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FOURTH QUARTER 2016

INDUSTRYREPORT

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of industry’s most influential leaders on the corridor

PLUS:

• Capital Region: After the flood • 2017 industrial outlook • FOCUS SECTION: Safety


• 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. 2016. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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HEAVY CONSTRUCTION EQUIPMENT

SPECIALTY ATTACHMENTS

RENTALS AND SALES Bottom Line Equipment focuses on heavy construction equipment needs of every major section of the construction industry along the Gulf Coast including:

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Over 30 years of providing the highest quality and most reliable Onsite Field Machining, Mechanical & Fabrication services in the industry

SERVICES FIELD MACHINING Flange Facing | Line Boring | Milling Drilling & Pipe Cutting | Beveling MECHANICAL Equipment Installation | Repair & Maintenance Laser Shaft Alignment | Consulting (In house and on-site) MACHINE SHOP General Machine Shop Services | CNC Parts Custom Parts & Repairs FABRICATION Fabricated parts including structrual and piping, weld repairs, overlays, common and exotic materials and alloys LASER INSPECTION Part and/or component inspection | Comparison to CAD drawing | Highly accurate measurment

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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CONTENTS

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Publisher: Rolfe McCollister, Jr. EDITORIAL Editorial Director: Penny Font Editor: Jerry Martin Director of Research: Sierra Crump Contributing Writers: Sam Barnes, Erin Z. Bass, Jen Bayhi-Gennaro, David Jacobs, Meredith Whitten Contributing Photographers: Lee Celano, Terri Fensel, Cheryl Gerber, Don Kadair, Collin Richie

of industry’s most influential leaders on the corridor

DON KADAIR

LAUNCH

10

ICYMI Industry briefs and other intelligence

16

New products

18

The big picture A massive ammonia plant in Jefferson Parish is now in operation.

24

27

PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Van Vu Graphic Designers: Tammi deGeneres, Melinda Gonzalez, Rachel Parker, Emily Witt ADMINISTRATION Chief Financial Officer: Jonathan Percle Chief Innovation Officer: Curtis Heroman Business Manager: Adam Lagneaux Business Associate: Lydia Spano Office Coordinator: Debbie Lamonica Courier: Jim Wainwright Receptionist: Cathy Brown

PAGE 28

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ADVERTISING Special Projects Manager: Jennifer Finley Account Executives: J.C. Applewhite, Angie LaPorte, Michelle Lawrence, Rebecca Robinson Marketing Director: Jennifer Guillot Advertising Coordinator: Lacie Thibodeaux Community Liaison: Jeanne McCollister McNeil

Update There’s a change in the skyline for quiet Cameron Parish. Project profile Indorama Ventures appears ready to move ahead with its unique brownfield project in Carlyss. People Meet David Rentrop, Operations Director, W.R. Grace, Lake Charles Plant

34

40

43

NEWS

53

A flood like no other Though not inundated with floodwaters themselves, corridor industrial plants faced “epic” challenges after the storm of 2016. Mission: Job creation Chennault International Airport in Lake Charles is a unique industrial development engine. 2017 industry outlook The chemical industry is cautiously optimistic as the price of oil slowly rises.

46

Riding a new wave New marine applications and rising Chinese demand are fueling hopes of a new boom for methanol makers.

48

Creating a culture of safety How do corridor companies do it? Leadership and people skills are key.

FOCUS: SAFETY

58

Safe passage An industry coalition and freight railroads disagree over who should determine new tank car standards.

INSIGHT Columnists weigh in on the controversy over oil and gas lawsuits and the importance of valuing our energy infrastructure.

CLOSING NOTES

60

Executive moves

62

Company news

66

Project maps Our maps of the megaprojects and medium-sized projects that are driving the industrial boom.

70

My toughest challenge Glynn Fontenot, Methanex

ON THE COVER: Clockwise, from top right, are Joe Andrepont, John Pacillo, Brent Wood and Rhoman Hardy.

AUDIENCE DEVELOPMENT Audience Development Coordinator: Kenna Maranto A PUBLICATION OF LOUISIANA BUSINESS INC. Chairman: Rolfe H. McCollister, Jr. President and CEO: Julio A. Melara Executive Assistant: Millie Coon SUBSCRIPTIONS/CUSTOMER SERVICE 9029 Jefferson Hwy., Suite 300 Baton Rouge, LA 70809 225-421-8140 • FAX 225-928-5019 1012industryreport.com email: circulation@businessreport.com Volume 1 - Number 4

© Copyright 2016 by Louisiana Business Incorporated. All rights reserved by LBI. 10/12 Industry Report is published quarterly by Louisiana Business Inc. Reproduction without permission is prohibited. Business address: 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809. 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.

Send your ideas and company news to editor@1012industryreport.com. 6

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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IN THIS ISSUE

The corridor’s industry leaders

J PENNY FONT EDITORIAL DIRECTOR

im Bernhard. John Pacillo. Rhoman Hardy. Larry DeRoussel. Art Favre. Tracy Case. Mike Thomas. Brent Wood. Eddie Rispone. You recognize the names. They are among the leaders who make industry hum along the 10/12 corridor. For this quarter’s cover story, we asked an array of economic development and industry groups to recommend creators, change agents, team-builders and decision-makers in south Louisiana. The 21 featured in this issue are leaders in the workplace and in the community. And their stories are compelling. There’s Joe Andrepont, who began his career as a pharmacist, and his job at K&B Drugs proved to be a great training ground for his role in community service and public affairs at Westlake Chemical. He now has a legacy as a proponent of industry that spans decades. There’s also Hyun Brossett at W.R. Grace, who moved to the U.S. from South Korea as a teenager. And Jonathon Shi, who led the Louisiana Chemical Manufacturing Initiative, which brings federal resources to Louisiana to enhance the chemical manufacturing ecosystem. Read about those industrial leaders and others beginning on page 28. HACKBERRY HUB The Cameron skyline is a-changing. The sleepy unincorporated community of Hackberry—population 1,261 at last count—is now a veritable hub of activity, with 4,500 construction workers and more than 75 cranes building Cameron LNG. The project—backed by San Diego-based Sempra LNG & Midstream and its partners—is one of about eight announced LNG projects in the Lake Charles area. Work on these three liquefaction trains is projected to end in 2018. Take a look at this large-scale initiative on page 22. FLYING HIGH What do you do with a shuttered Air Force base? The City of Lake Charles turned theirs into a catalyst for industrial development and job creation. The Chennault International Airport has had an estimated total economic impact of $6 billion since its founding. Local voters recently approved a 10-year property tax for development by a 2-to-1 margin. And now Chennault is looking

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

at a proposed $257 million expansion that would include an air cargo facility on 220 acres now occupied by an adjacent golf course. Read more of the Chennault success story on page 40. DOUBLE CHALLENGE Anyone who has been involved in the construction of a plant knows what a challenge it can be. So imagine being tasked with building and starting up two of them—with less than a year between. Methanex plant manager Glynn Fontenot moved two methanol plans from Chile to Ascension Parish—and is sharing the challenges he overcame in our recurring feature, “My Toughest Challenge.” A hint at what made it work: modules. “Usually, you build a plant and you don’t do anything like that for another 20 to 40 years,” he notes. “We did it twice, within a year of each other.” Read his tips and takeaways on page 70. NEW TO ‘10/12 INDUSTRY REPORT’ In this edition of 10/12 Industry Report, we begin a new section called Focus. It’s designed to analyze key industry issues and bring you best practices on topics that are importance to you. This first installment focuses on safety. We interviewed executives at corridor companies known for their safety records to get their secrets for ensuring a safe workplace. We also took a deeper look at the ongoing battle over industry standards for tank cars. The Association of American Railroads wants rules that exceed those of the Pipeline and Hazardous Materials Safety Administration—a move opposed by a coalition representing chemical, gas, fertilizer and other industry groups. The outcome of the debate is particularly pertinent to Louisiana producers: The state ranks second in the country for the number of chemicals transported by rail and first for the amount of crude oil transported. Check out both stories in our Focus section, which begins on page 48, as well as Associated Builders and Contractors Chief Economist Anirban Basu’s column on workplace safety on page 57. TALK TO US We want to hear your ideas and company news. Send them to editor@1012industryreport.com. If you have other decision-makers in your company who should receive this free publication, tell them to sign up at 1012industryreport.com/signup.

1012industryreport.com


• 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. 2016. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

ITI-USA These programs are applicable to the new hires and in-service training. A team from ITI-USA will custom design a program in any of the following areas: INSTRUMENT MAINTENANCE PROCESS ANALYZER TRAINING

Technical College Family owned & operated technical college Been in business since 1973 in Baton Rouge Industry driven curriculums with industry experienced instructors Accredited by the Accrediting Commission of Career Schools & Colleges

ELECTRICAL MAINTENANCE\PLC\TROUBLESHOOTING INDUSTRIAL ELECTRONICS MECHANICAL MAINTENANCE\MILLWRIGHT PROCESS OPERATIONS\PLANT EQUIPMENT OFFICE ADMINISTRATION\SOFTWARE APPLICATIONS\CPU SKILLS AIR CONDITIONING AND REFRIGERATION

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ITI Technical College Assuring employers in Louisiana and the nation in finding qualified, professionally trained and skilled candidates in the following fields: CONSTRUCTION PROCESS TECHNOLOGY HVAC ELECTRICAL AUTOMATION AND ELECTRONIC SYSTEMS TECHNOLOGY TECHNICAL DRAFTING/CAD INFORMATION SYSTEMS TECHNOLOGY OFFICE ADMINISTRATION

ITI Technical College: 225-752-4233 | www.iticollege.edu ITI-USA: 225-755-6300 | www.itiusasolutions.com 1012industryreport.com

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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LAUNCH ICYMI

ITEP update A CONTROVERSIAL executive order signed by Gov. John Bel Edwards earlier this year imposing stricter standards on the state’s 80-year-old Industrial Tax Exemption Program will only apply to new applicants—not renewals, according to a series of rules hashed out in late October by a committee of the Board of Commerce and Industry with the blessing of the governor. The distinction is significant. On June 24, Edwards signed an executive order tightening the generous ITEP program, which for decades has provided manufacturers a fiveyear break with an automatic fiveyear renewal on local property taxes. The governor’s order brings the program more in line with those of other states, tying the tax break to job creation and giving local governments more say over whether to grant the tax break to manufacturers

in their communities. But four months later, the Board of Commerce and Industry, which oversees the program, had yet to implement the changes. That’s in part because of questions over whether the order applied to renewals or only new applicants. Some $11 billion worth of exemptions are currently up for renewal. At the board’s last meeting Sept. 12, industry representatives made the case that it isn’t fair to change the rules of the program midstream, while community activists from Together Louisiana argued that local governments desperately need the tax revenues from the program. At the time, Edwards’ appointee to the board, former state Sen. Robert Adley, said he and the governor believed the executive order should apply to renewals.

After hours of testimony, however, the board deferred a vote on most of the applications. In the weeks following, the governor was lobbied hard by both sides. In the end, he met with representatives from Together Louisiana and explained that he is siding with industry on the issue of renewals. “In the meeting, he made it really clear he agreed with them and that he would like this (change) to apply to renewals but he has to balance competing interests,” Adley says. “He told them he feels very strongly that based on what was told to these businesses, Louisiana has a commitment to them and cannot be perceived as not keeping its word and not being dependable.” The board’s rules committee also met to clarify the new regulations

WHAT’S UNDERWAY VS. WHAT’S POTENTIAL? Industrial projects announced since 2012

$80 Built/Underway

COST (BILLIONS)

$70 Potentials

$60 $50 $40 $30 $20 $10 0

STATE

LAKE CHARLES MSA

BATON ROUGE MSA

NEW ORLEANS MSA

Source: Loren C. Scott & Associates, Inc., & GBRIA

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

governing the program. Under the changes, applicants will be required to show job creation figures, local governments will have more say over whether to grant the tax breaks and by how much, and renewals will only be granted for three years and up to 80%. The rules will also crack down on the types of manufacturing activities that qualify for the exemption and will no longer allow the break for miscellaneous capital additions. Together Louisiana organizer Broderick Bagert says his group is disappointed the order will not extend to renewals, adding the group is satisfied overall with the reforms.

—Stephanie Riegel

5.2%

National notseasonally-adjusted construction unemployment rate in September, the lowest September rate since 2000. Source: ABC 1012industryreport.com


Issue Date: Nov Q4 Ad proof #2

• Please respond by e-mail or fax with your approval or minor revisions. • AD WILL RUN AS IS unless approval or final revisions are received by the close of business today. • Additional revisions must be requested and may be subject to production fees. Carefully check this ad for: CORRECT ADDRESS • CORRECT PHONE NUMBER • ANY TYPOS This ad design © Louisiana Business, Inc. 2016. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

SECOND TIME AROUND FOR THE SECOND TIME in roughly a year, Dallas-based Trinity Marine Products says it will close its Brusly plant and lay off 288 workers, according to the Louisiana Workforce Commission. Trinity Marine sent a worker adjustment and retraining notification, or WARN notice, to the Workforce Commission in September. In August 2015, Trinity Marine sent a similar WARN notice to the LWC. But less than two months later, the company announced it had secured a big enough contract to keep the facility open. Layoffs at the plant were set to begin Oct. 31 and conclude by Dec. 9. —daily-report.com

IN SO MANY WORDS

We’ve long been of the opinion that (oil) demand will peak before supply, and that peak may be somewhere between five and 15 years hence. —SIMON HENRY, Royal Dutch Shell CFO

MEASURING THE PIPELINE THE BATON ROUGE AREA CHAMBER has published its annual workforce report summarizing the projected supply and demand of skilled occupations for its region for 2017. The report collates a broad array of information from local education and training institutions, state governmental entities, and national databases to get a full picture of the workforce pipeline for the nine-parish Capital Region. Some of the key insights from the report stem from the fact BRAC decided to analyze the number of projected graduates and completers of programs designed to train individuals for employment in specific occupations. “Over-the-year changes in training completions indicate that attempts to destigmatize skilled craft work have gained traction,” the report notes. Another positive was that “area community colleges and local businesses have experienced early success partnering to create customized employee training.” While the analysis found a surplus of training completions in welding, for example, plumbing and pipefitting have the opposite problem, with training completions projected to meet less than 10% of demand. The full report is available at brac.org under “Current Research.”

The VOICE of the

Louisiana

Construction Industry • The only statewide, full-service construction trade association • Represents nearly 800 general contractors, subcontractors, suppliers and service firms throughout Louisiana. • Helps members succeed and improve in day-to-day operations. • Promote skill, responsibility and integrity through construction and services that enhance the quality of life for those who live, work, or travel in Louisiana.

—Jerry Martin

NUMBERS

-67,000 Loss of U.S. manufacturing jobs in 2016 through October Source: BLS

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www.LAGC.org 10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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LAUNCH: ICYMI

IN SO MANY WORDS

Creating a culture of no incidents, is no accident. —MARIO LONGHI, CEO of U.S. Steel Corp., the company that first coined the phrase “safety first” back in 1912

COURTESY DYNAMIC INDUSTRIES

NEW GIANT IN THE OIL PATCH ON THE MOVE: PORT OF IBERIA THE BAYOU COMPANIES recently held a ribbon-cutting for its new 56,000-square-foot pipe coating facility at the Port of Iberia. The $14 million expansion will provide anti-corrosion coating for deep water pipelines in the Gulf of Mexico. The company will take on a two-year project for Shell Oil’s Appomattox project, Shell’s largest floating platform in the Gulf of Mexico. The Bayou Companies continued investment and commitment to the Port of Iberia and Iberia Parish helped secure $1.5 million in TIF (tax increment finance) funds for overall infrastructure improvements in and around its facility. The ribbon-cutting was just one of many notable developments at the Port of Iberia this fall. Working for Sasol and Fluor Technip Integrated (FTI), Dynamic Industries, a Dynamic Energy Services International company, completed the fabrication and load out of pipe rack modules for Sasol’s new Lake Charles Chemical Complex. The pipe racks, shown being shipped out of the port above, were all fabricated and assembled at Dynamic’s Port of Iberia facility. Dynamic is also currently working on

fabrication of a number of modules for Shell’s Appomattox project. Craig Romero, port executive director, said, “The Appomattox project is another example of Shell Oil’s commitment to south Louisiana companies and the Port of Iberia.” Meanwhile, Logan Industries is nearing completion of a 30,000-square-foot facility to store large components of offshore rigs. This $4.5 million facility will have cranes with lifting capabilities of more than 80 tons. Ram Design is continuing construction of its 18-acre facility at the port. The consulting and inspection company is a leader in automated internal high-speed corrosion mapping to drilling and production risers. Finally, Louisiana Machinery Co. is in final discussions for a multimillion dollar facility expansion at its Port of Iberia headquarters. Louisiana Machinery is an integrated products and service company supplying gas compression, power generation, pumps and process equipment to the oil and petrochemical industry. —Staff report

GROUNDBREAKING TECHNOLOGY TEXAS-BASED NUBLU ENERGY, which supplies liquefied natural gas for commercial, rail, marine and industrial applications, has broken ground on a new natural gas liquefaction plant along the Mississippi River in Port Allen. The facility will support the region’s rail, marine, long haul transportation, power generation, gas interruption, asphalt and other energy markets. It will have an initial startup capacity of 30,000 gallons per day and a total planned capacity of 90,000 gpd. The facility also will have a transfer system that allows for loading LNG transport trailers and ISO containers, which should help meet the needs of the company’s regional customer base. “Our patented process allows the production of LNG at a fraction of the cost per gallon of other existing liquefaction technologies, and our modular design allows the facilities to be deployed at a relatively low capital outlay,” said NuBlu general partner Cory Duck in a statement.

GENERAL ELECTRIC CO. agreed to combine its oil and gas business with Baker Hughes Inc., creating an industry giant with a broader suite of offerings amid the ongoing slump in crude prices. GE will own a 62.5% stake in the combined provider of oilfield services, which will be publicly traded and have $32 billion in sales, the companies said Oct. 31 in a statement. The deal comes after GE held talks earlier this year about buying pieces of Baker Hughes set to be divested under a sale of the Houston-based company to Halliburton Co., a transaction that collapsed. By joining forces, Baker Hughes and GE are betting they can compete more effectively with the world’s top oilfield-services provider, Schlumberger Ltd., which recently bought equipment-maker Cameron International. —Bloomberg

NUMBERS

7

Louisiana’s ranking among top state business climates Source: Site Selection 2016 rankings

—daily-report.com

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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SITE SELECTORS’ TOP LOCATION CRITERIA FOR 2016

1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Workforce skills Incentives State and local tax scheme Transportation infrastructure Land/building prices and supply Workforce development

BUSINESS TICKER • LyondellBasell has made the final investment decision to construct a high-density polyethylene (HDPE) plant at its La Porte, Texas, complex. This plant will have an annual production capacity of 500,000mt. Operations of the plant are expected to commence in 2019. • Nucor announced plans for a $230 million addition to its Nucor Steel Arkansas plant to produce cold rolled steel for the automotive industry. The plant addition is expected to be finished in two years. • Jacobs has won the EPC contract for Olin facilities in Freeport, Texas, and Plaquemine and St. Gabriel, Louisiana, as well as McIntosh, Alabama.

Ease of permitting and regulatory procedures Quality of life

Source: Site Selection survey of corporate site selectors, October 2016

• PG Technologies of Ellisville, Mississippi (a joint venture of Praxair & GE Aviation), plans a $100 million project to develop special aerospace coatings. • CenterPoint Energy Services of Houston is acquiring Atmos Energy’s retail energy services business. The purchase price for the acquisition is $40 million plus working capital. CenterPoint’s energy services business will now operate in a total of 32 states and deliver natural gas to approximately 100,000 customers. —Homesite and wire services

Utilities (cost, reliability) Higher education resources

• KP Engineering got the EPC contract from Praxair to expand its Geismar operations to make carbon monoxide. With work going on with Targa in Texas, this could total over $100 million.

