10/12 Industry Report [Q3 2019]

Q3 2019

PLUS: • Cash flow challenge • LNG’s changing fortunes • Focus on safety

The Sustainability Question $32 billion in construction projects are lined up through 2022. Can Louisiana handle it?

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Q3 2019

CONTENTS PLUS: • Cash flow challenge • LNG’s changing fortunes • Focus on safety

The Sustainability Question

Publisher: Rolfe McCollister, Jr. EDITORIAL Editorial Director: Penny Font Editor: Sam Barnes Contributing Writers: Erin Z. Bass, David Jacobs, Meredith Whitten Contributing Photographers: Lee Celano, Terri Fensel, Cheryl Gerber, Don Kadair ADVERTISING Account Executives: Morgan Galvin, Judith LaDousa, Angie LaPorte Advertising Coordinator: Brittany Nieto

$32 billion in construction projects are lined up through 2022. Can Louisiana handle it?

CORPORATE MEDIA Editor: Lisa Tramontana Content Strategist: Allyson Guay CUSTOM PUBLISHING Sales Director: Erin Palmintier-Pou MARKETING Chief Marketing Officer: Elizabeth McCollister Hebert Marketing & Events Coordinator: Katelyn Oglesby Events: Abby Hamilton Community Liaison: Jeanne McCollister McNeil PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Vu Graphic Designers: Gracie Fletcher, Melinda Gonzalez, Emily Witt ADMINISTRATION Controller: Jessica F. Sharp Digital Manager: James Hume Business Associate: Kirsten Milano Business Associate: Tiffany Durocher Office coordinator: Tara Lane Receptionist: Cathy Brown

PROJECTS

35 The courage to speak

CONTENTS

7 IN THIS ISSUE

Meeting industry safety goals requires a psychological safety net.

LAUNCH

8 ICYMI

INSIGHT

Industry briefs

11 Executive profile

49 LSU Center for Energy

Meet Gloria Moncada, refinery manager for ExxonMobil Baton Rouge.

NEWS

26 Money movement

Longer payout and complex invoicing are putting a drag on contractor cash flow.

FOCUS ON SAFETY

29 20 common OSHA citations

S P E C I AL AD V E R T I S I N G S E C T I ON

A PUBLICATION OF LOUISIANA BUSINESS INC. Chairman: Rolfe H. McCollister, Jr. President and CEO: Julio A. Melara Executive Assistant: Millie Coon

BUILDING SAFER, HIGHER PERFORMING WORKFORCES.

Studies Executive Director David Dismukes weighs in on LNG’s changing fortunes.

SUBSCRIPTIONS/ CUSTOMER SERVICE 9029 Jefferson Highway, Suite 300 Baton Rouge, LA 70809 225-421-8157 • FAX 225-928-5019 1012industryreport.com email: circulation@businessreport.com

CLOSING NOTES

58 The boom at a glance

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62 My toughest challenge Korey Kimball of Bayou Companies

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Volume 4 - Number 3

SPECIAL ADVERTISING SECTION

Our maps of the projects driving the industrial boom

The Alliance Safety Council: Building safer, higher performing workforces.

Page 37

and how to avoid them Knowledge is power when it comes to OSHA citations.

Send your ideas and company news to editor@1012industryreport.com.

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AUDIENCE DEVELOPMENT Audience Development Director: Benjamin Gallagher Audience Development Coordinator: Ivana Oubre

© Copyright 2019 by Louisiana Business Incorporated. All rights reserved by LBI. 10/12 Industry Report is published quarterly by Louisiana Business Inc. Reproduction without permission is prohibited. Business address: 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809.

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IN THIS ISSUE

LNG entrance comes at an interesting time

T

SAM BARNES

here’s something decidedly different about the impending wave of capital investment coming in 2019 and 2020. While it’s true the Gulf Coast industrial sector has had surges in the past, they’ve typically come on the heels of a recession or oil decline when jobs were sorely needed.

Today, U.S. economy is prospering, unemployment is low and the price for a barrel of oil is relatively stable. Couple that with a new player on the scene—liquefied natural gas—and it becomes clear that we’re entering uncharted territory. (See “The Sustainability Question,” page 13.)

While no one wants to turn work away, owners and contractors are more than a little concerned about how it will all be sustained.

You can count economist Greg Upton at the LSU Center for Energy Studies in that number. He says the unprecedented level of work is coming at a challenging time, as it could strain the market and significantly increase wage rates. Good news for workers; not so good for owners.

In fact, the sustainability question was a major topic at the June Downstream 2019 Conference in Houston. Multiple panels comprised of Gulf Coast owners and contractors discussed and debated a variety of best practices and tips for sustaining these socalled megaprojects in the coming years.

Some collaborations are already underway in the hopes that owners can sequence the work to create a more even, sustainable work flow. Ironically, the slow pace of regulatory permitting might provide some assistance there, particularly in the LNG sector.

CASH IN HAND Cash is still king in the industrial space, albeit in limited supply. Industrial contractors are feeling the pinch from a cash flow crunch caused by a variety of owner-mandated influences. (See “Money Movement,” page 26.)

Payment terms are being pushed into the stratosphere—some as far out as 120 days.

Furthermore, many owners require an invoice

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audit of 30 days or longer, and/or require the submittal of a preliminary “pro forma” invoice—even before the clock starts ticking.

Invoicing has also become a complex process, contractors say, making it difficult to gauge cash flow and estimate profit. They often must break down invoices into multiple accounting “buckets” for the client, whether by units, purchase orders, work breakdown structure (WBS), etc. This can turn into a costly and time-consuming process that further complicates cash flow projections.

In response to these and other changes, Turner Industries of Baton Rouge has ramped up its accounting staff by a third in the last several years to support the owner-specific complexities of invoicing, along with organic growth.

The key to success, CFOs say, is a reliable cash flow projection model, along with a good understanding of market conditions. And, of course, everyone needs to be on a first-name basis with their banker.

SAFE TO SPEAK UP There are some new safety buzzwords gradually gaining a foothold in the industrial space, although they each follow the same theme: the development of a safety culture based upon positive reinforcement, community and acceptance. In such an environment, experts say workers are more likely to feel more comfortable pointing out safety concerns or in reporting minor accidents. (See “The courage to speak,” page 35.)

They say a “just culture”—one based on fairness, community and an open-door policy—also gives workers a vested interest in what happens at the plant.

That’s admittedly difficult to create in the industrial world. Many managers take a decidedly divergent approach by focusing on mistakes rather than accomplishments, and owners are often plagued by high turnover rates. Nonetheless, safety experts say that makes a noticeable, purposeful cultural change all the more important.

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LAUNCH ICYMI

Lemons into lemonade engineering graduate student, along with biology professor Grover Waldrop and mechanical engineering professor Marcio de Querioz, in finding potential suitors. Robert Brown, the office’s associate director, is searching for companies that might benefit from the discovery as users or licensees.

While there have been no bites yet, Brown’s office has filed a provisional patent application and researchers have published a paper on the research. The next step will be “scaling up” the process and determining the quantity of Malonyl-CoA needed to be commercially relevant. “The provisional patent is a one-year protection and then you have to decide if you want to pursue or abandon it, and those are costly decisions,” Brown says.

Mello used mostly existing lab equipment to develop the process.

Along the way, she found a way to inexpensively engineer and detect the Malonyl-CoA at a 300% reduction in cost than conventional means at three times the rate of production.

fluctuating predictability and results,” she adds. “It has to be consistent so that it’s a predictable process.”

One option might be for Mello to launch a startup and license the innovation from LSU. Or seek out federal grants for small businesses.

The National Science Foundation’s Innovation Corps (I-Corps) provides a $3,000 grant to pay for the expense of bringing the technology to potential customers. “I know that we have something very valuable in our hands and I don’t want this to die,” she says.

The challenge has been getting the news to the right people in Louisiana’s industrial sector. That’s because the local plants don’t typically perform R&D. Mello’s work has already made some waves, as she spoke at January’s National Biodiesel Conference and Expo in San Diego as one of only four students nationwide asked to present their research.

DON KADAIR

IF TATIANA MELLO has her way, her groundbreaking method for using the nefarious E. coli bacteria as a biofuel will make huge waves in the industrial world.

Working in a chemistry lab at LSU’s Choppin Hall, Mello has developed a cheaper way for genetically engineering and optimizing the bacteria. The big question: whether her discovery can be produced to the necessary scale.

Mello proposes using the bacteria to create a new type of feedstock for biodiesel production. Currently, the main feedstocks for biodiesel are soybean and corn oil, but in a few years, demand could far outweigh supply. E. coli, on the other hand, is cheap and abundant and can be genetically modified to fulfill the need.

Her goal is to use Malonyl-CoA (an enzyme found in E. coli and other bacteria) to produce a variety of bioproducts such as biodiesel, plastics, polymers and pharmaceuticals.

LSU’s Office of Innovation & Technology Commercialization is assisting Mello, a mechanical

Tatiana Mello

She also studied fermentation conditions—food, pH, temperature and others—to determine the optimal method for enhancing output.

Ideally, Mello would like to take LSU’s lab-scale production and apply the methodology “in the field” at a significantly larger scale. That means her primary goal will be proving its scalability in the quantities that industry needs, while keeping costs down. “It can’t have

—Sam Barnes

NUMBERS A look at Sasol’s Lake Charles Chemicals Project and its economic impact

2

Number of units started this year

5

Units expected to come online in late 2019 and early 2020

700

New employees hired

100

Additional jobs planned

$80,000 Average annual salary

8 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

$4 billion

$20 million

$230 million

$5 million

Amount of money spent with Louisiana firms

Amount contributed to taxes and infrastructure improvements during the construction phase

Annual sales, employment and other taxes for state and local governments the Sasol Lake Charles Chemicals Project will generate annually

Contributions to community projects focused on education, small business development and environmental sustainability SOURCES: Sasol, Jim Richardson 1012industryreport.com

TOP DOG METHANEX IS spending up to $1.4 billion to construct a third methanol facility in Geismar—an investment that will create one of the largest methanol complexes in the world right here in Louisiana.

The project will create 62 new direct jobs with average salaries of $80,000 plus benefits, according to a news release from Louisiana Economic Development. LED estimates another 301 indirect jobs.

The three Methanex plants in Geismar bring 230 total direct jobs and another 1,500 indirect jobs to the region. The new plant is expected to generate over 1,000 construction jobs.

“Louisiana is a very attractive location for methanol production and the state’s investment attraction programs provide an excellent backdrop for this additional investment,” Mark Allard, Methanex vice president for North America, says.

The third plant will generate up to 1.8 million metric tons of methanol per year, LED says. It will be built on a 156-acre site.

IN SO MANY WORDS “Over the next decade, the United States will be one of the three most significant exporters of LNG in the world, and thanks to our vast pipeline infrastructure, much of that LNG will flow through the Pelican State.”

GIFFORD BRIGGS, president, Louisiana Oil & Gas Association

Gone BANKRUPT

SIBLING RIVALRY

THE COLLAPSE OF what was once the largest privately owned oil equipment rental company in the world may have its roots in a younger brother protecting his older brother from bullies in the schoolyard. In a story entitled “Cain and Abel and Oil,” New York magazine in July detailed the battle between Bryan Knight and Mark Knight for control of the $800 million Knight Oil Tools. The story details the elaborate conspiracy in Lafayette by Mark Knight to frame his brother using cocaine, painkillers, a henchman and two corrupt cops. The magazine touts the tale as a “brotherly parable” about “how ruthless that rivalry can become among the second-generation inheritors of great wealth, no longer striving to build an empire but only to hold onto the one they were born into.” Knight Oil Tools has since merged with IronGate Energy Services to form Knight Energy Services, based in Houston, and SLEMCO has purchased the company’s former headquarters near the Lafayette Airport, noting on Facebook the acquisition was made for “just pennies on the dollar.”

A HOLDING COMPANY owned in part

by Lafayette oilman Michel Moreno and seven of its affiliates have filed for bankruptcy.

Louisiana-based Shale Support Global Holdings LLC, a fracking industry supplier, has filed for Chapter 11 in the Southern District of Texas, saying heavy competition and unpredictable energy prices have left it unable to sustain its nearly $128 million in debt.

According to documents filed in the petition signed by Moreno, MOR Bison LLC of Lafayette holds a 70% equity security stake in the company and BBR Holdings of Baton Rouge holds a 30% equity stake. BBR Holdings’ managers are Jeffery Bartlam and Stephen Kevin Bowen of Baton Rouge, according to documents on file with the Louisiana Secretary of State.

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A handful of Louisiana companies hold the top 40 unsecured claims on file, including Retif Oil & Fuel of Harvey, $596,876; Conveying & Screening Machinery of Pine Grove, $99,937; the New Orleans Public Railroad Corp., $72,724; Pearce Pump Supply of Prairieville, $63,083; Patriot Construction & Industrial of Duson, $60,000; and Hydra Works of Slidell, $38,113.

Shale Support Global Holdings estimates the value of its assets between $1 million and $10 million. The company was founded in 2014 and mines monocrystalline sand—or frac sand—in and around Picayune, Mississippi. The quartz sand is then transported to a drying facility south of San Antonio, and ultimately transported to fracking operations in the Eagle Ford basin, Austin Chalk, Haynesville, Tuscaloosa and other shale plays.

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 9

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LAUNCH: PEOPLE

A

native of Philadelphia, Gloria Moncada arrived in Louisiana as an intern during her sophomore year in college.

Twenty years later, she has come full circle as she returns to Baton Rouge as the first female manager of the fourth largest refinery in the country.

In March, Moncada was also named the first female chair of the Louisiana Mid-Continent Oil & Gas Association, Louisiana’s longest standing trade association representing all aspects of the oil and gas industry for the past 97 years.

“Diversity, in all forms, is good for our industry and any business that wants to achieve superior results,” she says about her history-making appointment.

Moncada has led a diverse career with ExxonMobil, holding roles in technical, operations, maintenance, supply and investor relations from California to Singapore. Before returning to Baton Rouge as refinery manager on Jan. 1, she served as manager of ExxonMobil Americas Crude Optimization in Spring, Texas.

The daughter of Italian immigrants, Moncada takes none of her success for granted. She and her family are very involved in the Baton Rouge community, giving back through the Salvation Army and United Way. She touts ExxonMobil’s Growing the Gulf initiative as investing in the local economy and creating jobs as well. “I also believe supporting business development is important to build strong communities,” she says.

Where did your interest in chemical engineering and refining come from?

I enjoyed math and science in school and knew I wanted to pursue those fields. No one in my family had attended college, so I didn’t know what kind of careers were possible. A local refinery invited students from my high school to attend a tour. As soon as I stepped foot in the plant, I knew I wanted to work in a refinery.

1012industryreport.com

DON KADAIR

Executive Profile: Gloria Moncada I asked the tour guide what degree I would need, and that’s when I heard about chemical engineering.

Is it true that you started with ExxonMobil as an intern at the Baton Rouge refinery?

Yes, my first internship with the Baton Rouge Refinery was in 1989 when I was a sophomore at Drexel University. I was living at home while attending college, so I knew I wanted to do an internship somewhere different. I had never traveled further south than Washington, D.C., until then.

How does it feel to return 20 years later as the first female refinery manager there?

POSITION

Refinery Manager COMPANY

ExxonMobil Baton Rouge HOMETOWN

It is a tremendous Philadelphia honor to be able to come EDUCATION back and lead the Baton Drexel University, Rouge Refinery. This bachelor’s of science degree refinery, the talented in Chemical Engineering people that work here and the entire Baton Rouge community helped shape me as I was getting started in the industry. I also met my future husband on our first day of work, right here at the refinery. Coming What is your greatest back is like coming home. I want to professional accomplishment? be able to pay forward the care and The greatest satisfaction and leadership I benefitted from to the purpose in my professional career next generation of employees. has been seeing people who I’ve You’ve held many different mentored or supervised develop roles with the company, from into successful employees and future Singapore to Texas. How have leaders. Unlocking talent in others they prepared you for this new provides much greater impact than position? anything else I’ve worked on.

