The Sonti Report
A monthly newsletter covering global economy, energy, investments, life sciences, healthcare, food & water
Contact Information
“The Sonti Report”
Issued by:
Pat V. Sonti, Advisor
P.O. Box 423
Short Hills, NJ 07078 USA
Telephone: +1-973-467-2923
FAX: +1-973-665-2361
E-mail: pvsonti@comcast.net
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SM
Volume 1, Issue 2 December 2009
In This Issue
Page 2: Clean Energy Project Development in Current Economic Conditions.
Page 7: Pharmaceutical Companies Ramp-Up on Contract Manufacturing.
Page 9: Domestic U.S. Natural Gas; Transition Fuel for Cleaner, Smarter, & Secure Energy Future.
Page 14: Addressing Fly Ash; A Sensible & Viable Approach.
Curtain Raiser
As the global economy is trying to recover from the Great Recession, there are major concerns on the
resulting impact of quantitative easing by central banks in developed countries which have injected massive
amounts of low interest capital into the financial markets in order to preclude deflation which occurred during
the Great Depression. Currently, there is a major “carry trade” occurring wherein massive infusion of low
interest funding is chasing various asset classes in emerging markets such as Brazil, China and India on the
hope and potential that adequate returns from these countries can fund, finance and continue stock market
rallies. It should be noted that this “massive speculation” is inflating asset bubbles in stocks, commodities,
real estate, currencies, thus creating unavoidable risks for the recovery of the global economy including
emerging markets. In such a case, it is vital to avoid a “depression-inflation” scenario based on the above
“asset bubble” which may burst without much advance notice to investors. Simply, inflation occurs when too
much money is chasing too few goods and services. A key underpinning factor to any tangible global
economic recovery is the ability for countries to maintain economic dynamism based on their own innate
capacity, urge and ability to invent / innovate / improvise solid job creation for products and services. In the
case of the U.S., the current “carry trade” has never been fully tested before and is being undertaken by the
Federal Reserve against the backdrop of unemployment rates as high as 17.5%, rising federal deficits and
burgeoning national debt while domestic consumer demand, constitutes 70% of U.S. GDP, is not rebounding
even with major stimulus funding.
The energy sector is also undergoing a major transformation as traditional business and market
fundamentals are on the verge of potential shift through proposed legislative means on climate change rather
than through market mechanisms of developing and deploying advanced innovative technologies into
projects and assets as in the case of India and China. Along these lines, it is imperative to clearly articulate,
understand and appreciate clean energy project development and finance in the current economic
conditions. Main goal must be to achieve sustainability of the sector.
There is much emphasis on reducing the cost of prescription drugs, increase role of generics, and enhanced
role of biotech. In addition, there is much attention on introducing new life saving molecules in key
therapeutic areas through cost effective and efficient contract drug discovery, contract research, clinical trials
and contract manufacturing. Thus, pharmaceutical companies are targeting their efforts on ramping up on
contract manufacturing.
Domestic natural gas is gaining much bipartisan support in U.S. Congress as a “bridge fuel” to a clean
energy economy. There is full alignment between policymakers, regulators and industry on harnessing local
natural gas supplies, conventional and non-conventional, in order reduce crude oil imports, achieve energy
independence, and transition to increasing role of alternate / renewable energy. Based on advanced
technological innovation of horizontal drilling and hydraulic fracturing, commercially proven methods exist
today to enable the U.S. to meaningfully increase domestic natural gas supplies to meet increasing
wholesale and retail demand from consumers across-the-board.
Fly ash is a residue from coal fired power plants and its leakage from onsite storage ponds poses a serious
environmental threat. Currently there are proven advanced innovative technologies to process fly ash and
convert to beneficial byproducts which serve as a feedstock to cement industry, road construction materials
and other viable uses. The U.S. Environmental Protection Agency is currently contemplating legislation to
classify fly ash as a hazardous waste whereby beneficial methods for conversion may no longer be viable.
In Next Issue
 Smart Grid; Its Role in a Clean Energy Economy.
 Industrial Waste Energy Recovery; Makes Common Sense.
 Addressing Critical Issues Related to Clean Water.
 Electronic Health Records; Making Healthcare Reforms Effective.
 Marcellus Shale; Major Natural Gas Supply for Northeast U.S.
This newsletter has been prepared by; Pat V. Sonti, Advisor; co-author(s); or other contributing author(s), as so indicated in each article contained herein, and issued for private
circulation at no cost and a on complimentary basis via e-mail. This newsletter covers insights, perspective, opinion, commentary, critique, analysis as well as research and other
content. This newsletter utilizes certain information and / or data in the public domain and is referenced accordingly. This newsletter may contain confidential or proprietary
information and / or data. No part of this document may be reproduced, copied or otherwise reproduced without prior written approval.
Copyright 2009; All rights reserved worldwide by Pat V. Sonti, Advisor.
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Volume 1, Issue 2 December 2009

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Clean Energy Project Development in Current Economic Conditions

Pat V. Sonti, Advisor, Short Hills, New Jersey, USA

Introduction and critical phases which if altered leads to unsustainable

technologies and projects. Today, clean energy
Based on recent trends, there is much enthusiasm on technologies which are being promoted are, including but
promoting clean energy in the form of technologies and not limited to; solar, wind, biomass, biofuels, smart grid,
projects. Politicians, bureaucrats, legislators and regulators and green buildings.
as well as industry stakeholders have also embarked on
promoting clean energy against the backdrop of tackling
global climate change, reducing greenhouse gas (GHG)
emissions and creating jobs as part of a new clean energy
economy. Various international, regional and national level
climate change legislation is being proposed and in some
cases being seriously considered for enactment.

Source: World Energy Outlook, Intl. Energy Agency

There is no doubt in anyone’s mind that there is an

ongoing “global recession” and the path to recovery is
quite uncertain considering the recent financial meltdown
which occurred is the worst in the post-World War II
period. Significant debt burden and ongoing weak balance
sheets across-the-board coupled with deleveraging
continue to plague businesses and individuals while
substantial liquidity has already been injected into financial
markets by central banks as part of quantitative easing
efforts. Meanwhile, any foreseen recovery is subject to
other important economic and financial factors, including
but not limited to, increasing federal / state budget deficits,
double-digit unemployment, reduced consumer demand,
increasing rate of bankruptcies, continued mass financial
destructive effects of over-the-counter derivatives,
collateralized debt obligations and credit default swaps.
Source: i2bf.com
The above includes; combined heat & power (CHP),
natural gas, commercial nuclear as well as clean coal and
enhanced hydrocarbon recovery through carbon capture
conversion and sequestration (CCCS). Successful energy
project asset development follows three (3) critical phases:
 Project Development (feasibility, permits &
clearances, contracts, and financing).
 Project Execution (engineering, procurement,
construction, startup and commissioning).
 Project Operations (facility operations,
management, and operations).

