10/12 Industry Report [Q1 2019]

Q1 2019

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CONTENTS

Publisher: Rolfe McCollister, Jr. EDITORIAL Editorial Director: Penny Font Editor: Sam Barnes Contributing Writers: Erin Z. Bass, David Jacobs, Meredith Whitten Contributing Photographers: Lee Celano, Terri Fensel, Cheryl Gerber, Don Kadair ADVERTISING Sales Director: Robin Blanchard Account Executives: Donna Arnold, Judith LaDousa, Angie LaPorte Advertising Coordinator: Brittany Nieto CORPORATE MEDIA Editor: Lisa Tramantana Content Strategist: Allyson Guay CUSTOM PUBLISHING Sales Director: Erin Palmintier-Pou MARKETING Chief Marketing Officer: Elizabeth McCollister Hebert Marketing assistant: Katelyn Oglesby Events: Abby Hamilton Community Liaison: Jeanne McCollister McNeil PRODUCTION/DESIGN Production Manager: Melanie Samaha Art Director: Hoa Vu Graphic Designers: Gracie Fletcher, Melinda Gonzalez, Emily Witt ADMINISTRATION Controller: Jessica F. Sharp Digital Manager: James Hume Business Associate: Kirsten Milano Business Associate: Tiffany Durocher Office coordinator: Tara Lane Receptionist: Cathy Brown

7

ISTOCK

PAGE 22 NEWS

Editor’s Take

32 Correcting course

LAUNCH

8

Ignore the shadow that 2018 cast over LNG. The long-term demand remains.

ICYMI Industry briefs

36 Bayou bottleneck

12 The Big Picture

With the completion of Shell’s Tiger A04, South Louisiana is now home to the largest alpha-olefins producer in the world.

15 Executive Profile

Meet Claire Marceaux, director of the Cameron Parish Port, Harbor & Terminal District

16 Dialogue

FOCUS

42 It takes an Idea Village

Shell’s partnership with a New Orleans nonprofit is creating the next generation of energy entrepreneurs.

44 In the wind

The challenges of diversity

18 After hours

Louisiana’s seismic shift to expert state strains the supply chain.

Industry events across the corridor

At Michoud, LM Wind power taps into a growing market

INSIGHT

46 David Dismukes on energy 47 Jessica Pranjic on workforce 48 David Sowers on safety SPECIAL ADVERTISING SECTION

49 Company spotlights

CLOSING NOTES

55 Executive Moves 56 Company News 58 The boom at a glance

Our maps of the projects driving the industrial boom.

62 My Toughest Challenge Jerry Dunn of CITGO

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

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AUDIENCE DEVELOPMENT Audience Development Director: Benjamin Gallagher Audience Development Coordinator: Austin Arnold 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 Highway, Suite 300 Baton Rouge, LA 70809 225-421-8157 • FAX 225-928-5019 1012industryreport.com email: circulation@businessreport.com Volume 4 - Number 1 © Copyright 2019 by Louisiana Business Incorporated. All rights reserved by LBI. 10/12 Industry Report is published quarterly by Louisiana Business Inc. Reproduction without permission is prohibited. Business address: 9029 Jefferson Hwy., Ste. 300, Baton Rouge, LA 70809.

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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.

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 5

6 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

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IN THIS ISSUE

The age of instant news requires that owners get out in front

W

THE ASSOCIATED PRESS

SAM BARNES

e live in an tive ways to get product here through LM Wind Power’s new Technoloage of instant various multimodal means. [See gy Center of the Americas, recently information and “Bayou bottleneck,” page 36.] unveiled at the sprawling Michoud misinformaAn insufficient infrastructure of Assembly Facility, is creating a promtion, and social pipelines seems to be the biggest ising pathway for high-tech jobs in media is leading the way. This can be problem right now, as rail, truck and wind power. troublesome following a crisis in the shipping are ineffective in getting The company is actively collaboindustrial space, as anyone with a cell large volumes of crude oil and naturating with the University of New phone, Facebook or Twitter account ral gas to the plants and ports.

Orleans, Tulane University and LSU, can create their own news in mere As a result, there has been a fairly along with the state of Louisiana, to seconds. consistent flow of announcements help fast track its workforce needs, Mum is certainly not the word regarding new pipelines and flow reincluding 100 direct and 220 indirect during such an event. Silence is versals on others. Still, the strain on workers. [See “In the wind,” Page 44.] quickly perceived by the commuthe supply chain will likely worsen as At the facility, scientists, designers nity at large as guilt, and can turn the market expands. and fabricators will work side by side a nonevent into something to create the next generamore. Even when the crisis is tion of wind turbine blade. real, industrial owners should Through such efforts, the be quick to own it. Unfortucompany hopes the U.S. nately, some plant managers will soon become a leader take the wrong approach, and in the creation of wind put the lid down on informapower technology. tion. The results are usually Meanwhile, Shell is unpleasant and unnecessary. collaborating with The Idea Experts say laying the Village in New Orleans to groundwork for effective crisis help innovators bridge the communications begins long gap between dreams and before a crisis occurs. Comreality. [See “It takes an Idea munity outreach and involveVillage,” Page 42.] ment, along with responsiveOnce such innovator is Former BP CEO Tony Hayward waves the media away at Fourchon Beach. ness to the media, can build the Gulf Offshore Research solid relationships and pay tremenAn impending surge of liquefied Institute, which hopes to re-purpose dous dividends down the road. natural gas export facilities in the abandoned offshore oil rigs for a variLong before an incident, reporters Gulf Coast adds some additional ety of purposes, including providing need a recognizable, and available, urgency to the problem. [See “Coruniversities with offshore research contact within each and every plant. recting course,” page 32.] facilities, or even the U.S. Navy with Otherwise, they’ll go elsewhere for While LNG prognosticators have charging stations for their fleet of the story. Our cover story, “Damage become a little more hesitant due to underwater drones. control,” offers insights from the extariffs, changing market dynamics These endeavors have GNO Inc.’s perts on how to handle such a crisis. and the lack of long-term contracts, Michael Hecht ecstatic about the [Read more starting on page 22.] they still says significant increases in prospect of New Orleans growing its long-term demand are unavoidable reputation as one of the fastest growSUPPLY CHAIN TIGHTENS over the next decade. ing tech markets in the country.

There’s been a seismic role reversal That means plants will be needed, in Louisiana, and the supply chain and that Louisiana will be the epi10/12 INDUSTRY WEEKLY is feeling the strain. The state is in center of activity based on projects in Don’t forget to sign up for our free uncharted territory, indeed, as it has the queue. e-newsletter, 10/12 Industry Weekly. switched from its primary role as an We deliver the latest information importer to that of an exporter. For CREATING JOBS, SPURRING about projects, workforce, operations the first time, getting product to the INNOVATION IN NEW ORLEANS and maintenance, safety, environmenstate has become more important A couple of collaborative endeavtal, transport, construction, design than transporting it to other U.S. ors in the Crescent City are generatand more, right to your inbox. Sign destinations. ing some excitement in the highup at 1012industryreport.com.

That has many petro owners tech market, although in decidedly Send your news to editor@ scrambling to find new and innovadifferent ways.

1012industryreport.com.

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10/12 INDUSTRY REPORT • FIRST QUARTER 2019 7

LAUNCH ICYMI

EXPANDING THE ATLANTIS

‘A wake-up’ call in Baton Rouge BATON ROUGE IS not a predictable site for future investment. That was the message from ExxonMobil after the East Baton Rouge Parish School Board rejected two of the company’s Industrial Tax Exemption Program requests in January. ExxonMobil subsequently withdrew its pending 2017 requests before they were scheduled to be voted on by the city’s Metro Council.

“Due to the uncertainty, we will have to assume there is no ITEP incentive as we make cost projections on future investment opportunities in Louisiana,” states the release, penned by several local Exxon officials: Polyolefins Plant Manager Stephen Hamilton, Chemical Plant Manager Dave Luecke, Refinery Manager Gloria Moncada and Plastics Plant Manager Angela Zeringue.

ExxonMobil was seeking two property tax breaks worth approximately $2.9 million over 10 years— one for work at its Baton Rouge refinery; the other, for its polyolefins plant. Work for both was completed in 2017.

Which brings Baton Rouge and

ExxonMobil to the billion-dollar question: What does all this mean for the petrochemical giant’s proposed $1 billion polyolefins plant expansion? At press time, the company was about to begin a funding review on the project as well as consider its site selection options.

“I can’t say that for sure,” says Stephanie Cargile, an ExxonMobil spokeswoman. “But the school board’s message will certainly weigh into that decision and future decisions.”

Cargile says the company questions why ExxonMobil is consistently “singled out by activists who haven’t protested more than 50 other similar ITEP applications that were approved statewide.”

The tax break program is regularly the subject of controversy. Community group and frequent ITEP critic Together Baton Rouge recently released a report arguing the average East Baton Rouge Parish business pays more than twice as much in property taxes on the dollar as ITEP-exempt companies, which ITEP supporters dispute.

The Baton Rouge Area Chamber

8 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

in a statement called the move a “wake-up call,” noting the company has been “the picture of corporate partnership, and extremely generous in their support of community groups, charities and nonprofits, most significantly to education and education charities.” ExxonMobil invested $1 billion in capital investments in the last three years and pays $100 million in total Louisiana taxes annually. It employs nearly 7,000 people, and those jobs support nearly 1 in 8 jobs in our community.

“Community activists have targeted the ITEP program and this one company in particular with their derision, attacks and misrepresentations, fueling an anti-business sentiment today in our community,” BRAC said. “This toxic atmosphere led the school board to vote to oppose the company’s recent applications for additional investments. The tone has gotten to the point where this company has chosen voluntarily today to withdraw its application at a $6 million expense to the company, rather than continue to endure this circus.”

BP has approved a major expansion at the Atlantis field in the U.S. Gulf of Mexico and has also identified significant additional oil resources that could create further development opportunities around the production hubs it operates in the region.

The $1.3 billion Atlantis Phase 3 development comes after recent BP breakthroughs in advanced seismic imaging and reservoir characterization revealed an additional 400 million barrels of oil in place at the Atlantis field.

“BP’s Gulf of Mexico business is key to our strategy of growing production of advantaged high-margin oil,” says Bernard Looney, BP’s Upstream chief executive. “We are building on our world-class position, upgrading the resources at our fields through technology, productivity and exploration success.”

Atlantis Phase 3 will include the construction of a new subsea production system from eight new wells that will be tied into the current platform, 150 miles south of New Orleans. Scheduled to come onstream in 2020, the project is expected to boost production at the platform by an estimated 38,000 barrels of oil equivalent a day (boe/d) gross at its peak. It will also access the eastern area of the field where the advanced imaging and reservoir characterization identified additional oil in place.

BP is the largest investor in the Deepwater Gulf of Mexico over the past 10 years. The company operates four large production platforms in the deepwater Gulf of Mexico—Thunder Horse, Atlantis, Mad Dog and Na Kika—and holds interests in four nonoperated hubs— Mars, Olympus, Ursa and Great White.

BP discovered the Atlantis field in 1998 and began production there in 2007. BP is one of the largest leaseholders in the Gulf, with acreage in about 200 lease blocks.

—Staff report

—Annie Ourso and Caitie Burkes

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The top 5 issues for industry in 2019

IN SO MANY WORDS

There’s a host of issues facing Louisiana industry in 2019, but an informal survey by 10/12 Industry Report found some common denominators among its leadership. Following are those they identified as most significant this year:

1

No.

ONGOING IMPROVEMENTS TO ITEP

Greg Bowser, president of the Louisiana Chemical Association, says while there have been some important and necessary changes to the state’s Industrial Tax Exemption Program, there is much room for improvement. “[ITEP] has to be competitive,” Bowser says. “When you start looking at all the local twists to the program—i.e. what New Orleans is doing, what Baton Rouge is doing, etc.—companies start to ask, ‘Is it really worth the headache or is it easier just to go somewhere else?’”

Larry DeRoussel, executive director of the Lake Area Industry Alliance in Lake Charles, hopes ITEP will eventually regain its position as a viable program for attracting industry. “The reality is that if we’re not incentivizing [owners] through ITEP, they will go somewhere else, typically Texas,” he says. “So ITEP needs to be kept alive and well.”

Tyler Gray, president and general counsel of Louisiana Mid-Continent Oil & Gas Association in Baton Rouge, agrees that the status of ITEP will figure prominently in the coming year. Says Gray: “We want to work toward a better policy for investment in the state.”

2

No.

INFRASTRUCTURE ENHANCEMENTS

LMOGA’s Gray sees improvements to the state’s infrastructure as another important issue, whether it be pipelines, highways, bridges or ship channels. “There is more oil in the Permian and Delaware basins than in Saudi Arabia, and all that is coming to the Gulf Coast to be exported,” Gray says. “In order to get it to the Gulf Coast refineries, pipelines are going to be an important part of that scenario.”

LCA’s Bowser says enhancements to the state’s roadways will be crucial for moving both product and people. “We’re having trouble moving our products but also moving human capital,” he adds.

“It’s a big issue.”

This is especially true for southwest Louisiana. DeRoussel says the much anticipated re-work of the I-210 bridge begins in January, noting “it will be a challenge for industry as we try to get employees to work.” Fortunately, the Louisiana Department of Transporta1012industryreport.com

tion and Development has reduced the project duration to one year, down significantly from the original projection of three years.

The consistent dredging of the Calcasieu Ship Channel is another Lake Charles-specific infrastructure concern, as new industries—particularly LNG facilities—begin to build there. “We need a sustainable plan for maintaining the channel and keeping it dredged,” he says. “We all need the ship channel to move product in and out.”

3

TARIFF WOES

The ongoing trade war also makes the list. Bowser No. says some LCA members plan to journey to Washington, D.C., later this month to voice their concerns to Louisiana’s congressional delegation. “That’s probably our biggest challenge going forward,” he says. “It impacts investment decisions because their costs are going up.”

4

No.

WORKFORCE DEVELOPMENT OPPORTUNITIES

In the state’s industrial hotspots, maintaining a sustainable, qualified workforce will be a continuing concern in 2019. “With the expansions in southwest Louisiana, it’s a bit of a challenge,” DeRoussel says. There are some glimmers of progress. Associated Builders and Contractors’ Pelican Chapter is planning a new training facility in Lake Charles, and SOWELA continues to provide vital support.

More funding for universities and technical community colleges could be another solution. McNeese State University President Daryl Burckel has launched a program to attract private funding into the university to support various goals and initiatives, DeRoussel says.

5

No.

RESOLUTION OF COASTAL LAWSUITS

For oil and gas owners, Gray says coastal lawsuits will continue to be a thorn in their side. The lawsuits seek restitution for purported damage caused by oil and gas companies to the state’s coastal wetlands. Says Gray: “It’s a product of the state’s legal climate.”

In my 40 years, this is the best economic development move I have ever seen by any Louisiana governor—for the state of Texas.

Economist Loren Scott on the new ITEP rules

END OF AN ERA CertainTeed’s resin manufacturing plant in Westlake has closed after more than 40 years of operation.

The plant employed 50 employees, who remain on active status through March of 2019. Lisa Miree-Luke, CertainTeed manager of internal and human resources communications, told The American Press that high market competition was the main reason the plant was closed. “Long-term raw material supply options were no longer economically viable to allow Lake Charles to continue to supply resin to our plants,” she said. The company is offering severance packages for all affected employees. Other PVC resin suppliers will supply CertainTeed’s siding, fence, deck and rail production.

—The American Press

NUMBERS

591,253

Twenty-foot equivalent units of containers moved by the Port of New Orleans in 2018—up 12.2% from the previous year and setting a historical record. It marks the fifth year in a row Port NOLA has surpassed the half million TEU-mark at its Napoleon Avenue Container Terminal, which is operated by New Orleans Terminal and Ports America. Port NOLA President and CEO Brandy Christian credits growth in resin and frozen poultry experts, as well as the expansion of the Panama Canal.

—Sam Barnes

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 9

LAUNCH: ICYMI

HAYNESVILLE SHALE CHASES A NEW RECORD

NATURAL GAS PRODUCTION in Louisiana will soon reach record heights, the Oil & Gas Journal reports, thanks to an outstanding resurgence of the Haynesville shale play.

Research from Rystad Energy—an independent energy research and business intelligence company—shows that the Haynesville shale alone was able to add 1.85 bcfd of gross gas production between fourth-quarter 2016 and fourth-quarter 2017. Another 1.3 bcfd was added last year. Production needs to increase by another 700 MMbcfd to reach new all-time highs.

“We conclude that Haynesville shale’s revival, for the second year in a row, looks sustainable,” Artem Abramov, Rystad Energy partner, says. “Supported by its proximity to a new LNG export terminal, gas production will continue to grow, and achieving new all-time high gas production levels should happen within a matter of months.”

