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THE SUBSIDIARY (C-SYSTEMS)
C-SYSTEMS was created due to the waste problems in the U.S.
Mr. Clayton had been reading technical journals relating to incineration of waste and began the process of applying a segment of the weapon system (i.e., plasma generation) to global waste problems.
Thus, the Waste-to-Energy concept was integrated into C-SYSTEMS.
A convergence of circumstances has made it extremely opportune to develop, implement, and deploy innovative plasma technologies for waste management and energy generation. First, the volumes of municipal solid waste and regulated medical waste are reaching proportions that are threatening to become an environmental disaster if nothing is done to resolve the problem responsibly. Second, stringent global agreements to curb the effects of global warming caused by emission of carbon dioxide from burning coal and oil are driving a move toward cleaner energy technologies. And finally, tighter and expensive government regulations on waste and pollution are forcing municipalities and hospitals to limit or eliminate pollution from waste. These circumstances and the fact that waste will always be part of civilized society, and that to function society needs energy, provide an attractive and sustainable business opportunity.
Gasification / incineration technologies offered in the marketplace today, all claiming to convert biomass to synthetic natural gas have been around for over a century. Conventional gasification works by reacting biomass or other organic material at temperatures above 1200 (degrees F) in an environment with controlled amounts of oxygen and steam. Some of these technologies have been adapted to process waste because the incumbent incinerator technologies have been found to be wanting. However, the plants are inefficient and cannot reach the extreme temperatures necessary to melt and gasify high melting-point materials. Furthermore, they lead to emissions of even more toxic gases.
C-SYSTEMS will manufacture and deploy innovative plasma technologies for waste management. The plasma technologies will be used for waste to energy and other applications. The Clayton Industries’ Directed High Energy Plasma Ionization Platform is an extremely efficient and closed loop process for converting any waste stream to energy as compared with today’s gasification technologies. The Clayton platform works because organic materials are converted to carbon monoxide and hydrogen – which is synthetic gas; a fuel that can be converted to electricity in a turbine or to other hydrocarbon products. Because of the extremely high temperatures reachable by plasma technologies (> 6,000 degrees F), inorganic solids with high meting temperatures (such as metals, oxides or ceramics) are converted to harmless, vitrified, or glass-like materials that can be used in the construction industry. Plasma gasification offers large producers of waste such as municipalities and hospitals to become net generators of energy, thus transforming the waste into a revenue stream.
C-SYSTEMS will pursue a diversified business model with initially three portfolios: (i) manufacturing of plasma technologies; (ii) construction and operation of plasma waste management facilities for partnering entities such as municipalities and hospitals, and (iii) provision of service to owners of plasma-based waste management facilities. The company will derive revenue from (i) sale of plasma technologies, (ii) sales proceeds from energy products (electricity, fuel, and other byproducts) produced in the facilities it operates for partners such as municipalities and hospitals, and (iii) service contracts. The volumes of municipal waste, and biosolids in particular, have reached critical proportions that are threatening to become an environmental disaster if nothing is done to alleviate the problem. Because the vast majority of waste is carbonaceous (organic) matter, one approach to solving the problem is potentially a business opportunity to convert waste to clean fuel energy and to other harmless and useful byproducts. C-SYSTEMS is organized to manufacture and deploy innovative technologies for waste management. The company will implement advanced hybrid plasma technologies that gasify solid and sludge waste, and convert these to clean, renewable fuel energy commodities, and to other harmless and useful byproducts. Producing clean fuel this way contributes to solving another of the world’s big problems – global warming; this is attributed to emission of too much carbon dioxide from burning coal and oil for energy. Stringent global agreements on climate change are driving a move toward cleaner energy technologies of which conversion of waste-to-energy will become a viable alternative, and a lucrative business opportunity. Waste is a looming environmental disaster for the United States and for most of the developed and developing world. Medical waste, as an example, is of special concern. This type of waste is regulated in most parts of the world and is expensive to dispose of responsibly. It is not known exactly how much medical waste is generated in the United States.
The other waste stream that contributes significantly to the problem is municipal waste. Estimates by the U.S. Environmental Protection Agency (EPA) put the volume of municipal solid waste generated annually in United States to over 260 million tons. At this rate of generation, it means the average American produces about 4.7 pounds of waste per person per day. In most municipalities, about 35% of this waste is recycled to recover some kind of useful byproducts, 12% is combusted and converted to energy, and the rest, about 53% is discarded. Although medical waste constitutes only a small fraction of the overall annual waste production in the United States, it costs about 3 to 6 times more to dispose of, costing on average about 0.20 to 0.40 cents per pound.
Waste and the related problem of pollution will continue to be part of civilized society. A solution to this problem guarantees a sustainable business. What has become clear is that the increasing volumes of waste are beginning to reach proportions that adversely impact the quality of life. The U.S. Government, through the EPA, is enforcing regulations that state and municipal governments are expected to comply with. Every municipality is grappling with this problem, and without a clear and permanent solution, the result has been a continuous cycle of increasing utility bills to absorb the additional infrastructure investment and repair costs associated with the current methods of waste management. The U.S. Government has not had the political will to deal with the problem in a clear and decisive manner. Environmental activists and class action lawsuits filed against incinerators that emit dioxins have pressured the Executive Branch of the U.S. Government to act. The EPA, in conjunction with the Department of Justice, has set in motion a legal process to push financial and liability burdens to local governments and private entities by means of consent degrees. The core problem for the deficiency in dealing with waste stems from lack of effective approaches and appropriate technologies for eliminating waste in a responsible and environmentally benign manner. This is the problem and business opportunity that C-SYSTEMS will address and solve.