Working at different sites across What has been the toughest the world and seeing different aspects challenge in your career? of the business has broadened my There have been times when understanding of the challenges and being a wife, mother and manager opportunities in the industry. It has at the same time has not been easy. also helped me see that no matter I’m always doubting whether I am what country I’m in or which role I doing enough in any of those roles. am holding, there is nothing more My blessing is having a supportive powerful than human connection. husband and wonderful kids, caring That is the single biggest “aha” family and friends and remarkable moment I’ve had over the years, and coworkers who have supported us I use that in how I communicate and through eight relocations. lead here at the site.

How would you characterize the refining industry in today’s economy?

This is an exciting time in our industry, particularly in North America. The Permian Basin in the U.S. and Canadian crude provides domestic energy opportunity and growth. We are able to costcompetitively produce products across our integrated sites, like clean fuels, engine oils, jet fuel and plastics, that go into domestic and global markets. There is tremendous investment, including ExxonMobil’s Growing the Gulf initiative, which is investing more than $20 billion with more than a dozen projects through at least 2022. The huge investment will brings tens of thousands of jobs, helping to fuel the economy.

—Erin Bass

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 11

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COVER STORY

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The A Sustainability Question $32 billion in construction projects are lined up through 2022. Can Louisiana handle it?

trucker’s daily bumper-tobumper crawl on I-10 in Lake Charles and Baton Rouge has consequential impacts on commerce, to be sure, but it spotlights an even larger problem looming for the industrial sector.

While no one is wishing it away, there’s growing concern about the state’s ability to sustain the expected tidal wave of capital project investment beginning in the latter half of 2019 through 2022.

Louisiana appears to be beating the pants off Texas in pure investment dollars. Along the 10/12 corridor alone, some 125 projects valued at $32 billion among 12 industries have begun construction or plan to begin construction in 2019, according to data provided by Industrial Info of Sugarland, Texas.

PROJECTS

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25 percent for a while? Sure. Was that built into the budget? Probably not.”

DON KADAIR

And over the course of the most recent industrial renaissance, the state has attracted about $151.7 billion in actual and projected capital investment, $100 billion of that in LNG export facilities. That comprises about 51% of all Gulf Coast chemical industry capital investments. Texas, on the other hand, accounts for 46% of all investments distributed evenly between LNG investments and non-LNG investments, or about $65 billion each.

St. James, Calcasieu and Cameron parishes are ground zero for the industrial explosion. Projects

by Yuhang Chemical, Formosa, Wanhua Chemical, South Louisiana Methanol and others are expected to overlap in St. James—all in the billions of dollars. In southwest Louisiana, it’s all about Liquefied Natural Gas, namely Driftwood LNG in late 2019, and possibly Lake Charles LNG, Port Arthur LNG and Golden Pass LNG not long after. This while Cameron LNG is still under construction.

Cheap and abundant natural gas is the catalyst for the surge. Much of the supply is coming out of the Permian Basin and other shale plays, where the cost of natural gas has been incredibly low and is expected to remain that way.

While daunting, it’s not the cost and size of the investments but the timing that is cause for concern, says Greg Upton, assistant professor of research at LSU’s Center for Energy Studies. That’s because there are some decidedly different economic variables at play, compared to the previous two booms.

“The first boom coincided with the Great Recession when labor was more mobile,” Upton adds. “The second boom occurred in 2014, mainly due to capital expenditures in the refining and chemical manufacturing sector. This, coincidentally, was at the time of the oil price bust when there was a slack labor market.”

Fast-forward to today, when oil prices are inching back up, natural gas is seeing steady production and Louisiana construction employment is at an all-time high at 160,000 (many working in a maintenance capacity within existing plants). The state is also at near full employment, statistically speaking, with the unemployment rate hovering around 4.7%.

“If you go in with your eyes wide open you can manage it.”

CHARLES DABADIE, Americas regional manufacturing manager, ExxonMobil

“In that regard, you might actually have an unprecedented challenge,” Upton says.

The entrance of LNG into the market in 2020-2022 will have the most significant impact on the local industrial landscape. If the projects converge at the same time, the cost of wages, materials and equipment will likely increase across the board.

“Labor market theory tells us when we’re at full employment like we are now and you have that shock (of investment), you will have a relatively larger impact on wages and less of an impact on employment,” LSU’s Upton says. “That’s because employment is already being utilized.”

The same can be said for the

cost of construction and raw materials, all of which boils down to supply and demand. Upton says a best-case scenario would be for the investment to be spread out over the next three years. “I don’t think we’re not necessarily going to have $50 billion in investment in one year alone,” he adds.

Of course, the current trade war with China is the elephant in the room. That could mean that some of the LNG projects get pushed to a later date. Eric Smith, interim director of the Tulane Energy Institute in New Orleans, sees tariffs as a huge cost concern, as LNG is largely dependent upon exotic alloy steel made in China. “Can we afford the

GULF COAST PREPARES Owners and contractors are scrambling to prepare for the next wave, as getting caught off guard could significantly impact profitability, timing and cost. Some of the major players hope to beat the odds through various innovative work practices, such as modularization, Advanced Work Packaging (AWP) and project digitization.

Modularization has become an increasingly popular means for removing some of the risk from the jobsite, lowering local manpower demand and exerting greater control over the schedule. “Anything you can do in a shop instead of the field is going to be cheaper and of a higher quality,” Smith says. “It’s tough to maintain quality standards when you’re doing stick-built construction.”

The robotization of the fabrication process is another trend. At offsite facilities, welders serve as supervisors to robotic devices that perform the welds, “because they do a better, more uniform job.”

To tackle manpower challenges, many LNG owners are stretching the building schedule, as each plant will require some 4,000 to 5,000 people to construct. “At least one LNG developer has asked for a three-year extension to the approved schedule,” Smith says. “This also serves the purpose of delaying start up until all of the other new capacity is absorbed into the system.”

Petrochemical owners are prepping in their own way. ExxonMobil in Baton Rouge is staying ahead of its workforce needs by working collaboratively with local contractors and engineers in advance of its $500 million-plus polyolefins expansion, slated to break ground in 2020.

In fact, the company has already ordered equipment and completed designs. The project is expected to peak at about 600 to 700 construction workers.

Charles Dabadie, Americas regional manufacturing manager at ExxonMobil, hopes to improve productivity and keep a finger on cost in the process. “If you go in with your eyes wide open you can manage it,” he says. “We backed up and said

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 15

SAFETY IS OUR CULTURE FOR 30 YEARS, WE’VE PUT SAFETY at the forefront of every job. Working safely is more than the most important thing, it’s everything – it’s why we built our company, and our safety manual, from scratch. From pioneering industry safety standards to winning national safety awards, ours is a culture that ultimately comes from the integrity of our associates and their care for one another.

16 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

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COVER STORY general manager in St. James Parish, says his biggest concern at the moment is the high water levels of the Mississippi River. That’s because Wanhua is fabricating several modularized process units at its Yantai, China, petrochemical facility, then shipping them upriver to the site. “It will be important to plan these large module movements to avoid high Mississippi River levels,” Newport says.

Wanhua expects to peak at more than 1,200 construction workers, and is working closely with its EPC partner, Fluor, to attract skilled labor. Newport expects to break ground in late 2019. “The project will utilize ship, barge, rail and roadways for both construction and operations deliveries and product transport,” he says. “Modifications of existing infrastructure for all of these are included in project plans.”

DON KADAIR

let’s start getting together early and start planning. One of the advantages to handling this is partnering with good local (construction and engineering) firms to perform some of this pre-planning, and get out in front of it.”

Across the Gulf, ExxonMobil is in the middle of a $20 billion multiplant expansion, so the Baton Rouge plant must compete against Texas and other parts of the world for projects. “I’m always competing for capital dollars, so I’ve got to get the best return,” Dabadie says.

Hurting his chances somewhat is the interstate system running through Lake Charles and Baton Rouge. In fact, daily bottlenecks in the cities could worsen as construction ramps up. To proactively work the problem, ExxonMobil joined the Capital Region Industry for Sustainable Infrastructure Solutions, or CRISIS, “so we’re not just sitting on our hands. We’re part of the team,” Dabadie says. “I think that’s a great community effort. I think we all have to work together on our infrastructure.”

Jim Newport, Wanhua Chemical’s

FEELING THE STRAIN There’s some real industry-wide concern about the ability of local manpower to support the volume of work in the queue. Given the record number of laborers already working

“It will be important to plan these large module movements to avoid high Mississippi River levels.”

JIM NEWPORT, St. James Parish general manager, Wanhua Chemical

Gulf Coast Energy Manufacturing Total Capital Expenditures by Sector $40

BILLIONS OF DOLLARS

$35 $30 $25 $20 $15 $10 $5 0

2011

2012

2013

2014

2015

LNG Export

2016

2017

2018

2019

Cracker/Polymer

2020

2021

2022

2023

2024

Methanol/Ammonia

2025

2026

2027

2028

Other

Source: LSU Center for Energy Studies internal research

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10/12 INDUSTRY REPORT • THIRD QUARTER 2019 17

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COVER STORY

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Charles. Since St. James lies squarely between Baton Rouge and New Orleans, the Pelican Chapter is also collaborating with ABC-Bayou Chapter in New Orleans to augment training and create a bigger pool of workers.

Most recently, Helveston has noticed a significant spike in demand for pipefitters. “Our members are putting a lot of pressure on us to get down into the high school level to encourage students to think about pipefitting,” he adds. “Welding is the sexy thing in the area right now, but in the industrial field there’s a one-for-one need for pipefitters to welders.”

He credits the Louisiana Department of Education’s Jump Start program for incentivizing high schools to offer meaningful career pathways.

ExxonMobil proactively tackles its workforce development needs through the North Baton Rouge Industrial Training Initiative, which it helped launch in 2012. “These are $75,000- to $125,000-a-year jobs, so if we can educate the people out there and get them the skills they need, it’s a win-win for the local community,” Dabadie says.

Jenkins says Performance monitors market potential to determine its workforce needs, then focuses on what it feels are the more attractive projects based upon the client, project type, schedule, contractual structure and current strategy.

Looking ahead, Performance hopes to fill a majority of its manpower needs from Louisiana. Nonetheless, the contractor has a large pool of workers to pull from, as its projects have spanned from California to Florida over the last 10 years.

The contractor employs an average of 8,000 craft employees and performs about 16 million man hours of work per year.

Alasdair Cathcart, president of Bechtel’s Oil, Gas and Chemicals business in Houston, says the convergence of petrochemical and LNG projects will certainly strain Gulf Coast resources, but he feels the construction industry can handle the load. He spoke in June at the Downstream 2019 conference in Houston.

DON KADAIR

in the state, LSU’s Upton says it’s likely that fewer than half of new workers will be local residents.

Lee Jenkins, vice president at Performance Contractors in Baton Rouge, says if all of the projects become reality, manpower will almost certainly need to come from outside of Louisiana.

“While we have a strong resident workforce in this area, additional manpower from outside the area will be needed to supplement local manpower,” Jenkins says.

By comparison, southeast Texas faced a similar confluence of industrial work in the last five years and suffered its own manpower problems, despite its proximity to Houston. “Even a market the size of Houston couldn’t support having those three projects (ExxonMobil, Enterprise, ChevronPhillips Chemical) within about five miles of each other,” Jenkins says.

That means Louisiana will become a proving ground of sorts, says Greg Bowser, Louisiana Chemical Association president and CEO. “If the state can handle the manpower load—along with its other supply chain needs—it could lure even more work away from Texas in the future. We’ve got to demonstrate that we can manage through this because owners will be looking at that when they’re making those decisions.”

That includes figuring out how to attract and train more skilled laborers, whether they be Louisiana natives or Louisiana-based companies bringing workers from other states.

Bowser says skilled labor availability and a strained supply chain have become prominent issues for LCA’s member companies, exacerbated by up to eight planned maintenance turnarounds at various facilities in 2019.

LCA serves as a venue for owners to work together in sequencing the work so that it doesn’t strain the supply chain or workforce. “We want to schedule it out a bit so they can have some spacing and more opportunities to manage it,” Bowser says. LCA’s Workforce Committee also works with local community colleges and Associated Builders and Contractors chapters to plan for training needs.

“While we have a strong resident workforce in this area, additional manpower from outside the area will be needed to supplement local manpower.”

LEE JENKINS, vice president, Performance Contractors

David Helveston, president and CEO of Associated Builders and Contractors’ Pelican Chapter in Baton Rouge, says as many as 8,000 construction workers could be needed for the St. James projects alone.

The parish’s total population is only about 21,000. “Our members say we need to fill up every classroom and every lab, and if that means running at a deficit for the next year, run at a deficit, because the work’s coming,” Helveston says. “They’re putting heavy pressure on us to ramp up our educational programs. They see the wave coming from Baton Rouge to New Orleans over the next couple of

years and they’re feeling that workforce pressure.”

In fact, the contractor group is running out of training space, and plans to strengthen its partnership with Louisiana’s Community and Technical Colleges system for additional classrooms and training opportunities. ABC-Pelican also runs daytime educational programs with area high schools, including a mid-afternoon welding program, as it has “maxed out” traditional nighttime training slots.

At present, nearly 3,000 are trained annually at Pelican Chapter facilities in Baton Rouge and Lake

Continued on page 22

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 19

COVER STORY

Megalesson: THE SUCCESS OF SABINE PASS LNG WAS AN ANOMALY—BUT NOT BY CHANCE IT WASN’T DUMB LUCK. While there were bumps in the road, to be sure, an unmatched level of transparency and a good dose of confidence in the contractor are what made the Sabine Pass LNG project a success.

The $18 billion, five-train Cheniere Energy terminal in Cameron Parish is an anomaly, as it was built on budget and on time in an era when megaprojects almost always exceed both. This culminated with an unprecedented achievement: In February 2016, the facility became the first to ship LNG from a commercial facility in the contiguous U.S. So just how did the owner/contractor duo tackle the megaproject and not fall victim to the various pitfalls familiar to other jobs?

Ed Lehotsky, a former senior vice president and current executive advisor at Cheniere, and Darren Mort, Bechtel general manager, say adversity was the mother of invention.

“At Cheniere, we call it slaying dragons,” Lehotsky says. “They’d raise their heads and we’d have to step back and understand those dragons and eventually conquer them.”

Hurricanes proved to be one of the

bigger dragons. Cheniere’s Gulf Coast sites were impacted by numerous storms over a 14-year period. While Hurricane Katrina in 2005 didn’t directly hit the Cameron site, it significantly impacted workforce availability. Shortly thereafter, Hurricane Rita scored a direct hit. Hurricane Ike in 2008 had a serious impact, and then there was Hurricane Harvey in 2017. “Harvey hit our Corpus Christi site very seriously,” Lehotsky says, “then circled around Houston and whacked into Sabine, flooding the site.”

At the time, the team could have easily added time to the schedule. Instead, Cheniere and Bechtel worked together to attract labor by raising salaries and building temporary housing for workers in the storms’ aftermaths. “We worked together as a team,” Lehotsky says. “We gave Bechtel assistance with getting things moving. In the process, we developed a kinship and a sense of teamwork that continues to this day. It was hard, but we learned a lot from it.”

BUILDING TRUST While there were a lot of developers warily eyeing the LNG market in the early

20 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

days, Cheniere was a trailblazer. Building the Sabine facility was a risky proposition, as there were a lot of skeptics.

