Jacobs Solutions Inc. (J) Earnings Call Transcript & Summary

Hello, everyone. Good afternoon, and thanks for joining us today for our last panel and presentation with the Jacobs team. I know it's been a full day of panels, there are conversations around the EPA, litigation, the Department of Defense, a panel on science. We just heard from early on mantras and AECOM and now we're going to hear from Jacobs. They prepared a great slide deck. So we're going to spend the next 15, 20 minutes kind of going through these slides. And I'm going to hand it over to Jan, who is going to hand it back to me, we will dive into some Q&A to wrap up today. Over to you, Jan.

Thanks so much, Michael and Bank of America Securities for the opportunity to speak with you and be part of these important conversations. My colleagues -- if we can go to Slide 3, please. My colleague, Sharon Minchak, Scott Grieco and I will appreciate the opportunity to provide your audience with an overview of the state of play related to PFAS contamination. The treatment and remediation approach is available to date and those showing promise going forward. If we go to Slide 4, by way of introduction, Jacobs is an $18 billion market cap company with approximately $11 billion of trailing 12 months net revenue and more than $1 billion of trailing adjusted EBITDA. We have been a leader in the global water and environmental markets for many decades. Our more than 13,000 practitioners in this space across the globe are principally aligned to our People & Places Solutions line of business, 1 of 3 verticals comprising the overall company. Our People & Places business represents about $7 billion in annual revenue and provides solutions for modernizing critical public and private infrastructure in what is now an increasingly ESG-focused world. Together with our colleagues from Critical Mission Solutions business, Jacobs conservatively delivered about $5 billion in annualized ESG-related revenues across these 2 business verticals in FY '20. And in FY '21, we welcomed additional colleagues through our investment in PA Consulting. We provide particular expertise in digital transformation, sustainability and circular economy consulting that will further add to our ESG revenues into the future. Moving to Slide 5. To begin our overview of PFAS treatment and remediation, it's important that we ground ourselves in some historical context regarding how the regulatory community and environmental industry have dealt with classes of contaminants over time. In comparison to our efforts related to previous high-profile compounds, for example, the chlorinated solvents, such as perchloroethylene, trichloroethylene and vinyl chloride. The industry and regulated community has made great strides in a relatively short period of time with regard to our understanding of PFAS as a class of emerging contaminants. We spent approximately 5 years moving from discovery to assessment and to implementation of basic remedial measures in selected environmental media, something that took more than 3 decades to accomplish with the chlorinated solvents. Yet we are all acutely aware that the expectation by the public and regulatory community is that we make significant progress on all fronts much faster to enable expedited decision-making and action in a more transparent and equitable manner. This includes our understanding of the chemistry, toxicology and risk, fate and transport and possible treatment and remediation approaches applicable to PFAS for all impacted media. Moving to Slide 6. As you've heard today, PFAS compounds have been produced by the fluorochemical industry since the 1940s and have been used in product manufacturing across a vast array of industries. We have literally invited these compounds into nearly every facet of our lives because of their unique chemical properties make them so effective in so many applications. Over time and despite regulation of industrial processes, affluents, emissions and chemical applications since back in the 1970s PFAS compounds have been released into the environment and can be found in all forms of environmental media. Human and ecological receptors come into contact with PFAS compounds through various interactions, which may result in acute or chronic risks over time and contribute to resource degradation as well. As we contemplate the various treatment and remediation options for any of these impacted media, we must keep in mind the highly complex system within which we're engaging. As an example, focusing on treating drinking water for PFAS contamination will most certainly eliminate or minimize risk to human health through this route. But it will not eliminate the PFAS mass itself as the treatment media will then contain this mass, and it must be disposed in an appropriate manner. And what about the source of the PFAS contamination of that drinking water in the first place? Where is it? How large is the source area? What contaminants are present? How fast is the contaminant plume migrate? And what could we do to eliminate or remediate the source area sooner rather than later. We ask that you keep these system-level questions in mind as Scott and Sharon walk through the state of play related to treatment and remediation options available to us today with a view towards where these are headed in the near future. And with that, over to you, Scott.

