Industrial Evolution: Sustainable Technology

Conventional pollution control technologies do just that; they control pollution to acceptable levels but provide little else in the way of economic benefits.  But what if the redesign of such systems makes it possible to produce useful by-products beyond the so-called “end of pipe” controls?  In the case of industrial plants required to reduce volatile organic compounds (VOC), the conventional abatement technologies include regenerative thermal oxidizers (RTOs) which have an efficiency removal rate of 98 percent and higher.  Environment and Power Systems International, LLC (EPSI) has developed an alternative technology that uses the VOC-containing gases enriched with natural gas to generate both electricity and useful thermal heat as a by-product of pollution control.  This paper describes the alternative technology and reviews the potential contribution to the nation’s electricity supply.  Preliminary data suggests there may be 100,000 industrial facilities that might be able to take advantage of this alternative technology.  If 60 percent of these facilities adopt the EPSI system by 2030, the primary energy savings might exceed one quad of energy.  This is equivalent to the petroleum production that might be provided by opening the Alaska National Wildlife Refuge.  Review this white paper at http://vocgen.com/Publications.aspx

You are invited to express your support for this emerging technology on this weblog or at The VOCGEN Group on LinkedIn.   

2010 Copyright Environment & Power Systems International

A Next Generation Energy Solution for the 21st Century

VOCGEN CHP is a “next generation” small scale decentralized CHP energy solution for industrial facilities that generate and control (abate) VOC air emissions and that can use high quality heat and electricity on site. It is also for facilities that emit VOCs without any air pollution controls, which is a net VOC reduction strategy that competes directly with the concept of emission credits. The customer value proposition is an enhanced combined heat and power (CHP) economic model that dramatically improves profitability and provides greater technical and operational flexibility than traditional VOC abatement equipment.

Specifically, VOCGEN represents an enhanced CHP economic model by eliminating the life cycle cost of traditional thermal destruct equipment. The abatement utility makes this small, yet scalable CHP solution cost-effective and quite profitable when compared to even the most efficient thermal oxidizers offered in today’s marketplace. The latest economic feasibility studies completed for a number of Fortune 500 and Fortune Global 500 companies in various industry sectors have resulted in impressive IRR and simple payback of less than 2 years for 20-year projects.

The sensible use of high Btu value solvent emissions known as VOCs as well as natural gas in small, yet scalable cogeneration systems (≥500kWe) for industry sectors such as manufacturing, petrochemical and synthetic organic chemical manufacturing industry (SOCMI) will prove to be a pivotal energy solution for major sources in regulated markets including Europa and North America, providing tens of thousands of legacy equipment replacement opportunities.

Some of the advanced capabilities and benefits of VOCGEN include:

1)       Rapid starts and stops for either intermittent operations, or continuous operations;

2)       Processing 6,000 cfm per genset and >200,000 cfm VOC-laden air using VOC concentrator technology or stacked gensets;

3)       The thermal destruction of typical low boiler VOC mixtures and concentrations;

4)       Advanced VOC combustor with no moving parts, media substrates or catalysts to maintain

5)       Advanced automation and control systems for high equipment availability and reliability

6)       Automated temperature controls that rapidly respond to a variety of VOC species during operation;

7)       A five minute system start time resulting in VOC destruct readiness and energy generation;

8)       VOC destruct/removal efficiencies (DRE) that achieve USEPA MACT standards for major sources;

9)       The optional replacement of emergency standby power generators and a demand response solution

10)    The cost effective option of utilizing liquid or gaseous fuels with “switch on the fly” capability;

11)    The offset of purchased power and fuel(s) for process and/or building heating and cooling;

12)    An increase in production reliability by adverting brownout and/or blackout events and production losses;

13)    Significant carbon emission reductions when compared to conventional regional power generation;

14)    Avoidance of public funding requirements to make the project economically feasible and beneficial

15)    Less permitting complexity with a focus on “inside the fence” Part 70/71 Title V and stationary gas turbine emission sources

16)    A net decrease in air shed inventories of ozone and toxics

17)    An increase in manufacturing capacity, jobs and tax base

18)    Over 50 industrial applications, e.g., manufacturing, pharmaceutical, petrochemical, fuel transport, etc.