Key Fundamentals of Energy Projects

The energy industry (conventional / alternate / renewable
sources) is extremely complex, sensitively balanced and a
highly integrated sector along its entire value chain and life
cycle from raw materials to exploration, production,
generation, transmission, and distribution to wholesale and
retail consumers of fuels, feedstock, and electricity. In this
context, the business and market fundamentals of energy Source: Pat V. Sonti, Advisor
projects have always followed some very key fundamental

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Many well-minded enthusiasts such as project developers, investors to engage highly qualified consultants and
promoters and investors as well as up and coming “clean & advisors with proven track record in project development.
green” entrepreneurs are aiming to take advantage of the
potential opportunities from the clean energy sector. In Sub-Phase 2; Permits & Clearances
order to achieve true sustainability of projects, it is vital to
address the critical phases of clean energy projects in light Covers; (i) federal, state and local permits; (ii) green-tag
of the current economic conditions. permits; and (iii) emissions and tax credits. During this
phase, regardless of the clean energy technology, some
projects may face substantial public opposition such as
“Not-In-My-Backyard-NIMBY” issues which must be
foreseen and factored by project developers, promoters and
equity investors.

Sub-Phase 3; Transactional Contracts

Covers; (i) Engineering-Procurement-Construction (EPC);

(ii) Operations & Maintenance (O&M); (iii) fuel /
feedstock supply agreements; (iv) product / commodity /
offtaker agreements; and (v) other applicable agreements
required for securing debt. The main focus and attention
must be on maintaining and achieving back-to-back
arrangements or “sacro-sanctity” between various project
agreements and contracts. It is vital to demonstrate
“bankability.” Contracts with creditworthy wholesale and
retail customers and long-term offtakers will enhance
chances of non-recourse debt financing from lenders. Such
Source: www.matternetwork.com
contracts include Power Purchase Agreements (PPA’s) and
Project Development Energy Sales Agreements (ESA’s).

This is the most critical phase of a project wherein techno-

economic feasibility and viability must be clearly
demonstrated as well as obtaining the required federal /
state / local permits and clearances. In addition, mandatory
transactional agreements and contracts must be executed in
order to ensure syndicating and securing of debt for
achieving financial closure.

The cost of the project development phase depends on the

type of clean energy technology, its complexity as well as
its site location among the key factors. This major phase
typically can range from $1 million to $5 million
(estimated) from initial start to financial closure which
must be funded by project developers, promoters and
equity investors Very few projects can attract federal /state
grants at the initial phases of a project. There are four (4)
succinct sub-phases which make-up project development. Source: www.ocrwm.doe.gov

Sub-Phase 1; Feasibility Sub-Phase 4; Project Financing

Covers; (i) conceptual, basic, preliminary and detailed
engineering; (ii) Project Feasibility Report (PFR); (iii)
Detailed Feasibility Report (DFR); (iv) Front-End-
Engineering-Design (FEED); (v) Environmental Impact
Studies (EIS) and; (vi) Commercial market studies, Risk
assessment and mitigation analysis. During this phase, it is
prudent for project developers, promoters and equity
Covers; (i) financial analysis and modeling; (ii) structuring
of equity, grants and debt; (iii) critical inputs regarding
equity and debt agreements through financial closing; (iv)
comprehensive risk assessment mitigation & management
report; (v) due diligence, syndicating and securing senior /
subordinated debt, working capital, and financial closing
costs. If non-recourse debt financing cannot be obtained,
lender’s may opt for limited recourse financing by way

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collateralization and securitization of project assets and / or As a note of caution, any clean energy technology which is
balance sheet(s) of project developers, promoters and utilized in a project must be commercially proven and the
equity investors. It is important to understand and promoters, project developers, equity investors and lenders
appreciate the wise saying; “if you cannot finance it, forget must avoid becoming “guinea pigs” for early stage, pilot or
it.” This is especially true to clean energy projects. proof-of-concept technologies. Non-commercialized
technologies will add to project risk and may impact not
Project Execution only financing but also sustainability of the project itself.
Project execution is also known as the design & build
phase. During this critical phase, project promoters, equity Project Operations
investors and lenders require supervision and management This phase covers facilities operation, management and
of the EPC contractor throughout the entire process of maintenance, renovation & modernization, re-vamps and
design-build-construction-startup-commercial operations upgrades. Various owner’s and lender’s engineer reports
leading to plant commissioning. This is typically achieved are required during the execution and operations phases. It
through engagement of an owner’s and / or lender’s should be noted that the operations and maintenance costs
engineer. (OPEX) must be supported by a very detailed project
financial model in MS-Excel to be mutually developed and
agreed upon by the various equity and debt stakeholders.

Source: www.uvm.edu Source: www.tinycomb.com

Continual monitoring of project critical path and milestone Funding & Financing In Today’s Current Economic
schedules is required upto commercial operation of the Conditions via Private-Public-Partnerships
facility. In principle, any target total project cost structure
for a single project follows the below items of hard costs As indicated earlier, the project development phase must
and soft costs in addition to working capital and interest be funded by the promoters, project developers and equity
investors. In otherwords, balance sheet strength is essential
during construction. It should be noted that the total project
cost (CAPEX) must be supported by a very detailed project for undertaking any clean energy projects. In today’s
financial model in MS-Excel to be mutually developed and economic conditions, it is very difficult to fund the project
agreed upon by the various equity and debt stakeholders. development costs with debt in the form of either senior or
subordinated debt including working capital lines of credit.
Hard Costs In some cases, depending on the individual merits of the
(i) Civil and structural and related costs; (ii) mechanical clean energy project, some projects may attract either
equipment, process systems; (iii) electrical equipment and federal and / or state government matching grants.
systems; and (iv) auxiliaries and ancillary equipment and Private-Public-Partnerships (P-P-P)
process systems. Sources Funding & Financing
Equity Project developers, equity & tax
Soft Costs investors/funds, and promoters
(i) Pre-operative expenses (from initial project to Debt Commercial banks, financial
commercial operations); (ii) preliminary expenses (legal, institutions, federal and state govt.
Working Capital agencies
accounting, statutory, corporate, insurance); (iii) turnkey
Grants Federal and state govt. agencies,
project engineering and management services; and (iv) non-profits and foundations.
technology(s) license fee (as applicable). The project
developments costs incurred are included in this category. Source: Various government and industry sources

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The project execution phase, via CAPEX, must be funded
via a debt-equity ratio of minimum 50:50 to 80:20 Project Structure
maximum depending on the risk profile assessment and
debt service coverage ratio (DSCR) as determined by the Design and implementation of a viable project structure is
lenders. Syndication of the debt usually comprises of both vital to the success of any clean energy project. Below is a
commercial banks and financial institutions; both public proven business model and structure for effective project
sector and private sector. Depending on the balance sheet development along with funding and financing sources.
strength and commercial market fundamentals,
collateralization and securitization of the debt is done
either via balance sheet strength, limited recourse (project
assets hypothecated to lenders), or non-recourse (strength
of revenue / offtaker agreements). In today’s economic
conditions, federal / state loans and loan guarantees may be
available on a project-by-project basis. The loan guarantees
are critical to securing any debt from commercial banks
and financial institutions.