“I think Bechtel was the only one who really believed that we had the wherewithal, skill and the experience to do this,” Lehotsky says. “That’s why we chose them and that’s why we continue to use them as we build more trains.”

The team’s success is said to have been based upon a foundation of mutual respect. “Cheniere’s role was to develop a project and provide the oversight, but also give us the space to do our job,” Mort says. “That sounds like a simple thing to do, but it’s not the normal roles.

Getting the roles right and getting the right culture and team around us was very important.”

As such, Cheniere gave Bechtel a high level of autonomy, putting the responsibility squarely on that company’s shoulders. An integrated engineering-procurement-construction (EPC) approach also went a long way toward eliminating the number of interfaces.

“This ensured that engineering fed procurement, and that procurement and engineering fed construction in the most effective way,” Mort says.

Bechtel and Cheniere used a standard template—The ConocoPhillips Optimized Cascade process—for the design of the liquefaction process, which resulted in lower cost and maximum efficiency. Replication was central to the process. “Any time there’s an opportunity to standardize and replicate, that’s an important characteristic to any successful project execution,” Mort says.

A standardized approach to construction was also beneficial. “Bechtel doesn’t just standardize on a single project or business type,” he says. “We design steel the same way everywhere.

We make our pipe the same way. All of this is done in a standardized fashion so if you’re a Bechtel superintendent or foreman anywhere in the world you get what you expect.”

WHY PROJECTS FAIL Lehotsky says there are usually three reasons a project fails. Either a contractor has a bad plan, a contractor poorly executes a good plan, or the owner micromanages the project.

Micromanaging is just a bad idea.

“I love driving cars, but I’m not going 1012industryreport.com

to tell Mercedes how to design a car,” he notes. “Pick a contractor that has proven that their model works well.

Make sure that they know what they’re doing and then let him do it. Of course, that has to be backed up by a measure of accountability.”

It’s also important to realistically estimate time and budget and avoid “low balling” the numbers to get approvals.

Armed with a realistic schedule and cost, the contractor can then work to beat that number. “The bottom line: Don’t try to fool yourself and management that you can do things cheaply.”

Mort says Bechtel sets aggressive targets in its schedule but hesitates to make those targets the new baseline.

The thinking is that if an owner adjusts the schedule based on the new targets, the contractor likely will be less transparent in the future. That can be harmful to the relationship.

“Transparency creates a single reality,” Lehotsky says. “The team—all the way up to the CEOs—must have the same view of reality. The same reality that the workers have in the field. That’s very important in order to avoid miscommunication and misconception.”

This is particularly important on megaprojects, as they are brutal, complex and large. Lehotsky says every team should ask these questions: How good is the plan? Where are people coming from? Where’s the strategy?

How does this integrate? What are the supply challenges out there?

“I think all of us have a responsibility to get into the details and make sure it

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all blends together,” he says. “And if it doesn’t, then it isn’t real. It goes all the way through the supply chain to the human chain, to keep that communication and transparency there.”

That’s why Cheniere participated in every Bechtel meeting and pushed the communication down to the lowest level at the site.

Lehotsky says indecisiveness can also be a killer. “We didn’t sit around wondering, ‘Is it best to do it this way or that way? Should we be looking at several options and picking the right one? No. We said, ‘This one will work.

Let’s do it.’”

THEY’VE COME A LONG WAY While it’s now central to the Bechtel and Cheniere partnership, transparency was difficult to achieve in the beginning.

That’s because Bechtel wasn’t known for being open about its work practices. “That wasn’t our reputation, and rightfully so,” Mort says. “Because of our journey with Cheniere, we’ve come to realize you can’t be successful as an island.”

Over time, the owner and contractor have developed a respect for each other and an understanding of one another’s values. “We’ve been working together for 16 years now,” Lehotsky says. “There have been times in that relationship when it has been tough, but we’ve worked together to do what’s right for the job, every time. We removed the emotion and did the right thing.”

—Sam Barnes

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 21

COVER STORY

“Our members say we need to fill up every classroom and every lab, and if that means running at a deficit for the next year, run at a deficit, because the work’s coming.”

DON KADAIR

DAVID HELVESTON, president and CEO, Associated Builders and Contractors’ Pelican Chapter in Baton Rouge

“I think we have a very experienced and skilled workforce,” Cathcart says.

“We really believe that the crafts are available, competent and committed and that we can deliver the next wave of projects in the U.S. Gulf Coast safely, ahead of schedule and under budget.”

Also speaking at the conference, Samik Mukherjee, group senior vice president of projects at McDermott in Houston, says owners and contractors are working collaboratively in the face of the challenges. “It takes a collaborative approach with the customer,” he says. “It’s such a fluid situation, and customers are open to discussing how we can mitigate the risk.”

Alliance in Lake Charles, says the completion of Sasol’s $11 billion LCCP (Lake Charles Chemicals Project) left an abundance of contractors and suppliers in its wake.

Both will be needed for the impending LNG surge.

“Many of the major contractors are now well-established with shops and offices, and there are many more suppliers and heavy equipment rent-

al places, etc.,” DeRoussel says. “All of that was brought in to support this initial surge and they’re all still here. We’re now well positioned to shoulder some of what we see coming. We are certainly in a better place.” Lake Charles’ training apparatus is also in high gear, including facilities operated by the ABC Pelican Chapter and SOWELA Technical Community College.

New Projects Top South Louisiana project starts in 2019 by sector

SOUTHWEST LOUISIANA BENEFITS FROM SASOL’S BIG WAKE Southwest Louisiana is perhaps prepared better than most to handle the load. Larry DeRoussel, executive director of the Lake Area Industry 22 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

LNG Production......................... $13.1 billion Petrochemicals.......................... $10.6 billion Plastics/Rubber........................... $1.8 billion Crude Oil Storage........................ $1.7 billion Oil & Gas production...................... $1 billion Natural Gas pipelines................ $891 million SOURCE: Industrial Info Resources Inc.

Jason French, vice president of government and public affairs at Tellurian Inc., isn’t worried about manpower or other issues that might come up during construction of his company’s $15.3 billion Driftwood LNG plant in Calcasieu Parish, breaking ground later this year. At peak, Driftwood will require some 6,500 workers.

“Bechtel has guaranteed cost, performance and schedule on the project,” French says. “Our management team has a strong history of working with them and strong confidence in Bechtel to deliver on all those things. They are used to managing the workforce issues and we have confidence in their ability in what will certainly be a constrained environment.”

Still, French admits the project will likely strain the local workforce.

There could also be some logistical hurdles, as the site is remotely located five miles south of Carlyss in 1012industryreport.com

Success of SEACOR’s container-on-barge services at the Port leads to major expansion of container storage capacity.

The public/private partnership between the Port of Greater Baton Rouge and SEACOR Marine continues to produce increases in the number of containers handled at the Inland Rivers Marine Terminal at the Port’s North Line Road facility. In 2017, SEACOR handled 8,018 containers there, and in 2018 a total of 13,685 containers were handled at the IRMT. Due to this increase in container movement, the Port has undertaken an expansion of the Inland Rivers Marine Terminal’s container storage yard. The expansion is estimated to cost approximately $4.5 million and will include 17,541 square yards of concrete poured to expand the Port’s container storage capacity.

Port Executive Director Jay Hardman said, “We are excited about the success of the COB service and the opportunity to expand our capacity. Every container that goes down the Mississippi River to New Orleans for export is one less 18-wheel truck on our roads and bridges.”

For more information, contact Greg Johnson: 225-342-1660.

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10/12 INDUSTRY REPORT • THIRD QUARTER 2019 23

COVER STORY

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“Can we afford the 25 percent for a while? Sure. Was that built into the budget? Probably not.”

ERIC SMITH, interim director, Tulane Energy Institute in New Orleans, on the potential impact of tariffs on the price of exotic alloy steel made in China necessary for LNG projects

Calcasieu Parish. “There’s going to be a significant local component to the workforce. But are there some constraints? Will there be competition for the workforce? Absolutely.”

The timing of the Sasol completion and the impending wrap up of nearby Cameron LNG could also prove fortuitous for Tellurian, as it should free up local contractors and suppliers.

However, there are other projects waiting in the wings, namely Lake Charles LNG, Port Arthur LNG and Golden Pass, that could tap into that supply. “We believe we’re at the head of the next wave,” French notes, “and will benefit from that.”

Driftwood’s terminal and as-

sociated pipeline received all the necessary permits and in early July entered into definitive agreements with Total Delaware Inc. and Total Gas & Power North America Inc. to purchase 1 million tons per annum from the terminal.

In the meantime, the company is investing in a new half-mile road around the plant site, in conjunction with DOTD, to separate residential and construction traffic. This will allow the existing road to be dedicated to facility traffic during and after construction.

Tellurian’s goal is to begin producing LNG by 2023. It will employ approximately 400 permanent workers.

1012industryreport.com

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10/12 INDUSTRY REPORT • THIRD QUARTER 2019 25

NEWS MANAGEMENT

“For industrial contractors, cash flow is very volatile, and the larger the job the more volatile it can become.”

TAMI MISURACA, CFO, The Newtron Group

Money movement Longer payout and complex invoicing are putting a drag on contractor cash flow.

DON KADAIR

BY SAM BARNES

I

nvoicing an owner for work is as complex as higher-level math these days, as contracts are more convoluted and payout terms are frequently extended from 30 to 90 days and beyond. That puts the pinch on cash flow in a big way.

Turner Industries’ accounting department in Baton Rouge has grown significantly in the last 10 years.

While some of that is due to organic growth, much of it is necessary to manage the increasing difficulty of simply getting paid.

Turner CFO Jimmy Sylvester says it’s all part of a greater effort by many industry procurement departments to hold onto their cash. Gone are 30-day payment terms. Industrial owners are now pushing it to 120 days in some cases.

Several states have taken action to block the trend over the years. Texas, for example, passed a Prompt Pay Act in 2003 that requires owners to pay an invoice by the 35th day after receipt. Failure to do so is a violation of the act, unless there is a reasonable basis for dispute.

Unfortunately, no such legislation exists in Louisiana, and owners are pushing their payment terms into the stratosphere. This is the reality of the industrial world.

“It takes the contractor weeks to put a bill together, and then the customer typically performs a 30-day audit (of the invoice),” says Jay Montalbano, a partner at CPA firm Hannis T. Bourgeois in Baton Rouge and former president of the Construction Financial Management Association’s South Central Chapter. “And God forbid if there’s a discrepancy, because it’ll get kicked back.”

This disproportionately affects subcontractors, since general contractors often pass the longer terms down the line. “The subs can’t pass that on to their workforce,” Montalbano says.

“Their workers still must be paid every Friday.”

Whether a small scaffolding job or a $200 million capital project, the trend is industrywide. And Sylvester, who is responsible for cash flow management at Turner, among other things, says it shows no sign of slowing down.

26 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

“Clients we’ve had a relationship with for decades will arbitrarily tell us they’re changing our terms to 90 days,” he says. “‘If you want to still work for us, you will go to 90 days.’”

That’s because the invoicing responsibility has shifted away from the local plant manager to a corporate procurement department. “They (the plant managers) were our champions,” says Sylvester, a 25-year Turner employee. “That’s who we’d negotiate with. That’s who we discussed payment terms with. That paradigm has completely and totally turned upside down.”

Some owners even require that contractors submit a pro forma invoice for review and approval. Once the “practice” invoice is approved, the contractor is allowed to submit the actual invoice. “Here’s the problem: The contract doesn’t say how long they can review our pro forma and get it back to us,” Sylvester says. “It could sit in the pro forma stage for six months. By the time we get paid, we’ve paid our employees 98 days ago.”

Further complicating matters,

contractors are often responsible for breaking down their invoices into multiple accounting “buckets” for the client, whether by units, purchase orders, work breakdown structure, etc. This can turn into a costly and time-consuming invoicing delay, and further decrease cash flow.

CONTRACTUAL COMPLEXITIES Montalbano says contractual language can be particularly impactful on cash flow, so contractors should be fully aware of their contractual obligations and comprehend the consequences. This is especially true when dealing with owners based out of the country, as they can be shrewd negotiators.

“Lump Sum” and “Cost-Plus” contracts are the friendliest to cash flow. “The margins and cash flow are better because the billing process is simplified,” he adds. Additionally, some lump sum projects will allow a contractor to bill in advance for mobilization costs.

Time & Materials (T&M) contracts, on the other hand, are more complex and take weeks to invoice.

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“On the T&M side, the customer wants to see the labor records.

They want to see the records for the material and the equipment that was used, etc.”

And, Montalbano says, there are far more complicated contracts entering the scene. “You now see Lump Sum hybrids or Cost-Plus with guaranteed maxes, which essentially converts them to a Lump Sum. You also have contracts that start out as Cost-Plus and get converted to Lump Sum at a certain point, and some that start out Lump Sum but the change orders are done on a Cost-Plus basis.”

Just which contractual arrangement an owner uses is a plant-byplant decision that incorporates numerous factors, including the level of acceptable risk, the timeline for project completion and the current pool of contractors.

The Newtron Group, an industrial contractor in Baton Rouge, currently has a mix of 60% T&M and 40% Lump Sum, but those percentages can vary from year to year. CFO Tami Misuraca says most of the time larger projects are bid Lump Sum, but an engineer or owner may also bid them as Unit Price or T&M depending upon the state of engineering designs.

Says Misuraca: “When the projects are being pushed through and the engineering isn’t far enough along, owners or engineers will elect to use a T&M contract because change orders could raise the price too much.”

Successful contractors, she says, keep a mix of both. “With the Lump Sum work, there is the potential to get help on the cash flow side if the contract allows up-front billing, but there is more risk. While T&M is safer work, these projects require many days of cash flow and the lower margins affect profitability.”

BEST PRACTICES Misuraca says industrial subcontractors feel somewhat powerless in regard to cash flow, as owners and general contractors are usually calling the shots on contractual language.

The key to success, therefore, is a reliable cash flow projection model, along with a good understanding of market conditions.

As one of her roles, Misuraca determines future needs from a cash perspective, then ensures that her company’s existing capital and line 1012industryreport.com

of credit exceed projections. That’s because cash flow can swing wildly and quickly become a concern. “For industrial contractors, cash flow is very volatile, and the larger the job the more volatile it can become,” she adds. “I look at what I call ‘stretch scenarios.’ For example, if this one thing happens, are we going to be in a good cash position?” The contractor’s projected needs are then communicated to its banker of 46 years, JPMorgan Chase.

Montalbano agrees that the banking relationship has never been more important. Some of his clients earn hundreds of millions in revenue but don’t have the capital to make payroll, so they have large lines of credit—as high as $75 million in some cases— to provide the cash they need.

While that carries additional risk, savvy contractors price the interest expense back into their contracts.

“We tell them that we’ll absolutely go from 30 to 90 days, but it will cost you this much,” Turner’s Sylvester says. “We’ll increase our rate structure by ‘X’ amount to cover our cost.” In those cases, Turner accounts for any potential future rate increase.

Nonetheless, cash is still king and there are consequences to a diminished cash flow. Perhaps most significantly, it impacts a contractor’s ability to invest in equipment or facilities.

It can also limit a contractor’s ability to take on new work. After Hurricane Ike made landfall near Galveston in 2008, The Newtron Group was able to take on a large influx of work because it was well capitalized.

“That takes cash,” Misuraca says. “In a six-month period we saw a $50 million swing in cash flow.”

There are other steps a contractor can take. Billing in a timely manner is perhaps the simplest approach to improving cash flow. Others include negotiating more favorable terms or billing in advance when possible.

