As countries mature, they inevitably have pollution issues. It happened in the United States just like it is happening in China today. With better science, however, it's easier to see the global impact of what may seem like a local problem. It's why the world needs to work together on the pollution issue -- and that's good news for companies like General Electric (NYSE:GE), Siemens (OTC:SIEGY), Southern Company (NYSE:SO), and KBR (NYSE:KBR).
China has grown by becoming the world's manufacturing hub. Add the less developed regulatory and business environment in China, and it's easy to see how things could get out of hand. According to the World Bank, China is home to 16 of the world's 20 most polluted cities.
While dirty rivers and contaminated land are largely local in nature, air pollution isn't. In fact, a recent study suggests that Los Angeles has at least one extra day per year of smog that exceeds government thresholds because Chinese pollution is blowing across the Pacific.
The United States is well along the way to dealing with pollution. The recent shift toward cleaner-burning natural gas has been a notable help. Utility giant Southern, for example, just asked permission to switch a collection of coal plants to gas. That's great, but the U.S. market is largely mature. China is still building out its power infrastructure, and low-cost coal is going to be a big part of the future.
That's why it's so important that the United States continues to support clean-coal efforts, like Southern's Kemper plant. Although it's over budget and facing delays, the lessons learned from, what will be the cleanest coal plant in the United States, will be invaluable here and can be applied abroad, too.
That will be great news for Southern and Kemper-partner KBR. The pair has worked together on the technologies being employed at Kemper and will both benefit if they can be sold to others. China's own efforts at clean coal, GreenGen, show there's demand well beyond U.S. shores. Once Southern's new plant is up and running, the two will have a showcase product that will help the technology sell itself.
Not just coal
The thing is, it isn't just cleaning up coal that's an issue. That's where companies like GE and Siemens come in. These two industrial giants have their fingers in everything from wind farms to utility plants to process automation. That makes them key players in helping the world clean up its act.
For example, GE recently introduced software that can increase the output of its wind turbines. Although the expected 5% improvement may not sound like much, it's the equivalent of customer E.ON (OTC:EONGY) adding 19 new turbines to the more than 450 it already has. And every megawatt of power that's added to the system is less power that has to be generated by burning something.
But GE and Siemens are bigger than just wind turbines. Both are working on more efficient power-plant designs that use coal gasification and combined-cycle technologies. Combined cycle isn't unique to coal, however, since it speaks to using the waste heat from the energy process. That makes burning fuel even more efficient and, thus, cleaner. In fact, Siemens products are powering a newly commissioned coal plant in Germany.
Carbon capture is similarly versatile -- although natural gas burns cleaner, it still produces pollutants like carbon dioxide. Taking the knowledge from Southern and KBR's Kemper efforts and transferring them to other carbon-based fuels shouldn't be all that difficult.
The future is OURS
Although cleaning up after ourselves is an important step toward a cleaner planet, the job doesn't stop there. We have to recognize the limitations and needs of other countries as we go. China's pollution problems are already our problems, but the technology to help is being worked on. Look for Southern and KBR to use Kemper as a real-world sales brochure for carbon capture once it's up and running. And for GE and Siemens to keep pushing the envelope on their own environmental efforts at making the world a cleaner place to live.
Speaking of Chinese manufacturing...