Thanks, Jan. Well, let's stay focused on drinking water for a moment. On Slide 7, I want to present that with the lack of federal drinking water maximum contaminant levels or MCLs since the EPA health advisories were lowered in 2016, states have rapidly established PFAS guidance values and regulations. To give you an idea the rapid pace that this has occurred, here's a map from about a year ago. The values for the individual PFAS and the flags are in micrograms per liter or PPB, parts per billion. States that are dark blue indicate promulgated drinking regulations or MCLs. All the colors other than dark blue indicate non-promulgated guidance values or draft regulations. In the mid-2020s, there were 7 states with promulgated regulations and 14 with nonbinding values. If you fast forward to Slide 8, this is today, you can see the increase in dark blue across the U.S., representing a large increase in state-level promulgated regulations. We've more than doubled the number of states. We now have 16 states with promulgated regulations and 11 states now have guidance values or draft regulations. So that's 27 states overall. The pattern we see is an increased number of individual PFAS compounds and lower regulatory values. So to provide perspective, we now have 11 individual PFAS being regulated. In many states have promulgated values for PFOA less than 20 nanograms per liter. That's compared to the EPA advisory of 70 nanograms per liter. And it's of note that even non-promulgated draft regulations and guidance values are often treated as actionable levels by the utilities, given the public focus and concern. Although most recently, the federal administration has placed a priority on PFAS with respect to MCLs for PFOA, PFOS and PFBS, we can see that the states have several year jump on the situation and have greatly expanded the list beyond those 3 compounds. If you go to Slide 9, I'd like to spend some time talking about the technologies to address PFAS. Conventional technologies are defined as proven technologies able to be deployed at scale and supplied by multiple providers. The number of applicable and feasible treatment options for PFAS in water are often limited. And we have conventional technologies such as granular activated carbon, ion exchange and reverse osmosis, effectively treatment -- treating the regulated PFAS. Of note, one of the more promising areas within this conventional absorption technology is the development of next-generation absorbents. This is taking a proven scalable technology like absorption and applying it to new media that are focused on PFAS with the goal of increasing capacity, improving selectivity towards PFAS while reducing costs. This is vitally important for large utilities as well as small utilities that are investing in PFAS treatment technologies as we speak. Jacobs is on the forefront of applying this testing with these absorbents to assess performance against current technologies. Each of the conventional technologies is what we consider transfer technologies, meaning they move PFAS from the liquid to a solid or to a smaller volume of liquid. All of these technologies can be considered ultimately destructive if we combine it with off-site thermal reactivation or incineration. But at the application point of the utility or the household, they're simply transferring PFAS from one media to another. And with the scrutiny we're seeing regarding incineration, this could change the current landscape, both with feasibility and economics of treatment residuals management. So if we go to Slide 10, we're looking at developing technologies at the -- and these are at academic or start-up company level, and they're being assessed at bench or limited field scale pilot. But it's important because most of these are developing technologies that either directly destroy PFAS or can be applied in situ, neither of which the conventional technologies can do. Unfortunately, we're at a state right now that because these are in development, these are the look ahead for the next 3 to 5 years plus. There are important aspects of treatment, which these are more efficient and sustainable being that they're destructive and potentially in situ. The most promising of these technologies in these categories are advanced physicochemical oxidation reduction, in situ sequestration, and advanced biological treatment. So with these technologies, these are definitely of up and coming. They're certainly more efficient and sustainable, and there's multiple entities actually developing these in parallel. So it's a very promising area for technology and for growth. If you go to Slide 11, I'd like to just cover very briefly 2 example case studies. With the pace of increased state regulations, many communities need to act quickly. This is an example of an emergency granular activated carbon system to treat 6.5 million gallons per day. Fast tracking to design through innovative design tools and real-time partnership had us up and operating in 7 months. This allowed the city to maintain current demand with the water in compliance with PFAS while being able to consider the larger water master plan. And lastly, I'd like to bring to your attention Orange County Water District. To evaluate various absorption media and understand performance of these media with different background water qualities and concentrations, bench scale testing was conducted on 12 water sources using activated carbon and 2 novel absorbents applied at commercial scale. The testing is complete, and we're moving on to Phase II to evaluate additional ion exchange media novel absorbents not included in this Phase 1 bench in field pilot scale. Operational costs were projected from these efforts and were invaluable to allow individual pumpers within Orange County Basin to evaluate and select the most effective -- cost-effective media. In addition, There were significant advances in understanding PFAS absorption with these various media to provide value to the industry as a whole via publications and webinars. And now I'd like to hand it over to Sharon to talk more about environmental remediation at the source.

