10/12 Industry Report [Fall 2020] by Baton Rouge Business Report

FALL 2020

PLUS: LNG limbo Rhoman Hardyâ&#x20AC;&#x2122;s Toughest Challenge Focus on safety

A NEW REALITY South Louisiana industry undergoes a paradigm shift in the wake of a pandemic.

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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. 2020. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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10/12 INDUSTRY REPORT • FALL 2020 3

CONTENTS

Publisher: Rolfe McCollister, Jr.

A NEW REALITY South Louisiana industry undergoes a paradigm shift in the wake of a pandemic.

EDITORIAL Editorial Director: Penny Font Editor: Sam Barnes Contributing Photographers: Terri Fensel, Cheryl Gerber, Don Kadair ADVERTISING Sales Director: Kerrie Richmond Senior Account Executives: Marielle Land-Howard, Kelly Lewis Account Executives: Mary Katherine Bernard, Mandi Bryant, Taylor Fountain, Angie LaPorte Advertising Coordinator: Brittany Nieto CORPORATE MEDIA Editor: Lisa Tramontana Content Strategist: Allyson Guay Multimedia Strategy Manager: Tim Coles Account executive: Judith LaDousa CUSTOM PUBLISHING Sales Director: Erin Palmintier-Pou MARKETING Chief Marketing Officer: Elizabeth McCollister Hebert Marketing & Events Assistant: Taylor Floyd Events: Abby Hamilton Community Liaison: Jeanne McCollister McNeil PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Vu Graphic Designers: Melinda Gonzalez, Emily Witt

PAGE 28

37 The promise of blockchain

CONTENTS

A new industrial consortium tests emerging supply chain technology.

In this issue

LAUNCH

FOCUS: SAFETY

8 ICYMI 13 Executive Profile

41 Big Picture

Meet Alta Baker, president and CEO of Safe Haven Enterprises in Jennings

NEWS

25 LNG limbo

New projects slam the brakes as long-term contracts vanish and investors opt out.

30 Breaking barriers

Total Worker Health takes a holistic view of safety.

47 Safety first

Five decades after the birth of OSHA, Louisiana’s injury rates continue to decline.

COMPANY SPOTLIGHT

52 Bengal Transport 54 Highway Transport

AUDIENCE DEVELOPMENT Audience Development Director: Katelyn Oglesby Audience Development Coordinator: Ivana Oubre

57 Greater Baton Rouge Industry

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

CLOSING NOTES

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

INSIGHT

Alliance Executive Director Connie Fabre takes a look at how industry responded to the COVID-19 threat.

58 The boom at a glance

Our maps of the projects driving the industrial boom

62 My Toughest Challenge

Rhoman Hardy, vice president for the U.S. Gulf Coast, general manager of Shell Geismar, rose to the challenge of Improve operational excellence in North America, Europe and Asia.

Louisiana women and minorities working in industry make gains in the quest for inclusion.

Send your ideas and company news to editor@1012industryreport.com. 4 10/12 INDUSTRY REPORT • FALL 2020

ADMINISTRATION Digital Manager: James Hume Assistant Business Associate: Tiffany Durocher Business Associate: Kirsten Milano Office Coordinator: Tara Lane Receptionist: Cathy Brown

Volume 5 - Number 2 © Copyright 2020 by Louisiana Business Incorporated. All rights reserved by LBI. 10/12 Industry Report is published biannually by Louisiana Business Inc. Reproduction without permission is prohibited. Business address: 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. Telephone (225) 928-1700. POSTMASTER: Send address changes to 1012 Industry Report, 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. 10/12 Industry Report cannot be responsible for the return of unsolicited material—manuscripts or photographs, with or without the inclusion of a stamped, self-addressed return envelope. Information in this publication is gathered from sources considered to be reliable, but the accuracy and completeness of the information cannot be guaranteed. No information expressed here constitutes a solicitation for the purchase or sale of any securities.

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MECHANICAL SERVICES ELECTRICAL & INSTRUMENTATION CIVIL CONSTRUCTION As a diverse organization, our mission at RES Contractors is to build and nurture successful partnerships through value-added construction and maintenance services.

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10/12 INDUSTRY REPORT • FALL 2020 5

IN THIS ISSUE

An unprecedented impact to any forecast

SAM BARNES

6 10/12 INDUSTRY REPORT • FALL 2020

o one could have predicted the cataclysmic shift in demand that impacted the industrial market—along with every other market—in the first half of 2020. Much like meteorologists, economists are notoriously inconsistent, but nearly all of their predictions had to be thrown out the window. This impacted Louisiana industry in vastly different ways. While COVID-19 delivered a major gut punch to an already ailing oil and gas sector, things weren’t nearly so dire in the chemicals market. Many Louisiana chemical plants, in fact, produce things that are in far greater demand during the “new normal.” There will undoubtedly be longterm residuals coming out of the pandemic in our professional and personal lives, both good and bad, but the U.S. free market economy has demonstrated remarkable resilience in the wake of previous disasters, and this will be no different. Read more in our cover story on page 16. Cornerstone Chemical Co. in Waggaman, for example, is operating more efficiently these days, and even expanded its geographical hiring “footprint” after it realized that many tasks could be performed remotely. By hiring outside of the immediate area, Cornerstone is attracting a larger pool of talent. And during LSU’s Fall Career Expo in September, students and companies interacted in a virtual SIMCity-like setting whereby avatars took the place of real people. University leaders hope it will boost participation as both companies and students realize that the new format

is a less expensive and more convenient way to connect. SPEAKING OF CHANGING PREDICTIONS … This hasn’t been the year for LNG, to be sure, as investors slammed the brakes on any new projects until at least 2022. The availability of longterm contracts, an absolute necessity for finding investors, have quite literally dried up. The reason? COVID-19 uncertainties and competitively priced natural gas in other parts of the world have turned U.S. LNG exports into a risky proposition. Read our story on page 25. That doesn’t impact LNG plants in Louisiana that are either completed, under construction or adding trains, but it has serious repercussions for several pending projects. Tellurian is in cost-cutting mode, recently unveiling plans to cut Driftwood LNG’s Phase 1 by 30% and postponing its proposed Permian Global Access Pipeline, with a capacity of 2 billion cubic feet per day, and Haynesville Global Access Pipeline, with a capacity of 2 billion cubic feet per day. Despite these and other troubling developments, economists says two facts hold true: There will continue to be worldwide demand for LNG and the U.S. remains the low-cost provider of natural gas. That will undoubtedly buoy the market in the long term. A HOLISTIC VIEW While the National Institute for Occupational Safety and Health developed the concept of total worker health several years ago, it remains a largely unfamiliar term

in the Louisiana industrial space. In practice, however, it’s nothing new. At Baton Rouge’s PRIME Occupational Medicine, it goes by another name— workforce safety and health management—but both take a similarly holistic approach. Read our story on page 41. Seeking to get the word out, NIOSH is funding additional research into TWH across the country. They define TWH as policies, programs and practices that integrate protection from work-related safety and health hazards with promotion of injury and illness-prevention efforts to advance worker well-being. TWH seeks to improve the well-being of the U.S. workforce by protecting its safety and enhancing its health and productivity. It prioritizes a hazard-free work environment for all workers and brings together all aspects of work in integrated interventions that collectively address worker safety, health, and well-being. NIOSH addresses job-related factors such as wages, work hours, workload, interactions with coworkers and supervisors, and access to paid leave. A SECOND ANNIVERSARY Our newsletter, 10/12 Industry Weekly, celebrates its second anniversary in November. Focused solely on the story of south Louisiana industry, it is unique in the market. Our readership just keeps growing—we’re up 35% from where we started. Every week, we keep our readers informed of pending projects, trends and more. If you aren’t getting the newsletter, sign up now at 1012industryreport.com.

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LAUNCH

ICYMI

THE DAMAGE CAUSED by Hurricane Laura—a Category 4 storm that ravaged southwest Louisiana in late August—was largely manageable in the industrial sector, with the supply chain pretty much intact. Even so, at press time, normal operations weren’t expected to resume there until mid to late October. Why? All nine transmission lines that deliver power into Lake Charles and southwestern Louisiana were knocked out of service. None of the plants could resume full operations without a dependable source of backup electricity. “If you start up one of these plants and then lose power,” says George Swift, president/CEO of the Southwest Louisiana Economic Development Alliance, “you could have a catastrophic event.” With the exception of a three-day fire at the BioLab chlorine plant in Westlake immediately after the hurricane, most of the damage at 8 10/12 INDUSTRY REPORT • FALL 2020

the area’s 20 or so plants was confined to a few buildings and cooling towers. The Port of Lake Charles had damage to some of its loaders, but it was quickly operational. In Cameron Parish, a hub of LNG facilities, Cheniere LNG and Cameron LNG in Hackberry were in restart mode at press time, and Venture Global—currently under construction at the mouth of the Calcasieu River—had some damage. But it was working with its EPC contractor, Kiewit Louisiana Co., to regain access to the project site and supporting facilities, restore utilities and incrementally support the return to work of craft and Venture Global personnel. Cameron LNG was also working with the U.S. Army Corp of Engineers to expedite restoration of the Calcasieu Ship Channel for vessel access to the facility. Hurricane Laura built up debris in the waterway leading to the plant, restricting access to large vessels, so dredging

work is underway. Also at press time, Sasol had completed an initial damage assessment of its 14 manufacturing facilities, associated utilities and infrastructure at its Lake Charles Chemical Complex. The conclusion: It had sustained no apparent damage to major process equipment, utilities or infrastructure, despite moderate wind damage to cooling towers and some insulation and building damage. Removal of debris, repair work and startup planning had begun there as well. Regular employee work shifts had resumed, and several hundred contractors are working on site to expedite readiness for startup. Sasol was also quick to mention that its negotiations with a partner for its U.S. Base Chemicals business was not impacted. Entergy was projecting full load service and industrial-level reliability power to be available to Sasol and other industrial customers in the area by early-to-mid October.

ISTOCK

Power out An Independent Commodity Intelligence Services (ICIS) analysis was projecting that delayed startups in the Lake Charles petrochemical market could squeeze several markets that are already tight. The region is a petrochemical hub, with a concentration of facilities that make ethylene, a building block used to make PE and monoethylene glycol. PE is a plastic used in packaging, and it was already in high demand because of the coronavirus. MEG is used to make polyethylene terephthalate, or PET, another plastic used to make packaging and beverage bottles. Plants in Lake Charles also make propylene, a building block used to make polypropylene, a plastic used in manufacturing packaging and durable goods. Lake Charles plants make caustic soda and chlorine as well as ethylene dichloride and vinyl chloride monomer, which could impact the PVC market.

—Staff report

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10/12 INDUSTRY REPORT • FALL 2020 9

LAUNCH: ICYMI

BY THE NUMBERS

5.1%

THE ASSOCIATED PRESS

THE AMOUNT OF stake that Abu Dhabi’s sovereign wealth fund has acquired in Cheniere Energy, the largest U.S. exporter of liquefied natural gas and owner of Sabine Pass in Louisiana. The shares are worth $615 million, and make the Abu Dhabi Investment Authority Cheniere’s fourth-largest shareholder. ADIA has almost $580 billion in assets and is the world’s third-biggest government wealth fund.