Perhaps most importantly, a contractor should practice fiscal responsibility. That by itself, Sylvester says, can overcome many obstacles. At the end of the day, executive management has the ultimate call as to whether Turner accepts the risk or walks away from a project. “Contractors don’t go out of business because they can’t make money,” he says. “They go out of business because they can’t pay their employees on Friday.”

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 27

A DV E R T I S E M E N T

Held to the Highest Standards FallTech is vigilant about updating, testing and retesting its products to ensure workers remain safe.

Based in Compton, Calif, FallTech has been designing and manufacturing state-of-the-art fall protection products from its own facility since 1991. Its commitment to reliable performance, unsurpassed value and the best-possible service combines with an in-house ISO 17025 accredited test lab to ensure every FallTech product meets or exceeds ANSI and OSHA standards. In addition to its high-quality product line, FallTech offers safety training as well as helping clients identify fall safety hazards, write fall protection plans and engineer anchorage solutions.

Regulations in the safety industry change rapidly, but FallTech remains knowledgeable of the changes as part of its safety mission. This includes an important focus on leading-edge protection. OSHA’s leading-edge standard has changed four times since it was introduced in 2012, and even though it can be challenging to keep up, FallTech strives to provide “simple www.falltech.com answers in a complex world.” In doing Headquarters: Compton, Calif. so, it helps to Specialty: Fall protection equipment

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ensure its clients understand what the standards mean and require at worksites.

FallTech offers several solutions to the .14 leading-edge standard, including leading-edge cable lanyards, 15 to 60-foot self-retracting lifelines (SRLs) and a smaller 9-foot personal leading-edge SRL, as well.

One of the company’s newest products is its DuraTech 9’ LE Personal SRL which can be attached to the back of a harness and meets all of the .14 leading-edge requirements. Unique features were added to help make the user more comfortable and provide a smooth walking speed with no nuisance lockup of the SRL. It was designed to enable the user be productive in the field.

The company is a voting representative on the ANSI Z359 committee for the .14 (SRDs), .17 (HLLs), and .18 (Anchorage Connectors) subcommittees. This is another example of FallTech’s dedication to safety and high standards in the industry.

Fall protection and creating a culture of safety is FallTech’s main concern, so the company is constantly updating, testing and retesting its products to ensure they keep workers safe. By being flexible in how it adapts to changing industry requirements and the needs of users, FallTech continues to exceed expectations.

“We educate and consult with our clients as the standards change, while also designing products that go beyond the scope of the standards.”

FOCUS SAFETY

common OSHA citations and how to avoid them

By SAM BARNES

A

ISTOCK

t its core, the success of the manpower-strapped Occupational Safety and Health Administration is measured by one overriding calculus: the number of citations issued in the field. That’s motivation enough for many inspectors to search for the “low-hanging fruit” during random or scheduled visits.

Most OSHA citations can be easily avoided with a few inexpensive changes, says Paul Andersen, a former inspector and now a senior safety advisor for OSHA Compliance Services LLC. He addressed the American Society of Safety Professionals in New Orleans in June.

Andersen says knowledge is power when it comes to OSHA standards. “No matter the business, an owner should be intimately familiar with the applicable standards, and take the necessary steps to comply,” he adds. “If you’re running a business and you can’t afford to do these basic things, you should not be in business.

We’re talking a few dollars to provide safety to your workers.”

Bear Process Safety President and CEO Adam Beary of Baton Rouge says many citations in the industrial space are issued for not having proper documentation, whether it be to support operating procedures, process

1012industryreport.com

changes, Process Hazard Analysis (PHA) or mechanical integrity.

In each of those areas, an owner can either design the risk out of the system or implement safety procedures to prevent an occurrence. In its role, Bear Process Safety reviews plant processes with operators and engineers to determine the potential for risk and help them design and implement the necessary protocol.

To assist owners in identifying pitfalls, Beary and Andersen outlined 20 common OSHA citations and some simple steps to ensure compliance: FIRE EXTINGUISHERS Another common citation: fire extinguishers not being properly identified.

The OSHA standard reads, “The employer shall provide portable fire extinguishers and shall mount, locate and identify them so that they are readily accessible to employees without subjecting the employees to possible injury.”

Additionally, fire extinguishers should not be mounted higher than 60 inches above the floor and should display an annual inspection tag. Andersen says fire extinguisher inspections should be an easy thing to track. “Most of the vendors put you on the schedule for 11 and a half months. Then they come out to your facility and inspect all your fire extinguishers at once.”

MANAGEMENT OF CHANGE All process changes require documentation that has been approved by the owner of that process. “Included in that should be a startup date and a Pre-startup Safety Review date,” Beary adds. “That all needs to be signed and dated, confirming everything was completed on that day and that it’s in service.”

Many times, the final signature and date are omitted.

“That’s a super easy thing for OSHA to find.”

TOP 10 OSHA CITATIONS,

BY CATEGORY 1. Fall Protection 2. Hazard Communication 3. Scaffolds 4. Respiratory Protection 5. Lockout/Tagout 6. Powered Industrial Trucks 7. Ladders 8. Machine Guarding 9. Electrical Wiring 10. Electrical General Requirements SOURCE: Paul Andersen, OSHA Compliance

ANNUAL APPROVAL OF Services OPERATING PROCEDURES All operating procedures should be approved annually, stating that they are accurate and up a clamp on it,” Beary says. “You are to date. Some companies develop a supposed to write a temporary operlist that can be easily signed by the ating procedure and review it.” There “owner” of the procedure every year. also needs to be a process in place “The standard doesn’t say you have for determining when a temporary to review your procedures annuchange becomes permanent. ally,” Beary says. “Instead, it reads, ‘The employer shall certify annually MECHANICAL INTEGRITY that these operating procedures are Make sure that employees are current and accurate.’ That means familiar with their equipment’s every 365 days. If you sign it on June inspection requirements, and that 5, then by June 4 the following year everything is documented. you better have signed it again.”

That means there should be an The document also needs to be established inspection and testing readily accessible. protocol, Beary says, “and you should be able to prove that your testing TEMPORARY CHANGES process is adequate. In some faciliOwners frequently neglect to docties, there’s not a single thing written ument temporary changes. “Let’s say down about the proper timeframe for you have a leaking pipe, and you put inspections.”

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 29

FOCUS: SAFETY protective clothing, respiratory protection, protective shields and barriers comply with the applicable standards and are maintained in a safe, sanitary condition.”

Furthermore, “The employer shall provide training to each employee who is required to use PPE. Each such employee shall be trained to know the proper care, maintenance, useful life and disposal of the PPE.”

area. “You have to use tepid water, so the water can’t be too hot or too cold,” Andersen says.

One common trip up: The addition of new equipment might impact your compliance with the eyewash station requirement.

EYEWASH STATIONS The standard for eyewash stations closely follows American National Standards Institute (ANSI) requirements: “Where the eyes or body of any person may be exposed to injurious corrosive materials, suitable facilities for quick drenching or flushing of the eyes and body shall be provided within the work area for immediate emergency use.”

Monthly inspections of the station are required, including a flow rate test. They should also be within a reasonable distance from the work

STAIRWAYS Inadequate, partial or missing railings on stairways or steps is an immediate citation.

PERSONAL PROTECTION EQUIPMENT (PPE) The OSHA Standard reads, “An employer shall ensure that all required safety devices and safeguards, whether employer or employee provided, including personal protective equipment for the eyes, face, head, hand, foot and extremities (limbs),

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OTHER EQUIPMENT There are many other pieces of equipment that require training, all of which should be documented.

And, most likely, OSHA will want to see your training records. “If you’re operating equipment and conducting training, you need to know the standard so you’re documenting that training in accordance with regulations,” Andersen says.

ISTOCK

FIRST AID KITS As a quick fix for one potential compliance issue, Andersen suggests removing all oral medications or sprays from first aid kits. “If you have orals, you’ll need to have a note from the doctor for everyone in that facility, or confirm somehow that the employees at the facility will not have a problem taking those orals. You start putting those extra things in there, especially with an expired date, you’ll get cited.”

The OSHA standard reads, “There shall be adequate first-aid materials, approved by the consulting physician, readily available for employees on every job.” The regulation notes First Aid supplies should be kept “in a sanitary and usable condition,” inspected frequently (no time period specified) and replenished as necessary.

PERMITS Equipment permits should be posted in a conspicuous place. For example, the standard for pressure vessels and air tanks reads, “The permit shall be posted under glass in a conspicuous place on or near the air tank or in a weatherproof container secured to the unit, and shall be available at all times to any qualified inspector.”

Andersen says this is a common citation. “I would go to a business and the permit would be in a desk drawer. That’s a citation.”

ISTOCK

FALL PROTECTION Fall protection must be followed by anyone working from an elevated position. No exceptions.

IMPROPER USE OF EQUIPMENT The inappropriate, or unsafe, use of equipment is an immediate citation.

As for forklifts, the standard reads, “Loads shall be so balanced, braced or secured as to prevent tipping and falling. Only stable or safety arranged loads shall be handled.”

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FOCUS: SAFETY

OC IST

ELECTRICAL PANELS Nothing can block an electrical panel. When opening the panel, the corresponding menu should match with the circuit breakers. And, of course, missing breakers are taboo. “All electrical citations could potentially be issued as ‘serious,’” Andersen says.

TOEBOARDS Toe boards—small vertical barriers attached to a raised floor or platform—must be used where necessary and at a minimum height of 4 inches.

EXTENSION CORDS Frayed and unprotected extension EQUIPMENT SHOULD cords are an immediate citation.

BE PROPERLY SECURED Cord strain relief is also required.

All equipment should be properly The OSHA standard reads, “Flexible secured. “For example, if you can cords and cables shall be connected push against the drill press with two to devices and fittings so that strain fingers and it rocks, that’s a citation. relief is provided, which will prevent They’re supposed to be bolted, so pull from being directly transmitted they would be bolted or mounted to to joints or terminal screws.” That’s prevent from rocking.” Additionally, because a damaged cord all cylinders should be properly could strapped and secured.

Issueeventually Date: 4Q Ad proof #3 • Pleasein respond by e-mail or fax with your approval or minor revisions. result a deadly For any and all OSHA • AD WILL RUN AS IS unless approval or final revisions electrical shock. standards, Andersen points to a are received by the close of business today.

• Additional revisions must be requested and may be subject to production fees.

ISTOCK

simple solution to ensuring compliance: “Create a study guide with all of the standards and then match those to a checklist when you do your program inspections. That’s how you get into compliance.”

Beary agrees but recommends that plants seek an outside consultant given the ever-changing safety landscape.

“The individual plants are so isolated.

If you don’t have consultants trying to keep you abreast of what’s going on, you could get tripped up during the next inspection.”

POWER INDUSTRIAL TRUCKS (FORKLIFTS) Having no seat belt or failing to wear a seat belt when operating a forklift can be a citation. Regulations also state that equipment operators should perform a daily, documented inspection of the equipment.

Per the OSHA standard, “Drivers shall check the vehicle (pre-use inspection) at the beginning of each shift, and if it is found to be unsafe, the matter shall be reported immediately to a foreman or mechanic, and the vehicle shall not be put in service

again until it has been made safe.”

Documentation should be readily available proving that the operator has been trained and that the forklift has been inspected.

LADDERS Ladders cannot be painted. “One guy painted his ladder so nobody would take it,” Andersen says. “That’s a problem.” Improper usage is another common issue. For example, a folding ladder cannot be used in a leaning position. Ladders must also be inspected and free of debris, and the inspection is to be documented.

Labels should be readable and the ladder in good condition, with no damage.

Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2018. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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Inspectors also look for improper usage, such as “where cords are run through holes in walls, ceilings or floors; run through doorways, windows or similar openings; attached to building surfaces; or concealed behind building walls, ceilings or floors.”

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• AD WILL RUN AS IS unless approval or final revisions are received by the close of business today.

• Additional revisions must be requested and may be subject to production fees.

Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2019. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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FOCUS: SAFETY

The courage to speak Meeting industry safety goals requires a psychological safety net. By SAM BARNES

C

ontrary to conventional wisdom, the up-andcoming generation of millennials might hold the key to an accident-free work environment in the industrial space. Their desire for a “touchy feely” management style makes them more receptive to a community- and relational-based approach to safety, which experts say is necessary for real change to occur.

The latest buzzwords—psychological safety, “just culture” and human performance—all emphasize a softer approach to management that focuses on positive reinforcement rather than coaching.

David Sowers, a founding member of Zachary-based human performance consultant Knowledge Vine, says creating a sense of community within the plant environment gives workers the confidence to report potential safety issues without fear of repercussions.

It all hinges on a culture based on positive reinforcement. Unfortunately, many managers take a decidedly divergent approach by focusing on mistakes rather than accomplishments. “You need to reinforce four positive things for every one time you have to coach,” Sowers says. “Most industries are probably skewed in the other direction.”

Building a community based on trust is crucial to the process. Sowers refers to it as a “just culture,” which is one based on fairness, community and an open-door policy. This, in turn, gives workers a vested interest in what happens at the jobsite or plant.

That’s admittedly difficult to create in the industrial market, particularly during boom times when plants and crews consist of traveling workers and high turnover rates. But Sowers says that makes it all the more important.

“You can’t build and sustain a human performance culture if you don’t have a just culture, if you don’t have that psychology.”

Knowledge Vine says it reduced one company’s turnover rate from

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80% to 40% by transforming its environment into a just culture. “The workers noticed that their voices were being heard,” Sowers says. “They recognized that the company was actually trying to improve the work processes and environment, rather than just yelling at them to pay more attention.”

Cindy Nassar, a Lake Charlesbased psychotherapist and mental health counselor, says a fear of retaliation is the primary reason that workers don’t report unsafe conditions.

As one of her services, she trains supervisors to recognize problems in industrial work environments.

Nassar gauges the condition of an organization’s culture by the rate in which its employees offer constructive criticism or offer suggestions.

If minimal or nonexistent, “that’s an indication that they’re in a culture where they do not feel safe.”

“They’re not able to point out the hazards due to a fear of retaliation,” she adds.

There are other reasons, too.

Poorly trained workers might not trust themselves to judge a situation properly. Or they might be linear, not creative or divergent, thinkers.

Another reason: Previous attempts to point out a problem went unnoticed or unresolved.

A CULTURAL SHIFT Nassar, who has worked in the industrial space for 20 years, says some of these issues could materialize in dangerous ways as the volume of industrial work increases, particularly in the Lake Charles area.

An influx of new workers, deadline pressures and even traffic delays are all part of a dangerous mix that could lead to safety issues.

That’s why managers and owners should develop an engaged work environment to ensure that safety doesn’t fall by the wayside. “Everyone’s under the gun,” she adds. “From the people who order parts up to the manager of the jobsite, at every level people are under a great deal of

stress. They also come from different places; they’re displaced. I’ve seen a lot of those in my practice who are overwhelmed.

“If they’re under a big time crunch that involves a great deal of money,” Nassar notes, “people can’t judge a situation appropriately or effectively.”

As a first step, Nassar says managers should make it obvious—preferably in writing—that employees can safely communicate issues or ideas through an open-door policy and that there will be no retaliation.

It might also be necessary to shake up the management team. “You have to have effective managers who employees feel they can go to with their concerns,” Nassar says. “A good manager is in tune with their emotional intelligence and knows how to recognize emotions in others. And if something’s going on, they can take the pulse of their team and figure out what it is.”

Team meetings, focus groups and educational programs that identify safety goals are also productive, with the end goal of creating an environment where it’s safe to speak up.

Like Nassar, Knowledge Vine’s Sowers says a familial and relational approach is more conducive to safety than a heavy-handed one. “In a just culture, there’s trust, people are treated fairly, and people are comfortable and willing to speak up,” Sowers says.