Thanks. Good day, everyone. So Scott walked us through this evolving state of the drinking water regulations and the treatment technologies. And certainly, drinking water is at the forefront of everybody's mind because of the acute concerns related to completing -- completed receptor pathways. But as Jan touched on earlier, PFAS in drinking water is sort of the downstream consequence of PFAS mass that has been released into and remains in a variety of other environmental media such as soil. And now it acts as a continuing source of contamination that will continue to impact drinking water. Now the regulation and remediation of these other media soil, sediments, biosolids those sorts of things, is going to be a necessary step that is going to have to be taken. If we're going to eventually stop the degradation of more drinking water resources, ideally, we'll move away from having to rely on downstream control of PFAS at the receptor level. And instead, we'll move to actually managing and remediating that contamination of the source. However, at the moment, few regulating jurisdictions are really leaning into addressing the mass that's contained in soil or other media. Now there are some screening values and guidelines for PFAS soil concentrations that are intended to be protective of groundwater, meaning that -- those levels, if you're below those concentrations in the soil, theoretically, you will not have contaminants migrating into an impacting groundwater. But on Slide 12, you can see in the table there that there are only a handful of states that have issued any kind of soil guidance and only for a few compounds. And as you look at those guidance levels, which are presented in micrograms per kilogram or parts per billion, they vary by 4 orders of magnitude. Highlighting the same questions and uncertainty, we are seeing with drinking water regulations related to toxicity risk, freight and transport. But given how important this piece of the puzzle is to really truly address the source areas of PFAS contamination, eventual regulation of these media is inevitable, and it's going to be those regulations that will really drive the overall remediation requirements in this market space. Moving to Slide 13. Let's turn our attention to some of the remedial technologies that are available or in development for addressing PFAS mass and soil sediments either nondrinking water media. As indicated in the table here, there are several conventional approaches that are generally quite recognizable and implementable technologies such as capping or stabilization rely on isolating PFAS mass from precipitation, water infiltration thereby reducing the potential for that mass to migrate away from the source area. In traditional excavation or dig and haul is certainly something that is available as well. And in that case, we're simply removing impacted soil from one location. We're transferring it to another location that where it can be more appropriately managed and isolated. And when we look at incineration as an option for soil as well, there we're looking at high-temperature destruction of the PFAS mass. The mechanics of these technologies are pretty straightforward. But with increasing awareness and concern on PFAS topics and how much there still is to understand about how these compounds behave in the environment, there are strings attached even with these traditional methods. Capping and stabilization, still inherently leaves the mass in place at the site, creating a long-term liability. Not to mention that we need further understanding of the science to validate how transport migration of contamination will or will not occur. Landfills and disposal facilities are becoming increasingly unwilling to accept PFAS waste because they don't want the long-term liability or if they accept it, they're charging a premium price. And there are questions about air emissions with incineration as well as the high cost and very energy-intensive nature of that technology. So Jacobs is really excited to be involved in evaluating and developing new solutions for this PFAS challenge. Thermal desorption has had promising results for removing PFAS from solid media at lower temperatures than incineration. It volatiles the PFAS compounds, liberates them from the soil and they are then captured as emissions. This provides an opportunity to address PFAS sources with an on-site approach. Although as with