HARD TIMES STONE ENERGY is taking steps toward filing for Chapter 11 bankruptcy protection by Dec. 9, the company announced in October. Spokeswoman Jennifer E. Mercer told The Advertiser that Stone, burdened with more than $1 billion in debt during a lingering downturn in energy prices, will sell its holdings in Appalachia for $350 million and has made agreements with senior bondholders, creditors and others to restructure its operations. Mercer said the Lafayette-based independent oil and gas exploration and production company and other parties involved have developed a prepackaged reorganization plan, which should help Stone navigate Chapter 11 proceedings and “come out on the other side,” perhaps as early as mid-2017. The agreement would relieve the company of some $850 million in debt and reduce its annual interest payments by $46 million. —daily-report.com

#LouisianaStrong #BASFCares www.basf.us/la 1012industryreport.com

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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LAUNCH: ICYMI

WORLD-CLASS SMARTS

IN SO MANY WORDS

A TEAM OF UL Lafayette petroleum engineering students placed first in North America and second in the world in the international PetroBowl Championship held in Dubai, United Arab Emirates. The competition pits members of Society of Petroleum Engineers student chapters against each other in a quiz bowl format. Participants must answer industry-related questions in a series of rapid-fire rounds, covering topics ranging from drilling to production to reservoir engineering. UL Lafayette students—and members of the SPE Evangeline Student Chapter—who competed in Dubai are: • Stephen Au, a senior from San Marino, Calif. • Benjamin Como, a senior from Broussard, La. • Gordon Guillory, a senior from Sugartown, La. • Nicholas Jarrett, a graduate student in geology from Tyler, Texas

You can’t risk not being in compliance. The fines are huge. —BILL SPANN, associate director, Postlethwaite & Netterville human resources consulting division, on the new overtime rules that go into effect Dec. 1

• Brandon Salazar, a senior from Panama City, Fla.

THE RATE of work-related injuries and illnesses among Louisiana’s private-sector employers improved in 2015 to the best level in 14 years, according to a federal Bureau of Labor Statistics survey. The survey showed Louisiana improved to 1.9 incidents per 100 full-time workers, down from 2.0 in 2014. The national average was 3.0. Louisiana ranked first among 41 participating states, trailing only the District of Columbia for the rate of non-fatal, workplace-related injuries and illnesses. Louisiana has continuously been below the national average since the federal Occupational Safety and Health Administration revised its record-keeping rules in 2002. —Staff report

—UL Lafayette

COURTESY ULL

SAFETY STATE

Issue Date: 4Qtr Ad proof #1

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NUMBERS

85.1

MILLION

Chinese steel exports in tons for the first nine months of 2016, the highest ever Source: Bloomberg

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CLEAN IT UP! • Portable • Environmentally Compliant • No Permitting Needed

CLOSED LOOP • ZERO DISCHARGE • PORTABLE WASH SYSTEMS 14

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

www.evansequipment.com • 800-377-5872 Baton Rouge • Lafayette • Lake Charles Houston • Corpus Christi

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MID-SOUTH OTI EDUCATION CENTER

COURTESY GRACE HEBERT

Bringing expanded opportunities for safety and health workers and employers

WINNING BY DESIGN AN OFFICE EXPANSION at the headquarters of Cajun Industries in Baton Rouge is garnering lots of attention for its contemporary and open design. In addition to providing much needed space for the fast-growing business, the 30,200-squarefoot building recently won a Rose Award, Members’ Choice Award and Planning Commission Award from the American Institute of Architects Baton Rouge, as well as a Good Growth Award from the Baton Rouge Growth Coalition. Placed between two existing buildings on the construction company’s south Baton Rouge campus, the expansion features a glass, two-story lobby with beautiful outdoor views that also serves as a beacon to nearby Airline Highway. GraceHebert Architects of Baton Rouge did the design and Cajun built the facility itself. —Jerry Martin

As recognized leaders in safety and education, the Mid-South OSHA Training Institute Education Center (OTIEC) is pleased to offer in demand OSHA courses close to industry and close to home. Serving Region VI - which includes the five-state area of Louisiana, Texas, Arkansas, Oklahoma and New Mexico - we deliver occupational safety and health training to public and private sector workers, supervisors, and employers on behalf of OSHA.

ON-SITE SERVICES ARE AVAILABLE! The Mid-South OTI Education Center can bring our classes anywhere in the U.S., upon specific request.

For more information, visit MIDSOUTHOTI.ORG or call 877-345-2515

MID-SOUTH OTI EDUCATION CENTER IS A CONSORTIUM BETWEEN

INDUSTRY ON THE WEB LOUISIANA BUSINESS CONNECTION is an online platform designed to promote growth and inclusiveness in Louisiana. The new tool will connect major Louisiana business projects with small businesses, as well as minority-owned and disadvantaged business. It will serve as a comprehensive database where large economic drivers and prime contractors can find Louisiana-based small businesses offering services and supplies to meet their needs and requirements. Louisiana Business Connection will launch in the first quarter of 2017, and will be free and exclusive to companies doing business in Louisiana. The matching platform is modeled upon Louisiana Job Connection, a successful platform that has made over 2.7 million matches between Louisiana employers with qualified job candidates. Businesses can add information about themselves that will be used to match against project requirements including product and service offerings, insurance and bonding levels, and training and certifications.

your partner in

pr gress DEMCO gives your business the power to grow.

—Staff report

ENERGY FROM WASTE GROUND WAS BROKEN in October at a facility in St. Mary Parish that is poised to put waste heat from one of the area’s carbon black plants to work powering homes in the area. And it’s not just heat that will be put to work on the project. The facility is also expected to create much needed jobs in St. Mary Parish. Cleco, a utility company based in Pineville, is in the process of developing what they call a “clean energy plant” in partnership with the Cabot Corp. According to Cleco spokesperson Robbyn Cooper, the $80 million facility will generate hundreds of jobs in the area and provide power for 17,000 homes by generating electricity from “waste heat” from the Cabot black carbon plant south of Centerville. The St. Mary Energy Center will produce 50 megawatts of electricity, enough electricity to power 17,000 homes, without increasing emissions. The plant will take two years to construct. During peak construction, both Cleco and Cabot will each have approximately 200 construction workers on site. —St. Mary Now.com

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demco.org

/DEMCOLouisiana

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

15


LAUNCH: NEW PRODUCTS

Truly open data New products herald notable milestones for oil and gas biz. STAFF REPORT

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

he oil and gas industry has long collected huge volumes of data, but it hasn’t always known quite what to do with it all. Often, the terabytes aren’t even stored on computer systems that readily talk to each other.” So begins a FuelFix report that may herald a remarkable new digital world for the oil and gas industry. Here’s the rest of the story: Industry insiders are used to the disconnected data, said Michael Jones, senior director of strategy at the oil and gas software maker Landmark. But it’s not OK, he said. So, about a year ago, Jones and some of his oil industry colleagues set about to fix it. In late August, at Landmark’s Innovation Forum & Expo in Houston, the company unveiled the beginnings of a collaborative its members called groundbreaking. In a move to drive technology further, faster—and, perhaps, take a bigger piece of the burgeoning big-data market—Landmark is pushing its main computing platform into the cloud, for all to use. Moreover, it is going to allow members of the collaborative access to the very code that creates the platform, called DecisionSpace. They’ll be able to change the platform, use it, and add to it. “Everyone is going to use this code,” said Harold Mesa, a vice president at Halliburton, which owns Landmark. “Ten years from now, everyone will use DecisionSpace.” Big data is helping ConocoPhillips drill wells far more quickly, said Ken Tubman, Conoco’s subsurface vice president. What once took weeks now takes hours.

It’s helping liquefied natural gas companies identify plant problems and avoid shut-downs that cost upwards of $25 million a day, said Johan Nell, who leads consultant Accenture’s upstream oil and gas practice. The key, Nell said, is actually analyzing the reams of data companies collect. Learn more at fuelfix.com. GLOBAL MILESTONE IN DRILLING In a project that established a new worldwide milestone in casing while drilling (CwD) operations, Frank’s International N.V. provided its FA-1® casing running tool (CRT), modified for 30-in casing drilling and running, to Schlumberger for a 30-in CwD Shallow Waters Project in the Bay of Campeche, Gulf of Mexico. The company reported the achievement in a press release dated Sept. 19. The event marked the industry’s first 30-in CwD job, according to Frank’s. The 30-in by 34-in conductor section was drilled and cased at 256 meters, drilling a total of 178 meters in 9.52 hours with an average rate of penetration of 18.04 meters per hour. The successful implementation of Frank’s modified 22-in FA-1 CRT in conjunction with the Schlumberger Direct XCD* drillable alloy casing bit saved the operator 1.31 days. Frank’s worked in close collaboration with Schlumberger to successfully complete the design, manufacturing and testing of the new components for the FA-1 CRT in just under eight weeks. The CRT and tubular running services for the project were performed by Frank’s local operations team in Villahermosa, Mexico. 1012industryreport.com


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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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LAUNCH: THE BIG PICTURE

UP AND RUNNING

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JOINT EFFORT In September, Gov. John Bel Edwards, Incitec Pivot Limited Chairman Paul Brasher and Cornerstone Chemical CEO Greg Zoglio dedicated the $1.025 billion production plant that includes the combined construction of Dyno Nobel’s $850 million ammonia plant with Cornerstone Chemical’s $175 million investment in upgrades and infrastructure. Incitec Pivot, based in Australia, is the parent company of Dyno Nobel, which developed the plant (above). 1012industryreport.com


COURTESY KBR

THE FINISHED PRODUCT Construction of the Dyno Nobel project launched in August 2013, and ammonia production has now begun at the facility. The plant has an annual ammonia capacity of 800,000 metric tons and is located at Cornerstone Chemical’s 800-acre Fortier Manufacturing Complex on the west bank of the Mississippi River in Jefferson Parish, near the town of Waggaman. Dyno Nobel estimates construction employment peaked at 1,200 workers. 1012industryreport.com

THE HANDOVER EPC contractor KBR Inc. handed over the keys to the plant to Dyno Nobel and Cornerstone Chemical on Oct. 19 after ensuring the facility met and exceeded all performance parameters for throughput, efficiency and environmental performance.

THE TECHNOLOGY The project is the first to use an integrated KBR solution of KBR’s Purifier™ ammonia technology along with KBR’s EPC services. It is one of the first onshore ammonia plants built in the United States in the past 20 years, and the first new grassroots ammonia plant in Louisiana in over 30 years. Additionally, the plant incorporates control technologies to produce the lowest air pollution of any ammonia facility to date.

SAFETY FIRST KBR reports construction was completed with no lost time incident, while executing more than five million man hours.

IN A NUTSHELL “This facility demonstrates the appeal of Jefferson Parish and Greater New Orleans as a location for industrial expansion, with a $1 billion-plus investment made by Dyno Nobel and Cornerstone Chemical,” said President and CEO Michael Hecht of GNO Inc. “These companies were able to take advantage of the region’s natural assets of the Mississippi River and supply of natural gas, as well as the financial savings created by our economic climate.”

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LAUNCH: LOGISTICS

Looking south

BY DAVID JACOBS

Shippers take advantage of new direct service from New Orleans to South America.

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IMPORTS UP: A ship loaded with containers at the Port of New Orleans container yard.

TRACIE MORRIS SCHAEFER / COURTESY PORT OF NEW ORLEANS

n mid-August, the Pomerenia Sky arrived at the Port of New Orleans, marking the beginning of a new direct service from Louisiana to the west coast of South America. The service is operated by Francebased CMA CGM, the third-largest container shipping company in the world. CMA CGM has been “very aggressive” in the New Orleans market since 2009, says Janine Mansour, the port’s commercial director. The new expansion of the company’s service will offer weekly direct calls to San Antonio, Chile; Callao, Peru; and Buenaventura, Colombia, in addition to its established routes to Guayaquil, Ecuador, and Cartagena, Colombia. Adding direct calls gives shippers more carrier options, helping them

to save time and money, Mansour explains. “While we were able to serve these calls before, we did not have direct service,” she says. “It’s

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

significant for the shippers in our market.” The new service is expected be particularly useful for importing fresh fruits, forest products

and containerized copper. As for exports, cargo will include fresh poultry and plastic resins for manufacturing. Cargo agents and terminal operators also benefit, Mansour says, along with providers of refrigerated storage such as port tenant New Orleans Cold Storage. Port officials are working to attract more distribution centers and a direct container carrier service to Asia, which would allow them to attract more imports and take greater advantage of the canal expansion. In March, the port opened a new intermodal rail yard, providing better access to inland markets like Memphis, Chicago, Kansas City and Dallas, Mansour says. Since the Port of New Orleans isn’t near a huge population base, connections to inland cities are important for attracting a healthy share of the vessel traffic.

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LAUNCH: UPDATE

Cameron skyline sees new additions

BY EMILY FONTENOT

LNG plant is one of several megaprojects underway in southwest Louisiana.

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hree cylindrical buildings—each larger than the Superdome—now dot the Hackberry skyline, signaling that construction on Cameron LNG is well underway. The project—backed by San Diego-based Sempra LNG & Midstream and its partners—is one of about eight announced LNG projects in the Lake Charles area. Construction of three liquefaction trains started at Cameron LNG about two years ago and is projected to end in 2018, said Julie Nelson, a spokeswoman for Cameron LNG. Progress has been steady, she said, with some interruptions due to heavy rains. Nelson said more than 75 cranes are operating on the project, and that major pieces of equipment— such as air coolers, pressure vessels and compressor packages—are being received and installed. She said continued electrical work, structural steel work and piping are all part of

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COURTESY CAMERON LNG

GOING UP: The Cameron LNG project site in Hackberry is a hub of activity, with 4,500 construction workers and more than 75 cranes on the job.

the current phase of construction. The project has created thousands of temporary jobs in construction, which is the sector responsible for bringing the most new jobs to the local market this past year, according to a recent report by the Louisiana Workforce Commission. Nelson said that over 4,500 contractor construction workers—many of them craft workers recruited from this region—are working on the project. Every employee hired to work on the project receives safety training tailored to his or her position, she said. Another phase of employment will begin when construction ends, Nelson said, and Cameron LNG is now recruiting experienced staff— such as operators, mechanical technicians and instrument techs—to begin training now. “Our job fair in January provided us with many good local resumes, but we still have positions open which can be found through our website,” she said.

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The construction site sits next to Cameron LNG’s existing import facility, for a combined length of about two miles, Nelson said. Cameron LNG began as an import terminal, receiving its first import in 2009. But after increased access to cheap U.S. natural gas made exporting profitable, Sempra partnered with three other companies to add liquefaction and export facilities to the Hackberry site. A quarterly report Sempra filed with the Securities and Exchange Commission at the end of July acknowledged potential risks associated with large-scale construction projects. It said these risks include “potential for unforeseen engineering problems, substantial construction delays and increased costs.” None of these issues have been reported thus far. But a second phase of construction—which involves adding two more liquefaction trains and a tank—experienced what could prove to be a setback after one partner

announced in July that it “currently does not want to invest additional capital in Cameron LNG JV with respect to the expansion,” according to the July report. Cameron LNG in May received approval from the Federal Energy Regulatory Commission to construct the additional trains, which would increase the company’s capacity significantly. The company also in June received approval from the Department of Energy to export to countries that don’t have free-trade agreements with the U.S. But the report says the expansion “requires the unanimous consent of all the partners” and that failure to obtain this could cause delays. It says that “alternatives are being developed and negotiated” among the partners, but that the final investment decision could be delayed beyond the first half of 2017. Reprinted with permission from the American Press.

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LAUNCH: UPDATE

The reviews are in

STAFF REPORT

As construction passes the halfway point, Sasol completes a major review of its Lake Charles project.

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outh Africa-based Sasol completed a detailed review over the summer of its ongoing Lake Charles Chemicals Project, leading to the release of a full report on the review and on the project’s progress in late August. The LCCP consists of a worldscale 1.5 million-ton-per-year ethane cracker and six downstream chemical units: two large polymers plants (low-density and linear low-density polyethylene) and an ethylene oxide/ ethylene glycol plant, which together will consume around two-thirds of the ethylene produced by the cracker; and three smaller, higher-value derivative plants, which will produce specialty alcohols, ethoxylates and other products. The project is under construction adjacent to Sasol’s existing chemical

operations outside of Lake Charles. It is the second largest of the industrial megaprojects currently on the board for both southwest Louisiana and the state. The review confirmed that the total capital cost for the project is expected to be $11 billion, which includes site infrastructure and utility improvements. This is an increase of $2.1 billion from the original estimate at the time of final investment decision in October 2014. As of June 30, the capital expenditure to date on LCCP was $4.8 billion, and the project was around 50% complete, the company reported. An updated schedule now has the first unit, the linear lowdensity polyethylene unit, expected to achieve beneficial operation in the second half of calendar year 2018, which will be followed by the ethane

cracker and ethylene oxide and mono ethylene glycol units later that year, with the low-density polyethylene unit shortly thereafter. Sasol said this will put the LCCP at 80% of total output by early 2019. The increased cost of the project was attributed to several factors, which Sasol said played equal roles: • a significant increase in site and civil costs due to much more ground works required to establish the site compared to what was estimated as a result of poorer than anticipated subsurface conditions, 50% more weather day delays over the site construction period compared to the average norm, and much lower field productivity resulting from a conscious decision to proceed with out-of-sequence site preparation activities while waiting for a variation

of permit conditions to be granted; • increased EPC costs due to “an increase in contractor wage rates,” “lower engineering productivity” and an increase in hours as a result of increased material quantities. • “an increase in labor costs as a result of higher quantities of material for installation, the decision to change to a higher-skilled and thus higher-cost crew mix to enable planned labor productivity improvements for the remainder of the project, and lump-sum contracts placed at higher rates than estimated.” Although now forecasting returns lower than those expected two years ago, the company still considers LCCP “to be a sound strategic investment that will return value to our shareholders for many years into the future.”

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LAUNCH: PROJECT PROFILE

Catcracker revival

BY SAM BARNES

Indorama gets permits, edges closer to refurbishing Carlyss facility.

COURTESY INDORAMA VENTURES

Indorama Ventures is the world’s largest producer of polyethylene terephthalate (PET) and a major producer of polyester fiber whose products serve major players in diversified end-use markets, including food, beverages, personal and home care, health care, automotives, textile and industrial.

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his summer, a Thailand-based industrial owner took a critical step toward breaking ground at the dormant Occidental Chemical Corp. ethane cracker site in Carlyss, Louisiana, after receiving the air and water permits needed to proceed with construction. Indorama Ventures is investing $175 million to revamp the abandoned cracker, which has sat idle on a 250-acre site since 2001. Officials with Indorama Ventures said issuance of a water permit in June and air permit in August keeps it on track for a scheduled fourth quarter 2017 startup. “As it is an existing mothballed cracker that we are rehabilitating, inspection activities were allowed prior to permitting,” says Dolhatai Likanasudh, assistant manager of investor relations and corporate communications at Indorama’s corporate office in Bangkok. “Key air and water permits were received on schedule, with inspection complete and key long-lead-

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time equipment on order. Also, the site has begun the installation of some replacement parts.” By revamping the abandoned facility and getting it operational faster than they could have a greenfield project, Indorama hopes to take advantage of the rising prevalence of U.S. shale gas. The company would not say when it expects to break ground at the site. “The low shale gas pricing is favorable to the fastest movers in the cracking industry, and we expect to be one of the few opening in 2017,” Likanasudh notes. Indorama already has 44 full-time employees in Carlyss to facilitate startup, with additional hires expected as work progresses. It estimates the project will eventually generate up to 600 construction jobs, as well as more than 100 permanent jobs and 480 indirect jobs. A job fair held Nov. 3 in Sulphur targeted filling a variety of positions for the operation, including process operators, laboratory technicians, electrical and instrument technicians, mechanical maintenance

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

personnel and other positions. “This acquisition will make us well-placed to receive cost-advantaged ethane and propane feedstock,” said Indorama CEO Sri Prakash Lohia at the project’s announcement. “(The project) will make us the first Thai company to take advantage of the shale gas revolution in the U.S. ahead of the greenfield crackers being constructed.” Once operational, the plant will have the capacity to produce 370,000 metric tons of ethylene and 30,000 metric tons of propylene per year, with the capability to produce both ethane and propane. Indorama Ventures acquired the ethane cracker site and facilities in 2015 as a joint investment with Singapore-based Indorama Corp., and will operate the facility through its U.S. subsidiary, Indorama Ventures Olefins LLC (IVL). Indorama considered options in other states, including Texas, but chose Louisiana primarily because of the existing cracker facility, the availability of the state’s workforce training programs

and other incentives. “This is another example of an international company investing in our industrial complex,” said George Swift, president and CEO of the Southwest Louisiana Economic Development Alliance in Lake Charles, at the project’s announcement. “Indorama will renovate a closed plant into a modern state-of-the-art production facility and bring new jobs to our region.” IVL already produces purified ethylene oxide and mono ethylene glycol in the U.S., with ethylene being the primary feedstock, and currently runs intermediate petrochemical manufacturing facilities in Texas, Alabama, Georgia, North Carolina and South Carolina. Indorama Corp. is a leading Asian industrial company based in Singapore, with manufacturing plants in more than seven countries across Asia, Europe and Africa. It also produces other industrial products, such as fertilizers, textile raw materials and disposable gloves. 1012industryreport.com


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LAUNCH: PEOPLE

Executive Profile: David Rentrop Where did your career start, and how did you get to where you are today?