Driven by Louisiana’s Sabine Pass LNG terminal on the Gulf Coast, U.S. LNG exports increased markedly in 2018. Rystad Energy forecasts U.S. LNG production to surpass 40 million tonnes/year in 2019 as liquefaction capacity is set to double, including additions at Freeport, Cameron, Sabine Pass, Corpus Christi, and Elba Island, according to the Oil & Gas Journal. While currently sanctioned LNG plants will produce about 65 million tpy by 2022, Rystad Energy forecasts production to reach 150 million tpy by 2030.

Prior to the collapse in U.S. gas prices in second-half 2008, the magazine notes, the Haynesville shale was one of the world’s most prospective shale gas reservoirs, with the capability to drive growth in U.S. gas production for years. But low gas prices from 2009 to 2011 effectively derailed Haynesville’s growth prospects. After peaking in fourth-quarter 2011, gas production in Louisiana entered a multiyear decline phase, losing nearly 4 bcfd by fourth-quarter 2016.

NUMBERS

$85,000 Amount of money a bankruptcy trustee for East West Copolymer is seeking from the Louisiana Department of Environmental Quality. The now-defunct company paid that amount in fees to the agency just 90 days before filing for bankruptcy. Trustee Dennis Blunt says the transfers enabled DEQ to receive more than its share had DEQ’s claims been paid in accordance with the Bankruptcy Code. East West Copolymer made rubber used in tires, molded mechanical goods, hose jackets, conveyor belts, seals, footwear and printing rolls.

In the last decade, Louisiana has made great strides to become one of the safest states to work in the U.S. And through a strong safety culture and strategic approach to planning, LWCC is making it a point to continue this trend. Learn how LWCC goes beyond providing workers’ comp coverage—with online safety training, on-site evaluations and more—by contacting an agent at LWCC.com.

10 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

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10/12 INDUSTRY REPORT • FIRST QUARTER 2019 11

LAUNCH: THE BIG PICTURE

WORLD DOMINATION IN GEISMAR With the completion of Shell’s $700 million Tiger A04 project, Geismar is now home to the largest alpha olefins producer in the world. At its Geismar Chemical Plant in south Louisiana—already the top producer in North America—the company took advantage of the latest technology and state-of-the-art equipment to execute the expansion project, adding 425,000 tons of capacity. Alpha olefins are used to produce household detergents, plastics, synthetic lubricants, and drilling fluids, among other products.

BUILT BY LOCALS The AO4 project utilized local relationships and resources, with an emphasis on working with local contractors. Notably, the primary construction contractor (and largest contractor on the project in terms of workforce size) was Baton Rouge’s Turner Industries. Lead design firm for civil/structural/MEP was Jacobs Engineering, which also has a significant presence in south Louisiana. Startup operations began in December 2018.

GROWTH MARKET Shell has earmarked the growing petrochemicals market as one of its major growth priorities as it reshapes its business. An International Energy Agency report finds that petrochemicals are set to account for more than a third of the growth in oil demand between now and 2030, and nearly half by 2050. Petrochemicals are also poised to consume an additional 56 billion cubic meters of natural gas by 2030.

AP PHOTO/ARNULFO FRANCO

12 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

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OVERCOMING THE FLOOD The Tiger A04 project was recognized last year as the Excellence in Safety Best Project

by ENR Texas & Louisiana. During civil construction in April 2016, workers dug down 5 feet to form the foundation. This created a “bathtub” effect for the entire site. In the months that followed, southeastern Louisiana experienced above-average rainfall that saturated the ground and prevented it from compacting. The management team worked quickly to bring in lime-stabilized dirt to reach compaction. In August 2016, the area experienced the worst flooding in its history, putting the project at risk of falling behind schedule. The management team offered employees—many of whom had lost their homes—additional weekend hours to allow them to make extra money, while also helping the project gain back lost time. Over the course of 5.4 million man-hours, crews logged an OSHA recordable incident rate of just 0.15. The safety program included a heat-stress plan that featured 14 cool-down stations across the site and a zero-incident performance and observation program.

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10/12 INDUSTRY REPORT • FIRST QUARTER 2019 13

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LAUNCH: PEOPLE

Executive Profile: Clair Marceaux

— Erin Z. Bass

What led to your job as port director?

Cameron Parish is in the midst of tremendous development in areas like the export of liquefied natural gas and coastal restoration and protection.

Parish Administrator Ryan Bourriaque offered me an opportunity to come to work for the Police Jury as director of economic development, which eventually allowed me to serve as port director.

You managed more than 11,000 FEMA temporary housing units after Hurricane Rita. What did you learn from that experience?

I learned that disaster management can be an overwhelming, complex and frustrating experience, but I met mentors, friends and allies who have changed my life and made me a better human being.

I learned that even disaster can polish us, help us uncover our gifts and give us a chance to leave a positive mark on our community.

What is your typical workday like?

No two workdays are the same for me, but I often find myself working closely with my colleagues in agencies like the Coast Guard, at engineering firms, 1012industryreport.com

NAME

Clair Marceaux POSITION

Director, Cameron Parish Port, Harbor & Terminal District AGE

41 HOMETOWN

Cameron EDUCATION

UL Lafayette, bachelor’s degree in English language and literature

a variety of developers, landowners, local, regional, state, federal and global officials. I get to fly in helicopters, ride in boats, help people learn more about Cameron Parish and connect to the resources they need. I get to do what I love, which is help others every day.

What is your greatest professional accomplishment?

I would like to think I have not yet experienced my greatest professional accomplishment, but if I pick one thing I’ve done that may have had the greatest positive impact, it would be helping to build the SEED Center, where business connections are made in southwest Louisiana and companies like Waitr have been created and housed.

What has been the toughest challenge in your career?

I’d say my toughest challenge has been knowing when to stay in a job and when to move on. For me, realizing when I’ve done what I got hired to accomplish and deciding to move forward to my next job challenge, so I can grow, is not easy, but my career is a testament to the great rewards that come from doing what is uncomfortable and unexpected.

How would you characterize the state of Cameron Parish Port in today’s economy?

Our port is ripe, ready and poised to grow more rapidly than perhaps any public port authority in the world. We are becoming the clean energy capital of the world. Our nation’s energy independence is in large part due to the projects located right here in Cameron Parish.

LEE CELANO

C

lair Marceaux’s degree in English literature may not have exactly prepared her for directing a major port system, but it took a nontraditional path for her career to come full circle. After studying British literature in the Graduate School of UL Lafayette and teaching English in Lafayette for a few years, the devastation of Hurricane Rita called her home to Cameron Parish. A job with FEMA led to her administering grant funds through the Calcasieu Parish Police Jury, working with Entergy Louisiana and finally the Cameron Parish Port, where she was hired as director in May of 2016. “I do not believe I could have landed in economic development without each of the work experiences I have had,” she says.

What does it mean to you to be working and making a difference in your home parish?

I am humbled by this chance to do right by the people and place that raised me.

I’m reminded by the lyrics in the theme song to the sitcom “Cheers” that says, “you wanna go where everybody knows your name.” Well, for me, that’s true. I feel like I can make the greatest possible impact right here. I owe my very best effort to making the lives of Cameron Parish residents the best they can be.

Our people are hard-working, fun loving, resilient, and with them is where I want to be.

Are you involved in the community?

I serve in the Cameron Parish Lions Club, plant dune grass with the Coalition

to Restore Coastal Louisiana, participate in 5K runs to benefit the preservation of our Sabine Pass Lighthouse, and I serve on the boards of Southwest Economic Development Alliance, Women’s Business Network, Propeller Club, Magnolia LNG’s Community Action Committee, Louisiana Industrial Development Executives Association, Area Maritime Security Committee, Southwest Louisiana Community Foundation, Louisiana Energy Export Association and others like our regional planning commission.

What are your passions outside of work? Do you still read British literature?

My family is my greatest source of joy, and I love to run. I try to get in 12 miles a week. And yes, I still read and enjoy Jane Austen, George Elliot and the greats of British lit.

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 15

LAUNCH: WORKFORCE

DIALOGUE

The diversity challenge

I

n their myriad forms, diversity programs aimed at removing workplace obstacles to women, minorities and other groups are proliferating across the industrial landscape. While the benefits for these groups are obvious, some corporate dividends are also coming into focus—lower attrition rates, higher job satisfaction and productivity, and improved market share.

According to the 2018 World Economic Forum, 48% of companies in the U.S. with more diversity at the senior management level improved their market share over the previous year, while only 33% of companies with less diverse management reported similar growth. And in the American Petroleum Institute’s Oil and Gas Career Guide, the group predicts that 40% of the nearly 2 million industrial job opportunities in the coming decades will be held by women, African Americans or Hispanics.

To gauge the effectiveness of local diversity programs, 10/12 Industry Report recently gathered comments from state and regional leaders who are on the “front lines” of diversity efforts in their respective organizations.

Some of the remarks were derived from panel discussions at the 2018 Downstream Petrochemical Conference in Galveston and the Louisiana Oil & Gas Association’s fall 2018 meeting in Lafayette.

Following are their comments.

—SAM BARNES

Have you ever been discouraged by circumstances in the work environment based upon your gender and/or race?

I’ve been with BP for over 28 years and there have certainly been events over that time that have been discouraging. I often describe my career as a great adventure, as I’ve had the chance to work in many areas of our company. Over those many roles, there have been occasions when people have said that I only got the job because I’m a minority. That can be discouraging, but I’ve found that the best way to deal with that is to just be really good at your job. Eventually, the noise stops.

RAY DEMPSEY, chief diversity officer, BP America Inc., Houston

Like many women in industry, I have encountered initial skepticism and lower pay rates for similar positions.

However, I have also risen above and pushed forward regardless of initial circumstances.

I have been lucky to have had advocates, both male and female, who have worked to eliminate bias and pave the way for gender parity.

LINDSEY ALL, manager of marketing, programs and business development, Women’s Business Enterprise National Council, Baton Rouge

As a woman, you don’t want to walk around with a chip on your shoulder—just let your work send the message that you are competent and capable. Still, there are times when you may feel like you’re being treated differently because you are a woman, and want to stand up and point out, “Well, you treated this person differently and I think I performed just as well. So can we at least have the conversation?”

DECIE AUTIN, vice president – project manager, ExxonMobil, Baton Rouge

What are the leading obstacles to diversifying?

There is a lack of open competition for work within the industry. Women- and minority-owned companies often have a harder time getting a seat at the table to compete for top opportunities.

LINDSEY ALL

The first [barrier] is awareness.

Most of the careers available in the industry are not widely publicized. In fact, study after study shows that women and minorities are unaware of the opportunities the industry affords. The second is cultural. The nature of the work requires specific workwear and nontraditional schedules, which would suggest women are at a disadvantage.

Are you seeing progress to diversify workforce in the industrial market?

The energy industry has been tackling diversity and inclusion for decades, but it has been prioritized and re-prioritized due to economic cycles. Now, the industry is stepping up its efforts significantly as the war for talent has become real tight across all industries. It’s not a war for talent inside oil and gas. The war is with other industries: technology, finance, medicine.

KATIE MEHNERT

Leadership is critical. If the CEO of the company is supportive of inclusion and diversity, then 80%-90% of the management is supportive of it. And so, if this isn’t being led from the top, then it isn’t going to work within the company.

There is a growing awareness of the real value created by a more diverse workforce, and there is a realization that changing workforce demographics requires a sharper focus on women and minorities. At BP, there is a very clear focus on building and maintaining an inclusive culture that will enable more effective attraction, development and retention.

DECIE AUTIN

RAY DEMPSEY

KATIE MEHNERT, CEO/Founder, Pink Petro, Houston

16 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

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What are your company’s long- or near-term goals for greater diversity?

BP has a global diversity and inclusion ambition that frames our expectations of progress. There are several components of [this] covering strategy, leadership, capability, culture and improvement. There are also very specific elements related to women in senior roles and for representation of U.S. minorities in our workforce. As chief diversity officer, I lead a team that focuses not just on workforce diversity, but also supplier diversity, national strategic relationships, and our global philanthropy through the BP Foundation.

RAY DEMPSEY

WBENC’s mission is to fuel economic growth globally by identifying, certifying and facilitating the development of women-owned businesses. WBENC is in the middle of a four-year commitment to provide the Energy Executive Program to WBEs annually that will directly impact 120 women business owners working in or seeking to do business in the energy industry.

LINDSEY ALL

What remains to be done?

I’m leading a STEM effort in the Legislature, looking at the workforce needs in our state and the educational components that we need to put into place to deliver that workforce. A big part of that is making people aware of the opportunities. Industrial owners are getting better at supporting STEM in our school system to encourage women.

STATE SEN. SHARON HEWITT, Slidell

Water resources are our focus. We plan, design, and commission water, wastewater and storm water infrastructure.

SITE AND CIVIL PLANNING We support our clients’ planning needs from initial site investigations through construction administration.

I think just showing them how you can make a career in this industry is crucial. That way you make it personal to them. While I have a career that’s not necessarily traditional, I think it makes a job in an industrial setting more attractive to younger women.

I think as employers we need to get involved at the college level. We need to put ourselves out there and get more women in our industry. I think every company has key women, so we need to make them more visible. That would encourage more women to join our industry.

JAIME GLAS, founder and owner, HauteWork Flame Resistant Clothing, Baton Rouge

JESSICA ROGER, vice president – administration, Wellsite Fishing & Rental Services LLC, Broussard

I would challenge you to look at your own house to see how many females are employed. More importantly, what is the diversity of your makeup of employees right now? Is it fair? There are universities that definitely have more females in geology, petroleum land management and engineering now more than ever before. So give some consideration to that when you’re hiring someone. Take a look at that short list and ask, “Do I have the right diversity?”

FELICIA FREDERICK, state government affairs, Chevron USA, New Orleans 1012industryreport.com

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LAUNCH: NETWORKING

After Hours Industry events across the corridor

ASSOCIATED BUILDERS & CONTRACTORS INSTALLATION BANQUET

In January, the ABC Pelican Chapter installed its new officers at a banquet at the Country Club of Louisiana in Baton Rouge. Donn Peterson of GROUP Industries has been named 2019 chairman (inset photo, right). Rounding out the executive committee are Carlos Guidry of Turner Industries Group, chair-elect; Shawn Worsham of Jacobs Field Services, secretary; Ryan Girouard of Hancock Whitney, treasurer; Josh Rounds of Performance Contractors, vice chair of education; Keith Coleman of Beard Construction, vice chair of member growth; Wes Mincin of Triad Electric Controls, vice chair of outlying area; Jeff Plauche of Boh Bros. Construction Co., vice chair of member services; and Glenn Redd of Triad Electric Controls, vice chair governmental relations. Trey Crawford of Grady Crawford Construction was honored as the immediate past chair. Past chair liaisons are Kenny Freeman of Brown & Root ​Industrial Services and Andy Lopez of Cajun Industries. Also serving on the 2019 Board of Directors are Conrad Bourg of Primoris Services, Donnie Braud of L.S. Womack, Ben Brown of Turner Industries Group, Scott Callaway of Cajun Industries, Donnie David of ISC Constructors, John Freeman of Brown & Root ​Industrial Services, Beau Leitner of Doyle Electric, Scott McKnight of BXS Insurance and Matt Shoriak of ​EXCEL Group.

EXXONMOBIL 2018 ANNUAL HOLIDAY OPEN HOUSE

ExxonMobil celebrated the holidays with community partners at its eighth annual Holiday Open House on Dec. 4 at Boudreaux’s in Baton Rouge. The Baton Rouge Magnet High School Jazz Band provided the entertainment. Above left: Stephanie Cargile, ExxonMobil; Shawn Welcome, Louisiana Economic Development; Andrew Fitzgerald, Baton Rouge Area Chamber; Kyle Bove, Capital Area United Way; Evelyn Ware Jackson, East Baton Rouge School System; John Daniels, Southern States Scholars; Keila Stovall, Foundation for the East Baton Rouge School System; Lois Dorsey, St. Vincent de Paul; Karyn Andrews, Louisiana Department of Environmental Quality; and Rory Denicola of ExxonMobil.

ABove right: Will Moore and Jeff Copeskey, ExxonMobil; Charlene Guarisco, Greater Baton Rouge Food Bank; Megan Manchester, ExxonMobil; Leroy Davis, Baton Rouge North Economic Development District; Connie Fabre, Greater Baton Rouge Industry Alliance; Matt Bourque, ExxonMobil; Brandon Smith, GBRIA. 18 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

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COVER STORY

By SAM BARNES

22 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

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THE BP LESSON

Some crisis communications manager cite BP as an example for poor damage control, citing the company’s handling of the Deepwater Horizon disaster in 2010.

Tony Hayward addresses the media in Port Fourchon.

THE ASSOCIATED PRESS

F

ires, environmental threats, explosions, leaks or even shifts in public opinion can thrust an industrial owner into the media spotlight faster than you can say “Deepwater Horizon.” Owners can no longer afford to stay quiet, or even worse, appear unprepared, tentative or unconcerned in the aftermath of a crisis. Mum is most certainly not the word.

