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Mar24

Replacing the Boomers

BY KATE KUNKEL

retirementsignA common concern voiced by many valve manufacturers with whom I speak is the perceived upcoming shortage of skilled labor. With many baby-boomers (including me) setting their sights on days spent on the beach, golf course or playing with grandchildren, they are taking with them the benefit of decades of experience and lessons learned the old-fashioned way – by putting in the time and sometimes, making mistakes.

The fear is that the generations left behind to run the show do not have the skills, mind-set or experience to keep things running. This is not unique to the valve industry. We’ve heard from end users in all manufacturing, power and processing industries who have the same concerns. While this is a real concern, it is not one that cannot be remedied.

Yes, it takes planning and commitment on the part of management, but by developing and nurturing a strong training culture within a company, the so-called skilled labor gap can be filled. It does take money, though, and time, and while many companies look to trade schools and universities churning out engineers to populate their workforce, bottom line is – you have to train within. And you need to do it before the boomers give their notice.

Andrea W. Johnson, a client development manager at FlashPoint, wrote in an article, “Modern work environments require good communication skills, the ability to work in a team, time-management skills, the ability to adapt to change, and to work with people from diverse cultures.”

One of the most important ways of developing these skills is what she called “Transfer of organizational knowledge”. According to Johnson, by 2015, nearly 20% of the nation’s workers will be 55 years old or older, up from 13%. She urged businesses to utilize job audits and other collection methods to document the tacit knowledge of employees who have been with the organization for years, and train those longtime employees to share their knowledge with others.

It is now 2014. If you haven’t started actively collecting the knowledge of these long-time staffers and sharing it with newer recruits, do not delay. Now is the time to start. With that transfer of knowledge comes the need to have continuous training opportunities for that newer workforce. One thing younger workers stress time and again whenever they are surveyed is that they need to feel that they are growing professionally. To make the most of your investment in any individual, it’s wise to insure that that individual has ongoing access to continuing education and training.

Certainly many larger organizations retain in-house training staff, but many outsource to professionals. Whether it’s paying for employees to attend a class like the Valve Basics program run by VMA or courses run by any of the piping, power generation or manufacturing associations, the ongoing education of your workforce is a wise investment.

Are you ready for your boomers to ride, fly or dive into the sunset?

Kate Kunkel is senior editor of VALVE Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it. .

Mar03

Bullying and the State of Keystone XL

BY KATE KUNKEL

Harper and ObamaLast year, three Nebraska landowners challenged the law that amended state pipeline laws to grant the power of eminent domain to Gov. Heineman, a law they claimed was corrupt and was passed in order to pave the way for Keystone XL. Last week, the Lancaster County District Court in Lincoln, NE found that the law was unconstitutional and void. Included in the ruling was an injunction preventing any further action under that law, by Gov. Heineman and the Nebraska Department of Environmental Quality, which would authorize or advance Keystone XL.

Plaintiff and landowner Randy Thompson summed up the frustration and anger of many residents when he summarized the actions of TransCanada. “They came out here like a bunch of bullies and tried to force it down our throats,” he said. “They told us there was nothing we could do to stop it.”

This is not the first time that the word “bully” has been associated with this project. The drive to forward Keystone XL has resulted in other allegations of bullying on the part of the company behind it.

In 2012, Transcanada brought against several environmental groups and 19 individual protesters what is known as a Strategic Lawsuit Against Public Participation (SLAPP). According to a press release from one of the groups, Tar Sands Blockade, the people involved "were threatened with losing their homes and life’s savings if the lawsuit went forward.” The suit was settled in 2013, inspiring headlines like “David vs. Goliath: Keystone XL Multinational Bullies Pipeline Protestors into Settlement”.

With tactics like this, it’s no wonder that a good project is getting such bad press. But Trans Canada is not the only villain accused of bullying in the fight against Keystone XL. Canadian Prime Minister Stephen Harper is accused at home of running roughshod over his own (Conservative) party members and stifling dissent anywhere in Canada and his particularly aggressive style is not helping matters when it comes to Keystone XL.