Following graduation from Louisiana Tech in 1978, I worked as a process engineer at what was then the Citgo polyethylene plant. In 1982, Citgo discontinued all chemical NAME operations. On April David Rentrop 1, 1982, I started working at Grace POSITION as a process engiOperations Director neer. Over the next COMPANY 34 years, I had the W.R. Grace, Lake Charles Plant opportunity to learn AGE about plant opera60 tions, leading up to plant management HOMETOWN starting in 2005. I’ve Lake Charles been very fortunate EDUCATION at Grace. I’ve always B.S., Chemical Engineering, been surrounded by Louisiana Tech University a very talented and dedicated team.

It starts with environment, health and safety. Once the culture of any organization embraces EHS as a value as opposed to a priority—priorities may change, but values do not—results are sustainable. Another key responsibility is building a highly talented group that thrives in a team environment. Ultimately, this will drive the performance that delivers on manufacturing KPIs: EHS, quality, production, reliability and financial. What are some of the biggest challenges that come with working in your industry?

The challenges change over time. At this point in time, the industrial expansion in Louisiana is unprecedented. In southwest Louisiana alone, the investment for projects exceeds $100 billion, which strains the talent pool of operators and journeymen craftsmen. The tax structure in the state seems to be in flux. Collectively, we 1012industryreport.com

LEE CELANO

What are your responsibilities at W.R. Grace?

need to determine affordable spend levels by government so that business growth continues at a healthy pace. What do you see for the future of your industry?

The next three to five years will be highly competitive. At the plant level, this will translate into increased focus on the metrics that drive operational excellence. As important as process control technology has been, I think it will become even more critical to help drive optimization of processes. What are your next goals both professionally and personally?

I’m retiring in the first quarter of 2017. My professional goal is to

execute a smooth transition with my successor. That process started at the beginning of this year. My personal goals are to continue exercising daily, wake surf more (which means I need my wife to agree to drive the boat) and spend more time with family. What is your most satisfying professional accomplishment?

Building the current leadership team at the site stands out to me. I would also include being part of the team that achieved OSHA Star status in 2005. What is your favorite way to spend your time?

I ride a spinning bike six days a week and work out three times a week. I do this in an attempt to keep

up with younger friends and family when we wake surf. Wake surfing is my passion. What is an item on your “bucket list”?

My wife Emily and I want to visit 10 national parks in 10 years. We went to Yellowstone and Grand Tetons this year and will visit Glacier in 2017. I’d like to watch the San Francisco Giants play in eight cities and meet Willie Mays. What is your go-to spot?

We wake surf on the Calcasieu River, but I’ve always considered the beaches of 30A (between Destin and Panama City) our go-to spot. — Erin Z. Bass

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COVER STORY

21

of industry’s most influential leaders on the corridor

THEY ARE IDEA creators and change agents. They are team-builders. They are decision-makers. They are communicators. They are the embodiment of the passion and experience that make a chemical plant or an industrial business run productively and safely. They may even be lightning rods for accountability. They are the leaders. We wanted to provide a closer look at some of the top managers and executives who keep industry humming along the 10/12 corridor, so we asked an array of economic

development and industry groups to tell us who in their area should be included in a feature on top leaders. Our editorial team then whittled those suggestions down to the 21 people featured here. We found that most of them are as much leaders outside the workplace, in their communities, as they are within. Ultimately, as you will learn in the following profiles, these are the people who weave industry into the fabric of Louisiana, just as industry has done for them. Take a look.

PROFILES BY SAM BARNES

MIKE ALBANO

Lead Director of Environmental, Health and Safety, Dow’s Louisiana Hub PLAQUEMINE FOR THE PAST 27 years, Michael Albano, lead director of environmental, health and safety at Dow’s Louisiana Hub, has held several leadership positions in operations, construction, engineering and maintenance. He has chaired Dow global teams that oversee industrial cleaning and equipment leak prevention, and represented the U.S. Gulf Coast region on Dow’s Global Maintenance Leadership Team. He currently co-leads the implementation project for Dow’s 2025 Sustainability Goal on World Leading Operations Performance. Mike has been a board member and Workforce Development Committee co-chair for the Greater Baton Rouge Industry Alliance, a member of the Louisiana Craft Workforce Development Board, and board chair for the 10-parish Capital Area United Way. 28

PAUL AUCOIN

JIM BERNHARD

Executive Director PORT OF SOUTH LOUISIANA

Founder, Bernhard Capital Partners BATON ROUGE

PAUL AUCOIN has worked in economic development for 27 years, including five years in the maritime industry. He was appointed executive director of the Port of South Louisiana in 2013, after a successful 46-year law career. Aucoin has been a guiding force for business and education, serving on the River Parishes Community College Foundation, the River Region Chamber of Commerce, the River Parish Tourist Commission, the Board of Supervisors for the University of Louisiana System and the World Trade Center Board of Directors. He is proudest of his work at the port over the last three years. “What most people don’t realize is the port’s sheer size and scope,” Aucoin says. “It stretches 54 miles along the Mississippi River in St. James, St. John the Baptist and St. Charles parishes, and is the largest tonnage port in the U.S.”

JIM BERNHARD retired from The Shaw Group in 2013, after selling it to Chicago Bridge & Iron, and not long after founded Bernhard Capital Partners with several of his top Shaw executives. He has spent the past three years creating a network of companies under BCP. Bernhard grew Shaw from a small pipe fabrication company into a Fortune 500, global energy services firm with significant engineering, construction, environmental, fabrication, manufacturing and other critical energy service capabilities. Shaw expanded to more than 25,000 employees across 150 locations worldwide and generated more than $6 billion in annual revenue. BCP is an energy services-focused private equity firm that seeks to create sustainable value by leveraging its founding partners’ 25 years of experience acquiring, operating and growing energy services businesses.

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DAN BORNÉ

Former President, Louisiana Chemical Association BATON ROUGE DAN BORNÉ is strong voice for the Louisiana chemical industry, serving as president of the Louisiana Chemical Association for 28 years before retiring in November. Borné is the recipient of Nicholls State University’s James Lynn Powell Award, presented to an outstanding alumnus for distinguished service, and has been inducted into LSU’s Alumni Hall of Distinction and the Manship School’s Hall of Fame. His positions of leadership are numerous: chairman of the board of Blue Cross Blue Shield of Louisiana, president of the Louisiana Foundation for Excellence in Science, Technology and Education, vice chairman of the board of the Blue Cross Blue Shield of Louisiana Foundation, South Louisiana Advisory Board of Regions Bank and the Advisory Board of Entergy Louisiana/Entergy Gulf States.

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JOE ANDREPONT Senior Community Affairs Representative, Westlake Chemical

LEE CELANO

SULPHUR

J HYUN BROSSETT

Assistant Plant Manager, W.R. Grace SULPHUR HYUN BROSSETT currently serves as assistant plant manager at W.R. Grace in Sulphur, a position she has held since early 2016. Since moving to the U.S. from South Korea as a teenager in the 1980s, Brossett has encountered numerous challenges in her professional and personal life. “I am proud that through all the steps I’ve taken during my lifetime— learning a new language and culture as a teenager, graduating from college with no debt and no help from my family … working my way up from an entry level position to my current position, and working the toughest operations position I’ve held while fighting cancer—I did my best to meet expectations.” Brossett’s industry and civic memberships include Southwest Louisiana United Way, American Chemical Society, Tau Beta Pi (Engineering Honor Society), Amazing Grace volunteer and Lake Charles First United Methodist Church member.

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oe Andrepont strongly believes that family and community are inseparably linked to the Lake Charles industrial market. After all, he never left the area, apart from his college years, and today lives just three blocks from his parents. Andrepont began his career as a pharmacist, which is a far cry from working in the petrochemical industry. After graduating with honors from the Northeast Louisiana University School of Pharmacy (now UL Monroe), he returned to Sulphur to work for K&B Drugs. The job proved to be a great training ground for his eventual role in community service and public affairs at Westlake Chemical, as he interacted with his customers over the next 15 years. “I learned that much of communications involves listening, not so much speaking,” Andrepont says. “I think that’s a forgotten thing, how to listen to people.” While he now has a legacy of industrial involvement spanning decades, he’s equally proud of his service to the community—Andrepont served on the Calcasieu Parish School Board for five terms, is a past president of the Rotary Club of Sulphur and a member of Our Lady of Prompt Succor

Catholic Church. He’s also a pretty accomplished baseball coach, and currently coaches his grandson’s “undefeated” T-ball team. His unwavering dedication to community eventually helped him land the job at Westlake back in the 1990s, and since taking the job his role has expanded—he now has oversight of plant security, as well as its drug and alcohol policy. “In today’s world, security is critical, especially with the regulations that exist out there and the guidelines that every company has to maintain. I enjoy that aspect of my job, because to me security is an extension of public relations, in the sense that your security officers need to know the regulatory agencies and interact with them.” Over the years, Andrepont has become an outspoken proponent of industry. He has served more than 20 years as a member of the Lake Area Industry Alliance and has had similar stints on the board of directors for the Safety Council of Southwest Louisiana and the Louisiana Chemical Association’s Louisiana Manufacturers Political Action Committee (LAMP). He’s also on the board of directors and a past president of the West Calcasieu Chamber of Commerce. Perhaps most notably, in October he was recognized by the LCA

Governmental Affairs Committee’s as its MVP during the LCA/LCIA annual meeting in New Orleans. Andrepont gives credit to one of his previous plant managers as having the greatest impact on his professional career. “I think the influence of him being supportive is the primary reason, of him being receptive to the ideas and suggestions that I had to offer for our company to get involved in the community,” he adds. “He was always very open and willing to support me in the recommendations that I made.” Support from plant management is critical, he says, since recommendations “don’t go anywhere” without their backing. Looking ahead, Andrepont sees retirement as a far-off notion. “If I’m blessed with good health, it’s my intention to continue to work for Westlake and retire down the line,” he says. “I enjoy what I do and hope to continue along those lines. Anything that I can do to help Westlake Chemical grow, I’m ready to be a team player.” He has no plans to retire from community service anytime soon, either. “My dad serves on the Calcasieu Parish Police Jury and he’s not going to seek re-election. I’ll probably run for his seat in a few years.”

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COVER STORY

TRACY CASE

General Manager, Marathon Petroleum GARYVILLE TRACY CASE’S proudest achievement since taking the reigns as general manager of Marathon’s Garyville refinery is the completion of the $3.9 billion Garyville Mega Expansion, completed in 2009, which doubled the size of the refinery. Case played a significant role in championing the project to the company’s executive team and board. Having accumulated 34 years of experience in industry—all at Marathon— Case is committed to leading a values-driven organization that achieves success on the foundation of respect for people, safety, environmental stewardship and corporate citizenship. He serves on the board of directors and executive committee of the Louisiana Mid-Continent Oil and Gas Association.

RHOMAN HARDY Plant Manager, Shell Chemical

A JOHNNY CHAVEZ Site Leader, Dow ST. CHARLES

JOHNNY CHAVEZ JR., Dow St. Charles’ site leader since April 2014, holds bachelor’s and master’s degrees in chemical engineering from New Mexico State University and is a current board member of the Red Cross of Southeast Louisiana and the Louisiana Chemical Industrial Alliance. Chavez says a family atmosphere and sense of community provide the foundation for his site’s success, complemented by a host of other factors. “Having access to low-cost feedstock and energy sources are major advantages here,” he adds. “But also, the access to the Mississippi River, major interstates and railroads is tremendous. These factors help in adopting a culture of reliability excellence, while also capitalizes on the people and culture of south Louisiana.”

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fter a 20-plus-year stint working in southeast Texas, Rhoman Hardy returned home in June 2015 to become the first Louisiana native to manage Shell Chemical’s Geismar site. Originally from Lake Charles, both Hardy and his wife left the state after graduating from LSU in the early 1990s. His parents still reside in Lake Charles. “I’ve been away from Louisiana a long time, and it’s fantastic being back,” he says. “I love my home state.” He’s no newcomer to Shell either. The industrial owner has been his only employer since college—he began as an entry-level engineer, then took on more significant leadership roles as the years progressed. Before coming to Geismar, Hardy served as Shell’s manager of reliability, maintenance and turnarounds for five years, assisting facilities in such faraway places as the Netherlands, Singapore and Germany to improve their operations and be more cost competitive. “That was the single best learn-

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GEISMAR

ing experience in my career, but also the toughest single assignment,” Hardy says. “The deliverable was to help our locations run better. The reliability of these facilities is paramount to how safe they are, and how much product they can produce. We made a fundamental jump in our performance there.” On average, the facilities increased their reliability about 15% to 20% under his watch. Still, Hardy says that five years of globetrotting was enough, and he welcomed the new assignment in Geismar. The timing of the move coincided with the groundbreaking of Shell’s new $717 million olefins expansion, which will ultimately make it the largest olefins producer in the world. Hardy is a natural fit for the project, having spent a significant amount of his career managing large turnarounds and maintenance. Since arriving back in his home state, Hardy has assimilated quickly into the industrial community, and currently serves on the boards of the Louisiana Chemical Association and Capital Area United Way.

“I think the primary role of the LCA board is to represent industry’s views and share that with both the public and our legislators so that they understand our perspective on how changes are going to impact industry,” Hardy says. “We’re in the midst of a lot of changes in the tax laws, which will impact industry. One of the things we want to get across is that when we make these very large scale investments, change creates uncertainty in the decision-making process.” Hardy feels much could be accomplished if the industrial community would simply tell its story better and be a better neighbor to the surrounding community. “One of the first things I did when I got here was take a look at how we are touching the community,” he adds. “One of these main areas is the Capital Area United Way—we spent time looking at its effectiveness and by the end of that review I felt comfortable with us putting a lot of our time and support behind that agency. I’ve been impressed at the quality of the board and the quality of the staff there.” 1012industryreport.com


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JOHN PACILLO

LARRY DEROUSSEL

Operations Director, Mexichem Fluor

Executive Director, Lake Area Industry Alliance LAKE CHARLES

ST. GABRIEL

LARRY DEROUSSEL views his 50-year career in two segments, pre-retirement and post-retirement. “My pre-retirement career began with Firestone Polymers, then Citgo Polyethylene Plant and Hercules Polyolefins,” DeRoussel says. “I was involved in the establishment of Community Advisory Panels (CAPs) and responsible for communicating to the public about ‘worse case scenarios.’” DeRoussel’s post-retirement life began with the incorporation of the Lake Area Industry Alliance and his subsequent role as executive director. “Over a period of several years, we began to gain the support and respect of the community as they began to better understand the workings of industry.” He has a degree in electrical engineering from the University of Southwest Louisiana.

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t was a huge cultural leap when Boston native John Pacillo moved to Baton Rouge in 1990. The food, the people, and especially the accents were radically different from what he was accustomed to— but in a good way. “Baton Rouge was a great place to raise our kids,” Pacillo says. “I was thrilled with the level of community involvement, the church involvement. I often say that you can make a great friend in Massachusetts, and you can make a great friend in Louisiana; but in Louisiana you get the benefit of the doubt. You don’t have to prove yourself first.” After graduating in chemical engineering from Tufts University in Medford, Massachusetts, where he also played three years on the university basketball team, Pacillo landed his first job as a process engineer at Imperial Chemical Industries. In 1990, ICI chose to build a plant in St. Gabriel to ramp up its production of R12 refrigerant, and offered Pacillo the job of plant superintendent. Despite the plant ownership changing hands multiple times, that’s where Pacillo has stayed for the last 26 years, eventually earning his current title of operations director at MexiChem Fluor. Along the way, his level of industrial advocacy has increased, particularly as it relates to training. It was during his work with a community advisory panel in St. Gabriel that he came to an important realization. “One of the first things I asked was, ‘What’s important to you?’ Their response was, ‘Don’t run me out of my house, and jobs.’ As soon as you start digging into that, you realize that it’s education that’s holding them back, not the lack of jobs. While we had the jobs, they weren’t necessarily trained to do them.” Pacillo was instrumental in facilitating numerous training opportunities, such as getting Career Compass involved at East Iberville High School. Career Compass is a volunteer organization that seeks to remove financial or other obstacles to students attending a postsecondary institution. “If you don’t have money to get there, they

can help,” Pacillo says. “SAT tests, transportation … those kind of things. Then we began offering courses at Baton Rouge Community College and River Parishes Community College.” “We went in and worked with the mayor and the parish president, the churches and the schools to try and develop interest within the community,” he adds. “Plants offered [students] scholarships to continue their P-Tech (process technology) education, with the goal of giving someone from the community a process operator’s job in one of our plants.” In the mid-2000s, Pacillo ramped up his volunteer work through his involvement with the Greater Baton Rouge Industry Alliance, and today he serves as GBRIA chairman. As such, he has taken a vital role in spearheading the group’s workforce development

and safety efforts. Pacillo has also tackled one the biggest current issues facing Baton Rouge-area industrial owners: traffic congestion. Through GBRIA, Pacillo is co-chair of Capital Region Industry for Sustainable Infrastructure Solutions (CRISIS), an organization established to research and develop a literal roadmap for resolving traffic concerns. “I think we’ve got things moving in the right direction now,” he says. Through it all, one of Pacillo’s proudest accomplishments is the safe, efficient work environment he has nurtured at Mexichem Fluor. “It is as competitive a plant as there is in the industry—as efficient and as safe and as happy as I think you can have in the chemical industry.” In fact, the plant won LCA’s coveted Serious About Fostering Excellence (SAFE) award in 2010, a difficult designation to achieve.

ART FAVRE

President/Owner, Performance Contractors Inc. BATON ROUGE AS AN LSU alumnus, Performance Contractors president and owner Art Favre has supported the university’s mission in many ways, but he says one endeavor stands out—the expansion and realignment of LSU’s Patrick F. Taylor Hall for the College of Engineering. “My LSU degree provided me with the tools to be successful. Now many others can follow that same path,” he says. Favre has also been heavily involved with the Associated Builders and Contractors’ Industrial Contractors Council for the past 30 years. The ICC oversees the operation and sustainability of the ABC craft training program for the Baton Rouge area. He serves on the Louisiana State Licensing Board and for the last several years has participated on the board of the Mary Bird Perkins Cancer Center.

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COVER STORY

BRENT WOOD

Governmental Affairs Regional Manager, Chevron Corp.

CHERYL GERBER

NEW ORLEANS

EDDIE RISPONE Co-Founder and Chairman, ISC Constructors BATON ROUGE

SINCE THE EARLY days of ISC Constructors in 1989, Eddie Rispone’s accomplishments have been testament to the strength of his ideals. Not only has he grown ISC into a successful business, Rispone has had a major impact on construction and business communities across the U.S. He has served as a national Associated Builders and Contractors chairman, ABC’s representative on the Construction Users Roundtable, and chairman of the Louisiana Workforce Investment Council. In 2005, he spearheaded the Louisiana Craft Workforce Development Board to address the state’s craft worker shortage. Some of Rispone’s most transformative accomplishments have been through the local ABC chapter and through his support of workforce training. In 2011, he stepped down as chairman of the LWIC to chair the Louisiana Federation of Children.

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STEVE KOONTZ Plant Manager, AmSty ST. JAMES PARISH

SINCE BEGINNING his tenure as manager of AmySty’s St. James plant, plant manager Steve Koontz is proudest of his plant receiving the “Best in Louisiana” SAFE Award for three consecutive years and the OSHA Regional VI Administrative Award five times. During his 37 years in industry, Koontz has remained committed to the idea that industry should maintain close ties with community. He has hosted the St. James High School Academic Achievement in Education banquet for seven years, has been active in the St. James Elementary Reading Program for 10 years, is an active member of the St. James Community Advisory Panel for eight years and a United Way Leadership member for the past 15 years. Koontz holds a degree in chemical engineering from the University of Kansas.

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JONATHON SHI

MARK SUELLENTROP

JONATHON SHI has played an increasingly crucial role in shaping the state’s industrial landscape, most importantly by leading the Louisiana Chemical Manufacturing Initiative. LCMI is working with 90-plus partners to bring federal resources to Louisiana to enhance the chemical manufacturing ecosystem in workforce, infrastructure, supply network, research and innovation, and international trade. Shi also leads LSU’s Industrial Assessment Center, which assists small and medium-sized manufacturers in improving production energy efficiency, productivity, technology and environmental performance. Shi has worked at several leading universities for 28 years on problems facing industry. He is a current council member of the Construction Management Association of America and a member of the American Society of Civil Engineers.