“It’s not who you know or any other kind of bias. It’s that we’re all going to be treated the same and fairly.”

That’s a barrier difficult to over-

come in some settings, where managers are more likely to punish mistakes than recognize accomplishments.

In those environments, employees will never speak up for fear of repercussions or a negative outcome.

Ultimately, they’ll make a crucial decision: Report a minor mistake, or say nothing at all.

CREATING COMMUNITY Dr. Steven Simon, president of Culture Change Consultants in Larchmont, New York, says “psychological safety” is quickly becoming recognized as a necessary component in every work environment. Simon spoke on the subject at the American Society of Safety Professionals’ annual conference in New Orleans in June.

“Psychological safety is an intrinsic basic need, and if not fulfilled many of your other needs aren’t going to be fulfilled either,” he says. “In other words, if employees feel threatened, feel fear of retaliation, feel insecure in the workplace, etcetera, you’re not going to get the best out of their participation.”

In fact, Simon says physical safety is not possible without psychological safety, a concept introduced by Dr. Amy Edmondson of Harvard University in 1999.

“She introduced the idea that if you have psychological safety on a team, then you could have learning on the team, and if you have team learning, then you’re going to have much better team performance.”

Psychological safety, he adds, is a

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 35

FOCUS: SAFETY part of any successful work culture as it makes all programs work better.

It’s also leadership driven. “The leader should have an open mind. The leader should ask employees what they think and get their input.

“In such cultures, people feel encouraged to make their contributions, they’re not afraid to be themselves,” Simon says. “Workplaces devoid of psychological safety have an abundance of cynicism, fear and intolerance.”

As a practical step, Simon says companies should create written team “norms” that outline these psychological safety standards. Grass roots teams led by workers on the front lines can also actively engage in psychological safety initiatives.

dition of its work environment, but merely reports the rates of events and errors, mistakes and injuries.

That’s why the frequency of “nearmiss” reporting is the best barometer.

Rather than focusing on accidents or mishaps, Simon says companies or teams should ask themselves, “Are my workers willing to make themselves vulnerable by reporting circumstances that did not directly result in an accident? How many people actually spoke up? How did we respond?

These kinds of communication shifts really do make a difference.”

It should all be backed up by a well-established process for reporting near misses. “That’s the leadership side of it,” Sowers says. “Create a process that is anonymous, where no one is to blame, where we just want CULTURE CHECK: to learn from this near miss. Because NEAR-MISS REPORTING the next time, the near miss is going Safety experts urge owners and to be a hit.” teams to stop gauging the effectiveHow your leadership is perceived ness of their safety programs through in the field is another indicator. Leadstatistics, and instead by the quality ers need to be approachable so that of the dialogue between employees.

Issue Date: 3Q 2019 Ad proof #2workers feel comfortable in bringing • Pleaseall, respond by e-mail sorsafety fax with record your approval or minor After a company’ uprevisions. problems.

• AD WILL RUN AS IS unless approval or final revisions does not accurately reflect the conThey also need to be dependable, are received by the close of business today.

• Additional revisions must be requested and may be subject to production fees.

so that workers feel assured that action will be taken if necessary.

Unfortunately, supervisors often lack the people skills to effectively manage a team. In those situations, Knowledge Vine provides what it refers to as COACH (Communicate, Observe, Acknowledge, Change, Help) training, an essential element in establishing a just culture. “One of your roles as a leader is making sure you’re clearly communicating expectations, that you’re observing the correct behaviors and not just measuring a result.”

In the end, any cultural changes should be noticeable to the worker.

That way they’ll recognize the value in communicating and in “sticking their necks out” when there’s a problem. “We call it a change of scenery,” Sowers says. “If the worker doesn’t see a change in scenery, if it’s all just a bunch of lip service, you’re never going to implement change.”

Leadership should also be actively engaged in the field, so workers will see that there is accountability and a full organizational effort.

As an added benefit, those man-

agers will have a more accurate view of the organization as information permeates more easily through the chain of command.

IT’S GETTING BETTER OUT THERE Nassar says she’s noticed some real progress in recent years, as companies begin to move away from these fearbased work environments. They’re also recognizing some tangible benefits other than safety in providing these psychological safety nets, such as decreased turnover rates and higher productivity.

“Studies have shown that millennials will take less money per hour if they feel like they’re part of something bigger,” Nassar adds. “If we don’t give them that sense of community and family, they’re going to go find it somewhere else.”

Nonetheless, Sowers says much work remains. “We’re leveraging technology more effectively to keep people safer, but we’re still bad at coaching,” he says. “We’re significantly behind other sectors such as aviation, nuclear power and pharmaceuticals.”

Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2019. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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S P E CI A L A DVE R T I S I N G S E CT I O N

BUILDING SAFER, HIGHER PERFORMING WORKFORCES.

S PE CI AL ADV E RT I S I N G SECT IO N

Staying

FUTURE FOCUSED

I

N THE 61 YEARS since Alliance

tools, techniques and processes used

(OTIEC), a consortium between Alliance

behaviors, that support those values.

Safety Council began, the organi-

in 2019 may differ from those of 1958,

and LSU’s College of Engineering. It is one

As a result, Alliance has built an inno-

zation has grown into a premier

Alliance’s focus on, passion for and dedi-

of only 26 OTIECs in the U.S. and the only

vative, purposeful culture that informs

provider of training and technol-

cation to improving safety has remained

center located in Louisiana.

relationships with customers, members,

ogy solutions that develop and elevate workforces, ensuring companies remain

workers each year, has impacted over

works with companies from a wide array

20,000 companies and is one of the larg-

of industries, including construction,

est safety councils in the U.S.

manufacturing and transportation.

members.

Today, Alliance trains nearly 300,000

safe and competitive. The organization

petrochemical, pulp and paper, power,

students, partners and Alliance team

constant.

The organization has developed several signature programs, such as Certified

GUIDED BY THE FUNDAMENTALS

“We’ve been very intentional about setting the culture at Alliance and identifying the behaviors that support our core

For Alliance, every aspect of the organization aligns with its core values:

values,” said President and CEO Kathy Trahan. “The behaviors that support

As such, Alliance helps build the

Occupational Safety Specialist® (COSS),

• Ask What’s Next

those values have become second nature

standard of training and safety in the

Certificate for Occupational Safety Man-

• Drive for Results

to us. We start our meetings by speak-

industry. Alliance achieves this aim by

agers™ (COSM) and Safe Supervisor™, as

• Do the Right Thing

ing about the fundamental of the week

streamlining its products and services

well as the PowerSafe® system.

• Help Others Succeed

and find ourselves using the language in

• Foster an Enjoyable Workplace

everyday conversation.”

and building lasting relationships with

Alliance also provides OSHA-autho-

its members and customers based on a

rized training through the Mid-South

foundation of expertise. And while the

OSHA Training Institute Education Center

38 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

From these core values, Alliance developed 28 fundamentals, or measurable

With clear expectations, Alliance team members are encouraged to be innova-

1012industryreport.com

S P E CI A L A DVE R T I S I N G S E CT I O N

SHARING THE VISION

core value of helping others succeed.

Other examples include providing data integration and records management

Alliance is dedicated to ensuring

services, and developing custom systems

customers and members leverage rap-

that enable customers to focus on their

idly changing technology and Alliance’s

core business.

growing portfolio of products and

“We help our members and customers choose the right compliance training – training that is relevant, up to date and

services to meet their current and future business needs.

“We help educate our customers,

engaging,” Trahan said. “Our job is to help

potential customers and partners about

our customers make good choices, so

the latest technology Alliance offers,” said

they can make every day and every dollar

Alliance VP of Business

count.”

Development Travis Broussard. “Our job is to com-

POWERING INNOVATION

municate with industry the

Change is a constant across industries.

whole picture

For Alliance, change and growth fuel

of what we offer

innovation.

and all of the new

“Our goal is to create the most engag-

Travis Broussard

things we’re doing,

ing products on the market,” said Alliance

so we can build on our

Chief Technology Officer Scott Edwards.

60-plus year foundation of helping busi-

This includes the development of a

nesses and communities stay safe.”

new suite of software applications: Pyvot Connect, Pyvot Track and Pyvot Explore.

Pyvot Connect is an employee recruit-

This is evident in Alliance’s nontraditional approach to business development. Alliance evaluates how the orga-

ment and candidate tracking application,

nization has helped existing customers,

Pyvot Track is a compliance and training

including interviewing those customers

records management system, and Pyvot

about why they’ve been successful. They

Explore is a workforce development and

then document that success story and

learning experience platform.

share the vision with as many like-mind-

While many students take Alliance’s

ed customers as possible.

training courses to satisfy mandatory reg-

Central to Alliance’s approach is

ulations and requirements, Pyvot Explore

listening. To do this, Alliance builds

will motivate individuals to seek addition-

lasting relationships with existing clients,

al training to fill in gaps in their skills.

partners and potential customers.

The aim here is to not only improve productivity but advance careers.

“We work with some of the biggest companies in the world,” Broussard said.

“At the highest level, this suite of

“They are busy keeping their operations

products will help our customers get

going, building our cities and power-

the most out of their work-

ing our communities. It’s our

force,” Edwards said. “We’re

job to listen to them and

diversifying our products

ask the right questions

and support, so our

about what’s keeping

tive, to embrace change and growth, and

the way of your success, we want to help

customers are engaged

them up at night.”

to provide the unparalleled expertise

you see things in a new way. We walk our

and want to take addi-

This may be safety

and service that Alliance’s customers and

members through challenges they may

tional training to take

concerns, workforce

the next step in their

shortages, compliance

members have come to expect.

be struggling with, sift through the

These fundamentals are key

complexities and help them

to every product and ser-

develop new approaches

vice Alliance provides.

that set them up for

The culture is further

success.”

exemplified by Alliance’s

Although common

issues, training gaps,

careers.”

technology challenges or

Alliance is also working

Scott Edwards

on other innovative tech-

pains from growing so fast that they can’t keep up with the

nology solutions for existing and potential customers. These include mo-

latest in training, technology, records

investment in its mem-

themes – such as time

bile platforms, artificial intelligence-driv-

management and constantly changing

bers’ new 3,000-square-

management, project

en recommendations, and 100 percent

regulations.

foot Design Thinking lab,

management and hiring

cloud-hosted services, thus eliminating

where Alliance hosts workshops to help customers solve

talent – exist across in-

Kathy Trahan

critical problems they are facing.

“All of the great ideas in the world don’t matter if you can’t execute them,” Trahan said. “If an obstacle is standing in

1012industryreport.com

dustries, Alliance adapts this collaborative approach for each

PowerSafe, a comprehensive safety

concerns about scalability or disaster

orientation and verification system, was

recovery.

borne from Alliance listening to custom-

“We’re investing in our content and

ers. “We listened to a problem: How do I

industry and for each issue a company

our services,” Edwards said. “This enables

get thousands of utility contractors, who

is facing.

us to connect with our customers even

never come to an office, trained and

more.”

verified while they’re on the road and

This is in alignment with Alliance’s

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 39

S PE CI AL ADV E RT I S I N G SECT IO N

The Alliance Safety Council headquarters at 10099 N. Reiger Road in Baton Rouge. before they even get to the jobsite? We

us to know which type of learner is ac-

ters and satellite locations, our web-based

built the PowerSafe system to be a solu-

ing our training as engaging as current

cessing our content at any given moment.

clients enjoy the fact that they can access

tion for that problem,” Broussard said.

technology will allow,” said Alliance VP of

The challenge is creating interactive and

our training over the web from a variety

By continually learning and sharing the

“At Alliance, we are committed to mak-

engaging content that can reach all

Operational Excellence Sheri Bank-

types of learners.”

of devices. Because of this flexibility, new

latest technology solutions, e-learning

ston. “Instead of developing

platforms and content delivery systems,

content that focuses

To that end, Alliance

and ready to work. This time savings ulti-

Alliance empowers its customers and

solely on the transfer

incorporates interactive

mately translates into monetary savings

their workforces to become safer and

of knowledge, we use

questions throughout its

more efficient. “It’s not about selling

the latest learning and

programs and utilizes

them something; it’s about listening,”

development technol-

innovative technologies,

continue to support workforces with

Broussard said. “Only then can we truly

ogies to offer solutions

such as avatars, custom

new and exciting training technologies,

offer solutions that matter to an owner,

that promote student

contractor or worker – ones that are

interactivity. We believe

going to save a project, save a career or

engaged students better

save someone’s life.”

retain information, which in turn

animation and interactive videos to improve the

Sheri Bankston

allows them to later recall critical

ENGAGING A CHANGING WORKFORCE Training programs are only impactful

student experience.

A majority of Alliance’s training courses can be accessed from

hires can arrive on the first day trained

for our clients!”

Looking to the future, Alliance will

as well as content that will follow workers throughout their career.

“Traditionally, Alliance’s focus has been on the post-hire, pre-employment worker who needs to meet an owner’s

information that will help keep them safe

any type of device. With the workforce

requirements to enter their facility and

while on the job.”

becoming more mobile than ever before,

go to work,” said Bankston.

Key to this is to design programs that

the ability to deliver training optimized

“Our focus for the future is to follow

speak to all types of adult learners, who

for a given user’s device has been a game

that worker as they enter the work-

can range from visual, auditory and

changer.

force and offer training solutions that

if the student is able to retain and apply

reading/writing learners, all the way to

“Many employees don’t check into

the lessons learned. As such, Alliance has

will address not only safety but other

kinesthetic learners, who prefer to learn

an office every day,” Bankston said. “In

content that will drive their success as

made developing engaging, innovative

by doing. “Adults learn in a variety of

addition to proctored training delivered in

they advance in their careers. Some ex-

content a primary goal.

ways,” Bankston said. “There’s no way for

computer labs at each of our training cen-

amples include content that focuses on

40 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

1012industryreport.com

S P E CI A L A DVE R T I S I N G S E CT I O N

The courtyard at Alliance’s headquarters.

soft skills, leadership development and

customers. Customer success is what

personal growth.”

makes or breaks a business, and that is

In addition, as more advanced solu-

a differentiator for us.”

tions like augmented and virtual reality

Alliance measures customer success

become more widespread and cost-ef-

in several ways. The organization uses

fective, these solutions will become a

data collected from contact touchpoints,

regular part of Alliance’s training offer-

such as student surveys and call center

ing. Artificial intelligence will also play a

data, to stay on top of customer needs

pivotal role in personalizing the learning

and monitor trends. For example, if Alli-

experience for Alliance’s students.

ance team members notice that demand

“Because of the various types of tech-

is increasing for specific training cours-

nologies and authoring tools available in

es, they identify the needs these courses

the learning and development industry

are filling and suggest the courses to

today, we have an opportunity now

other customers doing similar work.

more than ever before to meet learners

Alliance uses a variety of ways to

where they are and to provide the sup-

communicate with customers, includ-

port they need at any given moment,”

ing a robust call center, email and chat

Bankston said. “In keeping with our com-

boxes. The Alliance team works each day

mitment to help people and businesses

to make sure customers understand the

succeed, we are seizing the opportunity

products and services, and can use them

to do just that!”

effectively to achieve their business

TRAINING - EQUIPMENT - STAND-BY SERVICES WE DO RESCUE

800-647-7626 RocoRescue.com 1012Roco1/4CSRTad.indd 1

7/10/19 11:52 AM

GHC-ARCH.COM

objectives.

Its customer success staff is trained to

FOCUSING ON CUSTOMER SUCCESS

be proactive in identifying trends and potential enhancements, and empowered

As Alliance grows, the

to solve any issues

organization remains

that arise. With

proactive about keeping

service-level agree-

customers at the heart

ments, Alliance

of its operations.

is committed to

“We’ve been here

providing expert

for more than 60 years

customer service and

because of our relationship with our customers, and we continue to stay laser focused on

a one-call resolution.