19)    Fulfillment of power utility energy efficiency portfolio requirements and joint project ownership scenarios

20)    Direct reduction in environmental health, global climate, homeland security and aging grid concerns

21)    Fulfillment of environmental and energy efficiency goals of the US EPA, US DOE and the European Commission

22)   Fuel flexible operations utilizing liquid and gaseous fuels such as natural gas, butane, propane, diesel, regular gas, Jet-A, ethanol, etc.

Contact Steve Sexton (sesexton@vocgen.com) at Environment & Power Systems International to ask about a feasibility review and lease to own opportunities for 2012 and 2013. Initial planning strategies include installation of new, pre-certified equipment for further evaluation and planning of facility-wide replacement of legacy thermal oxidizer equipment and the transition to some level of independent CHP and optionally, grid synchronization for droop controlled distributed energy (DE).

2011 Copyright Environment & Power Systems International

THE VOCGEN CHP ENERGY MARKET – A Wealth Generating Energy Technology for Industry

Representing an enhanced CHP economic model, VOCGEN technology is capable of pushing small-scale combined heat and power (CHP) to its full potential by replacing tens of thousands of existing industrial air pollution control systems worldwide exclusive of the need for government economic incentives. 

In the United States alone, the EPA and the States have issued thousands of Part 70 permits (Title V of the Clean Air Act) to facilities classified as major sources of volatile organics (VOC) and that deploy pollution controls to cut regulated air emissions. The VOCGEN CHP niche market in the U.S. is represented by many discrete industrial categories subject to these regulations.

The starting point for on site CHP investment is a review of market related variables or risks including technical, economic and regulatory factors. Key factors include energy prices that represent a “spark spread” sufficient to forecast the financial success of a CHP project. Large scale combined heat and power/distributed energy (CHP/DE) projects are often handicapped because they are subject to far-reaching project development criteria and permitting. Small and scalable VOCGEN CHP are however, capable of flexible modes of operation including quick start and stop functionality, representing a logical alternative technology for the replacement of existing thermal oxidizers and that can comply with existing permit conditions and requirements; power utility demand response programs; significantly reduce carbon emissions; operating with or without switch gear and grid interconnection.

Shale gas discoveries represent a tremendous potential supply of low-cost natural gas for many years to come and it seems that increasing pollution control regulations by the EPA will greatly influence the coal-fired generation industry and increase the cost of electricity.  The CHP/DE market outlook is therefore improving and may perhaps be resurrected sometime in the near future due to an improved spark spread and regulatory favorability at key deregulated States. However, simple payback and operational cost savings for proposed CHP projects are at this time not entirely compelling except in areas of the country where electrical prices are quite high.

VOCGEN CHP enhances the traditional economic and social benefits of CHP for industry by additionally eliminating the life-cycle costs of traditional air pollution controls. Bottom line results are based on feasibility studies recently completed with Fortune 500 companies revealing $400K to >$500K annual cost of operations savings for each 560kWe generator set deployed in 20-year projects; ≤2 year simple payback vs. 5 to 8 years for conventional CHP; >50% carbon emissions reduction; and >50% internal rate of return (IRR).