Experts frequently point to BP as the poster child for bad communications. Gary Meltz, a Washington, D.C.-based specialist in crisis management, says the company did just about everything wrong in the wake of the Deepwater Horizon disaster in 2010. Meltz spoke on the subject during Louisiana International Trade Week in November.

“When we train our clients, we show a video of the former CEO, Tony Hayward, going around with his elite British accent and talking to guys in overalls in some small town,” he says. “It presented such a terrible image.”

BP is not alone. Other companies frequently make the same mistake, thinking the best “face” for their brand is the CEO or someone else in upper management. Instead, the right person might be 20 steps down the food chain, but an effective communicator who can relate to the community. As such, Meltz says owners should always have someone local as their spokesman.

Patricia Prebula, president of Prebula Public Relations in Lake Charles, couldn’t agree more. “I love to tell that story because he (Hayward) was so insensitive,” she adds.

“All he cared about was getting back to the golf course. The lesson there is that if you don’t have a spokesperson identified at that field location, you’re in trouble.”

Jonathan Manns learned that the hard way when he was hired as PPG’s Lake Charles plant manager in 2005, just before Hurricane Rita made landfall. Not long after in summer 2006, PPG workers went on strike over a wage dispute.

For a while, PPG’s corporate office instructed him to avoid the press when the strike happened, and it didn’t take long for the resulting void to be filled with misinformation. “It was frustrating, because people were

A Hands Across the sand protest along the shores of the Gulf of Mexico to protest offshore drilling.

WHAT ARE THE

Rep. Steve Scalise, R-La., questions BP CEO Tony Hayward in a public hearing on Capitol Hill.

RISKS?

Possible organizational issues that may need to be managed

• Boycott of company products or services

• Employee/contractor injury or fatality

• Serious legal claims or personnel issues

• Contract negotiations and/or strike

• Sexual harassment allegations against senior management/leadership

• Possible plant and/or unit closures

• Threatened loss of management or employee layoffs

• Environmental or wildlife impact

• Natural disasters • Railroad or transportation issues • Fire, explosion, unplanned emissions or leaks • Cyber breakdowns

• Customer loss

SOURCE: “Effective Crisis Communications in Today’s Instant Media World,” by Patricia Prebula 10/12 INDUSTRY REPORT • FIRST QUARTER 2019 23

COVER STORY

CRISIS COMMUNICATION MISTAKES 1. Burying your head in the sand

2. Delaying crisis response or preparations

3. Relying on your reputation to speak for you

4. Treating the media like the enemy

5. Reactive versus proactive communications

6. Not communicating effectively

7. Not listening to stakeholders

8. Relying on facts

versus perception

9. Not being compassionate 10. Ignoring social media SOURCE: “Effective Crisis Communications in Today’s Instant Media World,” by Patricia Prebula

PROACTIVE CRISIS COMMUNICATIONS • Every organization needs a crisis plan and a crisis command structure.

• Always assume the worst and hope for the best.

• Companies that don’t do enough to deal with a crisis are branded as insensitive, uninterested.

SOURCE: “Effective Crisis Communications in Today’s Instant Media World,” by Patricia Prebula

able lesson—that a local solution is always better than a corporate one, and that an effective communications strategy should be a vital part of every crisis plan. “Having a strategy is not devious or conniving,” he adds. “It’s just a way for a plant or company to plan their approach and ensure the accuracy of information. A big part of that is ensuring that someone local is the face of the company. It can’t be some statement from the corporate office … it has to be someone here.”

In PPG’s case, that turned out to be Manns. He served in that capacity until his retirement in 2014. At every opportunity, he was the one talking to the media, making presentations and presenting checks or donations. “It wasn’t only about giving bad news, but good news as well,” he says. “The whole point was that people got to know me and they could trust me, and they knew that I would be frank with them about things.”

an important connection to the community, as they seek to enable dialogue between residents on issues of importance, provide a venue for feedback and create awareness. “I’m a big believer in them, because you’re setting that foundation,” she adds.

“You need to identify your stakeholders and develop a relationship with them. And when you meet with them on a regular basis, you can answer questions, show your transparency and talk about what you’re doing, from environmental to safety to employing local people.”

Supporting community initiatives through monetary donations can also create a connection, but a little elbow grease is better. Boswell’s clients call it “sweat equity.”

“That means getting out in the community, volunteering, showing your face, joining the chamber etc.,” she adds. “Get your leaders, as well as your employees, out there. Conduct workshops at technical colleges or other schools.”

Sasol in Lake Charles is a prime example of community outreach in action. Since entering the scene in 2011, the South African-headquar-

tered company has funneled money into a much-needed Southwest Louisiana Workforce Resource Guide and Workforce Resource Guide Scholarship Program, and financed a painstakingly-researched effort to preserve nearby Mossville’s rich history. As a result of these and other endeavors, they’ve been largely well received by the community.

Prebula can think of other examples when a lack of community engagement has had the opposite effect. “When something goes down in your industry, they’re not going to support you if you haven’t been a good neighbor. You’ve got to build those alliances when times are good.

It’s like an insurance policy, so that you’ll have that support when times are bad.”

That, she adds, is the key to establishing trust and credibility. “You have to build that trust over time.

Being active in a community certainly helps. When something does happen, you have those resources.

You have a way of communicating

to those different stakeholders and getting your word out and it’s a believable message.”

BUILDING TRUST Laying the preliminary groundwork through a strong community connection is crucial to damage control. If a company is not involved in the community, the community knows it. And if a company is not contributing through monetary resources or volunteer efforts, they know that as well.

Stephanie Boswell, a communications professional with TJC Group in Baton Rouge, is a proponent of community interaction in the industrial space, and says establishing trust should be a critical element of every strategy. Boswell began facilitating Community Advisory Panels nearly two years ago for TJC, in addition to assisting with media training for corporate clients.

Boswell says CAPs provide

24 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

DON KADAIR

THE 10 WORST

making ridiculous claims about what the strike was about and its impact,” Manns says.

It got so bad that corporate eventually instructed Manns to take a more proactive approach. That’s when he turned to a third-party communications expert for help, and brought in local government officials, state legislators and area mayors for a Q&A session to clear the air.

In the end, Manns learned a valu-

“You need to identify your stakeholders and develop a relationship with them.”

STEPHANIE BOSWELL, communications professional, TJC Group in Baton Rouge

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10 DOS and 10 DON’TS for media interviews THE DOS

THE DON’TS

• Listen to the question before answering.

• Do not be a wimp.

• Don’t use jargon/acronyms.

• Be calm.

• Respect the reporter’s job and deadlines.

• Utilize the reporter as a partner or ally.

• Be accessible.

• Tell the truth.

• Look the reporter in the eye.

• Do not speculate.

It’s OK to say, “I don’t know.”

• Do not get overly upset about being misquoted.

• Do not play favorites with the media.

• Do not threaten to pull advertising.

• Do not stick with a story if it has changed.

• Use your crisis communications plan.

• Do not assume your news release will be published “as is.”

• Keep employees informed.

• Do not predict the future.

SOURCE: “Effective Crisis Communications in Today’s Instant Media World,” by Patricia Prebula

Another way to build trust in the community? Showing empathy for the needs of employees during and after a crisis. Cindy Nassar, a licensed professional counselor in Lake Charles, has worked extensively with industry, and says the mental impacts of a crisis are often overlooked. That’s unfortunate, since employees are often subject to acute trauma following a crisis or traumatic event.

Her organization typically performs Critical Incident Stress Debriefings (CISDs) in small groups of 20 within 24 to 72 hours of an event. By doing so, the research-based intervention method can shorten a crisis reaction and reduce the psychological trauma.

This is critical, since a crisis can result in worker impairment if left unaddressed. “In that case, they can’t return to work and can’t be productive employees,” Nassar says. “It leads to functional impairment. We want people doing their job with a clear head and being able to function.

“Most importantly, we want to get them back on the road to recovery.”

PERSONABLE, RELATABLE The best local spokesperson is not necessarily the plant manager, as they can be found at any rung of the organizational ladder. Without 1012industryreport.com

as a team

• Do not chew gum or wear sunglasses.

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exception, however, they should have strong connections with the community, be personable, relatable and an effective communicator.

“If people just don’t like you, there’s no amount of leadership training that’s going to change that,” Meltz says. “That’s one common mistake that corporations make.”

Still, spokesperson training is undeniably vital and a task that is usually outsourced. Terri Ammerman, president and CEO of The Ammerman Experience in Houston, tutors potential industrial spokespersons on the “dos” and “don’ts” of communicating during a crisis, particularly when addressing the media. Along the way, she performs mock interviews, films and critiques participants on their body language, facial expressions and word choices, among other things.

“They’re on camera practicing several different times,” Ammerman says. “If their arms are crossed or if they go into this long rambling dissertation during an answer to a question, etc. … all of that will come out.”

Instead of viewing the press as an unnecessary evil, spokespersons are taught that they are an essential conduit for communicating to the community. “Additionally, we want to familiarize them with what the

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COVER STORY

MEDIA AT BREAKNECK SPEED There has been a new wrinkle added to the damage control effort over the last decade or so. Technology now distributes information at breakneck speeds, as cell phones can take pictures and distribute them before a plant can react or formulate a response.

Forty years ago, third-party communications experts would tell clients they had about two hours to prepare a response. In today’s media landscape, they have mere minutes.

“I can’t state that enough—how social media has changed the dynamics of how we respond,” says Prebula, who will present “Crisis Manage-

(Tony Hayward) was so insensitive.

All he cared about was getting back to the golf course. The lesson there is that if you don’t have a spokesperson identified at that field location, you’re in trouble.”

PATRICIA PREBULA, president, Prebula Public Relations in Lake Charles

LEE CELANO

media wants from them.” Ammerman says. “It can be done. People can learn these skills, but if left to their own devices they typically mishandle it. We had a client who had an explosion at their plant and the plant manager—who had not been trained—walked by the press and shielded his face. Well, do you think that made the 6 o’clock news?

Absolutely.”

Ammerman also helps with interviewing skills, such as avoiding speculation, being familiar with key messages and reacting to challenging questions that might not have an immediate answer. “During an interview, you should focus on the fact that the right people are doing the right things at the right time,” she says. “And those messages need to be created prior to the interview.

Otherwise, you’re going to wind up boxing yourself into a corner.”

As part of The Ammerman Experience tutorial, company personnel typically take a refresher course every 18 months, although every situation is different. For example, Ammerman trains executives at a local pipeline company once a year for only two hours, with a different communications focus for each session.

In his training sessions, Meltz encourages clients to avoid re-hashing corporate-approved statements. “It’s very difficult because there’s a certain amount of security in always using approved talking points,” he says. “I get that, but they don’t reflect what’s happening and they seem cold and insincere. They don’t relate to what’s happening most of the time.”

ment in a Social Media World” immediately, and provide the ‘who, Feb. 26 at The Chamber Southwest what, when, why, where and how.’

Louisiana. “You no longer have time.

Identify the facts. When you’re out Today, you’ve got 15, 20 minutes there, it shows compassion. It shows tops to get your that you are story together.” interested and In the wake you care. of an incident, “In the midst ALL ABOUT forget about of a breaking THE MESSAGE having the luxunews story, you Key talking points in a crisis ry of scheduling have two immea press briefing. diate goals: to • Our biggest concern is for Most of the put a caring and those affected. time, the press concerned face • Our first priority is the safety of will simply show on your compaour employees and the public. up at the gate. ny, and to be a • We are sorry for what And if a spokesreputable source happened, and we take person doesn’t of information.” full responsibility. provide inforThis is admit• We are gathering information. mation right tedly difficult • We don’t know how it away, they’ll to do while happened, but we are trying typically go also responding to find out and we will let you know as soon as we know. elsewhere to get to the actual the interview. emergency, says SOURCE: “Effective Crisis Communications in Today’s Instant “If they show Jim Harris, Media World,” by Patricia Prebula up, you need to president of have a designatcommunications ed spokesperson firm Harris, go out and speak to them,” she adds.

Deville & Associates Inc. in Baton “That person needs to be trained not Rouge. “Most companies and pipeto speculate, not to repeat negative lines are very good at handling emerwords, and give the impression gencies because they practice it all of of being informed and in charge. the time,” Harris adds. “The difficult Regardless, you need to take action part is putting that together with

26 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

communicating with their neighbors and with everyone else outside of the emergency to keep people posted. It’s very difficult in those kinds of situations, so that’s one of the businesses that we’re in. We’re on call with a number of facilities and pipelines.”

Policies and procedures need to carefully delineate policy in regard to all information outlets, including social media. While experts admit that the days of controlling information are over, they stress that employees should be asked to sign confidentiality agreements to ensure they don’t post on social media about proprietary matters.

“You need to monitor all media, including social media, and find out what’s being said,” Prebula says.

“Because that’s where a lot of the information is. That’s your community talking. That’s where you operate your business. You can’t hide.”

Policies should also be malleable so that they can keep pace with other changes in the media climate. In Lake Charles, for example, there has been a seismic shift in news coverage as the industry has grown in size and diversity. While in the past most coverage was done by local news media with entry-level reporters, the 1012industryreport.com

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“Most companies and pipelines are very good at handling emergencies because they practice it all of the time. The difficult part is putting that together with communicating with their neighbors and with everyone else outside of the emergency to keep people posted.”

DON KADAIR

2” Thick X 10’ Wide Plate Rolled in-house

JIM HARRIS, president, Harris, Deville & Associates Inc. in Baton Rouge

recent industrial boom has attracted the interest of more seasoned reporters from Houston and Baton Rouge.

Of course, social media and the lightning fast speed of news in general have been the biggest disrupters.

This immediacy of news creates an environment where plants don’t have time to formulate a response.

More than ever, they need to have a pre-prepared plan for reacting quickly and decisively.

Dick Gremillion, director of Homeland Security and Emergency Preparedness for Calcasieu Parish, admits there have been times when he has learned of incidents from the media rather than the plants themselves. “If you have a fire, it’s going to be obvious to everyone pretty soon,” Gremillion says. “So go ahead and say, ‘Hey, we have a fire out here, but we have it under control or we’re doing this or that.’ Don’t wait a couple hours while the fire is burning for people to form their own opinions.”

The biggest initial challenge is preparing a statement when much of 1012industryreport.com

the information is still unknown.

“In two minutes there’s a picture on Facebook,” says PPGs Manns.

“I guarantee you that the person designated to communicate with the community is not going to know what’s going on. They’re not going to know any specifics, but they’ve still got to get out there and say, ‘Yeah, we have an incident, and we’re working the incident. We’ll get back to you in 20 minutes with more details.’ Right away, you’ve established that you’re not trying to hide anything. You should constantly be as open and honest as possible—you still have to get out there.”

Manns adds that a good working relationship with emergency responders, state police and other emergency groups should be another critical part of the plan, as those agencies will also be inundated with questions from the public in the wake of an incident.

Despite its obvious faults, Gremillion says social media is not all bad. “We’re not only the subject of social media; we actually use social

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COVER STORY

CRISIS PREVENTION TACTICS • Foster organizational policies

allowing for updates and changes

RN

ES

• Reduce the use of hazardous SA

M

BA

materials & processes

• Initiate safety training programs

with rewards for employees with stellar safety records

• Allow open two-way

communications

• Communicate past

problems or failures

• Attend community meetings • Develop a community advisory

panel with key stakeholders

• Internal newsletter and

communications

• Offer scholarships • Host community/

employee events

• Sponsor community activities SOURCE: “Effective Crisis Communications in Today’s Instant Media World,” by Patricia Prebula

media to get the information out,” he adds. “So it’s a two-way street.

My role is to, A, confirm that it did happen and, B, is there going to be any danger to the public from that incident? Those are the two things that we need to establish immediately and that’s the emergency part of it.

Those are questions for industry to answer.”

A CORPORATE APPROACH At the corporate level, many petrochemical, oil and gas companies have broader communications plans that seek to address shifting public opinion. Paul Hagel, a Shell Corp. external relations manager in New Orleans, says a communications strategy anchored by a respect for people is particularly effective as public support shifts away from fossil fuels.

Hagel spoke on the subject in New Orleans during Louisiana Trade Week. “Whatever the situation, you communicate through the lens of honesty, integrity and respect for people,” he says. “The byproduct of that is a reputation and brand 1012industryreport.com

“Whatever the situation, you communicate through the lens of honesty, integrity and respect for people.”

PAUL HAGEL, external relations manager, Shell’s Deep Water Gulf of Mexico business in New Orleans

that will help you over the longterm, and be successful during those times of uncertainty.”

This changing public opinion has prompted Shell to increase its focus on renewables in recent years, as well as take a hard look at its communications strategy. First and foremost, Hagel says, Shell seeks to honor the public’s varying viewpoints. “People have a lot of different, strong opinions about oil and gas exploration, development and production,” he adds. “We honor those perspectives.

