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January 2016


Editorial Note
Editors Choice
ExxonMobil: Gas to lead global energy demand
growth through 2040
API official asks administration to pursue
innovation, not regulation

Editor's Pick
Dont tamper with patent laws
Indias renewable energy targets: How to overcome
a $200 billion funding gap
Goldman: This may push oil to $20
Post-sanctions Iran roils crude market; petchem
may follow suit
How low oil price affects Chemical Industry
Ten Futuristic Technologies
Cheap oil, good for consumers, is slamming stocks.

January 2016

Honble Prime Minister dedicates IndianOil's 11th
Refinery to the Nation
India tops Asia in sending scientists, engineers to
Indian refiners need to invest $4.5B to produce Euro
VI fuels by 2020
Emission test
Doing scientific research will be made easy: Modi
tell scientists
Now Mineral Water costlier than Mineral Water in
Indias state refiners agree to jointly build new
world-scale refinery
India to offer tax discount if Iran accepts all oil
payments in INR
India Africa Hydrocarbon Conference

Fluor To Build $1-Billion Petroleum-Refining Facility
In Mexico
These are the energy stories Houston cared about
in 2015
ConocoPhillips ships first LNG from Australian
Women CEOs Of The S&P 500
Petrobras cuts investment by USD 32 billion

January 2016

China planning to build floating nuclear power plant

Siemens to buy engineering simulation software
supplier CD-adapco
Iran Kicks Off Plan to Boost Oil Exports as
Sanctions Lifted
Exclusive: China buys first U.S. crude cargo since
end of export ban source
Marathon Petroleum to combine 2 Texas refineries
Oil producers struggle to plug budget holes torn by
price collapse
CNOOC flows first oil from 2 Beibu Gulf Basin
projects in South China Sea
Kuwait to set up company to run refinery complex
Canada imposes further delays on two major
pipeline projects
Enbridge to buy some Murphy Oil gas plants in
British Columbia
Suncor takes $2-billion loss for 2015, sheds more
2016 budget
IEA See Global Oil Glut Worsening. OPEC Deal

Raymond James: For oil field services companies,
2016 will be a roller coaster ride
Finally Flexing Energy Muscle on Global Stage
Analysts: Global oil, gas M&A to rise in 2016 as
companies shed assets
Weak oil markets prompt Saudi leaders to make
quicker decisions

January 2016

Former US energy secretary: OPEC grip, surging

gas to shape markets in 2016
Chinas diesel use falls as gas, gasoline post gains
Oil rises, pares losses in January on hopes for
production deal
Lower oil prices they arent good for everyone
Forget peak oil: shale is a market game-changer
Oil slips below $33 as hopes for production cut fade
Kuwait Petroleum International says oil prices could
reach $50 a barrel mid-2017

The new digital tools catching on in the old school
oil field
DuPont, ADM Biotech Will Enable 100% Renewable
Chemicals, Plastics
RFCC Failure Analysis - A CASE STUDY
Shocking! 'Electric Eel' Fibers Could Power
Wearable Tech
Putting Fuel Cells Inside the Data Center


Renewables Attracted record investment of $329 b
in 2015
IRENA Considers Onshore Wind As Cheap As Coal
The Changing Face of HVAC Motor Control

January 2016

HSE, Climate Change & Sustainability

Deficiency found in ExxonMobil California Refinery
California calls gas leak a state of emergency
Oil & Gas Firms Under-Reporting Methane Risk,
EDF Says
Charging a Smartphone While Driving Isn't as Free
as You Think
Is Recycled Oilfield Water Safe for Crop Irrigation?
Zika-linked condition: WHO declares global
How Engineers Can Adapt Infrastructure Design for
a Changing Climate
State of the Union Pushes Clean Energy, Calls for
Coal-Lease Reform
Like Not Having The Next Ice Age?
Cairn India Providing Safe Drinking Water To The
Community In Barmer, Rajasthan
12-Year-Old ShrustiNerkars Invention Can Save
Upto 80% Water In Showers
Why your Organisation Needs a Chief Sustainability
Sustainability is impossible until companies
Account for
Rigid plastics recycling surges 27%; film recycling
grows 3%
Microsofts Datacenters and the Deep Blue Sea

January 2016

How Ericsson aligned its people with its
transformation strategy: An interview with chief HR
officer BinaChaurasia
Unconventionals in Saudi Arabia
Kellogg President Wendy Davidson on how women
can become leaders in the industry

Employee problems are your problems, too.

The Banyan Tree

Vision vs Conceit : Are you a visionary or full of
Want to Lead? Consider Becoming a Project
The best way to deal with stress, according to a 69year-old monk who scientists say is the 'world's
happiest man'
Why you should give mentoring all you've got
New Years development goals for leaders: 2016
How great leaders balance execution and empathy
Today's actions will matter 15 years from now: Mark
Fields Ford CEO
Good management habits are the foundation of
great Leadership

January 2016

Editorial Note
A Landmark Event
Commissioning of much awaited commissioning and dedication of
the 11th oil refinery of IndianOil at Paradip, a new landmark was
created by IndianOil. This 15 mtpa refinery constructed at the cost
of over R 34000 crores, is highly complex refinery ready to
produce Euro-IV grade fuels right from the day one.
We complement IndianOil team of dedicated engineers for
working tirelessly braving great hardships in shaping this refinery
against all odds. This is one of mega projects executed in the
recent times.
The Refinery built at a cost of Rs 34,555 crore and can process
dirty and heavy crude oil is located 140 km from the state
capital Bhubaneswar, Paradip refinery is one of the most modern
refineries in the world which can process cheaper high sulfur
heavy crude oils. It has a complexity factor of 12.2.
Spread over an area of over 3000 acres, initially this refinery
conceptualized to set up a refinery of 9 mtpa capacity on the
eastern coast in the state of Odisha, its capacity was
subsequently raised to 15 mtpa. With plans t0 produce polymers
like paraxylene, polypropylene and styrene in addition to other
valuable transport fuels and petroleum products.
It has also huge linked projects of pipeline from Paradip to Raipur
via to Ranchi, which shall cater to the states of Jharkhand and
Chhattisgarh besides Odisha. This
pipeline cutting across
2,400 km length is almost the length of Ganges. A MercedesBenz S-Class car can pass through the largest diameter pipeline
of 126-inch.. On the way there are many tap off points , depots
and installations built to meet local demands of the petroleum
One can appreciate its mamothness from certain comparative
figures which went into constructing this refinery at very difficult

January 2016

and low lying site. Over 2.8 lakh ton of steel, equivalent to 30
Eiffel Towers or about 350 Rajdhani trains, 11.6 lakh cubic meter
of concreting equivalent to 3 times volume of Burj Khalifa, Dubai,
were use on this site, besides over millions of cubic meters of
earth filling required in constructing it.
Designed to produce 5.6 million tonnes per annum of diesel, 3.79
million tonnes of petrol and 1.96 million tonnes of kerosene/ATF,
besides 790,000 tons/ annum of LPG and 1.21 million
tonnes/annum of Petroleum Coke. The refinery sent out it's first
consignment of diesel, kerosene, and LPG on November 22,
There are many landmarks associated with this refinery has
extensively use PPP BOOT and BOO models in execution and
operation of this refinery.
But the brightest landmark of this project is construction and
commissioning of the FIRST COMMERCIAL INDMAX of 4.9
mtpa capacity, designed and constructed BASED ON
Indigenous technology developed by IndainOil-R&D. With
commissioning of this novel RFCC technology India has
joined the league of worlds select group of FCC Technology
licensor. We hope this technology shall find huge market in
India and abroad. I am sure the Govt of India, under its Make
in India policy shall bring out certain regulations or
incentives for adaptation of Indigenous technologies. China
did it and prospered. India has to do it for self reliance.
It was finally inaugurated and dedicated to the nation by
Prime Minister Narendra Modi , who was personally
monitoring the progress of this mega project, on February 7,
The refinery has plans to set up an Ethylene Recovery
Unit/Mono-Ethylene Glycol (MEG) at an estimated cost of Rs
3,800 crore. It is expected to be completed by 2020-21

January 2016

The execution of this project took almost two decades from the
concept to commissioning, and it is fit for carrying out an
academic case study for taking lessons in How not to Execute
Projects, for the PSEs, consultants, statutory and regulatory
organizations, project managers and the governments.
I had got a case study developed on the Acquisition and Merger
of IBP with IndianOil by IIMA. Indian Oil may once again take
help of one of premier business schools specializing in project
management, for develop a case study on the Paradip refinery,
fro consolidating the lessons learnt.
Team Petrotech send its Heartiest Congratulations to the Team
IndianOil for creating another landmark in the first month of 2016.
Anand Kumar


January 2016

Editors Choice
ExxonMobil: Gas to lead global energy demand growth
through 2040
Global energy demand will increase 25% between 2014 and
2040, driven by population growth and economic expansion,
ExxonMobil said Monday in its 2016 edition of The Outlook for
At the same time, energy efficiency gains and increased use of
renewable energy sources and lower carbon fuels, such as
natural gas, are expected to help reduce by half the carbon
intensity of the global economy, according to the annual report.
During the period, the worlds population will increase by about 2
billion people and emerging economies will continue to expand
significantly. Most growth in energy demand will occur in
developing nations that are not part of the Organization for
Economic Co-operation and Development (OECD), Exxon said.
Per-capita income in those countries is likely to increase by
Natural gas is expected to meet about 40% of the growth in global
energy needs, and demand for the fuel will increase by 50%.
Nuclear and renewable energy sources including bio-energy,
hydro, geothermal, wind, and solar are also likely to account for
nearly 40% of the growth in global energy demand by 2040. By
then, they are expected to make up nearly 25% of supplies, of
which nuclear alone represents about one third.
ExxonMobils analysis and those of independent agencies
confirms our long-standing view that all viable energy sources will
be needed to meet increasing demand, said Rex W. Tillerson,
CEO of ExxonMobil. The Outlook for Energy is a useful resource
to help understand future energy supply and demand, which can
aid decisions by individuals, businesses and governments that
together will affect the future of energy.

January 2016

The outlook projects that global energy-related carbon dioxide

emissions will peak around 2030 and then start to decline.
Emissions in OECD nations are projected to fall by about 20%
from 2014 to 2040.
The Outlook for Energy is ExxonMobils long-range forecast
developed by its economists, engineers and scientists through
data-driven analysis. It examines energy supply and demand
trends for approximately 100 countries, 15 demand sectors and
20 different energy types.
Our forecast is used as a foundation for the companys business
strategies and to help guide multi-billion dollar investment
decisions, said William Colton, vice president of ExxonMobil
Corporate Strategic Planning, which develops The Outlook for
Energy. For many years the outlook has taken into account
policies established to reduce energy-related carbon dioxide
emissions. The climate accord reached at the recent COP 21
conference in Paris set many new goals, and while many related
policies are still emerging, the outlook continues to anticipate that
such policies will increase the cost of carbon dioxide emissions
over time.
Key findings of the report include:
In 2040, oil and natural gas are expected to make up nearly
60% of global supplies, while nuclear and renewables will be
approaching 25%. Oil will provide one third of the worlds
energy in 2040, remaining the No. 1 source of fuel, and natural
gas will move into second place.

North America, which for decades had been an oil importer, is

on pace to become a net exporter around 2020.

India will surpass China as the worlds most populous nation,

with 1.6 billion people. The two countries are expected to
account for almost half of the growth in global energy demand.

January 2016

Global demand for electricity is expected to increase by 65%,

and 85% of the increase is in non-OECD nations.

The share of the worlds electricity generated by coal is

expected to fall to about 30% in 2040 from approximately 40%
in 2014.

Global energy demand from transportation is projected to rise

by about 30%, and practically all the growth will be in nonOECD countries.

Sales of new hybrids are expected to jump from about 2% of

new-car sales in 2014 to more than 40% by 2040, when one in
four cars in the world will be a hybrid. Average fuel economy
will rise from 25 to about 45 miles/gal.

Already the worlds largest oil-importing region, Asia Pacifics

net imports are projected to rise by more than 50% by 2040 as
domestic production remains steady and demand increases.

For more information about The Outlook for Energy,

Visit www.exxonmobil.com/energyoutlook.
API official asks administration to pursue innovation, not
By Nick Snow OGJ Washington Editor, 02/04/2016
The Obama administration should rely more on oil and gas
industry innovation and cooperation, and less on heavier federal
regulation, as it moves into its final year, an American Petroleum
Institute official recommended.
The US oil and gas industry is a case study on how the nation
can continue to make its general economy grow, create more
jobs, and protect the environment through market-driven

January 2016

innovation, API Upstream and Industry Operations Group Director

Erik Milito said.
By continuing to rely on industry innovation, basing decisions on
sound science and providing for oil and gas energy opportunities,
we can build on the success of the past decades, he told
reporters during a Feb. 4 teleconference prior to the White
Houses scheduled release of its proposed fiscal 2017 federal
budget on Feb. 9.
Milito said the situation is different now than it was a few years
ago, when the US basically was counted out as a global energy
Technology has made the difference in allowing the industry to
produce the oil and gas we rely on in our daily lives, while at the
same time providing environmental benefits, he said. Vast
supplies unleashed by hydraulic fracturing have allowed gas to
generate much more of Americans electricity. In other words,
were it not for [fracing], our carbon emissions would be much
Methane emissions from fraced wells fell about 80% in the 200513 period as domestic oil and gas production grew by one of the
largest amounts in history, Milito said. Methane is the primary
component of gasa product we selland companies [have the
incentive] to capture as much methane as possible so that it can
be delivered to customers. The data show that companies are
doing just that, he said.
More regulations proposed
But both the US Bureau of Land Management and US
Environmental Protection Agency are moving forward with
methane regulation proposals that do not provide tangible
benefits, but could actually restraint domestic producers ability to
develop resources as well as the nations oil and gas technology
leadership, Milito warned.

January 2016

The industry has developed technologies to reduce emissions

from [fracing] completions, equipment to phase out high-bleed
pneumatic controllers, technologies to reduce emissions from
storage tanks, and methods for detecting leaks, he said. All of
this has occurred outside of the regulatory process. Unfortunately,
the EPA and BLM rules overlap, and also duplicate, state
APIs development of more than 500 industry standards and
practices through a process accredited by the American National
Standards Institute allows experts from the government, the
industry, and engineering and safety companies to work together
and develop consensus recommended best practice approaches,
he noted.
Offshore energy development is a perfect example of how
innovation and standards development have combined to
enhance the safety in operations, Milito said, citing API Standard
No. 53 which governs well blowout prevention systems.
Unfortunately, the Bureau of Safety and Environmental
Enforcement has proposed a well control rule (OGJ Online, Apr.
14, 2015) that goes well outside the scope of API Standard 53,
and could create unintended safety consequences and lead to a
decline in offshore oil production, he said.
BSEE expanded its proposed offshore BOP regulation beyond
the API standard into other areas, Milito said. It proposed a very
strict drilling margin in which you must drill a well, yet the great
majority of wells which are being drilled are outside of that
margin, he said. The prescriptive types of regulations being
advanced by EPA, BLM and BSEE could stifle innovation by
locking in specific types of technologies through the regulatory
Base decisions on science
Milito also urged the administration to base more of its energy
policy decisions on sound science. He said that EPAs Science

January 2016

Advisory Board continues to hear arguments that fracing is

unsafe the agencys own findings in a 5-year study which found
the process does not threaten drinking water supplies.
Interestingly enough, the US Department of Energy has
identified hydraulic fracturing as an advanced technology that
provides environmental benefits and protects groundwater, he
After 65 years and 2 million wells, the evidence and science are
credible and clear, Milito stated. The data and facts
overwhelmingly support the conclusion that hydraulic fracturing
can be done safely. We need to ensure that our government
processes stick to the credible science.
Allowing more access to federally administered acreage lands for
oil and gas effectively would embrace a free market approach, he
suggested. Most of todays production increases stem from
projects that started before this administration came into office,
and most of it is happening on state and private lands, he said.
With 87% of all federally controlled US offshore acreage off-limits
to oil and gas activity, Milito said it is essential that more areas
are included in the 2017-22 US Outer Continental Shelf
management plan which the US Department of the Interior is
He urged the administration to keep all OCS options on the table,
and expressed disappointment that a segment off Mid-Atlantic
states is the only new area where a lease sale might be held
during the next 5-year plan.
We saw a positive bipartisan policy proposal under consideration
in the US Senate yesterday that would provide revenue sharing to
coastal states where offshore oil and gas development occurs,
Milito said. Policies like this are essential for our long-term
energy security.
Contact Nick Snow at nicks@pennwell.com.

January 2016

Editor's Pick
Dont tamper with patent laws

India is being too accommodating of MNCs

The Centre is needlessly apologetic about our IPR laws. It set up
an IPR think tank in October 2014, perhaps responding to a view
that our IPRs are not strong enough to invite foreign investment.
Last January, Prime Minister Modi and President Obama issued a
joint statement which committed to establish an annual high-level
Intellectual Property Working Group. In November, Modi said in
Singapore that India is committed to protect the intellectual
property rights of all innovators. And now, the Cabinet is
expected to discuss a new IPR policy in a month.
It appears that MNCs have lobbied with world governments after
two setbacks in 2013. In April that year, the Supreme Court struck
down a patent for Novartis leukemia drug, Glivec, citing Section 3
(d) of the Patents Act which disallows superficial innovation. In
March 2013, the Intellectual Property Appellate Board awarded
NatcoPharma a compulsory licence to make and sell a cheaper
version of Bayers anti-cancer drug, Nexavar. The MNCs gripe
against Indias patent law is unjustified. In the book,Politics
Trumps Economics, Sunil Mani points out that the share of
foreign companies in business enterprise R&D expenditure
increased from 10 per cent in 2003 to 29 per cent in 2011. Whats

January 2016

more, with tighter TRIPS-compliant IPR regime put in place by

India, from 2005 onwards, the possibility of spill-overs to the
domestic economy from the R&D done by these foreign
companies stands greatly diminished, he says. In other words,
the MNCs are doing pretty well for themselves.
Our patent law merely deploys the safeguards allowed in TRIPS
to protect domestic consumers and industry. It is considered a
model for the developing world. It enabled India to supply cheap
anti-HIV drugs to South Africa. Why dismantle this system? India
arguably conceded enough at the Nairobi ministerial. Our IPRs
laws should be non-negotiable.
Senior Deputy Editor
(This article was published on January 8, 2016)
Indias renewable energy targets: How to overcome a $200
billion funding gap
09 July 2015
Rohan Singh
Rohan Singh explores the main issues relating to financing
renewable energy projects in India, offering up some
solutions to help domestic and foreign companies alike meet
the challenges head on.
India is set to become one of the world leaders in Renewable
Energy. Since his election in May 2014, prime minister
NarendraModi and his government have embarked upon an
ambitious target of increasing renewable energy capacity five-fold
by 2022 (from 30GW currently to a projected 175GW). This would
require additional funds of about US$200 billion.
Financing woes
To understand a little about Indias financial landscape, the main
financial actors and capital providers are as follows:


January 2016

Private equity firms local & international: Actis, 3i, Aditya

Birla, Aloe Private Equity, EIG Partners, etc.
Institutions: IFC,
Proparco, FMO, OPIC, etc.
Domestic Debt-oriented institutions: PFS, Yes Bank, IDFC,
Axis Bank, etc.
The major issues regarding those sources of financing are
numerous. It would be hard to list all. The main issues are:

High &variable interest rates given by Indian commercial

banks - a traditional solar or wind energy project is getting a
loan with an interest rate around c.12%;
o Short tenor of debt from Indian commercial banks traditional maturity in senior debt is about 10-12 years;
o Hedging currency for international financing - the cost of
hedging currency is a component to carefully keep in mind and
before addressing any international institutions, an arbitrage
between local and international financing solutions should have
been completed upfront.
A recent report from Climate Policy Initiative (CPI) suggests these
barriers mean the cost of renewable energy in India is 24-32%
higher than similar projects in the US. The Indian government has
attempted to bridge this gap in infrastructure investment through a
number of initiatives, such as Infrastructure Debt Funds and the
National Clean Energy Fund. However, given the ambitious
renewable energy targets and limited resource availability, there
is a need to explore alternative modes of financing for renewable
power projects, by leveraging existing resources more effectively.

Optimistic moves
Despite several hurdles, India is currently adopting a very
optimistic pace. Recent achievements include:

The Reserve Bank of India (RBI) now Notifies Renewable

Energy under priority sector lending. This means banks can now

January 2016

provide loans up to a limit of INR 150 million to borrowers for

renewable energy projects. This can also help commercial local
banks to raise infrastructure bonds which are exempt from PSL
but still use the money to lend to renewable energy;
o The Asia Development Bank (ADB) is increasing its sovereign
and non-sovereign lending to support Indias new initiatives from
the present $7 billion to $9 billion in three years from 2015 to
2017 and then from $10 billion to $12 billion between 2016 and
2018 using ADBs expanded lending capacity;
o International investors have increased their market share in
India with more than 78% of capacity under development. More
than half of large Indian renewable energy projects are
internationally funded. The UK Green Investment Bank, for
example, has agreed terms on a 200m international pilot
India is currently receiving a growing demand from international
companies in the RE landscape. These include French-based
Fonroche, Solaire Direct, EDF EN (through its subsidiary ACME
Solar) and US-based companies SunEdison, First Solar. Besides
such internationally recognised players, local firms such as
Welspun Energy, OGPL, and Renew Power have also scaled up
their footprint in the Indian RE sector.
Innovative financing solutions
So what can be brought to the table to put India on a faster track?
The answer, primarily, is that there is no need for an entire, new
revolution, but just to build on what has already been done:
New policies and clarifications from the State Government on
the solar sector (solar parks allocation, distributed solar, etc.)
will bring more confidence from potential investors and thus
decrease the cost of financing;
o Existing actors should continue developing
projects and
In the meantime, innovative financing solutions can be used


January 2016

Green bonds - they still remain sparsely known in India even if

in March 2015 the Exim Bank of India launched Indias first
dollar-denominated green bond issue ($500 million fiver-year
bonds), which was subscribed nearly 3.2 times. This solution
has to be applied to corporate as well.
o Yieldcos - renewable energy projects face some uncertainty
during the development stage but tend to produce low-risk cash
flows once they are operating. Yieldcos have the potential to
unlock the value of these renewable assets. Yieldcos may
attract new investors who may otherwise perceive unacceptable
risk or lack the appropriate channels to invest capital in
o Dollar denominated PPA - this solution can decrease the cost
of financing especially for companies who borrow internationally
(i.e. from multilateral agencies) and then can avoid to hedge
currency risk;
These are few of the many solutions that can definitely unlock
Indias potential in renewable energy. Finergreen is currently
working on these challenges and helping clients (local or
international developers, IPPs, etc.) to get access to affordable,
long-term and adequate funds. The company carefully selects
clean energy projects that fit with its ethical philosophy and
ambition to help local populations gain access to electricity 24/7

To quote a Finergreen partner: When we give a family extra

hours of light every night, we extend their day, we give them more
time to be together, more time to work, more time to study, more
time to talk. We not only give them more hours of light, we give
them more hours of life every day.
Rohan Singh is project manager at Finergreen. With its head
office in Paris, France, and offices in New Dehli, India, the
company is a financial advisory company specialising in
renewable energy and energy efficiency projects.

January 2016

Goldman: This may push oil to $20

Friday Sept 11, 2016, CNBC
The risk that oil could fall as low as $20 a barrel is rising, with a
persistent surplus requiring prices to remain lower for longer to
rebalance the market, Goldman Sachs said, cutting its forecasts
"While we are increasingly convinced that the market needs to
see lower oil prices for longer to achieve a production cut, the
source of this production decline and its forcing mechanism is
growing more uncertain, raising the possibility that we may
ultimately clear at a sharply lower price with cash costs around
$20 a barrel Brent prices," Goldman said in a note Friday.
The sources of stress: an abundance of oil coupled with a scarcity
of storage space. The bank estimates the industry added around
240 million barrels of petroleum to storage tanks from January to
August. It projects available identified storage capacity outside
China at around 375 million barrels and expects an around 240
million barrel inventory build outside China between September of
this year and the end of 2016.
"If you don't bring U.S. or global production down low enough
underneath demand to create that rebalancing then you're likely
to slam into storage capacity constraints and that would put that
downward pressure," said Jeffrey Currie, head of commodities
research at Goldman, in a CNBC "Power Lunch" interview
But it noted $20 a barrel isn't its base case, even though risks that
oil will fall that low continue to rise, especially as the bank expects
only moderate production declines through the end of the year.
There is a less than 50 percent chance it would reach $20 a
barrel, Currie noted.

January 2016

Cuts to production are not "significant enough," as low-cost

output continues to surprise to the upside, Currie added. Risk that
neither producers with strong balance sheets nor weak balance
sheets would want to trim production "reinforces this idea of lower
for longer," he noted.
Goldman cut its one-month, three-month, six-month and 12month WTI oil price forecasts to $38, $42, $40 and $45 a barrel,
respectively. That's down from $45, $49, $54 and $60 previously.
It cut its average price forecast for 2016 to $45 a barrel from $57.
Brent for October delivery settled down 75 cents at $48.14 a
barrel on Friday, while U.S. crude fell to $44.63 a barrel, down
$1.29. That follows a wild ride for oil prices, with crude rallying
from a low of $37.75 touched Aug. 24, with daily swings of more
than 5 percent in either direction.
"The oil market is even more oversupplied than we had
expected," Goldman said. "We now forecast this surplus to persist
in 2016 on further OPEC production growth, resilient non-OPEC
supply and slowing demand growth, with risks skewed to even
weaker demand given China's slowdown and its negative
emerging market feedback loop."
CNBC's Amanda Diaz contributed to this article.