The $620M deal

DOW’S $620 MILLION DEAL to divest itself of its marine and storage terminal operations and assets at Dow’s sites in Plaquemine and St. Charles, Louisiana and Freeport, Texas, is expected to close by year’s end. Vopak Industrial Infrastructure Americas, a joint venture of Royal Vopak and BlackRock’s Global Energy & Power Infrastructure Fund, is acquiring three major industrial terminals on the U.S. Gulf Coast, each adjacent to an active Dow production complex. The company will enter into long-term service agreements with Dow for storage and infrastructure services. Dow expects Vopak’s terminal expertise and capabilities to deliver additional operational efficiencies and opportunities for growth. The total capacity of the three terminals is 852,000 cubic meters (cbm). The Freeport, Texas, terminal has 53 tanks (140,000 cbm) for storage of chemicals. The St. Charles terminal has 73 total tanks (409,000 cbm) for storage of chemicals. The Plaquemine terminal has 30 tanks (303,000 cbm) for storage of chemicals and refined products. The involved assets include 16.4 hectares of expansion land, 36 vessel berths, multiple pipeline connections, rail and truck racks. Vopak Industrial Infrastructure Americas and Dow are working closely to ensure a seamless transition. The transaction is subject to customary closing conditions. Royal Vopak CEO Eelco Hoekstra says the deal fits into the Rotterdam, Netherlands, company’s growth strategy for industrial terminals. The independent tank storage company is focused on bulk liquid products and gases ranging from chemicals, oils, gases and LNG to biofuels and vegoils. BlackRock manages approximately $7.32 trillion in assets on behalf of investors worldwide.

$12 billion

THE AMOUNT OF after-debt service cash flows Cameron LNG is expected to generate for Sempra Energy during its 20-year contract period. The export facility in Hackberry has begun full commercial operations under its tolling agreements, marking the beginning of full run-rate earnings under Cameron LNG’s tolling agreements. Cameron LNG is jointly owned by affiliates of Sempra LNG, TOTAL SE, Mitsui & Co., Ltd., and Japan LNG Investment, LLC, a company jointly owned by Mitsubishi Corporation and Nippon Yusen Kabushiki Kaisha. Sempra Energy indirectly owns 50.2% of Cameron LNG.

MORE BIG DEALS CALIFORNIA-BASED Westfield Hydraulics is investing $5.1 million to build a new facility in Lafayette. The company will occupy a 30,000-square-foot facility at Northpark Technology Center along West Pont des Mouton Road. Northpark is one of four Lafayette Parish business parks owned by the Lafayette Economic Development Authority. Founded in 1974, Westfield Hydraulics manufactures precision hydraulic and fluid control components for aerospace and defense applications. The company is relocating an existing manufacturing operation from San Fernando, California. Highway Transport, a Tennessee-based company providing bulk transportation of specialty chemicals, has opened its $12.5 million flagship service center in Geismar. The new Geismar facility, the company’s 14th service center in the U.S, will serve as the training center for all Highway Transport employees in Louisiana and Texas. Additionally, the site comprises a service center, 4.5 bays for tank washing, a six-bay mechanical shop, multiple office spaces and more. The site can facilitate up to 150 tanker trucks at any given time from the company’s fleet of more than 400 trucks on regional and long-haul loads. President and CFO Marshall Franklin said the new service center better positions the company to serve clients in the state’s chemical corridor and beyond. 10 10/12 INDUSTRY REPORT • FALL 2020

$5 MILLION EXPANSION=

DOUBLE CONTAINER STORAGE CAPACITY A PUBLIC-PRIVATE partnership between the Port of Greater Baton Rouge and SEACOR AMH has steadily upped the number of containers handled at the Inland Rivers Marine Terminal at the Port’s North Line Road facility, near the intersection of the Mississippi River and the Gulf Intracoastal Waterway. The Louisiana Department of Transportation and Development’s Port Priority Program provided $3.4 million; the Port, $1.6 million. The expansion follows a 75% growth over a two-year period in shipping containers handled. In 2017, SEACOR AMH handled 8,018 containers at the terminal. In 2018, that number increased to 13,685 and continued to rise in 2019 to 14,000 containers. The container-on-barge service transports empty barges from Memphis to several local petrochemical plants, where they are filled with containers loaded with plastic pellets. The containers are then shipped down the Mississippi River to New Orleans, where they are sent to plants in Europe, Asia and South America. 1012industryreport.com

Tellurian has negotiated another four months to pay back an $87.5 million loan. The second extension will give Tellurian until March 23, 2022, as it struggles to secure sufficient commercial support to advance its Driftwood LNG export project in Louisiana, Bloomberg reports. In March, Tellurian had negotiated an 18-month extension of the maturity of the loan, which was to come due in May. That deal gave the company until Nov. 23, 2021, to pay back the money. In its latest filing with the Securities and Exchange Commission, Tellurian said it negotiated the further extension to March 23, 2022. As a condition, Tellurian must repay $12 million of the remaining principal immediately. While commercial discussions among LNG terminal developers have picked up after coming to a virtual standstill during the summer due in large part to the coronavirus pandemic, Tellurian’s prospects for Driftwood remain uncertain: F Investors have shed Tellurian shares. When its stock price fell below $1 for more than 30 consecutive trading days, the company recently received a delisting notice from Nasdaq. It will have additional time for its stock to rise above that threshold before any action is taken. F Tellurian has cut 38% of its staff and worked on freeing up cash by adjusting its debt obligations. F Tellurian has scaled back its midstream ambitions, saying it will build only one of four proposed pipelines during the first phase of the Driftwood project if it decides to sanction the U.S. facility. F To date, only France’s Total has signed a firm partnership deal tied to Driftwood, a $500 million investment agreed to in 2019. Talks with India’s Petronet about a potential equity deal are uncertain.

THEY SAID IT

[The pandemic] caught a lot of people off guard. When this all started happening, I put my security team on high alert and upped the vigilance of our network. I could see what was coming, so we got proactive. We want to be efficient, but we still have to be secure. APRIL DANOS, then-director of Homeland Security, Greater Lafourche Port Commission [now retired], noting Port Fourchon was on “high alert” as ports and maritime interests were seeing more targeted cyberattacks amid the pandemic 1012industryreport.com

THE ASSOCIATED PRESS

TELLURIAN TROUBLES

Breakdown of an old war debt The U.S. government now owes ExxonMobil $20.3 million. Here are the details about what it means. WHAT’S IT FOR? It dates all the way back to World War II and the Korean War. The money is to cover a share of environmental cleanup from producing war materials at its Baton Rouge and Baytown, Texas, refineries and chemical plants. In 2010 and 2011, Exxon sued the U.S. government under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, seeking reimbursement for a percentage of the costs it paid, and will continue to pay, to remediate environmental damage at the Baytown and Baton Rouge refineries and nearby chemical plants under the Resource Conservation and Recovery Act. The statutes impose environmental standards and allow past owners and operators of facilities where hazardous substances are located to be liable for the costs needed to clean them up and prevent further harm. HOW MUCH HAS EXXON SPENT ON CLEANUP? Exxon alleges that through December 2014, it has incurred $77 million in past response costs attributable to the wartime-related contamination and that it will incur more. WHY NOW? In a 113-page order issued back in August, U.S. District Judge Lee Rosenthal concluded the government exerted substantial control over the refineries’ actions during World War II and the Korean War, including decisions on how to use raw materials and labor. This control, the judge wrote, makes the government responsible for a share of the remediation costs, including costs related to the refineries’ delays in implementing certain waste-management improvements. Specifically, the judge assessed the government 14.4% of past response costs at the Baton Rouge refinery and nearly 25% of those at the company’s Baytown refinery and 36.54% at the Ordnance Works/Tankfarm 3000 area. It is the third—and likely final—opinion issued in a series of related environmental pollution cases. WHAT WAS EXXON’S ROLE DURING THOSE WARS? The two refineries date back to the early 20th century, when they were built and operated by predecessors to ExxonMobil. In the 1940s, the Baton Rouge and Baytown refineries “converted with astonishing speed into aviation gas and synthetic rubber production sites,” the order notes, which was “important to the military victory over Japan and Germany. Both refineries operated under wartime contracts with the United States. In both, military needs were given priority over environmental consequences.” The Baytown and Baton Rouge facilities were two of only three refineries to manufacture over one billion gallons of 100-octane aviation gas during WWII on behalf of the government, according to a document submitted in February by ExxonMobil’s lawyers. In fact, the companies produced approximately 20% of the avgas consumed by the Allied Forces during WWII. WHY IS THE GOVERNMENT PAYING FOR IT? During the bench trial, forensic historians testified about the government’s control over the materials and manpower essential to refiner operations, and the inability of refinery operators to make timely repairs or perform routine maintenance because of the government’s insistence on having the plans operate 24 hours a day, 7 days a week—and the resulting hazardous wastes.

10/12 INDUSTRY REPORT • FALL 2020 11

BEAUMONT BAYTOWN

SULPHUR

BATON ROUGE BROUSSARD ST. ROSE

CORPUS CHRISTI

12 10/12 INDUSTRY REPORT • FALL 2020

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LAUNCH: PEOPLE

Executive Profile: Alta Baker

1012industryreport.com

POSITION

President & CEO COMPANY

Safe Haven Enterprises LLC HOMETOWN

Jennings EDUCATION

Bachelor’s degree in Education, McNeese State University, Lake Charles

Alta Baker, president and CEO of Safe Haven Enterprises, inspecting a test building with no penetrations.

What do you find most challenging about working in the industrial space?

In the beginning, it was about getting people to realize that I knew what I was doing. We just needed them to open that door and give us a crack, and if we couldn’t provide what they needed, they could go to someone else. Safe Haven is a certified WBE. These certifications are nice to have, but I don’t want people to focus on that. I can stand on my own. It makes a big difference when they realize that I don’t need the certification to get the job; that we can do it and we know what we’re doing. Most of the women you run across in industry are pretty tough because they have to be. That’s why we’re finding a bond through WBENC and other organizations. We’re finally realizing that we don’t need to stand alone. We can help each other.

Any best practices that you would like to share?

If you’re a young lady starting out and you’re deciding on a career, you better like what you do. This has been a rewarding process for me, but it has s been a lot of work. If I didn’t like what I do, I couldn’t put the same amount of time and effort into it. We do a lot of the impossible. The more impossible it sounds the more our people seem to like it. We were in Baghdad less than 24 hours after the fall of Saddam Hussein with buildings and mobile communications centers in Iraq. More recently in Beirut, we installed maximum security buildings for the U.S. government during the pandemic and recent explosion at the port there. The hotels were closing, the restaurants were closing because the country was in lock down. We had 12 hours to find our people transportation out of the country, and we did. In fact, a

PHOTO COURTESY SAFE HAVEN ENTERPRISES LLC

lanning out her business on a napkin, Alta Baker knew she was taking a big risk by creating a woman-owned startup in what traditionally has been a man’s world. Nonetheless, she began to feel a strong calling in the late 1990s after scrambling with the rest of her team—she worked for her family’s construction business at the time— to escape a hazardous gas release in a Gulf Coast petrochemical plant. Then, six months later, she had to run from a waterspout as it barreled toward her jobsite. “Like never before, I needed shelter … some protection,” says Baker, president and CEO of Safe Haven Enterprises LLC in Jennings. “It was then that I knew some sort of protective structure was needed to save lives. Physical protection became my business and my passion.” She created her first fire and blast resistant modular building to protect her own team while working in a plant. Later, Safe Haven found itself supplying buildings to petrochemical facilities, offshore platforms and war zones around the globe. It was a Safe Haven building workers stayed in to shut down the plant after the recent Williams Olefin explosion in Geismar. The company also provides Forced Entry/Ballistic Resistant (FE/BR) products for U.S. embassies and consulates. Along the way, Alta has become a major proponent for other femaleowned enterprises, serving on the Women’s Business Enterprise National Council’s board of directors and as past chairman of the National Women’s Enterprise Leadership Forum. In 2002, she received the Louisiana Board of Commerce and Louisiana Economic Development’s Lantern Award for leadership, dedication and commitment to excellence. 10/12 Industry Report sat down with Baker to ask her about the challenges and rewards of working as a WBE in Louisiana’s industrial market.

woman-owned business based there literally finished the job under our direction. What do you find most rewarding about your line of work?