incineration, understanding and managing the air emissions portion of the equation is an important component to be further considered with this technology. Site segregation, soil washing, allows us to address the source term of the PFAS in the soils while minimizing the volume of soil or material that we actually need to process for remediation. We do that by exploiting some of the physical properties of these compounds, how they absorb the different particle sizes, different soil constituents to be able to reduce the volume that's actually having to be addressed. Ongoing research is key to really understanding how PFAS do behave and move in the environment so we can really optimize these techniques as an approach for remediation. And an area that we're really excited about here at Jacobs is helping advance the industry's understanding of how natural treatment systems are going to play a part in PFAS remediation. As we better understand these natural in-situ processes that impact PFAS compounds, we have a real opportunity to use that understanding to manipulate, to influence, to enhance degradation of the source mass in soil. That's going to allow us to expedite and optimize how and where and when we remove that mass from the environment. So we're putting time and energy into further advancing that as a developing solution, more to come. And we feel -- but we definitely feel that in the in-situ natural treatment element can well and really has to be a tool we have in the toolbox for addressing this ubiquitous global contamination challenge. Moving on to Slide 14. Let's talk through a few examples of projects that Jacobs is involved in that's helping us advance our thinking and the industry's understanding of these approaches and challenges. In collaboration with some of our academic partners and as part of the sort of ESG CP programs, we're working on creating adsorbents that can be injected into the subsurface and create an absorbent barrier that removes PFAS from groundwater as it flows through that barrier. PFAS is absorbed to the material. That material can be injected in a configuration that's complementary that the natural ground water flow works essentially passively, and those absorbent materials then control that groundwater plume for migrating away from the soil source. This avoids further and farther down gradient degradation of groundwater. And while we're able to then actually focus on remediation of the source area. Field testing is planned for this fall, and we're really excited about that. Moving on to Slide 15. Another pilot test Jacobs is conducting is in conjunction with the Air Force at Travis Air Force Base, where we're piloting a biogeochemical reactor to address source zone contamination. There we're leveraging machine learning, data analytics to really study how a highly specialized microbial ecosystem can create conditions that degrade PFAS in a natural treatment approach. Initial results of this multi-month pilot are encouraging, showing notable reductions in total PFAS mass. And we're really excited to continue the pilot to not only further monitor the degradation results but also to overarchingly better understand the interdependencies within these complex natural systems and how they contribute to contaminant degradation. On Slide 16, to round us out shift gears just a little bit. I want to provide an overview of a project Jacobs is doing for one of our aviation clients at the Melbourne Australia Airport. At both military and commercial airports historic use of AFFF, the firefighting foam has resulted in widespread impacts to various environmental media across those properties, that has to be managed and maneuvered around as part of any kind of construction or expansion within that airport footprint. At the Melbourne Airport, we're investigating and managing PFAS impacted soil, concrete, construction water, storm water as a component of the overall runway redesign project. The airports recognize that as they excavate, move, reuse, impacted soil or generate PFAS impacted fluids, they need to really be very mindful of not creating more liabilities for themselves. This is an illustration of how an owner has to take action to address PFAS not because of a direct regulatory requirement but really as part of their overall capital improvement and liability management planning and operation for their facility. And with that, I'll turn it back over to Jan.