Source: K&L Gates, Pat V. Sonti

In all cases, it is very important to be weary of speculators

who may be keen to have various early stage exits in the
project development and execution phases by “flipping”
the assets which may have a major impact of the clean
energy project’s sustainability. It would be very prudent to
ensure that majority, if not all, of the various stakeholders
continue in the clean energy project until such time full
commercial operations and positive waterfall cashflows are
achieved. This approach may be required at least to the
extent that a major portion of the debt is serviced, normally
occurring during the first 1-5 years of commercial
operations.

Source: www.vnf.com Forward Steps

As a part of the detailed project financial model, it is
important to incorporate both fiscal and financial
incentives in the form of production tax credits, income tax
credits, tax holidays and accelerated depreciation. Also,
carbon credits, renewable energy credits, and any other
such incentives must be modeled accordingly. These will
help the overall project profitability indicators such as
Internal Rate of Return (IRR), payback period, DSCR etc.
In some cases, project developers, promoters and equity
investors with very strong balance sheets opt to fund the
entire project development, CAPEX and OPEX well into
project commercial operations. Such project developers,
promoters and equity investors may seek to re-finance the
project based on viable revenue / offtaker agreements
which generate high current income, high net profits and
positive cashflow.
The energy industry has undergone major ups and downs
since the first crude oil embargo of 1973. Many across the
policy and public spectrum have attempted to define an
optimal energy mix coupled with comprehensive energy
policy. In the last two-to-three decades, there has been a
major thrust of deregulation of the entire energy value
chain of production / generation-transmission-distribution.
The main emphasis has been; customer choice; open
access; independent regulatory authority; and market
indexed energy prices for wholesale and retail consumers.
Meanwhile, many project developers, promoters, equity
investors and lenders have been undertaking energy project
development based on non-recourse or limited-recourse
financing with very few balance sheet based projects. As a
result, with the onset of risks associated with business and
market fundamentals coupled with policy uncertainty,

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energy projects today must adhere to conservative balance These factors include:
sheet basics and focus on proven business models. 1. Comprehensive and sustainable energy policy with
Looking ahead, under the current economic scenario, one an optimal energy mix covering conventional /
of the most important factors is the restoration of equity alternate / renewable energy or “all of the above
investor’s confidence which will allow them to emerge solutions” must be enacted at the federal / state
back from the sidelines and participate with project levels.
developers and promoters in order to undertake 2. All encompassing legislative and regulatory
development of clean energy projects. framework for the energy sector must be enacted at
the federal / state levels.
Risks & Mitigation 3. All regulators must be free of political and
An effective comprehensive risk analysis must be bureaucratic interference and must encourage open
undertaken by stakeholders to assess, quantify, allocate and access, market competition, sustainable energy
distribute associated risks thereby resulting in a proper pricing and customer choice.
mitigation plan. A viable methodology and approach can 4. Sound, predictable, sustainable and effective tax
include; policy at the federal / state levels in order to allow
tax investors to participate in the “jump-starting” of
 Identify the risk, understand its origin, nature, and clean energy project development, especially with
categorize / classify the risk. funding the pre-operative and preliminary expenses
 Determine the effective course of corrective associated with the sub-phases; feasibility, permits
action(s), commercial / financial / schedule & clearances and transactional contracts.
impact(s) for each corrective action, and establish a 5. Entire project development phase must be funded by
tabulated categorized risk / reward ratio. equity sources and matched, when proven viable, by
 Assess the execution plans for each corrective grants. This will allow “bankable” projects to attract
action, roles & responsibilities, transactional debt financing via loan guarantees and loans.
contracts and agreements, and applicable insurance. 6. All project stakeholders must ensure that critical
 Implement the corrective action based on a critical path milestones are met, namely; financial closure
path milestones schedule and monitor and manage and commercial operations date.
the performance of all responsible parties. Summary
The potential risks can include, but not limited to, the There are great business opportunities available in the
following: clean energy sector worldwide. In order to achieve true
 Technical; proven technology, design, engineering, sustainability and “bankability”, beyond hype, hysteria and
procurement, construction, commissioning, start-up speculation, it is essential that project developers,
operations, maintenance, retrofits, revamps and promoters, equity investors or lenders adhere to both
spare parts. business and market fundamentals. In today’s uncertain
 Commercial; supply-demand, price, competition, economic conditions, it is also critical to understand and
transactional contracts and agreements, escalation, appreciate that balance sheet strength is vital for
indexation, foreign exchange variation, force undertaking successful project development, achieving
majeure, and default provisions. financial closure and commercial operations.
 Financial; debt-equity ratio, subscribing equity, References
syndicating debt, working capital, grants, balance 1. Five Emerging U.S. Public Finance Models:
sheet exposure, interest during construction, Powering Clean-Tech Economic Growth and Jobs
collateral / security, and hypothecation of assets, Creation, October 2009, Clean Edge Inc., San
liquidation and default. Francisco, CA, USA.
 Policy; federal / state energy policy, regulatory 2. Financing Incentives in the Stimulus Package
framework, permits & clearances, taxes / duties / Project Finance Basics Power Purchase Agreements,
levies, tax credits, accelerated depreciation, and Presented to the Florida Renewable Energy
carbon credits. Producers Association, September 2009, K&L
Essential Next Steps Gates, Palo Alto, CA, USA.
3. World Energy Outlook, 2009, International Energy
There are essential next steps which must be undertaken by Agency, Paris, France.
various stakeholders in order for any clean energy project 4. Annual Energy Outlook, 2009, U.S. Energy
to be implemented successfully and achieve sustainability. Information Agency, Washington D.C., USA.