A recent technology comparison and economic feasibility assessment for a polyethylene laminate process produced a customer plan of action at the corporate level as follows:

YEAR ONE

1. Complete a third-party EPA VOC destruct performance test certification at the Environment & Power Systems International demonstration facility
2. Install one (1) VOCGEN CHP genset and quantify and qualify all required performance targets

YEAR TWO

1.  Replace three (3) existing thermal oxidizers at a single facility with ten (10) 560kW gensets

• VOC-laden air flow – 60,000 cfm
• 52 lbs per hour VOC loading rate – 6:00am to 5:00pm Monday – Friday
• VOC destruction at >98% destruct and removal efficiency (DRE)
• Operational cost savings for the 20-year project >$84,000,000 (USD) (calculated in today’s dollars)

 

2011 Copyright Environment & Power Systems International

Transmission Bottlenecks Bad News for Renewable Energy

The World Resources Institute’s report cites two (2) grid-oriented issues as the key challenge for renewable energy in the European Union (EU), China, and the United States. Clearly, the report selectively evaluates electric transmission issues; however a reader might assume that there are no other good reasons why renewable energy may have commercialization issues. In addition to the reality that renewable energy typically fails to create a compelling economic model within the free market economy, consider the issue of energy supply. In the case of the United States, the issue of supply versus efficiency is an import factor, however is seldom acknowledged. Since 1970, 75% of all new energy demand in the US have been met via efficient products and processes, not supply (ACEEE). Given that the US economy is only 13% energy efficient, does the US need more energy supply, or should the focus be on energy efficiency? The basic assumption by the Institute is that renewable energy is a solution to the reduction of carbon emissions. Unquestionably, energy efficiency is a carbon reduction solution that does not suffer the commercialization issues renewable energy must overcome to be viable. – Steve Sexton

The debate over electric deregulation is back in the news.

Recent power blackouts in electric deregulated states have given defenders of the electric monopoly the occasion to assault electric deregulation claiming that deregulation is the cause for rolling blackouts and generally, higher electricity prices. The opposing view is that the government’s failure to permit new power generation, violent storms and the potential for solar storms and terrorist attack(s), make large centralized generation facilities and the power grid too risky to maintain and that they are economically unrealistic. Part of this reasoning is because blackouts result in huge economic losses for industry as well as the loss of essential commercial and emergency services, placing our economy and Citizens at risk as well.

Many in favor of deregulation believe that energy and economic security can be significantly improved as a result of investment in decentralized generation. Combined heating, cooling and power (CHP) and distributed energy (DE) has been a national priority for many years. This is evidenced by the energy policies of the USDOE and the USEPA. As energy prices and the cost of environmental controls increase and as the successful permitting of large centralized generation facilities becomes more and more difficult, large and small scale CHP/DE becomes essential.

Advocates of deregulation and decentralized CHP/DE generation believe energy security, energy efficiency, energy conservation and significant reductions in carbon and criteria pollutants can be achieved by replacing large central generation facilities. The social and economic benefits of CHP/DE can be realized by electric deregulation, however the aging electric architecture scheme including the controlling interest groups will not be easily persuaded.

VOCGEN & Siemens VOC CHP Technology – An Economic case for change

SIEMENS SGT-300 VOC Gas Turbine Genset

Investment in smaller combined heat and power generation technology united optionally with smart grid technology will increase as energy security and efficiency, production reliability, carbon reduction and air quality drive industry to seek a sustainable and competitive advantage.

This trend is possible given advancements in energy and environmental resource solutions such as VOCGEN and the Siemens VOC combined heat and power (CHP) solution. With the ability to use volatile organic air emissions as supplement fuel, this technology can lead the transformation of contemporary plant design in favor of numerous industrial categories subject to Clean Air Act Title V Operating Permits.

Recycling metals, gases, water, organics and energy is critical to resource conservation and sustainability. Whether on earth or off planet, once resources are in a cycle, system integrity and energy efficiency become the holy grail of sustainability. Therefore, the integration of energy, production and environment protection is an imperative of industrial plant design and systems architecture.

The latest VOCGEN economic feasibility studies completed on behalf of several major automobile manufacturers in North America indicate economic and social benefits beyond traditional CHP. This is achieved by exchanging the life cycle costs of traditional VOC destruct equipment and grid power, with crosscutting energy generation technology.

