ITT Developing Measurement Technology For Carbon Limits

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CHICAGO -(Dow Jones)- ITT Corp. (ITT) already knows which way the wind is blowing and wants to apply that know-how to tracking carbon dioxide emissions.

ITT is looking for a robust industry to emerge for measuring carbon levels if federal legislation for reducing so-called greenhouse gas becomes law.

“Ultimately, people are going to want to know whether somebody is producing more or less carbon,” said Steven Loranger, ITT’s chief executive and chairman. “We’re looking at our core competencies and matching them with future needs.”

The company, based in White Plains, N.Y., is already the U.S.’s largest manufacturer of satellite-based meteorological sensing and imaging equipment for recording weather conditions. Revenue from company’s space systems business grew 7.1% last year to $630 million.

Loranger, a former Textron Inc. (TXT) executive who has headed ITT since 2004, is eager to pursue revenue-growth opportunities from new environmental regulations and rising energy costs. Most of the diversified engineering and manufacturing company’s sales and income gains in recent years have come from military equipment used in Iraq and Afghanistan. ITT is the primary supplier of night vision goggles for soldiers and electronic jamming devices to disrupt the detonation of land mines aimed at U.S. forces.

ITT’s defense electronics and services unit accounted for 54% of its $11.7 billion of revenue in 2008 and 60% of its $1.21 billion of operating income. ITT also makes pumps and equipment for municipal water and wastewater treatment plants and motion-control products, such as shock absorbers and brake pads, for the railroad and automotive industries.

The company’s strategy for carbon emissions monitoring is focused on developing remote sensing technology that can provide precise carbon profiles for entire regions of the world as well as for specific sources of carbon emissions, such as steel mills, power plants, cement kilns and other industrial operations that use fossil fuels, like coal and oil.

ITT predicts it will take several years of research and an infusion of government money to deploy a network of carbon sensors on land, in the air and on orbiting satellites. ITT recently received a $7 million contract from the National Aeronautics and Space Administration to design and test carbon measuring instruments for NASA’s satellites.

Currently, there is little carbon data generated from actual testing. Most carbon dioxide volumes are compiled from mathematic calculations. ITT executives are counting on companies demanding more sophisticated and precise data, particularly as they spend money to reduce or offset their carbon emissions. Some estimates have placed the cost for complying with the proposed caps on carbon emissions at more than $100 billion a year.

“We’re trying to be at the forefront of shaping the testing market and understanding what the customers’ needs are,” said Rob Mitrevski, ITT’s vice president for commercial and space sciences. “This is a multi-billion dollar business if [the regulation] really happens.”

Under legislation pending in the U.S. House, companies would receive federal permits to release prescribed volumes of carbon dioxide into the atmosphere annually. Companies that reduce their emissions below their caps would be able sell their extra permits to companies exceeding their limits. The bill aims to reduce carbon dioxide emissions and other greenhouse gases by 17% from 2005’s level by 2020.

The U.S. and other countries are scheduled to begin negotiating a new carbon reduction treaty later this year in Copenhagen, Denmark, that ITT anticipates could provide additional momentum for precision testing.

“If the U.S. is going to sign that treaty, you’d want to know that other countries are doing as much” to reduce their carbon volumes, Mitrevski said.

Carbon dioxide is the main source of greenhouse gas, a heat-trapping gas in the atmosphere that experts warn is making the earth’s climate warmer. If greenhouse gas continues to increase, they argue it will profoundly alter the environment over time.

ITT’s stock was recently trading near flat at $44.19 a share.

-By Bob Tita, Dow Jones Newswires; 312-750-4129; [email protected]

(END) Dow Jones Newswires