Joelle McGehee

customer success,” said Alliance VP of Customer Success Joelle McGehee.

“We’re putting even more resources

“We aim for 100 percent customer success,” McGehee

said. “We want to make sure we reach out and solidify our relationships with our customers. We see ourselves as

into the customer side because our goal

advocates for our customers. We want

is to create an effortless journey for our

to help them succeed.”

1012industryreport.com

GR ACE HEBERT CURT IS

A R C H I T E C T S

“Grace Hebert Curtis Architects hit another home run for us designing our new Emerging Technologies Center. This new facility will provide an environment conducive to design thinking and also innovative content development and delivery technologies that will transform the adult learning experience” - Kathy Trahan // CEO // Alliance Safety Council.

1012 Industry AD.indd 1

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 41

7/26/2019 10:26:16 AM

S PE CI AL ADV E RT I S I N G SECT IO N

Innovation has a new home base Issue Date: Q3 Ad proof #2

• Please respond by e-mail or fax with your approval or minor revisions.

• AD WILL RUN AS IS unless approval or final revisions are received by the close of business today.

• Additional revisions must be requested and may be subject to production fees.

Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS

ALLIANCE SAFETY COUNCIL, one of the

11030 Industriplex Blvd. in Baton Rouge,

largest safety councils in the U.S., has

a 26,400-square-foot facility dedicated to

introduced two new dynamic resources,

advancing the future of learning technol-

the Emerging Technologies Center (ETC)

ogy and training process innovation for

and Design Thinking services, to further

business and industry. Within that space,

its safety and workforce development

there is an area dedicated to Alliance’s

mission.

new Design Thinking team, which offers

In June, Alliance opened its ETC at

workshops to companies in need of

Industrial Services Inc.

This ad design © Louisiana Business, Inc. 2019. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

GREMILLION INDUSTRIAL SERVICES, INC. PROVIDES: PORTABLE CEMENT DEMO • ROCK CRUSHING & SCREENING 18-WHEELER TRAILER REPAIR • TRAILER WASHOUTS

Industrial Services Inc.

PREVENTIVE MAINTENANCE & ANNUAL DOT INSPECTIONS DAILY AND MONTHLY DROP YARD • ROAD SERVICE SHOP & OIL FIELD WELDING • FABRICATION & PIPE WELDING PIPELINE RIGHT-OF-WAY MAINTENANCE EXCAVATION/TRACK HOE & DOZER SERVICES

GREMILLION TRUCKING, INC. PROVIDES: HOT SHOT • HEAVY EQUIPMENT AVAILABLE

ZACHARY, LOUISIANA OFFICE: 17540 BARNETT RD • SHOP: 17000 BARNETT RD P: 225.654.0616 • F: 225.658.2243

42 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

1012industryreport.com

S P E CI A L A DVE R T I S I N G S E CT I O N

a solution-based approach to solving complex problems.

Design Thinking is a strategic, human-centered process for ideation and creation that encourages quickly moving from an idea to a solution that can be tested and continually improved on.

“This new facility will provide an environment conducive to Design Thinking and also innovative content development and delivery technologies that will transform the adult learning experience.

We are here to support our members and our training partners, so they can in turn be responsive to the changing needs of their workforce,” said Alliance Safety Council President and CEO Kathy Trahan.

The Design Thinking lab is helmed by Alliance Innovation Consultant and Design Thinking Specialist Johnny Saye, who has helped world-renowned brands such as IBM successfully launch new technology services.

Whiteboards line the walls of the Design Thinking lab, which offers multiple seating arrangements to easily accommodate the team’s needs. Like the Design Thinking process itself, the lab is configured to allow for maximum flexibility. Nothing is stagnant here. The

Design Thinking is a strategic, humancentered process for ideation and creation that encourages quickly moving from an idea to a solution that can be tested and continually improved on.

Telecommunications & Security Systems Design Physical Security LAN/WAN Engineering - Video Surveillance Wireless (Wi-Fi, Construction - Access Control Mesh, Microwave) Commissioning - Gates, Turnstiles Public Address & Fiber Optic & Barriers General Alarm (PAGA) Structured - Intrusion IP Telephony Cabling Detection

The Leader in Electrical & Instrumentation Services (225) 756-5090 www.mmrgrp.com

1012industryreport.com

Senstar Sumitomo Fiber Gaitronics Certifications: Honeywell Panduit Future Fiber Milestone Federal Signal Commscope Fiber Genetec Industronic Softwarehouse Technologies Corning Fiber (FFT) 10/12 INDUSTRY REPORT • THIRD QUARTER 2019 43

Issue Date: 3Q Ad proof #6

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• AD WILL RUN AS IS unless approval or final revisions S PE AL ADVbyE RT S I N GofSECT IO Ntoday. areCIreceived theI close business • Additional revisions must be requested and may be subject to production fees.

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WE CAN TAKE CARE OF ALL OF YOUR COMPANY’S CABLE AND NETWORKING REQUIREMENTS. SERVICES

INSIDE PLANT & OUTSIDE PLANT CONSTRUCTION • FIBER OPTICS DIRECTIONAL DRILLING • AUDIO VISUAL • CCTV TELEPHONE SYSTEMS • DIGITAL SIGNAGE

225-261-9800 • 1-800-460-8070 •

GIL, MICHELLE, AMBER & COLBY MATHERNE

GMCABLE.COM

DEAN HARRINGTON CHIEF ESTIMATOR

Issue Date: Q3 Ad proof #3

DWAYNE HUGHES

DIRECTOR OF 225-261-9800 NETWORK WIRING

• Please respond by e-mail or fax with your approval or minor revisions.

• AD WILL RUN AS IS unless approval or final revisions are received by the close of business today.

• Additional revisions must be requested and may be subject to production fees.

• 1-800-460-8070 •

DIRECTOR OF GMCABLE.COM INDUSTRIAL PROJECTS

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Driving solutions for Greater Baton Rouge industry SINCE 1970

GBRIA is a trade association made up of industrial managers and their employees in the Greater Baton Rouge area.

Our mission is to drive solutions to common issues with an emphasis on workforce development and safety performance.

GBRIA and Alliance Safety Council have partnered to deliver dynamic safety training to plant employees and contractors since 1991.

GBRIA, Alliance Safety Council, ARSC and other jointly developed programs standardized contractor orientation training.

Contact us today!

44 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

GBRIA hosts numerous events throughout the year in support of industry. Visit us at GBRIA.org to learn more and be a part of our Workforce Development and Safety Award banquets and our Top Golf, Clay Shoot and Golf Tournament Fundraiser!

225.769.0596 • GBRIA.org 1012industryreport.com

S P E CI A L A DVE R T I S I N G S E CT I O N

The Emerging Technologies Center is the embodiment of Alliance’s commitment to building a dynamic digital future.

ETC is innovation’s new home base, and

solutions. Alliance recently did this for

Design Thinking is the future of creative

utility provider Entergy, one of its long-

problem solving.

time members.

Design Thinking is not a new concept,

Dennis Lytle, senior manager of

but it’s not often used by businesses in

operations and safety at Entergy, was

construction, petrochemical, energy or

introduced to Alliance’s Design Thinking

similar industries that Alliance serves.

after Travis Broussard, VP of business

Saye said Alliance is leading the charge

development, invited him to tour the new

to introduce this process of structured

ETC.

creative thinking to these industries.

“Louisiana is in need of this type of

“Travis talked to me about Alliance’s growth and business evolution and men-

creative thinking process. We have some

tioned Design Thinking. When I toured

of the most creative people in the world

the building, he introduced me to Johnny

here, but we’re not doing anything on the

Saye and talked about what Design Think-

technological front. I’d like to see Design

ing could do in terms of issue resolution. I

Thinking really seep in here and make a

set up a workshop right away,” Lytle said.

difference, to put Louisiana on the map

The initial workshop was held for the

as a creative tech hub,” Saye said. “We

Contractor Safety Council - Utility Group

want to build toward a dynamic digital fu-

that Lytle chairs. The workshop focused

ture. The Emerging Technologies Center

on laying out clear job descriptions for

is the embodiment of our commitment

reliability servicemen. “The feedback we

to this.”

got from the guys was so good. This is

Saye said one of the biggest mis-

something they needed for a long time,”

conceptions about Design Thinking he

Lytle said. “When I saw what Alliance did

encounters is that it’s only suited to cer-

for the Contractor Safety Council, I knew

tain industries. “Design Thinking is best

we needed to do it for Entergy.”

suited for particular times, not particular

As a utility provider for more than

sectors. The perfect time to use Design

2.5 million customers, Entergy is deeply

Thinking is at the beginning of a project

focused on providing reliable service to

or when you’re stuck. I’ve used Design

its customers and ensuring the safety of

Thinking for everything from planning a

its workers and the public. In Lytle’s 38

trip to building apps,” Saye said.

years at Entergy, he’s seen firsthand how

Alliance has already started conduct-

important these two things are. Despite

ing Design Thinking workshops with

the importance the company places on

local businesses. The workshops help

safety, Entergy was experiencing a few

uncover root causes of an issue and use

challenges in this area.

a company’s most valuable resource – its

“The timing of the workshop with

employees – to discover the best possible

Alliance was very good. We faced some

1012industryreport.com

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 45

Issue Date: 3Q 2019 Ad proof #2

• Please respond by e-mail or fax with your approval or minor revisions.

• AD WILL RUN AS IS unless approval or final revisions S PE AL ADVbyE RT S I N GofSECT IO Ntoday. areCIreceived theI close business • Additional revisions must be requested and may be subject to production fees.

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BUILDING ON

SAFETY, QUALITY,

PERFORMANCE AND

TRUST

2019

Pr

ies

Top 100 ivate Compa

n

SAFETY | QUALITY | EXCELLENCE

Headquarters IssueCorporate Date: 3Q Ad proof• 3970 #7 Rosedale Road

• Port Allen, LA 70767

• Please respond by e-mail or fax with your approval or minor revisions.

EARorDCONSTR • AD WILL RUN ASWWW.B IS unless approval final revisions UCTIONG ROU P.COM are received by the close of business today.

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“You can’t go in thinking you’re just going to tweak the processes you already have in place. You have to start fresh, from scratch.

This gets you to think about what the true goal is and what really needs to be done.

By the time you’re finished, you might reinvent your entire business.”

DENNIS LYTLE, senior manager of operations and safety, Entergy safety issues and knew we needed to

safety, and expanding services to better

shut things down until they could be

serve its members in the new digital age

resolved. Johnny Saye’s guidance in the

is crucial. “This is an effort to make that

Design Thinking workshop got us to the

leap into the future,” Saye said. “We want

right place quickly,” Lytle said.

to make sure our industry and the work-

“The process isn’t what you expect going in. You can’t go in thinking you’re

force are prepared.”

Alliance’s top priority is ensuring its

just going to tweak the processes you

members are thoroughly prepared for

already have in place. You have to start

the industry changes that technology is

fresh, from scratch. This gets you to think

rapidly introducing. The ETC represents

about what the true goal is and what re-

a bold investment in the future of safety

ally needs to be done. By the time you’re

and technology for local and international

OCCUPATIONAL TESTING

finished, you might reinvent your practice

workforces across multiple industries.

Including Respiratory clearance, pulmonary function testing, fit testing, audiometry, blood lab testing, in-house X-rays, physical examinations (DOT, non-DOT, Return to Duty, Physical Abilities Test, etc.)

or your entire business,” Lytle continued.

SUBSTANCE ABUSE TESTING Certified collectors for breath, saliva, urine, hair, and oral fluid testing with rapid testing available.

MROCC NATIONALLY CERTIFIED MRO

INJURY MANAGEMENT Conservative medical services delivered according to OSHA guidelines with respect to your safety record.

ONLINE REPORTING ACCESS Complimentary access to your employees’ files through our secure, easy to use database.

ONSITE SERVICES AVAILABLE • CONVENIENT AFTER HOUR ASSISTANCE Technicians and Providers are on call 24/7/365 for your after-hour needs.

GULF GATHERINGS EVENT & MEETING VENUE

The Design Thinking process encourages this reinvention of practices or business models that no longer serve

Training nearly 300,000 students annually, Alliance is making a significant impact. But it refuses to be complacent.

“At Alliance, we strive to honor the con-

an organization’s needs. This aligns with

tributions of our contractor workforce,”

Alliance’s guiding principle to always

Trahan said. “We’re working hard to keep

embrace positive change and growth. The

up with all the changes our industry expe-

new ETC and its Design Thinking services

riences and we strive to be an organiza-

are examples of this.

tion reflective of our industry’s commit-

Alliance is invested in the future of

ment to safety, quality and efficiency.”

Conference facility for corporate assemblies, training, HR hiring events and more.

6 FULL SERVICE CLINICS TO SERVE YOU Phone: 225.753.7233 • Fax: 225.753.5188 • Website: www.gulfcoastoccmed.com • Email: Info@gulfcoastoccmed.com

46 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

Alliance invites you to stop by for a tour of its headquarters or new ETC. Call (225) 766-0955 or email tours@alliancesafetycouncil.org today.

1012industryreport.com

S P E CI A L A DVE R T I S I N G S E CT I O N

Performance people

From the Ground Up.

www.performance-br.com

The people at Performance Contractors are the backbone of our industrial economy. Men and women across the country making an honest living doing an honest day’s work. They’re supporting their families and are striving to make American life even better for their kids. It’s a big job and we are proud to be a part of it. People are our most important asset and we are humbled by their hard work and dedication to making America the best ever.

261 Hood Road Sulphur, LA 70665 (337) 558-7440

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7516 Highway 63 Moss Point, MS 39562 (228) 285-7900

ALABAMA

808 Memorial Fwy. Suite 734 Nederland, TX 77627 (281) 478-4009

MISSISSIPPI

9901 Performance Way Baton Rouge, LA 70810 (225) 751-4156

TEXAS

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A seasoned General Industrial Contractor, Performance Contractors has offices across the Gulf South and operates pipe fabrication facilities in Texas, Louisiana x2, and Alabama.

8093 Padgett Switch Road Irvington, AL 36544 (251) 957-0800

27002 Hwy. 288 Rosharon, TX 77583 (832) 241-4400

4/10/19 2:33 PM

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 47

EXCAVATION OF SOIL IS DANGEROUS WORK...

“THE TRENCH & TRAFFIC SAFETY SPECIALISTS”

and can lead to severe injuries and even death if the excavation process is not properly addressed. National Trench Safety has a full complement of excavation support systems as well as engineering and training services to ensure you have the equipment needed to perform the job safely and effectively.

WITH A NATIONWIDE BRANCH NETWORK, WE’RE WHERE YOU NEED US TO BE

48 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

CALL (888) 234-9244 www.ntsafety.com

1012industryreport.com

INSIGHT LNG’s changing fortunes

DAVID DISMUKES

T

he shale revolution has facilitated considerable U.S. domestic natural gas production. Today there are multiple sources of prolific domestic natural gas production that keep the U.S. market well-supplied, affordably priced, with little to no pricing volatility compared to pre-2008 historic norms.

U.S. natural gas production is anticipated to hit a record level in 2019 to as much as 98 Bcf/d.

The rise in U.S. natural gas production has propelled U.S. energy exports of not only LNG and commodity chemicals, but also crude oil and refined products. There are currently three active LNG export facilities, with a total capacity of five Bcf/d, that account for almost 7% of the current 75 Bcf/d U.S. natural gas market.

There is still considerable room for additional U.S. natural gas exports, which is reflected in the number of LNG export project announcements that sum to a potential 45 Bcf/d in new incremental capacity, and if developed, most of which will be located on the Gulf Coast.