That’s a pretty easy answer: I save lives by supplying blast resistant buildings for petrochemical and offshore, and ballistic-resistant buildings for the federal government. In Lake Charles, we fabricated the Calcasieu 911 facility before Hurricane Rita and it quite literally saved lives. We also fabricated and installed bunkers in New Orleans for the U.S. Army Corps of Engineers prior to Hurricane Katrina. Today, the industry is much more aware of the need for this, so Safe Haven provides modular buildings and permanent facilities from concept to engineering to installation. We cover the entire gamut now with my engineering group here. —Sam Barnes

10/12 INDUSTRY REPORT • FALL 2020 13

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COVER STORY

A NEW REALITY

South Louisiana industry undergoes a paradigm shift in the wake of a pandemic. BY SAM BARNES

here was really no way to plan for this. The COVID-19 pandemic knocked Louisiana’s industrial community back on its heels and sent it scrambling to find answers in a new reality—and that’s in a region that has already battled storms, spills, floods

16 10/12 INDUSTRY REPORT • FALL 2020

and various other monkey wrenches over the years. It’s not the first time one of his economic forecasts has ended up in the “circular file,” says economist Loren Scott of Loren C. Scott & Associates in Baton Rouge, but while hurricanes Katrina and Rita were “like two rifle shots at New Orleans

and Lake Charles, COVID-19 has been more like buckshot with a lot more uncertainty associated with it. “It’s not just impacting certain areas,” Scott says. “It’s the entire state, country and world.” Louisiana’s construction sector was hit particularly hard, losing some 25,000 jobs, or nearly 17% of

its total statewide workforce earlier this year. That affected Baton Rouge and Lake Charles the most, as each supports the highest concentration of industrial contractors in the state. The reason? The refining industry screeched to a halt and slashed its construction workforce as fuel consumption dropped some 42% 1012industryreport.com

1012industryreport.com

drilling today, that would be like a boom.” As for the chemical industry, Greg Bowser, president of the Louisiana Chemical Association, says his sector wasn’t impacted as severely in the beginning, but that’s changing as the pandemic drags on. The demand for products is gradually declining as society makes permanent adjustments to its spending habits. In the meantime, LCA has become a physical presence for many of its member owners who are now working from home. “In this pandemic, they’re spending more time on Zoom calls, whereas we’re more in touch with people in government etc.,” Bowser says. “We’ve become their ground game … their physical presence.”

in the Louisiana Legislative Fiscal Office, says even though oil has stabilized since its precipitous drop into negative territory last April, tax revenues in the fourth quarter of FY 2020 (April, May and June), “were just horrible” compared to the same period in 2019. Sales and motor fuels tax revenues, for example, were 14% and 25% lower, respectively, than in 2019. While a recent uptick in oil prices could help boost the mineral revenue side of the equation, it’s still a far cry from the $60 a barrel price originally projected for FY 2020, and every dollar below the estimated price removes $10 million from the general fund. Due to that and other factors, Albrecht’s office reduced general fund estimates by $137

DON KADAIR

over a three-week period last spring. “In reaction, the refineries laid off their contracting workforce and said, ‘We’re going to handle maintenance and repair for the next few months,’” Scott says. Additionally, many capital projects were postponed until 2021. Should the pandemic be around for months or even years, and fuel demand remain depressed, many refineries could be in jeopardy. Fuel consumption has rebounded somewhat in recent months, but jet fuel continues to lag far below projections and refineries are struggling. That could become a troublesome long-term problem should people choose to permanently work from home. “Calcasieu Refinery in Lake Charles is shut down and nobody knows when it will re-open,” Scott says. “Even the larger ones are struggling.” One thing seems certain: A tidal wave of maintenance work will likely arrive in 2021 as many plants pull the trigger on a pandemic-induced backlog of turnarounds. “These huge firms postponed their turnarounds into 2021, and that will be piled on top of the other turnarounds already scheduled,” Scott says. “That translates into 1,000s of workers needed in the Baton Rouge area alone. Some contractors will go from a surplus worker situation to a shortage.” As for upstream oil and gas, Mike Moncla, interim president of the Louisiana Oil & Gas Association and owner of Moncla Cos. in Lafayette, says there’s little doubt there will be more bankruptcies before year’s end. Oil and gas owners were already in crisis mode in early 2020 and COVID-19 made things exponentially worse. “Simply put, we need higher oil prices … $40 oil is not good for anybody,” Moncla says. “There are oil companies saying they can break even at $35, but that’s not sustainable for the services side. It’s going to take some consolidation on both the service and operator sides for things to improve.” Moncla says the situation can’t be compared to the 1980s oil bust, as there were some 30 drilling rigs operating in south Louisiana and oil companies had offices in Lafayette. “Those old offices are now retail shops, and there’s not 30 rigs drilling … there’s zero. If we had 30 rigs

EVEN THE INTERNS: A hybrid schedule just wasn’t possible for BASF’s Process Technology internship program this fall, as the positions are exclusively hands-on in nature. The Geismar site currently has five P-Tech interns, mostly from River Parishes Community College, Baton Rouge Community College and area technical schools.

LOOKING AT THE LONG TERM LCA plans to urge legislators to closely evaluate the state’s inventory and utilities sales taxes in order to alleviate the burden somewhat on industrial owners. It’s an ongoing concern that has worsened during the pandemic. “If you manufacture products that you can’t sell (due to depressed demand), then that becomes inventory and is hit with the inventory tax,” Bowser says. “Other states don’t have that, and it can be substantial.” Nonetheless, he admits that convincing the state to make tax changes right now is a tall order, as the general fund is already reeling from reduced oil and gas revenues. Greg Albrecht, chief economist

million for FY 2020 and by $900 million for FY 2021. “I’m hoping we were super conservative and that we’ll be able to add money back, but I’ve got to see more improvements in the economy.” Albrecht is optimistic that oil prices have stabilized for now, but doesn’t expect any big upswings. “The industry seems to be reconciling itself to the fact that $40 oil is going to be the price band for the foreseeable future,” he adds. “Not much is going to increase that price in a hurry. We will recover, we’re going to adapt, but that could be some years down the road.” Greg Upton, assistant professor of research at LSU’s Center for Energy Studies, agrees that oil

prices will likely remain where they are for some time. Unlike previous forecasts, he expects that long-term behavioral and cultural changes stemming from the pandemic could have a unique influence on demand. “A lot of the workforce has moved home, and even when the pandemic subsides they’re probably going to go to hybrid schedules,” Upton says. “It has forced them to make adjustments and they’re realizing that it actually works.” That would result in a seismic shift in demand composition and force industrial owners to re-think their long-term strategies. “A refinery takes inputs (crude oil) and adjusts their output over time, depending on where the demand is,” he adds. “If the composition of demand changes over the long term (lower demand on jet fuel, diesel etc.), that could impact the Gulf Coast market’s competitiveness. That would undoubtedly dampen expectations for any impending industrial construction boom, although “you could see another round of capital expenditures down the road when economic activity picks back up.” Upton says demand-side factors in Asia, not the U.S., will have the most significant impact, particularly in regard to natural gas. “If Asia growth picks back up and comes out of this quickly, that’s going to be the demand needed to drive all of the activities here in the U.S.,” Upton says. “China and India have a strong incentive to transfer to gas due to air quality concerns, and natural gas has lower carbon emissions. “The question is whether it’s cheaper to find it locally or ship it as LNG. There’s a lot of politics that impact that.” ZOOM: NOT A SUSTAINABLE SUBSTITUTE Meanwhile, the plants, jobsites and offices of Louisiana have experienced a profound paradigm shift in the midst of the pandemic, and most will never be the same. LCA’s Bowser says plant work cultures have changed in a fundamental way. “I think you’re seeing a different structure from an administrative perspective,” Bowser says. “You have a number of folks that work from home, or on alternating days. Half 10/12 INDUSTRY REPORT • FALL 2020 17

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COVER STORY

“It takes an emergency to force us into trying a new technology, and we’ve proven that it works.” PAUL HELTON, executive director, FastStart

of the administrative crew might be here today, the other half on Wednesday, etc.” It has forced most plants to become more efficient in order to minimize person-to-person contact.

“For some companies, it’s actually working out better,” he adds. “They’re finding some of their employees are actually more productive off site.” Tom Yura, COO at Cornerstone Chemical in Waggaman, says the

pandemic prompted his plant to question its entire workforce approach. Other than its direct operations workforce, everyone at Cornerstone works at home either full time or under a hybrid schedule, including customer service, finance, accounting, etc. The plant has also reduced the number of third party contractors on site. “We’re questioning who is coming into the plant and why,” Yura says. “That has been an interesting outcome that I didn’t expect. Who would have thought you could have so many people working remotely and still be effective? COVID-19 has challenged some of our own paradigms.” They’ve also expanded their hiring reach. “It has helped us as a recruiting tool,” he adds. “If I want to reach out to candidates outside my immediate geographical region, I now have access to some incredibly talented people who can’t move to the New Orleans or Baton Rouge areas. It increases our candidate pool and allows me to retain people and work with them in whatever life

situation they’re in.” To compensate for a reduction in group interactions, Cornerstone schedules additional virtual meetings, and establishes and monitors deadlines to keep everyone on track. “There are some inherent deadlines that we have to meet,” Yura says. “Monthly closings, customer demand and delivery schedules all work to keep you going. The meetings play a vital role in keeping everyone updated on how they’re doing.” Even so, Yura issues a warning: While Zoom and other methods provide an effective means of communication for the short term, he worries about the long-term implications on relationship building. “Humans want and need contact,” he adds. “You’re not seeing any negative consequences right now, but what if we did this for another three years and you never got to sit down and spend face-to-face time with your colleagues, and get to know that person, what they need, etc. “From a leadership perspective, social interaction and two-way

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communication are very important. the strain on the local labor force We’re going to have to find ways to has vanished. “The resource pool is bring that back. Zoom meetings are as good as it has been in a decade, no real substitute for that.” and we’re finding a better quality of In fact, maintaining productivity worker as a result,” McManus says. over the long haul has been a con“We’re ramping up on a couple of cern for many during the pandemic. projects right now and having no Brown & Root of Baton Rouge difficulty finding the 400 workers we outlined specific work practices need. Resource availability is an upintended to maintain productivity side for us, because more and better levels even as its crews practiced people are available today.” social distancing and other safety Companies are also paying less protocols. in “per diems” because they’re not COO Fred McManus says there pulling workers from beyond the were some unavoidable issues in immediate area. The other upside: the beginning, as owners severely Brown & Root has reduced its limited workforce numbers, but overhead by shuttering 40% to 50% productivity is now back to pre-panof its leased jobsite office space. demic levels. That’s made them more competitive. Throughout the pandemic, “We’ve realized that we can take care maintenance work has continued of so many of our functions remoteto be a stable source of work for the ly,” McManus says. company. “We’ve learned to live and They’re even planning for the work in that environment,” he adds. long-term, and could possibly invest “They were difficult adjustments in in new technology so that designers the beginning, but now that those can more easily work from home. practices are in place our productivi“At present, about 30% to 40% of ty isn’t being our design work has to be done at Issue Date:impacted.” Fall 2020 Ad proof #2 • Please respond e-mailsome or fax with your approval or minor There havebybeen unexpecttherevisions. office because that’s where the • AD WILL RUN AS IS unless approval or final revisions edarebenefits as well—for example, technology is,” he adds. received by the close of business today. • Additional revisions must be requested and may be subject to production fees.