MARK SUELLENTROP, plant manager at Cabot Corp. in Franklin, lives by the mantra that plants cannot operate independent of community. “As a facility general manager it is important that you are seen in the community,” Suellentrop says. “Whether it is the chamber of commerce or some other civic organization, you must be open and available.” As such, he has served on several chambers of commerce over the years and as president of his local Rotary Club. “I’ve tried to instill the same view in my staff of young engineers.” Suellentrop currently leads the CHOICES program in Evangeline Parish, where community leaders teach life skills to eighth graders. He also initiated a Community Advisory Panel (CAP) shortly after arriving at the plant in 2008, opening a dialogue with neighbors and community members.

Professor/Art E. Favre Industrial Construction Chair LSU

Plant Manager, Cabot Corp. FRANKLIN

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ot long after receiving his law degree from Loyola University, Brent Wood began his tenure at Chevron working with transactions and contracts. Since those early days, some 36 years ago, Wood’s responsibilities have morphed into a more substantive role—today, he serves as governmental affairs regional manager for Chevron Corp., where he has governmental affairs oversight of Chevron facilities across 11 states in the eastern U.S. “Along the way, I developed a deep knowledge of not only the business, but the people involved both in the business and those who influence the business from the outside—whether they be community leaders, elected officials or regulatory officials,” Wood says. “It’s the depth and complexity of those relationships that I’ve been able to develop because of my long tenure.”

MIKE THOMAS

Senior Vice President, North American Operations, Sasol LAKE CHARLES MIKE THOMAS has more than 30 years of chemical manufacturing experience in operations, maintenance, engineering, procurement and management. As senior vice president of North American Operations for Sasol, he is responsible for operations in four states, as well as all functional support services in the U.S. and Canada. Thomas joined Sasol North America’s predecessor company in 1985 as a process engineer. During the following 22 years, he worked in Houston, Lake Charles and Baltimore, before returning to Lake Charles as operations manager for the company’s largest manufacturing facility in 2007. He assumed his current position in 2010. Thomas is on the board of directors of several Sasol companies, and is a member of the Louisiana Chemical Association and the Safety Council of Southwest Louisiana.

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Wood’s New Orleans roots are planted deep—his family has been here since the 19th century—and his commitment to the area is reflected in his lengthy list of corporate, industry and civic memberships. He currently serves on the boards of the Louisiana Chemical Association, the Louisiana Association of Business & Industry, the Louisiana Mid Continent Oil & Gas Association, Blueprint for Louisiana, the Metropolitan Crime Commission, the Audubon Commission, the LSU Center for Energy Studies, and the GNO Inc. Coalition for Coastal Resilience and Economy. He says his position at Chevron has provided him with numerous opportunities. “Most positions in our corporation are inwardly focused,” Wood adds. “Mine is a very outwardly focused position, and has afforded me the opportunity to get out a lot in the community.” He is also responsible for Chevron’s

KATHY TRAHAN

President/CEO, Alliance Safety Council AFTER RECEIVING her bachelor’s degree in engineering technology in 1992, Kathy Trahan began her career in industry as a process operator for PPG in Lake Charles. In the years that followed, she found opportunities to interact with various industry and education partners, eventually leading her to teach at the university level, then oversee the Petrochemical Training Center at Baton Rouge Community College. In 2004, she transitioned to the Alliance Safety Council as its president and CEO. “My dream is to help others achieve their dreams,” Trahan says. “I love mentoring emerging leaders, so when I think back over the course of my life and career I am most proud of others’ achievements rather than my own.” Trahan has received the Alden Andre PTEC Service Award for her contributions to workforce development projects, and the Craft Education Champion Award by GBRIA.

philanthropic budget, providing him with “a very broad reach in the communities along the Gulf Coast, as well as being able to tap into a whole host of volunteer efforts, both business- and community-related.” Being “outwardly involved” has not only given Wood the chance to communicate Chevron’s position on a variety of issues, but also allowed him to bring back ideas from outside the company to shape Chevron policy. His position in governmental affairs also puts him at the forefront of issues impacting the industry at large—such as Louisiana’s current business climate, particularly “some real challenges in the areas of litigation and taxes.” He credits his work ethic to the impact of a supervisor during his younger years, Ray Galvin, who eventually became president of Chevron. “Just him taking that interest very early in my career and exposing me to a lot of opportu-

STEVIE TRAHAN

Manager, External Relations, Cameron LNG HACKBERRY STEVIE TRAHAN has been involved in the oil and gas industry for 30 years, first as an operator at the Strategic Petroleum Reserve and currently as manager of external relations for Cameron LNG. Growing up in rural southwest Louisiana taught Trahan the values of hard work and commitment, traits he considers vital to the success of industry. “Without them our region would not thrive,” he adds. As Cameron LNG’s external affairs manager, he works with parish leaders and communities with the goal of being a “good corporate neighbor.” Trahan was elected to the Cameron Parish Police Jury in 2000, and served until 2008. He is a member of the Calcasieu Cameron Fair Board, the Cameron Parish Junior Livestock Committee, and was one of the original board members of the Chenier Plains Coastal Restoration and Protection Authority. He holds a degree in animal science from McNeese State University.

nities had a big influence on my subsequent career,” Wood says. “This was someone who at the time was responsible for about 2,500 employees … so him taking the time to do that had a lasting influence on me.” Despite his busy schedule, Wood hopes to dedicate more time to family and other passions. “I value personal relationships, so I’m jealous of the extra time that I have and try to spend as much of it as possible with family and friends,” he adds. “My roots are planted here, in New Orleans, so I have relationships with friends and family that go back many decades, and those are very important to me.” Along the way, Wood takes time to mentor young people when possible. “I try to make time when young people reach out looking for advice and direction. I try to take the time to do that, and pay it forward.”

TOM YURA

Senior Vice President and General Manager, BASF GEISMAR TOM YURA HAS had a profound impact upon the industrial community in Louisiana since taking the reins at BASF’s Geismar plant in 2009. On an industrywide basis, he has been heavily involved in several key areas facing the chemical/ manufacturing industry—workforce development, safety and transportation. As a member of the Baton Rouge Area Chamber, Greater Baton Rouge Industry Alliance and Louisiana’s Workforce Investment Council, Yura has helped develop and support meaningful solutions. Along the way, he has been a proponent for several workforce development improvements, such as the creation of the Jump Start program and a strengthened alignment between industry and the Louisiana Community and Technical College System. As chairman of the LCA’s Health and Safety Committee, Yura drives safety improvements across all LCA member companies.

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NEWS DISASTER

A flood like no other

BY SAM BARNES

Though not inundated with floodwaters themselves, corridor industrial plants faced ‘epic’ challenges after the storm of 2016.

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t didn’t take long for the record-breaking August deluge of 30-plus inches of rain in and around Baton Rouge—and the flooding that followed—to escalate into a tragedy of epic proportions, leaving thousands homeless and in need of immediate assistance. While the area’s industrial facilities were mostly spared from the rising waters, thousands of workers from a five-parish area weren’t so fortunate. On average, the flood directly impacted an estimated 20% of permanent, full-time employees of area plants. “Unlike Katrina, our plant operations were not severely affected,” says Dan Borne, president of the Louisiana Chemical Association. “With perhaps one minor exception, power was not interrupted, as it was in Katrina. Natural gas supplies were not shut off, as they were in Katrina, and business supply chains (rail, barge and truck transportation) were not severely delayed as they were in Katrina.” However, Borne estimates that about two-thirds of the state’s chemical manufacturing employees live

or work in the parishes affected by the flooding. “While we don’t have plant facilities in Livingston Parish, which was really hit hard, it’s a bedroom community for many or our employees and for lots of members of LCA.” The major challenge for plant owners in the flood’s immediate aftermath was assisting employees and helping them return to work— because the plants continued to run—and to help them rebuild their homes and restore their lives. Bob Johnston, ExxonMobil Chemical site manager, says adequately planning for this disaster was impossible. The company’s Baton Rouge area plants had an astounding 500 employees directly impacted by the flood. “It was unlike anything we’ve been through,” Johnston says. “The lack of advance warning and the scope of the impact was unprecedented.” While many employees were already involved in various stages of search-and-rescue as members of the Cajun Navy, one of ExxonMobil’s first official actions was to contract a company called Red Hawk of Baton Rouge to mobilize up to 65 three- to

“I was like, ‘I work at Exxon. I see you work at Exxon. Can you help us?’” —VANESSA BAILEY, Denham Springs, an eight-year employee at ExxonMobil who was impacted by the flood

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five-person crews to tear out sheet rock, clean out debris and remove furniture and cabinets from employee homes. Additionally, some 300 ExxonMobil employees mobilized as volunteers. “As people worried about getting their homes clean and tried to figure out how they were going to continue to work,” Johnston says, “it was really about providing someone to get in there and help with that critical first step.”

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‘CAN YOU HELP US?’ Vanessa Bailey, an eight-year employee at ExxonMobil and a resident of Denham Springs, found herself at “ground zero” the morning of Aug. 13. “We left the house headed to soccer, then got a call that it had been cancelled,” Bailey says. “By the time we got back, the back part of our neighborhood was already flooding.” Before long, the entire neighborhood was under water, as was her car. That was when she noticed someone with a truck and an ExxonMobil hang tag on the rearview mirror. “I was like, ‘I work at Exxon. I see you work at Exxon. Can you help us?’ So we jumped in the truck with him. I didn’t even know who the guy was.” Brandon White, an ExxonMobil chemical plant process operator, was Vanessa’s savior that day, and had been in the neighborhood checking on one of her neighbors. Brandon’s goodwill didn’t end there. Since his house had not flooded, he let Vanessa and her son stay there for four days. All the while, he kept them in food and clothing until Vanessa could return home. “During all of this, I was keeping up with my bosses,” she adds. “I let them know when we were going to try to get back to the house, and by the time I got there about four of my co-workers were pulling up behind me.” In the days that followed, co-workers brought a generator and a saw to cut sheetrock, and Red Hawk assisted with debris removal. “I was literally in tears when these guys showed up with shovels, an ice chest and food to come help,” Bailey says. After three days, “all that I had left were studs and a toilet.” Ultimately, Vanessa missed seven days of work.

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NEWS: DISASTER

HELPING EMPLOYEES IN NEED Vanessa’s story is similar to many across the parishes affected by the flood, as plants stepped up to help employees in their times of need, whether materially, financially or through hands-on cleanup. BASF in Geismar quickly mobilized a task force to determine needs, and locate and acquire necessary housing, transportation and supplies for its impacted employees. “We actually did not have a specific plan for an event like this,” says Tom Yura, senior vice president and general manager of BASF in Geismar. “You pull out everything you know. You pull out your hurricane plans and your incident command plans. You pull out your cooperative efforts within the broader community and you start working on it. 36

“When a crisis like this occurs, you don’t typically have days to sit back and contemplate next steps. You’ve got to move fast. You have to move decisively and you have to think about people above everything else.” —TOM YURA, senior vice president and general manager, BASF in Geismar

“When a crisis like this occurs, you don’t typically have days to sit back and contemplate next steps. You’ve got to move fast. You have to move decisively and you have to think about people above everything else.”

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In addition to BASF’s impacted employee population of 300, another 30% to 40% were either surrounded by water or had family members who were homeless. BASF’s leadership team designated three people to lead the recovery

effort: one to coordinate communications; one to determine needs for lodging, food, clothing and transportation; and a third to procure those needs. “We became a forward staging area for employees, where we brought in supplies for remediation and for immediate needs such as food, clothing … or even toys and baby supplies.” Many plants in the area were similarly affected, although at different scales. At Dow’s Louisiana Operations in Plaquemine, the flood stranded more than 160 of its 1,400 employees, but the impact to its contract work force was particularly significant. “We were gearing up for a large turnaround, and it was a challenge to get that contract workforce back to work,” says Public Affairs 1012industryreport.com


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NEWS: DISASTER

Director Stacey Chiasson. “We were about 70 percent after the flood, as far as the contract workforce coming back, and that slowly picked up.” Within days, the Dow Chemical Co. Foundation had donated $250,000 to support the recovery efforts, and an additional $50,000 apiece to the Capital Area Chapter of the American Red Cross and the Capital Area United Way Flood Emergency Fund. Dow also offered interest free loans to those employees in immediate financial need. “We went to a three-pronged approach,” Chiasson says. “How do we help with dollars from our foundation? What do we do from an employee engagement standpoint? And what’s our influence and partnerships and relation with businesses and customers?” At Shell Chemical in Geismar, about 100 employees (of 650) were impacted, prompting the plant to organize “special benefits for those people who were impacted,” says plant manager Rhoman Hardy. “That includes salary continuity, 38

low- to no-interest loans, etc. We also organized crews to help them gut their homes.” Plants also turned to customers for help in the flood’s wake. Dow approached Proctor & Gamble for assistance through Tide’s Loads of Hope program, which was created following Hurricane Katrina. Loads of Hope is essentially a mobile Laundromat developed to restore a sense of normalcy for victims of a disaster. “We worked with them on where to go, what the needs were, etc.” Dow’s Chiasson says. “They set up at a local church, and we were able to get word out to our employees.” BASF customers also stepped up to help. Future Foam delivered 200 queen-sized beds and more than 500 mattress toppers to BASF’s administrative offices, where employees could pick them up. “We actually produce the chemistry for those products,” BASF’s Yura says. “When you mix the materials together you get the foam that goes into the mattresses.”

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COURTESY DOW LOUISIANA OPERATIONS

After the August flooding, Dow fed 5,000 people from its Dow Louisiana Operations site. Workers from the St. Charles Operations site came and cooked for their colleagues at the site near Plaquemine, saying they were “returning a favor” from when Plaquemine employees cooked for the St. Charles Operations team after Hurricane Katrina.

LCA’s Borne points out that most of the products used during the cleanup contained chemical products made in Louisiana. “Succinctly put, if you can name it Louisiana chemical manufacturing helped make it,” he adds. A NEW DISASTER GAME PLAN TAKES SHAPE At BASF, it didn’t take long before the “lessons learned” from the flood

of 2016 were put into practice: Hurricane Matthew hit the company’s Savannah, Georgia, site just a few weeks later. “Our team reached out to that site and we ran down our list of ‘Hey, think about this, or we used this technology. Or, here are the types of supplies you might want to consider,’” Yura says. As with any disaster, many plants performed a plus/delta evaluation following the storm to determine 1012industryreport.com


NEWS: DISASTER lessons learned and implement best practices going forward. One such “best practice” for BASF was utilizing neighboring plant sites as a forward staging area for stockpiling necessary supplies and equipment. “We’re quick learners and we’re doing a lot of documentation of this event,” Yura adds. “When you’re moving fast, sometimes you just shoot out numbers and then you may overshoot or undershoot; so we refine that and document it and put it into our emergency plans moving forward. Most importantly, we share it within the corporation.” ExxonMobil’s Johnston says many of the lessons learned from the flood revolve around the effective use of communications. “I don’t think any of us really expected the scope of the communications challenges,” Johnston says. “One of the biggest problems was connecting with folks who no longer had a home phone, or even an operating cell phone.” As one remedy, ExxonMobil set up an external website with resources for employees that could

be accessed by cell phone or any computer. Dow’s Chiasson says what worked during Hurricane Katrina didn’t necessarily work during the flood of 2016. As such, Dow’s plus/delta process will examine the effectiveness of established procedures in order to identify policies and processes that need changing or revising. Dow also found communications to be one of the most significant initial challenges. “While we work a phone tree system during disasters, we’ve learned that social media is particularly useful in such situations,” she adds. “When the phone lines are out, sometimes they can still go to Facebook and see how to contact their supervisor. That’s how we were able to push out a lot of messages and get information back from our employees.” She adds that other issues will be addressed in the coming months. “I think we’re looking at going about things differently when addressing mental health issues and homelessness that result from these events. It’s eight weeks later and people are

nowhere near going back to their homes. What’s the long-term effect of that? That’s important to us.” THE FINANCIAL BURDEN Begun in the aftermath of Hurricane Katrina, the Baton Rouge Area Foundation’s Employees 1st program partners with companies provides cash grants to their employees facing unexpected difficulties. Employees are also encouraged to make tax-deductible donations to the fund. The program expanded from just 10 employee assistance funds to 80 in the aftermath of the storm, as area businesses leaned upon the program to disseminate financial assistance to their employees. In the wake of the flood, numerous plants and industrial contractors have established Employees 1st accounts, some of which include Dow, Formosa Plastics, Georgia-Pacific, MexiChem, Pala Industrial Construction, Praxair and Associated Builders and Contractors Pelican Chapter. To get started, these companies made a minimum seed depos-

it of $10,000, then employees were encouraged to make a tax-deductible donation to build the coffers. “Certainly, depending upon the employee base, sometimes you want to have more than that, but in general that’s the starting point,” says Elizabeth Hutchison, Employees 1st project manager at BRAF. “We have research data that helps us determine what we recommend keeping in the fund, and how many of their employees might face one of these qualifying incidents in a calendar year. We really work with each company based upon their needs, their employee base, and customize their fund according to their need.” The funds are controlled entirely by BRAF within an investment portfolio managed by Goldman Sachs and J. P. Morgan. Hutchison says the process works fairly quickly after an employee submits an on-line claim. “Within 48 hours they have an answer of ‘Yes, your incident qualifies,’ or it’s denied for whatever reason,” she adds. “Then within a week tops, if not sooner, you receive a check if approved.”

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NEWS: FACILITIES

EXECUTIVE DIRECTOR RANDY ROBB: “We have some 1,500 people out here now. We would like to double that.”

Mission: Job creation

BY SAM BARNES | PHOTOS BY LEE CELANO

Chennault International Airport in Lake Charles is a unique industrial development engine.

F

rom the ashes of the oil bust in the mid-1980s, Chennault International Airport was born, more than 30 years after the shuttering of the Air Force base there in 1963. Cobbled together from pieces of land leased to the state, parish, city and school board, the sprawling airport outside of Lake Charles and its growing portfolio of tenants quickly became a catalyst for industrial development and job creation. A 10,700-foot runway, taxiway and associated aircraft aprons provide its backbone, spanning some 60 acres of concrete, 17 inches thick, and complemented by 1.5 million square feet of hangar, office and warehouse space. Literally anything

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can land there, from air or space— the runways were once used as the backup landing site for NASA’s space shuttle program. Chennault is backed by strong community support. Local voters recently approved a 10-year property tax for economic development by a 2-to-1 margin. This can in no small way be attributed to a well-executed public relations effort, complemented by such popular local events as the Chennault International Air Show, held each spring. George Swift, executive director of the Southwest Louisiana Economic Development Alliance in Lake Charles, says attracting potential business to the airpark has never been difficult. “They have certified sites, access to runways and

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

are the geographic center between Mexico, Canada and the U.S.,” Swift says. “More importantly, they have a willingness to work with industry and to make things happen.” Added to that is an estimated total economic impact of $6 billion since Chennault’s founding. Job creation remains the 1,300acre airport’s overriding goal, says Chennault Executive Director Randy Robb. “Our role is to create jobs and to level the ups and downs of the petrochemical industry,” Robb says. “We have some 1,500 people out here now. We would like to double that.” Robb’s job creation target undoubtedly took a hit with the June announcement that one of Chennault’s primary tenants—AAR

Aircraft Services Inc., an aircraft maintenance, repair and overhaul (MRO) provider—would lay off virtually all of its 150 employees and essentially shutter its operations, just a year after opening the airport’s largest hangar. AAR’s financial troubles were exacerbated by recent tax increases placed on business by state government. “AAR’s profits were already thin, then you throw in a sales tax when you’re making 6 cents on the dollar, it just didn’t make sense anymore,” Robb says. EXPANSION AHEAD In a more upbeat development, Chennault hired CSRS, a Baton Rouge-based engineering and planning firm, to attract potential devel1012industryreport.com


NEWS: FACILITIES opers for a new project that would increase the airport’s cargo-handling capacity. The proposed $257 million expansion would include construction of an air cargo facility on 220 acres now occupied by an adjacent golf course. The plan is to secure a developer and start the project within a year, and will also include two 150,000-square-foot rail-served warehouses, four 75,000-square-foot aircraft hangars, a 200,000-squarefoot light industrial park, a 250,000-square-foot business park, cargo-handling equipment, and roads and rail infrastructure. Chennault also hopes to tap into the growing national demand for certified sites. The airport’s 343-acre Chennault Southwest property was one of the first of its kind to be certified under Louisiana Economic Development’s Certified Sites program. Certification means the site has met stringent criteria from the state, including extensive examination and documentation of the property’s suitability for economic development projects. Essentially, the designation means it’s shovel-ready for development.