January 2016


January 2016

Post-sanctions Iran roils crude market; petchem may follow
18 January 2016 07:15 Source:ICIS News

DUBAI (ICIS)--Oil prices fell on Monday on heightened concerns

about oversupply, with Iran now free to compete in the global
export market after international sanctions on the country were
officially lifted over the weekend, industry sources said on
Price volatility is expected to permeate the downstream
petrochemical markets in the near term, they said.
Crude fell by more than $1/bbl during Monday's morning trade to
their lowest levels since late-2003. Prices fell amid expectations
that Tehran will raise exports significantly in the coming months,
aggravating the glut in the market that has sent crude values
falling since the second half of 2014.
At 04:51 GMT, March Brent crude was trading at $28.52/bbl,
while February NYMEX light sweet crude futures (WTI) were
trading at $29.05/bbl.
International economic and financial sanctions were imposed on
Iran on suspicion that the country is developing a nuclear
On 16 January, the world powers lifted the sanctions after the
United Nations (UN) confirmed that Tehran has curbed its nuclear

January 2016

programme and has complied with the terms of their July 2015
comprehensive agreement.
Iran is a major oil exporter and is a member of the oil cartel
What this says is volatility will continue in the oil and its
downstream petrochemical markets for the next one to two
years, said Ewe EeFoong, ICIS vice president of Business
Development & Consulting.
ICIS Consulting provides insight into commodity markets via
consultancy and data services. It operates independently of ICIS
Prior to the lifting of sanctions, Iran had been exporting around
1.1m bbl/day of oil, principally to Asian buyers. The country has
been producing just under 2.9m bbl/day, compared with 3.6m
bbl/day prior to the implementation of tighter sanctions in 2011.
With Iran back into the picture, the price of oil is set to be driven
down purely on sentiment and speculation, said a banker based
in the Middle East.
With the sanctions lifted, oil prices will see further declines. We
are really worried this could lead to more price volatility further
downstream, a source close to a Middle East energy producer
Ewe of ICIS Consulting said: "Lower oil prices normally lead to
lower product margins, especially for non-integrated producers.
All companies should take this opportunity to relook at their cost
structures. And take the ride on such low oil price scenarios to
weed out inefficiencies."
Naphtha and aromatics prices in Asia were moving in tandem
with crude on Monday. At midday, naphtha prices shed
$17.50/tonne to $310-312/tonne CFR (cost and freight) Japan,
while benzene fell $17/tonne at $521-525/tonne FOB (free on

January 2016

board) Korea, and toluenetrading $15-30/tonne lower at $500535/tonne FOB Korea, according to ICIS data.
Iran is ready to increase production almost overnight, according
to a source close to a major Iranian energy company.
The lifting of sanctions will unfreeze Irans $100bn worth of assets
and allow the country to sell oil to Europe.
Immediately after the announcement of the lifting of sanctions,
Irans deputy oil minister Amir Hossein came out to say that
Tehran could increase crude exports by 500,000 bbl/day.
Most of the new Iranian exports are expected to come from
substantial volumes stored at sea. As of end-November, Iran has
an estimated 36m barrels of oil held at sea in tankers, according
to the International Energy Agency (IEA).
We are watching the developments closely. If Iran increases
supply, oil prices will plunge, a Qatar-based petrochemical
source said.
The announcement to lift sanctions on Saturday, seen as
unexpected by some given its speed of implementation, came just
a month before Iranians vote in a crucial parliamentary election.
Iran petrochemical suppliers are expected to compete actively in
the market once Tehran re-joins the Society for Worldwide
Interbank Financial Telecommunication (SWIFT) services
network, although it remains unclear when exactly this would
happen, industry sources said.
Once Iran can access SWIFT, the country can start to participate
in international trade once again, said a source close to a major
US-based energy distributor.
Iranian petrochemical suppliers have been planning to ramp up
production and to divert about a fifth of their cargoes from China
to Europe once the international sanctions are lifted, industry
sources said.

January 2016

We would like to re-establish our links in Europe but at the same

time not abandon our partners in China, a source close to an
Iranian petrochemical supplier said.
Iran has an annual petrochemical capacity of 59m tonnes,
according to the countrys National Petrochemical Company
(NPC), and plans to more than double production in the next
three years, but this will depend largely on foreign direct
investments (FDIs) from Europe and Asia, industry sources said.
Should Iran violate any aspect of the nuclear deal, the sanctions
will automatically resume and will be in place for 10 years, with
the possibility of a five-year extension.
Meanwhile, a series of US-led sanctions will remain in place for
Iran, including restrictions over doing business with entities linked
to the Iranian Revolutionary Guards. On 17 January, the US said
it will also enforce separate sanctions on 11 entities in Iran over a
recent ballistic missile test.
Talks of a possible repeal of the Iran nuclear deal in the US are
being debated, with the US expected to elect a new president in
November this year.
Well, almost all the [US] Republican [presidential] candidates
promised to repeal the deal if elected, so who knows what will
happen this time next year, a Saudi-based polymer source said.
Focus article by MuhamadFadhil
Oil Route Changes Chemical Landscape
How low oil price affects Chemical Industry
ONDON (ICIS)--As oil continues to collapse past the $30/bbl
mark, the global chemical industry faces some new realities if - as
looks likely - these low prices persist


January 2016

Although the heads of some oil companies such as Shells Ben

van Beurden are still talking up the oil price (he needs a higher
price for the proposed $51bn merger with BG Group to make
sense), increasing numbers of analysts disagree.
International eChems Paul Hodges has been predicting $2030/bbl since August 2014 and he has now been joined by the
likes of Goldman Sachs and Morgan Stanley in expecting the rout
to continue and low prices to persist for years.
On the supply side the oil price crash has cut the number of US
exploratory rigs yet production there has dipped only slightly.
Meanwhile once sanctions end sometime this year, Iran could
bring daily production to 3.6m bbl/day, around 800,000 barrels a
day above current production according to the International
Energy Agency. That would be the countrys highest level of
crude output since 2011. Iraq is also ramping up production to
record levels.
According to Hodges, there is now a vast energy surplus
in coal, gas, oil and renewables: So its a market share game, as
the Saudis realised when they gave up trying to hold the price 18
months ago. You either sell today, or risk ending up leaving the
oil in the ground.
For the chemical industry, a collapsed oil price levels the playing
field in terms of feedstock costs. This is good news for naphthabased regions such as Europe, which had been suffering from
years of decline with an oil price so much higher than natural gas
and ethane prices elsewhere.
As the global ethylene cost curve flattens, we can expect this to
be a positive tailwind for naphtha-based producers, especially as
they enjoy a broader production portfolio of co-products than their
ethane-based peers.


January 2016

Analysts at HSBC said in January that as oil fell faster than

chemical prices in 2015, positive net pricing was the largest driver
of operating earnings growth for the European chemical industry.
The explosion of US shale oil and gas production, meanwhile,
gave US chemical producers a new and huge advantage over
their peers in Europe and Asia. With typical, entrepreneurial zeal
the industry grasped this opportunity with a tidal wave of capacity
additions planned or under construction with startups from 2016.
However many of these investment decisions were based on oil
at up to $100/bbl, giving a big differential between oil and gas
values. There may well be delays or cancellations now that oil
has collapsed and demand growth has slowed.
Low oil is having a disastrous effect on the finances of oil
companies, large and small. One estimate suggests that 250,000
jobs have been shed globally in the oil and gas sector since the
price collapse began.
Investment by oil majors is being severely curtailed, and this will
impact their integrated chemicals operations. We can expect to
see more project cancellations or delays in 2016.
Looking at demand, Chinas economy looks set to endure
permanently lower rates of economic growth as its population
ages and economy rebalances. This means one of the worlds
key drivers of oil and energy demand growth will need less fossil
fuels, especially as the government there pushes renewables.

January 2016

Elsewhere, there are signs of slowing of economic growth in the

US and many emerging markets are also slowing, especially
those reliant on oil export income. Although lower oil prices leave
more money in consumers pockets, there are few signs of this
feeding through to more consumer spending at present.
Demand remains the driving factor for chemicals, with trade group
Cefic forecasting only a 1% rise in chemicals production across
Europe in 2016 because of sluggish domestic and international
demand. The American Chemistry Council remains more bullish
with a forecast of 3.1% for chemical production (excluding
pharmaceuticals) in 2016 after a 3.8% gain in 2015.
ICIS and International eChem are publishing a new study, which
includes various oil price scenarios.
Focus article by Will Beacham
Ten Futuristic Technologies
1. The Hydrogen Economy
Instead of guzzling imported oil (and being at the mercy of oil
suppliers) we could turn water into hydrogen and burn that (or use
to charge fuel cells.) Meanwhile, the only byproduct of the
combustion of hydrogen is ... more water! However, hydrogen
storage remains a thorny issue, due to its low density, and
hydrogen may end up being only one of many interlocking
that replace
2. Therapeutic Cloning
Forget the stories about generating identical copies of a particular
sheep or person. The whole idea behind cloning all along has
been to grow replacement organs or tissue in a vat, which the
body would see no reason to reject. Cancerous or damaged
organs could be replaced by new, disease-free clones of

January 2016

3. Moore's Law Upheld

The law, stated by Intel cofounder Gordon Moore in 1965, implies
that available computer power can be expected to double every
other year. For at least two decades pundits have been pointing
out barriers to the law's fulfillment, and the chip industry has
been smashing those barriers. Currently they can't agree if the
law has a couple of more decades of life left, or 600 years. Either
way, in terms of available computing power, it's clear that we ain't
seen nothing yet.
4. Desktop 3-D Printing
Instead of going to the store for your next gadget, you might
download a design of your choosing and generate it in your
desktop 3-D printer. The next step will be to design your own
gadgets, post the designs, and sell them, etc. Toys, kitchenware,
and decorative household items should be fair game, at least.
Cottage industry, here we come!
5. Location-Based Computing
Instead of clicking an icon on a browser screen, you can walk
outside, point your cell phone at an actual three-dimensional thing
(presumably, a building that houses a business), click the phone,
and get information about (or jump to the Web site of)
whatever you were pointing at. As well as servers with Internet
address, there will be servers with geographic coordinates.
6. Better, Cheaper Solar Cells
The cost of photovoltaic cells (that turn sunlight into electricity)
are coming down. In less than ten years the cost of solar
energy could be at parity with the cost of electricity from the grid,
and solar cells could be standard features in new residential
construction. Your house could power itself about a third of the
time. (Science can't do much about night and bad weather.)
7. Mobile Robots
The recent DARPA challenge (where robot cars navigated
through suburban traffic) hints at what might come. Why drive to
the deli to pick up your order when you can just send your car?
We may see convoys of robot trucks on the highways. Admittedly,

January 2016

they'll probably have more initial acceptance in warehouses,

handling pick-and-pull chores.
8. Pervasive Wireless Internet
WiMAX, 3G, 4G, etc., all point to a pervasive wireless Internet,
where being on-line everywhere, all the time, will be routine. That
implies the possibility of full connectivity between any two random
devices. Want to check your burglar alarm from your cell phone?
It'll be easy. Unjacking to get away and relax, however, may not
be so easy.
9. Gene Therapy and/or Stem Cells
A lot of maladies actually involve inherited conditionsthey're in
your genes, in other words. But scientists are working to change
those genesand trick defective cells into growing correctly.
Perhaps, someday, birth defects will be as treatable as
10. Digital Libraries
Having total connectivity is pointless if all you get is the latest
gossip about Paris Hilton. But the digitization of mankind's
accumulated worksproceeds apace. All of MIT's courses are now
online, for instance, and, if you haven't done so, check out Google
Book Search. The time will come when any straightforward
factual question can be answered immediately, online. But, alas,
those are always the easy questions.
Cheap oil, good for consumers, is slamming stocks. Why?
The drastic drop in
oil and stock prices
stands in contrast
with a US economy
that, on the whole,
is doing pretty well.
experts think is
going on.

January 2016

The price of crude is down 28% this year already, which in turn
has dragged down energy company shares in the Standard and
Poors 500 index by 13%, which has helped pull the overall index
down 9%. Photo: Reuters
New York: Wall Street is drowning in oil.
Stocks are having their worst start to a year in history in part
because of a rapid plunge in the price of oil. The price of crude is
down 28% this year already, which in turn has dragged down
energy company shares in the Standard and Poors 500 index by
13%, which has helped pull the overall index down 9%.
This even though low oil pricesand the cheap prices for petrol
and other fuels that resultare wonderful for consumers and
many companies.
It seems ironic that in the run-up to the global financial crisis we
were worried about oil prices being too high in 2007 and 2008.
Now were worried about them being too low, said Julian Jessop,
head of commodities research with London-based researchers
Capital Economics Ltd.
The drastic drop in oil and stock prices stands in contrast with a
US economy that, on the whole, is doing pretty well. US
employers created 292,000 jobs in December, and few
economists see the economy sliding into recession.
Heres what experts think is going on.
Why is oil so low?
Because there is so much of it.
A long run of high oil prices inspired drillers to develop new
techniques and to go to new places to find more oil, and they
succeeded. In the US, improved oil drilling technologies known
generally as fracking have added more oil to the global market
than the total production of any other nation in Opec other than
Saudi Arabia.

January 2016

Producers in the US and abroad havent cut back production very

much, despite the low prices, and now the lifting of international
sanctions against Iran could send more oil flowing into markets
that are already awash in crude.
US stockpiles are at their highest level in at least 80 years, and
the International Energy Agency (IEA) predicts that during the first
half of this year global oil supply could outstrip demand by 1.5
million barrels per day.
Demand for crude has been growing steadily, but that may not
last because economic growth in China, the worlds secondlargest oil consumer after the US, is slowing.
Why do low oil prices hurt the stock market?
Oil company profits are plummeting, so oil company shares are
plummeting, and that is dragging down the whole market.
Analysts estimate that profit for all S&P 500 companies in total
are on track to be down a recession-like 5.8% for 2015. But if
energy companies were removed from that figure, S&P 500
profits would be up a very healthy 5.7% for the full year.
That profit drop directly leads to lower share prices that drag
down entire indexes. Two of the biggest oil companies in the
world, Exxon and Chevron, are part of the 30-member Dow Jones
industrial average. Of the 20 biggest share price losers in the
S&P 500 this year, 13 are energy companies.
Investors are also selling shares of companies that may have
exposure to the oil industry, like certain banks. And the price of oil
has now fallen so low that investors are also worried that it could
mean global economic growth is much weaker than expected,
which could hurt all companies.
Arent lower oil prices a good thing for the economy?
It depends on why prices are lower.
If they fall because new supplies have been found, it usually
helps the broader economy, and markets held up fairly well during

January 2016

oils big slide from over $100 a barrel in 2014 to under $50 a
barrel last year.
In the long run, lower oil prices should be positive or at worst
neutral for the world economy because all theyre really doing is
transferring income from oil producers to oil consumers, Jessop
But this latest plunge in prices to under $30 a barrel has investors
worried that oil prices are falling because global growth is
slowing, as businesses and consumers in many developing
countries, particularly China, cut back on spending. Bruce
Kasman, chief economist at JPMorgan Chase, says that steep
drops in oil prices have historically been a sign of a weakening
global economy.
Also, US consumers have remained cautious about spending the
money they arent putting into their gas tanks, which limits the
benefit to the broader economy. Americans saved 5.5% of their
incomes in November, up nearly a full percentage point from a
year earlier.
Kasman estimates that US spending grew at a tepid pace of just
1.5% in the final three months of last year. Theres no doubt that
the consumer spending growth figures for the US, Europe and
Japan have disappointed, he said.
Some of that likely reflected a temporary drag from warm
weather, as Americans spent less on winter clothing and utilities.
That could turn around in the first quarter, giving the economy a
lift, Kasman said.
Delta Air Lines told investors this week that bookings for this
spring are ahead of last years pace because cheaper petrol
means consumers have more money.


January 2016

Could this lead to broader turmoil, the way the subprime

mortgage crisis did?
It is already having some ripple effects, but the energy market
isnt nearly as big or far-reaching as the housing market.
When oil prices were high, lots of banks, including some of the
biggest on Wall Street, made loans to energy companies to
finance drilling in North Dakota, Texas and elsewhere. Dealogic
estimates that the oil and gas industry has roughly $500 billion in
outstanding debt. According to the Federal Reserve, there is $11
trillion in outstanding residential mortgage debt.
Still, some are feeling it. Oil company cash flow is slowing, and
companies are finding it harder to repay their loans. Oil and gas
company bankruptcies are rising, and the entire market for socalled junk bonds has been shaken as a result of energy
company defaults.
JPMorgan Chase, Wells Fargo, Citigroup and Bank of America all
had to write down the value of energy loans or set aside more
money to cover losses. BofA executives told investors this week
that energy loans were roughly 2% of its total loans. Smaller
regional banks could to be more exposed relatively than the big
Wall Street banks.
Is there an oil price that would be good for the market and
Jessop thinks that a price of about $60 a barrel would do the trick.
High enough to keep the main producers in business but low
enough to provide a real boost to the incomes of consumers, he
says. He expects prices to return to that level by the end of next
year as oil companies pare back exploration and the glut is
worked off.


January 2016

Honble Prime Minister dedicates IndianOil's 11th Refinery to
the Nation

Honble Prime Minister of India, Mr. Narendra Modi, dedicated

IndianOils 11th refinery at Paradip in the service of the nation on
February 7, 2016 amidst thunderous applause by more than two
lakhs cheering audience and the musical strains of Bande Utkal
Janani, Odisha State anthem.
Honble Prime Minister, in his address, said, "Paradip Refinery of
IndianOil marks the beginning of a new era of development.
Following the commissioning of the Refinery, an investment of
Rs. 1, 00,000 crore will come into the State. Paradip Refinery is
the Vikas Deep for Odisha. The Refinery will contribute to the
development of the state and bring new hope for the youth. The
people of Odisha know about the importance of the Refinery.
There will be every support available from the Government of
India to sustain this march of development."

Honble Prime Minister especially complimented the Ministry of

Petroleum & Natural Gas for initiating a number of new initiatives
for the benefit of the citizens. He also emphasised the need for
more production of LPG in order to reach the clean fuel to millions
of Indian households--taking care of women who still work in the
kitchen under the smoke of firewood. We want to reach out to
every household with LPG, with the INDMAX at Paradip Refinery,
we will be closer to this goal, he said.
Mr. Naveen Patnaik, Hon'ble Chief Minister of Odisha, said that
Paradip Refinery is the pride of Odisha. It is a mark of Odisha's

January 2016

development. He also thanked the Hon'ble PM for his support and

cooperation for the refinery in Paradip.
Mr. Dharmendra Pradhan, Honble MoS (I/c) for Petroleum &
Natural Gas, in his welcome address, said, "This refinery was a
dream of many and today the dream is coming true. I am
honoured by the presence of the Hon'ble Prime Minister of India,
Mr. Narendra Modi ji today at IndianOil Paradip refinery. I am also
honoured by the presence of our guests from Sri Lanka and
Bangladesh. Mr. Pradhan also mentioned that we all dream of a
developed Odisha. A new milestone has been reached today on
this pious land of Odisha. Through this Paradip Refinery, we
would try to enrich the Eastern Province of India, create job
opportunities and bring about a transformation in the State of
Odisha, he added.

Mr. Narendra Modi, Hon'ble Prime Minister at Pardaip Refinery

dedication ceremony in the presence of Dr. S. C. Jamir, Hon'ble
Governor of Odisha, Mr. Naveen Patnaik, Hon'ble Chief Minister
of Odisha, Mr. Dharmendra Pradhan, MoS (I/c) for Petroleum &
Natural Gas, Mr. K.D. Tripathi, Secretary, MoP&NG along with
Chairman IndianOil, Shri B. Ashok, State guests from Bangladesh
& Sri Lanka and senior members of the Parliament.
Mr. Jual Oram, Union Minister of Tribal Affairs, thanked all the
stakeholders for being part of the occasion that heralded a new
wave of development for the state of Odisha and the nation as
The other top-level dignitaries present on the occasion were the
Honble Governor of Odisha, Dr. S C Jamir. Odisha State
Ministers who graced the occasion were Honble Minister for
Industries, School & Mass Education, Mr. Debi Prasad Mishra,

January 2016

and Honble Minister for Co-Op & Excise, Dr. Damodar Rout.
Honble Members of Parliament Dr. Kulamani Samal (Lok Sabha)
and Mr. Ranjib Biswal (Rajya Sabha), were also present.
Special foreign guests were EH Dr. Towfiq-e-Elahi Chowdhury,
BB, Advisor to PM of Bangladesh (Energy, Power & Mineral
Resources) and H.E. Dr. Anoma Gamago, Dy. Minister of
Petroleum Resources Development, Srilanka.
Mr. K. D. Tripathi, Secretary, (Petroleum), Mr. B. Ashok,
Chairman, IndianOil, and Mr. Sanjiv Singh, Director (Refineries),
IndianOil, were also present on the ocassion.
Hon'be PM takes a tour of main units of the Refinery
On his arrival, Honble Prime Minister was taken to the Main
Control Room, which is the heart of a refinery. Mr. Sanjiv Singh,
Director (Refineries), gave a briefing on the operation of the
control room which is the biggest Control Room among IndianOil
refineries and it can control each and every refinery operation
along with the facility of startup and shutdown.
He also visited the INDMAX unit, an in-house technology adopted
in the refinery, the finest representation of Make in India
campaign of the Government of India. The continuous endeavour
of the IndianOil leadership is to identify the challenges and
opportunities for strengthening the Indian economy through
development of pioneering technologies for import substitution,
dynamically supporting local talent and trade, skill development,
creation of job opportunities, spurring manufacturing enterprises,
and facilitating inclusive growth to realise the vision of Make in
India in its true spirit.
Make in India Sculpture of INDMAX unveiled
At Paradip Refinery, Honble Prime Minister unveiled the glorious
and illustrative symbol of Make in India- a sculpture of the inhouse technical innovation of IndianOils R&D- the INDMAX
technology. The sculpture is a national salute to Hoble Prime
Ministers initiatives to take India to the next level of growth by

January 2016

attracting big investments in the country, and giving a boost to

Indian skill and trade for economic development. The INDMAX
technology implementations will double LPG production. This will
support the mission of Government of India for providing domestic
LPG gas to every household in next three years. At present,
approximately 50% of LPG is imported in the country.

India tops Asia in sending scientists, engineers to US

India continued its trend of being the top country of birth from Asia
for immigrant scientists and engineers in US, with 950,000 out of
the continents total 2.96 million, according to a new report.
From 2003 to 2013, the number of scientists and engineers
residing in the US rose from 21.6 million to 29 million. This 10year increase included significant growth in the number of
immigrant scientists and engineers, from 3.4 million to 5.2 million,
the researchers said.
Of the immigrant scientists and engineers in the US in 2013, 57
per cent were born in Asia, 16 per cent were born in Europe, 6
per cent were born in Africa, 20 per cent were born in North
America (excluding the US), Central America, the Caribbean, or
South America, and less than 1 per cent were born in Oceania.
Among Asian countries, India continued its trend of being the top
country of birth for immigrant scientists and engineers, with
950,000 out of Asias total 2.96 million.
Indias 2013 figure represented an 85 per cent increase from
2003, according to the report from the US National Science
Foundations National Centre for Science and Engineering
Statistics (NCSES).


January 2016

Immigrants went from making up 16 per cent of the science and

engineering workforce to 18 per cent, the report said.
In 2013, 63 per cent of US immigrant scientists and engineers
were naturalised citizens, while 22 per cent were permanent
residents and 15 per cent were temporary visa holders.
Also since 2003, the number of scientists and engineers from the
Philippines increased 53 per cent and the number from China,
including Hong Kong and Macau, increased 34 per cent.
The report found that immigrant scientists and engineers were
more likely to have earned post-baccalaureate degrees than their
US-born counterparts.
In 2013, 32 per cent of immigrant scientists reported their highest
degree was a masters (compared to 29 per cent of US-born
counterparts) and 9 per cent reported it was a doctorate
(compared to 4 per cent of US-born counterparts).
The most common fields of study for immigrant scientist and
engineers in 2013 were engineering, computer and mathematical
sciences and social and related sciences.
Over 80 per cent of immigrant scientists and engineers were
employed in 2013, the same percentage as their US-born
Among the immigrants in the science and engineering workforce,
the largest share (18 per cent) worked in computer and
mathematical sciences, while the second-largest share (8 per
cent) worked in engineering.
Three occupations life scientist, computer and mathematics
scientist and social and related scientist saw substantial
immigrant employment growth from 2003 to 2013.
(This article was published on January 14, 2016)


January 2016

Indian refiners need to invest $4.5B to produce Euro VI fuels by

01.07.2016 | Hydrocarbon Processing
India has advanced the date for nationwide implementation of
Euro VI fuels by four years to April 1, 2020, in an effort to curb
pollution, according to the report.
Indian refiners need to invest 300 billion rupees ($4.5 billion) to
produce fuels in compliance with new Euro VI rules, the nation's
road transport minister said this week.
NitinGadkari delivered the projection, which was captured by
news agency Reuters.
India has advanced the date for nationwide implementation of
Euro VI fuels by four years to April 1, 2020, in an effort to curb
pollution, according to the report.
Pollution levels in Indian cities have often been compared to
China's Beijing. A 2014 study from the World Health Organization
said India's capital city of New Delhi had the worst air quality out
of 1,600 cities surveyed worldwide.
Refining needs better and cheaper technology. For that refiners
must come out of box and try new cheaper technologies like
Crude Oil Sulfur Removal and Quality Improvement (COSRQI) It
should do in 1 billion and save 3.5 billion.
By Mary Page Bailey | January 6, 201 ChemEngg.
BP plc (London; www.bp.com) has agreed to sell its
petrochemical complex in Decatur, Ala., to Indorama Ventures
Public Co., as part of a previously announced effort to refocus its
global petrochemicals business for improved profitability and

January 2016

long-term growth. The divestment is in line with BPs global

petrochemicals strategy of pursuing a competitively advantaged
portfolio through world-scale, low-cost facilities that utilize BP
proprietary technology, including the production of purified
terephthalic acid, or PTA, a key raw material in the production of
This agreement allows us to focus investment on our world-class
PTA production facility in Cooper River, S.C., and a key PTA
feedstock producer in Texas City, Tex., as well as to maintain a
strong position in the important U.S. petrochemicals industry,
said Rita Griffin, chief operating officer of BP Global
Under the terms of the agreement, Indorama Ventures will
purchase the Decatur complex, including working capital and
related infrastructure and assume certain contracts with suppliers
and customers. The parties anticipate the deal closing to occur in
early 2016 when employees will transfer to the new owner.
We are grateful to our employees who have made the Decatur
facility a safe, reliable and valuable contributor to BPs business
for so many years, said Luis Sierra, head of BPs global
aromatics business unit. We believe this agreement with an
established global industry leader such as Indorama Ventures provides a compelling future for those employees, the site and the
community of Decatur.
The Decatur complex makes chemicals essential for the
production of thousands of items, from plastic water bottles to flatscreen televisions. Located on 1,000 acres in Northern Alabama,
the complex can produce one million tons per year of PTA, as
well as paraxylene (PX), a raw material for PTA production. The
site also is the worlds only commercial manufacturer of
naphthalene dicarboxylate (NDC), a specialty chemical used in
new-generation polyesters and resins used to make LCD flatpanel displays, ultra-thin data storage tape and other products.