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COVER STORY

“The resource pool is as good as it has been in a decade, and we’re finding a better quality of worker as a result.” FRED MCMANUS, COO, Brown & Root

TRAINING AND RECRUITMENT Training and recruitment in the industrial space has experienced a paradigm shift of its own. Associated Builders & Contractors’ Pelican Chapter in Baton Rouge has

staggered its schedule to accommodate the new realities of COVID-19 and student enrollment numbers are now determined by actual need. And instead of filling up the PMAC with hundreds of corporate

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COVER STORY

Digitization: It’s no longer optional

—Sam Barnes

22 10/12 INDUSTRY REPORT • FALL 2020

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igitization in the industrial space has quickly gone from a want to a need. The COVID-19 pandemic has upended industrial operations in a fundamental way and forced many owners to reconsider their current infrastructure and radically change the way they do business. It’s no longer optional for today’s owners, as there’s an urgent need for many jobs to be performed remotely. Cornerstone Chemical in Waggaman Cornerstone COO Tom Yura got a fortuitous head start last summer by appointing its own digitization leader and ramping up efforts to implement “Industry 4.0.” The decision serendipitously prepared the plant for 2020’s “new normal.” “In a situation like COVID-19, digitization has enabled us to have more effective and efficient remote interactions,” says Tom Yura, Cornerstone’s chief operating officer. “That could be vibration monitoring on a pump, for example. Instead of having a service provider come out and put in a meter to measure the vibration, digital tools can capture that information and send it to a maintenance algorithm in the Cloud that then informs a maintenance engineer when something is wrong. “It allows us to remotely monitor a situation. In this environment, it keeps us working at a certain proactive level without having to be there full time.” Cornerstone focuses much of its digitization efforts on equipment effectiveness and raw material consumption. Rather than allowing data to live in different silos, the plant gathers data through connected systems to form a knowledge base from which they can make better decisions. “We had a good head start ahead of COVID-19,” Yura says. “It’s now a matter of figuring out how to continue our efforts in terms of tools and training while we’re trying to roll these new tools out during a pandemic, hurricanes and other issues.” However, Yura points out that digitization will never fully replace physical inspections. “It’s no different than a parent,” he adds. “You can monitor them from afar, but when you’re sitting at the dinner table asking them questions, that’s when you really find out what’s going on. Digitization is clearly a game changer, and we’re utilizing that to understand how the plant is running, but it’s hard to replace the in-person views that you get by walking through the plant and talking to the operators.” Jonathan Shi, director of the Industrial Assessment Center at LSU, says COVID-19 could finally force smaller industrial sites in Louisiana to take the leap into digitization and automation. That’s long overdue, since technology will play a key role in the future irrespective of the pandemic. ”As we have all seen, working from home and remote learning have been enabled by new technologies,” Shi says. “Similarly, I think we’re going to see more remote sensing, control, automation and robotic technologies in industrial applications. That is how humans have adapted. We all have a job to do and we figure out how to do it safely and efficiently.” Prior to the pandemic, some plants were “on the fence,” but they’re now forced to find ways to reduce manpower. “If they don’t, they’re exposing their employees to high risk, so that’s an added factor to the decision,” Shi says. There’s significant downward pressure―both internal and external―on even the smallest job shops to adopt Industry 4.0 technologies. In the process, plants hope to achieve a higher level of efficiency, reduce bottlenecks, increase production speed and trim costs. There are also demand side pressures in the world of COVID-19. “Plants are hurting because the demand isn’t as stable as it used to be, and they’ve experienced radical changes,” Shi says. “On top of that, there are additional strains on worker performance, as they’re forced to incorporate social distancing.” In that respect, automation and digitization could go a long way toward reducing manpower at the plant. That’s especially true with the smaller plants. “Now, some of these that were on the fence might have the latitude to make those changes … simply to survive,” Shi says.

“For some companies, it’s actually working out better. They’re finding some of their employees are actually more productive off site.” GREG BOWSER, president and CEO, Louisiana Chemical Association + Louisiana Chemical Industry Alliance

booths and students, LSU’s Fall Career Expo in September occurred in a virtual SIMCity-like setting and avatars took the place of real people. Jesse Downs, director of LSU’s Olinde Career Center, attributes current lower-than-average participation rate to a late start in planning but says there’s also some hesitancy among the companies. That’s because many owners, particularly in the industrial market, are struggling to define their recruiting strategies. Downs warns that this could cause problems down the road. “If you stop recruiting altogether during periods of uncertainty, you’ll pay for that when the market rebounds,” she adds. “The strategy for many of them is to reduce their recruiting but not eliminate it altogether.” Sarah Haneline, BASF-Geismar’s director of workforce development, says while her plant’s leadership had some serious discussions in March and April about whether to cancel its Summer 2020 internship program, they ultimately decided to move forward with a hybrid schedule that included work both at the site and virtually. BASF-Geismar typically averages 20-25 chemical and mechanical engineering interns, but in the summer of 2020 there were only eight.

“It was a struggle to give them the best experience,” Haneline says. “After all, they’ve already spent so much time in the classroom. An internship is supposed to provide an ability to see, hands on, the equipment they’ve studied about, or see how our chemistry works.” A hybrid schedule just wasn’t possible, however, for BASF’s Process Technology internship program this fall, as the positions are exclusively hands-on in nature. The Geismar site currently has five P-Tech interns (similar to previous years), mostly from River Parishes Community College, Baton Rouge Community College and area technical schools. ExxonMobil in Baton Rouge made some swift adjustments to keep its inaugural craft internship program moving forward this past spring. Kelly McCloskey, human resources advisor for ExxonMobil, says six machinist and instrumentation interns had just finished their first month in the program when COVID-19 hit. The interns are students at Baton Rouge Community College, and several eventually transitioned to full-time positions at the plant. “They had gone through the safety training, and were working on transitioning to field work when COVID-19 started to impact us,” 1012industryreport.com

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McCloskey says. After discussing next steps for the program, ExxonMobil “essentially put protocols into place—social distancing, masking etc.—but they (the interns) continued in the program, working in the plant and the field, just with new restrictions.” With the first successful internship completed in August, ExxonMobil is now evaluating the success of the program, and determining future needs. After a COVID-related shutdown in the spring, Louisiana Economic Development’s FastStart Program has bounced back to near pre-pandemic numbers. While some companies have postponed their recruitment and training due to market uncertainty, the incentive-based program continues to provide recruitment and training services to an average of 70 to 90 companies. Paul Helton, FastStart executive director, says there’s been a radical shift to remote learning. “The pandemic has pushed us into that mode almost exclusively,” Helton adds. “I can’t remember the last time we’ve had an in-person class.” He says 15% to 20% of his clients

are from the petrochemical and manufacturing industries. FastStart, in fact, will assist in recruiting and training employees for Formosa’s new plastics plant in St. James Parish by conducting job fairs, identifying needed college programs, designing pre-employment assessments, training, etc. Helton admits that not all of that can be done virtually. “There are aspects of the pre-employment assessment where we try to address the intangibles as well,” he says. “Do they show up for the appointment on time? When they go on break, do they come back on time? Are they good communicators? It even comes down to evaluating their attitude.” Still, Helton says there are advantages to an online learning environment, whether that be remote live learning or computer-based learning. It’s more focused, convenient and available. “This technology has been out there for a while, but it really hasn’t taken off for a variety of reasons,” he adds. “It takes an emergency to force us into trying a new technology, and we’ve proven that it works.”

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NEWS EXPORTS

Cameron LNG

LNG Limbo

By SAM BARNES

New projects slam the brakes as long-term contracts vanish and investors opt out.

ny new LNG investment in Louisiana will likely remain in limbo until at least 2022, as the uncertainty of COVID-19 and availability of competitively priced natural gas in other parts of the world have turned U.S. LNG exports into a risky proposition. Financiers of U.S.-based LNG export facilities are requiring the existence of long-term contracts before they’ll dole out any additional money, and those are difficult to come by when natural gas is at rock-bottom prices. Fortunately, that doesn’t impact LNG plants that are either completed, under construction or adding trains, says Eric Smith, associate director of the Tulane Energy Institute in New Orleans. “Once you get

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a multimillion-dollar project going,” Smith says, “it might take a little longer and get stretched out, but it will get finished.” That’s because developers were able to enter into 20-year contracts when LNG was in short supply. It’s a far different landscape now. “While these ‘second generation’ plants are more efficient, there is a lot more LNG sloshing around in the world,” he adds. “Customers are being more choosy, and they want three-year contracts with an option to renew.” Shane Mullins, vice president of product development for energy markets at Industrial Info Resources in Sugar Land, Texas, says the market downturn has had serious repercussions for several Louisiana projects, most recently Tellurian’s Driftwood LNG near Lake Charles. “We thought Driftwood was going

to get closer to an approval this year, because India planned to buy a huge portion of that project,” Mullins says. Instead, Tellurian is in cost-cutting mode, unveiling plans to cut Driftwood’s Phase 1 by 30% and postponing its proposed Permian Global Access Pipeline, with a capacity of 2 billion cubic feet per day, and Haynesville Global Access Pipeline, with a capacity of 2 billion cubic feet per day. Tellurian has delayed a financial investment decision on the Driftwood facility until 2021, but still hopes that full operations could begin in 2026 or 2027. The LNG facility is expected to produce 27.6 million tons of LNG per year. Elsewhere, the news is equally troublesome. In March, Shell pulled out of the Lake Charles LNG proj-

ect, forcing owner Energy Transfer to consider reducing the size of the project and begin looking for long-term contracts on its own; in June, Magnolia LNG sold its Lake Charles development to NYC-based Glenfarne Group; and Cameron LNG’s partners recently postponed the addition of two new trains (4 and 5). LOOKING ELSEWHERE Smith says the world still needs LNG, but clients are getting it from other places, and trade squabbles between the U.S. and other countries haven’t helped. “Germany is going to find the cheapest gas they can find, and if that means buying it from the Russians then they’re going to buy it from the Russians,” he says. Economist Loren Scott of Loren C. Scott & Associates in Baton 10/12 INDUSTRY REPORT • FALL 2020 25

NEWS: EXPORTS the ointment, Mullins notes. “Qatar is planning to construct $30 billion in new LNG trains, with product hitting the market by that same time frame,” he adds. “If that happens, the Qatar gas could go to India and undercut the U.S.” Not surprisingly, local LNG owners are throttling back on investment. Seven LNG projects have delayed FIDs or altered their plans since March, according to a report from BTU Analytics. Those projects

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Industrial Info’s Mullins feels the outlook for LNG won’t change until demand increases significantly in China and India—two of the biggest consumers of U.S. natural gas. “Previously, we were looking at shortfalls in the natural gas supply by 2025 … we’re now looking at 2026-27. That means any new projects won’t need to be approved until 2022,” as it takes about four years to build an LNG facility. There’s another potential fly in

Rouge says the U.S. lost its competitive edge following a one-two punch from COVID-19 and an unusually warm winter—both of which significantly impacted the worldwide demand for natural gas. This was exacerbated when oil dropped below $20. “Other countries price their natural gas off of the price of oil,” Scott

says. “Instead of being way higher than ours, the price of natural gas in Europe and Japan suddenly collapsed to being the same as the price at Henry Hub.” Nonetheless, Scott says it’s a short-term issue. “That demand will come back. The weather will cool off and the price of oil has already gone up.”

