CHEM, due to decreased demand for power generation.

Gross margin for Q1 2022 was 41.4% of revenues compared to 46.9% of revenues in Q1 2021, reflecting lower gross profit margin at both operating segments.

SG&A expenses were stable at $3.1 million for the 2022 and 2021 periods.

Operating loss narrowed to $(1.0) million from an operating loss of $(1.2) million in Q1 2021, as higher revenues were offset by a decline in gross margin.

Net loss in Q1 2022 was $(1.0) million, or $(0.03) per share, compared to net income of $0.4 million, or $0.01 per share, in Q1 2021. Net income for Q1 2021 included $1.6 million in other income reflecting full forgiveness of the loan proceeds from the Paycheck Protection Program, established pursuant to the CARES Act.

Consolidated APC segment backlog on March 31, 2022, rose to $9.6 million from $9.1 million on December 31, 2021.

APC segment revenues rose to $2.2 million from $0.9 million in Q1 2021. APC gross margin in Q1 2022 was 35.2% compared to 41.5% in Q1 2021, due to a modification in product mix.

FUEL CHEM segment revenues were $3.3 million compared to $4.1 million in Q1 2021. Segment gross margin was 45.5% compared to 48.0% in Q1 2021, due to lower revenues and higher material, freight, and labor costs.

Adjusted EBITDA loss was $(0.9) million in Q1 2022 compared to Adjusted EBITDA loss of $(0.9) million in Q1 2021.

Financial Condition
On March 31, 2022, cash and cash equivalents were $34.2 million and restricted cash was $1.1 million. Stockholders’ Equity on March 31, 2022 was $45.1 million, or $1.49 per share, and the Company had no debt.

Babcock & Wilcox Enterprises Reports First Quarter 2022 Results

Babcock & Wilcox Enterprises, Inc. (B&W) announced results for the first quarter of 2022.

"Our results for the first quarter 2022, combined with strong bookings and backlog, have positioned us for a milestone 2022," said Kenneth Young, B&W's Chairman and Chief Executive Officer. "We’re continuing to make steady progress in converting our global pipeline of identified project opportunities to bookings, as shown in the significant revenue increase in our Babcock & Wilcox Renewable segment, which had $68.0 million in revenues for the quarter, reflecting a 136% increase over the same quarter a year ago. While the war in Ukraine and COVID-19 have had limited impacts on our supply chain, we are leveraging our flexible sourcing strategy to mitigate these challenges and are also preparing for what we expect will be positive, tailwind effects across all of our business segments as our customers assess long-term energy security and decarbonization needs."

"It was an exciting quarter for our ClimateBright™ decarbonization platform, as we announced that we will partner with Kiewit Industrial to support Fidelis New Energy’s planned 200-megawatt electric net-negative-carbon biomass power plant in Louisiana, which is the largest of its kind in the world. We will provide B&W's biomass boiler technology and our OxyBright™ oxy-combustion technology to isolate and capture CO₂ for long-term sequestration," Young added. "In addition, we are in discussions regarding specific sites and partners for our BrightLoop™ hydrogen and carbon capture commercial demonstration projects, and we expect to begin construction on our first project by the end of this year."

"As previously disclosed, we completed two more strategic acquisitions in the first quarter of 2022, expanding our portfolio of thermal and renewable technologies for hydrogen, natural gas and pulp and paper applications as well as waste heat recovery products for use in power generation, petrochemical, and process industries," Young stated. "We also are continuing to explore additional acquisition opportunities in both emerging technologies and mature markets and aggressively pursuing opportunities to further increase shareholder value. Based on our strong bookings and backlog in the first quarter, we are reiterating our 2022 target of $110 million to $120 million in adjusted EBITDA¹. Our robust pipeline of more than $7.5 billion of identified project opportunities in the next three years, recent contract wins, and additional acquisitions continue to give us confidence in our ability to achieve significant year-over-year growth in 2022, while following our normal quarterly cyclical performance, which typically displays increasing profitability from the first quarter to the fourth quarter of each year."

(¹)The most comparable GAAP financial measure is not available without unreasonable effort.

Q1 2022 Financial Summary

Consolidated revenues in the first quarter of 2022 were $204.0 million, a 21% improvement compared to the first quarter of 2021, primarily due to higher volume driven by new-build projects and the impact of acquisitions completed in the fourth quarter of 2021 and first quarter of 2022, in addition to a higher level of volume in the Environmental segment and partially offset by a lower level of construction activity in the Thermal segment. The negative impacts on the global economy as a result of the ongoing Russia-Ukraine military conflict adversely impacted each of the Company's segments causing shortages of supplies and materials and affecting the timing of revenue on several projects. Net loss in the first quarter of 2022 was $8.7 million, an improvement of $6.8 million compared to net loss of $15.4 million in the first quarter of 2021. GAAP operating loss in the first quarter of 2022 was $6.8 million compared to operating loss of $6.5 million in the first quarter of 2021. Adjusted EBITDA was $12.0 million compared to $8.6 million in the first quarter of 2021. Bookings in the first quarter of 2022 were $239.0 million, a 41% increase compared to first quarter bookings in 2021. Ending backlog was $721.0 million, a 35% increase compared to backlog at the end of the first quarter of 2021. All amounts referred to in this release are on a continuing operations basis, unless otherwise noted. Reconciliations of net income, the most directly comparable GAAP measure, to adjusted EBITDA for the Company's segments, are provided in the exhibits to this release.

Babcock & Wilcox Renewable segment revenues were $68.0 million for the first quarter of 2022, an increase of 136% compared to $28.8 million in the first quarter of 2021. The increase in revenue was primarily driven by higher volume of new-build projects as well as acquisitions in the fourth quarter of 2021. Adjusted EBITDA in the quarter was $1.5 million compared to $0.2 million in the first quarter of 2021, primarily due to the increase in volume partially offset by the impacts of the mix of business within the segment.

Babcock & Wilcox Environmental segment revenues were $34.9 million in the first quarter of 2022, an increase of 12% compared to $31.2 million in the first quarter of 2021. The increase was primarily driven by increased volume in ash handling systems, scrubbers, precipitators, and cooling systems. Adjusted EBITDA was $1.4 million, compared to $1.1 million in the same period last year, primarily due to the increase in volume.

Babcock & Wilcox Thermal segment revenues were $102.2 million in the first quarter of 2022, a decrease of 6% compared to $108.3 million in the first quarter of 2021, primarily due to a lower level of activity on construction projects, partially offset by the acquisitions completed in the first quarter of 2021. Adjusted EBITDA in the first quarter of 2022 was $14.2 million, an increase of 34% compared to $10.5 million in the first quarter of 2021, primarily due to the acquisitions and continued cost savings and restructuring initiatives benefiting the current year, which more than offset the overall decrease in volume.

Acquisitions
On February 1, 2022, the Company acquired 100% of Fossil Power Systems, Inc, (“FPS”), a leading designer and manufacturer of hydrogen, natural gas and renewable pulp and paper combustion equipment including ignitors, plant controls and safety systems based in Dartmouth, Nova Scotia, Canada.

On February 28, 2022, the Company acquired 100% of the equity interests in Optimus Industries, LLC, ("Optimus"). Optimus designs and manufactures waste heat recovery products for use in power generation, petrochemical, and process industries, including package boilers, watertube and firetube waste heat boilers, economizers, superheaters, waste heat recovery equipment and units for sulfuric acid plants and is based in Tulsa, Oklahoma and Chanute, Kansas.

Liquidity and Balance Sheet

On March 31, 2022, the Company had total debt of $343.8 million and a cash, cash equivalents and restricted cash balance of $117.0 million.