EEC hopes to really clean up with fertilizer pellets as fuel

Power plants need to reduce emissions

July 10, 1999|By William Patalon III | William Patalon III,SUN STAFF

Environmental Elements Corp. has a new solution for power plants that want to slash their smog-inducing emissions: fertilizer pellets.

EEC, a Baltimore-based maker of pollution control equipment for utilities and pulp paper mills, has been experiencing a solid rebound in its long-dormant business, thanks to federal regulations that clamp down on how much smog ingredient power plants can emit.

But company officials believe that the new technology using fertilizer, licensed from two companies and refined by EEC, will put another arrow in its quiver. The fertilizer creates ammonia, which is one of the ways power plants reduce their emissions of smoggy stuff. The process employing the pellets negates the need to use liquid ammonia.

"It's cheaper, it's cleaner I believe it can be a very good business for us," said E. H. "Ted" Verdery, EEC's chief executive officer.

One of the largest components of smog is nitrogen oxide, referred to as "NOx" (pronounced "nox"), in industry jargon. One of the most effective smog-fighters has been ammonia, which helps break down the NOx into two harmless elements: water and carbon dioxide.

But ammonia bears some risks and costs of its own. It's toxic, and is considered a hazardous material. It has to be stored in big tanks that feed the chemical into a power plant's pollution-control system via a tangle of plumbing that has to be manned by especially trained personnel. And, because ammonia is highly caustic, it over time corrodes the storage and plumbing systems, which then have to be replaced.

What EEC has done is to bring together technologies from two other companies -- Hera LLC of Orange County, Calif., and Siirtec Nigi of Milan, Italy -- to create an "ammonia on demand" system for customers that buy its pollution control systems. Terms of the licensing agreements were not disclosed.

Instead of using liquid ammonia, this new system employs "urea," or pelletized fertilizer. The pellets are put through a chemical process which Verdery says is "relatively simple" and which converts the fertilizer into the ammonia needed. Robert Tisone, EEC's senior vice president of technology, said the "ammonia on demand" system can be as much as 200 percent to 300 percent cheaper for customers to build, operate and license than conventional ammonia systems.

EEC has begun offering the "ammonia on demand" system to its customers, including some with which it already has multimillion-dollar contracts for others of its products, Verdery said.

According to some estimates, the emission-control business for cutting smog emissions is probably worth an aggregate $10 billion to $15 billion in the United States alone over the next five years to eight years. Others say it is a $1 billion-a-year business in this country. In either eventuality, it's big business and EEC is angling to get a good chunk, Verdery said.

EEC's stock has languished in the $3 per share range, although it has shown sporadic signs of life as contracts roll in. Indeed, Verdery says EEC has "in hand" a yet-to-be-announced order worth several million dollars.

He declined to provide details, noting securities regulations prohibiting so-called "selective disclosure."

EEC shares closed yesterday at $3.25, up 6.25 cents each.

Pub Date: 7/10/99

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