ON THE RUNWAY Over the years, a diverse group of tenants has found its way to Chennault, for equally varied purposes. Naturally, aircraft-centered companies make up the park’s primary tenants. Northrop Grumman Corp. opened shop there nearly 25 years ago as an MRO facility, and in the last year and a half has added 200 employees to boost total employment to 850. “Our workload has been growing,” says Michael Flatt, site director for Northrop Grumman. “We currently have more than 100 open requisitions for more employees, primarily because of new work with existing contracts.” Northrop Grumman’s clients are largely military in nature, as they annually maintain up to 10 Joint Surveillance Target Attack Radar Systems ( Joint STARS) and 14 KC-10 Extender aircraft, both for the U.S. Air Force. The Joint STARS is a ground surveillance, battle management, and command and control aircraft, while the KC10 Extender is an aerial refueling tanker aircraft. The global security giant has also funneled more money into its facil-

ities to support the expected work increase. “We recently purchased CNC (computer numerically controlled) machines for our fabrication center, which enable us to automatically mill large parts,” Flatt says. The CNC system is highly automated and relies upon computer-aided design (CAD) and computer-aided manufacturing (CAM) programs. While Northrop Grumman enjoys Chennault’s unrestricted airspace and lengthy runway, which support any size aircraft, Flatt says they’re particularly excited about the airpark’s plans to widen its existing taxiway, which would effectively create a second runway. Since 2005, Chennault’s other aircraft-focused tenant—a fixed base operator called Million Air—has benefited from the airport’s central location to provide a re-fueling point for commercial, private and military aircraft. As such, the tenant has indirectly acted as a catalyst for area industrial expansions, as it has served as a stopping off point for executives flying in on corporate jets to visit area sites, such as the $2 billion Sasol chemical complex in Westlake. Joe Torres, general manager at the facility, says Million Air was initially

attracted by Chennault’s long runway and existing available facilities when it set up shop there 11 years ago. “We get a lot of military coming in,” Torres says. “As they traverse the U.S., this is one of their favorite re-fueling destinations because of the atmosphere we provide and the good service. We also operate a flight school, and we’re strategically placed so they can fly in, re-fuel and rest. They also use our flight planning bay to plan their next trip.” One of 10 franchises owned by Freeman Holdings Group, Million Air employs about 15 workers at Chennault. MORE THAN AIRCRAFT Aviation mechanic training takes place right next door at SOWELA Technical Community College, which has long been a Chennault partner in attracting sophisticated technology industries. SOWELA, in fact, is set to open a new $20 million, 67,000-square-foot regional training facility at Chennault late this year—largely due to the need for skilled laborers at the new Sasol plant and other area industrial sites. The center will stand across from SOWELA’s main campus on land

LOCATION, LOCATION: Tenant Million Air has benefited from the airport’s central location to provide a re-fueling point for commercial, private and military aircraft from across the country.

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NEWS: FACILITIES

once occupied by a trailer park. “The SOWELA campus is impressive,” Robb says. “SOWELA is vital not only to Chennault, but to the region. If you go around to any of the plants around here, you’ll find SOWELA graduates.”

operations here, but they’ve been graduatLOOKING AHEAD: Site director Michael Flatt says Northrop Grumman has a ing only about 35 growing workload and jobs to fill. a year,” Robb adds. “They need much more.” Another non-aviation tenant, Louisiana Millwork Inc., has utilized two of the airpark’s existing buildings for the manufacture and storage of custom-made doors and frames for 16 years. Setting up shop at the airpark was a no-brainer. “They didn’t have to build anything, so there was no capital cost,” Robb says. Increasing the number of gradu“They can’t find this kind of facility ates via the new facility is importanywhere in the world for the kind ant, since area training efforts are of rent that they pay here.” currently falling short of demand. “There is an A&P Mechanic CertiCHENNAULT PLOTS A COURSE fication program there that services With an eye on the future, Northrop Grumman’s MRO Chennault recently released its 2016

Master Plan to map out a course for development over a 20-year period, in collaboration with airport management, federal and state agencies, local officials, businesses, and airport users/stakeholders. The most immediate goals outlined in the plan are the land purchase and new air cargo facility announced this summer. Robb has big plans for the land. “We are talking about warehousing. We are talking about air cargo. The possibilities here are endless,” he says. The master plan also outlines other key, strategic goals for the airport, such as a dedicated airport entrance, support facilities for MRO operators, development of a large scale airport manufacturer and alternate access routes to I-210 and local roads. Meanwhile, Robb and the Chennault Airport Authority continue to seek out new industry and job opportunities, with the hopes that the airpark will eventually become self-sufficient and not be dependent upon parish property taxes to operate.

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ISTOCK

NEWS: OUTLOOK

2017 industry outlook

BY SAM BARNES

Chemical industry cautiously optimistic as price of oil slowly rises.

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n an economic landscape shaped by anemic global growth, low oil prices and a strong U.S. dollar, many chemical industry proponents hope that Louisiana’s plant owners will focus instead on long-term demand variables and move forward with the more than $24 billion in capital investment currently in the queue. Four Louisiana parishes in particular—St. James, St. John, Calcasieu and Ascension—have the most to gain from projects announced since 2012, since more than 80% of the projects in the FEED (front-end engineering and design) stage are located there. Economist Loren Scott of Loren C. Scott & Associates says the primary reason the chemical industry is “tapping the brakes” continues to

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be low natural gas prices in Europe and China. Since overseas natural gas prices move in tandem with oil prices, unlike in the U.S., the falling price of oil has made these countries more price competitive. Natural gas is not only a popular source for fuel but also a raw material used in a variety of chemical processes. Many of the planned projects were announced when market conditions were decidedly different, with oil hovering around $100 a barrel and natural gas prices much higher abroad—a formula that makes the U.S. more attractive for investment. However, in October Scott took a more optimistic tone, pointing to recent increases in the price of oil as an encouraging sign and one that could lead to a widening competitive advantage for Louisiana plants.

“OPEC has gotten together to put a cap on the production of oil, and Russia did the same,” he adds. “If these folks really follow through, you are going to see the price of oil drift upwards.” A LONG-TERM VIEW Rhoman Hardy, plant manager at Shell Chemical in Geismar, says his plant’s $717 million alpha olefins expansion—expected to make it the largest alpha olefins producer in the world when it begins production in late 2018—has not been significantly impacted by short-term variables, adding that Shell takes a 20-year outlook for demand when planning projects. Alpha olefins are the building blocks for a variety of consumer products, such as detergents, plasticizers and synthetic lubricants.

Increasing demand for polyethylene is expected to drive the global alpha olefins market, along with the growth of automotive and consumer goods industries, particularly in the emerging markets of the Asia Pacific region and Latin America. “What creates the demand for these products? For one thing, it’s general population increases (worldwide),” Hardy says. “Also, as parts of the world become wealthier, the consumer products they want change. We think through these drivers, and that’s why you see so much investment in the chemical business.” Still, Hardy says short-term factors undoubtedly play a role in the timing of investments. “I don’t think it changes the long-term trajectory, but the time frame and how things happen, are definitely impacted,” he adds. As such, he says “we’re manag-

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NEWS: OUTLOOK

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LOGAN: Expected delays in queued projects “going vertical” may actually allow time for Lake Charles to recover from workforce strains.

The Baton Rouge area is already feeling the downturn, as reflected in the Greater Baton Rouge Industry Alliance’s July forecast. GBRIA’s Semi-Annual Contract Labor Forecast shows a reduction in large capital projects in 2017, with spikes in turnarounds occurring in late 2016/ early 2017 followed by an overall slowing beginning midyear. As a result, the overall workforce demand for Baton Rouge area plants is expected to steadily fall to less than 20,000 by the end of 2017, after peaking at nearly 30,000 this fall. Connie Fabré, GBRIA executive director, says maintenance projects provide some necessary stability when major capital projects are put on hold. “Some people question the value of temporary construction and maintenance jobs, but when you look at them in aggregate, they make up a permanent workforce that has supported the Baton Rouge area for more than 100 years,” Fabré says. In a recent report published by the American Chemistry Council in Washington, D.C., Kevin Swift, senior economist, acknowledges that national projections for chemical industry growth in the near term have been downgraded since the end of 2015, as headwinds from the high dollar and weakness in the economy and in manufacturing have softened demand. Still, Swift predicts capital spending will grow by 7.8% in 2017 and 7.2% in 2018, and that the most dynamic growth will occur in the Gulf Coast region over the next five years. Turning to the long term, the ACC expects the growing popularity of shale gas in the U.S. to foster new investment and new capacity in the chemical industry, increasing access to affordable natural gas supplies. In fact, the report adds that U.S. basic chemicals (inorganic chemicals, petrochemicals, plastic resins, synthetic rubber and manufactured fibers) are already experiencing the effects of renewed competitiveness from shale gas, with basic chemicals production anticipated to grow 4.9% in 2017. LEE CELANO

ing our costs extremely closely” on the current project. Some in the methanol market also remain bullishly optimistic about long-term demand. Methanex Global Market Development Senior Manager Jason Chesko says the energy market has seen significant growth in demand for the product, which has prompted continued investment. “If you look at methanol today, it’s being used primarily as a vehicle fuel, in power generation and in biodiesel fuel,” Chesko says. “The industry is growing at a pretty high rate. A large part of that is being driven by the use of methanol for energy applications. Power generation, biodiesel … that’s where we’re seeing the higher growth rates.” As much as 60% of demand for methanol comes from chemical derivatives. “Methanol is the building block for hundreds of products that touch our lives daily—paints, plastics, solvents, resins … they all use methanol,” says the Methanol Institute CEO Greg Dolan. “It’s a very simple molecule, which makes it a good building block for making other things.” By far, China is methanol’s biggest consumer, despite a leveling off of the economy there. A growing market in China is the conversion of methanol to olefins, which are a raw material used to create synthetic rubber and plastics, among other products. Meg Mahoney, public affairs manager at the Methanex plant in Geismar, won’t rule out the possibility of future expansions at her plant to meet general demand growth. “We have looked at a potential third plant in Geismar as part of our ongoing process to grow business,” Mahoney says. CF Industries—which recently completed a $2.1 billion ammonia plant expansion in Donaldsonville— also voices long-term optimism for its products. The substantial investment seeks to meet long-term demand for nitrogen fertilizer and takes advantage of the facility’s proximity to abundant natural gas, a skilled local workforce and multiple transportation channels. Still,

Chris Close, manager of industrial relations for CF Industries, said in a prepared statement he expects a challenging price environment through 2017 that could lead to decreases in exports, production curtailments and shutdowns at plants. SKILLED LABOR TO CATCH UP One Louisiana parish with a lot on the line, Calcasieu, might actually benefit from a slight delay in projects going vertical, as it struggles to keep up with workforce demand. While Dale Logan, executive director of the Southwest Louisiana Construction Users Council in Lake Charles, has a “high degree of confidence that what they’re telling me will happen,

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will happen,” he concedes that the state’s largest project currently under construction—the $11 billion Sasol plant in Lake Charles—has slowed its pace a bit as the company closely eyes expenditures. [See our update on the Lake Charles Chemical Project on page 23.] Logan adds that expected delays in queued projects “going vertical” would actually allow time for Lake Charles to recover from workforce strains. The Lake Charles area’s manpower needs are continuing their upward trajectory, and SLCUC forecasts manpower demand to peak at nearly 14,000 (for SLCUC member companies only) in March 2017 and remain near those levels through the fall.

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STATE-SPECIFIC INVESTMENT DRIVERS Regardless of national or worldwide demand variables, recent actions by Louisiana state government could negatively impact Louisiana’s ability to compete with neighboring Texas for chemical investment dollars in 2017. Dan Borné, outgoing president of the Louisiana Chemical Association, says Louisiana’s current environment could prompt capital for projects in the FEED stage—currently totaling more than $60 million when including refineries and petroleum—to be diverted elsewhere. Borné fears that increased economic burdens placed on business by state government will make the task of attracting and/ or retaining industry immeasurably more difficult. “Previous legislatures and governors supported taking the sales and use tax off of machinery and equipment, or taking the tax off of utilities and natural gas,” Borne adds. “Now those taxes have been re-imposed, albeit for a temporary period, but with no clear path as to whether there are going to be changes or whether those will be extended or even increased. These are very important inputs because of the magnitude of the natural gas and electricity that these companies use and the billions of dollars in equipment and machinery that they buy.”

He adds that other issues—such as the industrial tax exemption [see page 12] and how it will be administered in coming years—compound the problem, creating uncertainty that could significantly impact industry’s willingness to expand in Louisiana. Economist Scott says while state government had legitimate reasons for re-imposing the taxes, the longterm implications could be costlier. “One might argue, reasonably, that we needed to have business share in the cost of government, so we raised taxes on businesses a lot these last 12 months. But we also need to understand that this is just math. Somewhere in these companies (planning industrial investments) there is an accountant that has to figure the rate of return on the equity. “What we did with these taxes is we moved the dial away from Louisiana. It’s not a matter of feelings or emotions, it’s just math.” Borné agrees. “When you take into consideration the economic variables that we’re dealing with here, meaning oil very low, competition from around the country and the world, the imposition of business taxes that Texans don’t have to pay and a change of philosophy … to some degree it goes into the decision-making process of these companies.”

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BORNÉ: These (tax changes) are very important inputs because of the magnitude of the natural gas and electricity that these companies use and the billions of dollars in equipment and machinery that they buy.

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NEWS: PETROCHEMICALS

COURTESY METHANEX

NEW BEGINNINGS: Companies like Methanex are hoping the conversion of more marine vessels to run on methanol will boost demand.

Riding a new wave

BY SAM BARNES

New marine applications and rising Chinese demand are fueling hopes of a new boom for methanol makers.

D

espite lower oil and gas prices, some methanol producers feel they are on the cusp of a boom, encouraged by the advent of new marine fuel applications and rising Chinese demand in the energy and methanol to olefins sectors. The industry is particularly excited about the potential of new marine applications for methanol. In April, Waterfront Shipping, a subsidiary of the world’s largest methanol producer, Methanex, launched seven 50,000-ton marine vessels built with dual-fuel engines that can run on methanol, fuel oil, marine diesel oil or gas oil. The conversion will enable the vessels to comply with a 2020 deadline imposed by the International Maritime Organization, an agency

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of the United Nations, to reduce marine fuel sulfur content to less than 0.5% globally. Waterfront also operates the world’s largest methanol ocean tanker fleet, with 22 deep sea tankers maintaining an uninterrupted flow of methanol to storage terminals and plant sites around the world. Greg Dolan, CEO of Washington, D.C.-based industry group Methanol Institute, says the cleaner burning methanol is a promising alternative fuel for ships. “Currently, there are some 90,000 vessels on the world’s oceans that consume about 370 million tons of bunker fuel, which is typically a high-sulfur diesel fuel,” Dolan says. “It’s estimated that a single large container ship can produce as much sulfur dioxide as 50 million cars.” While other available fuels burn

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less sulfur, such as marine gas oil or liquefied natural gas, these options often come with a premium. Dolan says the low-cost simplicity of converting methanol to marine fuel is its greatest attribute. “It’s not rocket science,” he says. “There is a simple conversion that they make. Methanol is already one of the top five chemical commodities shipped around the world— now we’re looking at just moving the methanol from the ship’s cargo hold to its bunker where they keep their fuels.” By converting to methanol, large ocean-going vessels can reduce sulfur dioxide emissions by 99%, nitrogen oxide emission by 60% and particulate matter by 95%. This is important to port cities such as Baton Rouge and New Orleans, where pollutants discharged by shipping

vessels can create “pollution islands.” “Anything you can do to introduce cleaner burning fuels for those inland waterway vessels will have an immediate impact,” Dolan says. The innovative engines used in the Waterfront vessels were manufactured by MAN Diesel & Turbo SE, headquartered in Augsburg, Germany. “MAN developed these two-stroke engines in response to interest from the shipping world to operate on alternatives to heavy fuel oil and meet increasingly stringent emissions regulations,” says Ole Grøne, MAN senior vice president, in a news release. “To hedge the risk of fuel price volatility, the vessels can switch between fuels, and operate cost-effectively.” The engine expands the company’s dual-fuel portfolio, also enabling the use of other fuels such as liquefied natural gas. 1012industryreport.com


Meg Mahoney, public affairs manager at the Methanex plant in Geismar, says it’s difficult to predict how advances in marine applications might impact the local plant. “I think it would be too early to speculate on the direct impact to Geismar,” Mahoney says. “However, any new market for methanol is positive for our industry overall.” Still, she won’t rule out the possibility of future expansions to meet general demand growth. “We have looked at a potential third plant in Geismar as part of our ongoing process to grow business,” Mahoney says. “I don’t have any more information at this time … but it is a possibility.” At a combined cost of $1.4 billion, the Vancouver-based company has relocated a pair of plants from Chile to Geismar, the second of which began producing in December 2015, three months ahead of schedule. North America is a key global market, and moving its assets to the region enabled the company to supply customers in a more reliable way. “There is also an abundance of competitively priced natural gas in the U.S., and in Geismar we have access to a very talented workforce that is skilled in chemical production,” Mahoney explains. Anticipated growth in demand for methanol has led to other investments in Louisiana. Houston-based G2X Energy broke ground in mid-January 2016 on a $1.6 billion methanol plant in Lake Charles. The 200-acre Big Lake Fuels Methanol Plant is expected to produce 1.4 million metric tons of commercial grade methanol per year upon completion in 2019. It will also be capable of converting methanol into automotive gasoline. In St. James Parish, China-based Shandong Yuhuang Chemical Inc. broke ground in September 2015 on a $1.85 billion methanol plant, to be built in three phases. The first phase, which company officials have said is expected to be up and running in the first quarter of 2018, will be a methanol plant expected to produce 1.7 million tons annually. Some methanol producers, however, don’t appear to be as bullish as others. Houston-based Syngas Energy CEO Vas Kenyen is more 1012industryreport.com

cautious, saying the $360 million, 130-acre plant announced last fall in St. James Parish has been put on hold until the second quarter of 2017. “The market conditions are slowing us down a bit,” Kenyen says. “We are moving forward with EPA permitting, but we don’t expect to break ground until conditions improve.” Kenyen says cheap oil makes methanol a less attractive fuel source, thereby suppressing demand and reducing prices. At least for Syngas, demand for the product in China has not been enough to counter market fluctuations in the oil and gas sector. While new marine fuel applications are a promising source of new demand, approximately 60% of current use of methanol comes from other sources. Methanex Global Market Development Senior Manager Jason Chesko says the energy market has seen the most significant growth. “If you look at methanol today, it’s being used primarily as a vehicle fuel, in power generation and in bio-diesel fuel,” Chesko says. “The industry is growing at a pretty high rate. A large part of that is being driven by the use of methanol for energy applications. Power generation, biodiesel … that’s where we’re seeing the higher growth rates.” Still, as much as 60% of demand comes from chemical derivatives. “Methanol is the building block for hundreds of products that touch our lives daily—paints, plastics, solvents, resins … they all use methanol,” the Methanol Institute’s Dolan says. “It’s a very simple molecule, which makes it a good building block for making other things.” By far, China is methanol’s biggest consumer, despite a leveling off of the economy there. A growing market in China is the conversion of methanol to olefins, which are a raw material used to create synthetic rubber and plastics, among other products. “On a global basis, global methanol demand in 2015 was 70 million metric tons,” Dolan says. “Of that demand, probably 40% of it was in China. In fact, last year the Chinese consumed 7 million metric tons of methanol in their cars, trucks and buses.”

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FOCUS:Safety Creating a culture of safety

BY SAM BARNES

How do corridor companies do it? Leadership and people skills are key.