We try and balance that with our own view and we try and move on.”

Shell also seeks to encourage employee advocacy and engagement, as it looks to its employees to communicate more effectively to stakeholders. “We tell everyone that our purpose is to produce more clean energy,” Hagel says. “That’s our place in the world and that’s really how we’ve been trying to respond to these issues. This is an important approach for today’s oil and gas companies, as a large portion of the population moves away from fossil fuels.”

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 29

TOP-FLIGHT CONSTRUCTION SERVICES BARRY’S PASSION FOR FLYING RADIO-CONTROLLED MODEL AIRPLANES ILLUSTRATES THE LEVEL OF SKILL AND CONTROL HE BRINGS TO THE LEADERSHIP TEAM

Barry has that team-mindedness, expertise, and flexibility we need to deliver safetyfirst, high quality work at RES. He and our entire team are the reason we maintain long-term relationships with our clients.

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REASONS BARRY IS A HUGE ASSET TO THE RES TEAM HE SECURES CONTINUOUS FEEDBACK FROM THE ENTIRE TEAM “Our site supervisors, team members in the field and inspectors are the eyes and ears of our company.” - Barry

HE IS SKILLED AT THE BEST TECHNOLOGY TO TRACK AND PROJECT CLIENT WORK “The right expertise and the right technology will save the client a lot of time and allow us to project more accurately.” - Barry

HE KNOWS THAT THINGS CAN GO AWRY AND STAYS FLEXIBLE “If it’s too hot, if it’s too cold, if there is other construction going on at the site, productivity will be affected. We collect as many details as we can knowing things can and most likely will change. Then we use our expertise and best judgement to adjust manpower or strategy to stay on schedule.” - Barry RES Contractors, LLC was established in 2002 and is strategically located in the heart of South Louisiana’s industrial corridor. RES has successfully performed a wide range of small and large projects for clients in the industrial, federal, state and government sectors. The RES mission is to provide value-added construction services to their customers by creating a successful partnership throughout the construction process. We strive to develop and maintain long-term relationships with our clients by delivering safe and quality services that save our clients time and money.

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NEWS ENERGY

Correcting course

By SAM BARNES

Ignore the shadow that 2018 cast over LNG. The long-term demand remains.

“If you walk around a Cheniere LNG site, the internal tanks that are in contact with the minus-260 degree Fahrenheit LNG are all made out of a very specialized steel (from China). And if you’re getting ready for the next generation of LNG export terminals in Louisiana, that can be quite troublesome.”

I

n some ways, nothing has changed in the liquefied natural gas market. Proponents still expect unparalleled global demand and a significant supply gap over the next 10 to 15 years to necessitate a second, larger wave of LNG facilities and a swift ramp-up in production.

Nonetheless, it would be disingenuous to say the road to the next wave didn’t get a little bumpy

CHERYL GERBER

ERIC SMITH, interim director, Tulane Energy Institute in New Orleans

in 2018. A destabilized political climate, increased competition and a changing price structure prompted many LNG owners to delay projects or postpone investment decisions.

Eric Smith, interim director of the Tulane Energy Institute in New Orleans, says the trade war between the U.S. and China undoubtedly had an impact. China is the biggest consumer of natural gas in the world, and its countervailing duties

32 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

on LNG, in retaliation for U.S. duties on steel and aluminum, proved detrimental.

That hurt the industry in two ways—in the cost of construction and the marketability of the product. “A lot of the stuff that we use to build LNG terminals relies on some fairly exotic alloys that aren’t available from U.S. suppliers,” Smith says. “If you walk around a Cheniere LNG site, the internal tanks that

are in contact with the minus-260 degree Fahrenheit LNG are all made out of a very specialized steel (from China). And if you’re getting ready for the next generation of LNG export terminals in Louisiana, that can be quite troublesome.”

Furthermore, an inability to line up contracts with Chinese customers played an undeniable role in dampening expectations. Australia’s LNG Limited recently postponed a 1012industryreport.com

LEE CELANO

final investment decision on its Louthat the approval process is what’s LNG Canada project. However, the ables, Industrial Info Resources says isiana export terminal, largely due to really holding us up. I think it’s the decision didn’t rely on commitments long-term demand for LNG is still the trade tension. economics.” from large buyers, as Shell plans to there, and predicts it will reach 141 University of Tulsa economist Another issue: China has begun absorb the cost into its budget, at million tons a year by 2030. Natural Ron Ripple, speaking at LSU’s 2018 to buy LNG preferentially from least for now. gas production is ramping up ahead Energy Summit in the fall, says other countries, including several in “Portfolio players such as Exxonof the demand and is projected to short-term uncertainty is lowering Africa. “If the Chinese don’t make Mobil and Shell have been able to increase 25 percent through 2020. demand projections, but China’s long-term commitments (with U.S. move forward without financing or Shane Mullins, IIR’s vice presinot the only reason. Japan plans to companies), then we don’t have a having to pre-sell volumes,” Smith dent of product development, told significantly increase its reliance basis to build upon, regardless of says. “Along those lines, we expect attendees at a Nov. 1 Industrial Marupon nuclear energy by 2030, and whether it’s a good idea or not,” the Golden Pass LNG project (in ket Outlook in Baton Rouge that that will have a significant impact Tulane’s Smith says. “If I’m sitting Sabine Pass) to be approved.” While the Gulf Coast would likely remain on its demand for natural gas. “All in China, I’m looking at some of the currently an LNG import facility, the epicenter of LNG development the numbers that I’ve seen show a countries where reputable, big interGolden Pass has plans under develfor years. “There’s no other place demand reduction (in Japan) by a national oil companies are building opment to add export capabilities on Earth that has this much under million tons per year,” Ripple says. big LNG export facilities.” to the terminal, which is owned by development (at $2 billion) … and All of these factors have made Competition is also increasing affiliates of Qatar Petroleum, Exxthere are $200 billion in liquefaction owners skittish, at least in the short as other countries jump aboard onMobil and ConocoPhillips. trains to start construction in the term. He says three Louisiana LNG the LNG train. Royal Dutch Shell next five years, excluding the pipeprojects have had FERC-approval made a final investment decision LONG-TERM DEMAND? lines or processing facilities that will for two years but have yet to break last month to build a $30 billion Regardless of short-term varifeed them.” ground. “I’m a bit confused According to IIR data, when I hear all these comtwo Louisiana-based LNG “We’re actually starting to acquire the gas in plaints about how the slow trains—Sempra Energy’s approval process is putting the ground. We will now begin to increase that Cameron LNG in Hackberry the brakes on getting more of and Cheniere Energy’s Train acquisition by tenfold within the next year.” this gas ready to move out,” 5 at Sabine Pass LNG—are Ripple says. “I don’t think scheduled to begin production JASON FRENCH, vice president of government and public affairs, Tellurian

1012industryreport.com

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 33

NEWS: ENGERGY in 2019, and two others—Train 6 at Sabine Pass LNG and Lake Charles LNG—could begin construction in 2019. Venture Global’s two Louisiana projects in Calcasieu Pass and Plaquemines Parish are awaiting FERC approval.

To date, Cheniere’s Sabine Pass LNG and its recently completed Corpus Christi LNG remain the only large-scale export facilities online on the Gulf Coast.

“Currently, there’s 74 metric tons per annum under construction, and considering utilization rates and declines in production in other countries, we’re going to need another 141 metric tons per annum to

be approved by 2025,” Mullins says.

For the U.S., that translates to about $27 billion in LNG-related construction in the next five years.

Tulane’s Smith says the longterm outlook remains good because Chinese demand for natural gas isn’t going anywhere. “They’re under a big political cloud to clean up the atmosphere, even though they’re not happy with the U.S. suppliers right now. The Chinese don’t like uncertainty any more than the Americans do.”

While political tensions are impacting current numbers, Ripple says China will continue to play a significant role in future LNG

demand. He adds that the U.S. exports to 25 of the 40 countries that currently import natural gas in the form of LNG. “China is important and demand will grow,” he adds.

“However, in 2017 there was 130 million MCF (thousand cubic feet) of gas imported in the form of LNG into China, but during the first eight months of 2018, only 24 percent of all that was imported.”

A NEW APPROACH As short-term economic variables slow the market, LNG owners are finding it difficult to lock in longterm contracts. In the past, LNG suppliers could easily enter into 20-

year contracts with overseas clients, but the precipitous drop in the price of oil in 2014 made it difficult for them to remain globally competitive.

That sent owners scrambling to find new ways to raise capital.

Houston-based Tellurian Inc. began offering equity in its projects, whereby 70% of the operation would be owned by outside customers and the remaining 30% of capacity sold in the spot market. That enables Tellurian to take on less debt and gives customers certainty in price.

Speaking at a World Trade Center of New Orleans luncheon in August, Tellurian Vice President of Government and Public Affairs

“The government has their finger on the pulse of everything and there’s a lot of rules and regulations that go along with LNG conversion terminals, especially in terms of exporting that product out of the country.”

DON KADAIR

CHETT CHIASSON, executive director, Greater Lafourche Port Commission, of the $800 million Fourchon LNG facility at Port Fourchon.

34 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

1012industryreport.com

SAM BARNES

“There’s no other place on Earth that has this much under development.”

SHANE MULLINS, vice president of product development, Industrial Info Resources, noting that the Gulf Coast would likely remain the epicenter of LNG development for years.

Jason French says the company has taken other unprecedented steps, such as acquiring 1.5 trillion cubic feet of natural gas in the Haynesville Shale. The acquisition will ultimately support Tellurian’s Driftwood LNG project south of Lake Charles, which received its draft environmental impact statement from FERC in September.

“We’re actually starting to acquire the gas in the ground,” French adds.

“We will now begin to increase that acquisition by tenfold within the next year. We want to have 15 trillion cubic feet of reserves in the Haynesville Shale by this time next year.”

Tellurian also announced plans to build a 256-mile pipeline from the shale play to southwest Louisiana in order to transport 2 billion cubic feet of gas each day. “In total, our $15 billion LNG project goes up to $29 billion when you look at the investment that we’re putting into pipe and into Haynesville Shale.” In the process, Tellurian hopes to control costs and circumvent impending pipeline shortages.

MOVING FORWARD—SLOWLY Chett Chiasson, executive director of the Greater Lafourche Port Commission, says the $800 million Fourchon LNG facility at Port Fourchon has not been affected by current economic variables since 1012industryreport.com

the facility will supply a controlled group of customers. He says the project remains on track, despite still being in the FERC pre-filing stage.

Much of Chiasson’s current attention remains on getting the channel dredged to 60 feet deep. While water depths are good enough for Fourchon LNG’s first phase (2 million tons per annum), additional depth will be needed for Phase 2 (5 million tons per annum) to support larger, higher-capacity vessels. “That process is moving along,” Chiasson says. “We’re finalizing the feasibility study, which looks at the environmental and economic justifications for a 60-foot channel into the port.”

While the project remains a couple of years from breaking ground, Chiasson doesn’t think there’s any danger of it being delayed. Facility owner Energy World USA most recently visited the site in October.

“The government has their finger on the pulse of everything and there’s a lot of rules and regulations that go along with LNG conversion terminals, especially in terms of exporting that product out of the country.”

Energy World is currently leasing 140 acres at the port and has a “right of first refusal” on another 12 acres.

“There are certain milestones that have to be reached before the lease commences. They’ve signed a lease, but the clock hasn’t started ticking yet.”

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ISTOCK

NEWS: LOGISTICS

Bayou bottleneck

By SAM BARNES

MOVE IT OUT: Sharp increases in petrochemical, crude oil and natural gas production are quickly transforming Louisiana into a net-export state, and there’s simply not enough infrastructure to support such a seismic shift in market dynamics.

Louisiana’s seismic shift to export state strains the supply chain.

T

hings are tough all over for the industrial supply chain.

Sharp increases in petrochemical, crude oil and natural gas production are quickly transforming Louisiana into a net-export state, and there’s simply not enough infrastructure to support such a seismic shift in market dynamics.

Since mid-2017, rail congestion, shipping container shortages, trucker shortages and pipeline deficiencies have become serious issues for many owners. Tyler Gray, president and general counsel of Louisiana Mid-Continent Oil and

Gas Association in Baton Rouge, predicts the strain on the state’s infrastructure will only intensify as the fervor grows over shale plays, LNG facilities and polyethylene. That will impact everything from pipelines, to roads, to bridges, to ship channels.

“There is more oil in the Permian and Delaware basins than in Saudi Arabia, and all that is coming to the Gulf Coast,” Gray says. “In order to get it to the refineries, pipelines are going to be an important part of that scenario.”

Louisiana is indeed in uncharted territory, as it has been primarily a receiver, not a giver, for decades when it came to shipping. While

36 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

some owners are creatively sidestepping their current supply chain issues, the root cause of the problem can’t be ignored.

“We have an inadequate number of interstate pipelines,” says Eric Smith, associate director of the Tulane Energy Institute in New Orleans. “We need pipelines to feed these (LNG) terminals and transport crude. Without the Keystone XL Pipeline, for example, Texas doesn’t have any crude, and I guarantee you if Texas doesn’t get heavy crude, we don’t get their excess.” As an alternative, owners are turning to trucks and trains to transport product to Gulf Coast locations, which some

see as less efficient and less safe.

The chief hurdle is figuring out how to get crude oil from locations outside Texas and Louisiana. For some owners, that means taking some rather unprecedented and costly steps. On Jan. 2, the owners of the Capline Pipeline—Plains Pipeline LP, BP Oil Pipeline Co. and Marathon Petroleum Corp.—announced plans to reverse their pipeline flow to transport crude oil from Patoka, Illinois and Collierville, Tennessee, to the Gulf Coast, thereby providing a route for Canadian and North Dakota oil producers to reach refineries in the New Orleans and Baton Rouge areas. It would also 1012industryreport.com

“The market is excited about the versatility of Seahorse, which has multiple market options including refinery demand in the St. James area and substantial export capability,” said Tallgrass Chief Operating Office Bill Moller in a press release.

Tallgrass also announced details of a $30 million land acquisition for the PLT site, including more than 600 acres along the Mississippi River in Plaquemines Parish.

When complete, the PLT is expected to offer up to 20 million barrels of storage for both crude oil and refined products and export facilities capable of loading Suezmax and other large-capacity vessels for international delivery.

The land was acquired pursuant to an agreement between PLT and the Plaquemines Port & Harbor Terminal District. PLT and the Plaquemines Port will work collabo-

ISTOCK

open up another route for exports out of a variety of terminals on the Lower Mississippi River.

While Capline’s owners say crude oil service could commence by Third Quarter 2020, Tulane’s Smith expects it could take longer than that.

“Even though you’ve got the right of way and you’ve got the pipeline, everything has to be turned around and you need different pumping capacities when you’re dealing with heavy oil and light oil,” he says.

Tommy Clark, commissioner of the Louisiana Office of Multimodal Commerce, says in the race “to get crude oil to deep water quicker and faster than Texas,” he is particularly excited about a recent announcement by Tallgrass Energy to build a crude oil pipeline—the Seahorse Pipeline—from Cushing, Oklahoma, to its planned Plaquemines Liquids Terminal (PLT) in Louisiana.

REVERSING COURSE: The owners of the Capline Pipeline announced plans to reverse their pipeline flow to transport crude oil from Patoka, Illinois and Collierville, Tennessee, to the Gulf Coast, thereby providing a route for Canadian and North Dakota oil producers to reach refiners in the New Orleans and Baton Rouge areas.

ratively to permit and construct the terminal. The Plaquemines Port is also the site of one of two proposed Venture Global LNG facilities. Venture Global LNG expects to take formal final investment decisions on both its Calcasieu Pass and Plaquemines LNG projects in 2019.

Other pipeline projects are at varying stages of completion in an effort to support growing demand.

Oklahoma-based Enable Midstream Partners recently announced plans to build a 165-mile gas pipeline from northwestern to southwestern Louisiana along the Texas state line.

The pipeline would take gas from the Haynesville Shale and other regions and ship it to new LNG export terminals in Louisiana and Texas. Elsewhere, the nearly complete $750 million Bayou Bridge pipeline

by Energy Transfer Partners and Phillips 66 will transport an estimated 280,000 barrels of crude oil a day between hubs in Nederland, Texas, and St. James Parish.

BIGGER IS BETTER Some petrochemical owners are leveraging their size and resources to resolve logistical challenges.

ExxonMobil’s upstream businesses produce oil and natural gas in the Permian and other basins, then transport them via midstream assets to refineries and chemical complexes along the Gulf Coast, including the Baton Rouge complex. From there, they are upgraded to higher-value fuels, products and feedstocks through the fuels, lubricants and chemicals value chains.

“We can take advantage of logistics flexibility to ensure no value is lost to third parties,” says Stephanie Cargile, ExxonMobil public & government affairs manager in Baton Rouge. “Simply put, we are uniquely positioned in industry, capturing an additional $700 million of earnings per year through integration.”