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NEWS: EXPORTS represent about 14 billion cubic feet per day of potential capacity.

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RISING DOMESTIC DEMAND? Despite all that, Mullins says there are some signs of life. “Venture Global’s Calcasieu Pass LNG is currently under construction and should be completed in 2023,” he notes. “They could also move forward with an identical facility in Plaquemines Parish, as all of the permits have been received.” Additionally, Cheniere is building its sixth train at Sabine Pass LNG, representing the only other LNG project currently under construction in Louisiana. Scott says U.S. gas is already becoming more competitive as oil prices inch above $40 a barrel. He also expects rig counts to bounce back from current dismal numbers. “We’ve seen the most stunning decline in the rig count that I’ve ever seen in my career,” he says. “In early February, there were 1,038 operating in the U.S. The latest number in March was 244. “And if you’re producing less oil,

“That demand will come back. The weather will cool off and the price of oil has already gone up.” LOREN SCOTT, economist, Loren C. Scott & Associates

you’re producing less associated gas. For that reason, we are predicting that the price of natural gas is going to go up from under $2 per million BTU to as much as $3.10 by 2022 because of the drop in associated gas production.” Tulane’s Smith also thinks the market will undoubtedly get back on track. “The U.S. is still the cheapest source of natural gas on the planet,” he says, “and it’s a commodity, so low cost wins whether you’re talking about oil in Saudi Arabia or natural gas in the U.S.” He also anticipates rising domestic demand, chiefly through LNG fuel-cell powered shipping and long-haul transport. Additionally, there’s an apparent move to install small LNG liquefaction trains in the

Permian Basin to store natural gas or power drilling and fracking units. Regardless of these variables, Smith says politics and public opinion will continue to be potential threats to any forecast, particularly in regards to pipeline construction. “The environmental community has discovered that all of these projects require gas pipelines, so it’s getting very difficult to get them approved,” Smith says. As an alternative, the Trump administration authorized the use of LNG rail shipments in a June rule handed down by the U.S. Pipeline and Hazardous Material Safety Administration. The decision comes amid court and regulatory battles over pipeline projects that have slowed movement of the nation’s

world-leading gas production to markets. Previously, federal hazardous materials regulations allowed shipments of LNG by truck, but not by rail, except with a special permit. The rule requires enhancements— including a thicker outer tank made of steel with a greater puncture resistance—to the approved tank car design that, for decades, has been approved for shipments of other flammable cryogenic materials, such as liquid ethylene and liquid ethane. “The department’s new rule carefully lays out key operational safeguards to provide for the safe transportation of LNG by rail to more parts of the country where this energy source is needed,” Transportation Secretary Elaine Chao has said in a statement.

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Enhancing everyday life. Every day. From soda cans and textiles to personal care products like soaps, shampoos, and cosmetics, you’ll find innovative materials made at our St. Gabriel operations in products you use every day. With a commitment to safety and sustainability, we are focused on improving the quality of life for people around the world. Inspiring innovation goes beyond the workplace and into our communities as well. Whether we’re volunteering on local projects, advancing educational efforts for the future workforce, or promoting a safe and vibrant place to work and live, our community investments reflect the rich heritage of Eastman’s men and women around the world. We’ve come a long way since 1920, the year Eastman got its start. In that age of blackand-white photography, our doors opened in Kingsport, Tenn., with the sole intent to make chemicals used in Kodak film. Fast forward to 2014, and St. Gabriel operations joined the Eastman family, making our company a proud member of Iberville Parish. Eastman is excited to be celebrating 100 years in 2020. Together, we’ll continue to enhance the quality of life—today and for future generations.

© 2020 Eastman Chemical Company. Eastman brands referenced herein are trademarks of Eastman or one of its subsidiaries or are being used under license. The ® symbol denotes registered trademark status in the U.S.; marks may also be registered internationally. Non-Eastman brands referenced herein are trademarks of their respective owners. EMN-CC-12138 9/20

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10/12 INDUSTRY REPORT • FALL 2020 29

DON KADAIR

NEWS: WORKFORCE

Breaking barriers

By SAM BARNES

Louisiana women and minorities in industry make gains in the quest for inclusion.

here’s a big difference between diversity and inclusion. While diversity goals are undoubtedly important, they mean little if there are inherent obstacles in the workspace that prevent employees from advancing because of their color or gender. As Lindsey All puts it, diversity without an inclusive work culture is a lot like being invited to a dance, but not actually being asked to dance. Director of marketing, programs and business development for the Women’s Business Enterprise National Council in Baton Rouge, All recalls her own struggles as a young project manager in the energy industry. “I worked for a large consulting firm in the oil and gas market,” she says. “I was young and female, and

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they would literally laugh when they learned I was project manager.” It was hard in the beginning, but she proved herself to be capable and ultimately developed “a lot of great relationships.” As a woman, All says she brought a lot to the table. “I think being a woman in those situations was invaluable. I led a startup for a biodiesel plant in Nebraska, and we had several challenges in getting that started. I think I had an innate ability to calm a situation that

helped move the project along.” Alta Baker, president and CEO of Safe Haven Enterprises LLC in Jennings, had a similar experience when founding her blast-resistant modular building company in the late 1990s. Much like All, she had to prove that she could stand on her own. “I can remember when I used to go to facilities and the comment was always the same: ‘Look, they sent the secretary.’ That was a lot to overcome.”

“I worked for a large consulting firm in the oil and gas market. I was young and female, and they would literally laugh when they learned I was project manager.” LINDSEY ALL, Director of marketing, programs and business development, Women’s Business Enterprise National Council in Baton Rouge

Today, Baker makes sure that her own culture incorporates inclusive policies, and that she actively seeks out other WBEs. “I use womenowned businesses any time I can,” she adds. In fact, Safe Haven recently finished a project at the U.S. Embassy in Beirut with the help of four WBEs, one based in New Orleans. Some industrial companies are doing better than others in addressing inclusion and removing traditional barriers to advancement. They’re getting some help along the way—each year in the Louisiana community of Robert, WBENC immerses women’s business enterprises (WBEs) that are in the energy industrial supply chain in a curriculum focusing on industry-specific topics. Sponsored by Shell, BP, Chevron, ExxonMobil and others, the Energy Executive Program includes a mix 1012industryreport.com

2020

Top 100 i

Companie

of lectures, expert panels and field exercises. In the process, participating WBEs make vital connections with industry leaders that otherwise wouldn’t be possible. A big part of WBENC’s mission, All says, is to “get women-owned businesses a seat at the table. That’s difficult for a startup in an industrial setting.” Many companies are making a purposeful effort to hire from Historically Black Colleges & Universities (HBCUs) and are launching TAKING A HARD LOOK: Many companies are examining their work culture to determine if minorities and genders have equal access to advancement. initiatives aimed at bringing parity life for everyone.” Hecht says, New Orleans has one to education and providing equal opCurrent GNO Inc. initiatives foof the highest concentrations of colportunities to all races and genders. cus on both economic mobility and leges per capita in the U.S. “We have They’re also examining their work inclusion. “One of the more exciting an excellent mixture of HBCUs, but culture to determine if minorities is Black Entrepreneurship, where we haven’t done a good job of marand genders have equal access to we’re working with HBCU’s in New keting that in critical mass,” he adds. advancement. Orleans (Xavier University, Dillard Through GNO University Michael Hecht, president and University and Southern University (GNOu), GNO Inc. addresses “disCEO of GNO Inc., says his New of New Orleans) to facilitate startup connects” between curriculum and Orleans economic development activity among recent graduates,” area needs, and creates a clear path group launched a multi-prong Hecht says. “All of the area universifor minorities to fill that need. “We effort about a year ago that seeks to ties have a seat at the table.” identify an industry or company remove those barriers. They even Issue Date: Fall 2020 Ad proof #2 They also launched a website with a need, then find a university updated their mission statement to • Please respond by e-mail or fax with your approval or minor revisions. aimed at marketing area universities that can best provide the training or be more inclusive: “To create a thriv• AD WILL RUN AS IS unless approval or final revisions to a broader audience. After all, curriculum to meet that need,” he ingareeconomy andclose excellent received by the of businessquality today. of • Additional revisions must be requested and may be subject to production fees.

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NEWS: WORKFORCE adds. “For example, we’re facilitating a water management program at Dillard and an applied chemistry program at Xavier.” In the process, GNO Inc. serves as a catalyst and “a neutral third party to get the players around the table and catalyze those players into action.” WBEC South in New Orleans saw a need for connecting WBEs to the marketplace—particularly in the energy industry—so launched the first “co-locating” space specifically for women, the “WB Collective,” earlier this year. Located at 401 St. Joseph St. in New Orleans, WB Collective provides WBEs with temporary office space and a physical address with minimal overhead. “It’s a space where people can come and work for a day, where they don’t have the overhead but get shared office resources and an office environment,” says Phala Mire, president and CEO of WBEC South. Mire’s region includes Louisiana, Mississippi, Alabama, Tennessee and the Florida Panhandle. The initiative has been well received,

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prompting WBEC to open a second facility in Nashville in October. WBEC South also launched “WB Marketplace,” an on-line location for women-owned businesses that is searchable by type of business, skillset, geographic location and other criteria. “This has really taken off, and has been especially needed during the COVID-19 pandemic,” Mire says. “We can now easily connect buyers from anywhere in the U.S. with local WBEs. This gives them a vital online presence.” Mire works closely with oil and gas companies to identify common needs, hoping to connect buyers and WBE suppliers while removing “barriers to entry” for startups. Safety and environmental concerns can become huge barriers “because the standards are so high,” she adds. “We assist with the training around that … with the help of corporate sponsors, who provide insider knowledge. “Oil and gas is a major supporter of our organization, and were the driving force behind both WB Marketplace and WB Collective,” Mire says.