Thanks, Sharon and Scott. And as we finish up on Slide 17, it's clear that the work we are collectively doing today as a diverse community of industry players and committed partners is necessary and vital. The U.S. Department of Defense, EPA and other national agencies around the world have been funding investigation and R&D efforts for a number of years. And Jacobs as well as fellow industry players continue to invest our time and money to further advance R&D to solve PFAS challenges. But none of this is enough. The community needs to move faster to address the human health, ecological and business risks associated with this complex class of compounds so pervasive in our lives today. It's also clear that ongoing efforts to advance our collective understanding of the science around this class of compounds must be expanded to include a wider array of questions. The answers to these questions will enable us to make better informed decisions grounded in broader and deeper understanding of the science around these compounds. That evolved understanding is essential to providing improved transparency and the ability to further quantify the evidence-based risks these compounds pose to human health in the environment. For the environmental industry and the regulatory community to make effective progress at an even more accelerated pace, we must embrace the collaborative efforts of our entire community of stakeholders and truly partner together in an inclusive way for the benefit of all people and the planet. With that, that concludes our remarks, Michael. We look forward to your questions.

Perfect. Thanks, everyone. Can you hear me?

Yes.

Great. Yes. Let's dive in. Those great, great slides. I actually wanted to ask on your slides that show June 2020 and July 2021, about more drinking water standards. You've highlighted how we went from 7 states, nonbinding, it more than doubled. I think it was 16 states and then there's 11 states incrementally that have drafts out. I'm just curious Is that driving incremental demand? Are you seeing more movement in activity with some of the customers in those states that have kind of moved ahead of the EPA and a federal national standard.

I'll start, Michael, and then ask Scott to jump in with some more specifics for you, but the answer is definitely yes. The states are in the lead in that drinking water space. And now with the Biden administration and the EPA taking their interest and working their way through, especially from an environmental justice perspective and the focus around this class of compounds, we're seeing increased activity and more collaboration between the feds and the states. But Scott, why don't you give us a little bit more color?

Yes, absolutely, that's definitely correct. And when you look at states that have applied those regulations, many of the states have much more wide sweeping issues. California is a good example where there's diffuse contamination in a lot of different areas. So a lot of those states that do have those regulations are definitely driving forward with a number of projects. And as more states are added, we just see more projects being added state by state.

That's great, Scott. And you guys show this time line. And I'm just curious what really accelerates this time line here. So if in 2022, we wake up and PFAS is designated as hazardous, we get a MCL. How long does it take for projects and the opportunity to really pick up? Is it like in 2023, 2024, we just see this becomes just a much bigger scale with projects that are much bigger in scale rather than just maybe monitoring early phase work around testing. I'm just trying to -- we're just trying to get a feel for the time line on how this all kind of plays out.

So Michael, what you're really getting at is really what all stakeholders in this environment really want, right? That's increased clarity and decreased uncertainty, okay? And that takes that entire community of players that we have listed on the right-hand side of Slide 17 to really engage together. It takes the EPA to lean in at a federal level to work their way through how are they going to handle these things from a drinking water standards perspective? Might these actually be listed as hazardous substances. If that goes into effect then there's additional certainty and clarity around some things. The states will inevitably continue to move forward and provide increased certainty for their constituents as well. And then the regulated community wants to understand this so that they know how best to lean in as soon or as late as they want to lean into this process so that they're investing their own capital in smart ways and that, that won't go to waste. So and with Congress contemplating right now as part of some of the Infrastructure Bill discussions, the notion that PFAS might receive some additional funding. That can actually lean into additional money for R&D that can actually allow us to move forward on the remediation front, on the toxicology front, which is key to understanding the risks we're talking about. So you're talking about accelerating the front end as best we possibly can with more certainty around that there will be something in the form of regulation. That will accelerate the front end. But then it's really getting those regulations in place and understanding how quickly and in what forms, what media, that will take, that will start accelerating the demand on the treatment and remediation action side. So you're talking about a few year window here. The next 2 to 5 years are a very interesting time that we'll see acceleration on many fronts in this country, but also realize that other countries around the globe, actually, their regulatory environment actually is a bit different than ours. And so in some parts of the world, Australia, as an example, they are a bit further ahead in terms of their regulatory way of thinking about this. And so you've seen accelerated spend in that country versus what we've seen to date, not from a total volume perspective, because they have less mass to go deal with, but from an acceleration on the learning curve, the time line of getting from the start to the finish.

And can we talk about just the client momentum. I recognize that the bucket of PFAS projects the size, it's likely small. It's probably grown in the last just few years doing feasibility studies, monitoring, testing. What are you seeing in the client momentum so like? What customers and end markets are moving the fastest? And what do you think if we do wake up in 3 years, and we do have more regulatory certainty that we could see other customers coming to the picture.