Harper has been accused of attempting to pressure President Obama on this matter, and his government’s appearance of being anti-environment has even caused a former Canadian Prime Minister to speak out on the matter. Joe Clark says the Harper government has taken a divisive approach to international climate discussions and contends that the government that has seen Canada become a perennial favorite for the tongue-in-cheek Fossil Award may have also made selling Canadian crude abroad. By extension, it has made it more difficult to get approval for Keystone XL approval .

TransCanada and Stephen Harper are not doing a good project any favors with their adversarial stance. People like to see bullies get their comeuppance. Hopefully President Obama will not let that color his decision to okay the pipeline.

Kate Kunkel is Senior Editor of VALVE Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it. .

Feb17

Fracking: A Cracking Success or Much Ado About Nothing?

Guest Blogger

Fracking guest blogFracking not only proves to be a boon for the U.S. economy, but also for the valve industry. Some EU states, however, are stalling.

Fracking is giving the U.S. a lot of hope. Utilizing this extraction method of unconventional gas deposits, the transatlantic superpower could become the world's largest gas producer. Nonetheless several European states remain skeptical and warn of the environmental risks of fracking. Is this much ado about nothing? Valve manufacturers would resent it, as hydrofacturing rock formations require numerous valves for the downstream process.

Loud Drilling

Fracking is disruptive. A mix of water, quartz sand or ceramic balls and various chemicals are pumped into rock layers. This brute force process creates fissures. “The chemicals in hydraulic fracturing fluid are used to reduce friction and protect the rock formation, thereby making the hydraulic fracturing process safer and more efficient,” explains Exxon Mobil.

Valves are of great value: the right amount of gas, chemicals and sand need to be pumped into the drill hole, before the gas can be extracted in a controlled manner at the top of the well. Demanding technology allows manufacturers to extract gas from otherwise unreachable rock layers 3,280 to 16,400 feet beneath the ground.

New pipelines utilizing new valves convey the shale gas. U.S. company Quanta Services made record profits in 2012, reported German magazine Boerse Online, due to pipeline construction and maintenance. General Electric supplies gas turbines and compressors for the pipelines. Fracking is proving to be a lucrative business.

Fracking Creates U.S. Jobs

In the end, the shale gas makes its way to power plants. Should fracking become successful in the EU the way it did in the U.S., then additional, new power plants would have to be constructed – with a high amount of valves. An impressive supply chain for this component. The U.S. has calculated the effect of fracking for the economy. “We have a supply of natural gas that can last America nearly 100 years, and my administration will take every possible action to safely develop this energy,” stated President Barack Obama, adding that fracking will create 600,000 new jobs.

The U.S. is currently producing more natural gas than ever before. Obama also sees a golden future for oil exploration: “After years of talking about it, we’re finally poised to control our own energy future.” His administration will speed up permits. The International Energy Association is also certain of a “golden age” for natural gas. For Obama, fracking is a transitory technology, until wind and solar power achieve higher output.

The prices for natural gas have been falling over the past 5 years, after the fracking boom began. However, the U.S. is currently experiencing an increase in natural gas prices. Natural gas is 60% cheaper in the U.S. than in Europe. In turn, the lower prices drive the domestic economy. Energy-intensive sectors and households profit especially from the development.

Energy-Intensive Sectors Profit

One such sector is the paper industry. If paper manufacturers are doing well, then they are lucrative customers for valve manufacturers. Low energy costs, however, are a basic prerequisite. Numerous valves are needed, as the paper and pulp production consists of various phases. The necessary range covers ball segment valves, check valves, gate valves and ball valves for manual on/off valves. Here, high-quality components are especially needed: “fluids, other than water, conveyed through hose lines are seldom harmless for the paper industry,” emphasizes Dr. Jens Reppenhagen, CEO of RS Roman Seliger Armaturenfabrik.

The chemical industry also requires a lot of energy for its processes. As such, the sector is prone to higher energy costs, to the detriment of valve manufacturers. A thriving chemical sector is good for orders – and demand is rising in the U.S.. Production is increasingly being relocated overseas.

Robust Valves

Valves have to do their part to contribute to low emissions, high plant safety and pollution control in chemical plants – and they must do it all in a demanding environment. Often enough, poisonous, corrosive and highly dangerous fluids are used to produce chemicals. Gate valves, valve blocks, pipeline components, gaskets, screws and flushing rings are required to withstand them. Materials “in all possible variations” are needed, explains Project Manager Björn Bofinger of AS-Schneider. Demands are also required for valves in fracking. The chemically enriched water pumped downward requires robust valves.

