For engineering firm, growing emissions business a gas

Phil Castle, The Business Times

Michael Cote’

Staff from Ruby Canyon Engineering inspect a natural gas and biomass feedstock at a pulp mill near Vancouver in Canada. The Grand Junction-based consulting firm offers a range of technical services that document, inventory, verify and reduce greenhouse gas emissions. (Photo courtesy Ruby Canyon Engineering)

Michael Coté initially envisioned a business providing services under what he expected would be a national program capping greenhouse gas emissions and trading credits for reduced emissions.

“We were going to ride a pretty big wave,” said Coté, president of Ruby Canyon Engineering.

While a national cap-and-trade program never materialized, the Grand Junction-based consulting firm has flourished nonetheless by serving smaller markets and a variety of industries — what Coté describes as “a series of smaller waves.”

Ruby Canyon Engineering recently completed only the second offset verification project conducted under a greenhouse cap-and-trade program in California and is in the process of completing verifications for seven other projects.

The firm also is involved with projects in Massachusetts as well as in Canada. That’s not to mention additional work around the world in capturing and using methane gas emitted from coal mining operations.

In the process, business and staffing has increased since Coté and Ronald Collings founded Ruby Canyon Engineering eight years ago. The company now employs nine people, five of whom work in Grand Junction.

“It makes it kind of exciting to be involved in so many industries,” Coté said.

Coté and Collings founded Ruby Canyon Engineering in 2005. Coté brought to the venture his experience as an environmental engineer, in particular his expertise with coal mine methane recovery. Collings brought to the business his experience as a professional engineer who’d worked for the petroleum industry and also became an authority on coal mine methane.

Coté said he saw an opportunity for the business following approval of the Kyoto Protocol, an international treaty intended to reduce emissions of greenhouse gases believed to contribute to global warming.

He expected a cap-and-trade program limiting greenhouse gas emissions in the United States would be enacted, in the process creating a national market for a business providing services for emission reduction projects. “It never really happened,” he said.

Ruby Canyon Engineering grew instead by serving regional and niche markets and diversifying services, he said.

In 2009, Ruby Canyon Engineering became the first firm in Colorado and the Rocky Mountain Region to earn American National Standards Institution accreditation for third-party greenhouse gas validation and verification.

In retrospect, that was an important accreditation to earn, Coté said, because third-party verifications now constitute nearly two-thirds of business for the firm.

As part of an effort to reduce greenhouse gas emissions to 1990 levels by 2020, California has imposed a cap on emissions, starting this year with electric utilities and large industrial facilities. The program also allows for the purchase of credits from other emission reduction projects to offset up to 8 percent of emissions, but those offsets must be independently verified by a third party. Ruby Canyon Engineering is among the firms that verify those offsets.

In the case of its first verification project in California, Ruby Canyon Engineering evaluated the operation of a facility destroying refrigerants taken out of automobiles, Coté said. The firm verified the refrigerants were destroyed and the quantity involved.

Ruby Canyon Engineering is in the process of completing verifications for three more offset projects that destroy ozone-depleting substances and four projects that capture and destroy methane gas from dairies and other livestock operations, Coté said. The methane projects typically involve treating a mixture of manure and water in what’s called a biodigester. The resulting methane gas is captured and either used or burned, he said.

Coté expects Ruby Canyon Engineering to soon be involved in another type of offset projects in California capturing methane from mines. The firm has helped the state develop verification protocols for those projects — in effect creating yet another market the company will serve, he said.

Ultimately, Ruby Canyon Engineering also could become involved in verifying yet another type of offset involving forestry projects, Coté said.

Despite its comparatively small staff, Ruby Canyon Engineering has twice been named runner up for best verification company in North America in the results of annual market surveys conducted for Environmental Finance magazine, Coté said.

Meanwhile, Ruby Canyon Engineering continues to help clients elsewhere inventory and report greenhouse gas emissions, reduce emissions from oil and natural gas production operations and capture and reduce methane emissions from coal mines.

Under a contract with the U.S. Environmental Protection Agency, the firm compiles an annual report inventorying methane emissions from inactive and active coal mining operations. The firm also is involved in an international outreach program offering assistance to mining operations in recovering methane.

While a cap-and-trade program never was implemented in the United States, a market for credits has developed, Coté said.

A credit for the equivalent of a ton of carbon dioxide emissions sells for $2 to $5 under volunteer programs, but double to triple that under mandatory programs, he said.

That market helps in turn to foster investments in projects that not only reduce greenhouse gas emissions, but also increase profitability, Coté said.

As an example, more and more dairies use methane produced from manure management techniques to heat facilities and generate electricity, he said.

Given what he foresees as continued growth in efforts to reduce greenhouse gas emissions in the United States as well as Canada, Mexico and Latin America, Coté expects those series of smaller waves to become bigger.  And as they do, so will his company, he said. “We’re going to continue to grow.”