January 2016

Elsewhere, BP is spending $200 million to upgrade its Cooper

River plant and its sister facility in Geel, Belgium the largest
PTA-producing sites in the Americas and Europe, respectively.
The investment will enable the two facilities to lower operating
costs, improve reliability and reduce emissions.
Emission test
By BusinessLIne January 8,2016
Improved fuel norms are useful, but will achieve little in isolation
The Centres decision to jump an entire cycle on vehicle emission
norms and move directly to Bharat Stage VI corresponding to
Euro VI norms by 2020, skipping Bharat Stage V altogether,
has expectedly been welcomed by environmental activists.
Equally expectedly, it has caused disquiet among automobile
manufacturers and fuel refiners over the issue of the heavy
investments they would be required to make in order to conform
to the new norms by the stipulated deadline. The case for
speeding up the switch to Stage VI is simple Indias cities are
reeling under toxic levels of pollution, with six of the worlds ten
most polluted cities being in India. Vehicle emissions, particularly
diesel emissions, which contain high levels of particulate matter,
are one of the key contributors to this, and at Stage VI levels of
emission controls, particulate emissions from compliant diesel
engines will match those of petrol engines. Those arguing for
bypassing Stage V also say that Stage VI technology achieves
superior levels of actual, in-use emissions, and greater reductions
in nitrous oxide emissions compared to Stage IV and V than the
difference in limits alone indicates. And by speeding up Stage VI
to 2020, India, under pressure for not committing to sufficient
reductions at the recently concluded climate talks, will also get
some bragging rights for having beaten most nations, including
several advanced economies, to that standard.
However, the question of why, when a detailed roadmap for
achieving Stage V and VI was already in place, the Centre chose
to speed things up has not been adequately answered. The move
appears something of a knee-jerk reaction to the pollution crisis

January 2016

gripping Delhi. It is also difficult to avoid the impression that the

move may have been prompted more by political considerations,
since the ruling AamAadmi Party in Delhi had managed to steal a
march with its experimental road rationing plan in Delhi. The fuel
issue merits more serious consideration. Although BS IV norms
are nominally in effect, BS-IV petrol and BS-IV diesel are
available only in 24 per cent and 16 per cent of the domestic
market, respectively. The entire country will have BS IV quality
fuel only by April 1, 2017. Achieving fuel availability by the
deadline, therefore, remains a question mark.
It is also worrying that the pollution control debate appears to be
narrow-focused on emission norms alone. For meaningful impact,
these will have to be accompanied by other measures, such as
strict scrappage rules, proper monitoring and control of
emissions, as well as enforcement of other regulations, including
those covering overloading of commercial vehicles. Even this will
address only part of the problem since construction dust, coalburning power plants, and lack of waste management leading to
burning of rubbish contribute significantly to pollution levels.
Rather than go for piecemeal action, the Centre and States need
to address the issue in a more holistic manner.
(This article was published on January 8, 2016)
Doing scientific research will be made easy: Modi tell
PM calls for bridging
traditional knowledge
and modern science
Looking ahead Prime
Karnataka Governor

January 2016

VajubhaiRudabhaiVala (right) arrive for the inauguration of 103rd

Indian Science Congress at the University of Mysore on Sunday
The Centre will make it easier to do scientific research in the
country and science administration, too, will be improved, Prime
Minister NarendraModi told scientists while stressing that their
work should focus on the five-Es economy, environment,
energy, empathy and equity.
In his inaugural address at the Indian Science Congress here,
Modi called for greater scientific collaboration between central
and state-level institutions and agencies.
He asked scientists from India and overseas to bridge the gap
between traditional knowledge and modern science so that
localised and more sustainable solutions could be found to
various challenges.
He said the impact of science would be the most when scientists
and technologists keep the principles of what he called Five Es
at the centre of their enquiry and engineering.
Economy related to finding cost-effective and efficient
solutions; Environment to keep the carbon footprint at the
lowest and with least impact on the ecology; Energy when our
prosperity relies less on energy and the energy we use keeps our
skies blue and our Earth green; Empathy when our efforts are
in tune with our culture, circumstances and social challenges and
Equity when science advances inclusive development and
improves the welfare of the weakest, he said.
Modi said good governance was not just about policy and
decision making, transparency and accountability but also about
integrating science and technology into the choices to be made
and the strategies to be pursued.


January 2016

We will also try to increase the level of resources for science and
deploy them in accordance with our strategic priorities, he said at
the ManasaGangotri campus of the University of Mysore, which
is celebrating its centenary.
Some 500 eminent scientists and experts are attending the fiveday Congress with the focal theme Science and Technology for
Indigenous Development in India, in tune with Modis big push for
Make in India programme.
(This article was published on January 3, 2016)
Now Mineral Water costlier than Mineral Water in India
NDTV, Jan 11,2016
The continued softness in global crude prices and the relative
stability in the rupee-dollar exchange rate means oil in India now
costs less than a bottle of mineral water. However, the drop in
domestic petrol and diesel prices has not kept pace with global
prices because the government has repeatedly hiked excise duty
on petrol and diesel to increase its revenues. Earlier this month,
excise duty on petrol and diesel was hiked for the third time in the
current fiscal year.
The government last week said that the price of Indian crude
basket has fallen to $29.24 per barrel or Rs 1,956.45 per barrel at
Rs 66.91per dollar as on January 7, 2016. An oil barrel is 159
litres, so the price of one litre of crude oil comes to Rs 12 per litre,
which is 20 per cent lower than a litre of mineral water priced at
Rs 15.
The current situation aptly sums up the spectacular drop in global
crude oil prices. Oil prices have already fallen over 70 per cent
since the downturn began in mid-2014. Goldman Sachs says oil
could hit $20 a barrel.
The crash in global crude prices has however moderately

January 2016

benefitted Indian consumers as pump prices have fallen by just

20 per cent as compared to the 70 per cent drop in global prices.
Basic excise duty on petrol has gone up by Rs 7.73 per litre in
fiscal year 2015-16 while on diesel it has risen to Rs 7.83 per litre.
The government had in four instalments raised excise duty on
petrol and diesel between November 2014 and January 2015 to
lessen the reduction in retail rates, which followed falling
international oil rates.
If the government would not have raised these duties, consumer
price of petrol and diesel should have been lower by Rs 10.02 a
litre and Rs 9.97 per litre, respectively.
Petrol currently costs Rs 59.35 per litre in Delhi while diesel is
priced at Rs 45 a litre
Indias state refiners agree to jointly build new world-scale
01.25.2016 |
Indian Oil Corp., the nations biggest refiner, will build a 60 MMtpy
(1.2 MMbpd) oil refinery in Maharashtra together with Bharat
Petroleum, Hindustan Petroleum and Engineers India.
Indias state-run refiners plan to build one of the worlds largest
refineries on the countrys west coast, Oil Minister Dharmendra
Pradhan said in a Twitter post Monday
Indian Oil Corp., the nations biggest refiner, will build a 60 MMtpy
(1.2 MMbpd) oil refinery in Maharashtra together with Bharat
Engineers India.
The companies will develop the project in two phases, with the
first 800,000 bpd facility costing more than 1 trillion rupees ($14.7
billion), according to Pradhan.

January 2016

The planned refinery will produce gasoline, diesel, liquefied

petroleum gas (LPG), jet fuel and supply feed stock
for petrochemical plants in Maharashtra, Pradhan said.
Reliance Industries twin refineries at Jamnagar in neighboring
Gujarat state have a combined capacity of 1.24 MMbpd. That
makes that plant currently the worlds biggest refining complex.
In years to come, India will import products if capacity is not
augmented, Deepak Mahurkar, leader for the oil and gas team at
PricewaterhouseCoopers in India, said in an interview
with Bloomberg. Availability of domestic and export markets
make room for more capacity.
A timeline for construction of the refinery was not disclosed.
The project may take six to 10 years for design, land acquisitions
and construction, MahurkartoldBloomberg.
India to offer tax discount if Iran accepts all oil payments in
Iran may no longer be keen on taking payments in rupee when it
can get paid in US dollar and Euro with the lifting of tinternational
trade sanctions
PTI January 11, 2016

A file photo of the

Mangalore refinery,
one of the Indian
importers of Iranian
crude. In June last
year, Iran agreed to
receiving all of the
payment in rupees
but wanted waiver of

January 2016

40% withholding tax, to which the finance ministry has agreed.

Photo: Bloomberg
New Delhi: The finance ministry will exempt payments to Iran
from hefty withholding tax if the Persian Gulf nation were to
receive full payment for oil it sells to India in rupees.
With sanctions against Tehran blocking payment channels, 45%
of the oil India imports from Iran are settled in rupees since
January 2012. The remaining gets accumulated and cleared as
and when easing of sanctions opens payment window.
In June last year, Iran agreed to receiving all of the payment in
rupees but wanted waiver of 40% withholding tax. Finance
ministry is agreeable to such waiver, a senior government official
The Budget for 2012-13 had exempted Indian refiners from
paying withholding tax when paying 45% of dues in rupees to
Iran. The same benefit will be extended to 100% payments made
in rupees, he said.
As of now, Indian refiners owe Iran $5.8 billion. Cabinet approval
for exempting payments to National Iranian Oil Co (NIOC) would
be sought, he said.
But Iran may no longer be keen on taking payments in rupee
when the option of getting payment in hard tradable currencies
like US dollar and Euro is on the verge of opening. Oil and
banking sanctions against Iran may be lifted as early as this
month following a historic deal the Persian Gulf nation reached
with the US and other western powers in July last year.
Sanctions are to be lifted on Iran agreeing to limit its nuclear
programme. Sources said Iran was using the rupee payment it
received since January 2012 to pay for imports from India. It had
planned to use the full payment received in rupee for the same
Rupee is not freely traded on international markets. In March
2012, the finance ministry had issued a notification exempting

January 2016

45% of payments made to Iran in rupee from any local tax. The
notification, under Section 10 (48) of the Income Tax Act, related
with tax exemptions in regard to foreign oil companies selling
crude oil in India has notified the National Iranian Oil Company
has as a foreign company.
This followed fears that the money paid to NIOC may be
considered as income generated by Iranian firm in the country
and liable to be taxed.
Iran is Indias 5th largest crude oil supplier, selling 6.53 million
tons of oil in the first half of 2015-16. Iranian supplies made up for
6.6% of the 99.36 million tons of oil India imported during AprilSeptember.
Iran was Indias second biggest supplier of crude oil after Saudi
Arabia till 2010-11 and made up for 12 per cent of Indias oil
needs. But sanctions relegated it to 7th spot last fiscal with
supplies of 10.95 million tons. This year it has regained some lost
India Africa Hydrocarbon Conference
Ushering a new era of partnership between India & Africa, the 4th
India Africa Hydrocarbon Conference was held in New Delhi on
January 21st & 22nd 2016.
This comes as a significant boost to Indias energy security
manifold with the aim of
enhancing co-operation
towards Development
Partnership in the field
of Hydrocarbons.
About 22 African nations
conference, out of which

January 2016

Sudan, South Sudan, Tunisia, Senegal and Equatorial Guinea

were represented by their Ministers.
Drawing inspiration from Honourable Prime Minister Shri
Narendra Modis words, When the sun sets, tens of
thousands of homes in India and Africa become dark. We
want to light up lives of our people and power their future. at
the India- Africa Forum Summit held about three months back,
the theme of the conference was "Energizing the bottom of the
pyramid Together towards tomorrow".
Addressing the conference, Minister of Petroleum and Natural
Gas (I/C) Shri Dharmendra Pradhan, spoke about how India
apart from being an attractive market for crude oil and gas, would
be an able partner for African nations across the industry value
chain. He highlighted the importance of Africa in Indias Crude
imports, with approximately 16% of our crude consumption being
fulfilled by African nations.
Shri Pradhan also emphasised on the rapid growth of the African
Hydrocarbon sector with new discoveries of Oil reserves growing
by over 100% and gas reserves by over 55%.India on the other
hand, has emerged as the fastest growing major economy in the
world today with over 7% GDP growth.
This puts Africa in a good position as an oil as well as gas
exporter for India. Despite being a net importer of crude oil, India,
with 23 refineries, has become a net exporter of petroleum
products by investing in refineries designed for export. India
has emerged as a refining hub with the fourth largest refining
capacity in the world with 4.5% of world share.
In addition to this, Indian companies play an active role in Africas
hydrocarbon sector, having a major presence in exploration and
production segments with total investments of nearly US$ 7-8
billion in Mozambique, Sudan and South Sudan and some key Oil
& Gas projects in Gabon, Libya & Egypt.
With Indian companies providing comprehensive Engineering,
Procurement and Construction (EPC) services to the hydrocarbon

January 2016

sector in Africa and development of State- of-the- Art for

deployment across upstream and downstream sectors by Indian
research and training institutes in hydrocarbon sector, the
Minister in his speech expressed great optimism and potential for
collaboration between India and Africa.
India has also offered a concessional credit of $10 billion over
next 5 years for African countries, calling upon public and private
sector both in India and Africa to identify viable projects which can
be financed and pursued through this line of credit.
Shri Pradhan also held bilateral meetings with the Ministers of
the African Nations to discuss on enhancing co-operation in
hydrocarbon sector between India & various African Nations.


January 2016

Fluor To Build $1-Billion Petroleum-Refining Facility In
By Gerald Ondrey | January 11, 2016
Fluor Corp. (Irving, Tex.; www.fluor.com) says that ICA Fluor, its
industrial engineering and construction joint venture with
Empresas ICA, S.A.B. de C.V. (www.ica.com.mx/ir), was
authorized by Pemex Transformacin Industrial (Pemex) to
proceed with the engineering, procurement and construction
(Phase II) of the Madero Clean Diesel project at the Madero
Refinery in Tamaulipas, Mexico. Fluor booked its $500 million
share of the contract in the fourth quarter of 2015.
ICA Fluor will provide detailed engineering, procurement,
construction, commissioning and start-up services for two 25,000barrel-per-day diesel hydrodesulfurization trains and associated
facilities. The project also includes installation of new hydrogen,
sulfur recovery and sour water treatment plants, the revamp of
the existing diesel hydrodesulfurization unit, and offsites and
utilities to integrate the new production facility with the existing
refinery. The project is scheduled to be completed in the first
quarter of 2018.
The project is part of Pemexs clean fuels program, its
comprehensive development and modernization program, and is
designed to increase Mexicos production of ultra-low sulfur diesel
in accordance with applicable environmental standards.


January 2016

These are the energy stories Houston cared about in 2015

Posted on December 31, 2015 | By Rhiannon Meyers
New energy CEOs in 2015

Aaron M. Sprecher / Bloomberg

Cheniere CEO CharifSouki was ousted in December 2014. The
company is searching for his replacement.
As 2015 winds to a close, the energy industry is preparing to
close the chapter on one of its most tumultuous years in decades.
The troubles that started in late 2014 when oil prices started
collapsing deepened further this year, starting with oil field
services companies and offshore drilling contractors, then trickling
into the exploration and production companies as the crude rout
The early optimism for a quick rebound, fueled by a stabilization
in crude prices in the spring, quickly faded with the fresh collapse
in the summer as the crude glut remained stubbornly high,
demand started to falter and speculation mounted that more oil
was headed to market.


January 2016

The year was marked by layoffs, bankruptcies and spending cuts,

but there were some bright spots, too, as the battered energy
industry continued to chug forward with a few new projects
despite the brutal market conditions.
With crude prices stuck firmly below $40 a barrel, and energy
companies predicting another austere year in 2016, heres a look
back at some of the most popular stories that appeared
on FuelFix.com this year.
1. Exxon Mobils new campus.
reporter Jordan
Blum took
readers behind the scenes of Exxon Mobils sprawling new
complex near The Woodlands, four years after construction
started. His tour in August gave readers the first glimpse inside a
closely watched project that has reshaped the region north of
Houston in our most-read Fuel Fix post of the year. Designed to
accommodate 10,000 employees across 385 acres, the campus
looks more like a modern college than a energy company office,
replete with sunlit hallways, a wellness center and surprisingly
modest personal offices and conference rooms. Employees were
still relocating to the campus, which was slated for full completion
this year.
2. Layoffs.
As oil prices refused to budge higher, energy companies cut
deeper and deeper, paring back their payrolls to match a
diminished level of activity. By years end, the number of job cuts
exceeded 250,000 worldwide, although that number may be
underestimated. The Federal Reserve Bank of Dallas estimated
the job losses at 70,000 in the U.S. alone. The numbers were
behemoth Schlumberger revealed plans in January to chop 9,000
jobs. The announcement, the first of a series of similar
disclosures, was the second most-read story for the year,
followed by other big layoff announcements from Chevron, which
slashed 1,500 jobs; Conoco Phillips, which trimmed 10 percent of
its global workforce, a second round of job cuts by Schlumberger,

January 2016

bringing the total number of losses to a whopping 20,000; and

some Houston-specific job losses at Sulzer Pumps in Brookshire
and the local office of Swiss contract driller Noble Corp.
3. Executive pay.
The downturn didnt strike all energy workers equally. One of
Houstons richest, Richard Kinder, executive chairman of pipeline
conglomerate Kinder Morgan, saw his wealth balloon by about
$2.5 billion from late 2014 to early 2015, according to rankings by
Forbes magazine released in March. In July, it was revealed
that Houstons highest-paid executives all came from the energy
industry. And seven of the 10 made more money they did during
the boom times of 2013. But not everyone was so lucky. Energy
giant BP announced in January that it would freeze most of its
employee pay in 2015 in an effort to save money during the tough
4. A new gas station.
For the first time in history, Mexicos national oil company opened
its first gasoline station outside the countrys borders. The Pemex
station in the 7900 block of Park Place Blvd. in Houston held a
grand opening in early December with much fanfare, including a
mariachi band that serenaded guests. The station is the first of
several planned for the area.
5. Shell strikes oil.
Slumping oil prices didnt stop Royal Dutch Shell from pressing
forward with its hunt for oil in the Gulf of Mexico. In November,
the energy giant announced that it had found 100 million barrels
of oil equivalentburied at its Kaikias field, about 60 miles south of
the Louisiana coast. A 100-million-barrel find is not a gamechanger in the Shell portfolio, said Rebecca Fitz, senior director
at IHS Energy. But this discovery is completely consistent with
what Shell is trying to do from its streamlined exploration


January 2016

6. Energy company mega-deal.

Schlumberger scooped up Houston-based oil tool maker
Cameron International Corp. in a deal worth about $12.8 billion,
one of the largest energy acquisitions this year. The deal, slated
to close in early 2016, is an attempt to create a company that can
offer more services in more locations.
7. Refinery strikes.
The United Steelworkers union went on strike in January, initially
walking out of nine plants across the nation, including five in the
Houston area, in the largest refinery strike in 35 years. The action
eventually spread to 15 refineries across the U.S. Months of
negotiations followed before workers finally reached a deal to
address concerns about unsafe working conditions, including
worker fatigue, the use of contractors and annual wage increases.
The strike final ended in July when employees at Marathon
Petroleums Galveston Bay Refinery returned to work.
8. CEO retires.
Apache Corp.s longtime chairman and chief executive G. Steven
Farris stepped down in January, marking an end to his 22-year
career with the Houston-based oil company. It has been a
privilege to lead one of the top independent oil and gas producers
and work alongside some of the best professionals in the
business, Farris, 66, said in a statement. He was replaced by
John Christmann, the companys executive vice president and
chief operating officer for North America.
9. Bankruptcies.
The longer-than-expected period of anemic oil prices began to
take its toll on North American oil companies, with the number of
bankruptcies rising to 37 by the end of November. Sixteen were
based in Texas. With crude prices hovering well below levels
considered economic to continue expanding and drilling, and no
end in sight to the global crude glut, several more oil companies
appear poised to run out of cash or miss the deadline to pay off

January 2016

their debt, which could lead to more bankruptcies in the coming

Categories: Bankruptcy, Crude oil, Deals, Exploration, featured
Tags: 2015 | Apache | BP | cameron | Conoco Phillips |
ConocoPhillips ships first LNG from Australian megaproject
Posted on January 11, 2016 | By Robert Grattan

(Tomohiro Ohsumi/Bloomberg)
HOUSTON The first cargo of liquefied natural gas has sailed
from the mammoth Australia Pacific LNG facility in Queensland,
ConocoPhillips and its partners in the project announced early
The shipment, carried on the 935-foot meter tanker Methane
Spirit and bound for customer in Asia, is among the first in a wave
of liquefied natural gas projects that are coming online even as
low oil prices have dragged down the value of natural gas on the
international markets they serve.
For the companies behind it, the cargo is an important first step
toward the project transitioning from a cash-sink to cash60

January 2016

generator after years of construction and more than $17 billion in

Houstons ConocoPhillips and Australias Origin Energy each own
a 37.5 percent stake in the venture, and Chinas Sinopec owns
the remaining 25 percent and is its largest customer. Kansai
Electric Power, a Japanese utility, has also signed contracts for
some shipments.
The Australia Pacific LNG, or APLNG, facility takes coal seam
gas from Eastern Australia, liquefies it and then ships the fuel to
customers in Asia. Mondays shipment sailed from the
first liquefaction train, and a second is due online in the second
half of 2016.
The projects backers began construction of the facility in 2011
hoping to capture the margin between cheap U.S. natural gas and
more expensive intentional gas, which is often linked to oil prices.
However, the oil bust has depressed natural gas prices abroad
and left immediate profitability of APLNG uncertain Origin has
said it needs between $38 and $42 per barrel international oil
before it sees positive cash flow from its investment, according to
the Sydney Morning Herald.
Still, the projects backers have continued to pour billions into the
projects construction even as their budgets were crimped by low
oil prices and the large investment weighed on their balance
ConocoPhillips said in a statement that an operational APLNG
would allow it more financial flexibility moving forward. The
independent oil and gas producer expects the project to be selffunding after the second train comes online later in 2016.
This is a significant milestone for our company and we are proud
to have safely loaded the first cargo from APLNG, said Ryan
Lance, chairman and chief executive officer, in a written

January 2016

APLNGs first shipment comes as another Houston company,

Cheniere Energy, is set to receive its first tanker at the $18 billion
natural gas liquefaction and export terminal the company has built
at Sabine Pass in Cameron Parish, Louisiana.
That tanker, the 290-meter Energy Atlantic, last reported a
position of about 50 kilometers off the Louisiana coast. It could
soon become the first ship to depart the mainland U.S. carrying a
cargo of American liquefied natural gas.
Cheniere Energy didnt respond to a request for comment on
Women CEOs Of The S&P 500
This list names all the women who currently hold CEO positions
at S&P 500 companies. Women currently hold 21 (4.2%) of CEO
positions at S&P 500 companies. To find out how many women
are at other levels of S&P 500 companies, take a look at
the Women in S&P 500 Companies pyramid.
Topics: Women in Leadership
Centers: Equity in Business Leadership
Date: December 14, 2015
Mary T. Barra, General Motors Co. (GM)
Heather Bresch, Mylan Inc.
Ursula M. Burns, Xerox Corp.
Debra A. Cafaro, Ventas Inc.
Susan M. Cameron, Reynolds American Inc.
Safra A. Catz, Oracle Corp. (co-CEO)
Lynn J. Good, Duke Energy Corp.
Marillyn A. Hewson, Lockheed Martin Corp.
Lauralee E. Martin, HCP Inc.
Gracia C. Martore, TEGNA
Marissa Mayer, Yahoo Inc.
Carol Meyrowitz, TJX Companies, Inc.
Beth E. Mooney, KeyCorp

January 2016

Denise M. Morrison, Campbell Soup Co.

Indra K. Nooyi, PepsiCo, Inc.
Phebe N. Novakovic, General Dynamics Corp.
Debra L. Reed, Sempra Energy Corp.
Barbara Rentler, Ross Stores Inc.
Virginia M. Rometty, International Business Machines (IBM)
Irene B. Rosenfeld, Mondelez International Inc.
Meg Whitman, Hewlett-Packard Enterprise
Upcoming Changes
Meyrowitz will be stepping down as CEO of TJX
Companies, Inc. and will move into the role of executive
chairman for at least three years on January 31, 2016.

Methodology: This list is based on the S&P list of companies

published by Dow Jones from October 2014. Whenever possible,
we update our list throughout the year whenever a woman
becomes CEO or departs a CEO position at any of the listed
companies. Women are counted in our list starting on the date
they officially take over their positions. We strive to keep this list
accurate and timely; if you have found that we have missed
something, or have any questions, please submit that information
here: http://www.catalyst.org/what-we-do/services/ask-catalyst.
Catalyst also maintains an historical list of women CEOs that
have appeared on the Fortune list from 1972-2014. If you would
like a copy of the list, please submit a request
here: http://www.catalyst.org/what-we-do/services/ask-catalyst.
How to cite this product: Catalyst. Women CEOs of the S&P 500.
New York: Catalyst, November 18, 2015.
Petrobras cuts investment by USD 32 billion
SOPAULO, January 13, 2016
Petrobras will cut its five-year investment plan by USD 32 billion,
Brazils semi-public multinational energy firm announced on

January 2016

The company intends to invest USD 98.4 billion between 2015

and 2019, a 25% decrease from its planned USD 130.3 billion. It
will also cut capital spending and slow its oil production from 2.19
million to 2.15 million bopd this year.
The decision comes during the continued fall-out of Petrobras
bribery scandal in 2014, in which at least USD 3 billion was stolen
from the firm and key members of government, including the
president, were implicated. The development contributed to the
companys USD 104 billion of debt, forcing it to put assets on
Petrobras has been working continuously to fine-tune its
business plan and adapt it rapidly to the changes in the business
environment, the company said in a statement.
China planning to build floating nuclear power plant
Beijing aims to increase its installed atomic power capacity to 58
gigawatts by 2020, when another 30 gigawatts are scheduled to
be under construction

The use of nuclear power at sea for civilian purposes appears to

be unprecedented, although a Russian project is reportedly
already under construction.