Economic feasibility studies for VOCGEN CHP projects are subject to variable favorability ratings based on state, regulatory, policy and energy prices, etc. Two (2) economic examples (theoretical CHP projects) for Michigan and California are provided below to aid in an understanding of the potential for VOCGEN.

Plant location: Michigan, USA

System (VOC) airflow: 120,000cfm

VOC loading rate: 225lbs/hr – 27,648 MMBtu/yr

Natural Gas Price: $9.47 / MMBtu (EIA Mar2010 for Jan2010)

Electricity Price: $0.0717 / kW (EIA Mar2010 for Dec2009)

Equipment option 1- 22kcfm RTO w/carbon concentrator

Equipment option 2 – two (2) Siemens gensets w/two (2) HRSGs

Siemens VOC Genset: nominal 7.9MWe, 8760 hr/yr operating hours

Pilot NG Fuel: 756,400MMBtu/yr

Estimated project costs $14,650,000

Adjusted first year costs: $10,324,000

Simple payback: 2.19 years

NPV at 10% discount rate $28,541,400

20-year savings: $88,447,298

IRR w/RTO, concentrator and capital reinvestment year 11 – 46%

Carbon reduction: 35%/yr ≈13,000 MT carbon/yr

Plant location: California, USA

System (VOC) airflow: 120,000cfm

VOC loading rate: 225lbs/hr – 27,648 MMBtu/yr

Natural Gas Price: $7.95 / MMBtu (EIA Mar2010 for Jan2010)

Electricity Price: $0.1046 / kW (EIA Mar2010 for Dec2009)

Equipment option 1- 22kcfm RTO w/carbon concentrator

Equipment option 2 – two (2) Siemens gensets w/two (2) HRSGs

Siemens VOC Genset: nominal 7.9MWe, 8760 hr/yr operating hours

Pilot NG Fuel: 756,400MMBtu/yr

Estimated project costs $14,650,000

Adjusted first year costs: $10,324,000

Simple payback: 1.01 years

NPV at 10% discount rate $70,741,529

20-year savings: $197,497,149

IRR w/RTO, concentrator capital reinvestment year 11 – 99%

Carbon reduction: 35%/yr ≈13,000 MT carbon/yr

2010 Copyright Environment & Power Systems International

Recycling VOCs as energy – a sustainability strategy

If I could offer one piece of advice to chemical ingredient manufacturers, I would recommend that they consider that sustainable manufacturing relies on a combination of key strategies including energy efficiency, environmental stewardship and a lower cost of operations, therefore, chemical ingredients should strategically enable manufacturing industries to meet these goals.

Manufacturers that can identify economic advantage and/or improved product performance as a result of utilizing volatile organic compounds (VOCs) in materials such as coatings, inks, adhesives, etc., may consider the option to recycle VOC emissions as energy on site. This option is available, but not necessarily appropriate for all manufacturers and project feasibility assessments are necessary to deploy such projects.

Recycling VOC emissions as energy can help justify the installation of CHP at an industrial facility, which has many benefits, but the real value proposition is reduced cost of operations based on an analysis of “value of energy and pollution control reliability,” which is critical to plant operations. In addition, manufacturers that emit VOCs below major source thresholds can benefit from VOC energy recycling on site via CHP.

Because CHP is a key USEPA and USDOE program strategy for industry pursuant to energy efficiency and conservation, carbon reduction and homeland energy security, this VOC energy-recycling option should be considered when selecting a CHP system, an air pollution control system, or instituting a pollution prevention program.