Plug valves, gate valves and dart-style check valves are needed for the pumps at the well site. On the pump suction side for mixing the fracking media are butterfly valves and swing check valves.

Constructing LNG Facilities

According to experts, the fracking boom will see the U.S. turn from a gas importer to a gas exporter. One problem, however, is the lack of necessary infrastructure. A greater number of pipelines for instance should lead to the coast. In addition, harbors also lack Liquefied Natural Gas (LNG) facilities for storing and converting gas for transport to Europe and Asia. The U.S. is set to invest several billion dollars in expanding and retrofitting their infrastructure. Valve manufacturers are also set to profit from this development, as valves control the flow of gas at gate terminals, liquefaction and vaporization installations and storage tanks. LNG tankers also need to be fitted with valves: shut-off valves allow steam to escape from tanks in order to maintain the required temperature and pressure levels inside the tank.

EU Cracks on Fracking

Fracking will not only offer the U.S. enormous amounts of shale gas, the reserves of which are estimated to more than 24 trillion cubic meters. China has the greatest deposits with 36 trillion cubic meters. Argentina is third in shale gas with reserves of 21 trillion cubic meters, followed by Mexico with 19 trillion and South Africa with 13 trillion cubic meters. As for Western Europe, reserves are estimated to be 14 trillion cubic meters.

Opinions of individual EU member states are divided on fracking. EU Energy Commissioner Günther Oettinger sees fracking as positive, because of “security reasons and to lower gas prices.” EU Climate Commissioner Connie Hedegaard, however, has identified problems, as the situation in Europe can't be compared to the U.S., in view of geology and environmental regulation. From a scientific point of view, shale gas seems to be non-hazardous, according to Anne Glover, Chief Scientific Advisor of EU commission President Jose Manuel Barroso. While Poland and Great Britain argue in favor of fracking, France and Bulgaria argue against it. Both countries are considering a ban.

Environmental Impact Disputed

There are various reasons for this skepticism. Next to earth movements, objectors fear damage to the environment and contamination of groundwater – and thus also of drinking water through the chemicals pumped into rock layers. Large amounts of water are flushed upwards at the well. Objectors refer to incidents in the Pennsylvania and Wyoming. U.S. environmental group Riverkeeper declares groundwater was contaminated through fracking.

Germany's Federal Institute for Geosciences and Natural Resources (BGR), however, doesn't see any danger through fracking, “as long as the legal provisions are adhered to, the required technical measures are provided and location based pilot surveys are undertaken.” “From the geoscientific view, an environmentally safe use of this technology is possible. Fracking and protection of drinking water supplies are possible,” states the BGR. In addition, the EU has stricter environmental regulations than the U.S.

Considering Advantages and Disadvantages

One major problem is the wastewater that is flushed to the surface. This needs to be disposed of and recycled, in order to prevent incidents such as those in the U.S., where wastewater flowed into the environment. Valves play an important role in the purification process. In order to purify wastewater, it needs to be disposed in wastewater shafts and later transported to treatment plants. Against all odds, there is one major argument for fracking and all the gas plants that need to be constructed – namely that old coal power stations can be shut down. In the U.S., the level of CO2 emissions sank by nearly 10% in a six-year period.

Fracking: yes or no? Governments have to consider the advantages and disadvantages and come to a decision. Some are looking at economic benefits – in times of crisis, low costs of energy are seen as a driver for economic growth. One thing is certain: states need to make sure shale gas is environmentally safe. Otherwise fracking will not be accepted by the general public, and will thus have no future.

Guest Blog is courtesy Messe Dusseldorf.  

Dec23

Pipelines Across the Great White North: Opportunities Abound for Valve Industry

BY KATE KUNKEL

working on pipelineCanada has a lot of oil and natural gas. The problem is, most of it is in Alberta, which is essentially cut off from the markets to which it must sell. Thus pipelines have become a huge issue across the Great White North, and though they are neighbors, Alberta, with much to gain from selling its resources, and British Columbia, through which the black gold must pass to get to the ports, have historically been unable to agree on the most equitable way to get these products to market.