ExxonMobil Pipeline Company (EMPCo) and its affiliates transport about 2.8 million barrels of product

DON KADAIR

“There is more oil in the Permian and Delaware basins than in Saudi Arabia, and all that is coming to the Gulf Coast.”

1012industryreport.com

TYLER GRAY, president and general counsel, Louisiana Mid-Continent Oil and Gas

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 37

NEWS: LOGISTICS

“We’re moving a ton of it by water, and a ton of it by rail and truck.

What we lack is an adequate supply of 40-foot containers for export.”

TOMMY CLARK, commissioner, Louisiana Office of Multimodal Commerce

DON KADAIR

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each day through approximately 8,000 miles of pipeline in 10 states and the Gulf of Mexico. Additionally, the company plans to perform key midstream infrastructure upgrades to move product from the Permian Basin to ExxonMobil refineries and other market destinations along the Gulf Coast.

To further support Permian operations, ExxonMobil recently acquired a crude oil terminal in Wink, Texas, for transport to Gulf Coast refineries and marine export terminals. The company plans to invest more than $2 billion to expand the terminal and add key infrastructure upgrades.

Elsewhere, ExxonMobil is performing front-end engineering, design and other preparatory work

at its Beaumont, Texas, refinery to increase capacity to refine light crude oil from the Permian. “The Beaumont refinery is logistically advantaged, both geographically and by nature of nearby terminals, railways, pipelines and waterways, to benefit from Permian production growth,” Cargile says.

Still, while ExxonMobil and others are “doing a decent job” of circumventing their logistical bottlenecks, Tulane’s Smith says not everyone has the money or scope to match them.

SHIPPING AND RAIL CHALLENGES Clark says at least some of the supply bottleneck could be remedied in the shipping lanes of the Mississippi River, with the biggest hurdle

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COURTESY RAIL LOGIX

being a lack of inbound containers.

“We’re moving a ton of it by water, and a ton of it by rail and truck,” he adds. “What we lack is an adequate supply of 40-foot containers for export.”

Much of the current need for containers is in the polyethylene plastic resin market. According to Petrochemical Update, nearly 30% of U.S. polyethylene production is now exported, and could increase to as much as 90% because of new U.S. polymer capacity.

Necessity being the mother of invention, empty shipping containers that once sat idle in Memphis are today playing a critical role in supporting the resin market. In a fortuitous arrangement involving three ports, SEACOR AMH LLC barges the containers to Baton Rouge to be loaded with resin at area plants, then sends them downriver to New Orleans for international transport.

Now in its third year, the “container-on-barge” shuttle service has expanded the transportation portfolios of many Baton Rouge-area plants. Toshiaki Ansai, vice presi-

TURNKEY SERVICE: In Lacassine, Rail Logix will soon support the petrochemical and energy markets with an 800-railcar industrial park, once the facility is operational later this quarter. The park is the first of its kind in southwest Louisiana.

dent of planning and marketing for Shintech, says it’s likely that driver shortages and rising wages will make barging more cost-efficient in coming years. Shintech is the largest producer of PVC resin in the U.S. and 12th in container exports.

Clark says rail transportation

is also ramping up through the development of storage yards and distribution centers, as industrial owners increasingly outsource their rail logistics. As many land-locked companies expand, they’re utilizing territory previously occupied by rail storage yards.

“They’re increasing their capacity and utilizing private rail developers that are building these mammoth rail yards, and providing that type of logistic service back to the manufacturer,” he notes.

In Lacassine, Rail Logix will soon support the petrochemical and energy markets with an 800-railcar industrial park, once the facility is operational later this quarter. The park is the first of its kind in southwest Louisiana, as it offers synergies in the coordination and delivery of cars to rail-served tenants, enabling increased efficiencies and reduced operating costs. On-site service providers will coordinate the transloading of product, and the cleaning, maintenance and staging of outbound railcars as a turnkey service.

“There’s $160 billion in industrial development going on in southwest Louisiana, and a lot of that will have rail shipment needs,” Clark says.

“Rather than building out their existing rail infrastructure, plants are outsourcing that. They want to use their land to expand their plant, not their logistics.”

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 39

FOCUS ENVIRONMENTAL SERVICES

It takes an Idea Village Shell’s partnership with a New Orleans nonprofit is creating the next generation of energy entrepreneurs.

VALUABLE REAL ESTATE? Gulf Offshore Research Institute saw an opportunity to repurpose dormant offshore rigs, much like a developer might revitalize a blighted neighborhood.

ISTOCK

By SAM BARNES

K

ent Satterlee spent the better part of his 35 years at Shell working as an engineer in the Gulf of Mexico, and later as an environmental engineer and regulatory policy manager. Little did he know that his diverse background would prepare him for an epiphany that could literally transform the industry’s handling of abandoned offshore platforms.

Satterlee and the founders of the nonprofit Gulf Offshore Research Institute saw an opportunity to repurpose these dormant offshore rigs, much like a developer might revitalize a blighted neighborhood.

The innovation is a three-pronged hybrid that encompasses real estate, recycling and research.

“There are literally thousands of offshore platforms in the Gulf of Mexico that have been installed over the last several decades,” says Satterlee, who now lives in Mandeville. “The law requires that they be removed when they’re no longer useful, but that’s not necessarily the right decision for the environment or the ecology of the Gulf of Mexico.”

Instead of seeing these rigs as eyesores to be relocated or dismantled, the nonprofit GORI views them as real estate opportunities in an offshore environment. “We want to make scientific and environmental use—and even economic use—of these structures.”

GORI’s goal is to acquire platforms in the Gulf, restore them and sell them to public or private entities. The benefits, Satterlee says, could outshine other initiatives—such as the Louisiana Department of Wildlife & Fisheries’ “Rigs to Reefs” program— because the platforms stay in place and leave the existing ecosystem undisturbed.

In the beginning at least, the tenants would be universities and other public institutions looking for venues to perform research. The University of Southern Mississippi is a likely first tenant, given its attention to “blue tech,” which focuses on water-related issues ranging from conservation to sanitation. The U.S. Navy at Stennis Space Center could be another, as offshore rigs could be transformed into charging stations for its fleet of underwater drones.

42 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

Nonetheless, despite the potential of its idea, Satterlee’s group faced a daunting problem not unfamiliar to many startups. GORI had no real plan for turning the idea into a marketable reality, and it needed help “connecting the dots” and overcoming the dire possibility of failure that befalls most startups.

Fortunately, a unique partnership forged between Shell’s GameChanger program and New Orleans’ The Idea Village is paving the way.

Gamechanger was launched by Shell in 1996 to deliver innovative options that can potentially impact energy’s future, while The Idea Village, founded in 2000, is a nonprofit organization that provides direct service to high-impact entrepreneurs.

BRIDGING THE GAP In 2018, Shell and The Idea Village jointly launched their first energy-focused incubator and accelerator program to provide startups and innovators with the tools needed to turn their dreams into reality.

The program kicked off in December with an Energy Innovator Bootcamp that put entrepreneurs

and innovators through an intensive customer development and business model validation process to test the commercial potential in the marketplace.

From there, they selected three teams as finalists for a 16-week accelerator program, dubbed ENERGYx. The program is designed to help participants turn their technical innovation into a scalable business, based upon their demonstrated traction and market potential.

To conclude in April, ENERGYx provides structure, education and connections that help founders take their companies to the next level by ensuring they are focused on honing their innovation, validating their business model, building a market-ready product and continuing to develop customer traction. Participants in the program benefit from the opportunity to co-develop the technology with the input of Shell experts.

It has been a “perfect marriage” for the organizations, as Shell needed to bridge the gap between its 23-yearold GameChanger program and real-world applications, and Idea Village desired to expand its footprint.

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“As technology continues to transform industries, we’re excited to be at the forefront of helping entrepreneurs push the envelope in energy innovation.”

CHERYL GERBER

BRENNA KANE, senior associate of entrepreneur services, The Idea Village

For GORI, it has been a shot in the arm. Satterlee spent a week in the Bootcamp, examining and re-imagining their concept, and developing messaging. “Just like any small startup business, you need a lot of coaching and mentoring to know the right thing to do,” he says. “You need to know how to market yourself and present your benefits and selling points to others. That’s really what they’re providing us—mentoring and coaching on how to get our companies going.”

Lee Williams, who oversees the GameChanger program in Houston, says The Idea Village fills an important need, as the collaboration provides energy entrepreneurs with structure, accountability and support through its robust entrepreneurial network. It also provides an avenue for a fledgling company to access Shell’s internal experts to help formulate their idea.

This is not a new idea for Shell.

“A couple of years ago, we changed GameChanger’s focus to be entirely on external companies,” Williams says, “whereas it used to be on internally-executed projects and ideas. But 1012industryreport.com

now, we’ve changed that focus to be on the early stage startups in order to de-risk ideas.”

Nonetheless, GameChanger’s mandate remains the same—to deliver innovative options that could drastically change and impact the future of energy. One notable innovation borne out of the program in the 1990s is the Floating LNG, a water-based operation designed to enable the development of offshore natural gas resources.

Williams says the partnership with The Idea Village is one of several across the globe. “We partner with the accelerators because there’s a whole lot that an accelerator does that GameChanger is not fit to do.”

TEACHING THE BASICS The entire ENERGYx program is run out of The Idea Village’s spacious office within “The Shop” at the Contemporary Arts Center on Camp Street in New Orleans. Brenna Kane, senior associate of entrepreneur services, says the program meshes perfectly with The Idea Village’s desire to turn innovations into reality.

“As technology continues to transform industries, we’re excited to be at the forefront of helping entrepreneurs push the envelope in energy innovation,” Kane adds.

During the program, subject matter experts brief participants on the basics of Lean Launchpad, an entrepreneurship methodology created

by Steve Blank to test and develop business models based upon querying and learning from customers. It combines experiential learning with

the building blocks of a successful Lean startup.

Students of Lean LaunchPad propose and immediately test business hypotheses. They get out of the building to talk with prospective customers and partners, using customer feedback to refine their product or service, ensure it meets a customer need or solves a customer problem, and validates that they have created a repeatable, scalable business model.

“We provide structure, education and accountability, and we provide resources to challenge some of their hypotheses,” Kane says. Along those lines, Shell’s Williams helps match each participant with a mentor in an applicable Shell division, who in turn provides valuable feedback.

Participants significantly accelerate their timelines by quickly vetting their innovations, and proving that they can provide a viable solution to a relevant problem.

Along the way, The Idea Village staff uses its experience in technology commercialization to mentor companies on how to transform technology into a product. “We help wrap a business around an idea,” Kane says.

“We’re in a unique position, where we have the business model tools and can bring in industry experts that understand the business side, but also understand the industry.”

The program is supported by Shauvik Kundagrami, a senior global energy executive with experience in guiding companies through their growth strategies and capital raising efforts.

At the beginning of ENERGYx, participants map out a plan, complete with milestones, goals and projected accomplishments. “Perhaps they need marketing help, HR help, accounting

help, etc.,” Kane says. “We create a resource-rich environment and let them dictate what they need.”

Upon conclusion of the program in April, participants will make their final pitch for an opportunity to participate in the Shell GameChanger program and will be eligible to receive up to $400,000 over two years to move their technology from proof of concept to a commercial product option. The announcement could be made during Jazz Fest, as Shell is the presenting sponsor.

Shell’s Williams says while not everyone will get funded, “a lot of people come to Shell GameChanger not only for our funds, but for the access it provides to our experts.”

Even so, Satterlee feels GORI’s chances are good. Shell scientists are interested in the nonprofit’s unique approach to repurposing offshore rigs. “From the ecological and environmental standpoint, the platform provides a tremendous opportunity to perform research and restoration activities that you simply would not have otherwise,” he says.

He adds that the ENERGYx program is helping him clarify the next steps for turning his idea into reality.

“We hope to take a platform, renovate it and restore it. In the process, we would provide living quarters, electrical generation, communication equipment, etc. All the needs that a tenant would have.”

Given its environmental potential, GORI hopes to apply for federal environmental grants. The Bureau of Ocean Energy Management, for example, has about $35 million available each year for environmental studies. “I think our work will occur over a period of time as we get the funding.”

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 43

FOCUS: ENVIRONMENTAL SERVICES

At Michoud, LM Wind Power taps into a growing market.

BLADE RUNNER: Still in the early stages of the journey, the Technology Center for the Americas facility will ultimately test a variety of new techniques for designing and building wind turbine blades, and support four of LM Wind Power’s largest facilities in Brazil; Canada; Little Rock, Arkansas; and Grand Forks, North Dakota.

By SAM BARNES

L

M Wind Power had already forged several crucial alliances by the time it unveiled its new Technology Center for the Americas in New Orleans last November. After all, the international wind turbine manufacturer would eventually need 100 direct and 220 indirect workers to support the facility, in addition to a voluminous 60,000 square feet of manufacturing space at NASA’s sprawling Michoud Assembly Facility.

Still in the early stages of the journey, the TCA facility will ultimately test a variety of new techniques for designing and building wind turbine blades, and support four of LM Wind Power’s largest facilities in Brazil; Canada; Little Rock, Arkansas; and Grand Forks, North Dakota.

TCA Director James Martin says the facility is intended to provide the Denmark-based company with a local presence for its North Amer-

ican customers, adding that the New Orleans site is well-situated to serve the rapidly growing wind power market in the U.S. “This will establish a technical and a customer support footprint, and New Orleans and Louisiana have the best value proposition to support the region and our customers,” Martin says.

A CROSS-FUNCTIONAL APPROACH TO MANUFACTURING LM Wind Power reached out to Louisiana Economic Development, Tulane University, University of New Orleans and LSU to assist with the ramp up of its workforce—with the end goal of doubling the size of the team through 2019. For its part, Louisiana offered a competitive incentives package, which includes the services of LED’s workforce development program, FastStart. Additionally, LM Wind Power qualified for the state’s Quality Jobs Program.

Once fully operational, the TCA

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facility will field a diverse team of physicists, engineers, draftspersons and composite technicians, among others. “One of the special things about TCA is that you have manufacturing and design working right next to each other,” Martin says.

Such cross-functional teams are vitally important for driving innovation, which will become increasingly important as the use of wind power becomes more widespread. There are more than 50,000 wind turbines in the field today, and all roads lead to substantial growth for both onshore and offshore applications.

At Michoud, TCA’s technology mission will be to drive down the cost of wind energy and make it more competitive with other forms of energy production. For example, recent work has sought to develop and enhance a jointed turbine blade, created as part of a collaborative project between LM Wind Power and GE Renewable Energy for its

Cypress onshore turbine platform.

The revolutionary two-piece blade design enables blades to be manufactured at longer lengths, while improving logistics and offering more siting options.

Martin says the longer blades can drive down the cost of electricity, and the proprietary design allows these larger turbines to be installed in locations that were previously inaccessible. “You can deliver the blade to the site in two pieces and join it together with a proprietary technology connection at the base of the tower,” he adds. “GE and LM Wind Power are the first in the wind energy sector to actually bring this to market.”

Much of the current research aims to make turbine blades longer and lighter. One of the newer blades created by the company measures 107 meters long, making it the largest blade on the planet.

That’s what makes the NASA Michoud facility ideal for TCA. “The 1012industryreport.com

COURTESY LM WIND POWER

In the wind

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not be restricted to the U.S., as it will have global applications.

DEVELOPING A WORKFORCE On the academic front, Matt Tarr at UNO is working closely with sources at LM Wind Power as the university’s vice president for research and economic development. In his role, Tarr supports research and scholarly and creative endeavors, part of which involves interacting with external partners.

He hopes to soon begin placing UNO engineering students into internship positions at the facility.

According to the most recent data, there were more than 800 students enrolled in the university’s College of Engineering. “They might also require some technical skills for some of their composite research, where a chemist or physicist might be useful,” Tarr says. “Students learn best when they learn in context and with experience.

The most effective graduates are those who’ve already been working before they graduated.”

With the endorsement of UNO President John Nicklow, Tarr recently established a committee on workforce and economic development

to streamline internship opportunities at the university. Committee members hope to consolidate the internship efforts and coordinate them across campus. A key member of the committee is newly appointed Director of External Collaboration Erik Wahl, who hopes to build relationships between the university and outside entities, whether through internships, patents or collaborative research.

“Universities have a vast array of information, knowledge and expertise,” Tarr says. “That doesn’t help anyone if it stays here on campus.”

UNO is also a founding member of the National Center for Advanced Manufacturing, a longstanding research and production center that focuses on applying advanced manufacturing technologies for use in aerospace and adjacent industries.

NASA, LSU and the State of Louisiana are also members.

Borne out of large-scale manufacturing technologies for the space program, NCAM is now diversifying into other areas. “LM Wind Power is a perfect example of this,” Tarr says.

“We’re looking for ways to enhance their manufacturing effectiveness

through different technologies.”

Through NCAM, in fact, UNO created an inaugural course in additive manufacturing in fall of 2018.