January 2016

Beijing: China is planning to build a floating nuclear power

station as it seeks to double its atomic capacity by 2020, a senior
official said on Wednesday.
Authorities are making plans for a marine floating power station,
which will go through strict and scientific demonstration, said
XuDazhe, chairman of China Atomic Energy Authority.
China is devoted to building itself into a maritime power and so
we will definitely make full use of ocean resources, he told a
press conference.
The use of nuclear power at sea is not unknown aircraft
carriers and missile submarines are often nuclear-powered but
doing so for civilian purposes appears to be unprecedented,
although a Russian project is reportedly already under
Beijing included the development of two marine nuclear power
plants, to be built by China General Nuclear Power Corporation
(CGN) and China National Nuclear Corporation (CNNC)
respectively, in its 13th five-year plan for 2016-2020, the two
companies announced earlier this month.
The CNNC plant is expected to start operation in 2019 and CGNs
the following year, according to their statements.
They could provide power for offshore oil and gas drilling
platforms, island development and remote areas, both firms said.
Beijing is at loggerheads with neighbours including Japan and the
Philippines over territorial rows in the East and South China Seas,
and has alarmed rivals with its massive reclamation and
construction of facilities on disputed reefs.
China currently has 30 nuclear reactors in operation, with a
capacity of 28.3 gigawatts, Xu said. Another 24 reactors capable
of generating 26.7 gigawatts are under construction, Xu added.


January 2016

Beijing has said it aims to increase its installed atomic power

capacity to 58 gigawatts by 2020, when another 30 gigawatts are
scheduled to be under construction.
China suspended approvals of new plants following the disaster
at Japans Fukushima nuclear power plant after a tsunami struck
in March 2011.
But it resumed approvals in 2012, despite a warning the same
year from the environmental ministry that the countrys nuclear
safety situation was not optimistic.
Siemens to buy engineering simulation software supplier CDadapco
01.25.2016 |
CD-adapco is a global engineering simulation company with
software solutions covering a wide range of engineering
disciplines including fluid dynamics (CFD), solid mechanics
(CSM), heat transfer, particle dynamics, reactant flow,
electrochemistry, acoustics and rheology.
Siemens and CD-adapco have entered into a stock purchase
agreement for the acquisition of CD-adapco by Siemens, the
companies announced on Monday.
The purchase price is $970 million.
CD-adapco is a global engineering simulation company with
software solutions covering a wide range of engineering
disciplines including fluid dynamics (CFD), solid mechanics
(CSM), heat transfer, particle dynamics, reactant flow,
electrochemistry, acoustics and rheology.
Last fiscal year, CD-adapco had over 900 employees and
revenue of close to $200 million with software-typical double-digit

January 2016

On average, CD-adapco increased its revenue at constant

currencies by more than 12% annually over the past three fiscal
years, officials said. Siemens expects this business to continue to
experience strong growth in the future.
As part of its Vision 2020, Siemens is acquiring CD-adapco and
sharpening its focus on growth in digital business and expanding
its portfolio in the area of industry software," said Klaus Helmrich,
a managing board member at Siemens. "Simulation software is
key to enabling customers to bring better products to the market
faster and at less cost.
"With CD-adapco, were acquiring an established technology
leader that will allow us to supplement our world-class industry
software portfolio and deliver on our strategy to further expand
our digital enterprise portfolio," he added.
CD-adapco is a global engineering simulation company with a
unique vision for multidisciplinary design eXploration (MDX).
Engineering simulation provides the most reliable flow of
information into the design process, which drives innovation and
lowers product development costs, the company says.
CD-adapco simulation tools, led by the flagship product STARCCM+, allow engineers to discover better designs, faster. CDadapco now has over 3,200 customers worldwide, and its
software is currently used by 14 of the 15 largest carmakers, by
all of the top 10 suppliers to the aerospace industry and by nine of
the 10 largest manufacturers in the energy and marine sectors.
I am pleased for both the employees and the customers of CDadapco," said CD-adapco CEO Sharron MacDonald. "The
opportunities that come with the acquisition by Siemens are
endless. The vision of our founders will be realized in
the integration of
manufacturing technologies and a business strategy that will

January 2016

allow engineering simulation to impact more products and

companies than ever before.
CD-adapco is headquartered in Melville, New York, and has 40
locations worldwide. Siemens expects synergy impact on EBIT to
be in the mid-double-digit million range within five years of
closing, mainly from revenue. Closing of the transaction is subject
to customary conditions and is expected in the second half of
fiscal year 2016.
CD-adapco will be integrated into the PLM software business of
Siemens digital factory (DF) Division. DF is the industry leader in
automation technology and a leading provider of Product
Lifecycle Management (PLM) software.
By adding advanced engineering simulation tools such as CFD
to our portfolio and experienced experts in the field to our
organization, were greatly enhancing our core competencies for
model-based simulation that creates a very precise digital twin of
the product, said Anton Huber, CEO of the digital factory division
at Siemens.
Iran Kicks Off Plan to Boost Oil Exports as Sanctions Lifted
Iran is beginning efforts to boost oil production and exports amid
a global supply glut after the removal of sanctions that shackled
its economy and capped crude sales.
The Persian Gulf country is targeting an immediate increase in
shipments of 500,000 barrels a day, Amir HosseinZamaninia,
deputy oil minister for commerce and international affairs, said
Sunday in an interview in Tehran. Iran plans to add another half
million barrels within months. The additional crude will push
prices lower when it enters markets that are already oversupplied,
said Robin Millsof Dubai-based oil consultant Qamar Energy.


January 2016

The oil ministry, by ordering companies to boost production and

oil terminals to be ready, kicked off today the plan to increase
Irans crude exports by 500,000 barrels, the official Islamic
Republic News Agency reported. Zamaninia said the plan is still
valid and will be done in a managed way to minimize the
negative impact on prices.
Buyers of Iranian crude are free to import as much of its oil as
they want after the International Atomic Energy Agency
determined that the country had curbed its ability to develop a
nuclear weapon. As holder of the worlds fourth-largest reserves
of crude and biggest deposits of natural gas, Iran gains
immediate access to about $50 billion in frozen accounts
overseas, funds the government says it will use to rebuild
industries. The end of sanctions also opens the door to foreign
investors such as Total SA and EniSpA.
Benchmark Brent crude has dropped 23 percent this year and lost
as much as $1.27 on Monday to trade at $28.53 a barrel at 9:34
a.m. in London, amid oversupply and the looming surge in Iranian
output. Gordon Kwan, a Hong Kong-based analyst at Nomura
Holdings Inc., said by e-mail that prices may drop as low as $25 a
barrel on the same day.
Knee-Jerk Reaction
Prices will probably show a knee-jerk reaction, falling on
Monday before recovering to more than $30 a barrel later in the
week, Eugen Weinberg, Commerzbank AGs head of
commodities research in Frankfurt, said by telephone. There is a
real oversupply in the market, but I think thats already reflected
correctly in the price.
Once the second-biggest producer in the Organization of
Petroleum Exporting Countries, Iran is now fifth-biggest in the 13member group. It produced 2.7 million barrels a day in December,
data compiled by Bloomberg show. Oil exports fell to an average
of 1.4 million barrels a day in 2014 from 2.6 million barrels daily in
2011, the year before the U.S. and European Union intensified

January 2016

sanctions, the U.S. Energy Information Administration said in

Volumes Uncertain
Theres still the cloud of uncertainty around how much Iranian
crude will come to market and when, said Mills, Qamar Energys
chief executive officer. The impact more Iranian barrels will have
on prices will depend on how aggressive the country is in offering
discounts and how quickly it ramps up sales, he said. Mills
expects Iran can raise output by 600,000 a barrels a day over the
next six months and add as much as 800,000 barrels of daily
output this year.
Morgan Stanley too sees production increasing by 600,000
barrels a day in the first half of the year, though the longer-term
outlook is less clear due to Irans uncertain investment
environment, the bank said in an e-mailed report. JBC
Energy GmbH expects Iran to boost output more slowly, by
255,000 barrels a day in 2016, it said in an e-mailed note.
Iran will probably start increasing exports by selling barrels it
stockpiled on tankers in the Persian Gulf in anticipation of the
deal. About 18 Iranian tankers are holding 12 million barrels of
crude and 24 million barrels of condensates, according to the
International Energy Agency.
Not Sustainable
We do expect to see a substantial increase in exports over the
coming weeks as Iran ships out the crude it had held in floating
storage, JBC Energy said. However, this quick boom is not
expected to be sustainable, and we see exports increasing by an
average of 450,000 barrels a day over the year.
Irans longer-term challenge will be to restore oil production, and it
hopes to attract more than $100 billion of investment to revitalize
ageing fields. The country plans to raise output capacity to 5.7
million barrels a day by the end of 2020, helped by new

January 2016

RoknoddinJavadi, managing director of state-run National Iranian

Oil Co., said in an interview in Tehran in November.
Exclusive: China buys first U.S. crude cargo since end of
export ban source
Thu Jan 14, 2016 | 10:57 PM EST

A customer gets the tank of her car filled at a Sinopec gas station
in Qingdao, Shandong province September 11, 2014.
By Jonathan Leff
(Reuters) - Chinas state-run oil refiner Sinopec Corp has
purchased its first ever batch of U.S. crude oil for export, a
source told Reuters on Thursday, a landmark transaction after
the ending of a four-decade ban on domestic exports.
The cargo, due to be loaded from a Gulf Coast port in March,
may mark the start of a sustained flow of U.S. oil to China, the
worlds second-largest buyer, which is eager to diversify its
energy sources. Unipec, its trading arm, also has the advantage
of leased oil storage tanks in the Caribbean, which could allow
it to blend U.S. shale with cheap, heavy Latin American crudes
for a bespoke mix ideally suited to its plants back home.

January 2016

While the first unfettered exports of domestic crude have

already set sail to Europe, those cargoes are generally seen as
one-off shipments by companies eager to make a point after
fighting for two years to end the ban. Based on current U.S. and
world prices, the cargoes do not appear profitable, traders said.
With China, the calculations are less straightforward. As the
world's second-biggest oil refiner, Sinopec buys more crude oil
than almost any other company, and has worked to improve its
supply security by seeking out diverse sources.
U.S. crude oil exports are positive news for the global market,
and make it possible for Asia-Pacific refiners to diversify their
supply if the crude is economically competitive," a company
source said. "Our upcoming storage capacity in the Caribbean
is well-suited to this development.
The source declined to comment on any further details of the
transaction, including the variety of crude, price or supplier.
A Sinopec Corp representative said the company does not
comment on specific deals.
Due to shipping limitations along the Gulf Coast, it is likely to be
around 600,000 barrels, a relatively tiny sum equivalent to
about two hours' worth of China's overall imports. That would
make it worth about $20 million, too small to put a serious dent
in a $30 billion a month trade deficit with China.
Marathon Petroleum to combine 2 Texas refineries
Two Texas refineries will be combined by Marathon Petroleum
next year to become the second-largest refinery in North America,
according to the company. The company's Galveston Bay and
Texas City refineries will be integrated, resulting in a combined
facility with a capacity of 585,000 barrels per day. Argus Media
New York, 3 December (Argus) Marathon Petroleum will begin
shutting underperforming units next year as it integrates two

January 2016

Texas City, Texas, refineries into the second-largest refinery in

North America.
A five-year, $2bn series of projects will combine the 475,000 b/d
Galveston Bay and 80,000 b/d Texas City refineries to a single
585,000 b/d facility, the company said today.
The company plans to next year begin shutting catalytic cracking
unit 1, one of three gasoline blendstock-producing units of its kind
at Galveston Bay. Marathon will later shut heaters at its older
Texas City refinery as it integrates steam production, and then
shut down reformer and aromatics units at the same refinery in
Marathon will revamp a heavy crude unit, adding 40,000 b/d of
capacity and improving gas oil and distillates yields. It will
upgrade a resid hydrotreater, adding 20,000 b/d of capacity to
bring it to 90,000 b/d. It will also add a new ultra-low sulfur diesel
(ULSD) hydrotreater to shift the facility to 100pc ULSD production
and increase finished distillates output to 65,000 b/d.
Marathon purchased the refinery and other Gulf coast assets from
BP in 2012 for $598mn. BP at the time said it would cost too
much to add light, sweet domestic crude processing to the facility.
The refinery also struggled to keep all of its gasoline-producing
fluid catalytic cracking (FCC) units operating consistently.
Marathon sees the refinery as half of its two-pronged waterborne
gasoline strategy in the US Gulf coast. The US independent
refiner uses its Texas City assets in conjunction with its 562,000
b/d refinery in Garyville, Louisiana, to supply Gulf coast markets
including Florida and growing export demand. Marathon plans to
through logistics projects reach 395,000 b/d of gasoline export
capacity by the end of 2017 and to push to 500,000 b/d of
capacity by the end of 2018.


January 2016

Oil producers struggle to plug budget holes torn by price

AFP/File / by Antonio Rodriguez | Austerity measures, loan
negotiations and state asset sales are all on the menu of moves
deployed to counter the brutal nosedive in the oil price
PARIS (AFP) Oil producing countries are scrambling to fill gaping holes in their
budgets torn by crashing petroleum prices, with some turning to
international lenders for help and others slashing spending.
Austerity measures, loan negotiations and state asset sales are
all on the menu of moves deployed to counter the brutal nosedive
in the oil price, with West Texas Intermediate currently below $30
a barrel and Brent just above -- a drop of about 70 percent since
June 2014.
"These are bad times for oil producers and their creditors,"
Gabriel Sterne, head of global macro research at Oxford
Economics, said in a note.
National budgets need to adjust further, financial buffers are
inadequate and proper adjustment to the new situation may be
delayed by weak governance, he warned, calling the assessment
In Russia, which depends on oil and gas sales for half of
government revenues, Economy Minister Alexei Ulyukayev on
Tuesday warned that his country's budgetary situation was
"critical" and that it was now urgent to implement a privatisation
programme that is expected to feature sales of stakes in stateowned companies such as oil giant Rosneft.
"It is no longer possible to wait," he said, just as Russia -- a top
global producer -- was pumping oil at record levels to offset falling
prices with increased volumes.
The government in Moscow has already admitted that tumbling oil
prices will push it to slash spending as it struggles to keep the
deficit to under three percent of gross domestic product.

January 2016

- 'A source of risk' "Government deficits are growing strongly. And to maintain social
peace and military spending, producer countries are in no position
to cut public spending," said Olivier Garnier, chief economist at
Societe Generale.
Trying to reduce spending regardless would be "a source of risk",
he told AFP.
Last month, the International Monetary Fund warned that the
sharp collapse in the price of oil is proving more of a drag on the
global economy than a stimulus, pointing to the dire budgetary
situation that oil exporting countries now find themselves in.
There are big differences between the various oil-exporting
countries, many of whom had accumulated vast dollar reserves
while the going was good in the commodities markets.
But even the world's biggest exporter, Saudi Arabia, is feeling the
The kingdom reported this week that its fiscal reserves dropped to
a four-year low of $611.9 billion last year, from $732 billion in
2014, as the government sought to finance a budget deficit
caused by plunging oil revenues.
In December, Saudi Arabia had reported a record deficit and
announced austerity measures, including cuts to fuel subsidies.
African producer Nigeria, meanwhile, boasting no such reserves,
is seeking loans from the World Bank, the African Development
Bank and other lenders to help cover this year's massive budget
deficit, the government and bank officials said on Tuesday.
The budget plan, which includes sharply increased spending to
stimulate the economy, calls for 1.8 trillion naira ($9 billion) to be
covered by borrowing from multilateral organisations -- which the
government believes is the cheapest funding option.
The possibility for cash-strapped nations like Nigeria to get a
friendly hearing from global lenders means that situation is

January 2016

perhaps not yet dramatic, according to Ludovic Subran, chief

economist at Euler Hermes.
"Today, exporters in Africa have enough foreign reserves for at
least another year. The others are being helped by international
institutions," he told AFP.
- Limited room for manoeuvre Maybe so. But while some countries may obtain "soft loans" to
tide them over, other credit lines come with strings attached,
notably austerity measures or forced asset sales -- and therefore
the danger of social trouble from already impoverished
"The room for manoeuvre is very limited. Growth is slowing and
adjustment is very costly because of austerity and the recession,"
Christine Rifflart, an economist with French think tank OFCE said
in a recent report.
Venezuela, which is sitting on the biggest known oil reserves from
which it derives 96 percent of its foreign revenues, has been
devastated by the drop in prices.
"The economic crisis in Venezuela will deepen," analysts from
research group Capital Economics wrote in a recent note. "In the
absence of a renewed rebound in oil prices a government debt
default looks increasingly likely."
Increasingly desperate, the South American country's oil minister,
Eulogio del Pino, last week started a whistle stop tour of Russia,
Qatar, Iran and Saudi Arabia to lobby in favour of measures to
stop the price decline.
But several OPEC countries, lead by Saudi Arabia, have resisted
calls to cut production, preferring to defend their market share
rather than prices.
by Antonio Rodriguez
2016 AFP

January 2016

CNOOC flows first oil from 2 Beibu Gulf Basin projects in

South China Sea
February 2, 2016.
China's CNOOC Ltd commenced production from the Weizhou
12-2 oilfield joint development project and the Weizhou 11-4
North oilfield Phase II project, both located in the Beibu Gulf
Basin of the South China Sea. The Weizhou 12-2 project, which
lies in an average water depth of approximately 118 feet (36
meters), has three oilfields, comprising the Weizhou 12-2 oilfield,
the Weizhou 12-1 West oilfield and the north part of Weizhou 112 oilfield. CNOOC indicated that the main production facilities
include three wellhead platforms and 18 production wells,
currently producing a total of 16,000 barrels of crude oil per day
and reaching its designed peak production. Meanwhile, the
Weizhou 11-4 North project -- situated in average water depths of
around 131 feet (40 meters) -- shares the existing adjacent
facilities for the development. Facilities for the project consisted of
two wellhead platforms and 15 producing wells. The Chinese
state-owned firm revealed that only one well is currently in
operations, producing around 500 barrels of crude oil per day and
peak production of approximately 8,000 barrels per day is
expected from the project within the year. The company
announced the commencement of first oil from the Kenli 10-4 field
in the South of Bohai. (www.rigzone.com)
Kuwait to set up company to run refinery complex
January 31, 2016.
Kuwait's National Petroleum Company (KNPC) said it will set up a
new company to run its planned alZour refinery and
petrochemical complex which, when built, will be the biggest in
the Middle East. The new company, KBRC, will also manage a
planned permanent liquefied natural gas (LNG) import terminal,
KNPC Chief Executive Mohammed al-Mutairi said. He said that
setting up KBRC would allow the independent management of the
projects under one structure. Mutairi said that commissioning of
the 615,000 barrel per day refinery was expected to start in

January 2016

November 2019. Contracts to build the 3 billion cubic feet per day
LNG import terminal were expected to be awarded early this year.
Canada imposes further delays on two major pipeline
January 27, 2016.
Canada announced new interim rules for environmental reviews
that will impose delays on two projects - TransCanada Corp's
Energy East pipeline and Kinder Morgan Inc's expansion of its
Trans Mountain Pipeline. The Liberal government issued the rules
on the grounds that public trust needed to be restored in the
process for assessing big energy projects. Proponents say that
after U.S. President Barack Obama's denial of the Keystone XL
pipeline, all-Canadian projects are needed so the country's oil can
reach its east and west coasts and fetch higher prices abroad.
The rules are designed to take greater account of environmental
impacts and indigenous groups' view for the two pipelines, which
are opposed by environmentalists and some communities but
backed by industry. Environment Minister Catherine McKenna
said the government would separately calculate direct and
upstream greenhouse gas emissions linked to the projects.
Enbridge to buy some Murphy Oil gas plants in British
January 27, 2016.
Enbridge Inc, Canada's largest pipeline company, said it would
buy Murphy Oil Corp's Tupper Main and Tupper West gas plants
in northeastern British Columbia for C$538 mn ($382 mn). The
deal includes the sale of plants capable of processing up to 320
million cubic feet per day, Enbridge said. The assets would boost
its natural gas footprint in Montney, one of the most attractive gas
plays in North America, the company said. The transaction, which
is between Murphy Oil's Canadian unit Murphy Oil Co Ltd and

January 2016

Enbridge unit Enbridge G&P Ltd Partnership, is expected to close

in the second quarter. Murphy Oil said that it would buy working
interests in some of Athabasca Oil Corp's assets in Alberta for
C$475 million. (www.reuters.com)
Suncor takes $2-billion loss for 2015, sheds more 2016
HOUSTON, 02/04/2016, By OGJ editors
Suncor Energy Inc., Calgary, has cut its capital guidance for 2016
to $6-6.5 billion from $6.7-7.3 billion reported in November (OGJ
Online, Nov. 18, 2015).
The additional reduction follows a net loss in 2015 of $1.995
billion, compared with earnings in 2014 of $2.699 billion.
During the fourth quarter, the company took a net loss of $2.007
billion, compared with earnings of $84 million in fourth-quarter
Suncor attributes the fourth-quarter loss to noncash asset
writedowns, a result of the depressed commodity cycle and a
foreign exchange loss on US dollar denominated debt.
In January, Suncor and Canadian Oil Sands Ltd. (COS) reached
an agreement in which COS and its board support Suncors offer
to purchase all of the shares of COS for 0.28 of a share of Suncor
stock for each COS share (OGJ Online, Jan. 28, 2016). The deal
was valued at $6.6 billion at the time of the agreement.
We are pleased that the board of COS is supporting our offer,
said Steve Williams, Suncor president and chief executive officer.
Operations update
Companywide upstream production during the quarter was
582,000 boe/d, compared with 557,600 boe/d in the prior year
quarter. Oil sands production in the quarter increased to 439,700
b/d, compared with 384,200 b/d in the prior year quarter.

January 2016

In its previously announced guidance, Suncor said it expected a

slight decline in oil sands output in 2016 due to significant
planned maintenance activities scheduled at various facilities,
including its first 5-year full turnaround at the U2 upgrader near
Fort McMurray, Alta. and major maintenance at the Firebag in
situ project (OGJ Online, Oct. 23, 2012).
The company during 2015 continued to focus on well pad
construction to sustain existing production at Firebag and the
MacKay River oil sands project, and completed debottlenecking
activities at Firebag, increasing nameplate capacity to 203,000
b/d from 180,000 b/d.
The Fort Hills oil sands project, where Suncor boosted its stake
by 10% in 2015 (OGJ Online, Sept. 21, 2015), remains on
schedule with construction more than 50% complete at the end of
the fourth quarter. Startup is expected in fourth-quarter 2017.
Construction of the Hebron heavy-oil project continued in the
quarter, with production startup expected in late 2017. Effective
Jan. 1, working interests in Hebron have been reset. As a result,
Suncors working interest in the project decreased to 21% from
22.7%, with the company to be reimbursed for costs incurred to
Dec. 31, 2015.
Development drilling at the Golden Eagle Area Development in
the central North Sea continued through the quarter (OGJ Online,
Nov. 3, 2014). Exploration drilling at the deepwater Shelburne
basin offshore Nova Scotia commenced in the quarter and will
continue during 2016 (OGJ Online, June 11, 2014).
IEA See Global Oil Glut Worsening. OPEC Deal Unlikely
Reuter, Feb 9, 2016
The world will store unwanted oil for most of 2016 as declines in
U.S. output take time and OPEC is unlikely to cut a deal with

January 2016

other producers to reduce ballooning output, the International

Energy Agency said.
The agency, which coordinates energy policies of industrialised
countries, said that while it did not believe oil prices could follow
some of the most extreme forecasts and fall to as low as $10 per
barrel, it was equally hard to see how they could rise significantly
from current levels.
The Paris-based IEA trimmed its forecast for 2016 oil demand
growth, which now stands at 1.17 million barrels per day (bpd)
following a five-year high of 1.6 million in 2015.
It cut its call on OPEC crude for 2016 by 100,000 bpd to 31.7
million bpd. That figure is much lower than OPEC's January
output of 32.63 million bpd.
"Persistent speculation about a deal between OPEC and leading
non-OPEC producers to cut output appears to be just that:
speculation. It is OPEC's business whether or not it makes output
cuts either alone or in concert with other producers but the
likelihood of coordinated cuts is very low," the IEA said.
Oil prices collapsed over the past 18 months to below $30 a
barrel from as high as $115 as OPEC opened its taps to drive
higher-cost producers such as U.S. shale companies out of the
Low oil prices have spurred global demand but it was not enough
to absorb all crude produced. As a result, unwanted oil went into
storage, leading to record global stockpiles of over 3 billion
U.S. shale oil output has started to decline because of low prices
and OPEC has said it sees the market rebalancing sometime
later in 2016 when demand finally meets supply.


January 2016

But the IEA said supply may still exceed demand throughout the
whole of 2016 and added it saw non-OPEC output falling by just
0.6 million bpd in 2016.
"The number could be higher of course and many senior
international oil company figures have said so but there is a
lingering feeling that the big fall-off in production from U.S. shale
producers is taking an awful long time to happen. Perhaps
resilience still has some way to go," the IEA said.
The agency also said it saw the dollar remaining strong as it
benefits from its safe-haven status, meaning more downward
pressure on oil prices.
With weaker global oil demand, likely new gains in Iraqi, Iranian
and Saudi output, low chances of an OPEC deal, resilient U.S.
production and a strong dollar - the IEA said the global oil glut
was only poised to worsen.
It said that even if OPEC production remained flat, global stocks
would build by 2 million bpd in the first quarter, followed by a 1.5million-bpd build in the second quarter.
"Supply and demand data for the second half of the year
suggests more stock building, this time by 0.3 million bpd. If these
numbers prove to be accurate, and with the market already
awash in oil, it is very hard to see how oil prices can rise
significantly in the short term. In these conditions the short-term
risk to the downside has increased.
(Reporting by Dmitry Zhdannikov; Editing by Dale Hudson and
Jason Neely)


January 2016

Raymond James: For oil field services companies, 2016 will
be a roller coaster ride
Posted on January 4, 2016 | By Rhiannon Meyers
New energy CEOs in 2015

Aaron M. Sprecher / Bloomberg

Cheniere CEO CharifSouki was ousted in December 2014. The
company is searching for his replacement.
The new year will usher in more tough times for oil field services
companies, as penny-pinching exploration and production firms
curtail their spending in the oil patch deeper than once expected,
according to a new analysis.
Although oil markets are expected to mount a recovery in the
second half of 2016, the first part of the year will prove to be
difficult for oil field services providers that have already been
struggling with a dramatic collapse in oil patch activity.