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Pharmaceutical Companies Ramp-Up on Contract Manufacturing

Pat V. Sonti, Advisor, Short Hills, New Jersey, USA

Introduction $82 million in 2007. This increased to an estimated $103

million in 2009, and is projected to reach $177 million in
The global economic outlook appears uncertain as the most 2014, for a 5-year CAGR of 11.4%. Sales in the contract
severe recession in the U.S. since World War II continues manufacture of bulk- and dosage-form drugs segment were
to linger, but prospects for the pharmaceutical industry worth $36 million in 2007, and were to increase to nearly
may remain brighter. The prevalence of various diseases in $44 million in 2009. By 2014, they are projected to
key therapeutic areas such as; oncology, immunology, increase to $73 million, for a 5-year CAGR of 10.8%.
infectious diseases, cardiology, etc., growing healthcare
needs and an ageing population are factors that ensure a
steady growth for the industry. So, even in a lean and
unpredictable economy, with major mergers & acquisitions
(M&A), the global pharmaceutical business is expected to
stay resilient as these companies tighten their business and
operating costs.
Pharmaceutical companies strive to maximize their return
on invested capital. Today’s costs for the entire value chain
for a new drug molecule (research, development, clinical
trials, and commercialization) ranges from $800 million to
$1 billion. Thus, their most effective approach is to
determine whether the margins on any drug justify the use
of the company’s manufacturing facilities.
U.S. Contract Manufacturing
U.S. pharmaceutical companies have been increasingly
turning to contract manufacturing organizations (CMO’s)
solely to achieve efficiencies in cost, capacity and time-to-
market, or to obtain a specific expertise not available in-
house. Today, these factors still play a role, but now the
most dynamic driver behind the use of CMO’s in the
pharmaceutical industry rapidly is becoming the unique,
innovative, and state-of-the-art process and production
technology they offer. More and more pharmaceutical
companies are leaning towards sub-contracting or
outsourcing to CMO’s in order to concentrate on marketing
their products, without spending time in new drug
discovery and process of manufacturing. This also applies
to some “virtual” companies that exist by the simple fact
they can rely on CMO’s and researchers. Today’s basic
Source: www.fillers.com
question for many pharmaceutical companies remains is;
Global Market Outlook “If the resources used to manufacture low margin products
could be applied to higher margin activities, why not sub-
According to BCC Research, a leading information
contract?”
resource company for the pharmaceutical and high tech
industries, overall sales in the pharmaceutical contract Pharmaceutical, biotech and generic drug companies have
manufacturing and contract research market were worth concluded that by sub-contracting some and / or all parts of
nearly $143 million in 2007, which increased to an their manufacturing process or services, the resultant
estimated $177 million in 2009. By 2014, sales are savings could be invested in the development of new
projected to increase to nearly $299 million, for a 5-year products that should provide higher margins and a potential
CAGR of 11.1%. competitive edge.
The largest segment in the market, contract manufacture of Over the past 75 years, pharmaceutical companies have
over-the-counter (OTC) and nutraceuticals, was valued at been one of the main sectors recognizing the financial

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benefits of CMOs. In addition, the U.S. Government has Some of these CMO’s have technologies and
been increasingly turning to CMO’s for production of manufacturing facilities which are still in early stages,
controlled substances, such as methadone in order to some in proof-of-concept stages, some in pilot plant stages
maintain cost effectiveness and control. With respect to the and some entering scale-up / commercialization,
current Administration, as part of its overall healthcare respectively. Most of the private sector parties involved in
reforms for Medicare, there is much greater emphasis on CMO technologies and manufacturing are small businesses
reducing the cost of prescription drugs via generics which and are presently starved for capital, with weak balance
can be achieved through sub-contracting to CMO’s in the sheets, minimum collateral and / or security for securing
U.S. versus offshoring to highly competitive CMO’s debt, but have highly competent technical and management
overseas. skillset with intellectual property. With the currently
India’s CMO’s fragile investment scenario for equity, working capital and
debt, it is vital to leverage a “Private-Public-Partnership”
The Indian CMO market was worth $874 million in 2007. model wherein the U.S. government will provide grants,
Although this market presently occupies a fraction of the loans, and loan guarantees via agencies such as the Small
total global opportunity, the future potential of the market Business Administration (SBA), the Food & Drug
seems immense. The Indian CMO market, with its low cost Administration (FDA), and / or the Department of Health
advantage, strong chemistry and reverse engineering & Human Services (HHS). This can be matched with
capabilities, improving infrastructure and strong incentives equity from CMO promoters and owners, private equity
from the Indian government, is expected to grow strongly groups and venture capitalists. In addition, the U.S. federal
in the next five years. By 2012, the Indian industry is and state government(s) must also seriously consider
expected to grab nearly 8% of the total global market. The providing income tax credits, production tax credits and
Indian CMO market is expected to grow in excess of other job creation incentives in order to spur active private
cumulative annual growth rate (CAGR) 37% between 2007 sector involvement. The U.S. can become a net exporter of
and 2012. Most companies presently outsource Active CMO products and services thereby increasing U.S.
Pharmaceutical Ingredients (API’s) and intermediates from exports and improving the current economic scenario. The
India. Moreover, India is also becoming a major hub for U.S. small business sector continues to remain as the major
outsourcing formulations. Most Indian CMO’s have engine for economic growth and can truly accelerate jobs
upgraded their manufacturing plants, which has enabled growth in order to meet the current Obama
India to have a number of plants certified by the USFDA, Administration’s objective to save or create nearly 2.5
EDQM and various other regulatory agencies. The cost of million jobs. However, unless and until business and
secondary manufacturing in India is around 13%-15% of market oriented policy and investment work hand-in-hand,
the cost in the U.S., the U.K. and Germany, with the commitment to increasing CMO’s market share as
companies making substantial savings on costs of plant set articulated above, will just remain as one more “concept”
up, labor and operations. India has more than four times and “business-as-usual” only as in the previous decades.
the total drug manufacturing staff than the U.S. and more
than 12 times that in the U.K. Growth of the CMO market Summary
is expected to provide a major boost to the pharmaceutical The pharmaceutical industry is undergoing significant
machinery market in India, which is expected to register M&A activity. By leveraging the utilization of CMO’s, the
revenues up to $822 million by 2010-11. Strong industry can supply cost effective generic drugs for the
appreciation of the Indian Rupee against the U.S. Dollar is global market. In addition, pharmaceutical companies can
having a detrimental effect on the profits being generated take advantage of innovative technologies developed by
by many of the Indian CMO’s. CMO’s and enhance job creation during the current global
Positive Steps Going Forward recession.

As with any effective policy, unless and until the U.S. References
Congress enacts comprehensive, bipartisan, fair, balanced, 1. Contract Pharmaceutical Manufacturing, Research
transparent, and equitable healthcare legislation and and Packaging, Report Code: PHM043C, October
regulatory framework, the task of dealing with reducing 2009, BCC Research, Wellesley, MA, USA.
the costs of prescription and generic drugs will be left 2. Indian Contract Manufacturing-A Hot Opportunity,
solely to the private sector and competing market forces of Report No. ASDR-2266, March 2008, RNCOS
globalization as in the past. Industry Research Solutions.
The U.S. currently is a global leader in CMO’s which have
been developed solely with private sector partnership.