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A CHANGE IN THOUGHT Many Louisiana industrial owners are re-examining outdated thinking and rewriting corporate language that could be considered noninclusive. In the process, they’re hoping to rectify social constructs and historical underrepresentation, and support a job environment where team members have the psychological safety to be open and take risks. They’re also leveraging relationships with minority and contracting communities to foster the collection of internal and external data to assist clients in improving policies, procedures and programs— intentionally increasing the presence and voices of historically excluded individuals. As for women-owned businesses, All says, there have been some decided improvements in the industrial setting. That’s because WBEs have proven themselves to be more agile, creative and quick in making decisions. “They bring a different type of leadership that’s necessary to industrial situations,” she adds. “So often

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NEWS: WORKFORCE

JOB ENVIRONMENT: Many Louisiana industrial owners are working to support a job environment where team members have the psychological safety to be open and take risks.

we can be seen as weak or meek, but employers are beginning to see that there is a certain balance that they bring to the situation.” Participants such as Shell, ExxonMobil, Chevron and others “really care about diversity and inclusion, and they’re really leading the way in trying to force this change,” All says. Some are even changing contractual verbiage with their suppliers

in order to include minority and women-owned firms. “They’re coaching and mentoring other corporations to develop their supplier diversity programs so that they’re not just the leaders but are also helping others manage their own diversity programs,” she adds. “It’s not simply just a good cause— it’s a bottom-line game-changer with some very real benefits in an industrial setting.”

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NEWS: MANAGEMENT

INDUSTRY APPLICATION: The elimination of paperwork, adoption of smart contracts and identification of risk activities are some of the major areas where blockchain could soon show its muscle in the industrial sector.

The promise of blockchain A new industrial consortium tests growing supply chain technology. By SAM BARNES

here have been countless seminars and work sessions on the subject over the last handful of years, but the mention of “blockchain” still produces more head scratching than understanding in the industrial space. Nonetheless, its proponents passionately tout its benefits, particularly in the management of petrochemical, oil and gas supply chains. Put simply, blockchain is a Cloudbased network that provides a streamlined method for processing and managing transactions. Owners using the technology can better mitigate fraudulent activities, manage data collection, conduct global transactions, save time and organize supply chain operations. The system is based on peerto-peer applications, whereby the computers in the network have equal status with no centralized server. That means transactions can be con-

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ducted directly between two or more parties in a protected, distributed digital ledger without third-party intervention. There are some very real benefits for plant operations, and maintenance and turnaround activities, says Peter Dumont, executive advisor at Premier Resources Group and CEO of operating systems developer Prairie Dog in Houston. “Any commodity transaction that is linear or repetitive is perfectly suited for it, including the buying and selling of diesel fuel, delivery of concrete to a jobsite, installing pipelines, etc.,” Dumont says. The beauty of the technology, he says, is that a single company can’t control and own the data. Instead, the data is owned by the “population set” participating in the blockchain. “It’s a multiparty, secure data environment that is immutable. Once you record transactions on a block chain, they’re viewable by multiple

parties that are participating, as long as they have permission. There’s tremendous power around the data and maintaining integrity and trust in the data.” In the process, it can help efficiently manage transactions, encourage a timelier payment process and rapidly “improve the velocity of money as it flows through the supply chain,” Dumont says. OIL & GAS PILOT PROGRAM Several large oil and gas producers are paying close attention to blockchain’s potential. Earlier this year, Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Marathon, Noble Energy, Pioneer Natural Resources and Repsol Shell launched the Offshore Operators Committee Oil & Gas Blockchain Consortium to study and define blockchain use across the industry value chain. During its first pilot this June, the consortium tested its potential in the

automation of water haulage from five Equinor wells in the Bakken field in North Dakota—from readings in the field to invoice payment. In the process, they hoped to achieve greater cost efficiencies, as hauling water from drilling and production operations is an expensive process. It was the first industry-wide use of a blockchain network for produced water haulage. In the end, the pilot—in partnership with blockchain network owner Data Gumbo of Houston—achieved real-time data transparency, accuracy and automation of contract payments. By providing a single record of truth, Data Gumbo’s blockchain network—GumboNet— synchronized data across multiple parties for greater transparency in order to free up working capital, reduce contract leakage and enable real-time cash and financial management. The OOC Oil & Gas Blockchain 10/12 INDUSTRY REPORT • FALL 2020 37

Issue Date: Fall 2020 Ad proof #1

NEWS: MANAGEMENT

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THE SMART MOVE IS LIVINGSTON PARISH TEST RUN: Earlier this year, Chevron, ConocoPhillips, Equinor, ExxonMobil, Hess, Marathon, Noble Energy, Pioneer Natural Resources and Repsol Shell launched the Offshore Operators Committee Oil & Gas Blockchain Consortium to study and define blockchain use across the industry value chain.

Consortium announced the successful completion of its first pilot leveraging blockchain technology. Data Gumbo’s blockchain network was used to automate produced water haulage from field reading to invoice payment. “The results of this pilot prove that nonmanned volume validations can trigger automated payments to vendors, and showcases the opportunities that exist for blockchain to reduce costs, increase efficiency, provide transparency and eliminate disputes in the oil and gas industry,” says Rebecca Hofmann, chairman of the OOC Oil & Gas Blockchain Consortium, in a press release. “This is just the tip of the iceberg for the potential of blockchain in our industry.” Ultimately, the pilot reduced process workflow from 90-120 days to 1-7 days and from 16 to 7 steps— with zero manual intervention. “It’s all about companies knowing their operating expense and reducing it,” says Andrew Bruce, CEO and founder of Data Gumbo in the release. “The pilot produced results that show blockchain delivers the ability to know and lower your costs. More importantly, the results show collaboration among field operations and technology experts to create a deployable and scalable solution.” The consortium next plans to expand blockchain applications to oth1012industryreport.com

er commodities and services, hoping to transform the way operators work with oilfield suppliers and vendors, and how goods and services can be validated in the field to trigger automatic payments and near-real time expense tracking. “Blockchain offers a path to navigate previously convoluted and resource-intensive issues around trust, accuracy and the ability to verify data in the field,” says Eivind Lie Kristensen, Bakken operations production leader at Equinor. JUST LIKE A SMARTPHONE Dumont says the elimination of paperwork, adoption of smart contracts and identification of risk activities are some of the major areas where blockchain could soon show its muscle in the industrial sector. For now, however, a major market disruption hasn’t occurred. Petrochemical owners continue to allow suppliers to maintain separate ledgers, leading to “inefficient, expensive and vulnerable business transactions,” Dumont says. While there are some isolated uses of blockchain, “there’s almost no applications yet in the industrial setting. It’s that new.” He compares blockchain in 2020 to the early years of the smart phone. “It’s still in its infancy, but in five to 10 years it will likely be prevalent across many industries.”

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FOCUS

NATIONAL INSTITUTE FOR OCCUPATIONAL SAFETY AND HEALTH

SAFETY

Big Picture

“A lot of oil and gas workers suffer from insecure work. They might have a job now that might disappear quickly in the next downturn. That can be detrimental to a worker’s overall well-being, as these are major stressors.” DR. CASEY CHOSEWOOD, Director, Total Worker Health Program, National Institute for Occupational Safety and Health

By SAM BARNES

Total Worker Health takes a holistic view of safety.

he National Institute for Occupational Safety and Health coined the term “Total Worker Health” a number of years ago, but it’s largely unrecognized by that name in the Louisiana industrial space. In practice, however, it’s not new at all. TWH focuses not merely on the safety and health of workers, but on their overall well-being. In the process, the initiative addresses a host of job-related factors such as wages, work hours, workload, interactions with coworkers and supervisors and access to paid leave. Dr. Casey Chosewood, who directs the program from the Centers

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for Disease Control and Prevention in Atlanta, says TWH brings together all aspects of work through integrated interventions that collectively address worker safety, health and well-being. While the principals of TWH aren’t necessarily new to local industry, Chosewood hopes to unify owners around the TWH concept. NIOSH is particularly interested in industrial and contract workers who are vulnerable because of the type of work that they do. That could include the health effects of “gig” work or stresses of insecure employment. “These are places where a lot of risk exists already,” he adds. “A lot of oil and gas workers suffer from insecure work.

They might have a job now that might disappear quickly in the next downturn. That can be detrimental to a worker’s overall well-being, as these are major stressors.” Recognizing that there is an awareness disconnect in some regions, NIOSH regularly presents TWH concepts to safety organizations, safety engineers and national safety associations. And the momentum is building. “I think the best evidence is the growth of our affiliate program from a handful to more than 50,” Chosewood says. “We also have more speaking requests than we can keep up with, and there’s a growing number of subscribers (currently at 70,000) to our emails.

There’s definitely momentum and growth.” NIOSH regularly funnels money to TWH research institutions, dubbed Centers for Excellence of Total Worker Health, with the next round of funding scheduled in 2021. There are currently six of the facilities across the country. “It’s very likely that some folks in the South will be applying for this next round,” Chosewood says. There are also 50 TWH “affiliate” programs that provide a vital link between the research and “in the field” applications. Affiliates can either be nonprofit, public sector organizations or private companies. For example, the University of Texas 10/12 INDUSTRY REPORT • FALL 2020 41

The Greater Baton Rouge Industry Alliance is proud to announce the winners of the 2020 Safety Excellence Awards. Since 1996, GBRIA has brought together members of the industrial community to celebrate the achievements of both our member companies and the industrial contractors who perform the critical work necessary to keep our facilities safe and efficient. This year will be one for the record books, in more ways than imaginable. GBRIA was set to host our annual safety excellence awards banquet in April of this year, right as the world responded to the threat of COVID-19. Out of an abundance of caution, the in-person event was canceled, but that did not stop our desire to showcase the nominees and award winners so their hard work did not go unnoticed. This year’s Safety Excellence Awards program represents 48 nominated contractors from 37 member plants. The nominees represent contractors involved in every facet of plant operations and all boasted impressive safety records over the past year. GBRIA published a 2020 GBRIA Safety Excellence Awards Magazine that can be viewed on www.gbria.org.

Westgate, LLC: Hal G. Ginn Award, GBRIA’s highest Safety Excellence Award and 1st Place, Specialty Trade Hard Craft Category, Division I. Pictured: Jerry Lebold, BASF, GBRIA Board Member; Kevin Venerable, Westgate; Bud Campbell, Westgate; Tim Thigpen, Westgate; Randy Adams, Westgate; and Darylene Harris, Shell Catalyst, GBRIA Board Member.

Primoris I&M: 1st Place, General Construction & Maintenance Category, Division I. Pictured: Darylene Harris, Shell Catalyst, GBRIA Board Member; Steve Welch, OxyChem Convent, GBRIA Board Member; Wade Moore, Primoris; Larry de la Bretonne, Primoris; and Neil Broussard, Primoris.

HydroChemPSC: 1st Place, Technical Support Category, Division III. Pictured: Jerry Lebold, BASF, GBRIA Board Member; Darylene Harris, Shell Catalyst, GBRIA Board Member; Dwayne LeBlanc, HydroChemPSC; Michael Puma, HydroChemPSC; Michele Ramagos; HydroChemPSC; Ronald Lewis Jr., HydroChemPSC; Dillon May, HydroChemPSC; Angela Zeringue, ExxonMobil, GBRIA Board Member; and Steve Welch, OxyChem Convent, GBRIA Board Member.