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A

s Louisiana’s continuing demand for skilled laborers leads to a worrisome decline in productivity, some are taking steps to ensure safety doesn’t become the next casualty. This comes in the wake of recent incidents that have been directly linked to unsafe work practices. In October, the U.S. Chemical

Safety Board concluded that poor safety practices were responsible for the June 2013 explosion at the Williams Olefins plant in Geismar, which left two people killed and dozens injured. While the board found that plant managers did follow safety procedures, it determined that they treated the procedures as an “after-the-fact” requirement rather than as a tool to detect hidden hazards. Also in October, OSHA fined PPG Industries in Westlake more than $90,000 for nine “serious” safety violations, including failure to monitor air in confined areas and inspect piping safety relief valves, and allowing equipment to be used without safety guards. An employee complaint sparked the OSHA investigation. On a national scale, safety concerns in the construction and manufacturing markets are nothing new. The occupations are traditionally ranked among the most injury-prone. According to the Bureau of Labor Statistics, those two occupations in 2015 were among a handful where the incidence rate per 10,000 full-time workers was greater than 300 and the number of cases with days away from work was greater than 10,000. This distinction was shared with police and sheriff ’s patrol officers, correctional officers and jailers, and firefighters. Kathy Trahan, president/CEO of Alliance Safety Council in Baton Rouge, says the state’s workforce surge has prompted some owners to add contractual language requiring that supervisors take Certified Occupational Safety Specialist, or COSS, training. The 40-hour face-to-face standardized program is offered through authorized training providers across the U.S. and

internationally. “We’ve already seen nearly 900 graduate from the COSS program in the first 10 months of the year,” Trahan says, adding that more than 10,000 have completed the program since its implementation. The council’s new Occupational Safety Manager program—meant primarily for corporate safety managers—has seen similar success, and currently has a waiting list. TOP PRIORITY Mike Phelps, vice president of safety, health and environmental at Turner Industries of Baton Rouge, says any contractor wanting to work in the Louisiana industrial market had better have an exemplary safety record, as well as intimate knowledge of a plant’s safety policies. Otherwise, the firm won’t remain competitive for long. “In just the last 10 years, we’ve more than doubled in size,” Phelps says. “The influx of new people, and getting those folks trained in terms of our safety and health expectations, has been absolutely critical to us.” Through it all, Turner’s safety performance has improved. Phelps attributes much of that success to a program in which all new hires are indoctrinated during a 90-day mentoring process. Relying upon numerous seasoned professionals within the organization, Turner assigns a mentor to each new hire to help integrate newcomers into the corporate safety culture. Mike Albano, lead director of environmental health and safety at Dow’s Louisiana Hub in Plaquemine, compares the safety relationship between contractor and owner to that of a doctor and patient: “If I’m up on a scaffold,” he notes, “I’m

DON KADAIR

“In just the last 10 years, we’ve more than doubled in size. The influx of new people, and getting those folks trained in terms of our safety and health expectations, has been absolutely critical to us.”

1012industryreport.com

—MIKE PHELPS, vice president of safety, health and environmental, Turner Industries of Baton Rouge

putting my life in their hands that they’ve done the job right and built the scaffold correctly.” Not only does Dow require assurance that its contractors follow established requirements and expectations, but also insists that they have a robust safety training and safety management system in place. As such, contractors must undergo management system reviews and be willing to engage in an open dialogue. “That way, I can explain to them what I’m seeing or if there are deviations in my expectations,” he adds. “At the same time, if there are things I can do to make the work environment safer, I need to hear that as well.” FINDING LEADERSHIP Most safety professionals say that a vibrant safety culture—whether for contractor or owner—begins with the hiring of strong safety leaders who possess a unique set of skills. Albano looks for three key attributes in his safety leaders: an acceptance of accountability, desire for teamwork and technical ability. “I place a high value on individuals who want to be held accountable for their results,” Albano says. “If you want to be a leader, you need to thrive on accountability. A real leader isn’t interested in providing excuses. That means putting a culture in place that promotes safety, promotes asking questions and creates an atmosphere where people are willing to ask questions.” Technical ability is also critical, since a leader must be able to work with various teams to resolve issues, as well as think outside the box. “Maybe in the past, you might build a scaffold with a 10-man crew. Now, there might be new technologies that enable you to employ remote technology to do the same inspection and save 10 people having to build that scaffold.” A good safety leader knows enough about the subject matter to propose a safer, more effective way of doing things. Albano also strives for diversity in his safety team of about 60 direct reports. “The real key is to do a good job of planting the seeds,” he adds. “You can find good talent both inside and outside your company. I try

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FOCUS: SAFETY

PROGRAMS APLENTY Education is playing an increasingly important role in cultivating today’s safety professionals. In addition to the Alliance Safety Council’s portfolio of programs, degreed programs are growing in prevalence. Southeastern Louisiana University in Hammond offers an increasingly popular occupational safety, health and environment degree, and LSU’s College of Engineering, in conjunction with the Alliance Safety Council, sponsors the OSHA Training Institute, one of only 26 in the U.S. Southeastern’s OSHE program is one of only 26 such programs nationally that award the Graduate Safety Practitioner Designation from the Board of Certified Safety Professionals. The program is accredited by the Applied Science Accreditation Commission of ABET. Lu Yuan, a certified safety professional and head of the Southeastern program, says the four-year OSHE program has expanded from just 10 to 147 graduates in Fall 2016. “It’s increasing dramatically,” Yuan adds. “Every year, we get 10 or 20 more.” To develop and improve curriculum, representatives from industry, professional organizations and state agencies meet twice a year. “We have a dynamically changing curriculum,” Yuan says. “When we see a need or get a request from industry, we look at our current curriculum to add some components, add a new professional elective, etc.” A growing number of nontraditional students are able to take advantage of the program, since most of the classes are scheduled at night. One such student was Lisa Bourgeois, currently senior health and safety manager at Turner, who graduated from the Southeastern program 10 years ago at the age of 44. “I was kind of drawn to the in50

high stress events and keep the team moving forward.” Dow’s Albano agrees that effective communications is a necessary component of a healthy safety culture, and that safety leaders must excel at delivering important information. “If they just lecture people for two hours, they’re not going to get it,” he adds. “If you want to get your message across, it better be interactive. That means you might need some videos and some pictures. You might want to do some role-play or some things to involve people. You have to engage people. Make sure they’re giving feedback, ask questions, break out into groups. You have to use all those techniques.” That could also include making seemingly mundane safety tasks more engaging—such as Job Safety Analysis documentation, the “cornerstone” of any safety program. As such, Turner’s Bourgeois is working to find ways to make her company’s JSAs more visually appealing. “We want to make that piece of paper as visually appealing as an iPad,” Bourgeois says. “So we ask, ‘How can we bridge those two somehow?’ I’m planning on meeting with the folks that actually use it. Then, it’s just putting it together and getting everyone’s opinion through every stage of the process.” Ultimately, an effective safety professional is able to convey to both employees and managers that a healthy safety culture directly impacts their jobs, and is a quantifiable component of business. “You can talk about the moral obligation of safety, or the commitment to our fellow man, but there is also a significant business driver,” Turner’s Phelps says. “It’s one of the main parameters that our clients judge us by—you can fail or succeed at getting that contract based upon how you approach safety.” DON KADAIR

to identify those people, then nurture them and help build them.”

“If I’m up on a scaffold, I’m putting my life in their hands that they’ve done the job right and built the scaffold correctly.” —MIKE ALBANO, lead director of environmental health and safety, Dow’s Louisiana Hub in Plaquemine

dustrial program,” Bourgeois says. “All of the safety classes were offered at night. That’s when I got to meet all the older folks in my safety classes.” Bourgeois, who began working at Turner as an intern, is responsible for finding and implementing “cutting edge” developments in the field of safety. “My predominate role here is to keep our safety programs new and fresh, so I am constantly developing, researching and proposing either new programs or a way to refresh our old programs,” she says. Bourgeois attends a variety of conferences, such as the recent Safety 2016, sponsored by the American Society of Safety Engineers, to stay abreast of the latest trends. PEOPLE SKILLS Above all else, effective safety leaders must be able to communicate corporate safety initiatives at the

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

jobsite level, a fact recognized by the Alliance Safety Council when it incorporated “soft skills” into its Safe Supervisor Course. Soft skills target such things as handling conflict, supporting a culture of safety, communicating the company’s commitment to safety and addressing corrective actions. Phelps, who oversees more than 30 corporate safety managers at Turner, has a keen eye for finding leaders with the appropriate set of people skills. “I want someone that’s stable in their approach, meaning they’re not easily rattled and they have the personality to be able to sit with business leaders and managers and talk about goals and processes,” Phelps says. “Safety is all about good people skills, good communication skills, team building and getting people on board with what you’re trying to accomplish. They can also handle

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SAFETY FIRST

ABOVE AND BEYOND

“Our team is trained to ask the right questions to ensure our jobs are safe. It’s our top priority. Westgate is an excellent company to build a career with that is focused on safety and growth. There is more opportunity in front of us as a company and an industry.”

We go above and beyond to deliver on-time and safe jobs. And while we learn something new every day, it is our commitment to our safety practices and our customers’ needs that make us proud to be a part of the Westgate team. Our processes work for our teams and our clients.

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“We are more than just employees here at Westgate. We have the opportunity to learn and grow as part of a family. Our attitudes about and contributions to this team matter. We show up every day, committed to our company and clients. That’s why the sky is the limit for Westgate. We make our own opportunities for success.” – BRANDON WHITE, 15 year Westgate team member with 17 years in the industry

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

YEA

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r su e p er v isors have worked for W

MORE THAN JUST EMPLOYEES

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– CODY T YREE, 9 year Westgate team member with 10 years in the indu stry

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– WALTER GREEN, 23 year Westgate team member with 21 years in the industry

Westgatellc.com (225) 749-2635 1355 Beaulieu Lane Port Allen, LA. 70767

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MOVING UP Most of our management team has worked their way up through the ranks at Westgate. That means we have learned to ask lots of questions and sweat the details. It also means that joining our team opens up all kinds of opportunities for those that want to grow and improve themselves and our company. Westgate rewards our team for paying attention to the details that make jobs safe, on budget, and on time. This is a career company, not just a job. – STEVE HUGHES, 20 year Westgate team member with 28 years in the industry

1012industryreport.com


FOCUS: SAFETY

Safe passage

BY SAM BARNES

An industry coalition and freight railroads disagree over who should determine new tank car standards.

REGULATION SHOWDOWN: Louisiana ranks second in the U.S. in chemicals transported by rail and first in the U.S. in the amount of crude oil transported. So the outcome of the debate over safety regulations will have major implications for industry in the state.

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battle is brewing over just how stringent industry standards for tank cars should be, and the outcome will have dramatic implications for Louisiana. Freight railroad interests want higher standards than those imposed by the Pipeline and Hazardous Materials Safety Administration. But a national coalition representing chemical, gas, fertilizer and other industry groups wants to block that initiative to streamline oversight of new tank car safety standards and control rising rail transportation costs. The outcome of the debate is particularly important to Louisiana’s chemical and petroleum producers, since tank cars are purchased or leased by the customers that use

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them. The Louisiana Department of Transportation and Development ranks Louisiana second in the U.S. in chemicals transported by rail and first in the U.S. in the amount of crude oil transported. “I don’t think a lot of people realize that our industry owns and/ or leases a lot of these tank cars,” says Jeff Sloan, senior director of regulatory and technical affairs at the American Chemistry Council in Washington, D.C., a participant in the petition. “When it comes to adhering to any standards, those are the sorts of things that fall on our industry.”

While all parties agree that new industry standards for stronger, safer tank car designs are needed, there is disagreement over the extent of the design changes and who has authority to mandate those changes. Industry manufacturers are petitioning the PHMSA—a direct response to efforts by the Association of American Railroads to impose tank car manufacturing guidelines that go beyond standards issued by PHMSA in 2015—seeking to establish that PHMSA is the ultimate authority for imposing new standards. Sloan says the petition is currently under official review, with no defin-

“Safety always has to be the top concern.” —GIFFORD BRIGGS, interim president, Louisiana Oil & Gas Association

itive timeframe given for a decision. Should PHMSA determine that the petition has merit, and subsequently accept it, a rule-making process will follow. DETRIMENTAL TO SAFETY? Some state leaders are concerned that any new tank car safety standards that fall outside those imposed by the PHMSA would not only hamper the economic viability of rail transport, but also become detrimental to safety. Louisiana Oil & Gas Association Interim President Gifford Briggs said the danger is that it could force some users to look to other modes of transportation. “And that’s not good for anyone, whether it’s the refiners of the product or the consumers, because those costs will get passed down,” Briggs adds. “Taking product out of

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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rail cars and putting it on the road means more big rigs pounding the pavement and that’s not necessarily safer. It’s just like any other business. You perform a cost benefit analysis and if you can get the product wherever it’s going in a timely fashion cheaper, then that’s what you choose.” Still, Briggs says producers will tolerate some additional expense in the interest of safety. “Safety always has to be the top concern,” he says. “It might be that at a higher cost rail is still the best way to do it to get the product where it’s going reliably and safety. “Certainly rail has historically played an important part, and will continue to play an important part, in the advancement of industry in Louisiana. Along with that comes regulations and rules about how to safety move the product throughout the country.” Carmack Blackmon, who represents the Louisiana Railroad Association in Baton Rouge, says the national petition is as an attempt by industry groups to establish DOT as the ultimate authority for industry standards, preventing other groups—primarily AAR— from imposing separate standards. “They want to have one agency be the regulatory authority for tank cars, because right now they have multiple agencies that determine that,” Blackmon says. “They’re saying they shouldn’t have to deal with the AAR, or the manufacturers.” AN OUTCRY The new federal guidelines aimed at strengthening tank car standards are the direct result of recent high-profile accidents, most significantly a July 2013 incident in Quebec when a runaway train carrying 72 tank cars of crude oil derailed, igniting 1.5 million gallons of oil and killing 47 people. In the months that followed, industry groups worked with PHMSA to improve the standards for tank cars, primarily those carrying crude oil and toxic materials. Since the federal guidelines were announced in 2015, there have been many challenges to the rule—both in federal court and in administrative proceedings before PHMSA. “The goal is to make them stron54

SCOTT PROKOP

FOCUS: SAFETY

WHO HAS THE POWER? While all parties agree that new industry standards for stronger, safer tank car designs are needed, there is disagreement over the extent of the design changes and who has authority to mandate those changes.

“They want to have one agency be the regulatory authority for tank cars, because right now they have multiple agencies that determine that.” —CARMACK BLACKMON, Louisiana Railroad Association in Baton Rouge

ger, and make them safer,” LRA’s Blackmon says. “One way to do that is through double insulation. That way, if the outer tank gets punctured it doesn’t puncture the tank holding the commodity. But it’s not a simple solution. When you do that, you put extra weight on that car and extra weight on that track, and that causes problems, too.” Blackmon says the stakes are high for everyone, since there’s a direct financial impact to all parties when a preventable accident occurs. “The rail industry worked with the federal agencies to improve standards because we don’t necessarily own those cars, but we do move them around the nation. When something goes wrong or there’s a release of some of those commodities, we get sued for the damages that they create, not just the owner of the commodity.” WHO PAYS FOR IT? The PHMSA standards target so-called high-hazard flammable

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

trains carrying crude oil and other hazardous liquids and materials. They are designed to reduce the consequences and probability of accidents through new enhanced

tank car design and an aggressive, risk-based retrofitting schedule for older tank cars. The recent petition requests that PHMSA adopt a rule that ensures that the responsibility for establishing tank car specifications remains in the hands of federal regulators. ACC’s Sloan says while the groups in the petition are supportive of allowing AAR to collaborate in the process of devising the rules, it should not be allowed to act on its own to establish new guidelines. “We think AAR’s Tank Car Committee does a lot of good work in improving safety,” Sloan adds. “But there are a few instances where the railroads have acted unilaterally to impose those standards on others … where the cost falls to others. We don’t think it’s the appropriate place for those standards to be set. We felt it was necessary to petition DOT to issue new rules that make it crystal clear that no one else can impose additional or contrary specifications on others.” Robin Rorick, director of midstream and industry operations for the American Petroleum Institute, another participant in the coalition, says failing to establish PHMSA’s authority could have other ramifications. “Attempts by third-party groups to deviate from PHMSA’s tank car requirements could compromise safety and jeopardize the strides industry has made to ensure the safe transport of products by rail,” Rorick says.

NEW STANDARDS Key changes in the final rule for the safe transportation of flammable liquids by rail • Unveils a new, enhanced tank car standard and an aggressive, risk-based retrofitting schedule for older tank cars carrying crude oil and ethanol • Requires a new braking standard for certain trains that will offer a superior level of safety by potentially reducing the severity of an accident, and the “pile-up effect” • Designates new operational protocols for trains transporting large volumes of flammable liquids, such as routing requirements, speed restrictions, and information for local government agencies • Provides new sampling and testing requirements to improve classification of energy products placed into transport SOURCE: U.S. Department of Transportation 1012industryreport.com


Always safe and technically sound

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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. 2016. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

PAID ADVERTISEMENT

FIRE SAFETY TIPS BROUGHT TO YOU BY

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Test and inspect your smoke detectors monthly by pressing the test button. Detectors without a test button should be tested with aerosol smoke detector test spray. If your detectors are monitored off-premise be sure to call ahead and let them know you will be testing. Follow up with the monitoring company to verify they received the alarm. During testing you should also inspect each detector for dust, insects, or other debris. Detectors can be wiped with a slightly damp cloth to remove any debris from the outside of the detector. Remember to replace your detector batteries every year, I change mine at Christmas.

Home fires often start with grease or oil while cooking. Never spray a grease fire with water as this will cause the grease to explode and spread the fire. Turn the stove off first if it is safe to do so. If the fire is small and only in the pot, use a metal lid to smother the fire. For larger fires, or fires that have spread outside of the pot, use a fire extinguisher to extinguish the fire, just be sure to stand at least 6’ away to avoid splashing the grease. Read label for proper distance and use of your fire extinguisher and share the info with your family members.

Strategically locate more than one fire extinguisher in each premise; ensuring they are free from obstructions and easily accessible. Fire extinguishers should not only be in the kitchen, but located throughout the premise so that they can be used to provide a path for escape if needed. Check your extinguishers monthly to make sure they are in their correct location and fully charged. Read the instructions and uses on your fire extinguisher label. Never expect to re-use a discharged extinguisher, no matter how little agent was used. Discharged extinguishers should only be recharged by licensed extinguisher contractors.

Household Electrical Fires – Never use water on electrical fire. If it is safe to do so, kill the power source by turning off breaker to the premise, then use dry chemical fire extinguisher.

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

Car fires-always keep cable cutters in your vehicle along with a fire extinguisher. Cut the battery cables should you suspect a short in the electrical wiring system is causing the smoke/fire then use fire extinguisher. “frequency of inspections...” is good.

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Issue Date: 4th Quarter Ad proof #3

• Please respond by e-mail or fax with your approval or minor revisions. • AD WILL RUN AS IS unless approval or final revisions are received by the close of business today. • Additional revisions must be requested and may be subject to production fees.

FOCUS: SAFETY

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

Safety and profits

ANIRBAN BASU

B

ased on fatal occupational injuries per 100,000 full-time workers, the four most dangerous occupations are loggers, fishermen, aircraft pilots and extraction workers, according to the Bureau of Labor Statistics’ latest data. However, a number of construction occupational categories make the top 20 list, including roofers (No. 5), electrical powerline installers and repairers (No. 11), construction laborers (No. 12), maintenance and repair workers (No. 14), painters (No. 16) and electricians (No. 19). According to a report released by OSHA, 4,251 worker fatalities were reported in the private sector in 2014. Of those deaths, 874 (20.5%) were in construction. Construction firms and organizations such as ABC have taken steps to increase awareness, provide guidance and insight, and recognize contractors boasting the best safety records. These efforts to promote safety demonstrate how much employers care about their employees and want to see that they return home safely each day. There are obvious financial considerations as well. Firms with better safety records are less exposed to lawsuits and claims for workers’ compensation. Trained workers are more likely to stay on the job. Better safety means fewer expenses to repair damaged equipment and reputation. And, safe companies eliminate the costs of investigation, potential workplace interruptions and impacts on morale. Study after study indicates that

1012industryreport.com

preventing injuries and suppressed lost productivity and medical costs are associated with bolstered profitability. Paul O’Neill, former secretary of the treasury under President George W. Bush and former chairman of Alcoa Steel Corp., has spoken at length about the positive economic impacts of investment in safety, stating that “When there are fewer accidents, society saves as a whole. Fewer hospitals, medical professionals and rehabilitation facilities will be needed, and employee productive capacity will not be reduced.” According to Liberty Mutual’s Workplace Safety Index for 2016, workplace injuries and illnesses generated more than $62 billion in direct workers’ compensation payments in 2013. In other words, workers’ compensation-related payments exceeded $1 billion each week. What’s interesting is that many of these studies look at the rate of return on investment in safety, but don’t distinguish between expenditures that actually improve safety and those that have de minimis impact. Presumably, those expenditures associated with significant reductions in accidents generate an even higher rate of return than expenditures that do not. A Goldman Sachs report indicates that during a recent four-year period, companies that actively managed safety issues performed better financially than those that did not, and it found a correlation between emphasis on safety and the general presence of good corporate governance. With respect to safety, there seems to be near-perfect alignment between doing the right thing and enhancing profitability. Construction firms need only look at studies such as ABC’s Safety Performance Report to recognize that the path to profitability is to invest more in safety. Such action also serves an ethical imperative. Anirban Basu is chief economist of Associated Builders and Contractors. Republished from Construction Executive, May 2016, a publication of ABC. Copyright 2016.