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Domestic U.S. Natural Gas; Transition Fuel for Cleaner, Smarter, & Secure Energy Future
Pat V. Sonti, Advisor, Short Hills, New Jersey, USA
Scott M. Shemwell, D.B.A., Houston, Texas, USA

Introduction The U.S. natural gas pipeline grid comprises of; 1) more
than 210 natural gas pipeline systems; 2) 305,000 miles of
There is no doubt that natural gas, the lowest carbon fuel, interstate and intrastate transmission pipelines; 3) more
remains the cleanest fossil fuel when compared to existing than 1,400 compressor stations that maintain pressure on
conventional hydrocarbon sources such as crude oil and the natural gas pipeline network and assure continuous
coal. Significant private sector efforts have been made in forward movement of supplies; 4) more than 11,000
the U.S. over the last 20 years to increase natural gas usage delivery points, 5,000 receipt points, 1,400 interconnection
for power generation thereby displacing crude oil and coal. points that provide for the transfer of natural gas
Today, with major advances in state-of-the-art technology, throughout the U.S.; 5) 24 hubs or market centers that
there is much focus on harnessing non-conventional provide additional interconnections; 6) 400 underground
sources of natural gas via shale gas in the lower-48 states natural gas storage facilities; 7) 49 locations where natural
for which the U.S. has vast and abundant domestic gas can be imported / exported via pipelines; and 8) 8 LNG
resources to enhance its energy independence and national (liquefied natural gas) import facilities; and 9) 100 LNG
security from crude oil imports and coal usage. As major peaking facilities (1).
bipartisan support continues to grow in the U.S. Congress,
there is major legislation proposed pending enactment to
ensure that natural gas takes center-stage as the “bridge
fuel of choice” for a clean energy economy coupled with
energy conservation, energy efficiency, reducing carbon
footprint, and integration of renewable energy sources such
as wind, solar and biofuels. Using clean domestic natural
gas will also enhance the U.S. economy. Since it is
produced in the U.S., higher gas demand will create more
jobs, and using domestic gas in lieu of imported crude oil
would reduce current trade imbalances, keeping energy
dollars in the U.S. instead of exporting crude oil dollars
overseas.

Current U.S. Pipeline Network

Based on the U.S. Energy Information Administration

(EIA), the current natural gas pipeline transmission
infrastructure is a highly integrated transmission and Source: www.vorysenergy.com
distribution grid that can transport natural gas to and from
nearly any location in the lower-48 states. Positive Regulatory Support

Under the current Administration, the Secretary of the U.S.

Department of Interior is recommending that natural gas be
considered as an important part of the U.S. energy policy
because using it produces less greenhouse gases (GHG)
than any other fossil fuel. To date, the U.S. Department of
Energy’s (USDOE), National Energy Technology
Laboratory (NETL) has funded nearly nine natural gas-
from-shale projects. Most of them are intended to improve
the management of hydrofracing water at shale drilling
sites or waste water treatment sites. NETL projects’ goals
are to improve management of water resources, usage, and
disposal; and to support the science which will help the
shale gas development regulatory and permitting process.
The USDOE share will be about $7million to $10 million.

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The proposed legislation, H.R. 1835, The New Alternative winners when it comes to new pipeline construction and
Transportation to Give Americans Solutions Act (or “Nat recovering from releases or accidents.
Gas” Act), to the 111th Congress on April 1, 2009, yet to be
passed by the U.S. Congress contains robust support for
natural gas transportation initiatives including mass-
deployment of natural gas vehicles (NGVs). Under the
proposed legislation, there will be expansion of the market
for natural gas as a heavy-duty transportation fuel by
increasing incentives for gas-powered buses and heavy
trucks. In addition, creation of incentives for communities
to develop bus rapid transit systems that employ buses
fueled by natural gas.

Recent Growth

The past 10 years have seen an increase of about 20,000

miles of natural gas transmission pipelines. From a demand
perspective, this new capacity was added primarily to serve
new natural gas-fired electrical generation plants. New
unconventional gas is primarily coal seam or coal-bed
methane and shale gas. Given the large amount of recent
construction and the current relatively low energy price
environment, construction activity is likely to decline from
this peak for the next several years. It should also be noted
that Alaska continues to be a major potential supply of
natural gas with reserves in excess of 42 trillion cubic feet
(TCF) (estimated) with technically recoverable reserves of
nearly 28 TCF (estimated). In addition, the deepwater
region of the Gulf of Mexico also promises to be a major
source of natural gas along with the outer continental shelf
(OCS).
Source: www.engineervill.com
Natural Gas Prices
Natural gas prices in the U.S. are indexed based on spot
prices of Henry Hub / New York Mercantile Exchange
(NYMEX) both being commercial market driven indices.
There have been some major price spikes in the last 4-5
years and prices have now been stabilized and today range
from $4-7 per MMBTU. Improved commodities regulatory
oversight will ensure that speculation is kept under check
thereby minimizing volatility of natural gas prices.

Infrastructure Limitations

The largest economic threat to natural gas transmission line

profitability, although highly unlikely given the relative
environmental attractiveness of natural gas as a fuel, is a
reduction in natural gas use to fire electric power
generation facilities. Environmental regulations have thus
far favored and will continue to favor natural gas as a fuel
of choice. These regulations will continue to drive power
plant demand of natural gas, even though on a strictly
energy equivalent economic basis this use is questionable.
Pipeline integrity expenditures will continue at significant
levels but will not seriously threaten industry profitability,
as regulators and the pipeline industry have been Both wholesale and retail natural gas prices are expected
developing these programs for at least the past decade. to, subject to adverse weather, continue their stable pricing
levels. From a supply-demand scenario, ample storage is
Accidents and the attendant litigation, however, could expected to meet any peaking demand scenarios while
threaten individual company profitability. Consequently, maintaining price elasticity to meet the norms of both
prior to investing in natural gas transmission companies, wholesale and retail consumers.
investors should understand the company’s integrity
programs and the risks those companies face. Permitting Capturing the New Natural Gas Opportunity (2)
and land use are impacted by a patchwork of federal, state,
and local regulations. Those pipeline companies that can The recent development of advanced technology, as above,
best manage the public relations process will be the that enables the affordable development of significant

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shale gas reserves in the lower-48 states could
fundamentally alter the U.S. energy system and play a
larger role in helping to more rapidly and cost-effectively
speed the transition to a low-carbon economy and reduce
global warming pollution. The EIA estimates that the U.S.
has approximately 1,770 TCF of technically recoverable
gas, including 238 TCF of proven reserves. It is estimated
that total U.S. gas resources is 2,074 TCF. It is also
estimated that “technically recoverable unconventional
gas” including shale gas accounts for nearly two-thirds of
U.S. onshore gas resources.