While a framework agreement between the two provinces has been hammered out, and the federal government is on board with the notion of developing the export capability, there is no guarantee that either of two potential projects – Northern Gateway and Trans Mountain - currently being proposed will go ahead. There are stiff environmental stipulations in place and aboriginal protesters have been vocal in their opposition. Currently there seems little that any of the concerned governments will be able to do to quell widespread opposition.

What does this mean to the industry generally, and in particular, to manufacturers of valves, actuators and the companies that supply to and distribute for them?

How Many Valves Does it Take to Make a Pipeline Safe?

While there is a regulated maximum distance between shutoff valves to minimize the adverse effect of spills, in reality, the number of valves in a project and the locations of those valves is determined by topography, grade and temperature. The environmental damage that can occur from a set amount of leaking oil will be very different in an area with many streams as compared to a bald granite canyon.

northern gateway map

Northern Gateway is Enbridge’s twinned 730 mile (1,177 km) pipeline that would bring oil-sands bitumen from Alberta to Kitimat, B.C. for shipment to Asia, and move condensate in the other direction.

In pages 34 to 38 of its application to the National Energy Board to build the Northern Gateway, Enbridge set out the preliminary locations of valves along the pipeline. The application shows more than 200 locations for valves, including those at pumping stations, and there are 132 remotely operated isolation valves on both pipelines.

This week, Canada’s National Energy Board gave its stamp of approval to the project, saying it will meet an economic need by diversifying Canada's oil market. However, the pipeline will be subject to 209 environmental, safety and financial conditions including rigorous pipeline inspections every two years to check for cracks and almost $1 billion in liability coverage in the event of a catastrophic oil spill. The company must also have a plan for monitoring the pipeline's effect on the environment and submit plans for monitoring species at risk, including proposals for caribou habitat.

While the decision is a major step forward for the $6.5-billion project, opening the potential for access to lucrative Asian markets, the final decision will be a difficult political test for Canada’s federal Conservative government. Despite Enbridge’s efforts to consult with local communities and First Nations over the last six months, Unifor, the 300,000 member-strong union created by the merger of the Canadian Auto Workers and the Communications, Energy and Paperworkers Union of Canada, has stated this powerful labor group will support First Nations in opposing the Northern Gateway pipeline project.

While Enbridge has always maintained that Gateway will be “world-leading” when it comes to pipeline safety and marine and environmental protection, a recent report commissioned by the B.C. government indicated that in a best-case scenario only 50% of the crude that leaked from a tanker following an accident would be recovered from the waters off the B.C. cost. That figure could be zero depending on weather conditions at the time, and since climate along the province’s north coast can be hostile and volatile, this is a huge concern for environmentalists and First Nations people alike. The specter of the destruction wrought by the Exxon Valdez hangs heavy in the air during discussions of tanker safety.

Trans Mountain

Tanker safety is especially of concern in the next project creating controversy in Canada. Kinder Morgan has proposed tripling the capacity of the existing Trans Mountain oil pipeline from 300,000 to 890,000 barrels a day. In operation since 1953, the 617 mile (994 km) pipeline from Edmonton to Burnaby is the only pipeline system in North America that transports both crude oil and refined products to the west coast. Only crude oil and condensates are shipped into the United States.

TransMountainThe proposed expansion would “twin” the existing pipeline and take the same route for most of the way. With twelve new pump stations and 20 new tanks at various points along the route, there is huge business potential for the valve industry here as well. On its website, Kinder Morgan illustrates how modern-day pipelines benefit from some of the most advanced and environmentally-conscious technology available, much of it related to valves.

But potential accidents don’t end with the pipeline There will also be new marine terminals built to handle the anticipated increase in tanker traffic from the current five tankers a month to more than 30. While much of the discussion of safety has centered on the construction of the tankers and improved navigation tools, valves play a huge part in terminal operations as well, and here are more opportunities for manufacturers of valves, actuators and controls.

Keystone XL – Dead in the Water?

And still there is Keystone XL. Much of the current opposition to the project that would bring Canada’s heavy crude to refineries in the Gulf is focused on the notion that further development of Alberta’s oil sands will contribute to more greenhouse gas emission and thus to climate change. However, The U.S. State Department released a draft environmental impact statement that concluded the project alone would not have a major effect on development of the oil sands.