This ad design © Louisiana Business, Inc. 2016. All rights reserved. Phone 225-928-1700 • Fax 225-926-1329

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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INSIGHT Sue or get out of the way

STEPHEN WAGUESPACK

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n Sept. 21, 2016, a letter was signed and sent by Gov. John Bel Edwards to multiple coastal parishes in the state of Louisiana to “encourage” them to sue oil and gas companies in their parishes, as well as those that

previously operated in the area. In this letter, the governor explained that the state has intervened in lawsuits filed by Plaquemines, Jefferson, Vermilion and Cameron parishes in the hopes of landing a big payday from the industry in the name of coastal restoration. It goes on to say that a few hand-selected attorneys hired by the governor—at taxpayer expense, many with direct ties to his campaign last year—have told him that the parishes receiving this letter were ripe to join in the lawsuit. The governor’s attorneys obviously asked him to “encourage” the coastal parishes to get with the new program and apparently he was obliged to do so. The letter was explicit that in the new Louisiana, these parishes had better sue or get the heck out of the way. Gone are the days of

attempting to work collaboratively with all stakeholders to confront the challenge of coastal erosion in a comprehensive and responsible way. That is so 2015. The letter made it clear that there is a new sheriff in town, lawsuits are the new rage and time is a-wasting. Some parishes have stood up to previous threats from a variety of actors and repeatedly said they don’t want to sue. They like and need the jobs and investment in their area that oil and gas companies provide, and they want to keep the backbone of their economy intact. The governor’s letter gave these parishes 30 days to get over those feelings. As evidenced, the letter contained the following sentence, “We encourage you to consult with your private counsel and file such a suit, in which Secretary Harris will then intervene.

Should you not do so within thirty (30) days of the date of this letter, Secretary Harris will do so.” That’s right. The governor signed a letter telling parishes to either sue a valid operating business in their community for conducting legal and permitted operations—or he will do it for them. Those are the only two options made available. Is this where we are headed in the new Louisiana? Imagine if this letter told parishes with high obesity rates they better sue local fast food restaurants within 30 days to get a settlement to pay for Medicaid costs or else. What if the letter said that parishes had to sue local contractors within 30 days due to infrastructure they built that influenced the natural flow of water or else the state would do it for them? Are local paper mills, farmers and auto dealers next to be sued by

Valuing our energy infrastructure

DAVID DISMUKES

A

merican consumers often have little appreciation for how energy supplies are delivered to their homes or the marketplace. When

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we flip an electrical switch, we expect the lights to come on; when we turn the handle on the shower, we expect heated water to flow; and when we pull up to the gasoline station, we expect to be able to fill up our tanks with fuel. The delivery of these energy resources is made possible through an extensive set of power transmission and distribution lines, natural gas pipelines, and refined product and liquids lines. Critical energy infrastructure developers are grappling with realigning new energy supplies, particularly unconventional crude oil and natural gas, with large consuming areas, both domestically and internationally, through the increasing opportunities for global energy trade. In addition,

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

these infrastructure developers have the concurrent challenge to upgrade and modernize energy infrastructure assets to meet the real-time needs of the 21st century. Yet, at the same time, opposition to the very existence, much less preservation or modernization, of this critical delivery infrastructure is growing and becoming more strident. Siting protests and a “not-in-mybackyard” (“NIMBY”) opposition to pipe and power line projects are nothing new. However, energy infrastructure development opposition, starting with the Keystone XL pipeline, and progressing more recently to the Dakota Access pipeline project, goes far beyond what could now be considered

the benign protests of the past. Today’s infrastructure opposition is well-funded, concentrated and often orchestrated by nongovernmental organizations (NGOs) opposed to any energy development that is not renewable-based. Allen Fore, vice president of Kinder Morgan, a major pipeline and energy transportation company, reflected upon these challenges in the recent LSU Center for Energy Studies’ 2016 Energy Summit. Fore noted that successful infrastructure project siting will increasingly require sophisticated and extensive public policy planning and stakeholder engagement including making stakeholders aware of the importance of energy infrastructure and what that infrastructure means 1012industryreport.com


INSIGHT Louisiana government for coastal erosion or global warming? Are local gun manufacturers and sporting goods stores next in line for contributing to violent crime? What about prescribing health care professionals and local pharmacies for the drug epidemic that plagues too many of our communities? This template of state government forcing local government to sue local industry and blame them for large societal challenges is unprecedented, and it is sure to send shock waves across the country. What Louisiana business can honestly look in the mirror without questioning whether they are next on the chopping block if such a lawsuit gameplan is perpetuated by our elected leaders? If the governor’s plan works, the game is on. Creative trial lawyers will start working the white board in their conference rooms to find the next bonanza to use the governor’s template. Restaurants, contractors, hospitals beware. Transportation companies watch out. The seafood industry is on notice. No business, small or large, is safe in the new Louisiana if it is easy to force parishes to sue a valid company for conducting legal activities within

their parish lines, or simply watch the state do it for them. We are better than this. If any company from any industry operates in violation of a permit or illegally operates without one altogether, then justice should be sought. But that is not what we are talking about here. This effort is more about blaming a viable industry for a challenging public problem and using taxpayer-funded governmental lawsuits to shake them down. This is poor public policy and a toxic message to send to the rest of the nation about what it means to operate in Louisiana. Louisiana is a great place to live and work. Our people are second to none and our resources are rich and diverse. This should be a magnet for investment and growth. We should absolutely be the economic engine of the South. Instead, our economy is running on fumes while we continuously throw sand in our gears through a long history of actions just like this. This time, it has gone too far. This time, we have to say enough is enough. Stephen Waguespack is the president of the Louisiana Association of Business and Industry.

for ensuring safe, economic and reliable energy deliveries. Unfortunately, it can often take a major outage, like those arising after hurricanes Katrina and Rita, to remind consumers about energy infrastructure’s importance. Consider, as an example, the Colonial Pipeline System, which originates along the Gulf Coast, collects gasoline, jet fuel, heating oil, and other refined products from the region’s refineries, and delivers those products through Atlanta and then up the eastern seaboard all the way to the La Guardia airport in New York City. Immediately after the passage of Katrina and Rita, large swaths of the eastern U.S. were within three days of being completely out of gasoline given the interruptions originating along the Gulf Coast portion of the Colonial system. Outages can happen, even during

normal times, and that extensive, diverse and flexible delivery infrastructure is critical to ensure domestic energy security. Thus, while it is true that the U.S. is blessed with a new, abundant and affordable set of energy resources, the availability of these resources will come as little consolation if the capacity to move them is simply unavailable and obstructed by groups that can’t appreciate, or don’t want to appreciate, the role that energy infrastructure plays in ensuring safe, economic and reliable energy supplies for end-users. David E. Dismukes is a professor and the executive director of the Center for Energy Studies at the Louisiana State University. He holds a joint academic appointment in the department of environmental sciences where he regularly teaches a course on energy and the environment.

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

59


CLOSING NOTES EXECUTIVE MOVES

BOWSER

TROUT

LCA/LCIA Gregory Bowser has been appointed president of both the Louisiana Chemical Association and the Louisiana Chemical Industry Alliance. Bowser replaces Dan Borné, who is retiring after serving 28 years as head of the associations. Bowser has served as executive vice president for LCA and LCIA since 2011. He joined the organizations in 1991 and has directed their governmental affairs activities. Bowser becomes the first African American businessman to lead a major Louisiana statewide business trade association. SILURIA Siluria Technologies an innovator of process technologies for the energy and petrochemical industries, announced the appointment of Robert Trout as the company’s chief executive officer. Trout will also join Siluria’s board. Trout brings almost 30 years of relevant experience to Siluria. Prior to joining Siluria, he spent his entire career at Royal Dutch Shell in numerous leadership roles. Most recently, Trout served as the president of Criterion Catalysts & Technologies where he was responsible for overall integrated strategy related to Shell’s catalyst and licensing businesses, and directly accountable for the global refining catalyst business. PORT OF NEW ORLEANS The Board of Commissioners of the Port of New Orleans elected Michael W. Kearney chairman. Kearney represents Orleans Parish and joined the board in December of 2012 when he was appointed by former Gov. Bobby Jindal. He succeeds William T. Bergeron, whose term as chairman expired in September. Bergeron 60

KEARNEY

HERNANDEZ

continues to serve as a commissioner. Kearney is president and owner of The Kearney Companies Inc., a New Orleans-based third-party logistics company serving the supply chain needs of many large exporters and importers in the Greater New Orleans region. In addition, Gov. John Bel Edwards has appointed Tara C. Hernandez to the port’s board of commissioners. Hernandez will serve a five-year term, succeeding Gregory R. Rusovich, one of four Orleans Parish representatives on the seven-member regional board. Hernandez is president of New Orleans-based JCH Development, a boutique urban real estate development firm. FIDELIS GROUP HOLDINGS Fidelis Group Holdings LLC, with its subsidiary Continental Underwriters Ltd., announced the hiring of John Kirchhofer as vice president of its Marine Division. Kirchhofer will be responsible for expanding the group’s Brown Water Hull and Primary Marine Liability geographical footprint, which will complement FGH’s growing national Inland Marine and Ocean Cargo product lines. Kirchhofer will be based in the group’s New York City office. Headquartered in Covington, FGH is a leading provider of primary, excess, ocean cargo, and inland marine insurance for hull and maritime liability coverages (P&I) for vessel owners, ship builders, terminal operators, fleet operators, stevedores, cargo handlers, and marine contractors, and other maritime insurance products. LaBIC Committee of 100 CEO Michael J. Olivier was named to the Louisiana

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

KIRCHOFER

Board of International Commerce by Gov. John Bel Edwards. LaBIC serves as the state of Louisiana’s authority to advance the state’s international commerce initiatives. Olivier was nominated by the Louisiana Chemical Association and is the former secretary of Louisiana Economic Development under the administration of Gov. Kathleen Blanco. PELICAN CHAPTER, ABC The Pelican Chapter, Associated Builders and Contractors Inc.’s Industrial Contractors Council announced the appointment of Kathleen Carpenter as the interim director of education at the Pelican Chapter, ABC Baton Rouge campus. Carpenter has served in various capacities at the ABC training facilities for 11 years, most recently serving as the director of training center administration under David Alexander, who was appointed as superintendent of education for Ascension Parish in the summer. ENTERGY Entergy announced the selection of Andrea Coughlin Rowley, a veteran human resources leader in the energy sector, as senior vice president of HR, effective Sept. 19. Rowley, who has more than 25 years of HR management experience, will serve as a member of Entergy’s Office of the Chief Executive, reporting to Don Vinci. Rowley most recently served as the president and CEO of Advance/ Evolve, a leadership and change management consulting firm. She began her career in human resources at Shell and later served in a variety of HR leadership roles at Frito-Lay, BMC Software and Baker Hughes.

CARPENTER

PIKE

VENTURE GLOBAL LNG Venture Global LNG Inc. announced the hiring of John Brian O’Leary as senior vice president of operations for the company. Before joining Venture Global, O’Leary acted as the chief operating officer of Cameron LNG, where he led the pre-operations planning for commissioning and operation of three trains of LNG (4.5 MTPA each). He has over 25 years of experience with ExxonMobil in the areas of pre-operations, planning and commissioning of LNG terminals. His career has spanned the globe, having worked nearly a decade in Qatar, where he managed the startup and operations of the RasGas LNG facilities. Venture Global continues its development plans for the Venture Global Calcasieu Pass facility on an approximately 1,000-acre site located at the intersection of the Calcasieu Ship Channel and the Gulf of Mexico, and the Venture Global Plaquemines LNG facility in Plaquemines Parish. LAPELS BOARD Jeffrey A. Pike, lecturer of civil engineering and construction engineering technology at Louisiana Tech University, has been appointed to a six-year term on the Louisiana Professional Engineers and Land Surveyors Board. Pike was selected by Gov. John Bel Edwards from a group of five experts nominated by the Louisiana Engineering Society to represent academics on the board. You can submit items for Executive Moves by emailing a press release and a high-resolution headshot to editor@1012industryreport.com. Executive Moves is limited to senior management and board positions only. 1012industryreport.com


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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

61


CLOSING NOTES: COMPANY NEWS

The Ed Steimel Achievement Award

In recognition of sustained commitment to LABI and extraordinary efforts to improve the quality of life in Louisiana: Maura Donahue, Lane Grigsby (below)

Free Enterprise Champions

In recognition of exemplary engagement and contributions toward building a stronger, more vibrant Louisiana economy: Andree Begneaud, Mike Mitternight (posthumous) Free Enterprise Champions Young Businessperson (under 40)

In recognition of exemplary engagement and contributions toward building a stronger, more vibrant Louisiana economy by young business people: Eric Dexter, Brian Rodriguez Companies of the Year (more than 100 employees)

CGI, Sasol North American Operations Companies of the Year (less than 100 employees)

Celtic Media Centre, Steel Fabricators of Monroe LLC Economic Development Partners of the Year

In recognition of exceptional leadership and action to improve the business climate and quality of life in Louisiana: Baton Rouge Area Chamber, Livingston Parish Chamber of Commerce 62

Workforce Innovators of the Year

In recognition of significant effort and partnership to create a skilled workforce and more opportunities for Louisiana workers: Associated Builders and Contractors - Louisiana chapters, Associated Professional Educators of Louisiana Manufacturers of the Year (more than 100 employees)

Alliance Compressors Inc., RoyOMartin Manufacturers of the Year (less than 100 employees)

Arkema Inc., Hayes Manufacturing Co. Inc. EXXONMOBIL PLANT HITS FULL STRIDE ExxonMobil’s Port Allen aviation lubricants plant has achieved full production for the entire line of Mobil Jet products. The facility started shipping products worldwide in August after it received regulatory approvals. The 90,000-square-foot facility is part of a $200 million investment to expand ExxonMobil’s integrated chemical and lubricants complex in Baton Rouge. Nancy Carlson, vice president of aviation and marine at ExxonMobil Fuels and Lubricants, says the Port Allen facility positions ExxonMobil for growth and enables the company to meet the emerging needs of the industry. She says ExxonMobil expects demand for advanced aviation fuels and lubricants to increase 55% by 2040. CHENIERE CLEARED FOR TRAIN 2 Cheniere Energy Inc., which shipped its first cargo of liquefied natural gas in February, has been cleared to double exports from its landmark terminal in Louisiana. Cheniere’s second liquefaction plant at Sabine Pass, known as Train 2, was approved by the Federal Energy Regulatory Commission in a notice in October. Each plant has the capacity to produce the equivalent of about 650 million cubic feet a day. DRIFTWOOD LNG SEEKS EXPORT LICENSES The Driftwood LNG export project in Cameron Parish has applied to the Department of Energy

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

for authorization to export up to 26mn t/yr, which Driftwood said is equivalent to 4.1 billion cubic feet a day of gas, Argus reports. Driftwood is seeking a 30-year license to export to countries that have free trade agreements (FTAs) with the U.S. and a 20-year authorization to export to nations that do not have such agreements. The DOE has already issued pending approval for the FTA request, as such exports are presumed to be in the national interest. The agency will only review the non-FTA application if Driftwood gets environmental approval from the U.S. Federal Energy Regulatory Commission (FERC). Non-FTA licenses are crucial to U.S. projects, as most of the world’s major LNG importing countries do not have FTAs with the U.S. Driftwood plans to start construction in the second quarter of 2018 and begin exporting in the second quarter of 2022, according to the Argus report. ON THE DRAWING BOARD The Alliance Safety Council, a nonprofit dedicated to improving workplace safety, is adding a satellite training location at 29756 Walker South Road in Walker. The council says the 5,200-square-foot training center, which can accommodate 64 students, is scheduled to open in December, enabling the organization to offer more courses to workers in need of training. It will have a multipurpose training room and a computer lab. Gulf Coast Occupational Medicine, an industrial health and testing company, also will be located in the new building. GraceHebert Architects is designing the structure and Arkel Contractors is the general contractor. ZACHRY ADDS CATALYST SERVICES Zachry Group, a top turnkey construction, engineering, maintenance, turnaround and fabrication services business, announced today that it has acquired Catalyst Services from Clean Harbors. Catalyst Services is an international industry leader in catalyst change-out services, with a particular expertise in the refining and petrochemicals sector. These services represent a highly specialized aspect of the turnaround, repair and maintenance requirements of industrial facilities. Catalyst Services

has 500 employees and operates in the U.S., Canada and Trinidad. Catalyst Services will be rebranded as JVIC Catalyst Services and will operate alongside JVIC’s current catalyst operations within the recently created Services Division of Zachry Group. Zachry maintains JVIC operations offices in Sulphur and Port Allen, Louisiana. BARRIERE EXPANDS BR FOOTPRINT Barriere Construction celebrated completion Nov. 1 of an asphalt plant in Baton Rouge. The new plant expands Barriere’s footprint in the Louisiana economy and represents the company’s confidence in the future growth and vitality of the greater Baton Rouge community, Barriere said in a press release. “With numerous public and private sector construction projects throughout Louisiana, Barriere delivers on its commitment to safely build the state’s infrastructure with people, equipment, and new facilities,” the statement added. The company said voluntary clean-up procedures and environmental impact reports are a critical aspect of operations at the new plant. PORTS GET NEW EQUIPMENT The Port of New Orleans and the Port of Greater Baton Rouge will acquire specialized container loading equipment to increase efficiencies to the current container-on-barge shuttle service operated by SEACOR AMH between Baton

COURTESY PORT OF NEW ORLEANS

DONAHUE, GRIGSBY HEADLINE LABI AWARDS The Louisiana Association of Business & Industry announced its inaugural Free Enterprise Award recipients, celebrating “their unparalleled dedication to moving Louisiana forward.” The honorees were formally recognized at a reception in Baton Rouge on Nov. 17. Award recipients were:

JOINT PROJECT: A container is offloaded from a SEACOR AMH barge by stevedore Ports America at the Port of New Orleans Napoleon Avenue Container Terminal.

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Rouge and New Orleans with a newly announced grant of $1.75 million from the U.S. Maritime Administration (MARAD). “The container-on-barge service and the application for the MARAD grant have been joint projects for Baton Rouge and New Orleans, with both ports working together for more than a year,” said Jay Hardman, executive director of the Port of Greater Baton Rouge. The shuttle service, which began earlier this year with five barges per week, is a regularly scheduled container-on-barge service that supports exports moving from the Baton Rouge area to the Port of New Orleans, where the containers are loaded onto container vessels.

offers construction and automation services, including instrumentation and electrical, construction and maintenance, control and system integration elements, and cathodic protection services. Along with these additions, Danos’ project management team can now provide West

Texas and New Mexico customers with a single point-of-contact to oversee all phases of a project. The new office is located at 1501 West Francis Ave., five minutes from downtown Midland, Texas. With DANOS EXPANDS PERMIAN 7,000 square feet of office, warePRESENCE house and shop space and a secured Danos is expanding its footprint laydown yard, Danos is equipped in the Texas Permian Basin region, to serve customers in the upstream, adding more office and shop space in midstream and downstream sectors order make its full range of services throughout the area. The company’s available to customers in the area. Midland location has more than 200 Issue Date: Nov. 2016 Ad proof #1 • Please respondtobyproduction e-mail or fax with your approval or minor revisions. In addition services, field employees and a dozen support • AD WILL RUN AS IS unless approval or final revisions the Midland location now also staff —all of them local. are received by the close of business today.