At the current production rates, “the current recoverable

resource estimate provides enough natural gas to supply
the U.S. for the next 90 years.” These gas findings in
Arkansas, Louisiana, Michigan, New York, North Dakota,
Ohio, Pennsylvania, Texas, and elsewhere have increased
proven reserves of U.S. natural gas by 13%, and driven
potential reserves even higher.
Source: Energy Information Administration, based on data from the
Office of Fossil Energy, U.S. Department of Energy (6)
These statistics suggests that while crude oil imports have
been difficult to tame, natural gas based “energy
independence” is within range. First let’s define what we
mean by “energy independence” as it relates to natural gas.
Many define energy independence as simply zero import of
petroleum. This definition discounts a strong dynamic,
which we classify as the “3E’s of Natural Gas”. We have
all experienced the wobbly 4-leg stool, either on a rough
surface or as the result of wear and tear. Two legs will not
stand alone, but the tripod or “3-legged stool” is a very
stable platform as below.

Natural Gas 3 (E’

(E’s) Legged Stool

Energy Independence Environment

Economy (Jobs)

Source: S. Shemwell, D.B.A

National Security & Energy Independence First; with the advent of shale gas reserves as described
herein, natural gas becomes the primary fuel of energy
Since the 1973 oil embargo, all subsequent U.S. independence. Natural gas is not only the feedstock for
Administrations have called for “energy security” by clean electricity, but the basis of many carbon based
reducing the import of foreign crude oil. During that products such as plastics, fertilizer, and fabric.(7) Industrial
timeframe the importation of crude oil has increased from utilization, as well as gas liquefaction,(8) round out the
1,183,996,000 barrels in 1973 to 3,580,694,000 barrels in value from a robust economic hydrocarbon molecule.
2008 (3). This represents a growth from approximately 30%
of the total U.S. consumption in 1973 (4) to 58% in 2007 Second; the beneficial environmental impact, is partly
(last year reported) (5). understood in that burning natural gas emits a small
amount of GHG; however, what is often overlooked is the
Given the continued reluctance to drill for crude oil outside small environmental footprint from ongoing natural gas
of the current producing areas of the U.S., it is unlikely that production. Compared, for example, to wind and solar
meaningful reductions in the import of crude oil will be power, natural gas is more environmental friendly since the
attained anytime soon. Conversely, the level of natural gas industry has long remediated the landscape and is “good
imports has remained relatively steady, despite significant neighbors.” Natural gas can serve as a “bridge fuel” to a
increases in consumption. low-carbon, sustainable energy future. In particular, natural
gas can provide the critical low-carbon “firming” or back-

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up fuel that can enable deep market penetration of both dramatically. While much remains to be done, particularly
wind power and concentrated solar thermal power. The with infrastructure development and water management,
marriage of natural gas and renewable energy in the form shale gas could represent approximately 42% of the total
of hybrid wind-gas and solar-gas plants addresses the issue gas produced by 2035.(9) Some critics will suggest that
of renewable intermittency, greatly enabling low-cost / low shale gas drilling and production will damage the local
emissions power generation. water supply which is not the case. The industry takes the
remediation and reuse of produced water seriously and
uses processes that return the water to the environment for
appropriate human and animal / agricultural uses.(10)
Today, much of the conventional gas is supplied from a
few geographical areas such as Louisiana and Texas that
can be subject to unpredictable bottlenecks such as the
hurricanes that raked the area in 2005, dramatically
restricting availability for a period of time. The extensive
proximity of shale gas to industrial areas in the Midwest
and Northeast vividly changes this equation. States and
local communities with shale gas reserves can build strong,
resilient economies on the 3-legged stool of natural gas.
With clean energy availability assured, local areas will
have flexibility to address community economic and
environmental issues and take control of their destiny. The
following table provides readers with a brief overview of
Source: NY State Dept. of Conservation, U.S. Energy Information
some Key Economic Indicators on a state-by-state basis.
Agency
Key Indicators of Economic Activity from Natural Gas Production
(2007 Last Year Reported)
Due to ample supply along with price stability, natural gas
is the basis for promoting the development of clean energy

s
ee
d*

oy
technologies such as wind-gas hybrid electricity plants,

le

pl

id
ril

Em

Pa
lD
carbon capture and storage, and natural gas transportation

el

or

s
ls

xe
W

at
el

Ta
er
as
W
fuels. Such low-carbon technologies would find a market

p
G

tO

n
as

tio
of
G

uc
ire
overseas. The U.S. and the world’s needs for new jobs and
e
ng

at

od
D
ci

tim

Pr
as
du

new energy sources coincide with the emergence of a

Es

d
ro

an
al
fP

ric

ur

e
et

powerful wave of clean energy investment. More than

ro

nc
at
om
be

lN

ra
on

ve
um

ta

$155 billion was invested in clean energy technologies in State

Se
Ec

To
N

Alabama 6,591 529 6,203 $139,380

2008 alone and investments are expected to triple in the Alaska 239 15 1,253 $2,208,400
Arizona 7 - 250 $6,761
next three to four years. Arkansas 4,773 765 6,535 $14,928
California 1,540 163 3,131 $471,185
Colorado 22,949 3,385 23,970 $126,244
Third; benefits to the economy. The natural gas industry Florida - 1,852 $9,288
Gulf of Mexico (Federal) 2,552 - -
generates long-term, sustainable, well paying jobs. The Illinois 316 94 6,218
Indiana 2,350 37 3,749 $1,350
industry requires engineers, managers, finance, information Kansas 19,713 1,546 6,830 $131,217
Kentucky 16,563 937 3,326 $38,538
technology professionals as well as a significant number of Louisiana 18,145 1,260 52,588 $981,229
Maryland 7 - 678 $3
skilled laborers such as welders, fabricator, instrument Michigan 9,712 432 7,551 $67,796
Mississippi 2,315 200 5,283 $8,364
technicians as well as truck drivers and hospitality Missouri - - 3,305
personnel. When coupled with the fact that natural gas is Montana
Nebraska
6,925
186
494
132
2,467
2,432
$242,776
$2,894
substantially less expensive than a barrel of crude oil, the Nevada
New Mexico 42,644
4 -
1,265
23
13,483
$40
$987,921
economics of this industry are compelling. Moreover, as New York 6,680 211 5,799
North Dakota 200 12 242 $185,970
good neighbors, the industry works closely with local Ohio 34,416 547 8,243 $2,452
Oklahoma 38,364 2,570 36,713 $1,001,328
communities to better local lifestyles. Finally, for local, Oregon 18 - - $117
Pennsylvania 52,700 3,110 11,091
state, and federal governments, the industry is a source of a South Dakota 71 2 226 $3,153
Tennessee 305 59 3,335 $1,838
stable tax base. Texas 76,436 9,533 167,761 $2,729,862
Utah 5,197 646 5,729 $70,178
Virginia 5,735 705 4,759
Role of Shale Gas West Virginia 48,215 1,808 7,020 $80,294
Wyoming 26,900 2,876 22,268 $595,031
Total 452,768 33,334 424,312 $10,108,537
The commercial development of U.S. shale gas is little Sources: http://www.ipaa.org/reports/docs/2008-2009IPAAOPI.pdf
more than a decade old. During this period, the industry Note:
http://tonto.eia.doe.gov/dnav/ng/ng_prod_wells_s1_a.htm

has evolved rapidly and the arrival of this unconventional Econometric Estimate of Gas Well Drilled is estimated including percentage of dry wells attributed
to gas vs. oil wells

product is changing the natural gas landscape rather

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According to the EIA, in 2007 (the last full reporting required directly by the industry, there are “pull through”
period available) (11), there are over 450,000 producing gas required by this inexpensive, readily available, and
wells, employing over 400,000 direct employees. This does sustainable energy source. As shale gas infrastructure is
not include the supporting personnel as described above, developed, logic suggests that with favorable tax and
i.e., service company labor as well as local support regulatory environments, energy intensive industry can
infrastructure such as retail. compete from a common base within the U.S.