January 2016

Look for a roller coaster ride in early 2016 for oil field services,
followed by outsize gains in the second half, Raymond James
analysts wrote.
That retreat from U.S. oil fields will continue for the next few
months, as cash-strapped companies, with dwindling options for
obtaining financing, ratchet back their spending plans through at
least the second quarter of 2016 as they wait for a significant
rebound in crude prices. Raymond James said it now expects
annual oil field spending to fall 42 percent amid skinny E&P cash
flows and a non-existent debt market, analysts wrote in a
morning note to investors. (Although, the analysts noted, a
surprise uptick in oil prices could dramatically change spending
habits, with a small $5-a-barrel swing in crude translating into a
20 percent shift in cash flows).
They predict the U.S. rig count will continue falling over the next
six months, with drillers expected to sideline another 150 rigs by
mid-year. That pullback could cause the rig count to fall to 550
before shale plays begin to see an uptick in activity again, a
dramatic decline that implies a much uglier fundamental year
than current consensus estimates, Raymond James analysts
wrote. The rig count should pick up again in the second half of the
year as production declines draw down the global glut of crude,
and help support higher oil prices.
Raymond James says drillers will add 200 rigs between June and
December, with the recovery accelerating in 2017, when
Raymond James expects 463 more rigs to head back to work.
Still, the analysts warned that the rebound in oil field activity will
trail an uptick in spending.
Labor and service availability likely becomes a major constraint
on the ability to meet activity demand, the analysts wrote. This
should be compounded by oil field service pricing increases as
the market for services gets tighter.

January 2016

Any additional declines in activity and rig count, even if shortlived, spells more trouble for services companies, which have
seen their earnings pummeled in the past year. Companies best
positioned to ride out the prolonged slump are the bigger, more
well-known names with dominant market share and clean
balance sheets, the analysts said.
Categories: featured, Oil field services
Tags: crude oil | oil field services | oil prices | Raymond James
Finally Flexing Energy Muscle on Global Stage
Fuelflix, January 12, 2016 | By Brigham McCown
Two weeks ago, an oil tanker carrying a shipment of crude oil
from the Eagle Ford Shale left the Port of Corpus Christi for Italy.
Not long after, the first crude movement from the Houston Ship
Channel departed for Switzerland late last week. These moves
are historic for the U.S., as it comes less than a month after the
federal government authorized the reversal of a 40-year ban on
crude oil exports.
Americas inability to export its crude oil since the 1970s has
sidelined its potential on the global energy stage. In the last five
years, weve surpassed both Saudi Arabia and Russia as the
worlds largest producer of oil and natural gas, and its only
appropriate that we now take full advantage of this impressive
feat. The benefits are too significant to ignore.
Trading energy resources in the global marketplace can help
strengthen diplomatic alliances. Until recently, the U.S. was
forced to sit idly by while Allies in Europe and East Asia grew
increasingly dependent on energy resources from parts of the
globe seeded with political turmoil. From the European Unions
(EU) reliance on Russian oil and gas reserves, to South Korea
and Japans near 90 percent dependence on imports originating
in the Middle East, it has long been clear: U.S. crude oil and gas

January 2016

exports will bolster security and allow for stronger relationships

with our allies moving forward.
The potential for advancements abroad as a result of stable
energy supply to our allies is undoubtedly impressive. But it is the
economic growth here at home that will be felt the most by
As a result of the newfound abundance in oil supplies and
diminished storage capacity, our nations oil and gas industry
responsible for 9.8 million jobshas had no choice but to slow
production in recent months. While lower energy prices are proof
that the basic economic tenant of supply and demand still works,
the country finds itself locked in a price war with other nations
who would like to see the American energy renaissance falter.
But according to analysis conducted last year by Columbia
University, U.S. crude exports could increase domestic production
of crude oil by as much as 1.2 million barrels daily through 2025.
Such would help cement the rejuvenation of an industry that will
ensure the economic success of the country.
Several other studies conducted over the last year concur with
this same equation. Most notably, last year the Aspen Institute
projected that domestic crude oil exports will lead to as many as
1.3 million direct and indirect supply chain jobs by 2020. An
estimated 400,000 of these opportunities are expected to pop up
specifically in our nations minority communities, resulting in
desperately needed economic development for struggling
The forecast for the overall economy is just as bright. According
to research conducted by ICF International and EnSys Energy,
the impact could be much as $20 billion generated by 2020. And
separate analysis by the non-partisan Congressional Budget
Office late last year suggested crude exports would create $1.4
billion in economic revenue between 2016 and 2025.


January 2016

Study after study confirms that ending this outdated policy makes
sense for the economy. Now that the first tankers carrying
American crude oil have set sail for foreign coastlines, the country
is finally poised to effectively compete with countries such as
Saudi Arabia and Russia. By realizing the countrys full energy
potential in the global marketplace, the U.S. is poised to be an
energy force to be reckoned with for decades to come.
Analysts: Global oil, gas M&A to rise in 2016 as companies
shed assets
Oil and gas producers should see an increase in deals this year
as cheap crude prices and limited funding options force debtsaddled energy companies to sell assets, according to consultant
An uncertain oil price outlook discouraged M&A last year, with the
value of transactions falling 22% to $143 billion, despite the boost
from Royal Dutch Shells agreement to take over BG Group, IHS
said in a report on Wednesday. The deal pace will probably pick
up as energy companies face further financial pain after a 35%
drop in Brent prices last year.
Oil and gas producers with heavy debt burdens and hedges
rolling off in 2016 will become increasingly vulnerable,
Christopher Sheehan, director of energy M&A research at IHS,
said in the report. They will either have to dispose of prized
assets, face serious restructuring -- including the potential for
bankruptcy -- or become takeover targets in 2016.
The number of deals almost halved in 2015 to the lowest level
since 2001 while big, unsolicited takeover bids were rejected, the
report showed. Other than the Shell purchase, there were no
corporate takeovers exceeding $5 billion, it said.

January 2016

Scaled Back
Chinese oil companies spent less than $5 billion on acquisitions
for the second straight year, while Asian national oil companies
scaled back overseas acquisition spending for the second straight
year, according to IHS. Excluding the Shell-BG deal, North
America accounted for about 60% of global upstream value for
the second year.
The likelihood for wider consolidation in the oil and gas industry
will increase in 2016 as producers face further financial pain and
will have more constrained financing options due to persistently
weak oil prices, Sheehan said.
National oil companies in Asia will probably resume purchases
with PetroChina Co. and Oil & Natural Gas Corp. of India among
potential buyers, Sanford C. Bernstein & Co. said in November.
Weak oil markets prompt Saudi leaders to make quicker
01.08.2016 | By BEN HOLLAND, Bloomberg

Saudi Arabia, one of the most tradition-bound societies on the

planet, where family structure and tribal patriarchy differ little from
a century ago, is suddenly in a hurry. It has done more in the past
week than in most years.
Over eight days, it has executed dozens of militants, severed ties
with Iran and announced numerous steps for a radical rollback of

January 2016

the state that may include privatizing oil giant Saudi Aramco,
among the worlds largest companies.
The flurry of action, a result of tumbling oil prices, shifting US
interests and regional turmoil threatening rulers across the Middle
East, appears to be the largely the work of Prince Mohammed bin
Salman, the 30-something son of King Salman, in office less than
a year. And while his ambition to modernize has drawn praise,
some fear he is in over his head.
The Saudis had a reputation of being kind of cautious, secretive,
said EckartWoertz, a senior researcher at Barcelona Centre for
International Affairs. Right now there are some concerns about
rash decisions.
Thatcherite Revolution
The biggest bombshell this week: Prince Mohammeds
announcement, in an interview with The Economist, that an initial
public offering in Saudi Aramco may form part of the kingdoms
privatization plans. A decision will be taken in the coming months,
he said.
He called his plans a Thatcherite revolution, like the overhaul of
the UK economy in the 1980s, saying private investors will be
invited to play a bigger role in health care, education and some
defense industries; state land will be sold off; and sales taxes
introduced on consumer goods.
The new government is rapidly abandoning its old slow style, said
Saud Al Tamamy, a political theorist at King Saud University in
In a single day last week, the government announced and
implemented a cut in fuel subsidies, sending drivers speeding to
gas stations and spurring a spate of company statements on how
the change would affect them. In November, an annual fee on

January 2016

undeveloped urban land intended to transform the kingdoms

property market was approved by the cabinet after years of talks.
Some of the reforms bode well for the long-term health of Saudi
Arabia, in the sense that they have shown a willingness to cut
subsidies, to implement taxes, to cut spending, said Allison
Wood, Middle East and North Africa analyst at Control Risks in
Dubai. But on the other hand, these do increase risks for
investors in the sense that theyre often unpredictable and
implemented, as we saw, overnight.
State-run Saudi Aramco confirmed on Friday that it was
considering an initial public offering, which could see the producer
leapfrog Apple as the worlds biggest listed company.
Embassy Burned
Among the Sunni-ruled kingdoms 47 executions, many of which
included convicted terrorists and which were strongly supported
at home, was Nimr al-Nimr, a Shiite cleric and activist on behalf of
the Shiite minority.
Protests erupted throughout the Shiite world, especially in Iran,
where a mob set the Saudi embassy on fire. The Saudi foreign
ministry sent a text message to reporters in Riyadh on Sunday
calling a press conference 30 minutes later to announce it was
cutting ties with Iran. It thus escalated years of verbal sparring
between regional powers on opposing sides of wars in Yemen
and Syria.
Alarms went off in the US and Europe, concerned that efforts to
end those conflicts were set back. Some analysts noted,
however, that the move was aimed partly at the US, that the new
muscular Saudi style results from its feeling abandoned.
The US is and remains their primary security patron, said
RevaBhalla, a geopolitical analyst at the strategic advisory firm
Stratfor in Austin, Texas. But the Iran nuclear deal meant Saudi

January 2016

Arabia would have to take more matters into its own hands,
knowing they couldnt rely on the US exclusively to back up their
Plunging Reserves
Pressure for change is coming from a budget deficit that reached
15% of economic output last year, as oil fell by about two-thirds
from mid-2014 levels. Saudi Arabia has dipped into its savings to
cover the shortfall -- reserves declined for 10 straight months
through November, sometimes at an unprecedented pace.
Investors began to question whether the Saudis would be forced
to devalue their currency, or make an about-turn at OPEC and
sanction production cuts that would push oil prices back up. Saudi
credit-default swaps spiked this week to the highest since the
global slump of 2009, and riyal futures have weakened on
speculation about the dollar peg.
Some wonder whether the economic changes will occur. A few
weeks ago, Prince Mohammed made an unexpected
announcement, telling a hastily assembled press conference that
Saudi Arabia would head an Islamic military coalition of 34
nations to combat terrorism. Several of the countries knew
nothing about it.
Meanwhile, war in Yemen -- still largely under the control of the
Shiite rebels the Saudis are fighting -- is set to drain the same
budget that the kingdom is seeking to shore up. And tensions
over Yemen and Syria, now heightened by al-Nimrs execution
and the severance of ties, wont help efforts to attract the cash
that Prince Mohammeds ambitious plans will require.
Unprecedented Powers
Prince Mohammed came to power with little experience, yet has
titles that put him in control of the army, the oil industry and most
other areas of the economy.

January 2016

Weve seen fairly unprecedented consolidation of power in the

hands of a fairly young prince, according to Wood at Control
Prince Mohammed is seen as the driving force behind many
recent decisions, said Mohammed al-Sabban, a Saudi economist
and former oil ministry adviser. Saudi Arabias new stripped down
decision-making process, with power taken away from a finance
ministry that had previously delayed or blocked reforms, is more
attuned to the nations needs, he said.
The Ministry of Finance is now basically a treasury ministry. It
used to be the ministry of ministries, al-Sabban said.
The other leading figure among the younger generation of Saudi
royals is Prince Mohammad bin Nayef, who as heir to the throne
outranks the other. Prince Mohammed Nayef is a longtime pointman for the US on counter-terror issues and is in charge of
internal security. Primarily, that means the fight against al-Qaeda
and Islamic State, which have sought recruits in the kingdom and
carried out attacks there.
So far theres been no public indication of disagreement between
the kingdoms two rising stars, though there have been mutterings
of unrest among some more junior royals at the changes since
King Abdullahs death a year ago.
Disconcert People
But opening up the economy in the ways proposed by the young
prince may be anathema to Saudi conservatives. The kingdoms
clerics enjoy an exalted status in return for their backing against
radical Islamists such as al-Qaeda who have challenged the Al
Saud familys legitimacy.
People used to express frustration about how things werent
happening fast enough but at the same time these radical
changes disconcert people, said Crispin Hawes, managing

January 2016

director of Teneo Intelligence. There is a more aggressive

attitude about this government on certain issues, which has
created a lot of unease among people used to a certain ways of
doing things.
Former US energy secretary: OPEC grip, surging gas to
shape markets in 2016
12.09.2015 | Adrienne Blume, Hydrocarbon Processing,
By Adrienne Blume
Executive Editor
HOUSTON -- During a breakfast
presentation of The Economist's 30th
global forecast issue on December 9,
Executive Editor of The Economist,
Abraham, Chairman and CEO of The
Abraham Group LLC and former US
energy secretary under George Bush, to
discuss the energy markets in 2016.
With the recent OPEC decision to leave
oil production levels unchanged and
crude oil prices hovering below $40/bbl,
Franklin posed the question:
"What can we expect for the year ahead in energy?"
Abraham (pictured right) noted that, with regard to the cyclical
nature of energy markets and oil prices, it is interesting how the
US perception of commodity markets has changed over the past
year. The consensus used to be that low commodity prices were
a good thing for the economy, but perception has shifted in the
opposite direction since oil prices began falling in 2014.


January 2016

OPEC retains heavy influence on oil market.

Over a year ago, OPEC and the cartel's kingpin, Saudi Arabia,
made a decision to hold onto OPEC's market share in an
oversupplied market.
This decision, made amid dramatic increases in production in the
US and Russia, as well as potential ramp-ups in unconventional
energy output in the US and other nations, brought about a
"dramatic change in [OPEC's] philosophy," Abraham noted.
"The Saudis are trying to build a floor under prices," he said.
The cartel used to be willing to lose some market share to nonOPEC producers, but it is no longer taking that position. As lowercost producers, OPEC nations are forcing higher-cost producers
to take a step back with their new policy.
OPEC's new philosophy could cause oil prices to fall further,
Abraham acknowledged. The world will see significant reductions
in project CAPEX among oil majors, especially for highcost projects, such as those located offshore.
Additionally, the world will see reversing
signals from demand side, such as
slower economic and energy demand
growth in China, and environmental
regulations impacting demand in the
West. These factors will combine to
stabilize or potentially push down energy
demand in the midst of growing supply
After a decade of upward pressure on
prices, the reverse is now happening.
OPEC has evolved with the change in
global oil marketplace, and it is definitely
still a cartel, Abraham opined. OPEC
used to prioritize the maintenance of stability and limited price

January 2016

volatility in the oil market, but market share is now the cartel's
priority, he said.
Gas to surge in 2016.
Natural gas will remain extremely competitive next year,
according to Franklin (pictured left). Abraham noted that the US
has a "nearly unlimited supply" of gas reserves for both domestic
use and export. Cheniere Energy's new LNG export terminal in
Louisiana will mark the start of a new era of US natural gas
exports. A number of other LNG exports projects are "right
behind" Cheniere, Abraham said.
There is also a worldwide impetus toward increasing competition
for more natural gas imports and safer supply sources. The gas
marketplace will remain very competitive in 2016, particularly in
the US, Abraham said.
What about renewables?
The former energy secretary also spoke to the fluctuating appeal
of renewable energies. It is difficult to make renewables attractive
to investors with natural gas at $2/MMBtu, Abraham noted.
Investments in solar energy, wind farms and other renewable
energies are easier to justify when gas prices are higher;
otherwise, it is too expensive for consumers to make these
If gas is allowed to take on a larger role in power generation, it will
supplant coal use and continue to influence transition in fuel
markets, Abraham said. At the same time, the combination of
more nuclear energy, supplemented by renewables, will help to
offset greenhouse gas (GHG) emissions.
Paris climate talks.
Franklin also asked about the state of climate talks in Paris and
the possibility of a carbon tax. Abraham advised breakfast
attendees to look toward the November 2016 US election for
development on carbon taxes and environmental policy changes.

January 2016

US Democrats will push for clean power and Environmental

Protection Agency-generated rules that will affect related
industries, such as oil and gas, Abraham said. While these rules
may not include a carbon tax, they may collectively have a similar
If European economies continue to be soft and the US economy
remains a bit lax, then public support for actions that would
potentially undermine economic growth will not be popular,
Abraham noted.
The world, and in particular the US, needs to embrace nuclear
energy and "tone down some of the climate rhetoric," he
said. Environmental groups and politicians should appeal to
people on a practical, not emotional, level.
Future of Texas O&G.
In closing, Franklin asked Abraham, "What do all of these trends
mean for the Houston and Texas economies in 2016?"
Abraham noted that pricing and commodities cycles are
inevitable, although industry veterans know that they need to
"weather the storm." The Texas oil and gas industry has been
resilient in the face of rapidly fluctuating market conditions, he
As the global energy markets continue to grow and change,
Texas-produced commodities will continue to be highly sought
after. An end to the US ban on crude exports would be helpful. "In
a low-price environment, it's easier to make an argument for that
[scenario]," Abraham said.
Chinas diesel use falls as gas, gasoline post gains
01.25.2016 |
The 3.7% decline in diesel demand in 2015 is greater than the
1.5% drop in diesel usage in 2014. Meanwhile, gasoline and
natural gas consumption rose by 7% and 5.7%, respectively.


January 2016

Diesel use in China dropped 3.7% in 2015 from the prior year,
according to new data made available Monday from the nation's
National Development and Reform Commission.
The decline is greater than the 1.5% drop in diesel usage in 2014.
Meanwhile, gasoline and natural gas consumption rose by 7%
and 5.7%, respectively.
The figures reflect divergent economic trends, as gasoline
demand in the world's top automobile market rises. Meanwhile,
slowing industrial production has hampered the diesel market.
Industrial output in China expanded by 6.1% last year,
representing the slowest pace of growth since at least 1999.
However, China's total vehicle sales are expected to rise a further
6% this year after increasing to a record in 2015.
In a forecast issued last month, the International Energy Agency
(IEA) expects Chinese diesel consumption to stay flat or fall in
2016, while gasoline use will rise by 200,000 bpd. Diesel exports
from China surged 75% last year, representing a record volume.
The 5.7% growth in natural gas was likely driven by a price cut in
November, according to industry analysts, since consumption in
the first 11 months of the year had only risen by 3.7%.
Oil rises, pares losses in January on hopes for production
Reuters Sat 30 Jan, 2016
By Devika Krishna Kumar
NEW YORK (Reuters) - Oil prices rose on Friday, rebounding
more than 25 percent from 12-year lows hit last week and cutting
losses for the month, on prospects of a deal between major

January 2016

exporters to cut production and curb one of the biggest supply

gluts in history.
Oil also drew support from firmer stock markets, lifted by weak
U.S. gross domestic product growth data that raised hopes the
Federal Reserve may slow any planned interest rate hikes. [.N]
The oil market rallied for four straight sessions after a renewed
call from the Organization of the Petroleum Exporting Countries
for joint efforts with rival producers to cut supply triggered a volley
of comments from Russia on a deal with the cartel, something it
had been refusing to do for 15 years.
Brent March futures (LCOc1), which expired on Friday, closed at
$34.74 a barrel, 85 cents or 2.5 percent higher. On Jan. 20, it hit
$27.10, its lowest since November 2003.
U.S. crude (CLc1) settled up 40 cents or 1.2 percent, at$33.62
per barrel, having hit a high of $34.40 in the session.
For the week, Brent was 7.9 percent higher and U.S. crude 4.4
percent higher, paring their monthly losses to 6.8 percent and 9.3
percent respectively.
Both contracts briefly turned negative after the Wall Street Journal
cited an Iranian oil official as saying the country would not join an
immediate OPEC production cut.
Moscow has sent mixed signals, eventually saying veteran
minister Sergei Lavrov, who almost never comments on oil
policies, would visit the UAE and Oman to discuss oil markets.
Cash-strapped Venezuela is also sending its oil minister to
Russia on a tour beginning on Saturday of non-OPEC and fellow
OPEC states.
"The market has rewarded these statements about the possibility
of a deal, even though I think it's ridiculous," said John Kilduff,
partner at Again Capital LLC in New York.
He noted that Iran and Iraq were determined to boost production,
and were unlikely to come together with Saudi Arabia to cut
OPEC output. The Saudis have made no official statement on a
"This is a rally on false hopes, unfortunately"


January 2016

Other analysts said prices may have found a bottom and could
rally as high as $45 by year-end as non-OPEC supply is reduced
and global demand improves.
U.S. oil production fell in November for the second straight month
and U.S. shale producers, who have helped add to the glut, have
slashed 2016 capital spending plans more than expected.
Meanwhile, the U.S. oil drilling rig count fell for the sixth straight
week with more cuts seen, oil services company Baker Hughes
Inc (BHI.N) said.
"With more energy companies announcing cuts and OPEC
contemplating a cut, it looks like oil is forming a bottom," said Phil
Flynn, an analyst at Price Futures Group in Chicago.
"Now the question becomes how high can they go. The charts
look like a test near $40 is on the cards."
In a sign that the market sentiment was improving, hedge funds
raised their bullish bets on U.S. crude oil for the second straight
week, the U.S. Commodity Futures Trading Commission (CFTC)
said. [CFTC/]
"It's something that sub-$30 oil does. It makes some traders
inclined to think that we are have reached or are near a bottom,
so they want to be positioned ahead of it," said Gene McGillian,
Senior Analyst at Tradition Energy in Stamford Connecticut.
(Additional reporting Simon Falush and Dmitry Zhdannikov in
London, Meeyoung Cho in Seoul and Henning Gloystein in
Singapore; Editing by Marguerita Choy and David Gregorio)
Lower oil prices they arent good for everyone


January 2016

Receding oil prices have forced a decrease in drilling in North
Dakotas shale fields, leading to thousands of layoffs
Heres the economic question of the day: Arent lower oil prices
supposed to be a plus for the US economy?
Economists have long equated declines in oil prices to tax cuts,
putting more money into consumers pockets to spend elsewhere,
slashing heat, power, and material costs expenses for firms and
industries, and easing inflation.
Yet, over the past several weeks, financial markets have been in
turmoil, as investors dump stocks amidst concerns about a
worldwide oil glut, plunging oil prices, and slowing global
economy. US stock indexes have plunged as much as 9 percent
since the beginning of the year.
This reaction reflects a changing and more complex world, where
international markets and economies are more closely tied, and
the United States is not only the worlds biggest consumer of oil
and its products, but also now a leading producer.
Many economists insist that investor concerns over collapsing
crude oil prices which fell as low as $27 a barrel last week from
more than $100 per barrel 18 months ago are overblown.
Lower oil prices remain a net plus for most people, Mark Zandi,
chief economist at Moodys Analytics, the forecasting unit of the
bond rating company.
But Zandi and other analysts acknowledge there are always
negatives to wild swings in oil supplies and prices, whether up or
down. Here are some of the pluses and minuses in oils latest
crash, including its impact on local companies.


January 2016

The biggest loser

By far, the biggest losers from falling oil prices are energy
companies exploring, drilling, refining, and delivering crude oil
and other petroleum products. Oil-service companies such as
drillers in the shale fields in North Dakota, Pennsylvania, and
Texas have been the hardest hit.
Haynes and Boone LLP, a Houston law firm specializing in the
energy sector, says that 42 energy firms filed for bankruptcy last
year in the United States and Canada, as companies couldnt
fetch high enough prices to pay creditors. In turn, energy firms
have laid off tens of thousands of workers while leaving behind at
least $17 billion in unpaid loans.
Locally, Global Partners LP, an energy transportation, storage,
and distribution company is hurting like other publicly traded
companies in the energy sector. Global Partners, a Fortune 500
firm, grew quickly as shale oil production boomed in North Dakota
and crude needed to be shipped to ports and refineries. It also
invested heavily in building a network of rail-loading facilities,
storage and barge terminals, and retail gasoline stations.
Global Partners stock fell below $16 a share at one point last
week, down from its 52-week high of $42.74. The company
recently reported that third-quarter revenue last year plunged to
$2.5 billion from $4 billion in 2014, a drop of nearly 40 percent.
A spokesman for Global Partners did not respond to requests for
comment. But company officials in earnings calls blamed
deteriorating conditions in the oil industry.
Rich Hendrick, general manager of the Port of Albany in New
York, where Global Partners owns a large rail, port, and storage
terminal, doesnt need financial reports to see that business is
slowing for Global Partners and other energy firms.