The university is also working with LM Wind Power to identify the company’s needs in regards to research.

“I’m locating the right people on campus who can contribute, then assisting by starting the conversation.”

At present, LM Wind Power is particularly interested in reducing wind erosion on the surface of the blades.

In that vein, UNO engineers could assist by researching flow dynamics and measuring wind interaction on blade surfaces.

While LM Wind Power’s strong relationships with area universities and the state “have been very fruitful,” Martin says he also wants to bring people to New Orleans from other areas, “as we’ve had a lot of interest from people all over the world to come and join the team here in New Orleans.

“We certainly want to work to develop the skills here, but we also want to make sure that people see the benefit of moving to New Orleans and moving to Louisiana and being part of this technology growth.”

“GE and LM Wind Power are the first in the wind energy sector to actually bring this to market.”

JAMES MARTIN, director, Technology Center for the Americas

CHERYL GERBER

facility is flexible to both short- and long-term contractual arrangements, depending upon the size of the project,” Martin says. “We have a base of operations at NASA, which is the primary building where the engineers and manufacturing technicians are housed, but there’s a very large footprint here (Michoud supported more than 4,000 workers at one time) that we can rent as needed.”

Other research will focus on offshore wind power, aimed at making turbine blades lighter and more durable. Offshore blades tend to be larger than onshore turbines because of the cost of installation, and therefore require more advanced materials and faster tip speeds. “Therefore, you need more advanced aerodynamics and lighter, stiffer materials to enable that,” Martin says. LM Wind Power is using carbon fiber in the blade designs – prevalent in offshore technology – and developing advanced aerodynamics to get more energy out of each turbine.

Michael Hecht, president and CEO of GNO Inc., says the TCA facility is exciting news for New Orleans, as it promotes the use of Michoud as a public/private facility.

“We’re not only building the mission to Mars there, we’re hosting some of the most advanced private sector companies in the world,” Hecht says.

“As this is the global headquarters for manufacturing and testing for LM Wind Power, there’s an opportunity for New Orleans to become a global leader in the manufacturing and testing of wind turbines.”

The facility represents growth opportunities in advanced manufacturing and energy. “If you consider that every spaceship since the Apollo missions has been built in New Orleans, and that we’ve been a leader in oilfield services and maritime technology for decades, we already have a long legacy of advanced manufacturing,” he adds.

“This is just the next evolution. We are now one of the fastest growing tech markets in the country.”

While most of the innovations developed at TCA will remain intellectual property, LM Wind Power is co-developing with other partners when appropriate. In the end, it shares the industry-wide goal of making wind power manufacturing more competitive in the U.S. Conversely, the research performed by TCA will

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 45

INSIGHT 2019 Gulf Coast Energy Outlook

DAVID DISMUKES

T

his past November, the LSU Center for Energy Studies released its second Gulf Coast Energy Outlook.

The full publication, which is available on the CES website, provides a year-end retrospective on energy industry activity and a 2019 forecast for the entire Gulf Coast region.

Overall, the 2019 outlook for the Gulf Coast’s energy industries is a mixed bag: The potential outcomes vary depending upon the individual energy sector being examined.

U.S. and Gulf Coast domestic crude oil and natural gas production should continue to be strong.

The nation and region will build upon existing productivity gains and reasonable overall prices will continue to sustain some drilling activity. This drilling activity may start to diversify, in terms of location, over the upcoming few years, but not enough to knock the Permian basin off its perch as being the premier U.S. unconventional basin.

OCS production should also be strong; however, drilling activity will likely stay in the 20 or so active rig count range for the immediate future. Overall, the Gulf Coast will

continue to account for over half of U.S. crude oil supplies and make an important contribution to overall global energy supplies.

U.S. crude oil production is anticipated to continue to rise to 12.9 million barrels per day by 2020.

Gulf Coast production is forecast to rise to 8.4 MMBBls/d by 2020.

Near-term pipeline constraints are anticipated to limit the degree to which Permian production will exceed forecast levels, and if the region does exceed the anticipated GCEO baseline outlook, it will likely be due to increased production in other basins within the re-

tober, started by a streak of economic and financial uncertainties make that 2019 outlook of $90/ Bbl extremely unlikely given: (1) a slow-down in Asian demand; (2) continued lackluster energy demand growth in Europe; (3) increasing U.S. interest rates; (4) increased dollar valuations; (5) the potential for additional U.S. supplies to hit the world markets; (6) potential near-term sanction exemptions on Iranian supplies; and (7) supply coordination between Saudi Arabia and Russia.

Future crude oil prices, therefore, should rebound some from their

“Overall, the 2019 outlook for the Gulf Coast’s energy industries is a mixed bag: The potential outcomes vary depending upon the individual energy sector being examined.” gion, particularly the offshore OCS. U.S. natural gas production is anticipated to rise to 97.8 billion cubic feet per day, whereas Gulf Coast natural gas production will increase to 38.0 BCF/d, both by 2020.

Regional natural gas output will be heavily skewed towards associated gas production, and continued crude oil production growth should facilitate a well-supplied natural gas market for both domestic use and LNG exports.

The outlook for prices (crude oil, natural gas) is a little more complicated given economic, financial, and geopolitical risks and uncertainties.

Early in October 2018, several analysts were forecasting crude oil process that would rise to around $90 per barrel.

The corrective events of mid-Oc-

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relatively low levels to about $55/ Bbl for West Texas Intermediate and about $63/Bbl for Brent through the better part of 2019.

Natural gas prices are anticipated to remain stable in a range of $2.50 to $3 per MCF. Low natural gas prices are the result of continued large volumes of associated natural gas coming out of oil plays like the Permian basin.

The 2019 GCEO petrochemical industry outlook is flat.

The capacity utilization outlook for existing and recent investments will likely not increase in any measurable fashion given a number of global headwinds that include: (a) a slow-down in Asian demand; (b) increased dollar valuations; and (c) continued trade policy uncertainties.

The GCEO does not anticipate any chemical industry or LNG project cancellations, but it is not implausible that many currently-announced projects move out their anticipated commercial operation dates in order to account for the current global market and geopolitical uncertainties.

The 2019 GCEO sees a continued positive, yet limited growth for U.S. refining.

Refineries will benefit from continued growth of U.S. crude oil supplies and the geographic diversity of those supplies. The sector will also benefit from continued pipeline infrastructure moving into and within the region.

Efficiency investments and other capital improvements made over the past several years should also increase refinery profitability. However, refined product export growth in middle distillates (jet fuel, diesel) could slow due to an anticipated global economic slow-down and higher dollar valuations.

Thus, on an overall basis, the GCEO anticipates, on average, that the region will build upon its economic gains of the last year, although those gains will likely come at a pace much slower than the past due.

The region will continue to become a more integrated part of the overall world energy market and will likely place itself in a favorable position for future growth once some of these uncertainties start to evaporate.

David Dismukes is a professor and the executive director of the Center for Energy Studies at 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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Industry provides successful careers

JESSICA PRANJIC

T

here is no questioning industry’s large footprint in Louisiana, especially in the Greater Baton Rouge area. However, depending on a person’s background, he or she might remain completely unaware of the true abundance of opportunities for success and the impact industry has on the economy, local businesses and communities.

I was one of these people. Born and raised in Baton Rouge, a central hub for major industry, I grew up unaware of the reach these industrial-looking facilities had or the opportunities they provided so many.

I attended a college-prep high school, a school that implanted in my brain that my only option after graduation was to pursue a university degree, which I did. I went to LSU and obtained a bachelor’s degree in Mass Communications.

I was fortunate to find a job opening with the Greater Baton Rouge Industry Alliance (GBRIA) as a communications manager upon graduating. Here, I learned so much about what our state has to offer that so many people like me, including my peers, remain unaware of.

Connie Fabre, GBRIA’s Executive Director, has been making presentations about the billions of dollars planned for investment locally and says there is over $130 billion being

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planned in the state right now just in construction of industrial facilities, and in the Baton Rouge area, ExxonMobil, Formosa, Methanex, Shintech, Wanhua and YCI Methanol have over $16 billion of investment in the works.

Fortunately, to meet this great need, some communities have begun to embrace career and technical training as more high schools implement craft training programs into their curricula.

Some parishes have their own dedicated Career and Technical training centers where students can graduate with a technical certificate.

Organizations such as GBRIA strongly encourage students across the state, especially high school

From Denham Springs, Knost worked in a fabrication shop his father ran while in high school.

Following graduation, he worked as a helper at Rubicon. Knost would continue to change jobs, unsure of his goal until his father encouraged him to develop a personal plan. Knost decided to become a pipefitter and eventually, a project manager.

Knost received training and became a pipefitter at the age of 20; had his first foreman job at 21; then his first superintendent job at 24.

He then worked as a recruiter for Jacobs, which allowed him to take advantage of travel opportunities.

Knost also trained through the Associated Builders and Contractors

“Fortunately, to meet this great [workforce] need, some communities have begun to embrace career and technical training as more high schools implement craft training programs into their curricula.” students, to take advantage of this training in order to meet the demand of future industrial investment. One of the most fascinating aspects of industry careers is their versatile start. There are numerous training and degree programs available that allow people to obtain a stable, high-paying job.

In order to give you an inside view into some of the jobs in industry, I interviewed a few people and here are their stories: BRYAN KNOST Bryan Knost, general manager of Construction, Maintenance and Turnaround at Jacobs, trained his way up to the top.

Training Center, where he received certification in estimating.

This gave him the opportunity to work in Jacobs’ Quality and Operations Division, where he got his first operations job managing several sites.

After a few years in this position, Knost worked some large projects that helped him gain exposure and experience that ultimately positioned him for his current job as General Manager of CMT, where he now runs the Southeast Division of Jacobs Field Services.

Knost lives in Baton Rouge with his wife and three children. He calls his experience an amazing journey and advises others who “get presented with an opportunity, even remotely interesting, to try and accomplish it.”

JENNIFER STRONG Of course, industry also has opportunities for college graduates. Jennifer Strong works as the site logistics and integration leader at Olin, Louisiana Operations.

Strong worked two jobs, participated in sports and played in the school orchestra in high school. She continued her resilient work ethic by pursuing a degree in chemical engineering with a minor in biochemistry from the Colorado School of Mines.

After obtaining her degree, Strong moved to the Gulf Coast to work hands-on in a chemical manufacturing plant.

She has worked on the Gulf Coast for nine years, taking new jobs and expanding her knowledge throughout that time.

Strong also represents Olin on the Baton Rouge Area Chamber Board of Directors.

With the quality of life her career offers, she enjoys traveling with her husband throughout the year. The couple recently welcomed a baby boy.

As she and her husband begin their family, Strong says that having a good work/life balance is important. She commends her employer for offering good quality of life outside of the job.

“I have been grateful for all of the opportunities I’ve had in Louisiana,” Strong says, “and will continue to set high goals for myself around career progression.”

Read more profiles of industry success in my full column at 1012industryreport.com.

Jessica Pranjic is the manager of communications and workforce development at the Greater Baton Rouge Industry Alliance. She facilitates GBRIA’s Membership & Public Affairs Committee and manages the organization’s surveys.

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 47

INSIGHT

Near-miss reporting: 3 dos and 1 don’t

UP DAVID SOWERS

MID DOWN SHREVEPORT

NEW ORLEANS

BATON ROUGE

AT BRADLEY FIRM

WE DO IT ALL WWW.BRADLEYFIRM.COM

48 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

Y

es, “near miss” isn’t grammatically correct.

Yes, “good catch” or “safety opportunity” or “near hit” makes more sense.

We agree and like to use the term “good catch.” However, “near miss” is a widely used and understood term, so we’re going with it.

Near-miss reporting is amazing: It’s like eating the meal but not paying the check. The difference between a near-miss and an accident is usually a matter of inches or seconds. All the learning about how our error defenses failed are still there, but we don’t have to find it through the loss of blood or life. You can learn as much from a near miss as you can an accident.

But here’s the problem: We hardly ever report near-misses. It’s not that they aren’t occurring; we just aren’t recognizing them and reporting them. There’s a bevy of reasons why this is happening, but it can be boiled down to two negative influences: It’s extra work and there’s no trust in the process. If reporting a near miss makes the worker’s life harder today or carries the potential to do so, then they’re less likely to report them. So how can we influence workers to choose reporting?

Do No. 1: Make it easy to report.

Ask yourself these questions: “How easy is it for the person in the field to report a near miss? Can it be easier?”

From the computer you might be reading this article on, it seems easy.

Open a program or download a form and fill it out. Simple. But think about the person in the field. Is there

a way for them to report (or at least start the report) while on the job?

The longer you wait to report a near miss, the less important it becomes.

If the process is not at least started, it will slip behind all the other things on their plate. Make it easy to do it now.

Do No. 2: Integrate near-miss reporting into your work process. If near-miss reporting is not considered part of the work, it won’t get reported by the people who spend their day “getting work done.” It’s just extra stuff, not work stuff. Make the near miss reporting form part of the work package. Make it part of a post-job review. Give it some space at the end of your Pre-Job Brief or Job Safety Analysis. Now the option to report is right there in front of the worker.

They must actively choose to not report a near miss.

Do No. 3: Act on concerns.

Leadership must act on any concerns that arise from a near-miss report.

If workers report issues but nothing happens, then it’s just a matter of time before they give up. If there is a good chance that the person who reports an issue is also going to be the owner of the solution, then they might stay silent to make their lives easier. It’s critically important that leadership address any concerns and reinforce near-miss reporting.

Don’t No. 1: Don’t discipline based on a near-miss report. Workers are unsure if a near-miss report will get themselves or others into trouble and will likely choose the safest action: not reporting. If there is even a hint of concern that the real reason you want near-miss reports is to find who to hammer, then good luck getting them to speak up. For example, we had one organization tell us this: “For a long time we would get about 20 to 30 near miss reports a month. One time, we disciplined a person based on near-miss information and we haven’t received one near-miss report in the last 3 years.” Recognize that it is going to take time to build trust and probably a little more time to stop using the term “near miss.”

Dave Sowers is a founding member of Knowledge Vine.

1012industryreport.com

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

Company

SPOTLIGHTS Athlon Greener Blast Energy Mercedes-Benz of Baton Rouge T. Baker Smith

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10/12 INDUSTRY REPORT • FIRST QUARTER 2019 49

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

The Geismar, Louisiana, plant is one of two manufacturing plants successfully serving Gulf Coast-area customers.

ATHLON, A HALLIBURTON SERVICE OUR HISTORY

Multi-Chem Group, LLC (Halliburton), effective May 18, 2018 acquired 100% of the shares of Athlon Solutions LLC. This acquisition represents the combination of two entrepreneurial companies with strong corporate cultures deeply rooted in safety, service, innovation, and achievement.

Athlon’s roots proudly began in West Texas 65 years ago in 1953, with the founding of a small oilfield company, Champion Chemicals Inc. In 1990, Champion Chemicals changed its name to Champion Technologies.

At the time the sale of Champion Technologies to Ecolab Inc. finalized in 2013, the company had grown to become the largest privately-owned and second largest global oilfield production chemical company, serving the energy sector with more than 3,300 employees in 50 countries on six continents. In early 2013, the Johnson and Lindley families acquired Champion Technologies’ refinery process and water treatment business units and formed Athlon Solutions to operate the process and water treatment units as one independent company.

The products, services and many of the people that made Champion Technologies (including Chemtech Chemical Services LLC, which has a long history on the Gulf Coast and was acquired

by Champion in December 2010) a leader in the industrial process and water treating business are still in place at Athlon, allowing us to offer the market superior solutions to traditional and new industry challenges.

50 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

WHAT WE DO

Athlon, a Halliburton Service, delivers superior service and chemical applications expertise to maximize asset value for our customers.

Athlon is a premier provider of specialty water and process treatment chemicals, customized engineering solutions, and services to the industrial sector, including the refining, petrochemical, ammonia/fertilizer, and power (cogeneration) industries. We serve many of the largest refineries and ammonia plants in the United States, and we are expanding our presence to international markets.

We are also one of the fastest growing custom manufacturers and tollers of specialty chemicals in the country. Our team is experienced at processing a variety of custom flammable blends, as well as developing and processing sophisticated, multi-step reaction, including Ethylene and Propylene Oxide chemistries to a variety of industries.

UNIQUE SOLUTIONS

Our “unique engineered approach” is a cornerstone of our value proposition to provide applications expertise. We employ a team consisting of experienced field representatives, project engineering and technical support who are accountable for improved reliability, process optimization and value delivery in conjunction with custom manufactured chemistries. Our approach is to provide an experienced team accountable for reliability, optimization and value delivery.