KBR WINS SEAT ON NAVY SERVICES CONTRACT KBR Inc. announced that its wholly owned U.S. government services subsidiary, KBRwyle, has been awarded one of five seats on the U.S. Naval Facilities Engineering Command, Pacific’s (NAVFAC Pacific) Global Contingency Services Multiple Award Contract (GCSMAC) II. GCSMAC II is an eight-year indefinite delivery indefinite quantity (IDIQ) multiple award contract. Under this contract, KBRwyle will have the opportunity to compete on $900M in task orders in support of worldwide global contingency services for NAVFAC. ATC GROWS AGAIN ATC Group Services LLC announced its planned acquisition of Environmental Compliance Services, a multiregional provider of environmental consulting, site remediation and regulatory compliance services. Terms of the transaction were not disclosed. As a result of the transaction, ATC will grow to more than 1,900 employees and 100

locations across the country. ATC is headquartered in Lafayette and provides a wide range of environmental consulting and industrial hygiene services. It is owned by a group of investors led by Bernhard Capital Partners, an operationally focused private equity firm specializing in energy services. ATC’s agreement to acquire ECS follows its recent purchase of Dexter Field Services, a provider of leak detection and repair (LDAR), monitoring and other specialized technical environmental services, along with Sage Environmental Consulting, which does technical consulting services with a particular focus in air quality control and consulting, due diligence, and emission-reduction credit services. ENTERGY A TOP ECONOMIC DEVELOPER Entergy Corp. has been named one of the nation’s Top 10 utilities in economic development for 2015 by Site Selection magazine for its integral role that resulted in nearly $10.3 billion of capital investment and the creation of over 4,800 new

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

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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

63


CLOSING NOTES: COMPANY NEWS

INTRODUCING CYCLE MARINE GROUP Cycle Construction Co. LLC announced it has changed the name of its subsidiary Professional Construction Services Inc. to Cycle Marine Group Inc. The name change comes almost four years after PCS was acquired by Cycle. Since the acquisition, Cycle has reorganized the subsidiary and positioned PCS to focus solely on marine-related construction activities. Founded in 1974 by industry veteran Leonard B. Hebert, PCS began its marine construction division in 1980. Since this time, the company has built and rehabilitated countless wharfs and docks along the Mississippi River, constructed and repaired harbors along the Gulf Coast, and has been involved with numerous coastal restoration initiatives. Cycle will continue to operate Cycle Marine Group as a separate business unit. Cycle Marine Group will continue to offer diversified marine construction services. 64

ISC LAUDED FOR SAFETY RECORD Baton Rouge-based ISC Constructors recently received the Construction Industry Safety Excellence award from the Construction Users Round Table, which recognizes commendable safety performance over a sustained time period. The awards are intended to convey CURT’s strong support of contractor safety performance while applauding companies that have done their part in making others aware of mitigating hazards and working safely. In addition, Associated Builders and Contractors of Greater Houston awarded ISC Constructors an ICE award, the highest award, for their NAG Temporary Facilities for Site Preparation Phase 3 project (SP3),

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

Award of Merit was presented to Jacobs and Zachry Group.

submitted to the 16th annual Excellence in Construction Gala. More than one-third of a project’s score is rated on safety.

Specialty Trade (Soft Craft)

Division I, Global Industrial Contractors earned the Award of Recognition; Division II, Excel Modular Scaffold & Leasing earned the Award of Recognition. Specialty Trade (Hard Craft)

SAFETY WINS: ISC’s Shane Drury, Bobby Allen and Tyler Dixon accept an Excellence in Construction award from ABC of Greater Houston

GBRIA HONORS CRAFT WORKFORCE DEVELOPMENT LEADERS In September, the Greater Baton Rouge Industry Alliance awarded high schools in addition to announcing winners of its Ninth Annual Craft Workforce Development Excellence Awards. In a new initiative this year, GBRIA awarded high schools for demonstrating an outstanding job of implementing career and technical education classes related to construction. The following schools received awards in the Division I student-body size category: Maurepas High School received an Award of Recognition, Plaquemine High School received an Award of Merit and Doyle High School received an Award of Excellence. In the Division II size, Central High School received an Award of Merit, while Live Oak High School received an Award of Excellence. Finally, in the Division III size, Zachary High School and Dutchtown High School received awards of Recognition, East Ascension High School received an Award of Merit and St. James Parish Schools Career Center received an Award of Excellence. Here are the Craft Workforce Development company awards: General Construction & Maintenance

Division I, Brown & Root Industrial Services and Shelby Gaudet Contractors Inc. received Awards of Recognition; Division II, Cajun Industries, Excel and Primoris Services Corp. received Awards of Merit; Division III, Performance Contractors Inc. and Turner Industries Group earned Awards of Excellence and the

Division I, Westgate LLC earned the Award of Excellence, Capitol Ultrasonics and Pala Interstate received Awards of Merit; Division II, ISC and Turner Specialty Services received Awards of Excellence, MMR Constructors and Triad Electric & Controls earned Awards of Merit, and Acuren Inspection received an Award of Recognition. Technical Support

Division I, GE Water & Process Technologies received the Award of Merit. The complete list of award winners can be found at gbria.org.

COURTESY SLU

DANOS’ AMELIA LOCATION NOW A ‘PORT FACILITY’ The U.S. Coast Guard has certified Danos’ fabrication facility in Amelia as an official port facility. This designation allows both foreign and U.S. vessels to access the facility or remain docked there. The Coast Guard granted Danos port facility status following approval of the company’s facility security plan under Title 33 Code of Federal Regulations (CFR) Part 105. Located on 175 acres along Bayou Boeuf, the facility’s 5,000 linear feet of bulkhead and 18-foot water depth can accommodate large-scale custom fabrication projects of more than 1,000 tons.

ST. TAMMANY GETS KEY INDUSTRIAL EXPANSION Gov. John Bel Edwards and President Matthew Saacks of Ampirical Solutions LLC announced in August that Ampirical Solutions will create 50 new direct jobs to expand its electrical transmission infrastructure and distribution firm in St. Tammany Parish. Based in Mandeville, the company specializes in the design of substations, relay switchyards, protective relays and controls, transmission lines, distribution lines and related operations. “This homegrown company is bringing dozens of technical, high-paying jobs to Mandeville and the region with this expansion,” Edwards said. “Ampirical Solutions identified a market niche a decade ago and has grown to become an industry leader in designing electrical infrastructure for utilities and governments. This project demonstrates the value of Louisiana’s ongoing efforts to provide a skilled and ready workforce for business and industry.” Ampirical provides a broad range of engineering and related services to the electrical transmission infrastructure marketplace. The company’s target market has continually grown since its founding in 2006, but recent economic and industry factors have driven spending in the national transmission and distribution infrastructure to record highs. Ampirical’s customers include investor-owned utilities, municipalities, industrial plants, electrical co-ops and independent power producers.

COURTESY ISC

jobs in its service territory. It’s the ninth year in a row Entergy garnered the honor. The rankings may be viewed in the September 2016 print edition and on Site Selection’s website, siteselection.com.

RECOGNIZING ACADEMIC LEADERSHIP: Lu Yuan, left, head of the Department of Computer Science and Industrial Technology at Southeastern Louisiana University, accepts the GBRIA Craft Workforce Development Champion Award from John Pacillo, operations director of Mexichem Fluor and a member of the GBRIA board of directors. Yuan was nominated for the award by Chris Newton, coordinator of workforce development at Cajun Industries. “Dr. Yuan and the faculty in Southeastern’s Occupational Safety, Health and Environment program are a step above others in providing training for careers in the demanding field of safety,” said Newton.

Send news to editor@1012industryreport.com. News that will be considered includes new promotions, hires and transfers at the executive level; product announcements; office openings and moves; project and contract announcements; and awards. Personnel news should be accompanied by a 300 dpi, color photo of the executives involved. 1012industryreport.com


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10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

65


CLAIBORNE

6

CLOSING NOTES: PROJECT MAPS BOSSIER

Project by project

WEBSTER

24

CADDO

BIENVILLE

($25M-$250M) Louisiana industrial projects announced or proposed since Jan.1, 2014, with projected capital investment of $25 million-$250 million. Second line shows projected capital investment and direct new jobs. List is representative, not complete; project statuses change frequently. 1 First Bauxite $200M | 100 jobs Location: St. John the Baptist Parish Status: announced June 2015

9 Advanced Refining Technologies $135M | 325 jobs Location: Calcasieu Parish Status: completion of expansion projected for 2018

2 Indorama Ventures $175 M | 125 jobs Location: Calcasieu Parish Status: commercial startup projected before end of 2017

10 Praxair $100M+ | N/A Location: Ascension Parish Status: completion expected second half of 2018

3 Tennessee Gas Pipeline Co. (Kinder Morgan) $170M | N/A Location: Northeast Louisiana to southwest Louisiana Status: Construction to begin late 2016 4 NOLA Oil Terminal $162M | 54 jobs Location: Plaquemines Parish Status: under construction 5 Occidental Chemical $145M | 12 jobs Location: Ascension Parish Status: construction May 2016-late 2017 6 Regency Energy Services $144M | 6 jobs Location: Webster Parish Status: under construction 7 Bunge North America $140M | N/A Location: St.Charles Parish Status: under construction 8 Matheson Gas $130M | 40 jobs Location: Calcasieu Parish Status: under construction

66

11 Cleco/Cabot Corp.

$80M | 20 jobs Location: St. Mary Parish Status: broke ground October 2016

12 Florida Fuel Connection, LLC $75M | 50 jobs Location: East Feliciana Parish Status: completion projected for Q1 2017 13 Southwest Louisiana Bioenergy $69.3M | 41 jobs Location: Allen Parish Status: under construction 14 Momentive Specialty Chemicals, Inc. $66M | 68 jobs Location: St. Charles Parish and Ascension Parish Status: expected to begin construction in 2016 15 Hunting Energy Services $62M | 123 jobs Location: Terrebonne Parish Status: announced March 2015 16 Stepan Company $60M | 33 jobs Location: Ascension Parish Status: hiring to begin as early as 2017

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

17 Virdia $60M | 81 jobs Location: Lafourche Parish Status: completion projected for end of 2016

RED RIVER

DESOTO

NATCHITOCHES SABINE

19

18 Epic Piping $45.3M | 566 jobs Location: Livingston Parish Status: complete 19 Boise Cascade $43M | 400 jobs Location: Sabine Parish Status: completion projected for 2017

VERNON

20 Graphic Packaging International $41.5 M | 1,340 jobs Location: Ouachita Parish Status: under construction 21 Balchem and Taminco $40M | 110 jobs Location: Iberville Parish Status: expected to begin construction in 2015 22 Bayou Cos. $39M | 15-20 jobs Location: Iberia Parish Status: opening targeted for March 2016 23 TCI Plastics $36.5M | 280 jobs Direct jobs: 280 Location: Orleans Parish Status: under construction

BEAUREGARD

9

2

CALCASIEU

8

24 SB International $32.5M | 134 jobs Location: Bossier Parish Status: under construction, completion projected for 2017

CAMERON

BLUE = NEW PROJECT ADDED SINCE LAST EDITION

1012industryreport.com

J


UNION

NE

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

OUACHITA

RICHLAND

20

MADISON

3

JACKSON

SPONSORED BY

FRANKLIN

CALDWELL

TENSAS WINN

CATAHOULA LASALLE GRANT

CONCORDIA

RAPIDES

AVOYELLES WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

12 EVANGELINE ALLEN

POINTE COUPEE

13

TANGIPAHOA

ST. LANDRY WEST BATON ROUGE

21

ACADIA

ST. TAMMANY LIVINGSTON

5 16 15 10

ION NS

LAFAYETTE

IBERVILLE

ST. MARTIN

18

CE AS

JEFFERSON DAVIS

EAST BATON ROUGE

ST. JOHN THE BAPTIST

1

ST. JAMES

14

IBERIA ASSUMPTION

22 VERMILION

ORLEANS

7

ST. CHARLES

23 JEFFERSON ST. BERNARD

ST. MARTIN ST. MARY

11

17 14

IBERIA

Sources: LED, 10/12 research

1012industryreport.com

LAFOURCHE

PLAQUEMINES

4

TERREBONNE

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

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CLAIBORNE

CLOSING NOTES: PROJECT MAPS BOSSIER

Project by project

CADDO

WEBSTER

31

($250M and up)

BIENVILLE

Louisiana industrial projects announced or proposed since 2009 with projected capital investment of $250 million or more. Second line shows projected capital investment and direct new jobs. List is representative, not complete; project statuses change frequently. (LNG = liquefied natural gas export project) 1 Sabine Pass LNG (Cheniere Energy) $20B | 400 jobs 2 Sasol Ltd. $21.2B-$24.2B | 1,253 jobs 3 G2 LNG $11B | 250 jobs 4 Sempra Energy/ Cameron LNG $10B | 190 jobs 5 Formosa (St. James Parish) $9.4B | 1,200 jobs 6 Lake Charles LNG (aka Trunkline LNG; BG Group and Energy Transfer Partners) $9B | 250 jobs 7 Southern California Telephone & Energy (Monkey Island LNG) $9B | 200 jobs 8 Delfin LNG $7B | 400 jobs 9 Venture Global LNG (Calcasieu) $4.25B | 100 jobs

15 Marathon Petroleum $2.35B | 65 jobs

32 Monsanto $975M | 100 jobs

16 CF Industries Nitrogen, LLC $2.1B | 93 jobs

33 Lake Charles Cogeneration, LLC $820M | 210 jobs

17 Live Oak LNG (Parallax Energy) $2B | 100 jobs

35 Shell Chemical $717M | 20 jobs

19 EuroChem $1.5B | 200 jobs

36 Valero Refining – New Orleans, LLC $700M | 24 jobs

21 Shintech $1.4B | 100 jobs 22 South Louisiana Methanol $1.3B | 63 jobs 23 G2X Energy $1.3B | 243 jobs 24 BioNitrogen Louisiana Holdings, LLC $1.25B | 250 jobs 25 AM Agrigen Industries $1.2B | 150 jobs

10 Magnolia LNG $3.7B | 50 jobs

26 Castleton Commodities International $1.2B | 50 jobs

11 Nucor Steel Up to $3.4B | 1,250 jobs

27 Dow Chemical $1.06B | 71 jobs

12 Axiall/Lotte Chemical $3B | 250 jobs

28 Cornerstone Chemical Co./ Dyno Nobel $1.025B | 65 jobs

13 Lake Charles Clean Energy (Leucadia Corp.) $2.5B | 215 jobs 14 Revolution Aluminum (formerly American Specialty Alloys) $2.4B | 1,450 jobs

68

29 Monsanto $1B | 95 jobs 30 Entergy Little Gypsy $1B | 15-20 jobs 31 Benteler AG $975M | 675 jobs

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

NATCHITOCHES SABINE

34 Petroplex $800M | Not available

18 Yuhuang Chemical, Inc. $1.85B | 400 jobs

20 Port Cameron $1.5B | N/A

RED RIVER

DESOTO

VERNON

37 Louisiana LNG Energy, LLC $646.6M | 44 jobs 38 Pin Oak Terminals $600M | 70 jobs 39 Methanex Corp., Methanex 1 $570M | 35 jobs

BEAUREGARD

40 Methanex Corp., Methanex 2 $570M | 120 jobs 41 Honeywell International $500M | 80 jobs CALCASIEU

57 2 6 12 13 52 10 23 33 17

42 Shintech Louisiana, LLC $500M | 5 jobs 43 BASF (Geismar) $500M | 100 jobs 44 Sundrop Fuels $450M | 150 jobs 45 Westlake Chemical (Geismar) $425M | 70 jobs 46 Shintech Louisiana, LLC $420M | 88 jobs 47 Hazelwood Energy Hub $400M | 123 jobs 48 Williams Olefins $400M | 5 jobs

61

4 CAMERON

3 1

9 8

7 20

RED = PROJECT KILLED BLUE = NEW PROJECT ADDED SINCE LAST EDITION

1012industryreport.com

J


UNION

NE

MOREHOUSE

WEST CARROLL

49 NuStar Energy $365M | 32 jobs

EAST CARROLL

LINCOLN

SPONSORED BY OUACHITA

50 Syngas Energy $360M | 86 jobs

RICHLAND

JACKSON

58 Gavilon Trading $250M | 100 jobs

52 Westlake Chemical (Lake Charles) $330M | 25 jobs

FRANKLIN

53 American Biocarbon $312M | 450 jobs

TENSAS WINN

54 Avalon Rare Metals Processing, LLC $300M | 225 jobs

55 CATAHOULA

55 German Pellets Louisiana, LLC/Louisiana Pellets, Inc. $290M | 80 jobs

LASALLE GRANT

59 Cambridge Energy FLNG No announced size 60 Venture Global LNG (Plaquemines) *$7B | 100 jobs 61 Driftwood LNG No announced size Siluria Size and location unknown

TOTAL POTENTIAL CAPITAL INVESTMENT:

56

$157.2B+

CONCORDIA

14

57 PPG Industries, Inc. $264M | 27 jobs

51 ExxonMobil Corp. (Chemical) $336M | 30 jobs

MADISON

CALDWELL

56 Investimus Foris/ TopChem $265M | 85 jobs

TOTAL POTENTIAL DIRECT NEW JOBS:

RAPIDES

12,077

44 AVOYELLES

24

WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

EVANGELINE ALLEN

POINTE COUPEE

TANGIPAHOA

ST. LANDRY

47

WEST BATON ROUGE

42 ACADIA

27 19

IBERVILLE

53

IBERIA

48 43 54 45

ION NS

ST. MARTIN

LAFAYETTE

46

ST. TAMMANY LIVINGSTON

CE AS

JEFFERSON DAVIS

21

51

EAST BATON ROUGE

35 ST. JOHN 39 40 22 THE BAPTIST30 18 58 25 38 16 41 36 11 34 29 ST. JAMES 5 15 32 28 50 49

ASSUMPTION VERMILION

ST. CHARLES

JEFFERSON

ORLEANS

26 ST. BERNARD

ST. MARTIN ST. MARY LAFOURCHE IBERIA

Sources: LED, American Press, 10/12 research

37 60 PLAQUEMINES

TERREBONNE

59

*Estimate based on plant capacity 1012industryreport.com

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

69


CLOSING NOTES: MY TOUGHEST CHALLENGE

Glynn Fontenot BY JEN BAYHI-GENNARO

THE RESOLUTION Fontenot says it was a totally different engineering approach for all involved. Methanex brought in a project team of a handful of key personnel from their locations all over the world, who devised and executed the disassembling, transporting and reassembly plan. The result was a two-team approach, with Fontenot heading up the manufacturing team and a small team of global experts 70

POSITION: Plant Manager COMPANY: Methanex WHAT THEY DO: Founded in 1992, Methanex is the world’s largest producer and supplier of methanol, with nine production facilities around the globe. Production in Geismar began in 2015.

handling the project oversight. Instead of taking the facilities apart piece by piece, they engineered a way to dismantle the plants in “modules,” or large sections, and put the modules on ships for the complicated, four week-voyage. In all, the trip to Chile and back was made six times for each plant. Fontenot is proud to say the hires have years of experience in the petrochemical industry and, quite importantly, most of them didn’t have to change addresses. “We are the petrochemical mecca of the U.S., and for every job, we had somebody already doing that job within driving distance. Most people were doing the same job at another plant, looking for something better,” he says. “They wanted a unique and exciting project. This is a once-in-alifetime, once-in-a-career opportunity for all of us,” Fontenot says. THE TAKEAWAY When the first plant was done, Fontenot says, the Methanex team had a thick book of lessons learned and ideas for how to do it better the second time around—which happened to be immediately. Quick implementation, while it was fresh on everyone’s minds, made for smooth sailing for Geismar 2. After a successful and safe commissioning of both plants and working all kinks out in the first half of 2016, Fontenot says things have finally calmed down, and his team is all very much looking forward to the holidays. And there’s talk of a third Methanex plant relocation. Even after the challenges of the past couple of years, Fontenot is not intimidated. “I would do it again in a second,” he says. “I would do it again for Methanex anywhere.”

10/12 INDUSTRY REPORT • FOURTH QUARTER 2016

DON KADAIR

THE CHALLENGE When Glynn Fontenot was hired to run Methanex in Geismar, the plant as they know it now was nothing more than blueprints, engineering drawings and a 225-acre cow pasture near the Mississippi River. As the first hire for the global supplier of methanol, Fontenot rose to the challenge of helping to lead a team to do what had never been done before—not only to start up two chemical plants within a year of each other, but to relocate them from another country by bringing them to Ascension Parish safely and rebuilding them. Add to that, Fontenot was tasked with interviewing hundreds of applicants to hire 160 team members, who then needed to be trained to start and operate a methanol plant safely. At the time, the production facilities were located in the southernmost tip of South America. For the relocation plan to work, two world-scale methanol plants had to be dismantled in Chile and safely brought across the Atlantic, through the Gulf of Mexico, into the Mississippi River, under six bridges and to the bridge that Methanex built in Geismar—and then rebuilt, commissioned and started up. “Usually, you build a plant and you don’t do anything like that for another 20 to 40 years,” Fontenot says. “We did it, twice, within a year of each other.” And, keeping the employees motivated was also a huge factor, as the workload was heaviest during Louisiana’s sacred hunting, football and holiday seasons—two years in a row.

1012industryreport.com


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10/12 Industry Report [Q4 2016]  

10/12 Industry Report is an award-winning publication that provides news, data, analysis and insight on heavy industry and industrial constr...

10/12 Industry Report [Q4 2016]  

10/12 Industry Report is an award-winning publication that provides news, data, analysis and insight on heavy industry and industrial constr...