January 2016

Global Partners was shipping oil by barge [down the Hudson

River] at about one per day, Hendrick said, but now its down to
about a barge every other day.
Banks take a hit
A lot of that expensive drilling equipment that opened oil reserves
trapped in shale rock formations needed financing, and many of
the nations largest banks find themselves exposed to billions of
dollars in losses from loans they made to energy companies.
Wells Fargo & Co. of San Francisco has set aside about $1.1
billion to cover potential loan losses. JPMorgan Chase & Co. of
New York has said energy loan losses could top $750 million.
Citigroup Inc. has set aside $300 million to cover potential losses
in its energy lending.
Bank of America, one of the largest banks in the country and the
largest in Massachusetts, has set aside reserves of $500 million
to cover potential losses from the plunge in oil prices. In all, Bank
of America has about $8.3 billion in higher risk loans to oil
exploration and production companies, of which about 35 percent
are considered especially at risk of default.
These higher risk energy loans represent less than 1 percent of
Bank of Americas outstanding loans, but it and other banks are
still on guard.
Were very focused on energy, given the volatility in oil prices,
Paul Donofrio, chief financial officer of Bank of America, told
reporters last week. We are looking at every loan.
Investors, too
The Dow Jones industrial average is down about 8 percent this
month alone, the S&P 500 off about 7 percent, and the Nasdaq
Composite down by about 9 percent. Stocks have tracked oil
prices, falling when crude prices fall and rebounding when oil


January 2016

That pattern is tied directly and indirectly to energy stocks, said

Jeff Knight, head of Global Asset Allocation at Columbia
Threadneedle Investments in Boston. He noted that exchangetraded-funds that track energy stocks within the Standard &
Poors 500 are down about 50 percent since June 2014, when oil
prices exceeded $100 per barrel.
Those losses have a big impact on the broader market because
energy stocks once accounted for about 11 percent of the total
value of all publicly traded companies on the S & P index, he
said. Falling oil prices also affect sectors that provide goods and
services to the industry.
Major banks included in the S&P 500 saw their shares fall by 12.5
percent in the month ending Jan. 19, compared with the indexs
overall slide of 6.2 percent. The reason: Investors fear banks
exposure to loan defaults by energy companies.
On the other hand . . .
Transportation companies, from major airlines to trucking firms,
have benefited from lower fuel prices.
Chris Crean, a vice president at Peter Pan Bus Lines Inc. in
Springfield, said all of his firms 230 buses run on diesel fuel
and the company has enjoyed substantial fuel-cost savings,
though he didnt have specific numbers available.
The price of diesel has fallen to an average $2.24 per gallon in
recent weeks in Massachusetts, down from $2.96 a gallon a year
ago and from an all-time high of $4.92 a gallon in 2008, according
to AAA, the auto-services organization.
Even some railway companies, which have seen a drop-off in
crude-oil deliveries, consider todays lower petroleum prices as a
net plus for the industry because oil is a relatively small part of
what many railways ship.
Cynthia Scarano, executive vice president at Pan Am Railways in
North Billerica, said 15 percent of her rail companys operational

January 2016

expenses are tied to diesel costs. Though she declined to give

dollar figures, she said the savings from lower fuel prices have
improved the companys bottom line and allowed it to spend more
on improving tracks.
The lower prices have really helped us, she said.
Fueling auto sales
Falling gasoline prices have contributed to soaring auto sales and
brought gas-guzzling SUVs back in vogue. US sales of cars and
light trucks climbed to a record of 17.5 million last year, up 6
percent from 16.5 million in 2014.
Lower fuel prices are absolutely helping us, said Ray Ciccolo,
president of Village Automotive Group, owner of nine car
dealerships in the Boston area. Overall sales at Village increased
last year by about 6 percent, and sales of SUVs which are
more expensive and provide higher profit margins increased by
about 8 percent, Ciccolo said.
SUVs and trucks are driving the market, Ciccolo said.
Motorists are also big winners. Average pump prices in
Massachusetts fell to $1.87 last week, less than half the all-time
high of $4 a gallon in July 2008, according to AAA Northeast.
A warmer feeling
For years, heating oil dealers took it on the competitive chin
because heating oil prices were much higher than natural gas.
Just a few years ago, heating oil cost about twice as much as
natural gas to heat homes, leading many consumers to convert to
natural gas.
But with the recent fall in heating oil prices to about $2.10 a
gallon from a high of $4 a gallon two years ago the industry is
more competitive. Heating oil today costs 7 percent more than
natural gas to heat homes.
Were closing the gap, said Michael Ferrante, president of the
Massachusetts Energy Marketers Association, whose 350

January 2016

members are mostly heating-oil dealers. When prices fall like

this, its tremendous for our customers and for our members.
By the numbers
72: The percentage drop in monthly average oil prices per barrel
from June 2014 ($105.22) to January 2016 ($29.79)
53: The percentage fall in Massachusetts gasoline prices from
their all-time high on July 8, 2008 ($4.09 per gallon) to Jan. 21,
2016 ($1.92)
42: The number of US oil exploration and production companies
that went bankrupt in 2015
258,000: The number of lost energy sector jobs worldwide in
SOURCES: Energy Information Agency, AAA, Haynes and
Boone LLC, Graves & Co., Baker Hughes Rig Count
Jay Fitzgerald can be reached at jayfitzmedia@gmail.com.
Forget peak oil: shale is a market game-changer
US shale production could have long-term global
High elasticity of supply, lower US oil imports and lower oil prices
are some of the implications of US shale production, which has
increased to 4.5 million barrels per day from nearly nothing in
2010, Martin Wolf writes, citing a speech by BP chief economist
Spencer Dale. The shale boom is also expanding global supply
capacity for oil, Wolf writes. The Irish Times (Dublin)
US shale oil production has risen to around 4.5 million
barrels a day from almost nothing in 2010
Wed, Dec 2, 2015, 11:19 Updated: Wed, Dec 2, 2015, 11:31

Martin Wolf


January 2016

Pump jacks at the Belridge Oil Field and hydraulic fracking site,
the fourth-largest oil field in California. Photograph: Getty Images
Why have oil prices fallen? Is this a temporary phenomenon or
does it reflect a structural shift in global oil markets? If it is
structural, it will have significant implications for the world
economy, geopolitics and our ability to manage climate change.
With United States consumer prices as deflator, real prices fell by
more than half between June 2014 and October 2015. In the
latter month, real oil prices were 17 per cent lower than their
average since 1970, though they were well above levels in the
early 1970s and between 1986 and the early 2000s.
A speech by Spencer Dale, chief economist of BP sheds light on
what is driving oil prices. He argues that people tend to believe oil
is an exhaustible resource whose price is likely to rise over time,
that demand and supply curves for oil are steep (technically,
inelastic), that oil flows predominantly to western countries and
that Opec is willing to stabilise the market. Much of this
conventional wisdom about oil is, he argues, false.
US shale revolution
A part of what is shaking these assumptions is the US shale
revolution. From virtually nothing in 2010, US shale oil production

January 2016

has risen to around 4.5 million barrels a day. Most shale oil is,
suggests Mr Dale, profitable at between $50 and $60 a barrel.
Moreover, the productivity of shale oil production (measured as
initial production per rig) rose at more than 30 per cent a year
between 2007 and 2014. Above all, the rapid growth in shale oil
production was the decisive factor in the collapse in the price of
crude last year: US oil production on its own increased by almost
twice the expansion in demand. It is simply the supply, stupid.
One implication is that the short-term elasticity of supply of oil is
higher than it used to be. A relatively high proportion of the costs
of shale oil production is variable because the investment is quick
and yields a quick return. As a result, supply is more responsive
to price than it is for conventional oil, which has high fixed costs
and relatively low variable costs.

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This relatively high elasticity of supply means the market should
stabilise prices more effectively than in the past. But shale oil
production is also more dependent on the availability of credit
than is conventional oil. This adds a direct financial channel to oil
Another implication is a huge shift in the direction of trade. China
and India are likely to become vastly more important net
importers of oil, while US net imports shrink. Possibly 60 per cent
of the global increase in oil demand will come from the two Asian
giants over the next 20 years.
By 2035, China is likely to import three- quarters of its oil and
India almost 90 per cent. This assumes the transport system will
remain dependent on oil over this long period. If it does, it
demands no great mental leap to assume that US interest in
stabilising the Middle East will shrink as that of China and India
rises. The geopolitical implications might be profound.

January 2016

A further implication concerns the challenge for Opec in

stabilising prices. In its World Energy Outlook 2015 , the
International Energy Agency forecasts a price of $80 a barrel in
2020, as rising demand absorbs what it sees as a temporary
excess supply. A lower oil price forecast is also considered, with
prices staying close to $50 a barrel this decade.
Two assumptions underlie the latter forecast: resilient US supply
and a decision by Opec producers, notably Saudi Arabia, to
defend production shares (and the oil market itself). But the lowprice strategy would create pain for the producers as public
spending continues to exceed oil revenues for a long period. How
long might this stand-off last?
A final set of implications is for climate policy. The emergence of
shale oil underlines that the global supply capacity is not only
enormous but expanding. Forget peak oil. As Mr Dale notes: In
very rough terms, over the past 35 years, the world has
consumed around a trillion barrels of oil. Over the same period,
proved oil reserves have increased by more than a trillion
Direct opposition
The problem is not that the world is running out of oil. It is that it
has far more than it can burn while having any hope of limiting the
increase in global mean temperatures over the pre-industrial
levels to 2. Burning existing reserves of oil and gas would
exceed the global carbon budget threefold. Thus, the economics
of fossil fuels and of managing climate change are in direct
opposition. One must give. Technological change might
undermine the economics of fossil fuels. If not, politicians will
have to do so.
This underlines the scale of the challenge leaders confront at the
climate conference in Paris. But the response to the fall in oil
prices shows how hopeless policymakers have been. According

January 2016

to the IEA, subsidies to the supply and use of fossil fuels still
amounted to $493 billion in 2014. True, they would have been
$610 billion without reforms made since 2009. So progress has
been made.
But low oil prices now justify elimination of subsidies. In rich
countries low prices could and should have been used to
impose offsetting taxes on consumption, thereby maintaining the
incentive to economise on use of fossil fuels, increasing fiscal
revenue and allowing a reduction in other taxes, notably on
employment. But this important opportunity has been almost
entirely missed.
One has to ask whether there is the slightest chance that effective
action, rather than window-dressing, will emerge from Paris. I
hope to be proved wrong, But I am, alas, sceptical.
Oil slips below $33 as hopes for production cut fade
Brent for April delivery down $1.32 at $32.92 a barrel

Stockpiles are still on the rise, leading many to speculate

that global storage may be close to capacity. Photo:
London: Oil fell around 4% on Tuesday, dented by worries about
the demand outlook and rising supply, while hopes for a deal
between OPEC and Russia on output cuts faded.

January 2016

Brent for April delivery was down $1.32 at $32.92 a barrel by

1315 GMT a fall, after settling down $1.75, or 4.9%, in the
previous session.
The front-month contract for US West Texas Intermediate (WTI)
was down 80 cents at $30.82 after falling $2.00, or 5.9%, the
session before.
Russias energy minister and Venezuelas oil minister discussed
the possibility of holding joint consultations between OPEC and
non-OPEC countries in the near future, the Russian Energy
Ministry said on Monday.
But Goldman Sachs said it was highly unlikely the Organization
of the Petroleum Exporting Countries would cooperate with
Russia to cut output, saying such a move would also be selfdefeating as stronger prices would bring previously shelved
production back to the market.
Its hard to see a successful agreement between OPEC and
Russia to cut production and people are starting to see that, said
Andy Sommer, senior energy analyst at Axpo Trading in Dietikon,
He said there was a good chance that oil could fall back below
$30 per barrel this month.
Didier Houssin, president of French Institute for Petroleum and
New Energies said that a deal would benefit Russia and OPECs
main competitor, the United States.
There is no way US producers will respect any OPEC Russia
deal meanwhile, they will be the first to benefit from any price
recovery by ramping up production, Houssin said.
Underlining the well-supplied nature of the market, Russias oil
output rose to 10.88 million barrels per day (bpd) in January, from
10.83 million bpd in December, Energy Ministry data showed on
Stockpiles are still on the rise, leading many to speculate that
global storage may be close to capacity, Sommer said.

January 2016

US commercial crude oil inventories likely rose by 4.7 million

barrels last week to a new record of 499.6 million barrels, a
Reuters survey taken ahead of industry and official data showed.
The American Petroleum Institute, an industry group, releases its
weekly inventory report later on Tuesday, while data from the US
governments Energy Information Administration is due on
Investors await economic data later in the week, including US
nonfarm payroll and unemployment figures and producer prices
from the euro zone.
The tumbling crude price has hit oil majors, with BP slumping to
its worst annual loss in more than 20 years last year, its results
showed on Tuesday, pushing its shares down more than 6%.
Other oil companies also fell sharply. Reuters
Additional reporting by Keith Wallis in Singapore and Felix Bate in
Paris.Top of Form
Kuwait Petroleum International says oil prices could reach
$50 a barrel mid-2017
Reuter. Sat Feb 13, 2016
Kuwait Petroleum International (KPI) said on Saturday oil prices
could reach a range of $50 to $60 a barrel by mid-2017, the
official state news agency reported.
The agency quoted the company's top executive Bakheet alRashidi as saying prices could reach the range of $60 to $80 a
barrel in three years' time.
"The global oil market is going through a correction and we have
reached the bottom," he was quoted as saying by the official
Kuwait news agency, who added that Rashidi had made his
comments at a company event in London.
Rashidi attributed the drop in oil prices to excess supply in the
market and slow demand from Asia, particularly China.
Asked whether oil prices would ever reach the $100 per barrel
level again, Rashidi said, "We can reach prices ranging between
$60 and $80 but we need three years."
On Vietnam's Nghi Son refinery, Rashidi said it would start
operations by the end of 2016.

January 2016

The new digital tools catching on in the old school oil field
Posted on January 6, 2016 | By Rhiannon Meyers
New digital tools changing the oil field

Baker Hughes
Baker Hughes employees monitor a customer's wells from the
company's operations center in Claremore, Oklahoma. The
Houston-based oil field services giant developed the round-theclock monitoring system in an effort to help its customers bolster
Oil and gas companies have been working for years on ways to
swap out pencil and paper in the oil patch for sophisticated
sensors and iPads, but the digital oil field initiative fell by the
wayside during the recent shale boom when speed mattered
more than efficiency.
That effort is now gaining renewed attention during the worst
crude slump in decades as oil and gas firms scramble to squeeze
more out of their smaller fleet of wells and workers.
Read more about the new technology changing how oil workers
operate in the field at HoustonChronicle.com.
Categories: Crude oil, Oil field services
Tags: crude oil | iPads | oil field services | oil prices

January 2016

DuPont, ADM Biotech Will

Chemicals, Plastics
By: Jessica Lyons Hardcastle




DuPont Industrial Biosciences and Archer Daniels Midland today

said they have developed a game-changing technology a
process to develop a molecule that can be converted into several
biobased chemicals and plastics with applications in packaging,
textiles, engineering plastics and other industries.
The companies have developed a method for producing furan
dicarboxylic methyl ester (FDME) from fructose. FDME is a highpurity derivative of furandicarboxylic acid (FDCA), one of the 12
building blocks identified by the US Department of Energy that
can be converted into a number of high-value, biobased
chemicals or materials. It has long been sought-after and
researched, but has not yet been available at commercial scale
and at reasonable cost, the companies say.
The new FDME technology is a more efficient and simple process
than traditional conversion approaches and results in higher
yields, lower energy usage and lower capital expenditures.
This partnership brings together ADMs world-leading expertise in
fructose production, and carbohydrate chemistry with DuPonts
biotechnology, chemistry, materials and applications expertise, all
backed by a strong joint intellectual-property portfolio.
This molecule is a game-changing platform technology. It will
enable cost-efficient production of a variety of 100 percent
renewable, high-performance chemicals and polymers with
applications across a broad range of industries, said Simon
Herriott, global business director for biomaterials at DuPont.
One of the first polymers under development utilizing FDME is
polytrimethylene furandicarboxylate (PTF), a polyester also made
from DuPonts Bio-PDO (1,3-propanediol). PTF is a 100-percent

January 2016

renewable and recyclable polymer that, when used to make

bottles and other beverage packages, substantially improves gasbarrier properties compared to other polyesters. This makes PTF
a great choice for customers in the beverage packaging industry
looking to improve the shelf life of their products, DuPont says.
ADM and DuPont are taking the initial step in the process of
bringing FDME to market by moving forward on the scale-up
phase of the project. The two companies are planning to build an
integrated 60 ton-per-year demonstration plant in Decatur, Ill.,
which will provide potential customers with sufficient product
quantities for testing and research.
The global renewable chemicals market will reach $84.3 billion by
2020, up from $49 billion in 2015, growing at a CAGR of 11.47
percent, according to a Research and Markets report.

more: http://www.environmentalleader.com/2016/01/19/dupontadm-biotech-will-enable-100-renewable-chemicalsplastics/#ixzz3yzVjxF3t
RFCC Failure Analysis - A CASE STUDY
May please like to share with all FCC people of your refinery..
Major accident and failure of stationary equipment in the RFCCU
01.01.2016 | Seok, W., SK Energy , South Korea; Lee, S.,
SK Energy , South Korea in HP
The four case studies cover component failures and multiple
types of leakage: valve packing, expansion joint and
corrosion. Each case study systematically identifies cause,
countermeasures taken and lessons learned.
Keywords: [residue] [cracking] [failure] [lessons]
Several lessons were learned during the operation of two residue
fluidized catalytic cracking units (RFCCUs) built in 1995 and
2008. An RFCCU converts atmospheric residual oil to create
lighter hydrocarbons under very high temperature conditions, and

January 2016

the design of the equipment is complex. The RFCC streams of

catalyst, feed oil, air and flue gas are shown in Fig. 1.

Fig. 1. A typical RFCC process flow.

The major stationary components are the reactor, the regenerator
cyclone internals, catalyst-transfer lines that connect the reactor
and the regenerator, bellows expansion joints that absorb the
thermal movement of the lines, and slide valves that control
catalyst flow. After the regenerator, a carbon monoxide (CO)
boiler produces superheated high-pressure (HP) steam, using
flue gas as fuel. The boiler is operated under high temperatures
with a high velocity of erosive catalyst fines and, therefore, has
experienced many problems, both large and small. RFCCUs
always operate under very severe conditions, such as
temperatures ranging from 530C to 780C with catalyst fines. If
even a small amount of leakage or a minor abnormal symptom is
found, the consequences can be very significant.
Since its initial operation in 1995, this plant has gone through
many troubles and leakages that affected the process
capacitiesnamely, charge-down or total shutdown.
The major accidents experienced included:
1. Failure of a catalyst cooler tube and aeration pipe due to the
poor insertion of the inner tube to the outer tube, bad welding
quality and misalignment of pipe to elbow.
2. The leakage of a slide valve packing due to improper
countermeasures when the valve stem was stuck.

January 2016

3. Leakage of an expansion joint due to a lack of monitoring the

pressure gauge on the bellows.
4. Leakage of the CO boiler tube due to urea solution
penetration into the insulation beneath. Urea is used
for removing NOx from RFCC flue gas.
There are several types of commercially licensed RFCC
processes,1 but the process schemes are deemed similar
enough, by these authors, that their organizational lessons
learned can provide important lessons to readers for the
operation and maintenance of other RFCC processes.
The following case studies encompass the range from reactor to
CO boiler.
Failure of a catalyst cooler tube and aeration pipe
The catalyst cooler is used to both produce medium-pressure
(MP) steam, using the heat of the regenerated catalyst, and to
cool regenerated catalyst to again feed the RFCC reactor. The
cooler tube bundle is a bayonet type, which has inner tubes and
outer tubes that are inserted into a refractory lined shell of the
regenerator (Fig. 2). Boiler feed water enters the inner tubes, and
steam comes out through the outer tubes, each of which are
composed of a tube sheet and stainless-steel fluidizing air lances
that distribute air into the cooler near the bottom of the tubes. This
air creates turbulence and increases heat-transfer efficiency as
the bubbles move upward. Because they are operated under high
temperature with catalyst fines present, the tubes are subjected to
severe erosion.


January 2016

Fig. 2. A schematic of a catalyst cooler.

It is recommended to periodically replace them with spare
bundles and to repair the used tube bundles (e.g., re-tube and
replace aeration pipes). However, during maintenance, workers
may be unable to visually understand if it is actually assembled
properly because the insertion status can only be checked
through a nozzle.
If the catalyst cooler has some troubles, such as tube leakage or
aeration pipe failure, there are normally only two options: the first
is to repair it during a total shutdown, and the other is to carry out
a charge-down and keep it operating until the next turnaround.
Cause of the first failure. The plant has experienced four
failures since 1995. The first two cases were outer tube leakage
because the inner tube was not inserted properly, and the second
involved the outer tube cap, which was exposed to high
temperatures, causing oxidation or thermal shock (Fig. 3). The
inner tube was bent due to improper insertion at the maintenance
stage, so the inner tube was 163 mm shorter than in the design.
The outer tube had been exposed to approximately 720C and
was subject to oxidation with thermal shock, resulting in final

January 2016

Fig. 3. Expected failure mechanism.

Countermeasures. Visual inspection revealed that one inner
tube was bent due to interference between the pressure stabilizer
and the guide plate. The shell-side temperature was still high, so
other nondestructive examination (NDE) methods were not used.
After an idea-generation session, an interesting inspection
method termed the balloon plug test was implemented and
proved very successful in detecting leaked tubes. Two tubes had
leaked, and the adjacent 12 tubes were plugged to avoid further

Normally, for a failure like this, a total shutdown would be required

to repair it, but the team succeeded in doing the repair work with
only a 50% charge-down (Fig. 4). Only the inner tube bundle was
pulled down and the leaked tubes were plugged. There are many
precautions to be studied and taken before implementing such a

January 2016

repair. For the failure on the outer tube, it should be confirmed

that the hole is small, and the catalyst in the shell side should be
kept steady, without air fluffing, by closing the slide valve on the
catalyst-cooled standpipe, so that small leakage might be

Fig. 4. The repair sequence was completed

a 50% charge-down.
During bundle replacement, the workers should wear protective
equipment, such as heatproof protection clothes. If the catalyst
leakage is significant or cannot be stopped, work should stop and
the bundle should be assembled soon. Fortunately, the plant had
succeeded twice without any trouble because the condition was
under control. After the failure, the plant revised
its maintenance manual to prevent the improper insertion of inner
tubes, and to check the condition through the nozzle.

Lessons learned. The quality for inserting inner tubes into outer
tubes should be checked through a side nozzle, or by another
method, when conducting tube replacement. If the outer tube
failed, the repair can be done without a total shutdown, but
caution must be taken prior to beginning repair work.

January 2016

Cause of the second failure. The aeration pipe vibrates under

high temperature, so a fatigue crack can be easily initiated. In this
instance, a fatigue failure developed on an aeration pipe that is
used to fluidize catalysts in the shell side with air. Their original
design used a Schedule 80 elbow connected to Schedule 40
straight pipes, and there is a thickness difference: 8 mm vs. 5.7
mm. The inspection showed a crack initiated at the weld toe of
the Schedule 80 elbow to the Schedule 40 straight pipe due to the
notch effect of a thickness difference between the thicker elbow
and the thinner pipe. Microstructure analysis showed that the
crack was a fatigue crack, which does not show itself in small
branches, but in single cracks starting from a notched surface
area (Figs. 5 and 6).

Fig. 5. Microstructure analysis

fatigue cracks, which are
cracks starting from a notched
surface area.


January 2016

Fig. 6. Aeration pipes in the catalyst cooler.

Countermeasures. Since this fatigue crack could not be repaired
during operation, the plant could not continue operating with this
cooler. The second catalyst cooler was operated with maximum
capacity until the next turnaround. During the repair, all aeration
pipe welds were checked by dye penetration and radiographic
tests to confirm that there was no excessive penetration of any
welds. The field joint was checked thoroughly for excessive
misalignment or notch by NDE. To minimize stress
concentrations, the thicker Schedule 80 elbow was changed to a
Schedule 40 elbow.
Lessons learned. The aeration pipe is operated under severe
vibration conditions with high temperatures. Therefore, any area
of stress concentration is not permitted. All butt welds should be
flush ground, and any excessive misalignment prohibited. It is
especially important that excessive penetration at the root pass of
welds should be removed to minimize the stress concentration.
Leakage of a slide valve packing
Six slide valves are used for catalyst flow control between the
reactor and the regenerator. These are gate-type valves,
operated by hydraulic power under very high temperatures
(530C to 780C) with catalyst fines. The disc and orifice plate are

January 2016

covered with abrasion-resistant lining, and any parts exposed to

catalyst fines are hard-surfaced with Stellite 6, a cobalt-based
alloy with high abrasion, corrosion and elevated-temperature
wear resistance. A steam purge system is required for the valve
packings to keep the valve stem free of catalyst. The recirculation
slide valve that is operated more frequently leaked through its
packing box during operation, and the process was shut down
right away (Fig. 7).

Fig. 7. Detailed view of a slide

packing box.
Cause. The expected cause was the continued purge air flow that
was preventing the intake of catalyst fines from the regenerator to
the slide valve stuffing box. The plant staff should have controlled
the pressure and flow of the purge air after the sticking of the
stem was solved, but they had not. The valve packings had worn
out, and many catalyst fines had leaked during operation. As
shown in Fig. 8, the valve was stuck after the replacement of the
packings during turnaround. An attempt was made to solve the

January 2016

problem with a higher-pressure nitrogen/air purge, and this was

serviced continuously for about eight months. However, this
caused damage to the packings, and hot catalysts penetrated

Fig. 8. Leakage sequence.

Countermeasures. The process was shut down urgently, and the
leak area was covered with rectangular plates. After this accident,
the plant staff checked the purge flowrate and pressure

Lessons learned. The valve packing must be checked by

monitoring the purge gas flowrate and pressure. If any deviation
from the design value occurs, a sealant recommended by the
manufacturer should be prepared and injected through the
nozzle. When the valve is not working due to the inflow of catalyst

January 2016

fines, a higher gas pressure can be used to get rid of catalyst

fines. To avoid packing damage, this is not a recommended longterm solution.
Leakage of a metallic expansion joint
Seven metallic expansion joints were used in the large catalyst
transfer lines to absorb the axial, angular and lateral movement
within the system, thereby minimizing the stresses imposed on
vessel nozzles (Fig. 9). Insulation materials were installed due to
the high temperatures. The bellows are composed of two plies of
Inconel 625LCF (resistant to low-cycle fatigue) that are designed
to detect the leakage of the inner ply. During operation, the
regenerated expansion joint leaked, and the process had to be
shut down urgently because the amount of leakage was out of
control, and the additional bellows for repair had not yet been

Fig. 9. Metallic expansion joints were used

catalyst transfer lines to absorb axial,
angular and lateral movement.
Cause. When the leakage occurred, the process had to be shut
down urgently because the amount of leakage was out of control,
and the additional bellows for repair had not yet been prepared.
The cause of failure seemed to be fatigue cracking: for an
extended period of operation, the hose braid seal and insulation

January 2016

pillow were damaged, and the bellows were exposed to high

temperatures. Cracks developed, allowing leakage (Fig. 10).

Fig. 10. Extended operation damaged the

and insulation pillow, exposing the bellows
to high temperatures.
Countermeasures. As a temporary repair, a patch plate was
installed. An additional new bellows designed for temporary use
up to the next turnaround was again installed during operation
(Fig. 11). In accordance with the licensor manual, the monitoring
of the pressure gauge at the bellows should be checked and, if
the gauge is pressurized, additional bellows would be required to
avoid total shutdown. The plant staff did not accomplish this.