TOP EXECUTIVES Dale Winger, Vice President, Multi-Chem Eric Axcell, Director of Global Downstream Sales Ken Sulik, Domestic Downstream Sales Manager David DeBlanc, Senior Manager, Business Development

YEAR FOUNDED 2013

HEADQUARTERS

5500 N. Sam Houston Parkway W., Ste. 800 Houston, TX 77086

WHAT TO EXPECT IN THE FUTURE Safety will continue to be our number one corporate value, and we are committed to continue providing our customers solutions to improve throughput and reliability, while helping them maximize asset protection and value. Our solutions, whether they are specialty chemicals, an engineered approach, a novel application or a combination have helped several customers gain millions of dollars annually in additional ROI by identifying and delivering value improvement projects. In fact, many of our customers know the value they gain stacks up favorably against their specialty chemical spend.

CONTACT INFORMATION athlonsolutions.com

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

Benefits of Acquisition MAXIMIZE ASSET VALUE: Downstream | Heavy Industrial

DESCRIPTION: Athlon, now backed by the global Halliburton organization, continues to deliver superior customer service and custom chemistry to maximize the integrity and value of industrial water and process assets. We continue to work closely with our customers to share plans and make certain they are aligned with their needs and business strategies.

The acquisition provides Athlon and our customers with: • More resources to be applied to R&D, supply chain security, distribution, and manufacturing on a domestic and global basis • Access to advanced technology and services (e.g., software, cloud-based technology, digitalization tools, automation, data mining, etc.)

• Direct insight (for refining customers) back into the key upstream segments (e.g., heavy oil, unconventional production, etc.) to enable greater understanding and solutions for global crude oil challenges

1012industryreport.com

Laboratories and Manufacturing LOCATIONS: Geismar, LA | Houston, TX | Bayport (Pasadena), TX

DESCRIPTION: Our synthesis, analytical, and project laboratories, which span 17,000 square feet, are extensive and managed by a team of experienced leaders who have successfully met challenges in refining, petrochemical and oilfield specialty chemical markets. They are supported by the Multi-Chem network of laboratories.

Our world-class manufacturing facilities in Geismar, LA and Bayport (Pasadena), TX are strategically located to serve our customers. Our manufacturing capabilities include an ethylene and propylene (EO/PO) oxide reactor at the Bayport plant, which has extended our reach into and beyond traditional markets. We also completed construction of a pilot plant at the Bayport site in 2017. The plant allows the company to better bridge the benchtop development of products to manufacturing. The benefits are far-reaching. The pilot plant, which is a fully automated alkoxylation reactor system able to manage a broad set of chemistries, allows Athlon to examine all aspects of a process before commercialization at our own site and not a customer site, where there is a costly risk of downtime and reduced throughput.

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 51

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

GREENER BLAST ENERGY ABOUT OUR COMPANY

Greener Blast combines the benefits of old-school sandblasting and hydroblasting without the health hazards and with reduced safety risks. Greener Blast Energy offers a safe, environmentally friendly, and cost-effective approach to surface preparation and coating removal.

We are here to revolutionize the industry, offering effective solutions to transform the way your company tackles its industrial cleaning projects. We offer 24/7 customer support, free onsite demos and training services. Our services are second to none. Contact us to buy or rent HighPerformance Slurry Blasters. We serve the entire Gulf Coast Region, from Texas to Florida.

WHAT WE DO

Slurry blasting is a form of wet abrasive technology that incorporates three different elements: H20, compressed air, and an aggregate of choice-all working together. Greener Blast units are safer for the environment than traditional dry blasting and other surface preparation methods. Using less water, consuming less media, and producing minimal emissions, these machines reduce the environmental footprint significantly when compared to other abrasive blasting processes. Greener Blast’s method of cleaning follows NACE/SSPC, Joint Surface Preparation Wet Abrasive Blasting (WAB) standard: “Use of an abrasive slurry under pressure to achieve the 52 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

TOP EXECUTIVES Charlie Landry, Owner/CEO

YEAR FOUNDED 2014

NUMBER OF EMPLOYEES 4

HEADQUARTERS specified WAB degree of cleanliness.” Item 1.1 Element 3.

OUTLOOK

With OSHA’s Respirable Crystalline Silica Standards, now enforcing companies to comply.

Our company looks to fulfill that need for a safer and more efficient abrasive blasting unit. One of the ways OSHA recommends combating these health hazards is by implementing engineering controls. Substitution is one of those controls.

You can use abrasives that is combined with water (slurry blasting) to reduce the dust. You can also use a less toxic abrasive (sponge, baking soda, other biodegradable materials, etc.). Our units allow water to saturate and encapsulate the abrasive (slurry). It performs exceptionally well with numerous blasting materials/ inhibitors while providing less consumption.

New Iberia, LA 70560 337.359.4365

WEBSITE

greenerblastenergy.com

WHAT TO EXPECT IN THE FUTURE Greener Blast is always looking for ways to evolve its units to make them safer, faster, stronger and more efficient as a means of blast.

We plan to expand its presence in Texas with a new facility and are exploring emerging new abrasive materials and inhibitors that provide safer environments for use with our units.

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

MERCEDES-BENZ OF BATON ROUGE ABOUT OUR COMPANY

Joe Agresti and Nick Pentas started working together in 2005 and became partners in 2008 when they bought out Joe’s previous partner. MBOBR has been a luxury retailer in the Baton Rouge area since 1992, specializing in New and Certified Pre-Owned MercedesBenz and Commercial Van sales and service.

The company employs over 100 employees at this location and since has opened 4 additional Mercedes-Benz Dealerships in the southeastern United States as well as one Infiniti store. The cities include Birmingham, Houston, and Nashville. Agresti and Pentas founded the company based on Core Principles and Culture. They’ve instilled a series of Cultural Pillars that the team members are extensively trained on and expected to follow, maintaining a high standard for their operations. Some examples are a Culture Team that meets weekly to share stories of how fellow co-workers exhibited high character while taking care of guests and offering employees a paid day per quarter for charity work. The company has also won 7 prestigious Best of the Best awards from the manufacturer, making it the third consecutive one in a row.

WHAT WE DO

Dedicate our lives to inspiring our employees, our clients, and the members of our community in their quest to fulfill their dreams. It is 1012industryreport.com

our fundamental belief that all of this is best achieved through the faithful execution of servant leadership. Services include vehicle sales, parts sales, and factory-trained service offerings from multiple master-certified parts, sales, and service advisors as well as management and technicians. Our market area is the Baton Rouge and surrounding areas including Baker, Central, Denham Springs, Gonzales, Prairieville, St. Francisville, and Zachary. We will also service and ship vehicles outside of our designated market area. Our philosophy is that we are a luxury retailer, not a car dealer; our success will be measured in that light.

OUTLOOK

The outlook for the auto industry is bright.

Mercedes-Benz has held the luxury crown for the last three years in a row, and plans to continue to hold the crown in 2019. As we see many new SUVs launched and refreshed in the next 18 months, expect MercedesBenz to be the go-to brand for all sizes of Sport Utility Vehicles. And don’t forget about the sensual design of the Mercedes-Benz car lineup. With something for everyone, this will be the most expansive and diverse luxury vehicle brand in the world. With excellent overall value, affordable lease structures, and a vast array of standard safety features, we expect the brand to continue to grow its footprint locally, nationally, and globally.

TOP EXECUTIVES Joe Agresti, President Nick Pentas, General Manager/Partner

YEAR FOUNDED 1992

NUMBER OF EMPLOYEES 102

HEADQUARTERS

10949 Airline Highway, Baton Rouge, LA 70816 225.490.3101

WEBSITE mbobr.com

WHAT TO EXPECT IN THE FUTURE

2020 is expected to be an exciting year for MercedesBenz. Our brand new Sprinter factory is building the all-new 2019 Sprinter van in Ladsen, South Carolina. That will mean quicker access to inventory and made-in-the-USA quality. Another vehicle being built in the USA at the Vance, Alabama plant is the all-new 2020 GLE mid-size SUV. Both vehicles are expected to showcase the latest in technology and driver safety features. And the most exciting news to come is in the form of our smallest package. Mercedes-Benz will launch a new entry level sedan named the A-Class. This vehicle is sure to turn heads as well as pique the practical side of every consumer in the market for a vehicle.

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 53

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

T. BAKER SMITH ABOUT OUR COMPANY

T. Baker Smith (TBS) was founded in 1913 by T. Baker Smith, C.E., who was committed to precision, integrity, and ingenuity in providing tailored solutions to clients. In 1936, he engineered the first paved road in Houma and in the decades since, the mission of “turning ideas into reality” for clients continues to challenge TBS’ professionals to remain on the cutting edge of technology, so that TBS can provide the most economically viable solutions to clients. TBS currently employs 250 associates, including civil, structural, and environmental engineers; land and offshore surveyors; planners; environmental scientists; biologists; construction administrators; and project representatives, across 10 office locations: Houma, Thibodaux, Metairie, Covington, Baton Rouge, and Lafayette in Louisiana; Houston and San Antonio, Texas; Pass Christian, Mississippi; and Merida, Mexico. Three generations of leadership and 100 years later, the quest of providing superior, integrated, professional solutions is ingrained in TBS’ culture.

WHAT WE DO

TBS has been engaged in the subsurface utility industry serving primarily the pipeline and industrial market sectors for nearly 80 years in locating facilities and assisting with conflict resolution and regulatory compliance. In recent years, TBS has continued this service into the practice of subsurface utility engineering (SUE) by deploying various geophysical techniques and using 54 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

minimally intrusive excavation equipment, such as our Vacmasters® 4000 Vacuum Excavation Truck, and qualified personnel, to designate and provide finite location of subsurface utilities in accordance with CI/ASCE 38-02 guidelines to client-desired Quality Levels D-A. Our SUE services assist clients in managing risks associated with subsurface utilities by providing an accurate and detailed account of buried facilities using these geophysical techniques and non-destructive vacuum excavation. When the exact position, size, and depth of utilities is known, project features can be designed to eliminate or minimize conflicts with costly facilities, such as fiber optics and pipelines.

OUTLOOK

As project funding in all markets continues to tighten, facility owners are increasingly employing the use of existing right of ways and corridors in new construction design, which can be beneficial to projects in terms of environmental impacts and real estate costs. However, it can also be met with the often-unknown existence of subsurface utilities. TBS’ SUE solutions will continue to identify utility conflicts in the early stages of project design and eliminate delays in the construction phase through utility conflict management and mitigation.

TOP EXECUTIVES Kenneth Wm. Smith, P.E., P.L.S., FACEC, Chief Executive Officer Andree F. Cortez, P.E., Chief Operations Officer Randy C. Landry, Chief Strategy Officer Casey Liner, Chief Administrative Officer

YEAR FOUNDED 1913

NUMBER OF EMPLOYEES 250

HEADQUARTERS

412 South Van Avenue, Houma, LA 70363 985.868.1050

WEBSITE tbsmith.com

WHAT TO EXPECT IN THE FUTURE TBS will provide clients with subsurface utility data via GIS for their use in utility inventory.

Once utilities are designated, project owners will be able to “see” subsurface utility features in real time using a handheld screen, complete with optional topography, aerial imagery, and project design features overlaid by subsurface utilities to identify utility conflicts as they walk their project sites.

1012industryreport.com

CLOSING NOTES EXECUTIVE MOVES

LOUISIANA MIDof the executive commitCONTINENT OIL AND tee elected during the GAS ASSOCIATION December board meeting Tyler Gray is now were Tara C. Hernandez as president of Louisiana vice chair and Darryl D. Mid-Continent Oil and Berger as secretary-treasurGas Association. er. Baker was appointed to Gray, who has been the board in April 2015 by GRAY JOHN PERRET BAKER CAIN at LMOGA since 2014, former Gov. Bobby Jindal. served as the interim president President J. Don Weathers, retired and storage. CCUS is a process that He succeeds Laney J. Chouest, following Chis John’s November executive director of the Louisiana captures carbon-dioxide emissions whose term as chairman expired in announcement that he would be Asphalt Pavement Association; Vice from sources such as coal-fired powDecember. leaving the position after 11 years.

President Gordon Nelson, projer plants to prevent it from entering ect manager for Volkert Inc.; and Earth’s atmosphere. The committee’s WORLD TRADE CENTER/ LOUISIANA GOOD ROADS AND Secretary/Treasurer Ken Naquin, goal is to oversee CCUS’ integraNEW ORLEANS TRANSPORTATION ASSOCIATION chief executive officer of Louisiana tion into the energy marketplace, World Trade Center of New OrKenneth Perret, a retired adminAssociated General Contractors. specifically the petroleum industry, in leans CEO Caitlin Cain has received istrator with the Federal Highway an effort to reduce worldwide carbon a Fulbright Scholarship Award. The Administration and the Louisiana NATIONAL PETROLEUM COUNCIL emissions. program is in Australia. In her two Department of Transportation and LSU Center for Energy Studyears as CEO, Cain envisioned and Development, has been elected presies Executive Director David PORT OF NEW ORLEANS implemented Global Connect and ident of the Louisiana Good Roads Dismukes has been named to The Port of New Orleans Board of the first Louisiana International and Transportation Association. the National Petroleum Council’s Commissioners has elected Arnold Trade Week. At press time, a search Other officers are Senior Vice committee on carbon capture, use Baker as chairman. Other members had begun for her replacement.

Industry Leading Technology EcoLite manufactures the most efficient and cost effective Industrial and Petrochemical LED fixtures specializing in classified applications:

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info@EcoLiteLED.com

ECOLITELED.COM

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CORPORATE OFFICES: BATON ROUGE, LOUISIANA - CARROLLTON, TEXAS - HOUSTON, TEXAS The EcoLite LED warranty program is admin. by Trinity Warranty Solutions, LLC. 150 Pierce Rd Suite 600 Itasca, IL 60143 and underwritten by AVIVA PLC St. Helen's London, U.K.

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10/12 INDUSTRY REPORT • FIRST QUARTER 2019 55

CLOSING NOTES: COMPANY NEWS SOUTH LOUISIANA METHANOL’S $2.2 BILLION INVESTMENT South Louisiana Methanol, a project with ownership in New Zealand and Texas, has announced it is going forward with a $2.2 billion methanol complex in St. James Parish. The project will create 75 new direct jobs with an average annual salary of $71,400, plus benefits.

South Louisiana Methanol is assembling a 1,500-acre site along the west bank of the Mississippi River, approximately eight miles south of the Sunshine Bridge.

PORT OF NEW ORLEANS EXPANDS PORTS AMERICA PARTNERSHIP The Board of Commissioners of the Port of New Orleans is expanding its partnership with Ports America, the largest U.S. terminal operator and stevedore. The long-term lease and infrastructure agreements will bolster capabilities at existing Port NOLA terminals and open the door for expansion opportunities elsewhere in the Port’s three-parish jurisdiction—Jefferson, Orleans and St. Bernard parishes.

role in the purchase of the Avondale Shipyard and the opening of DXC Technology. Hecht has also led the organization to form a comprehensive plan for the region’s economy, including work on coastal restoration and water resource management and state tax and budget form.

Under the terms of the new and restated agreement, the Port will issue Ports America a 50-year lease to continue to operate at the Napoleon Avenue and Nashville Avenue Terminals. As part of the agreement, Ports America will invest $66.5 million in infrastructure and equipment to accommodate up to four new 100-foot gauge container cranes at the terminals. The investment will allow both terminals to facilitate larger ships and increases in volume.

GNO INC. LEADER NAMED ‘CEO OF THE YEAR’ GNO Inc. President & CEO Michael Hecht has been named “CEO of the Year” by Biz New Orleans. The magazine notes that since joining the organization in 2008, he has racked up many wins, including more than 77 new companies drawn to the region and $30 billion in new investment. Under his leadership, GNO helped bring the first nonstop flight from New Orleans to Europe since 1982, and also played a key

2018 EXCELLENCE IN CONSTRUCTION AWARD WINNERS The Pelican Chapter of Associated Builders and Contractors has announced the construction projects that have received an Excellence in Construction award. The EIC Awards are the construction industry’s premier annual awards program.

COMMERCIAL/INSTITUTIONAL: More than $25 million Excellence: The Lemoine Company, The Center for Coastal and Deltaic Solutions.

Merit: The Lemoine Company, Southside High School

ELECTRICAL INDUSTRIAL: Less than $2 million Merit: ISC Constructors, LLC, Honeywell UOP-DSG Electrical Upgrade and

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Lab Feeder Replacement. Merit: Triad Electric & Controls, Inc., Valero Gasoline Blending Project

Taylor Hall at LSU. Merit: Turner Industries Group, LLC, Shell Tiger AO4

OTHER CONSTRUCTION:

ELECTRICAL INDUSTRIAL:

$2 TO $100 MILLION

More than $2 million Excellence: MMR Constructors, Inc., Olefins Flare Gas Recovery. Merit: MMR Constructors, Inc., BASF Geismar-GERP. Merit: Triad Electric and Controls, Inc., Dow Gulfstream Poly B Train 3 Project

INDUSTRIAL:

Excellence: Primoris Services Corporation, Doswell Energy Facility Expansion.