THE FOLLOWING COMPANIES ARE GBRIA’S 2020 AWARD RECIPIENTS: General Construction & Maintenance DIV I: 1st Place: Primoris I&M Division 2nd Place: Turner Industrial Maintenance, LLC 3rd Place: Thompson Industrial Services, LLC DIV II: 1st Place: Specialty Welding and Turnarounds 2nd Place: Cajun Industries, LLC 3rd Place: Repcon, Inc. DIV III: 1st Place: Brown & Root Industrial Services, LLC 2nd Place: Performance Contractors 3rd Place: Worley Field Services

Specialty Trade (Hard Craft) DIV I: 1st Place: MasterVac Industrial Services 1st Place: Westgate LLC

2nd Place: Midwest Cooling Tower Services 3rd Place: Thermon, Inc. DIV II: 1st Place: ISC Constructors, LLC 2nd Place: Triad Electric & Controls 3rd Place: JVIC (A Zachry Group Co.) DIV III: 1st Place: MMR Constructors, Inc. 2nd Place: TEAM Industrial Services, Inc. 3rd Place: Johnson Controls Inc.

Specialty Trade (Soft Craft) DIV II: 1st Place: IRISNDT 2nd Place: Petrin LLC 3rd Place: Iberville Insulations, LLC DIV III: 1st Place: Apache Industrial Services

2nd Place: BrandSafway 3rd Place: Brock Services, LLC

Technical Support DIV I: 1st Place: BGS, LLC 2nd Place: CDI Engineering Solutions 3rd Place: Austin Fire Systems DIV II: 1st Place: Premium Inspection and Testing 2nd Place: Acuren Inspection 3rd Place: Petroleum Services Corporation DIV III: 1st Place: HydroChemPSC 2nd Place: Total Safety, U.S. Inc.

Crane & Rigging DIV I: 1st Place: Bengal Crane & Rigging DIV II: 1st Place: Deep South Crane & Rigging, LLC

Community Service Award Brown & Root Industrial Services

Hal G. Ginn Safety Award of Excellence Westgate LLC

Commercial Construction 1st Place: Arkel Constructors

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42 10/12 INDUSTRY REPORT • FALL 2020

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FOCUS: SAFETY

“You can invest upfront, in the middle or at the tail end. Upfront investment is far more efficient. Invest in the worker early on before something becomes an issue.”

DON KADAIR

DR. LUKE LEE, Medical Director, PRIME Occupational Medicine

at Houston, an academic affiliate, sponsors a TWH degree program focused on training safety officers, occupational health nurses and safety engineers. Other affiliates implement TWH practices into their workspaces. NASA, for example, uses a TWH approach to improve the health of its workforce, ranging from safety compliance to facing challenges at home to sleep and stress issues. “Along the way, we offer advice and assistance, and they share their best practices with us,” Chosewood says.

SUITED FOR INDUSTRY Corporately, major industrial players such as Chevron and Dow Chemical train their safety leaders on the TWH concept, developing policies, programs and practices that integrate protection from work-related safety and health hazards with the promotion of injury and illness-prevention efforts to advance worker well-being. Dow has identified employee safety and health as a strategic priority for the company, and is currently seeking to incorporate TWH

TOTAL WORKER HEALTH DEFINED

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TWH focuses not merely on the safety and health of workers, but on their overall well-being.

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to advance the well-being of its employees. Thomas Bender, Dow’s occupational physician and epidemiologist in Midland, Michigan, says in a statement that employee health is essential to the company’s sustainability. In fact, Dow includes TWH implementation in its 2025 Sustainability Goals and reports regularly on its progress. Dow’s TWH strategy includes three interdependent elements— “Healthy Culture,” which addresses flexible work options, leadership behaviors, return-to-work and matching the right people to the right job; “Healthy Workplace,” which aims to reduce chemical, physical, biological and ergonomic stressors and emphasizes the hierarchy of controls; and “Healthy People,” which monitors the reduction in health risks and includes preventive and occupational health metrics. To monitor its progress, Dow conducts medical and population surveillance and has systems in place for continuous improvement. The company’s website reports that it has achieved 16% of its 2025 sustain-

ability goal, and attributes some of the success to reductions in injury and illness rate and a successful start of the TWH Index. At Baton Rouge’s PRIME Occupational Medicine, TWH goes by another name—Workforce Health and Safety Management—but takes a similarly holistic approach. Luke Lee, medical director, says PRIME has challenged the traditional occupational model by focusing on a worker’s overall health. About 70% to 80% of PRIME’s customers work in the industrial market, including both contractors and owners. In that setting, they manage the entire workforce, with contracts as small as a single warehouse to thousands of employees scattered across the country. In the process, PRIME educates workers in a holistic manner and participate in the development of safety programs that address health and well-being. “We help owners draft and review their safety policies, review their safety policy implementations etc.,” Lee says. Through Workforce Health and 10/12 INDUSTRY REPORT • FALL 2020 43

Safety Management, PRIME focuses on preventing injuries and determining if workers are fit for duty. “Is the worker equipped for the job he is selected to do. Then we help the employer maximize an employee’s wellness, maintaining that fitness. “It’s much more economically efficient if we can help an employee stay fit in order to improve his job function, or move up to his next job or promotion.” Sean Conner, vice president of business development at PRIME, says the company can can manage worksites with 12,000 to 15,000 workers. Most recently, they’ve staffed projects at mega-projects located at Sasol and Cameron LNG in the Lake Charles area. When it comes to major capital projects, PRIME is typically brought in early. “We believe in comprehensive management, so early engagement is helpful to the process,” Conner says. “We do the physicals, we do the drug screening … we’ll check that employee to make sure they’re capable to do the job. That way, they’re

ISTOCK

FOCUS: SAFETY

ADVANCING WORKER WELL-BEING: Corporately, major industrial players such as Chevron and Dow Chemical train their safety leaders on the TWH concept, developing policies, programs and practices that integrate protection from work-related safety and health hazards with the promotion of injury and illness-prevention efforts.

less likely to get injured.” Lee says owners have a choice to make in regards to safety—pay a little now or a lot later. “You can invest upfront, in the middle or at the tail end,” he says. “Upfront investment is far more efficient. Invest in the worker early on before something becomes an issue.”

He says petrochemical owners should view safety collectively, across multiple departments, for real change to occur. “Historically, the safety team, medical team, human resources are all functioning separately (in the realm of safety), but I find that frustrating. They should be looking at everything together.”

NIOSH’s Chosewood says it all fits into the dream and hope of the TWH approach. “We believe that well-designed and high-quality work that enhances a worker’s well-being,” he says, “will enable them to go home at the end of the day with more health than when they arrived.”

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FOCUS: SAFETY

Safety first

By SAM BARNES

Five decades after the birth of OSHA, Louisiana’s injury rates continue to decline.

LESSONS LEARNED: Louisiana’s safety conciousness is rooted in history. Industrial disasters serve as valuable lessons and the basis for precise safety methodologies.

ive decades have passed since President Richard Nixon signed the act into law to create the Occupational Safety & Health Administration and National Institute for Occupational Safety and Health. It’s hard to dispute the wisdom of the decision, as the national rate of nonfatal workplace injuries and illnesses has declined significantly over the years from 10.9 cases per 100 full-time employees in 1972 to 2.8 cases in 2018. And although Bureau of Labor Statistics data have shown a troublesome leveling off of national injury rates, Louisiana’s rates continue to decline. The rate of total recordable cases in the state fell from 2.2 per 100 workers in 2016 and 2017, to 2.1 in 2018, the most recent available data. Greg Satterfield, a 40-year safety veteran and current senior safety engineer at LyondellBasell in Westlake, isn’t surprised. He says the Gulf Coast industrial market has become

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exponentially more proactive in its approach to safety than it was when he entered the workforce. “Back in the day, going a year without a lost time accident was a milestone,” Satterfield says. “Now, if you have one OSHA recordable it’s a big deal.” The formation of OSHA was critical, to be sure, but other factors have facilitated the change, including a shift from a union to “open shop” work environment and a realization by owners that working safely can help their bottom line. Ed Flynn, CEO of Catalyst Consulting Services LLC of New Orleans, says contractors and industrial owners used to have an “us versus them” relationship, rather than a collaborative one. That’s all changed. “We’re now on the same team,” says Flynn, formerly vice president, health, safety and security for the Louisiana Chemical Association. He now provides analysis, intelligence and solutions to public and private sector clients. “Owners, employees and contractors now share infor-

mation, work together and partner for safety … it’s a joint collaborative partnership, and that’s been enormously valuable.” Kathy Trahan, president/CEO of Alliance Safety Council in Baton Rouge, says Louisiana is more safety focused than other states “because so many citizens work in the industrial sector or a related industry that serves those sectors.” Governmental regulations have also played a big role. Trahan says the most significant impact, perhaps, has been the proactive execution of OSHA’s Process Safety Management requirements (initiated in 1992) by area plant leaders. “And if contractors want to work in that arena they must adhere to owner safety requirements, e.g. awareness-level training, site-specific training, hazard recognition, drug and criminal background screening,” she adds. Safety councils have been major contributors in that regard. Trahan says Alliance Safety Council’s signature programs focus on the practi-

tioners and frontline supervisors, as “they are the ones who inevitably set acceptable behaviors for both safety and productivity.” LEARNING FROM HARD LESSONS Louisiana’s safety consciousness is rooted in history. Industrial disasters at Bhopal, India, Texas City, Deepwater Horizon and elsewhere haven’t been forgotten, but are instead remembered and used as valuable “lessons learned.” As such, LyondellBasell and others have implemented precise methodologies for carrying experiences, near misses and other lessons from one job to the next. “All of that information is sent up the ladder, and depending on its significance is shared nationwide,” Satterfield says. Safety-related information is also collaboratively shared with other plants through the Louisiana Chemical Association and other industry groups. Put simply, Louisiana’s industrial owners work smarter than they did the past, Satterfield 10/12 INDUSTRY REPORT • FALL 2020 47

says. “At one time, it was all about production, quality and safety, in that order,” he adds. “They’re now all intertwined. You can’t have good performance in any of those three areas without having success in the others.” LyondellBasell has a robust management system, dubbed “Operational Excellence,” that’s designed to ensure continuous improvement and sustainability, and the CEO down to the craftsmen in the field are involved in the process. “We look at it on a daily basis, measure the performance and report it out to everyone so we all know how each facility is performing based upon our key performance indicators,” he adds. The same is expected of Lyondell’s construction workforce and reinforced by a handful of safety councils in the area. “The entire workforce has to be engaged, and new employees need to know the importance of being safe.” Flynn says Louisiana’s industrial space has created a culture of safety built around day-to-day, shift-to-

COLLIN RICHIE

FOCUS: SAFETY

SAFETY CULTURE: Kathy Trahan, president/CEO of Alliance Safety Council in Baton Rouge, says Louisiana is more safety focused than other states “because so many citizens work in the industrial sector or a related industry that serves those sectors.”

shift communication. It’s a two-way street that works only if an owner combines good safety protocols with positive behavioral reinforcement. “I think it’s all about the way that safety is talked about,” Flynn adds. “Safety isn’t just a priority … safety is an expectation, an unwavering obligation … a condition of employment.” The contractor community has become empowered in the process. Today, if a crew worker identifies a risk, they have the authority to stop work. “Years ago, contractors might

have seen something but didn’t say anything because they didn’t want to jeopardize their employment,” Flynn says. “Today, everybody on the team wants a safe working condition.” Of course, any effective safety program must have buy-in from management. A “sense of vulnerability” is also crucial, Flynn adds. “The best leaders I’ve seen over my decades understand the hazards of their processes and materials and are aware of symptoms of weakness, aka near misses or those things that might hint at a more serious event.”