2010 Copyright Environment & Power Systems International

The VOCGEN & SIEMENS CHP Solution

The Siemens SGT-300 VOC CHP Solution  Steven E. Sexton The Siemens VOC CHP gas turbine solution defines the future of integrated plant design and sustainable industry via a remarkable economic model.   The high destruction efficiency of regulated volatile organic compounds (VOC) by Siemens 7.90MW(e) SGT-300 significantly enhance the value of a typical economic sensitivity model for a cogeneration plant operating with fixed and variable output. This is good news for industry.  Thousands of existing facilities that use VOC abatement equipment and many more with the potential to use VOC abatement equipment represent a ready replacement market for the SGT-300 VOC CHP Solution. Given the goals of the USEPA and the USDOE to strategically deploy distributed generation (DG) throughout the power grid, the opportunity for energy efficiency and superior economics is at hand.  Preliminary data suggests there may be over 25,000 industrial facilities in the United States that might be able to take advantage of this alternative technology.  If 60 percent of these facilities adopt the technology by 2030, the primary energy savings might exceed 1.25 quads of energy.  This is equivalent to the petroleum production that might be provided by opening the Alaska National Wildlife Refuge.  Introduction The Siemens 7.9-MW(e) SGT-300 VOC solution is a stationary industrial gas turbine technology featuring advanced combustor designs that enable the gas turbine engine to ingest volatile organic compounds (VOC) in the form of vapors and gases and thermally oxidize hydrocarbons to the end products carbon dioxide and water. VOCs originate from various solvents and fuels when used in industrial processes. Waste VOC emissions are ingested into the air intake of the gas turbine and are utilized in the gas turbine combustion chamber as a supplemental fuel in addition to the natural gas that is directly injected into the combustor to fuel the operation of the engine.  Now that the United States and the world are determined to conserve valuable energy reserves and reduce climate change gasses via energy efficiency, high-Btu value solvent and fuel (VOC) emissions are a promising opportunity fuel. This is because VOCs have high heat value and can now be utilized by industrial gas turbines incorporating advanced designs. Therefore, VOCs can be sensibly used in the generation of electricity and valuable waste heat onsite. This technology solves a pollution control issue; conserves energy and reduces GHG via energy recycling. It replaces legacy VOC abatement equipment and the associated life cycle costs and promises to be a catalyst for long-term investment in onsite combined heat and power for industry.  Regulatory Drivers Combined heat and power systems result in energy conservation, efficiency, reductions of greenhouse gases, and reliable and uninterruptable power and steam for heating and cooling for industrial facilities when connected to an interactive grid; and CHP answers the call for Homeland Energy Security. The benefits of energy conservation and reductions of greenhouse gases are social benefits not included in break-even analysis when considering contributions of revenue vs. total fixed cost of a VOCGEN CHP system, yet these social values are drivers of change. In addition, the United States Department of Energy and the United States Environmental Protection Agency has determined that combined heat and power (CHP) fueled by clean-burning natural gas is a best available long-term strategic plan for American industry based on energy efficiency.  The Market Because combined heat and power systems comprising gas turbines are capital intensive, to date, combined heat and power have found limited applications with the exception of large-scale downtown heating districts, and university, medical and military institutions. In the United States, Con Edison distributes 30 billion pounds of 350°F (180°C) steam each year through its seven (7) cogeneration plants to 100,000 buildings in Manhattan, which is the largest steam district in the world. The peak delivery is 10 million pounds per hour (corresponding to approx. 2.5 GW). This steam distribution system is the reason for the steaming manholes often seen in New York-based movies (Reuters: Research and Markets). To make economic sense of many of these type of projects, government or “public” funds and tax incentives have been applied as a means to create workable project financing solutions for investors, lending institutions and the end user/owner. Large scale industrial users of energy like wood, pulp and paper mills and mining operations will justify and build onsite combined heat and power systems, but it is not entirely common. Past breakthrough applications, featuring smaller scale systems include publicly funded landfill and municipal digester gas; convention and conference centers, hotels, casinos and biomass, which are currently in hot pursuit. The financial viability of commercial projects typically depends on government subsidies and incentives, stable electricity and natural gas prices and recently “guaranteed savings” by developers,  however, these are commercial applications as opposed to industrial applications. Industrial applications are small scale CHP in the range of <50MW such as well field; distribution and storage; transportation and transfer; and manufacturing, which is the focus of the Siemens VOC CHP Solution.  Economics Economics are the key to the implementation of new energy and environmental technologies and businesses.  We have witnessed the recent surge of investment in renewable clean energy alternative fuels and technologies. We also have seen many investors pull back from their optimism and investments in renewables after witnessing the actual cash flows and balance sheet results from these popular clean energy projects and businesses. A good energy idea in today’s marketplace must demonstrate compelling economics to justify investment. From the big picture, investing in new technology without real savings is just trading dollars. It may move the economy along but that is the type of short term thinking that has contributed to the existing economic issues we face with energy today. What is needed is real lower costs and greater returns that result in wealth generation and result in long term projects that create jobs.” Many believe that widely deploying combined heat and power in industry can create jobs, real wealth and can be a very positive change for industry.  We must wisely put into practice long term sustainable planning and projects using energy efficient equipment and systems; projects that we can put into operation now to eliminate energy-intensive and expensive combustion technologies. The leaders in combined heat and power, including industry associations and state and Federal agencies are accurate in their approach and thinking about combined heat and power and they are on target to deploy combined heat and power. I urge investors and industry leaders to get involved in financing combined heat and power projects because “efficiency” means savings and that translates into long term projects, long term profitability, competitiveness and meaningful change in the American economy.  