Moreover, in 2007 over $10 million in severance and Summary

production taxes were paid to the states. Other tax revenue,
such as sales tax, would apply to the purchase of oil & gas It is both vital and important for U.S. Congress to enact
field equipment as well as purchases made by direct and pending legislation to ensure that natural gas takes center-
indirect employees. It is clear that the tripod model of stage in the U.S. clean energy economy and as a “bridge
value demonstrably provides; 1) energy independence not fuel” transitioning to an integrated energy mix
just from foreign sources but risk mitigation from Gulf of conventional / alternate / renewable sources of energy.
Mexico natural disasters; 2) economy and jobs at state and
local levels; 3) lowest environmental impact and footprint References
compared to crude oil, coal and other green alternatives; 1. U.S. Energy Information Administration (EIA),
and 4) less capital investment in infrastructure compared to www.eia.gov
other alternatives. 2. “Natural Gas, A Bridge Fuel for the 21st Century” John
D. Podesta and Timothy E. Wirth, Center for American
Moving Forward Progress, Washington D.C., August 10, 2009.
3. Energy Information Administration.
Natural gas infrastructure is critical and vital to economic http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n
growth. The current Administration must realize that no =pet&s=mcrimus1&f=a
country can have economic success without promoting 4. Energy Information Administration.
natural gas as part of its energy and environment policy http://www.eia.doe.gov/emeu/25opec/sld002.htm
wherein exploration companies are the producers, the 5. Energy Information Administration.
pipeline industry are the transporters, and gas utilities are http://tonto.eia.doe.gov/energy_in_brief/foreign_oil_depe
ndence.cfm
the local distributors. Understanding the natural gas 6. http://www.eia.doe.gov/pub/oil_gas/natural_gas/feature_a
industry and the electric power industry and how these rticles/2009/ngyir2008/ngyir2008.html#consumption
industries impact their customers is the price of entry into 7. http://www.naturalgas.org/overview/uses_industry.asp
the natural gas production, transmission and distribution 8. http://www.naturalgas.org/overview/uses_transportation.a
arena. Those natural gas companies who succeed in the sp
long-term must understand the myriad stakeholders. 9. Water Treatment Technology For Oil & Gas Produced
Appreciating stakeholder positions and working to balance Water;http://www.unm.edu/~cstp/Reports/H2O_Session_
the competing stakeholder demands that include safety, 4/4-5_Sullivan.pdf
environmental responsibility, reliability, efficiency, 10. Snow, Nick. (2009, November 9). CSIS: unconventional
resources altering global gas outlook. Oil & Gas Journal.
profitability, quality of life, and many others is the key to pp. 19-20.
long-term success in this industry. 11. The EIA published data is available through 2007. The
authors understand that due to the 2008-09 Recession that
Today, policymakers in Washington D.C. are desperately these figures maybe higher than the current level. The
trying to “create jobs, jobs, jobs”. The oil & gas industry point herein is to suggest the order of magnitude of
employs nine million people in the U.S. alone. These high economic value to State and local citizens and
paying jobs not only include those employed by gas governments.
companies, but those providing a wide variety of support 12. Snow, Nick. (2009, November 2). Tax policy leaders
as discussed herein.(12) urged to back high=paying energy jobs. Oil & Gas
Journal. pp. 26-27.
Moreover, energy industry that depends on a viable and 13. A Practical Guide to US Natural Gas Transmission
clean hydrocarbon source will locate where that energy Pipeline Economics, An Oil & Gas Journal Research
source is readily available. One school of thought is that Center™ Report, 2009, Oil & Gas Journal, Penn Energy.
the advent of the development of shale gas in the Midwest
and northeast U.S. can be a catalyst for sustainable jobs in
the current economic environment. In addition to the jobs

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Addressing Fly Ash; A Sensible & Viable Approach

Pat V. Sonti, Advisor, Short Hills, New Jersey, USA
Alec Ganopolsky, President, MCC Technologies Inc., New York, New York USA

Introduction of a clean energy economy and creating jobs. The

opponents would like to declare fly ash as a hazardous
Fly ash is one of the residues generated in the combustion waste through legislation and thereby preclude any
of coal in power plants. Fly ash is generally captured from leveraging of clean technologies and mitigating inaction.
the chimneys of coal-fired power plants, and is one of two
types of ash that jointly are known as coal ash; the other, U.S. Dealing With Fly Ash
bottom ash, is removed from the bottom of coal furnaces.
Depending upon the source and makeup of the coal being In the past, fly ash was generally released into the
burned, the components of fly ash vary considerably, but atmosphere but pollution control equipment mandated in
all fly ash includes substantial amounts of silicon dioxide recent decades required that it be captured prior to any
(SiO2) (both amorphous and crystalline) and calcium oxide release. In the U.S., fly ash is generally stored at coal
(CaO). Toxic constituents include arsenic, beryllium, power plants or placed in landfills. About 43% is recycled,
boron, cadmium, chromium, chromium VI, cobalt, lead, often used to supplement Portland cement in concrete
manganese, mercury, molybdenum, selenium, strontium, production. It is increasingly finding use in the synthesis of
thallium, and vanadium, along with dioxins and polycyclic geopolymers and zeolites.
aromatic hydrocarbons (PAH) compounds.