Yes. Again, it plays into the -- part of the answer to the last question around more clarity, less uncertainty. But there's no question that the regulatory arena for anybody who ever applied AFFF, but whatever it's, a commercial air or a military facility or any other firefighting facility, you're going to end up having some level of an issue that you're going to have to go deal with. So you have that element. You also have engagement from other parts of the Department of Defense in terms of thinking their military installations, redevelopment that they've been doing on their installation. How is that going to be impacted? Sharon particularly gave you the example of the Melbourne Airport to showcase it's not just about AFFF. It's really about how does that system have to actually work so that a client's facility as they decide to expand it, as they decide to decommission portions of it, and then put it to different purposes and uses. We have clients from every industry who, because these industries use this ubiquitous compound as part of their processes, carpeting industry is a classic example, PFAS is sitting in carpet, okay? So you've got many, many industries that actually will have to think their way through with some clarity around the promulgation of any regulation, how this is going to impact them, and whether they will start spending any amount of time and energy on this sooner rather than later in terms of the form of the regulation. So what actually regulatory regime is this going to come out under? And notably, there are some conversations now around regulating these compounds under TSCA as an example. That would put it in a bit of a different arena than having it be a hazardous substance under RCRA or CERCLA or as an MCL under the Clean Water Act.

Jan, just to be clear, is the PFAS-related solution, is this just like a complementary service to, let's say, like an environmental infrastructure project. So you're bidding on an environmental project, let's say, a wastewater treatment plant and you can bring towards the table that you guys have this PFAS-related solutions? Or is PFAS actually going to be a separate type of business unit, separate type of project and bidding criteria. I guess I'm just trying to get a feel for, is it entirely independent and separate bidding processes? Or is it we're working with these customers already for the last 10, 15 years, and this is just a complementary piece that's going to be part of future environmental projects going forward?

So both in our water market and in our environmental market, we've worked for a broad suite of customers for decades. And we've consulted with them about this class of compounds might they have some issues? Might they be concerned about it, have their constituents brought it forward. Are they in a state that actually already has regulation related to it or guidance levels already related to it. So as part of the ongoing work that we deal with those clients over a long period of time, we bring these kinds of thinking to the table, and sometimes they get incorporated, some elements of scope of projects get incorporated as just part of a natural extension of the work we're already doing. But oftentimes, when the projects get to a specific state where they have a specific area of their site or facility that they actually want something particularly investigated, then it will become a stand-alone project. That's part of our business. It's still part of an extension of our broad suite of scope of services that we do, but it will become a stand-alone project separate from anything ongoing that we have. So it can be both is basically the answer to your question. But it's wholly within the Jacobs operating environment that we work today, not some separate business.

And you have a variety of customers dealing with this. So I guess I just want to ask like what are the funding mechanisms for these projects. Is it different for doing some testing and monitoring for waste water treatments or for a municipality versus maybe the actual cleanup and the remediation that might have to happen at an airport or a base. Can you help me understand what the funding mechanisms for some of these projects, I have to think it's going to be different as we tackle different levels of this issue.

So Scott, why don't you talk about how do our municipal clients actually work their way through funding mechanisms for like the drinking water work we've done with Orange County or others, just to give an example.

Yes. The funding mechanisms vary. A lot of municipalities are looking outside the entities like the WIFIA federal grants or state revolving funds. It's -- the thought process, especially in a lot of areas where as many times as we can connect a direct contamination or contaminator to a source. In a lot of utility issues, they're dealing with it in their water source and they have to deal with it now. So funding -- immediate funding through loans and low interest loans and grants at the state and federal level are an important mechanism when it comes to treatment that we're dealing with right now.

And if you'd like, Mike, we can have Sharon speak to how some of our bigger customers actually work with our Department of Defense customers as an example. Sharon, why don't you chime in?