January 2016

Fig. 11. To control leakage, a patch plate

and new bellows were installed as temporary
Lessons learned. The lifetime of bellows (1020 years) depends
on operating conditionsouter bellows need to be monitored
periodically for pressure and temperature. If any change is
detected, an additional bellows that is designed in accordance
with the lifetime should be prepared. The internal components,
such as the hose braid seal and the insulation pillow, should be
checked during shutdown.
Leakage at a CO boiler tube
Flue gas exits the cyclones into a plenum chamber in the top of
the regenerator. The hot flue gas is sent to a CO boiler, where
both sensible heat and combustion heat are used to generate
superheated high-pressure steam. To correspond with enhanced
NOx emission regulations, a urea solution was supplied in the
boiler during operation; unfortunately, some of the solution
penetrated into the insulation refractory and caused CO2corrosion
of the tubes (Eq. 1).
CO(NH2)2 + 2NO + 12O2 2N2 + CO2 + 2H2O
Cause. Eight of the 10 urea nozzles had been serviced since the
initial startup in 2008. After isolation of the CO boiler, it was found
that one tube under the insulation refractory had leaked, and the
others had also started to thin from the outside. Severe localized
areas of corrosion around the leaked tube were found. The cause
was wet CO2 corrosion due to the urea solution that had dripped,
penetrated into the refractory and corroded the tube. The
refractory beneath the urea nozzle was not constructed properly

January 2016

to minimize the interference with the spray pattern of the urea

solution and the refractory (Fig. 12).

Fig. 12. Due to the urea solution, wet

CO2 corrosion dripped, penetrating into the
refractory and corroding the tube.
When urea solution decomposes in water, NH3 and CO2 are
produced, corroding the plain carbon steel (Eq. 2).
CO(NH2)2 + 2H2O 2NH3 + CO2
The moist flue gas from the generator contains CO2 and SOx and
causes wet conditions; therefore, the tube can severely corrode. If
NH3 contacts SOx, highly corrosive salt, such as ammonium
(NH4)HSO4 or
ammonium sulfide (NH4)2S can be formed, and corrosion may be
Countermeasures. A design and construction mistake was
confirmed (Fig. 13). To combat this, a spraying test was again
conducted to determine whether there was dripping. The
nozzle projection distance was adjusted to 35 mm from the tip of
the spray nozzle. Note: Almost any spray nozzle can have a
small amount of dripping, but evaporating the drips during
operation would remedy the situation. The urea injection system
designer or inspector may have thought the dripping liquid would
quickly evaporate and not penetrate into the refractory and
corrode the tubes.


January 2016

Fig. 13. Interference between spray and refractory.

Lessons learned. Using urea to remove NOx in the boiler flue
gas was a first experience for this plant. At the design stage, the
liquid should be checked thoroughly to determine whether it has
the potential to corrode the tubes. Additionally, the projection of
the nozzles should be checked to see if the liquid can be dripped
by conducting a spraying test.
Key learnings
As previously mentioned, the licensors of RFCCUs for other
refineries may be different, but the failure conditions for the main
equipment are similar. Therefore, these four failure cases
experienced in the RFCCU may help others that operate such
1. The catalyst cooler should be replaced at every major turnaround.
The outer tube failure may be due to the improper insertion of
inner tubes, so it is important to ensure they are assembled
3. For the fatigue crack of aeration pipes, all of the welds, including
field joints, should be checked to ensure that there are no
significant notches due to excessive penetration or misalignment.
5. To prevent leakage in slide valve packing, the purge gas flowrate
and pressure should be monitored and recorded periodically. If
there are significant deviations from the design, packing should
and a specific sealant should be prepared.

January 2016

7. Expansion joints are very important to absorb the thermal

movement, and they are exposed to very severe operational
conditions. The pressure and/or temperature gauge on the first
ply bellows should be checked periodically, especially after
shutdown or startup. If pressure increases, an additional bellows
should be prepared immediately.
9. If a urea solution is used to remove NOx in the CO boiler, it is
recommended to ensure that the solution does not penetrate and
soak the tube refractory surfaces during operation.
In-depth analysis and practical advice for the design, operation
and maintenance of fluidized catalytic cracking units for residue is
provided here. The four case studies cover component failures
and multiple types of leakage: valve packing, expansion joint and
corrosion. Each case study systematically identifies cause,
countermeasures taken and lessons learned.
A key strategy focus is on methods that can affect repairs without
requiring a total shutdown, rather only a 50% charge-down. NDE
approaches included using a balloon plug test to detect leaked
tubes. Design changes included avoiding stress concentrating
notches due to wall-schedule thickness change and minimizing
excessive penetration of root pass welds. Attention was needed
for the design of the urea spraying system to avoid dripping liquid
on refractory and corroding underlying tubes. Monitoring
improvements included temperature and pressure at
the expansion bellows to catch any leakage early from bellows
fatigue cracking, and having a replacement bellows ready to
install. HP
Sadeghbeigi, R., Fluid Catalytic Cracking Handbook, Ch. 1, 3rd
Ed., Elsevier, 2012.
Sang-Mo Lee is a senior engineer for SK Energy on the
stationary equipment engineering team. He has over 20
years of experience in technical support to the

January 2016

in refinery and petrochemical plants, especially resid
fluid catalytic cracking, hydrodesulfurization, lube base
oil and those that operate under very high pressure or
high temperature. He has participated in many large
plant construction projects as a key mechanical engineer
and advised on procurement, design, fabrication
and constructionprocesses. He has a BS degree in
mechanical engineering from the University of Ulsan in
South Korea, and has earned an international welding
engineer degree from the International Institute of
WoomyungSeok is a maintenance and detailed design
engineer at SK Energy in Ulsan, South Korea. He has
equipment maintenance and engineering, especially
within RFCC plants. He has a BS degree in mechanical
engineering from the University of Ulsan in South
Shocking! 'Electric Eel' Fibers Could Power Wearable Tech
by Charles Q. Choi, Live Science Contributor
January 21, 2016 03 ACC Smartbrief


January 2016

Stretchy fibers that mimic electric eels could be woven into

clothing to power wearable technology one day, new research
In experiments, these flexible fibers produced enough power to
run electronic lights and watches.
The new fiber is exciting because it takes a page from nature to
"solve real-world problems and even surmount nature in some
aspects," said study lead author Hao Sun, a materials
scientistatFudan University in Shanghai. [Top 10 Inventions That
Changed the World]
High voltage
Electric eels (Electrophorus electricus) can generate deadly
shocks to stun prey and defend against predators. These fish
have cells known as electrocytes, which store and release
electrically charged ions to generate powerful electric fields.
By themselves, electrocytes in electric eels generate low voltages
of only about 0.15 volts. However, in eels, thousands of these
disclikeelectrocytes line up, working in concert to produce deadly
shocks of up to 600 volts, or about five times the voltage emitted
from a U.S. electrical outlet.
Sun and his colleagues wanted to harness the power of the
electric eel in a man-made material. To do so, they created fibers
that mimicked the shocking creatures' ability to stack up tiny
voltage-producing cells in concert.
These fibers are capacitors, meaning they alternate pairs of
electrical conductors and electrical insulators, or materials that
block the flow of electricity. Capacitors store electric charge on
the surfaces of the conductors, and can capture and release
energy much more quickly than batteries can, although they
usually store less energy than batteries do.
The scientists fabricated the capacitors by first wrapping sheets of
carbon nanotubes around elastic rubber fibers 500 microns wide,
or about five times the average width of a human hair. Carbon

January 2016

nanotubes are pipes only nanometers, or billionths of a meter, in

diameter that possess remarkable electrical and mechanical
The researchers made sure that the electrically conductive
carbon nanotube sheets did not completely cover the electrically
insulating rubber. Instead, there were gaps where the insulating
rubber was exposed. Such gaps are key, because capacitors
consist of both conductive and insulating units.
Then, the scientists applied patches of electrically conductive
electrolyte gel onto these fibers. The pattern of patches the
researchers used converted the fibers into capacitors.
The more alternating segments of electrically conductive
nanotube sheets and electrically insulating rubber gaps a fiber
had, the greater the voltage it could generate. A fiber about 39
feet (12 meters) long could generate 1,000 volts, the researchers
reported online Jan. 14 in the journal Advanced Materials.
Previous research also sought to mimic electric eels by
connecting many electrocytelike units together. However, those
units were impractical because they were strung together with
metal wires, and generally had poor flexibility, the researchers
said. This new device instead connected all of its electrocytelike
units together on a single fiber.
"We think these findings provide an efficient strategy for the
advancement of flexible electronics and wearable devices," Sun
told Live Science.
Power fiber
The elastic fibers could stretch up to 70 percent more than their
usual length without losing their electrical or structural properties,
the researchers said. The team also showed that the fibers could
be woven together with conventional elastic fibers to create fabric
that could be incorporated into clothes.

January 2016

The researchers suggested that the eely fibers could help power
miniature electronic devices. For example, in experiments, they
created energy wristbands to power electronic watches, and wove
fibers into T-shirts to power 57 light-emitting diodes (LEDs). In the
future, these energy fibers "might be incorporated into our daily
clothes to power our wearable devices, such as the Apple Watch
and Google Glass," Sun said.
The scientists also connected their capacitor fibers to fibershaped solar cells to create material that could both harvest and
store energy. In experiments, these combinationfibers generated
10 volts of electricity when exposed to light enough to power
some types of small electronic devices, they said. Solar cell fibers
could also recharge battery fibers in wearable devices, the
researchers said.
Putting Fuel Cells Inside the Data Center
November 14, 2013 By Linda Hardesty
The idea is to bring the power plant inside the datacenter,
effectively eliminating energy loss, according to a blog posting by
Sean James, senior research program manager at Global

Foundation Services. Microsoft Research and Global

Foundation Services are investigating a way to power a
datacenter entirely by fuel cells integrated directly into the server

January 2016

racks. The two organizations have published a research

paper No More Electrical Infrastructure: Towards Fuel Cell
Powered Data Centers.
The paper explains how the researchers would integrate a small
generator with the IT hardware and eliminate a lot of complexity
of electrical distribution in the grid and the datacenter. Because
fuel cells are not limited by the Carnot Cycle Efficiency limit that
conventional generators are, they are clean, they fit in small-size
applications and they can be deployed within the data center,
according to the blog.
The researchers have found that an integrated server rack,
combining fuel cells with IT equipment offers these benefits:
-Higher power availability through reducing points of failure.
-Lower infrastructure costs by eliminating electrical distribution.
-Improvement in power utilization effectiveness (PUE).
-The ability to create a universal datacenter design.
In current data center energy supply chains, energy undergoes
several conversions from chemical, to thermal, to mechanical, to
magnetic, to electrical, as well as conversions from alternating
current to direct current, resulting in lost energy during these
In the new datacenter design approach outlined in our paper,
chemical energy is first converted to direct current
electrochemically and sent a few feet to the server power
supply.we are now getting double the efficiency of traditional
datacenters, writes James.
However, the researchers must resolve R&D challenges,
including thermal cycling, fuel distribution systems, cell
conductivity, power management.


January 2016

Alternative & Renewable Energy

Renewables Attracted record investment of $329 b in 2015
Posted on January 14, 2016 | By Bloomberg
The slump in oil prices thats brought upheaval and cost-cutting to
the traditional energy industry spared renewables such as solar
and wind, which raked in a record $329.3 billion of investment last
The 4 percent increase in clean energy technology spending from
2014 reflected tumbling prices for photovoltaics and wind turbines
as well as a few big financings for offshore wind farms on the
drawing board for years, according to research from Bloomberg
New Energy Finance released on Thursday.
These figures are a stunning riposte to all those who expected
clean energy investment to stall on falling oil and gas prices, said
Michael Liebreich, founder of the London-based research arm of
Bloomberg LP. They highlight the improving costcompetitiveness of solar and wind power.
While oil companies such as Exxon Mobil Corp. and Royal Dutch
Shell Plc eliminate jobs and curb capital spending to cope with
prices that have fallen two-thirds in 18 months, renewables are
enjoying a renaissance underpinned by rules designed to curb
fossil-fuel emissions damaging the atmosphere.
Fears that low oil prices will continue into 2016 have knocked
confidence among oil companies, delaying $380 billion worth of
investment in upstream projects, according to analysis by industry
consultant Wood Mackenzie Ltd. on Jan. 12. Companies are
going into survival mode this year with more projects delayed
and budgets cut, said Angus Rodger, one of the reports authors.
Brent crude oil has traded near $30 a barrel this month, down
from more than $110 in 2014 as exporters led by Saudi Arabia
battled for market share. Coal and natural gas prices have

January 2016

followed, already pushing a handful of producers into bankruptcy.

While BNEF has said lower prices may hurt funding for efficiency
projects and the spread of electric cars, the main clean energy
technologies enjoyed record installations in 2015.
Another strong year is in store for renewables in 2016, said
Angus McCrone, chief editor at BNEF, stopping short of saying
another record will be reached. Balancing that is a potential slip in
funding for yieldcos, which drew higher investment in 2015, and a
clouded outlook for offshore wind in its biggest market.
There is a lot of uncertainty on how strong U.K. support for
offshore wind is going to be, McCrone said. It is conditional on
costs coming down, and I think that will happen, but its hard to
say how many will be supported.
China remained the biggest market for renewables, increasing
investment 17 percent to $110.5 billion. Thats almost double the
$56 billion invested in the U.S., which was second in the BNEF
rankings. The strength of the dollar helped boost the value of
In India, funding for clean energy rose 23 percent to $10.9 billion,
and new markets including Mexico, Chile and South Africa
attracted tens of billions of dollars. Brazil bucked the trend with a
10 percent drop to $7.5 billion.
Wind and solar power are now being adopted in many
developing countries as a natural and substantial part of the
generation mix, Liebreich said. They can be produced more
cheaply than often high wholesale power prices. They reduce a
countrys exposure to expected fossil fuel prices. And above all,
they can be built very quickly to meet unfulfilled demand for
New wind and solar power accounted for about half of all new
generation last year. Around 64 gigawatts of new wind power and

January 2016

57 gigawatts of new photovoltaics was added, representing an

increase of 30 percent from to 2014.
Investment was driven mainly by large-scale projects, including a
number of major offshore wind farms. The U.K.s 580 megawatt
Race Bank offshore wind farm was the largest project financed
last year, attracting $2.9 billion, followed closely by the $2.3 billion
Galloper offshore wind farm, also in the U.K.
U.K. Record
As a result, the U.K. was by far Europes strongest market,
despite Prime Minister David Camerons effort to roll back
incentives for the industry. Renewables investment in the
U.K. rose 24 percent to a record $23.4 billion from 2014,
according to BNEF.
The U.K.s rooftop solar power market grew to $1.8 billion, putting
the U.K. in fourth place for investment in solar installations
smaller than one megawatt, behind Japan, the U.S. and China.
Globally, rooftop solar installations like the ones championed by
SolarCity Corp. were another big winner, reaping a 12 percent
increase to $67.4 billion.
Europe recorded its weakest year since 2006, in part because of
slower activity in Germany after the government cut subsidies
and revealed plans for a new auctioning system in 2017.
Investment in the continents biggest economy fell by 42 percent
to $10.6 billion. The continent as a whole suffered an 18 percent
drop to $58.5 billion.
IRENA Considers Onshore Wind As Cheap As Coal
January 26th, 2016 by Joshua S Hill
According to an analyst from the International Renewable Energy
Agency, onshore wind has dropped in cost to the level of coalfired production.
Michael Taylor, an energy analyst and renewable energy expert
at the International Renewable Energy Agency (IRENA), has

January 2016

recently analyzed the cost of onshore wind power, and found that
it has dropped to the level of coal-fired generation and thats
even without including the cost of health and environmental
effects caused by coal.

If the environmental and health

costs of fossil fuels were properly priced at realistic levels, the
situation would be even more favourable for wind, said Michael
According to the new study published by Taylor and IRENA, 1
KWh of electricity produced by an onshore wind farm could cost
in the realm of 0.05, and the same amount of electricity
produced by an average coal-fired plant is only 0.001 cheaper.
This brings onshore wind to within spitting-distance of coal, and
as Taylor hinted at, when the cost of coals impact on society is
included i.e., the cost of global warming on countries, health
impacts, and other similar impacts onshore wind makes a
strong case for ending the day as cheaper than coal.
Incidentally, gas-fired electricity generation did better than both,
coming in at 0.041/KWh.
However, what is most interesting from this study, is that this
sudden drop in onshore winds cost compared to that of fossil
fuels has happened so quickly, society hasnt followed the news.
Renewable power generation technologies can now provide
electricity at very competitive levels, Taylor said. Yet despite
these facts, many of the worlds decision-makers have yet to
grasp how competitive renewables have become. Often, vested
interests lead to propagation of the myth of costly renewable
energy. In other cases, the change has simply come so fast, and
so unexpectedly, that public information has yet to catch up.

January 2016

Between 1988 and 2014, the levelized cost of onshore windgenerated electricity has dropped by 65%, thanks in large part to
the growth of the industry which has allowed the economics of
scale and maturation of technology to drop the cost.
IRENA data provided courtesy of The Institution of Engineering
and Technology
Northern Ireland wind energy 'cheaper than gas generation' by 2020
GENERATING power through onshore wind farms will be
cheaper than through new gas projects by 2020, according to a
leading lobby group.
But the Northern Ireland Renewable Industry Group (NIRIG) said
that would only be possible through if "appropriate policy and
regulatory conditions" were in place.
The body is holding its annual conference in Belfast today.
It is using the occasion to call for certainty over the north's energy
policy which it said is "vital to future opportunities" for renewables.
Wind energy satisfied 20 per cent of the north's electricity needs
in 2015.
And it reached a new record of 583MW on June 1 last year,
providing 48 per cent of Northern Ireland's electricity.
Doubt has been cast over future projects with changes in how
they are incentivised.
The north's scheme for subsidising wind energy projects is due to
close in April, a year earlier than planned but in line with the
closure of the UK-wide initiative.
The decision has faced opposition, especially from farmers, many
of whom had applied to erect single turbines in an effort to avail of
the blanket payments on offer.
Stormont energy minister Jonathan Bell said he had hoped to
keep the scheme open but had his hands tied by his counterparts
in Britain.

January 2016

Speaking ahead of today's conference, NIRIG chairwoman

Rachel Anderson called for "agreement and coordination between
the NI executive and UK government about the direction of
energy policy and the role of wind energy in helping cut consumer
bills and power our economy".
She said the typical wind farm garnered 1.18m investment per
MW into the economy over its lifetime.
"The challenge for policy makers and the industry is to move to
ensure that Northern Irelands wind energy resource can continue
to act as a catalyst for jobs and investment for the future, while
also cutting harmful emissions," she said.
We are committed to ensuring that benefits continue to flow into
the local economy. Today more than ever, you can stand at the
base of a turbine in Northern Ireland, and be confident that
significant investment flows back into the regional economy.
"It is vital for the future prosperity of Northern Ireland that
renewables, particularly onshore wind continues to flourish from
now to 2020 and beyond.
Meanwhile Neasa Quigley, head of the energy team at Carson
McDowell Solicitors, said the sector was at risk of stalling over
obstacles to further development.
She said "obstacles outside of developers control are now putting
the industry on hold at a time when it should be pushing forward".
The Northern Ireland government has set clear goals about the
amount of electricity it wants to generate from renewable sources
by 2020.
"NIE has said it cannot meet the current demand for capacity for
network connections from wind, solar and other renewable energy
sources but if it cant accept these applications, then those targets
simply wont be met, she said.


January 2016

The NIRIG conference is taking place today at the Hilton Hotel in


The Changing Face of HVAC Motor Control

January 29, 2016 By Carl Weinschenk

The drive toward energy efficiency is changing just about

everything a facility manager has to track including HVAC motor
The use of variable frequency drives (VFDs) to control motors are
a common approach to powering HVAC systems. A VFD,
according to VFD.com, is a motor controller that uses frequency
and voltage to adjust the speed of the unit.
The overall VFD market which goes far beyond HVAC is
changing and growing rapidly. Technavio predicts that the sector,
which is taking market share from mechanical and hydraulic
motors will experience a compound an annual growth rate

January 2016

(CAGR) of 8 percent through 2020. Another report this one

released earlier this month by Frost & Sullivan suggested that
the evolution is dramatic:
Homeowners and end users from the construction and
commercial verticals are increasingly seeking out technologically
innovative solutions as replacement products. Consequently,
HVAC equipment suppliers are diversifying their portfolios with
respect to system design and technology.
The design changes were discussed this week by McGuire
Engineerings John Yoon at Consulting-Specifying Engineer.
Yoons piece is a highly technical. The bottom line, however, is
that facility managers or the on-staff or outside people who
advise them on difficult engineering-based buying decisions
should not understand these changes.
The move to energy efficient operations is made real by
legislators and regulators in changes to codes and standards.
Those who are charged with designing and installing HVAC
systems should keep abreast of these changes. Writes Yoon:
Design engineers are often caught off guard by energy-code
changes. In many cases, the changes seem to add unjustified
expense and complexity to HVAC systems that worked fine
before. While engineers usually focus on specific aspects of
designs, there is a need to take a step back to get a broader
perspective on the external influences that will continue to push
the designs toward increased energy efficiency.
The world of HVAC motors is not a simple one.
There are several concerns, according to Dave Morse, the
Director of Sales and Operations for Delta Products Industrial
Automation Group. Some systems may use variable speed
blowers or constant speed blowers with variable dampers, he
told Energy Manager Today. Many HVAC systems use Induction
motors, yet others are using Electrically Commutated Motors
(ECM) with embedded controls. There are also needs for Plenum
rating for use in the duct, or special features such as Purge mode
and BACnet communication. To help make the facility managers
workload easier, it is always better to find a VFD that incorporates
many of these features into one drive.

January 2016

The details are, of course, quite complex. At the highest level,

however, the basic point is simple: People in charge of HVAC
systems must educate themselves.
Yoon provides the overview on how things are changing over
time. Within that context, there have been several
announcements during the past few weeks on HVAC power and
related issues.
Delta used the Air Conditioning, Heating and Refrigeration
Expo at the Orange County Convention Center in Orlando to
introduce the NEMA 1 stacked bypass system. The company
said in a press release before the show that the device is
designed for drop-in HVAC applications. It offers the
capabilities of the companys CP2000 series VFDs, hand-offauto switch capabilities and other features.
EC Fans & Drives, which is a division of Epec Engineered
Technologies, used the same show tointroduce the EConomy
and the EXRi50 motors. The motors, the press release says,
have finished six-month beta tests with several companies. The
EXRi50 has a slim profile that can be deploy in areas too small
for many current motors. The EConomy is a single speed,
single direction entry level motor with an output power of 1 to
16 watts. The EXRi50 is a single speed, single direct motor
with EC fan assembly. It is available as a fan pack with an
integrated fan ring.
While not a motor itself, Flukes new 902 FC True-rms HVAC
Clamp Meter tests HVAC systems, which is deeply related to
motors and their operation. The press release says that the
meter is rated for CAT III and CAT IV (600V and 300 volts,
respectively) and performs what the release calls all the
essential measurement of an HVAC system. The 902 FC can
send measurements to a mobile device for subsequent
Energy efficiency is a goal and a high level concept. At the end of
the day, it only becomes real when it codified and companies
produce gear that fulfill those mandates. That seems to be
happening in the realm of HVAC powering.

January 2016

HSE, Climate Change & Sustainability

Deficiency found in ExxonMobil California Refinery
Fuelfix, Jan 15, 2016
REDONDO BEACH, Calif. (AP) An explosion at an ExxonMobil
oil refinery in California last year could have been prevented if
managers had taken into account aging safety equipment and
shut down a key, spark-generating part of the refinery before
attempting repairs elsewhere, federal investigators said
The unit being repaired had operated for five years without a
maintenance overhaul and, as a result, a key valve failed and
leaked volatile hydrocarbons into an electrostatic chamber where
the material combusted, the U.S. Chemical Safety and Hazard
Investigation Board said.
The resulting fireball injured four contractors, destroyed a large
part of the refinery and sent a fine white ash raining down on
nearby homes and cars.
The explosion could have been much worse, said Chairwoman
Vanessa Allen Sutherland.
The blast also shook nearby homes and tossed an 80,000-pound
piece of equipment within feet of another unit where tens of
thousands of pounds of a highly volatile and toxic substance
called modified hydrofluoric acid, or HF, are stored in tanks.
The blast knocked over a column that contained a laser sensor
dedicated to detecting a leak of the acid, investigators said.
What we definitely believe is that this was a serious near-miss
incident, Sutherland said. That amount of HF or even a
portion of the HF had the potential to vaporize and cause some

January 2016

The lack of layered safety precautions mirrors the cause of a

2012 fire at a Chevron refinery in Richmond, California, that sent
more than 15,000 residents to the hospital and endangered 19
workers, the agency said.
Exxon disputes the findings in the 2015 blast and has stringent
safety rules, said Todd Spitler, an Exxon spokesman. An internal
review of the incident found no protocols were violated, he said.
ExxonMobil stands on its record of good faith compliance with all
agencies, including the chemical safety board, and we look
forward to hearing their perspectives on the incident and
reviewing the preliminary report, Spitler said in a statement
Tuesday night before the news conference by investigators.
Exxon has refused to provide federal investigators with nearly half
of the documents they requested for the preliminary probe,
specifically those related to the acid, Sutherland said.
Exxon maintains that the federal agency, which serves a
watchdog role and has no regulatory authority, does not have
jurisdiction to investigate anything but the cause of the blast itself,
she added.
The Department of Justice will help the investigative agency
enforce subpoenas to get the files, she said.
ExxonMobil sold the refinery to New Jersey-based PBF Energy
Inc. in September. Continued repairs have delayed the closing of
the deal.
California workplace regulators issued $566,000 in fines last
summer for health and safety violations related to the blast. The
plant is located in a densely populated area of the city of
Torrance, about 20 miles southwest of Los Angeles.
The fluid catalytic cracker unit where the blast occurred is critical
to producing California-grade fuel.


