Sector Watch: Cleaner coal

Producing electricity is a dirty business; smokestack emissions from coal-fired plants are recognized as a major pollutant and source of global warming. Despite these issues, coal remains the primary fuel for global electricity production, mainly because of its low cost and abundant supply.

Coal produces about half of America’s electricity and is expected to produce 57% of electricity by 2030. Most of the coal burned in U.S. power plants contains substances that cause slag to form within boilers. Slag deposits, formed when ash produced during combustion melts and hardens, reduces the boiler’s efficiency and increases pollutants.

Most of the coal burned in India and China also forms slag, contributing to serious air pollution problems in those countries. The Chinese government is making pollution control a top priority of its new 5-year economic plan, a massive challenge given that China is opening the equivalent of two new coal-fired plants each week to meet its growing power needs.

U.S. environmental regulations are becoming more stringent and utilities are under pressure to curb emissions from their coal-burning plants. The Clean Air Act Amendment of 1999 required gradual reductions in noxious plant emissions on varying timetables. Over 1,000 utility and large industrial boilers in 19 states were affected by the 1999 mandate. This was followed in 2005 by the Clean Air Interstate Rule (CAIR), which extends emissions reduction requirements to 28 states beginning in 2009. CAIR affected an additional 300 utility and industrial broilers. In 2013, the Clean Air Visibility Rule takes effect. This nationwide initiative impacts an additional 50 utility boilers as well as hundreds of industrial boilers across multiple industries. 

New environmental regulations are also addressing groundwater pollution and increasing industry demand for leak detection and secondary containment piping systems. The Federal Resource Conservation and Recovery Act requires that oil and other potential contaminants be stored, handled and  transported via underground pipelines that have leak detection systems and secondary containment tanks. These regulations are causing oil and gas exploration and production companies, gas transportation and marketing companies and oil refineries to change how they transport their products.

Companies benefiting from new pollution controls and environmental regulations include MFRI, Inc. (Nasdaq: MFRI) and Fuel Tech, Inc. (Nasdaq: FTEK), both based in Illinois.

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