Sure. So for DoD, U.S. DoD military liabilities, they are looking for funding. I mean, expect and need funding to be allocated through their established environmental restoration funds and programs to -- from Congress. It's funded in that way, both the upfront investigation, preliminary assessments as well as the back-end ultimate, the remediation, for private commercial clients they need to fund that -- I mean these are liabilities, they're responsible parties. They will need to fund that through their own reserves, the way they handle liabilities. In some cases, some of those customers are potentially looking to insurance policies and different things that they have related to covering traditional environmental liabilities. But they're definitely -- people will need to obtain their funding source to address this issue.

Fair enough. And if I could just squeeze in, I know we've gone over. My last question is, you guys provided some options on remediation, which is helpful because that's obviously been the sticking point, do we do -- what's the best option, hazardous landfill, incineration? What are some of the options? And you laid out some good ones. I'm curious that until a permanent I guess, disruptive solution is commercially available and approved across the industry. How can an MCL be promulgated without prompting a host of technical impracticalities. Like it sounds like the biggest issue right now holding back customers is still visibility on the regulatory side. But is finding that permanent solution also a hurdle right now? Or are we getting more comfortable on that?

I'll just speak to it broadly. And since you brought the water piece of the puzzle into play, I'll let Scott comment on the water specific example you asked related to MCLs. There is no question. We all know as a community here, both the regulated community and those of us who support them, that inevitably, we have to get to a set of solutions as quickly as we can. And that ultimate destruction of these compounds is the best solution we could hope for as long as it's practicable, as long as it's cost-effective. And ideally, we actually don't do harm to our planet in the process. That would -- that's the ultimate goal that we all would have in this process. And so today, the only destructive technology we have is high-temperature thermal treatment, and that comes with a high cost, not much practicality involved in it. And not many examples of actually doing it, being put in place. As we -- it's one of the reasons why Jacobs is so excited about our work on the natural systems part of this equation, so that we can actually get ourselves to if nothing better than a significantly reduced volume of what we actually have to go deal with to ultimately destroy and minimize those costs to the planet that way and the cost to our client. That's a better solution than not getting there. But we've got ways to go. But we are very, very encouraged in terms of where the natural solutions is potentially going to go take us. Scott, I'll ask you to address the specific issue around the MCL and treatment.

Yes. I guess 2 comments on that. One is just to maybe take a step back, Michael, you had mentioned about driving MCLs driving things. And I would say that the PFAS situation we're in now is quite interesting from the standpoint that even states that don't have promulgated values, obviously, utilities because of the consumer pressure are treating them that way. So I think that there's a lot to be said about that. But when we're looking at advancements in technology, I think we have to keep an open mind that there's municipal scale. Am I not on? Can you hear me?

Yes. Yes. I can hear you.

Okay. Okay. There's municipal scale technology and then there's remediation technology. And I think two aspects come to mind. One is when you think about how we deal with TCE and chlorinated solvents, yes, we've made great strides in natural system removal at the source zone that limits contamination into drinking water, but we're still using transfer technologies, air strippers and carbon for drinking water. So I think that there's a couple of different ways the market is going to continue to evolve. One is treatment at scale at a drinking water system may continue down the road of the technologies we have now. And part of what I had mentioned was advancement of technologies, maybe incremental advancement different absorbents. But at the same time, tackling source zone may be quite different. And the way I look at it is back maybe 30, 40 years ago, we thought reverse osmosis was very impractical at a drinking water scale, and then we've learned over time that it's become a very cost-effective analogy compared to what it was when it started 40, 50 years ago. And so I still think we have those opportunities to advance technology with respect to PFAS. But at the end of the day, I think there still may be a breadth of technology, whether you're at a remediation scale or you are at a drinking water scale.

Perfect. And I think that was great. I apologize. I know we actually went over. There was just a lot to cover and it's such an interesting topic that I think isn't going away. I say we're going to hear more about it in the next year 2, 3 years with this administration and the new EPA. So we're going to end it there. Thank you, everybody, for participating. I want to thank to Jacobs team for their detailed slides and their content today. I want to thank everyone for joining this conference. And if you have any further questions with Jacobs, please reach out to me, I'll put you in touch with John and their team, and we can go from there. Thanks, everyone. Have a good one.