Over the years, waste streams have become more complex, but the per-processing phases have not kept up with the complexity. Waste processing facilities continue to use inefficient processing steps because they are necessary before the waste reaches its final resting place. It is now the case that past practices of not properly disposing of waste by classification, and in facilities that are not appropriate (incinerators) because they emit dangerous compounds, will run into legal problems and be shut down.
The waste problem and the potential to generate energy from waste are unique business opportunities for C-SYSTEMS. They provide a perspective within which to create a comprehensive business program that addresses the waste management problem and the energy problem. Current ways of dealing with these issues contribute to pollution, which is yet another problem. Our solution is a Directed High Energy Ionization technology. Clayton Industries will provide two independent ionization technologies for Pilot Programs.
We will engineer WTE systems that operate in a closed loop configuration to take advantage of inherent attributes for high efficiency and minimum pollution. The key component of the technology is a plasma torch.
TECHNOLOGY IS MATURE
The basic research for the technology was pioneered by NASA, and plasma torches resulting from it are mature and have been exercised sufficiently by the aerospace industry to simulate re-entry conditions for spacecrafts returning to earth from space. In the context of space, the overriding objective of the aerospace industry has been to find heat-shielding tiles that can withstand the plasma heat generated as a result of friction between a space-craft and the plasma at the edge of outer space and the earth’s atmosphere.
C-Systems will harness the extreme plasma temperatures to gasify the waste. The dominant existing technology in the marketplace for this purpose is marginal and is based on incinerators that can only achieve temperatures of up to 1500 (degrees F). At these relatively low temperatures, emissions from combusted waste include dangerous organic molecules and products of incomplete combustion like carbon monoxide, large amounts of particulates that contribute to acid rain, nitrogen oxides, and sulfurous compounds.
There are number of sectors where innovative versions of plasma technology can have a significant impact. These include (i) medical waste management facilities, (ii) sewage treatment plants, and (iii) municipal waste and garbage treatment facilities. In addition to these primary areas of application, plasma technology will also impact: (i) clinical medicine, (ii) sterilization, (iii) food processing and pasteurization, (iv) plasma spraying of protective coatings, (v) nanotechnology, and (vi) manufacturing processes where the chemistry can be modified with judicious application of plasma doses.
A projection of the waste industry for 2012 was estimated to be worth about $55 billion dollars. Of this, waste collection represents the largest fraction at about $34 billion, accounting for about 61% of total industry. Waste disposal including, land filling ($13 billion) and waste-to-energy-incinerator processing ($2.7 billion) comprised about 28% of the industry.
C-SYSTEMS will strategically position itself to capture the processing and disposal (land-filling and other aspects of final waste destination) segments of the business. Conservatively, the tally would position C-Systems to capture about 30% of the waste industry. While the remaining 70% of the industry constituted of waste collection, transportation, and recycling is very attractive, Clayton Industries would rather focus on specialized waste processing activities, and to other advanced applications of the plasma technology.
One of the valuable byproducts of the WTE activity in waste processing will be synthetic natural gas (syngas): a clean fuel source that can be used to generate electricity. The market share for electricity revenue projection for 2014 is estimated to be about $426.3 billion dollars. This projection is broken down into: (i) shareholder-owned electric companies and utilities (68.6%), (ii) electric cooperatives (13%), (iii) electric utilities owned by municipalities (11.2%), (iv) energy service providers (3.7%), (v) political subdivisions (2.6%), (vi) and state projects (0.9%) .
C-SYSTEMS can penetration and disrupt this market by introducing locally generated electric power that can be used in the locality where it is generated or transmitted over the national grid to contiguous locations. The concept is to focus on producing electricity locally for a regional distribution configuration that overlaps with the geographic location of the waste management facilities of concern. Future expansion of the technology could be incorporated in the municipalities of the entire state of concern. This should result in a much lower cost of electricity, eliminating the overhead that is currently charged for transporting power from much further locations. This would create a problem for the electric companies since most lack generation plants in the locations they serve.
Use of ionization technology to generate electric power potentially enables large generators of waste to become net producers of electric energy. Such entities include hospitals, municipalities, and large manufacturing industries that produce large volumes of waste or hazardous material. Not only would they be able to dispose of their waste in an environmentally responsible manner, but they would also generate their own electric power in the process to offset what they purchase from the utility companies. The usual process of disposing of waste, which is normally thought of as a financial sink hole, suddenly becomes a revenue stream.
In direct fuel production application, ionization technology can offer the coal industry a cleaner image. The technology can be used to directly gasify coal. Ionization of coal removes sulfur dioxide, mercury, and carbon dioxide from the flue gas before it is fed to turbines for electricity generation. Since synthetic natural gas is cleaner than raw coal, minimum quantities of nitrogen oxide and particulate matter are produced during the chemical process. There is a higher concentration of carbon in synthetic natural gas, making it easier to capture. For each unit of coal that is delivered to a coal gasification system, about 60% of it would come out as pure energy. This would compare more favorably than the 35% that is converted to energy in traditional pulverized coal plants. Thus, another avenue for monetizing plasma technology is to license it to the coal industry.
The market for waste management is experiencing rapid growth as a result of a large aging population. As more and more people begin to reach advanced age, they require more medical care which contributes to more waste generation. This is a global trend that is also leading to an expansion in the construction of increased sewage infrastructure, which in turn will generate more waste.