Merit: EXCEL Group, Westlake VCM Control Building

OTHER SPECIALTY CONSTRUCTION - INDUSTRIAL: less than $10 million

Less than $5 million Excellence: Trade Construction, Sulphur Brine Pond. Merit: Kostmayer Construction, ECO. Merit: Beard Construction Group, Waste Disposal Unit 22.

INFRASTRUCTURE HEAVY

Excellence: Turner Industries Group, Shell Tiger AO4 Heavy Transport. Merit: Cajun Industries, LLC, Enterprise iBDH

OTHER SPECIALTY CONSTRUCTION - INDUSTRIAL: more than $10 million

Merit: Beard Construction Group, Fort Polk Railroad Repairs. Merit: Barriere Construction Company, Highway 90 J-Turns.

Excellence: Cajun Industries, LLC, IHI Southern LNG Pilings and Basins

MECHANICAL INDUSTRIAL

Excellence: GROUP Industries, City Hall Plaza. Merit: Cajun Industries, LLC, Innophos MGA and Barge Unloading and Bulk Storage Tanks.

Excellence: Cajun Industries, LLC, HE201D Replacement Project. Merit: Turner Industries Group, Olin Plaquemine 2018 Turnaround

MEGA-PROJECTS

Excellence: Performance Contractors, Inc., Dow Poly B&D. Merit: EXCEL Group, Elba Island Liquefaction Project.

Merit: The Lemoine Company, Patrick

OTHER SPECIALTY CONSTRUCTION: less than $10 million

200 STUDENTS SET FOR TRAINING INITIATIVE The North Baton Rouge Industrial Training Initiative has selected 200 local students to be part of the

Graduate Anthony Moon program’s fifth cohort, which began in January 2019. The students are predominantly from North Baton Rouge and are pursuing careers in electrical, pipefitting, millwright and welding crafts.

Each student will receive free training and a National Center for Construction Education and Research Core, Level I, and Level II certification after completion of the program.

The NBRITI program began in completing craft training programs in 2012 spearheaded by ExxonMoelectrical, heavy equipment, millbil in an effort to better connect wright, mobile crane, instrumentacommunity members to industry tion, pipefitting, project supervision, jobs. The training is based at Baton site safety and welding.

Rouge Community College’s Aca“ABC Pelican educates our craft dian Campus and provides no-cost students so that they become a training for high-demand crafts. meaningful addition to the skilled workforce, and these graduates are on BATON ROUGE TRAINING a pathway toward a long-term career,” CENTER GRADUATES 155 says David Helveston, president and Some 155 students graduated last CEO of the organization. “I applaud week from the Pelican Chapter of the the persistence, work and long hours Associated Builders and Contractors that these graduates have devoted to Baton Rouge Training Center after developing an invaluable skill set.”

EXCAVATION OF SOIL IS DANGEROUS WORK...

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

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10/12 INDUSTRY REPORT • FIRST QUARTER 2019 57

CLAIBORNE

20

CLOSING NOTES: PROJECT MAPS BOSSIER

Project by project

WEBSTER

CADDO

($25M-$250M)

BIENVILLE

Active 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; statuses and costs change frequently.

1 Marathon/Praxair

$220M | N/A Location: Garyville, St. John the Baptist Parish Status: completion set for end of 2018

10 Air Liquide

21 Bunge North America

11 NOLA Oil Terminal

22 Westlake Chemical

12 Renewable Energy Group

23 Advanced Refining Technologies

$170M | N/A Location: St. James Parish Status: planning $162M | 54 jobs Location: Plaquemines Parish Status: under construction

2 Entergy (New Orleans East)

$212M | 20 jobs Location: Orleans Parish Status: construction to begin in 2018

$160M | N/A Location: Ascension Parish Status: N/A

3 Ergon

$200M | N/A Location: St. James Parish Status: construction set to begin Q4 2018

4 Nucor upgrade (St. James)

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

13 Cornerstone

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

14 Kinder Morgan La. Pipeline expansion

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

5 First Bauxite

$200M | 100 jobs Location: St. John the Baptist Parish Status: announced June 2015, but still seeking financing

15 BASF

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

6 Shell LNG

$200M | N/A Location: Capital Region Status: potential

16 Shell Norco

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

7 Diamond Green Diesel

$190M | N/A Location: St. Charles Parish Status: completion set for Q2 2018

17 Praxair

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

8 Entergy

$187M | N/A Location: Cameron, Calcasieu parishes Status: permitting

9 Tennessee Gas Pipeline Co. (Kinder Morgan)

$170M | N/A Location: Northeast Louisiana to southwest Louisiana Status: expected completion 2018

18 Occidental Chemical

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

19 Air Products (Geismar)

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

20 Regency Energy Services

58 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

$144M | 6 jobs Location: Webster Parish Status: under construction

RED RIVER

DESOTO

$140M | N/A Location: St. Charles Parish Status: under construction

NATCHITOCHES SABINE

$140M | N/A Location: Ascension Parish Status: N/A (PVC expansion) $135M | 325 jobs Location: Calcasieu Parish Status: project has been placed on hold, but is not canceled

24 Hunt Forest Products

VERNON

$115M | 110 jobs Location: LaSalle Parish Status: under construction

25 PBF Energy (Chalmette Refinery)

$110M | 27 jobs Location: St. Bernard Parish Status: Q1 2019 start BEAUREGARD

26 Praxair

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

27 Royal Dutch Shell

$85M | N/A Status: Q1 2019 start

28 Cleco/Cabot Corp.

34

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

30 Valero (Meraux)

42 8

29 Huntsman/Rubicon

$78M | 17 jobs Location: Ascension Parish Status: on hold awaiting construction

CALCASIEU

23

CAMERON

14

$75M | N/A Status: Q1 2019 start

31 Florida Fuel Connection, LLC

$75M | 50 jobs Location: Orleans Parish BLUE = NEW PROJECT ADDED Status: moved from East SINCE LAST EDITION Feliciana Parish; pursuing opportunities at Port of New Orleans 1012industryreport.com

J

UNION

NE

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN

OUACHITA

32 Southwest Louisiana Bioenergy

38 Almatis (formerly Noranda)

33 Taminco

39 Blue Cube (Olin)

34 Gulf South Pipeline

40 Air Products

35 ExxonMobil upgrades (Baton Rouge)

41 Diamond Green Diesel

$69.3M | 41 jobs Location: Allen Parish Status: under construction

RICHLAND

37

MADISON

9

JACKSON

$60M | 5 jobs Location: Iberville Parish Status: planning

Sponsored by FRANKLIN

CALDWELL

$35M | 65 jobs Location: St. James Parish Status: under construction $33.8M | N/A Location: Iberville Parish Status: planning

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

TENSAS WINN

24

$25M | N/A Location: Ascension Parish Status: under construction Cost/jobs N/A 275M-gallon production expansion Location: St. Charles Parish Status: under engineering and cost review

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

CATAHOULA

36 Thermaldyne

LASALLE

$50M | 75 jobs Location: West Baton Rouge Parish Status: set to open in late 2018

GRANT

42 Phillips 66

Cost/jobs N/A Production increase for blend components Location: Calcasieu Parish Status: completion set for end of 2019

37 Graphic Packaging International

CONCORDIA

$41.5M | 1,340 jobs Location: Ouachita Parish Status: under construction

RAPIDES

AVOYELLES WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

EVANGELINE ALLEN

POINTE COUPEE

32

TANGIPAHOA

ST. LANDRY WEST BATON ROUGE

EAST BATON ROUGE LIVINGSTON

36

17

33 39

ACADIA

IBERVILLE

ST. MARTIN

26 6

18

19

ION NS

LAFAYETTE

40 29 CE AS

JEFFERSON DAVIS

ST. TAMMANY

35

36 15 12 10 27

IBERIA

22

38

ST. JAMES

4

ASSUMPTION VERMILION

3

ST. JOHN THE BAPTIST

1

5

31

2

ORLEANS

21 13

16 ST. CHARLES

JEFFERSON

30 25

7 41

ST. MARTIN

ST. BERNARD

ST. MARY

28 LAFOURCHE IBERIA

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

1012industryreport.com

PLAQUEMINES

11 TERREBONNE

10/12 INDUSTRY REPORT • FIRST QUARTER 2019 59

CLAIBORNE

CLOSING NOTES: PROJECT MAPS

30

BOSSIER

Project by project

WEBSTER

CADDO

($250M and up)

BIENVILLE

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

1 Driftwood LNG $27.5B | 498 jobs

21 South Louisiana Methanol $2.2B | 75 jobs

40 Monsanto $975M | 120 jobs

2 Sabine Pass LNG (Cheniere Energy) $20B | 400 jobs

22 Commonwealth LNG $2B | N/A

41 Energy World USA $888M | 150 jobs

23 G2X Energy $1.6B | 243 jobs

42 Entergy (Westlake) $872M | 30 jobs

24 Tallgrass Energy – Plaquemines Liquid Terminal $1.5B | N/A

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

3 Sasol Ltd. cracker $11.1B | 700 jobs 4 G2 LNG $11B | 250 jobs 5 Lake Charles LNG $11B | 250 jobs 6 Cameron LNG (Sempra Energy) $10B | 190 jobs

25 Tallgrass Energy – Blue Water Gulf $1.5B | N/A 26 EuroChem $1.5B | 200 jobs

7 Formosa (St. James Parish) $9.4B | 1,200 jobs

27 Port Cameron $1.5B | N/A

8 Venture Global LNG (Plaquemines) $8.5B | 300 jobs

28 Shintech (chlor alkali & PVC) $1.49B | 120 jobs

9 Cambridge Energy FLNG $8B | N/A

29 Shintech (ethylene) $1.4B | 100 jobs

10 Delfin LNG $7B | 400 jobs

30 Haynesville Global Access Pipeline (Tellurian) $1.4B | N/A

11 Monkey Island LNG $6.5B | 200 jobs

31 Methanex Corp., Methanex 3 $1.3B | 25 jobs

12 IGP Methanol $4.5-4.8B | 325 jobs

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

13 Magnolia LNG $4.35B | 70 jobs 14 Venture Global LNG (Calcasieu Pass) $4.25B | 100 jobs 15 Lake Charles Methanol $4.2B | 200 jobs 16 Nucor Steel Up to $3.4B | 1,250 jobs 17 Pointe LNG $3.2B | N/A 18 Axiall/Lotte Chemical $3B | 250 jobs 19 Revolution Aluminum $2.4B | 1,450 jobs 20 Yuhuang Chemical $2.3B | 400 jobs

33 BioNitrogen Louisiana Holdings, LLC $1.25B | 250 jobs 34 Shell Chemical $1.2B | 27 jobs 35 Castleton Commodities International $1.2B | 50 jobs

47

NATCHITOCHES SABINE

46 Louisiana LNG Energy, LLC $646.6M | 44 jobs

VERNON

47 Southern Cross Transmission Project $600M | N/A 48 Gulf Run Pipeline (Enable Midstream) $550M | N/A 49 Diamond Green Diesel (Norco) $550M | N/A

BEAUREGARD

49 PBF Energy (Chalmette Refinery) $503.2M | 5 jobs 50 Shintech (ethylene expansion) $400M | N/A 51 Hazelwood Energy Hub $400M | 120 jobs CALCASIEU

55 Valero $400M | N/A

60 18 42 55 3 5 15 23 13

52 Shell Motiva $380M | 100 jobs 53 Westlake Chemicals (Westlake) $350M | N/A

1

54 Syngas Energy $350M | 100 jobs

4

37 Port of New Orleans $1B | 6,000 jobs

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

60 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

RED RIVER

45 Bayou Bridge Pipeline $670M | 12 jobs

56 NFR BioEnergy $312M | 450 jobs

39 ExxonMobil – Polypropylene expansion $500M-$1B | 65 jobs

48

44 Shell Chemical $717M | 20 jobs

36 Shintech (vinyls complex) $1.02B | N/A

38 Monsanto $1B | 100 jobs

DESOTO

58 TopChem Pollock (formerly Investimus Foris) $265M | 85 jobs

2

14

6 CAMERON

11

27 21 10

BLUE = NEW PROJECT

1012industryreport.com

J

UNION

NE

MOREHOUSE

WEST CARROLL EAST CARROLL

LINCOLN RICHLAND

OUACHITA

MADISON

Sponsored by

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

SOME RECENTLY COMPLETED PROJECTS

60 Marubeni, Inc. (formerly Gavilon Trading) $250M | 100

CF Industries Nitrogen, LLC $2.1B | 93 jobs Dow Chemical $1.06B | 71 jobs

61 Formosa (Baton Rouge) Cost/jobs N/A PVC expansion

JACKSON

62 Siluria No announced size or location

FRANKLIN

CALDWELL

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

TENSAS

Pin Oak Terminals $600M | 70 jobs

WINN

Methanex Corp., Methanex 1 $570M | 35 jobs

58

Methanex Corp., Methanex 2 $570M | 120 jobs

CATAHOULA LASALLE GRANT

BASF (Geismar) $500M | 100 jobs

59

Westlake Chemical (Geismar) $425M | 70 jobs

TOTAL POTENTIAL CAPITAL INVESTMENT:

$184.4B+

CONCORDIA

19

SE Tylose (Shintech) $420M | 88 jobs

TOTAL POTENTIAL DIRECT NEW JOBS:

RAPIDES

17,318+

AVOYELLES

33

WEST FELICIANA

WASHINGTON

EAST FELICIANA

ST. HELENA

EVANGELINE ALLEN

POINTE COUPEE ST. LANDRY

52 28 ACADIA ST. MARTIN

29

ST. TAMMANY LIVINGSTON

36 26

IBERVILLE

57

45

34

44 31

ION NS

LAFAYETTE

51

TANGIPAHOA EAST BATON ROUGE

CE AS

JEFFERSON DAVIS

WEST BATON ROUGE

62 39

22 20 49 32 16 ST. JAMES

IBERIA ASSUMPTION VERMILION

54 56

ST. JOHN THE BAPTIST

61

7

ORLEANS

53 38 43 40 ST. CHARLES

37 50 JEFFERSON

35 ST. BERNARD

ST. MARTIN

12 46 24 8

ST. MARY LAFOURCHE

PLAQUEMINES

IBERIA

17 Sources: LED, LEO, 10/12 research

1012industryreport.com

TERREBONNE

41 10/12 INDUSTRY REPORT • FIRST QUARTER 2019 61

9 25

POSITION: Vice president and general manager of the Lake Charles Manufacturing Complex, the sixth largest refining facility in the U.S.

Jerry Dunn THE CHALLENGE During his first year as refinery plant manager, Jerry Dunn and his team encountered several unplanned unit shutdowns that put their reliability into question.

These types of issues were uncharacteristic for the Lake Charles Refinery, which historically has high mechanical availability. The unit shutdowns negatively affected key performance metrics and also pulled valuable resources from planned work to address the unplanned unit shutdowns.

The normal practice at the Lake Charles Refinery is to perform a root cause analysis for all equipment failures. Dunn says this was done for the affected units, but the approach at that time was reactive in nature and focused on improving reliability after the equipment failed. “We

COMPANY: CITGO WHAT THEY DO: Refine, transport

BY ERIN Z. BASS

saw an opportunity to improve our practices and to create a more proactive approach,” he says. “Instead of maintaining the status quo, we took action to improve unit reliability and ultimately improve safety, environmental and financial performance.”

THE RESOLUTION The first step taken was to form reliability teams to address the affected units. These teams were cross-functional and comprised of different engineering disciplines and operations and maintenance personnel. “Getting the right team members assigned was critical since all the various disciplines have unique knowledge and skill sets,” Dunn says. In some cases, third-party consultants were also used. The teams evaluated the reliability histories and used tools such as pareto analyses [the principle

62 10/12 INDUSTRY REPORT • FIRST QUARTER 2019

and market transportation fuels, lubricants, petrochemicals and other industrial products.

CAREER: Dunn is an LSU graduate and has been with CITGO for 30 years, starting out in capital projects and rotating through most parts of the complex before being named vice president in January of 2018. that 80% of problems are due to 20% of causes] to help identify the problematic issues with each of the units.

Dunn says the pareto results were key—especially for one particular unit where the results indicated most of the issues were associated with instrumentation.

Other proactive approaches included identifying single points of failure, bad process control strategies, lack of condition monitoring tools and out of date rotating equipment components. The teams then generated action items to address the reliability issues and assigned them to various departments in the refinery. Progress

on the action items were reviewed with management on a monthly basis until final implementation.

THE TAKEAWAY Dunn says the typical Lake Charles refinery approach to reliability was making incremental improvements, normally after a failure occurred.

“Our new approach emphasizes proactivity by reviewing our units and processes in a more holistic manner,” he explains. “The actions taken to date have significantly improved the units’ reliability, and we look forward to implementing the practices across other refinery operations as well.”

1012industryreport.com

LEE CELANO

CLOSING NOTES: MY TOUGHEST CHALLENGE

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

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