Market Barriers and Barrier-Breakers Combined heat and power has not been widely deployed in the past for several primary reasons, but regulations and policies are shaping up.  Some barriers and barrier breakers include: Electricity and natural gas prices must exceed certain price thresholds to justify the capital investment and the difference between purchased electricity and purchased natural gas.  This “spark spread,” condition must be perceived to trend over time to realize a return on investment acceptable to investors and industrial operators and owners. Throughout the period of electrical deregulation, electric power monopolies have resisted combined heat and power by offering low rates for electrical power to industry and they charge tariffs and other standby charges needed for demand response to maintain generation assets in case of DG power system failures and unexpected demand for power. Electricity and natural gas prices have been “volatile” in that prices trend up and down based supply and demand and money market conditions and this makes it difficult to predict and guarantee that a combined heat and power installation will be able to achieve the “savings” anticipated at startup. Standard grid interconnect switchgear has just recently been developed thanks to changing standards, new Federal legislation and policies. This has helped the states to make the changes they needed to standardize the design of switchgear technology and to begin to build the new “smart grid.” The Federal Government has led the way for out-put based environmental regulations for energy efficient technology that has lower emissions because it burns less fuel. Some states are modeling from that example by incorporating new provisions in their rules and regulations.  20-Year Plan My proposed 20-year plan to deploy the VOC solution involves replacing approximately 100,000 boilers, chillers, pollution control thermal oxidizers, flares and other combustion and thermally activated devices that are utilized at manufacturing, petrochemical and synthetic organic manufacturing facilities; including bulk oil, gasoline, ethanol and biogas at loading and unloading facilities in truck, train, and shipping terminals. There are approximately 100 EPA-regulated industrial categories subject to the Clean Air Act that are major sources of VOC emissions. These industries have emission sources from operations such as paint and coatings, plastics, semi-conductor, pharmaceutical manufacturing, etc. Remarkably, many major source facilities enjoy “grandfathered” air quality permit status and are able to emit 50 to 100 tons of VOC annually.  The good news is that the Siemens VOC CHP solution can be an attractive economic proposition and energy efficiency opportunity for these industries.  The result can be a true net reduction of ozone and carbon emissions in air shed inventories wherever the application is deployed. Regardless of the fact that we have a VOC destruct gas turbine technology and a well-defined niche market, it does not guarantee that our plan or the government plan for combined heat and power will be implemented as widely and quickly as needed to turn around energy efficiency economics for industry within the United States. As of now, the economy is in a recession, credit is not flowing and investors are apprehensive, but we must consider the future and agree that the economy of the United States and of the world may not change for the better unless we work together to change it.  Combined heat and power is well-understood and practiced. The technology consists of off-the-shelf system designs together with pre-tested, pre-certified and pre-packaged equipment designed for rapid deployment once project development details, including risk and feasibility assessments, permitting and contracts are in place.  Market Projections Gas turbine combined heat and power technology, the compelling economics are not just highly efficient energy generation and greenhouse gas reductions, but VOC abatement. On the surface, it sounds like a very nice emerging waste-to-energy technology but it significantly represents better economics. That is because it can also eliminate the life cycle costs of legacy boilers, chillers, flares and thermal oxidizers. What we have then is a new economic model for air pollution controls. It is a wealth-generation model created by increasing income and decreasing spending; where payback periods can be less than 1-2 years, it produces excellent internal rates of return and excellent savings for large scale industrial end users. No other air pollution control or CHP technology have claim to this economic model.  Preliminary data suggests there may be over 25,000 industrial facilities in North America that might be able to take advantage of this alternative technology. If 60 percent of these facilities adopt the technology by 2030, the primary energy savings might exceed 1.25 quads of energy. This is equivalent to the petroleum production that might be provided by opening the Alaska National Wildlife Refuge[1]. I have projected that 20 years from initial commercialization, the conversion to industrial combined heat and power technology throughout American industry could contribute an estimated $3.0 trillion USD or more of wealth to the country including jobs, tax base, environmental and health benefits and the value of a decentralized grid and grid security.  Summary I am certain that most people understand by now that biogas, geothermal and solar (including wind and wave) may never be able to widely power our growing American industry; and nuclear power does not seem to be a sweeping option with uranium supplies low and the overwhelming environmental and health concerns for its use. As fossil fuels reach peak use rates and oil and gas reserves decline around the world, other nations may covet their fuel supplies and we may find the global energy situation to be highly competitive and expensive. If this happens, our concern here in America will be the production of our own energy, conservation of valuable energy reserves and the energy efficient design of sustainable industry to ultimately influence the transformation of our future job market and our economy.  This communication contains statements expressing expectations of future events and/or results, which may include, without limitation, statements concerning anticipated financial performance, business prospects, technological developments, potential markets, new products, research and development activities and similar matters.  Such statements constitute forward-looking statements.  A projected financial statement based on management expectations.  A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.  All statements based on future expectations rather than historical facts are forward-looking statements that involve a number of risks and uncertainties, and S.E. Sexton cannot provide assurance that such statements will prove to be correct.   S.E. Sexton undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. [1] This estimate is derived from calculations by Laitner (2004) and compared to ANWR production potential found in Koomey et al. (2003).