Source: www.caer.uky.edu

Other important components are aluminum trioxide (Al2O3) Source: fhwa.dot.gov

with concentration of up to 60%, cenospheres (1-2%) and
unburned carbon (Loss on Ignition-LOI). Some ashes Fly ash has become a very important issue which has
contain high concentration of rare elements such as received much attention from policymakers such as the
germanium (up to 1000 ppm) and gallium. Utilization of U.S. Environmental Protection Agency (USEPA). Millions
fly ash as cement substitute depends on LOI level and in of tons of toxic fly ash is piling up in power plant ponds in
case of high LOI (above 3%) would require processing. 32 states in the U.S. and the federal government has long
Germanium extracted from fly ash can be used in solar recognized fly ash as a risk to human health and
cells production, fiber optics and other high tech environment but has left it unregulated. The reuse of fly
applications. ash, via processing technologies, in the U.S. as an
engineering material primarily stems from its pozzolanic
Currently, the three major coal consuming countries, U.S., nature, spherical shape, and relative uniformity. Fly ash
China and India are focusing on dealing with fly ash. recycling, in descending frequency, includes usage in:
Emphasis thus far is on developing advanced innovative
technologies which can be deployed into state-of-the-art 1. Portland cement and grout.
projects which can utilize fly ash as a feedstock to support 2. Embankments and structural fill.
downstream industries thereby becoming an integral part 3. Waste stabilization and solidification.

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4. Raw feed for cement clinkers. Currently, man-made lagoons hold a mixture of the non-
5. Mine reclamation. combustible ingredients of coal and the fly ash trapped by
6. Stabilization of soft soils. equipment designed to reduce air pollution from power
7. Road subbase and aggregate. plants. Over the years, volume of waste has grown as
8. Flowable fill. demand for electricity increased and U.S. government, at
9. Mineral filler in asphaltic concrete. federal level, has clamped down on emissions from power
10. Other applications; includes cellular concrete, plants. The USEPA has set out to make national standard
geopolymers, roofing tiles, paints, metal castings, for ponds or landfills use to dispose of wastes produced
and filler in wood and plastic products. from burning coal. Under the current Administration, the
One new U.S. technology company estimates that 1.2 now USEPA Administrator, testified at her U.S. Senate
million tons (per annum) of Class F fly ash is processed by confirmation hearings in early 2009 that targeting fly ash is
either carbon burnout (CBO) or electrostatic separation one of the top three areas of her focus if confirmed as the
technologies in the U.S. The two primary carbon reduction new head of the USEPA. The USEPA estimates about 300
companies are Progress Materials (owned by Progress ponds exist for fly ash existing nationwide. The U.S. power
Energy) and Separation Technologies (owned by Titan industry estimates that ponds contain tens of thousands of
America). Both approaches, while effective, are capitally pounds of toxic heavy metals. Storing fly ash is getting
and operationally expensive for many utilities to consider more expensive and power utilities will be pushed to find
as a substitute for land disposal, mine backfilling and other more ways to recycle or process it safely via fly ash
less expensive material reuse options. CBO, the market processing plants. As stated above, some beneficial uses of
leading technology, is more effective on higher carbon fly ash are to process it and utilize substituting fly ash for
content (greater than 8%) ashes, which not all plants cement in concrete, which binds heavy metals and prevents
produce, and, from an environmental perspective, is harder them from leaching, or as a base for roads, where the ash is
to permit because of its atmospheric emissions. Other covered by an impermeable material. But using the fly ash
prospective technologies; chemical treatment, microwave, as backfill or to level abandoned mines requires intensive
ozonation have yet to offer significant competition for a study and monitoring.
variety of reasons. New fly ash processing technology As with any effective policy, unless and until the U.S.
companies propose an environmentally benign, closed Congress enacts comprehensive, fair, balanced,
loop, low capital and operational cost alternative – based transparent, “common good” and “common sense”
on multi-sectional column flotation technology – for legislation and regulatory framework, the task of dealing
processing coal ashes to exceed ASTM C618 carbon with fly ash will be left solely to each state and private
content criteria. The proposed plant can be designed to sector as in the past. Currently, there appears to be
process up to 500,000 tons of material per year. politicization of the issues dealing with fly ash and
U.S. Government constructive measures seem difficult under the present
legislative climate in Washington D.C. as partisan forces
The U.S. has laid great emphasis in tackling safe handling are not willing to compromise their respective positions.
and processing of fly ash as part of its clean energy agenda Today, the USEPA is seriously considering whether to
under the current Administration. The U.S. Department of classify fly ash as a hazardous waste which in turn may
Energy (USDOE) data found that 156 coal-fired power have significant impact on commercial utilization of
plants store fly ash in surface ponds similar to one that effective means of fly ash processing technologies.
recently collapsed the Tennessee Valley Authority (TVA) India and China
power plant in Tennessee in December 2008 which has
been declared a disaster much worse than the Exxon Today, India and China lead the emerging markets and are
Valdez oil spill in Alaska over two decades ago. well poised to be in the top three world economies in
coming years. Impressive growth rates of 5-10% annual
GDP, latent domestic demand, conservative fiscal and
financial regimen, along with an optimal energy mix of
conventional / alternate / renewable sources are fueling
both these countries. Coal constitutes over 50% of the
energy fuel mix and is likely to continue at these levels.
Although there is persistent pressure through proposed
legislation from developed countries to curtail coal
utilization, both India and China continue to focus on their
own economic growth leveraged by advanced innovative
technologies and on-the-ground clean energy projects.
Source: www.nytimes.com Both India and China are advocating sound policy to

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harness, process and recycle fly ash as a feedstock thereby It will be interesting to observe the outcome of the
supporting downstream industries. upcoming Copenhagen climate change summit as well as
India and China’s continued proposals for multilateral and
bilateral cooperation.

Source: www.hyderabadolx.in

Both India and China have shown willingness to discuss

multilateral framework for broad cooperation on climate Source: www.adityabirlachemicalsindia.com
change but discuss bilateral joint ventures for advanced
technology development and projects. Summary

Category Details Fly ash processing must be addressed by all stakeholders at

Policy Supporting upto 100% fly ash
(federal / state) utilization based mandatory policy
notifications.
Technology Research, design, development
(RD&D), early-stage, pilot plants.
Industries Cement, bricks, road construction,
other building materials.
Companies Small and medium enterprises,
joint-venture companies, technology
collaborations.
the political, bureaucratic, regulatory and industry levels.
Currently, there are proven advanced innovative
technologies which can effectively support fly ash
processing into be useful products. Any proposed
legislation must seriously consider a sensible and
economically viable approach to address the various issues
with fly ash.
References

Tie-ups with large cement companies, 1. Wastes-Resource Conservation-Reduce, Recycle,

building construction contractors,
roads & highway contractors.
Execution Private-Public-Partnerships.
Financing • Equity; private / public sector.
• Debt; commercial banks /
financial institutions.
• Grants; federal / state agencies,
non-profits, foundations.
Source: Various research and industry publications
Reuse-Industrial Metals Recycling, www.epa.gov,
2009, U.S. Environmental Protection Agency,
Washington D.C., USA.
2. Various data and information, 2008-09, MCC
Technologies Inc., New York, New York, USA.
3. Notifications, Government of India, New Delhi,
India, Ministry of Power and Ministry of
Environment & Forests.

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