The international LNG market has been growing at a healthy pace over the past decade, particularly the last five years. This market continues to expand at an average pace of 1012industryreport.com

almost 10% per year, or almost four Bcf/d in sales terms. The largest markets are in Asia ( Japan, South Korea, and China) and India.

While Japan is currently the largest market for international natural gas imports, the Japanese natural gas market is growing at a very slow pace of less than 1% per year. China, on the other hand, while smaller in absolute terms, is the fastest growing Asian natural gas market at about 8% per year.

At current growth rates, Chinese imports will outpace those to Japan in the next five years. Thus, current events impacting Chinese trade and economic growth will be critical if the announced Gulf Coast LNG

Second, the U.S. needs to gain more international market share.

U.S. LNG exports have seen one of the fastest growth rates in international markets over the past year.

However, the U.S. is still a very small player in the global LNG market at this time. U.S. LNG export volumes still fall short of many other countries that include those in the Middle East and Australia, both of which have been moving as much as 6 Bcf/d to 12 Bcf/d of volumes compared to the U.S. current level of five Bcf/d.

This competition for international market share, particularly in the current LNG buyers’ market, will continue to be fierce.

“Resolution of these issues is critically important for Louisiana, since a large portion of our future industrial capital investments is concentrated in LNG export terminal development.” export facilities are to materialize.

There are several critical factors that must be resolved before the U.S., and the Gulf Coast, can achieve its full LNG export potentials.

First, the ongoing trade war with China has to be resolved. At minimum, this trade war creates a considerable degree of uncertainty; something that is an anathema to large LNG capital investments ($9 billion to $12 billion each).

The longer the trade war continues, the greater the uncertainty and the less likely any party (LNG buyers or LNG sellers) will enter into the complicated longer-term contracts needed to financially backstop these large LNG export facility investments.

Third, the global LNG capacity “overhang” in the market need to be eliminated. The international LNG market is currently a buyer’s market: There is considerably more LNG export capacity than there is LNG purchasing interest. Current estimates have this international LNG capacity overhang at about 20%, or 10 Bcf/d of excess export capacity.

This capacity must be absorbed before developers start to actively pursue the next generation of capacity investments.

Current conventional wisdom expects this LNG liquefaction capacity overhang to start burning off in the 2021 time period. However, the economic and geopolitical uncertainties could push this overhang out several

years, thereby delaying new incremental investments along the Gulf Coast, including those announced for Louisiana during this critical time period.

Lastly, all boats—including those loaded with LNG—rise with the economic tide of prosperity and the current wave of economic weakness needs to pass if future LNG export facilities are to be developed in the 2021 time period.

However, it is difficult at this time to determine whether the currently emerging economic weakness (particularly in Asia) is just a temporary aberration, generated by a considerable level of current market uncertainty, or a structural change that reflects the ending point of a decade’s worth of global economic expansion.

Growing inventories and a slowing world economy (particularly in Asia) will weigh heavily in global natural gas demand, potentially pushing out many Gulf Coast LNG projects scheduled for commercial operation in the 2021-2022 time period.

Resolution of these issues is critically important for Louisiana, since a large portion of our future industrial capital investments is concentrated in LNG export terminal development.

Currently, there are at least ten LNG facilities that have been announced for the coastal Louisiana region, accounting for as much as $58 billion in capital investment.

Continued uncertainty will only serve to push these investments out to later years and, if this uncertainty lingers into early 2020, could push these projects into the limbo-land of development ambiguity.

David E. Dismukes is a professor and the executive director of the Center for Energy Studies at LSU. He holds a joint academic appointment in the department of environmental sciences where he regularly teaches a course on energy and the environment.

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 49

SPONSORED CONTENT

INDUSTRY INSIGHTS

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It is important to thoroughly identify a site’s strength and compressibility characteristics.

Since 1976, Southern Earth Sciences Inc. (SESI) has been providing complete geotechnical consulting and materials testing services to the construction industry and now has eleven offices providing services throughout the southeast.

We checked in with Joe Cobena, P.E., Branch Manager of the firm’s Baton Rouge Operation, to learn more about the advances in site investigation technology.

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50 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

engineering properties of soil,” Cobena says. “The Cone Penetrometer Test has become one of the most widely accepted test methods for determining geotechnical soil properties.”

Cone Penetrometer Test results are used by geotechnical engineering specialists to develop a continuous profile of a site’s subsurface conditions and assess geotechnical engineering properties such as shear strength, internal friction angle, relative density and soils behavior type, all of which are correlated from measured cone tip resistance, sleeve friction and pore pressure data.

This information serves as the basis of SESI’s design of foundations and ground improvements.

Experts on providing innovative solutions to unusual foundation problems, SESI has now expanded into virtually every aspect of geotechnical engineering, construction materials testing and environmental consulting.

For more information, connect with them at soearth.com or (225) 751-1727.

HOW DOES CPT WORK? ·

CONE PENETROMETER TESTING can be completed from the ground surface, barge or amphibious vehicle.

·

CONE PENETROMETER TEST rigs vary in size, from small portable rigs to large truck and track mounted rigs.

·

A CONE PENETROMETER TEST rig pushes a steel cone about 32 mm wide into the ground, generally up to 20 meters—or as deep as 80 meters— below the surface or until the cone reaches a very dense layer.

·

THE STEEL CONE contains electronic strain gauges and pressure transducers for measuring tip resistance, sleeve friction and pore pressure.

·

AS THE CONE is pushed into the ground, the soil responds with differing degrees of resistance. This resistance is recorded using strain gauges in the cone tip and sleeve.

·

AT THE SAME time the sensors are recording resistance at the cone tip, sensors in the friction sleeve are recording sleeve friction.

·

SESI CONES ALSO have a pore water transducer, which records water pressure in the soil. These readings can be used to determine ground water responses and to adjust soil strength parameters as the cone is pushed through the soils.

·

A CONE PENETROMETER TEST typically takes between 30 minutes and three hours. As the cone is hydraulically advanced into the ground, measurements are continuously sent back to the rig and recorded digitally by computer.

1012industryreport.com

SPE C I AL AD V E RT I SI N G SE C T I O N

Company

SPOTLIGHTS Lift Sales & Rentals, LLC OneSource Safety Council of Southwest Louisiana A&B Concrete Coring Co. Sabel Steel Service, Inc.

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10/12 INDUSTRY REPORT • THIRD QUARTER 2019 51

SPE C I AL AD V E RT I SI N G SE C T I O N

LIFT SALES & RENTALS, LLC. OUR HISTORY

E.A. and Linda Babin bought the company in 1996, and two years later, adapted it to the needs of the construction industry, changing from a dirt-oriented company to an aerial driven one. The company is managed by their son Samuel, and specializes in aerial equipment, including telescopic forklifts, man lifts and scissor lifts. In 2018, the Babins noticed a change in the industry, mainly that equipment prices were on the rise while quality was declining. Not willing to settle for “average,” they partnered with the companies XTREME (which builds the largest range of heavyduty, high-capacity telehandlers) and Snorkel, which this year celebrated 60 years as the inventor of the modern-day man lift/boom lift.

WHAT WE DO

“We consider ourselves specialists in aerial equipment and provide only the most durable, dependable and longest-lasting equipment in south Louisiana,” says Samuel. “We realize that quality and performance on every job site is crucial to our customers, so we also offer service, parts, equipment sales and rentals for jobs of every kind.”

OUTLOOK

The Babin family values the reputation of their business, which is why they have partnered with the very best companies—EXTREME, Snorkel and Lift Sales all share the same core beliefs and values, especially where safety and dependability are concerned. “We will continue to grow as south Louisiana’s top provider of EXTREME and Snorkel equipment,” Samuel says, “because we value our customers. Every day, we demonstrate honesty and a strong work ethic in order to deliver what they’ve come to expect from us—fair pricing, solid and dependable equipment, and outstanding customer service.”

2 52 10/12 10/12INDUSTRY INDUSTRYREPORT REPORT • • THIRD THIRDQUARTER QUARTER2019 2019

TOP EXECUTIVES E.A. and Linda Babin, Founders and CEO Samuel Babin, President and CEO

YEAR FOUNDED 1996

NUMBER OF EMPLOYEES 5

HEADQUARTERS

26542 Highway 1032, Denham Springs, LA 70726 225.667.9697

WEBSITE

liftsalesandrentals.com

WHAT TO EXPECT IN THE FUTURE

We expect to expand and grow our industrial equipment business by continuing to provide the highest quality equipment, parts, and rentals available to customers throughout south Louisiana, as well as the most dependable customer service.

1012industryreport.com

SPE C I AL AD V E RT I SI N G SE C T I O N

XTREME TELEHANDLERS XTREME Manufacturing builds a large range of heavy duty and high-capacity telehandlers that set the standard for safety, productivity and reliability. Standard features include: long-life boom rollers, steel dash and plate chassis, axle-mounted outriggers, rear-axle stabilization, melonite pins, large-capacity fuel tanks, heavy-duty boom chains, suspension seat, high-pressure hydraulic filter, and a center-mounted power train, to name a few.

XTREME telehandlers feature cabs with 360° operator visibility and intuitive controls so operators can keep one hand on the steering wheel at all times. That’s because safety is just as important as strength. Designed to outlast and outperform other brands, XTREME backs up all of its telehandlers with 10-year, 5-year, or 2-year warranties. The company likes to remind customers that “it’s not about meeting industry standards, but about setting them.”

MODEL 1570 The Model 1570 has a capacity of 15,000 pounds and a 70-foot reach, making it the tallest telehandler on the market.

1012industryreport.com 1012industryreport.com

10/12 10/12INDUSTRY INDUSTRYREPORT REPORT• •THIRD THIRDQUARTER QUARTER2019 2019 53 3

SPE C I AL AD V E RT I SI N G SE C T I O N

ONESOURCE ABOUT OUR COMPANY

Our founder worked his way through the ranks of a Fortune 500 company where he recognized the opportunity for a single provider for all environmental, health and safety issues to help companies in the industrial sector grow smartly and safely, offsetting the demands of compliance obligations so they can focus on what they know best—their business. OneSource EHS was based on the idea that a multidisciplinary team of experts could provide advisement to companies that lack the depth of in-house expertise, and also equip them with the ability to perform that work and understand the big picture in planning for success. This idea developed from the challenges of finding consistent, quality service from multiple providers. OneSource understands that it is through a team approach that solutions are effectively developed and implemented.

WHAT WE DO

OneSource services clients in diverse industries, including chemical/petrochemical, oil and gas, manufacturing and construction. This includes projects related to organizational risk management, process improvement, program development, implementation, training and on-site support. We work hand-in-hand with clients to provide practical solutions to problems with a unique perspective that relates to the company’s overriding goals. We are able to approach an issue and quickly understand its dynamics and effects on a company’s operations, processes and organizational health. OneSource EHS members approach their professional careers and personal lives in the same manner—with a “servant leader” mentality.

Our extreme dedication to customer service is a unique offering to clients. We help them go far beyond regulatory compliance to provide the necessary tools for their companies to thrive.

OUTLOOK

We believe that the long-term outlook for Louisiana’s industry is stronger than ever and we are excited to meet industry’s need to continuously improve environmental, health, and safety performance while improving each client’s operational efficiency. Our unique niche is providing clients with the best of both worlds by using EHS compliance efforts to enhance operational excellence.

1 54 10/12 10/12INDUSTRY INDUSTRYREPORT REPORT • • THIRD THIRDQUARTER QUARTER2019 2019

TOP EXECUTIVES Ronny W. Daigle, President Curtis Shakotko, Chief Operating Officer Kelli S. Conerly, Managing Director

YEAR FOUNDED 2011

NUMBER OF EMPLOYEES 30

HEADQUARTERS

1724 N. Burnside Ave., Suite 8, Gonzales, LA 70737 225.644.5332

WEBSITE

onesourceehs.com

WHAT TO EXPECT IN THE FUTURE

The next chapter for OneSource will focus on expanding our expertise and providing more value to our clients with better technology and information processing that is so critical in today’s industrial sector. With advancements in virtual training, information collection techniques, and real-time communications, OneSource prides itself on maintaining cutting edge solutions for our clients while building cost-saving programs.

1012industryreport.com

SPE C I AL AD V E RT I SI N G SE C T I O N

Sarita Scheufens

SAFETY COUNCIL OF SOUTHWEST LOUISIANA OUR HISTORY

The Safety Council of Southwest Louisiana was established as a nonprofit, nongovernmental organization on December 8, 1955. Today, we are charter members of the Association of Reciprocal Safety Councils (ARSC), formed in 1992 at the request of local industry to support growth. We began providing training for local area contractor employees with the goal of containing costs and providing quality programs. The Safety Council has expanded over the years to become a comprehensive educational and training resource for the community, serving as an innovative model for other councils around the country.

WHAT WE DO

We are proud to serve southwest Louisiana and our neighbors in southeast Texas. Our mission is to improve safety within the communities we serve through the prevention and reduction of both personal and economic loss associated with injuries, accidents and health hazards in the home, at work and at play. Our services are quality driven, cost-effective and always provided by trained professionals.

OUTLOOK

The training world continues to shift and expand daily, and our industry is no exception. We work tirelessly to maintain standards and regulations within our offerings, find ways to evolve our current programs, and consistently look for more opportunities to develop new training.

Clients are increasingly faced with employee driving incidents and opportunities to improve their safe driving records. When we began researching and developing our defensive driving training, we knew we wanted to include an innovative hands-on component. We chose virtual reality, which we believe is the future of training. This innovative tool, combined with instructor-led classroom training, is redefining the way we teach and allows us to serve a larger variety of clients.

1 1012industryreport.com 10/12 INDUSTRY REPORT • SECOND QUARTER 2019

TOP EXECUTIVES Sarita Scheufens, Chief Operating Officer Darryl Drewett, CPA, Comptroller Brittany Duplechian, Director of Operations, Strategic Development Kelley Green, Director of Operations, Logistics and Administration

YEAR FOUNDED 1955

NUMBER OF EMPLOYEES 32

HEADQUARTERS

1201 Ryan St., Lake Charles, LA 70607 337.436.3354

WEBSITE

safetyswla.org

WHAT TO EXPECT IN THE FUTURE

The Council has created a half-day instructor-led defensive driving training program (Workforce Driving Academy) that includes virtual reality driving simulations. These include real life, everyday driving situations, and the ability to control various driving scenarios and conditions. We are removing all risks associated with putting drivers on the road to practice their skills, instead allowing them to safely practice in a training setting until they feel comfortable. The training can also be customized based on a client’s driving policies and procedures.

10/12 INDUSTRY REPORT • THIRD1012industryreport.com QUARTER 2019 55

SPE C I AL AD V E RT I SI N G SE C T I O N

A&B CONCRETE CORING CO. ABOUT OUR COMPANY

In 1969, Richard Jones started the business as a retailer of concrete cutting tools. However, this industry was new and no one in the area was interested in purchasing this new technology. Jones was able to sell the service, which has continued to grow. Fifty years later, A&B Concrete Coring Co. is proud to continue to service the chemical industry, paper mill industry, commercial construction and road industry.

Safety is the number one priority in A&B’s work environment and the company added a safety partner to the team this year. The A&B team works primarily in the south, but serves industrial and commercial clients across the country.

WHAT WE DO

We provide concrete drilling, sawing, grinding, grooving, wire sawing and breaking services. Other special services include: removal and replacement of anchor bolts; drilling holes in metal structures for nozzles, penetrations etc.; wire sawing metal structures for removal; rock drilling for doweling; and early entry sawing with HEPA vac systems as is now required by Occupational Safety and Health Administration (OSHA). The company participates in many regional and national safety organizations, and is involved with official safety councils in New Orleans, Houston, and along the Gulf Coast.