A WARNING FOR THE ‘NEW NORMAL’ That sense of vulnerability is particularly important during the “new normal” of COVID-19. Alliance Safety Council’s Trahan says owners have doubled down on safety processes and procedures in response to the pandemic. “They have continued to direct the activities on their facilities to support a safe work environment regardless of production delays,” she adds. And as everyone returns to work, she warns against a tendency to give safety a back seat. “We have to keep an eye out for and lend a hand to those workers who are entering our industry for the first time or switching work environments,” she adds. “Hazard recognition is even more critical. Working in new environments on new equipment lends itself to the likelihood of incidents and accidents increasing. Reorienting oneself to a new work situation takes time. “You have to arrive with a fresh set of eyes if you are to stay aware of workplace hazards.”

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

Company

SPOTLIGHTS Bengal Transportation Highway Transport

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10/12 INDUSTRY REPORT • FALL 2020 51

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

BENGAL TRANSPORTATION HISTORY

For more than 25 years, Bengal Transportation Services has been an industry leader providing customized crane, logistics and transportation turnkey services. Bengal treats every client like family, and provides the stability, predictability and know-how that clients expect. The company’s goal is to create long-term trusting relationships with every client.

COMPANY CULTURE

This year, Bengal Transportation has helped to keep grocery shelves filled, hospitals stocked, restaurants cooking and communities fed, thanks to the hard work, sacrifice and dedication of its essential team of workers. Bengal’s “essential” work doesn’t stop with the pandemic. It has been on the ground since the morning after Hurricane Laura hit the Lake Charles area—working with power companies and contractors for disaster recovery. Bengal’s commitment to Hurricane Laura victims extended to the community, coordinating events that fed more than 10,000 people in September, and more planned for October. 52 10/12 INDUSTRY REPORT • FALL 2020

WHAT WE DO

Bengal Transportation provides win-win solutions for every heavy lifting or special transport challenge. Bengal offers services in a variety of markets and has a solid track record of delivering the highest quality results on budget and on schedule.

TOP EXECUTIVES Shane Tubre, Owner John Austin, President Torey Tubre, Vice President of Sales Bryan Vige, Vice President, Crane and Rigging

SERVICES:

• Complete turnkey solutions • Crane and rigging services • Heavy haul and heavy lift • Heavy transportation solutions • Logistics planning • Specialty projects • Turnarounds • In-house project engineering • Project management • New plant construction and expansions • Heavy equipment repairs • Heavy equipment maintenance • Extensive specialized fleet

YEAR FOUNDED 1995

NUMBER OF EMPLOYEES 125

HEADQUARTERS 37156 Highway 30 Geismar, LA 70734 225.677.8890 Bengaltransport.com

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

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10/12 INDUSTRY REPORT • FALL 2020 53

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

HIGHWAY TRANSPORT OUR PHILOSOPHY

To continue to be the leading bulk transportation and logistics organization utilizing leading technology. Highway Transport is people-oriented and customer driven, providing qualified trained personnel to surpass customer requirements.

HISTORY

Highway Transport has service centers in: Knoxville and Chattanooga in Tennessee; LaPorte, Freeport and Garland in Texas; McDonough, Georgia; Croydon and Pittsburgh in Pennsylvania; Florence, Kentucky; Joliet, Illinois; Wyandotte, Michigan; Geismar and Lake Charles in Louisiana; and Rock Hill in South Carolina.

COMPANY CULTURE

With a transportation industry legacy founded by the Watkins family in 1932, Highway Transport comprises an agile network of people, facilities and equipment. Its team of experts in the chemical and transportation industry is empowered to provide assurance, prioritize safety and create innovative supply chain solutions for logistics partners in the U.S. and Canada.

Highway Transport has a family culture that values open communication and is committed to investing in the development of its employees and delivering its promise of excellence. The company is defined by strong ethics, individual responsibility and accountability with continual improvement in a dynamic global environment.

WHAT WE DO

Highway Transport provides solutions to the chemical industry, including transportation and logistics services, and the company is recognized by customers and the industry for its dedication to safety, service, community and sustainability. Highway Transport’s proprietary, customer-focused technology provides transparency throughout the supply chain. Highway

Highway Transport is a Knoxville, Tennessee-based company that provides bulk transportation of specialty chemicals. The tanker fleet operates from 14 service centers in major chemical manufacturing areas across the country with a fleet of more than 400 tanker tractor trailers. 54 10/12 INDUSTRY REPORT • FALL 2020

RECOGNITION

TOP EXECUTIVES Marshall Franklin, President and CFO Christy Williams, Senior VP of Sales and Marketing Rick Lusby, VP of Safety and Quality Larry Edwards, VP of Fleet and Maintenance Matthew Powell, VP of Transportation Operations

YEAR FOUNDED 1948

NUMBER OF EMPLOYEES 533

HEADQUARTERS 6420 Baum Dr. Knoxville, TN 37919 865.584.8631 hytt.com

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

Highway Transport recently opened the Geismar Service Center, a $12.5 million project.

Transport was recently honored to receive the Responsible Care® Partner of the Year Award. The Responsible Care® organization recognizes partners with superb performance and safety records involved in the transportation of chemicals.

GOOD WORK

Highway Transport has opened a $12.5 million flagship service center in Geismar, which will serve the needs of its current and growing customers across the Gulf Coast region and will lead to the creation of up to 150 local jobs. The new service center expands the chemical transportation company’s presence in the Gulf Coast, positioning Highway Transport to serve several nearby prominent and growing chemical companies in the region and safely transport their chemical products throughout the country. This is Highway Transport’s 14th service center in the U.S. and it opens after a year-long, multi-phase project. The Geismar Service Center is expected to grow quickly and will eventually include 100 drivers, 20 mechanics, 20 tank wash positions and 10 office staff members. 1012industryreport.com

10/12 INDUSTRY REPORT • FALL 2020 55

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INSIGHT

CONNIE FABRÉ

OVID-19 has impacted the nation and the Baton Rouge region profoundly and industrial sites in the area responded to the emergency in many ways. Despite most facilities being critical infrastructure that had to continue producing, plants responded by slowing some construction and maintenance that could be deferred safely to focus on keeping their direct employees safe. In addition, many “non-essential” workers were asked to work from home. Necessity being the mother of invention, plants reacted quickly to defend their workers from the virus. Of course, they followed guidance from the Centers for Disease Control, Occupational Health and Safety Administration and others, and tapped into the innovation of their employees. Over the last few months, the Greater Baton Rouge Industry Alliance gathered the best experts in the industrial community from area facilities, contract maintenance and construction companies, medical and safety providers and held a

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series of workshops and listening area quickly ran short on supplies and donated thousands of dollars to meetings. The association then for masks, face shields, gowns, support efforts to fight COVID-19. developed a comprehensive guide to gloves, and sanitary wipes. Industrial Many of the area plants make help the industrial community bring sites also ran dangerously low on chemicals that go into medical more workers back to work at full hand sanitizer and other personal equipment, personal protective gear, capacity. protective gear, but many made the and clear barriers, which have been Now, as Louisiana moves at press effort to share and donate with the erected in many public and retail time into Phase III of reopening, front-line healthcare workers up and locations. The outlook for business plants are bringing more and more down the Mississippi River, collaboseemed bleak this past spring, save workers back on-site, and GBRIA’s rating with other area organizations for supplying products to fight new guide is helping plants decrease such as One Louisiana Now, LouCOVID-19; however, over the sumthe spread of COVID-19. The isiana State University, the Baton mer, more and more plants began to guide provides advice in the areas Rouge Area Chamber and more. see an improvement in their business of 1) Site Entry Requirements, 2) One Louisiana Now even made and hired back many contractors. Performing Work, and 3) Social face shields for New Orleans with GBRIA’s Quarterly Plant ManDistancing and Sanitization with common plastic sheet protectors for ager’s Forecast sank to 22 in the several sub-categories under each a while until more sturdy supplies second quarter, a level not seen since area. In addition to wearing face were donated by Formosa Plastics 2009. In the third quarter, there masks, there are many new strategies and made hospital gowns with was an uptick in the forecast to 35, that have been put in place to keep sheeting donated by Lamar Adwhich still indicates a contracting workers safe. vertising’s billboard plastic. Exxoneconomy since the number is below GBRIA encourages all industrial Mobil and others made or bought 50, but it seems to indicate progress sites, their suppliers and contracand donated thousands of gallons toward recovery and that living in a tors and other related or similar of hand sanitizer and donated it to “new normal” is possible. industries to view and implement community organizations. Many Connie P. Fabré is the executive strategies in the guidance document, plants and contractors cooked for director of the Greater Baton Rouge which can be found on GBRIA’s hospitals, provided meals and treats Industry Alliance Inc. website. Industrial sites and contract companies also donated many supplies to area schools and hospitals. Schools needed laptops and internet connectivity for students suddenly sent home to learn in midMarch. Plants donated time, expertise, and money to ensure that every child in neighboring schools had what was needed to complete online learning. Hospital workers in the Baton Rouge and especially New Orleans ExxonMobil donated 10,000 gallons of hand sanitizer to the U.S. military. 10/12 INDUSTRY REPORT • FALL 2020 57

PHOTOCREDITGOESHERE

Industry steps up to respond to the COVID-19 threat

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 Linde World-Scale Hydrogen Plant

$250M | 15 jobs Location: St. James Parish Status: 2021

2 Entergy

$211M | 20 jobs Location: New Orleans East Status: Under construction

3 Kinder Morgan Louisiana Pipeline expansion

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

4 IMIT terminal upgrades

$150M | N/A Location: St. Charles Parish Status: N/A

5 Delek Refinery

$150M | 30 jobs Location: Krotz Springs Status: 2024 completion

8 Dow polypropylene production expansion $119 M | 8 jobs Location: Plaquemine Status: In production by the end of 2021

9 Dow polypropylene production expansion

$119 M | 8 jobs Location: Plaquemine Status: Production begins Q4 2021

10 Cornerstone hydrogen cyanide plant

$100M | N/A Location: Jefferson Parish Status: Pending

11 BASF Phase 2 MDI Expansion

$87M | Jobs N/A Location: Ascension Parish Status: Pending

6 BASF

12 Huntsman/Rubicon

7 Shell Norco

13 Eastman Expansion

$150M | 15 jobs Location: Ascension Parish Status: N/A $150M | NA Location: St. Charles Parish Status: In progress

$78M | 17 jobs Location: Ascension Parish Status: Pending

RED RIVER

DESOTO

14 ExxonMobil upgrades

NATCHITOCHES

$50M | N/A Location: Baton Rouge Status: Q1 2019 start

SABINE

15 IGP Methanol Plant

$45M-$48M | 325 jobs Location: Plaquemines Parish near Myrtle Grove Status: Pending

16 Epic Piping unnamed expansions $40 M | N/A Location: Louisiana, Texas, Abu Dhabi Status: N/A

VERNON

17 Veolia Regeneration Plant Expansion

$40 million | 29 jobs retained Location: Burnside Status: Pending

BEAUREGARD

18 Port of South Louisiana improvements $37.8M | N/A Location: Port of South Louisiana Status: In progress

$70M | 5 jobs Location: St. Gabriel Status: Pending

CALCASIEU

CAMERON

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UNION

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

OUACHITA

RICHLAND MADISON

JACKSON

FRANKLIN

CALDWELL

TENSAS WINN