Cleaning up messes has grown into a big business since the 1970s. There are a lot of small and medium-sized businesses that get involved in environmental remediation for everything from cleaning up EPA-designated Superfund sites to washing noxious weed seeds off fire trucks used to battle forest fires. The disaster that destroyed the Deepwater Horizon semi-submersible rig that was drilling a deepwater well for BP plc (NYSE:BP) has so far leaked more than 100,000 barrels of crude into the Gulf of Mexico and a number of companies that have seen their shares rise on the bet that they could see higher revenues and profits as a result.
The remediation players include large companies like Procter & Gamble (NYSE:PG); medium-cap companies like Ashland Inc. (NYSE:ASH), Eastman Chemical Co. (NYSE:EMN), Nalco Holding Co. (NYSE:NLC), and Clean Harbors, Inc. (NYSE:CLH); and small-caps Newpark Resources, Inc. (NYSE:NR) and Arch Chemicals, Inc. (NYSE:ARJ). There’s even a OTC stock, MOP Environmental (OTC:MOPN) that is likely to benefit from the clean-up.
Procter & Gamble makes Dawn dishwashing detergent, which is the cleaner of choice for wildlife covered with oil. The company has already delivered 2,000 bottles of the detergent to the Gulf coast, and more will likely be needed. The impact on P&G’s bottom line should only be minimal, but this will give the Dawn brand a nice boost and it would be unlike P&G to miss a chance like this to build its image.
Ashland, Eastman, Nalco, and Arch make specialty chemicals that are being used to disperse the oil slick formed by the leaking well. Nalco has already supplied more than 300,000 gallons of its dispersant to BP and the others might be shipping the stuff as well. Ashland provides hazardous waste removal services as well as chemicals. Eastman and Arch make specialty chemicals and solvents that can be used to clean up oil slicks.
Clean Harbors offers ships and crews to the Gulf coast and has been contracted by government agencies to provide logistics and support services. The company today released an update to its expected revenues as a result of its work on the spill. Clean Harbors now forecasts an increase of second quarter revenues of 15%-20% above the First Call estimates of $352 million.
There are more than 650 vessels now in the Gulf to work on containing and cleaning up the oil. Over 1.25 million feet of containment boom is already in place (that’s more than 235 miles worth) and some 440,000 feet of absorbent boom has also been deployed. About 285,000 feet of containment boom and 900,000 feet of absorbent boom is still available for deployment. Almost double the amount of deployed containment boom is already on order from various suppliers, mostly small privately held companies along the Gulf coast.
One company that makes absorbent booms is MOP Environmental Solutions, Inc. MOP booms can absorb the floating oil and the oil can then be extracted from the boom material. The boom itself is recyclable. The company announced in a press release that it has lowered the price on its boom in response to the Gulf spill.
While all these companies are likely to see a revenue boost as a result of their abilities to aid in the clean up of the Gulf, the longer term prospects might be even brighter. It’s almost certain that new federal regulations will be adopted not only to make deepwater drilling safer, but that companies involved in drilling will be required to be better prepared for an a spill. That requirement will provide an opportunity for these companies to do even more business both with the federal government and with the oil companies that will surely be picking up the tab.
With the exception of Clean Harbors, all these companies are trading nearly flat or down today, probably due to the news that BP is having some success with its efforts to contain the spill.