Development there will continue with or without Keystone XL; the question is simply whether the oil goes south to the U.S. or west toward the Far East via one of the above-mentioned pipelines. While President Obama is staying quiet about his intentions at this point, the entire project may in fact flounder as a series of oil discoveries in the Bakken, Eagle Ford and Permian basins scattered across the continental U.S. have increased America's possible oil output to a level far higher than previously believed.

Plenty of Opportunity

While the current U.S. oil boom does not bode well for Canada’s oil industry or Keystone XL, for valve manufacturers, it’s a win-win. Currently most of the oil coming from the sites of the new U.S. oil boom is traveling by truck. Whether oil travels east and west or north and south, pipelines will have to be built, and they will need many valves.

As 2013 draws to a close and manufacturers, suppliers and distributors gear up for 2014, no doubt those in the valve industry will be watching closely the pipeline debates on both sides of the 49th parallel.

Kate Kunkel is Senior Editor of VALVE Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Dec05

Play Nicely, You Two

BY KATE KUNKEL

us canada borderNorth America, it seems, is falling apart. Traffic is at a gridlock in every major city, wasting countless hours and gallons of fuel. According to the Water Main Clock, 850 water main breaks occur every day in North America, wasting precious water and costing millions in repairs for municipalities and the residents whose homes are inundated with spillage.

A new report from the Building America’s Future Educational Fund explains why the U.S.A. ranks 18th in railroads, 19th in ports, 20th in roads, 30th in airports, and 33rd in the quality of its electrical system. Compared to our economic competitors, we systematically underfund infrastructure investments, have no national infrastructure planning, and, most importantly for the purposes of this blog, we fail to use rigorous measures of evaluation and accountability for the projects we do manage to fund.

Winding its way through the U.S. Congress is The Water Infrastructure Finance and Innovation Act which, among other projects, would establish a 5-year pilot program that would supply secured, low-interest loans from the U.S. Treasury for 10 water supply and wastewater projects costing at least $20 million each or $5 million for water systems serving 25,000 or fewer people.

In Canada, the Economic Action Plan 2013 calls for $70 billion over 10 years for public infrastructure, including the $53 billion New Building Canada Plan to build roads, bridges, subways, commuter rail, and other public infrastructure in cooperation with provinces, territories, and municipalities. It is starting in 2014-2015.

Sounds like a gold mine for EPCs and suppliers on both sides of the border. But therein lies the rub. Thanks to what some Canadians consider a protectionist attitude in the U.S., Canadian infrastructure projects could be closed to U.S. manufacturers. Canadian manufacturers and steel producers are urging Ottawa to channel those tens of billions of dollars their way over the next decade.

"The origin of the problem is the American Recovery and Reinvestment Act of 2009 (ARRA)," said Jayson Myers, president and chief executive of the Canadian Manufacturers & Exporters Association (CMEA) (Toronto, Ontario), in a recent interview. "That law prohibited U.S. municipal infrastructure projects from receiving federal funding if any of the iron and steel came from outside the U.S. The ARRA locked Canadian firms out of the U.S. market."

Given “Buy America” and other protectionist policies, Canadian industry representatives want the federal government to leverage the power of $47-billion to support Canadian companies. The proposed strategy is designed to even the playing field with countries such as the United States and was laid out in a letter signed by three Canadian industry lobby organizations: the Canadian Manufacturers & Exporters, the Canadian Institute of Steel Construction and the Canadian Steel Producers Association, and was sent to federal cabinet ministers in November.

The letter said that while Canadian public procurement practices offer “essentially open and equal access to foreign bidders,” the same foreign bidders benefit from “protective advantages” in their own domestic markets.

While it may seem like a retaliatory move, the Canadians do have a point. If the U.S. government will not even entertain a bid from a Canadian supplier, why, then, should U.S. suppliers be able to bid on Canadian projects? You can see how this could escalate.

Basic economics argues that, for the short term, protectionism can help right a country’s trade balance. But in the long term, trade protectionism weakens industry. Without competition, companies have no incentive to innovate and improve their products or services. Eventually, consumers, including municipalities and the federal government, will pay more for a lower quality product than they would get from foreign competitors.

What effects would a protectionist stance on either side of the border have on your business?

Kate Kunkel is Senior Editor of VALVE Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

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