OUTLOOK

We look forward to continued growth in our business due to industrial expansions. The specific sectors we serve should be busy for some time to come.

Our work facilitates expansion to nearby infrastructures, including roads, bridges, retail, sewer treatment and more.

1 56 10/12 10/12INDUSTRY INDUSTRYREPORT REPORT • • THIRD THIRDQUARTER QUARTER2019 2019

TOP EXECUTIVES Richard Jones, Jr., President Jimmy Jones, Vice President Wesley Henson, Dispatching

YEAR FOUNDED 1969

NUMBER OF EMPLOYEES 35

HEADQUARTERS

20975 Plank Road, Zachary, LA 70791 225.654.2873

WEBSITE

abconcretecoring.com

WHAT TO EXPECT IN THE FUTURE

A&B Concrete Coring Co. will continue to grow and expand as the work climate in the area is strong. The company stays current with all the new cutting technologies in the industry in order to provide customers with many options. Personal service is important, too. It’s about being there when needed and providing the best service possible on every level.

1012industryreport.com

SPE C I AL AD V E RT I SI N G SE C T I O N

SABEL STEEL SERVICE, INC. ABOUT OUR COMPANY

Sabel Steel Service was founded in 1856 by Marx Sabel, Keith Sabel’s greatgreat-grandfather, who sold and traded leather goods, cow hides and furs. As the country became more industrialized, the company evolved into the metal scrap business, and after WWII, Keith’s father and uncle purchased their first railcar load of new steel from U.S. Steel. By the early 1960s, Sabel expanded with the opening of its first rebar fabrication shop. Since then, Sabel has grown to four locations in Alabama, one in Georgia and one in Baton Rouge, which was added in 2002.

WHAT WE DO

Sabel Steel Service has a workforce of material handling operators that move and process more than 120,000 pounds of steel each day and a dynamic sales force with more than 75 years of experience in south Louisiana. We operate under the philosophy that our customers, suppliers and employees should all be treated with respect. The 80,000-square-foot location in Baton Rouge is a fullservice steel distributor serving south Louisiana with products that include steel plate, wide flange beams, tube sections, bar grating and more. Our services cover high definition plasma cutting, cut-to-length saw cutting and custom delivery options. We serve the steel fabrication market, oilfield and industrial supply companies, manufacturers and many others.

OUTLOOK

The domestic steel industry has seen significant growth and challenges in recent years. One thing is for certain–the company plans to press forward in maintaining the levels of inventory and service that our broad customer base requires. While many distributors come to south Louisiana from other states, the people who make up Sabel Steel Service in Baton Rouge live, work, worship, hunt and play in the areas we service.

1 1012industryreport.com 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

TOP EXECUTIVES Keith Sabel, President and Owner Fred Callahan, Vice President Jason Nickles, CFO Ron Taylor, Baton Rouge Branch Manager

YEAR FOUNDED 1856

NUMBER OF EMPLOYEES 230

HEADQUARTERS

National: 749 North Court St., Montgomery, AL 36104 334.265.6771 Local: 2809 N. Flannery Road, Baton Rouge, LA 70814 225.356.9812

WEBSITE

sabelsteel.com

WHAT TO EXPECT IN THE FUTURE

We are constantly adapting to the ever-changing carbon steel market as well as the needs of our customers. As times change, we will continue to seek to be a market leader making a difference where it matters to our customer. At the same time, we will promote the highest safety standards, providing the latest training and education on job hazards and best practices in the workplace.

10/12 INDUSTRY REPORT • THIRD1012industryreport.com QUARTER 2019 57

CLAIBORNE

CLOSING NOTES: PROJECT MAPS

Project by project

BOSSIER

WEBSTER

CADDO

($25M-$250M)

BIENVILLE

Active Louisiana industrial projects announced or proposed since Jan.1, 2014, with projected capital investment of $25 million to $250 million. Second line shows projected capital investment and direct new jobs. List is representative, not complete; statuses and costs change frequently.

1 Entergy (New Orleans East)

13 Westlake Chemical

2 Ergon

14 Advanced Refining Technologies

$212M | 20 jobs Location: Orleans Parish Status: Pending

$200M | N/A Location: St. James Parish Status: construction set to begin Q4 2019

3 Nucor upgrade (St. James)

$200M | N/A Status: completion end of 2019

4 First Bauxite

$200M | 100 jobs Location: St. John the Baptist Parish Status: Pending

$140M | N/A Location: Ascension Parish Status: N/A (PVC expansion)

$87M | Jobs N/A Location: Geismar Status: Begin Q4 2019; completion anticipated in 2021

6 Kinder Morgan La. Pipeline expansion

17 Huntsman/Rubicon

7 Delek Refinery

18 Florida Fuel Connection, LLC

8 BASF

19 Eastman Expansion

$150M | 30 jobs Location: Krotz SPrings Status: Pending $150M | 15 jobs Location: Ascension Parish Status: under construction (first phase of larger MDI production expansion)

9 Shell Norco

$150M | NA Location: St. Charles Parish Status: under construction

10 Praxair

$150M | 10 jobs Location: Ascension Parish Status: completion set for 2020

11 Occidental Chemical

$145M | 12 jobs Location: Ascension Parish Status: near completion

12 Air Products (Geismar)

$145M | 7 jobs Location: Ascension Parish Status: N/A

58 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

SABINE

15 BASF Phase 2 MDI Expansion

16 Cleco/Cabot Corp.

$151M | 0 jobs Location: Southwest Louisiana Status: permitting

NATCHITOCHES

$135M | 325 jobs Location: Calcasieu Parish Status: project has been placed on hold, but is not canceled

5 Cornerstone

$157.3M | N/A Location: Jefferson Parish Status: Pending

RED RIVER

DESOTO

VERNON

$80M | 20 jobs Location: St. Mary Parish Status: broke ground October 2016 $78M | 17 jobs Location: Ascension Parish Status: on hold awaiting construction BEAUREGARD

$75M | 50 jobs Location: Orleans Parish Status: Pending $70M | 29 jobs Location: St. Gabriel Status: Pending

20 Gulf South Pipeline

20

$56.2M | 2-3 jobs Location: Calcasieu Parish Status: planning

14

CALCASIEU

21 ExxonMobil upgrades (Baton Rouge) $50M | N/A Status: Q1 2019 start

CAMERON

22 Veolia Regeneration Plant Expansion $40 million | 29 jobs retained Location: Darrow Status: Pending

6

23 Air Products

$25M | N/A Location: Ascension Parish Status: under construction

BLUE = NEW PROJECT ADDED SINCE LAST EDITION

1012industryreport.com

J

UNION

NE

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

OUACHITA

RICHLAND MADISON

JACKSON

FRANKLIN

CALDWELL

TENSAS WINN

Sponsored by

CATAHOULA LASALLE GRANT

CONCORDIA

RAPIDES

AVOYELLES WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

EVANGELINE ALLEN

POINTE COUPEE ST. LANDRY WEST BATON ROUGE

ST. TAMMANY

21

LIVINGSTON

10

ACADIA

IBERVILLE

ST. MARTIN

11 15 12 7 22 13 8 ION NS

LAFAYETTE

19

23 17 CE AS

JEFFERSON DAVIS

TANGIPAHOA

EAST BATON ROUGE

2

ST. JOHN THE BAPTIST

18

4

1

ORLEANS

ST. JAMES

3

IBERIA ASSUMPTION VERMILION

5

9 ST. CHARLES

JEFFERSON ST. BERNARD

ST. MARTIN ST. MARY

16 LAFOURCHE IBERIA

Sources: LED, LEO, GBRIA, 10/12 research

1012industryreport.com

PLAQUEMINES

TERREBONNE

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 59

CLAIBORNE

CLOSING NOTES: PROJECT MAPS

25

BOSSIER

Project by project

WEBSTER

CADDO

($250M and up)

BIENVILLE

Active Louisiana industrial projects announced or proposed since 2012 with projected capital investment of $250 million or more. Includes projects that are underway, awaiting FID, and proposed. Second line shows projected capital investment and direct new jobs. List is representative, not complete; statuses and costs change frequently.

1 Driftwood LNG $27.5B | 498 jobs

19 G2X Energy Big Lake Fuels $1.6B | 243 jobs

36 Entergy (Westlake) $872M | 30 jobs

2 Sabine Pass LNG (Cheniere Energy) $19.5B | 400 jobs

20 EuroChem $1.5B | 200 jobs

37 Entergy (St. Charles) $869M | 27 jobs

21 Port Cameron $1.5B | N/A

38 Renewable Energy Group

3 Sasol Ltd. cracker $11.1B | 700 jobs 4 G2 LNG $11B | 250 jobs 5 Lake Charles LNG $11B | 250 jobs 6 Formosa (St. James Parish) $9.4B | 1,200 jobs 7 Venture Global LNG (Plaquemines) $8.5B | 300 jobs 8 Delfin LNG $7B | 400 jobs

22 Shintech (chlor alkali & PVC) $1.49B | 120 jobs 23 Shintech (ethylene) $1.4B | 100 jobs 24 Methanex methanol facility $1.4 billion | 62 jobs 25 Haynesville Global Access Pipeline (Tellurian) $1.4B | N/A 26 Methanex Corp., Methanex 3 $1.3B | 25 jobs

9 Monkey Island LNG $6.5B | 200 jobs

27 Wanhua Chemical Group (Convent/St. James) $1.25 billion | 170 jobs

10 Venture Global LNG (Calcasieu Pass) $5.0B | 100 jobs

28 Shell Chemical Monoethylene Glycol plant $1.2B | 23 jobs

11 Lake Charles Methanol $4.4B | 200 jobs

29 Castleton Commodities International $1.2B | 50 jobs

12 Magnolia LNG $4.35B | 70 jobs 13 IGP Methanol $3.6B | 325 jobs 14 Pointe LNG $3.2B | N/A 15 NOLA Oil Terminal $2.5B | N/A 16 South Louisiana Methanol $2.2B | 75 jobs 17 Commonwealth LNG $2B | N/A 18 Yuhuang Chemical $1.8B | 400 jobs

30 Shintech (vinyls complex) $1.02B | N/A 31 Diamond Green Diesel (Norco) $1.1B | N/A 32 Port of New Orleans $1B | 6,000 jobs 33 ExxonMobil – Polypropylene expansion $500M-$1B | 65 jobs 34 Monsanto $975M | 120 jobs

40 41

DESOTO

RED RIVER

NATCHITOCHES SABINE

$660M | 29 jobs Location: Geismar Status: N/A

39 Louisiana LNG Energy, LLC $646.6M | 44 jobs 40 Southern Cross Transmission Project $600M | N/A

VERNON

41 Gulf Run Pipeline (Enable Midstream) $550M | N/A 42 ExxonMobil Polypropylene Manufacturing Unit $469M | 65 jobs 43 Shintech (ethylene expansion) $400M | N/A

BEAUREGARD

44 Hazelwood Energy Hub $400M | 120 jobs 45 Valero St. Charles Refinery $400M | N/A 46 Shell Motiva $380M | 100 jobs CALCASIEU

47 Syngas Energy $360M | 100 jobs

36 45

48 Westlake Chemicals (Westlake) $350M | N/A 49 Siluria No announced investment, jobs or location 50 Venture Global Delta LNG (Plaquemines) No announced investment or jobs.

2

3

5 11 19 12 1 4 10 17 21 8

CAMERON

9

35 Energy World USA $888M | 150 jobs

BLUE = NEW PROJECT

60 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

1012industryreport.com

J

UNION

NE

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN RICHLAND

OUACHITA

MADISON

JACKSON

FRANKLIN

CALDWELL

TENSAS WINN

CATAHOULA LASALLE GRANT

Sponsored by

CONCORDIA

RAPIDES

AVOYELLES WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

EVANGELINE ALLEN

POINTE COUPEE ST. LANDRY

46 22 ACADIA ST. MARTIN

23

ST. TAMMANY LIVINGSTON

30 20

IBERVILLE

IBERIA

38 42 28 18 24 26 31 27 ST. JAMES 6 16 47 ION NS

LAFAYETTE

44

TANGIPAHOA EAST BATON ROUGE

CE AS

JEFFERSON DAVIS

WEST BATON ROUGE

49 33

ASSUMPTION VERMILION

ST. JOHN THE BAPTIST ORLEANS

48 37

32 43

34

ST. CHARLES

JEFFERSON

29 ST. BERNARD

ST. MARTIN

13

ST. MARY LAFOURCHE

39 7

PLAQUEMINES

IBERIA

14 Sources: LED, LEO, 10/12 research

1012industryreport.com

TERREBONNE

35

50

10/12 INDUSTRY REPORT • THIRD QUARTER 2019 61

15

CLOSING NOTES: MY TOUGHEST CHALLENGE

Korey Kimball

BY ERIN BASS

THE CHALLENGE In late 2012, a major oil producer approached Bayou Companies with a need to extract extremely high-temperature crude oil from deep beneath the Gulf of Mexico and get it through frigid water temperatures to a planned floating platform.

The problem: No existing insulation systems for pipelines could survive operating temperatures in excess of 350 degrees—especially mixed with hydrostatic compression exerted on the pipe in 7,400 feet of water.

POSITION: Senior manager overseeing the project management division at the New Iberia operations facility COMPANY: Bayou Companies WHAT THEY DO: Provide a complete line

required multiple subcontractors, vendors and partners throughout Louisiana and Texas to meet the timeline required.

Through strategic coordination, the project was ultimately completed in September of 2018 ahead of schedule and under budget.

“We are still the only company in the world who can do this type of coating at this high of temperature and at those pressures,” Kimball says.

“Our clients keep drilling deeper and finding more and more oil deposits, so it looks like a good long-term opportunity.”

62 10/12 INDUSTRY REPORT • THIRD QUARTER 2019

of pipeline anti-corrosion coating and insulation application as well as concrete weight coating, hightemperature thermal insulation, anode installation and engineered services to meet the growing needs of energy customers throughout the U.S., Gulf of Mexico and internationally.

THE TAKEAWAY Anything is possible when a company CAREER: Kimball is a graduate of Lamar has the right team in University in Beaumont, Texas. He joined Bayou place, the right cusCompanies’ family of businesses in 2003 as a tomer-focused mindcommercial estimator and has seen the company set and the desire to grow from a third-generation, family-owned business take on technically with revenues of $20 million to a privately held corporation with revenues approaching $100 million. and operationally complex challenges.

“The Bayou team came together and showed the the right solution to meet customer industry that it is not about being needs. Bayou has been doing that the biggest, but about being the since the 1940s and will continue best,” Kimball says. “We are always to improve and drive our industry willing to work a little harder to find forward.”

1012industryreport.com

TERRI FENSEL

THE RESOLUTION Bayou regularly partners with its customers to help them solve problems. The company’s management sought out key advisors and experts to form a team to address the specific needs of this project.

Those included identifying a material that could withstand the extreme heat of the oil flowing through the pipeline, the extreme cold and pressure at the bottom of the Gulf of Mexico and the sheer weight of the pipe and materials hanging from the platform and reaching down to the bottom of the Gulf of Mexico.

“Our engineering and research and development team identified an opportunity to partner with a forward-thinking materials science company that might have a solution,” says manager Korey Kimball says.

Testing of the new materials began in March of 2013. Some tests even had to be designed from scratch to ensure that the extreme conditions at the bottom of the Gulf could be simulated to mimic the challenges of the required service life of the pipeline.

While materials testing was progressing, Bayou also had to design an application method to apply this new material on the scale required to meet the customer’s timeline for installation of the project.

Construction on a new facility began in 2015 at the New Iberia campus. Dubbed Advanced Coating Systems, this new, state-of-the-art coating facility went into production in October of 2016. The project

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