Cogeneration Applications for Over 100 Industrial Categories

I invite readers to review our website at www.vocgen.com and learn more about our environment and power solution for industry. The EPA regulates about 100 discrete industrial categories that generate volatile organic compound (VOC) emissions.  VOC emissions are generated in processes (sources) that use solvents and fuels, etc., at manufacturing, petrochemical and synthetic chemical facilities including ship, rail, and truck; and tank, piping, well field and platform infrastructure.  VOCs are an energy-recycling opportunity for over 25,000 facilities in the USA.

Replacing legacy air pollution control technology at facilities that use air pollution controls to comply with air quality permits will definitely benefit the user and society. We also build winning economic models for industries that have never used air pollution controls, but emit thousands of tons of VOCs annually under grandfathered permits. Imagine that! Let’s go to work!

A Perspective on the Pickens Plan and the Natural Gas Act (H.R. 1835 and S. 1408)

Based on shortsighted wind energy market analysis and planning by Pickens Plan in 2008, the modified 2009 Pickens Plan narrowed its focus on the use of natural gas for transportation vehicles.  This colossal scheme and yet desirable goal is based on the assumption that a domestic supply of natural gas can beneficially replace a large fraction of the foreign oil (and natural gas) Americans depend upon.  To the extent this scheme is feasible and can change our current market position to rely primarily on a US natural gas supply will be an important question for Americans in 2010.  It is certainly an important question if we are to rely on American-supplied natural gas to give a hand in achieving energy independence.

Experts within the petroleum industry and our Federal government have considerable understanding of the potential reserves of natural gas within the US and they predict that the natural gas produced from traditional geologic formations in North American will continue to provide the USA with a reliable and reasonably inexpensive supply in the near term.  The traditional uses include the generation of electrical, heating, cooling and mechanical energy for industrial, commercial and residential submarkets.

Recent “discoveries” of natural gas trapped in shale formations have heightened the prospect of “100 years” of an allegedly potential supply for the United States.  The concern for many, including the US Congress is whether petroleum specialists and government authorities can agree with some certainty that these new natural gas fields can be reliable and effective in replacing foreign oil and gas, particularly for an expanded use in transportation vehicles considering the potential environmental impact and uncertain gas extraction methodologies.

Up to now, US natural gas has been held in reserve for the generation of electricity and other traditional uses such as home heating and the production of steam for industry while we purchased inexpensive oil and natural gas from other nations.  A concern is whether the environmental and economic values of the expansion and use of these new fields of natural gas liquids (NGL) from shale formations and oil from tar sands is actionable.  Note that the Canadian natural gas fields found in tar sand formations are second in size only to Saudi Arabia’s oil reserves and are now 60% owned by China.  Many US Citizens including our US Congress believe we must do more to understand these questions before the Natural Gas Act of 2009 can be passed.  Therefore the geologic conditions and the environmental sensitivities of these newly identified natural gas fields will dominate the discussion of technical and economic feasibility and most importantly, environmental regulation and management.

The decision to increase the use of natural gas found in non-traditional geologic formations by the insatiable transportation vehicle industry is not just political, it involves a series of technical and economic feasibility exercises that can reliably predict future market successes and failures.  This is critical for investors and investment is key to the future of the natural gas market particularly for non-traditional gas fields and non-traditional natural gas applications.

Whether US natural gas can somehow replace foreign oil and gas is again, the question.  The US is expert in the development of free markets, technologies and government regulations, but the American petroleum industry has not exhausted its market research nor has it published expert conclusions necessary to predict a new course in this energy market, nor has the US Federal Government exhausted market research or published expert conclusions regarding this emerging market.

The decision to reduce the use of foreign oil in large part from our natural gas reserves is not a political decision and is not as simple as the enactment of the Natural Gas Act of 2009 or 2010.  In the engineering and scientific world, this is simply placing the cart before the horse and it is a poor way to demonstrate that we have identified leadership or a proper course of action that we should follow.

A case in point is Henry Ford.  In short, a personal goal for Henry was to eliminate disease, illness and death caused from the waste produced from millions of horses in the big cities of the US.  In his time, New York City alone was home to over 4 million horses that were generally used for transportation.  Removing the waste daily was impossible.  Ford’s unintended consequence was the creation of SMOG and environmental and health issues from the adaptation of the combustion engine in transportation vehicles. Who new?

We must demonstrate that we understand the lessons we have learned from our first 300 years of industrial development in America.  We have learned that alternative energy sources and technologies depend on technical and economic feasibility research including the diligent development and investment of reliable and beneficial markets.  This was certainly not demonstrated recently in the development of the ethanol industry; just ask the initial investors and the EPA.

I also believe we can agree that we have little room for error on the topic of energy independence as “peak oil” and energy demand becomes an ever-growing concern for America and the world.  I therefore do not discourage good ideas and hard work, but I do encourage that we perform the work necessary to hedge our bets before we decide to politically divide our future from our good senses.  A lot is at stake on this idea of energy independence because it is an obvious necessity, but we must govern ourselves according to the extent of our available knowledge and skill and not our emotions, our political interests and/or potential personal profitable gains.

Finally, yes, I am contributing more than just an opinion; I have developed an energy market solution in the area of industrial energy efficiency.  It is my sincere hope that after 13 years of diligent market research and commercialization planning, my solution will not have unintended consequences.  We will see.