January 2016

The special blend means the state typically has the highest gas
prices in the U.S.
Exxon is appealing Cal OHSAs findings.
Federal investigators agreed that serious safety deficiencies led
to the blast that occurred when Exxon shut down the fluid
catalytic cracker unit to do repairs.
With the unit down, Exxon pumped steam in to prevent
hydrocarbon gas from seeping out, but workers complained about
the steam and so the volume being pumped was reduced, said
Mark Wingard, the boards investigator-in-charge.
The reduction was in line with a similar repair plan used in 2012,
but aging equipment changed the scenario and Exxon did not test
to make sure the lesser steam pressure was still sufficient to
prevent a leak.
A valve that had not been checked in five years failed and
allowed the hydrocarbons to seep through the system until they
reached an electrostatic precipitator, where a spark ignited the
gas and caused the explosion.
If Exxon had shut down the electrostatic precipitator, the accident
never would have happened, Wingard said. In addition,
investigators found five or six pieces of equipment including
the faulty valve that failed because they had not been
maintained, he said.
A full maintenance overhaul was due in June, four months later.
Exxon managers also failed to talk to workers who knew the valve
was faulty, said Don Holmstrom, western regional director of the
chemical safety board based in Denver.
Two other recent incidents at the Torrance plant have frayed
In September, the Fire Department reported a leak of modified
hydrofluoric acid and a month later, a leak in a pressurized pipe

January 2016

caused a large steam cloud above the refinery as sirens urged

residents to shelter in place.
ExxonMobil said it was mostly steam that leaked. A state
investigation is pending.
The refinery on 750 acres produces 1.8 billion gallons of gasoline
a year, which accounts for about 8.3 percent of the states total
refining capacity.
California calls gas leak a state of emergency
Jan. 6, 2016,
SAN FRANCISCO (AP) The latest on a natural gas leak in a
Los Angeles neighborhood (all times local): 1:35 p.m.
California Gov. Jerry Brown has declared a state of emergency
over a massive natural-gas leak that has been spewing fumes
into a Los Angeles neighbourhood for months.
Brown said Wednesday that he acted based on the requests of
local residents in the community of Porter Ranch and the
"prolonged and continuing" nature of the gas blowout at the
underground storage facility.
The leak is gushing huge amounts of methane daily, leading
thousands of families to request relocation and two nearby
schools to send away their students.
A well at the Aliso Canyon gas field owned by Southern California
Gas Co. blew out in October.
By Chemical Engineering | January 1, 2016
Different methodologies are available for conducting the
structured reviews known as process hazards analyses (PHAs)
for new processes. PHAs are often conducted or moderated by

January 2016

specialists, with participation by the design team, representatives

of the facility owner, and experienced process operators.
Each different PHA method is better-suited to a specific purpose
and should be applied at different stages of the project
development. The table below includes brief descriptions of some
of the most widely used PHA methods in the chemical process
industries (CPI).
Different types of PHA studies have varying impact, depending on
the design phase in which they are applied. For example, if a
consequence analysis is not performed in a conceptual or preFEED (front-end engineering and design) phase, important plotplan considerations can be missed, such as the need to own
more land to avoid effects on public spaces; or the fact that the
location might have a different elevation with respect to sealevel
than surrounding public places impacted by a flare plume.
Some other studies, like HAZOP, cannot be developed without a
control philosophy or piping and instrumentation diagrams
(P&IDs), and are performed at the end of the FEED stage or at
the end of the detailed engineering phase (or for improved
results, at the end of both) to define and validate the location of
pressure safety valves (PSVs) as well as to validate other
process controls and instrument safety requirements.
QRA or LOPA evaluations (or both) are undertaken after the
HAZOP study to validate siting and define safety integrity levels
(SIL), to finally meet the level required by the plant.


January 2016


January 2016

Oil & Gas Firms Under-Reporting Methane Risk, EDF Says

Karen Henry, Jan 12,2016
Leading oil and gas companies are failing to adequately disclose
meaningful information on emissions of methane, according to
a new report by the Environmental Defense Fund.
The report, Rising Risk: Improving Methane Disclosure in the Oil
and Gas Sector, examines the current state of voluntary reporting
on methane in the US oil and gas sector. The report found that
none of the 65 market leaders reviewed in the production and
methane emissions and less than a third report such emissions
via accessible, investor-facing data sources. The data, which is
publicly disclosed through sources like CDP questionnaires,
corporate sustainability/CSR reports and 10-K filings, is generally
low quality and lacks rigorous and standardized metrics, making
comparisons among operators difficult, EDF says.
The report provides a number of recommendations to improve
methane disclosure centered around four key methane metrics
that aim to bring a level of standardization and quantitative rigor
to methane reporting. Operator and disclosure platform adoption
of these metrics will help give investors much-needed information
to properly assess risk from methane.
The oil and gas industry releases seven million tons of methane
annually in the United States alone, according to the EPA.
Methane emissions from the oil and gas sector are increasingly
viewed as a financially material issue for companies, and by
extension, their investors. A 2015 study by the Rhodium Group
found that the sector loses $30 billion globally each year from
leaked or vented methane at oil and gas facilities.
The massive methane leak currently under way at the Aliso
Canyon storage facility in California, for example, has cost $50

January 2016

million for mitigation of environmental and community impacts,

over $12 million in lost product to date and reputational damage.
Read more: http://www.environmentalleader.com/2016/01/12/oiland-gas-firms-under-reporting-methane-risk-edfsays/#ixzz3x93fi5bP
Charging a Smartphone While Driving Isn't as Free as You
Jeff Green JeffAGreen
January 12, 2016, Bloomberg
Handsets plugged into car ports cut mileage, boost pollution
It also costs 33 times more than using outlets at home
Its not just using a handheld phone while driving thats a menace
to society. It turns out that charging it in the car has
consequences too.
Thats because a phone drawing electricity from a USB port cuts
0.03 miles from each gallon of gasoline in a tank. Across the fleet
of vehicles in the U.S., that would mean about 970,000 tons of
extra planet-warming carbon dioxide a year, according to
calculations by Jon Bereisa, a retired General Motors Co.
engineering executive who studies vehicle power usage. With a
race under way to see how many charging ports automakers can
cram into a car, the increased pollution is only going to get worse.

Do I think were at peak USB? No, said Mary Gustanski, vice

president of engineering and program management at Delphi
Automotive Plc, which makes wiring and USB ports for vehicles.
Well get more and more creative to not only allow you to

January 2016

connect with USB but also to connect wireless. Consumers want

their car to be just like their home.
Its not just an environmental issue, either. The proliferation of
consumer devices, the growth of dashboard touch screens and
other technology, and the shrinking size of engines to meet fueleconomy mandates mean the 12-volt automobile electrical
system is just about tapped out. Some automakers are already
turning to supplemental 48-volt systems in future models.
Port Proliferation
The number of vehicles sold in the U.S. with USB charge ports
rose to about 14.6 million last year from about 3.3 million in 2005,
the first year they were available, and is projected to climb to 16.7
million by 2022, according to a forecast from the consulting firm
IHS. Global sales of vehicles with USB ports will increase to 85
million in 2022 from about 49 million last year, IHS said.
That estimate doesnt capture how many ports are in a particular
vehicle. For example, the new Chrysler Pacifica minivan, which
goes on sale later this year, will have nine USB charging points,
the most of any automobile, said Bruce Velisek, director of
Chrysler brand product marketing. The model it replaces has four
charging points, he said.
To make his calculation, Bereisa assumed that a typical
smartphone connected to WiFi or the Internet needs about 4.8
watts of energy to charge in a car. (Delphi estimates that some
less-efficient models draw twice that amount.) For a vehicle
getting about 30 miles per gallon, thats a 0.03 mpg loss, he said.
Spread out across about 3 trillion road miles motorists drive each
year in the U.S. -- assuming an average speed of 30 mph -- the
estimated extra usage is 100 million gallons of gasoline, or about
$200 million in costs, said Bereisa, the chief executive officer of
Auto Electrification LLC in Sunrise Beach, Missouri.
Home Charging
The estimated extra CO2 created by plugging in one phone in
every car in the U.S. would be about the same as that produced

January 2016

by 185,257 passenger vehicles in one year, according to an

that converts greenhouse gas into real-world equivalents. Put
another way, thats the pollution created by burning 945 million
pounds of coal.
By far, the cheapest way to charge a smartphone is at home,
Bereisa said. With gasoline at $2 a gallon, it costs about 2 cents
an hour to charge a phone in a car compared with about 0.06
cent at home, or 33 times less. Gasoline would have to fall to 6
cents a gallon to compete with home electricity, he said. It would
also produce about half the carbon dioxide.
Thats why modern electricity power plants are not driven by
gasoline engine generators, said Bereisa, who worked on the
EV-1 and Volt electric-vehicle programs and fuel-cell models
during his 35 years at GM. We go through life without realizing
how important energy is to everything we do, and the
consequences of our energy consumption. We grow up entitled to
just plug it in or flip the switch or push start -- with no idea of
whats behind it all.
Is Recycled Oilfield Water Safe for Crop Irrigation?
Jan 19,2016 Environmental Leader
Some 50,000 acre feet of recycled oilfield wastewater is used to
irrigate about 90,000 acres of crops in Californias Central Valley,
one of the worlds most productive agricultural regions.
But is this produced water safe for use on food crops? A newly
formed panel aims to answer this question.
There appears to be a data gap here, the Central Valley Water
Boards Clay Rodgers, project supervisor of the Food Safety/Oil
Field Produced Water project team, told Environmental Leader.
Theres not much research we can find anywhere on using

January 2016

produced water for crop irrigation and thats the reason we

brought in food safety experts.
As farmers in drought-stricken California look for alternative water
sources for their crops, a $54 billion industry, recycled oilfield
wastewater has become an attractive source. In 2013, about 150
million barrels of oil were produced in the state, along with nearly
2 billion barrels of water. While the bulk of this water (878 million
barrels) is recycled for use in the oil fields, a portion of the
produced water is recycled to irrigate crops for human
At least five oil fields in the state provide recycled water to irrigate
crops including almonds, grapes, pistachios and citrus.
Chevron and the California offshoot of Occidental Petroleum,
called California Resources Corporation, are the primary oil
companies supplying oilfield wastewater to farmers.
Theres a desire to increase use of produced water for irrigation
and also concern about oilfield wastewater, and whether it
contains chemicals and other harmful substances.
Assuming its safe, recycled water is a boon for agriculture.
For the Central Valley, what we need to look for is how can we
diversify our water supply and that often means looking at more
local and recycled water in all forms. Oilfield water is just one
potential source of water that could be used for irrigation, the
Almond Board of Californias Dr. Gabriele Ludwig told
Environmental Leader. Ludwig sits on the new food safety panel.
Ludwig says there are two concerns with using alternative
sources of water for irrigation. One, from the safety perspective,
is making sure there is nothing harmful that can get into the food
supply, and thats an issue that has been controversial in terms of
using urban recycled water. The other concern is the plant itself.
There are only certain compounds the plants can handle. So
those are examples that need to be addressed.

January 2016

In December, the Pacific Institute, a nonprofit that studies water

issues, published a study, Oil, Food, and Water: Challenges and
Opportunities for California Agriculture, that, among other things,
looked at the reuse of oilfield water for crop irrigation.
There is an opportunity to expand the recycling of oil-field
wastewater for beneficial uses, such as for crop irrigation or
livestock watering, the study said. However, the health and food
safety impacts of this practice are poorly understoodScientists
should conduct a study to determine what level, if any, of
chemicals in oil-field wastes is safe for farmworkers, animals, and
consumers. Such a study should be performed by an independent
science panel, and would help to reduce the uncertainties around
the safety of this practice.
The Central Valley Water Boards first Food Safety/Oil Field
Produced Water panel met last week. Panel members include
experts from the California Department of Food and Agriculture,
California Department of Fish and Wildlife, California Department
of Public Health and Lawrence Berkeley National Laboratory.
Pacific Institute researcher Matthew Heberger presented the
nonprofits study at the meeting.
We are concerned about the health and safety of the people who
live and work near oil and gas production, Heberger told
Environmental Leader. We are especially concerned about
farmworkers. Oilfield wastewater can contain volatile chemicals
such as benzene and toluene that are known to have health
impacts, and Central Valley residents that we spoke to cited this
as a concern.
We are obviously also concerned about the safety of our food
supply. We need to take a more careful look at projects where
oilfield wastewater is treated and sent to irrigators to make sure
that the practice is safe. The bigger concern for me is pollution
due to spills, leaks, or unsafe disposal of oil-field wastes that can
contaminate the soil and water resources used by agriculture.

January 2016

The panel aims to produce a white paper, or a series of white

papers, that addresses the safety of using recycled oilfield water
for crop irrigation. Rogers says he hopes the white paper will be
ready by the end of summer but acknowledges, Obviously this is
an issue of critical importance to us. We want to get through it as
quickly as we can but we also want to makes sure we do the
things we need to do. If it takes longer to do it right, well take
more time.
Zika-linked condition: WHO declares global emergency
By Michelle RobertsHealth editor, BBC News online

A disease linked to the Zika virus in Latin America poses a

global public health emergency requiring a united response,
says the World Health Organization.
Experts are worried that the virus is spreading far and fast, with
devastating consequences.
The infection has been linked to cases of microcephaly, in which
babies are born with underdeveloped brains.


January 2016

The WHO alert puts Zika in the same category of concern as

It means research and aid will be fast-tracked to tackle the
There have been around 4,000 reported cases of microcephaly in
Brazil alone since October.
WHO director general, Margaret Chan called Zika an
"extraordinary event" that needed a co-ordinated response.
"I am now declaring that the recent cluster of microcephaly and
other neurological abnormalities reported in Latin America
following a similar cluster in French Polynesia in 2014 constitutes
a public health emergency of international concern."
Jump media player Media player help
Out of media player. Press enter to return or tab to continue.
Media caption WHO director general, Margaret Chan declares an
international public health emergency
She said the priorities were to protect pregnant women and their
babies from harm and to control the mosquitoes that are
spreading the virus.
She advised pregnant women:
to consider delaying travel to areas affected by Zika
seek advice from their physician if they are living in areas
affected by Zika, as well as protect themselves against
mosquito bites by wearing repellent
Dr Chan justified declaring an emergency even amid uncertainties
about the disease, saying it was time to take action.
The WHO faced heavy criticism for waiting too long to declare the
Ebola outbreak a public emergency.


January 2016

Stopping Zika
Currently, there is no vaccine or medication to stop Zika. The only
way to avoid catching it is to avoid getting bitten by
the Aedes mosquitoes that transmit the infection.
The WHO has already warned that Zika is likely to "spread
explosively" across nearly all of the Americas. More than 20
countries, including Brazil, are reporting cases.
Most infections are mild and cause few or no symptoms, although
there have been some reported cases of a rare paralysis disorder
called Guillain-Barre syndrome.
The bigger health threat though is believed to be in pregnancy, to
the unborn child.
Dr Jeremy Farrar, Director of the Wellcome Trust, said: "There is
a long road ahead. As with Ebola, Zika has once again exposed
the world's vulnerability to emerging infectious diseases and the
devastation they can unleash. Alongside the emergency response
that Zika necessitates, we must put in place the permanent
reforms, health systems strengthening and proactive research
agenda that are needed to make the global health system more
resilient to the threat of future pandemics."

January 2016

More on the Zika crisis:

What you need to know Key questions answered about the virus
and its spread
Travel advice Countries affected and what you should do
The mosquito behind spread of virus What we know about the
mosquito involved
Abortion dilemma Laws and practices in Catholic Latin America
Media reflect fears over virus Press in Latin America ask
searching questions

Are you worried about the Zika virus? Have you planned to
travel to areas where there have been cases of the virus?
Email your stories tohaveyoursay@bbc.co.uk.
Please include a contact number if you are willing to speak to a
BBC journalist. You can also contact us in the following ways:

WhatsApp: +44 7525 900971

Tweet: @BBC_HaveYourSay

January 2016

Text an SMS or MMS to 61124 (UK) or +44 7624 800

100 (international)

Climate Change
How Engineers Can Adapt Infrastructure Design for a
Changing Climate
Winn Hardin, 03 December 2015

Mud flows on Oct. 15, 2015 shut a 30-mile stretch of I-5. Image
source: Getty Images via Univ. of Arkansas
Now in its fourth year of severe drought, California is juggling with
knives. Groundwater levels are falling. Seawater intrusion
threatens drinking water supplies. Sinking land and erosion
expose structural vulnerabilities. But drought alone does not
cause infrastructure failure. Factor in heavy rainfalls or an
earthquake, and that precarious knife-juggling act could result in
some serious consequences.
(Read Hardening the Infrastructure: Flood Management

January 2016

California officials have put in place mandatory water restrictions

and groundwater supplies are being recharged with clean-treated
wastewater in southern parts of the state, but these efforts
represent the proverbial drop in a bucket in mitigating drought risk
and its impact on infrastructure.
The states volatile situation illustrates the challenges confronting
civil engineers when planning infrastructure for drought and other
extremes in the face of a changing climate. The primary challenge
to the engineering community is developing strategies for the
uncertainty that comes with projecting future climate conditions.
Cracks in the Facade
Prolonged periods of drought pose many threats, perhaps the
biggest of which is the stability of levee systems. Droughts
produce a series of weakening mechanisms that negatively
impact the integrity of such earthen structures.
A leading source of stress on levees is land subsidence. Drought
leads to increased extraction of groundwater from aquifers, which
creates subsurface movement. Over time the land sinks or

FarshidVahedifard, Mississippi State UniversityExtensive

groundwater pumping has exacerbated existing land subsidence
in parts of the state, especially the Delta, says FarshidVahedifard,
an assistant professor at Mississippi State University. The
geotechnical engineering specialist researches climate change
and its impact on critical infrastructure performance. A climbing

January 2016

rate of soil organic carbon (SOC) decomposition due to drought

also is contributing to land subsidence in the Delta.
Recent results from a monitoring program revealed that droughtaccelerated land subsidence has reached as much as 2 inches
per month in some places, several times greater than pre-drought
subsidence rates.
Additional drought-induced stressors on levees include soil
strength reduction, desiccation cracking, erosion, fissuring and
soil softening, and increased SOC oxidation. In California, such
conditions compound the stresses on levee systems that already
are endangered, says Vahedifard.
High Hazard
The California Department of Water Resources evaluated the
states levees in 2011 before the start of the current drought. The
agency classified 51% and 55% of urban and non-urban levies,
respectively, as high hazard. The designation indicates that
levees are in danger of failing during an earthquake or flood.
The study results imply that functionality of the aging structures
will continue to decrease unless strategic actions are taken to
implement some level of maintenance and rehabilitation
approaches, Vahedifard says.
That could spell disaster for the 13,000-plus miles of levees and
their various functions should heavy rainfall or storm surges
occur, a phenomenon that is not uncommon at the end of a
drought. The Delta, for example, directs drinking water to 23
million people and irrigation water for several million acres of
agriculture. Levees throughout most of the Delta downstream of
Sacramento primarily protect land at or below sea level and often
serve to hold water back.
Catastrophic failure of these non-urban levees could inundate
land that has subsided below sea level drawing in seawater and
consequently contaminating the water supply, Vahedifard says.

January 2016

In comparison to the Deltas levees, urban levees protect densely

populated areas in the Central Valley and Northern California
from flooding. According to Vahedifard, desiccation cracking can
be of greater consequence for the integrity of these intermittently
loaded levees that may become completely dry during drought.
Effects on Related infrastructure
Drought conditions impact more than levees. They can threaten
any infrastructure interfacing with soil, including slopes,
embankments, roads, bridges, building foundations and pipelines.

Vincent Lee, ArupLand subsidence, for instance, puts utility

connections at risk as buildings sink, says Vincent Lee, associate
principal at the international engineering firm Arup. Canals and
sewers are examples of utility conduits that require gravity to
enable them to function properly, Lee says. Sewer or drainage
pipes tilting in the wrong direction would result in conveyance
issues as water cant flow uphill, he says.
In California, two recent events demonstrate what heavy rains do
to drought-stricken, soil-related infrastructure. An intense October
storm with hail unleashed 300,000 cubic yards of mud and debris
onto Interstate 5 and surrounding roadways north of Los Angeles.
The mudslide trapped a few hundred vehicles.
In July, a bridge collapsed on Interstate 10 in the California desert
between Los Angeles and Phoenix after flash flooding eroded the
ground beneath the bridge supports. Repair of that magnitude
can typically take 18 months; design engineers and construction
crews finished the work in two months for $5 million.

January 2016

To further complicate matters, the El Nio weather phenomenon

is expected to hit California in early 2016 with the possibility of
heavy rainfall and storm surges, adding stress to already
vulnerable infrastructure.
In addition to heavy rain, extreme heat often accompanies
drought. In the Southwest U.S. and Texas, extreme heat has
caused railroad rails to bend, Arups Lee says. This increases the
risk of train derailments. Meanwhile, decreasing water levels in
rivers, channels and waterways can impact shipping and
transportation routes. Power plants that rely on water for cooling
may have to decrease their generation output or experience
shutdowns. Low water levels on the Missouri River a decade ago
impacted power generation across the Midwest.
Designing for Uncertainty
Californias drought-plagued infrastructure serves as a microcosm
of the challenges that civil engineers face when adapting and
designing critical infrastructure to be resilient to a changing

Bilal Ayyub, University of MarylandEngineers typically plan and

design infrastructure according to historic weather records. With
the changing climate, however, the assumption that things are
random but the same that is, they are stationary might not
be valid, says Bilal Ayyub, professor of civil and environmental
engineering and the director of the Center for Technology and
Systems Management at the University of Maryland. We are

January 2016

dealing with a higher level of uncertainty in predicting extreme

conditions compared to what we have done in the past.
That uncertainty relates to the location, timing and magnitude of
the changes over the lifetime of infrastructure. To help engineers
navigate these unknowns, the American Society of Civil
Engineers (ASCE) produced the white paper Adapting
Infrastructure and Civil Engineering Practice to a Changing
Written by ASCEs Committee on Adaptation to a Changing
Climate, the paper identifies three types of information engineers
need to effectively address climate change impacts: actionoriented knowledge, fundamental knowledge and analytical tools.
Civil engineers require action-oriented climate change information
that characterizes climate projections over the next few decades.
Also necessary is understanding interdependencies within and
between the various components of civil infrastructure.
Fundamental knowledge involves re-examining many civil
engineering design standards and performance metrics. That
means everything from identifying limits in current designs and
materials for extreme loads to evaluating the effects of changing
demands on infrastructure vulnerabilities.
Analytical methods are necessary to integrate variance into
planning and design, measure the effectiveness of infrastructure
adaptation and define and evaluate the economic implications of
infrastructure vulnerabilities.
Ayyub also points out that designing with climate change in mind
necessitates a risk-management strategy that allows a system to
be updated as conditions change. This framework includes
monitoring various infrastructure components with sensors to
detect early warnings of stress, says Ayyub, a lead author on the
ASCE paper. Performance data collected over the years can yield
insights into a systems performance under changing conditions.

January 2016

In addition to the paper, ASCEs Infrastructure Resilience Division

generated a list of potential initiatives this past summer that
address how to implement resilience concepts for infrastructure
into civil engineering practice.

Amir AghaKouchak, University of California at IrvineOne

roadblock awaiting engineers is that the codes used to design
infrastructure dont necessarily consider drought. When the
engineering community built all of this infrastructure in the 1940s
and 50s, potential impacts of droughts were unknown, says Amir
AghaKouchak, a hydrologist and assistant professor at the
University of California, Irvine.
Updating the codes is a complicated process that requires
research not only to understand the mechanisms but also develop
methods and frameworks to factor drought conditions into
There are infinitely potential ways to make a structure stable, but
those ideas should be explored and calculated by the greater
scientific community, AghaKouchak says.
Putting Infrastructure to the Test
Research, development and demonstration will help civil
engineers address the impact of climate change on the
infrastructure they design. In his work on quantitatively assessing
the resilience and vulnerability of critical infrastructure to extreme
events under a changing climate, Mississippi States Vahedifard
is collaborating with hydrologists and climate scientists to bridge
the gap between climate science and engineering practice.

January 2016

One part of his research assesses the thermo-hydro-mechanical

impacts of climate change on the performance of and soilstructure interaction in critical earth structures. In another part,
Vahedifard and his colleagues are working to develop tangible
design and risk management approaches for critical
The research team currently is evaluating the effects of
Californias drought on soil strength and the structural integrity of
the states levee systems, as well as the effects of increased
rainfall intensity on landslide activities in Seattle, Wash.
At UC Irvines Center for Hydrology & Remote Sensing,
AghaKouchak has developed the Global Integrated Drought
Monitoring and Prediction System (GIDMaPS). The system relies
on NASA data products to generate meteorological, agricultural
and agro-meteorological drought information. AghaKouchak and
his team will soon unveil a fourth category based on relative
humidity. He expects that to help detect drought onset earlier than
other indicators.
Used for seasonal analysis, the statistical drought prediction
model estimates how drought will change in the next 4 to 6
months. We dont go any farther out into the future because
drought prediction is very challenging, AghaKouchak says. He
and the other researchers also are developing a Californiaspecific model.
Solutions for a more resilient infrastructure are starting to emerge
outside the lab. We need a systematic approach and
understanding of how one system affects another, Lee says.
Engineering solutions need to be tied to an elegant and
integrated design.
Lee cites the proposed reconfiguration of the 51-mile Los Angeles
River corridor. Project planners and engineers seek to integrate
design and infrastructure for a more aesthetic solution that

January 2016

benefits the community while still functioning from an engineering

standpoint, Lee says.
The Los Angeles River Revitalization Corp. has commissioned
architect Frank Gehry and a team of experts to analyze data and
recommend river interventions and capital improvements based
on design storm impacts and process methodology.
The initial study, which involves public engagement, will address
factors such as flood management, infrastructure resilience,
recreation and quality of life. Lee says that public engagement in
this and other infrastructure projects is critical. After all, many
communities may have to transform significantly as climate
change risks increase.
To contact the author of this article,
email engineering360editors@ihs.com
By Chemical Engineering | January 1, 2016
Last month, delegates from 195 countries converged on Paris,
France for the 21st Conference of the Parties (COP21; November
30 December 12) to the United Nations Framework Convention
on Climate Change (UNFCCC). The goal of COP21 was to reach
an international agreement on how to limit global warming by
reducing or eliminating the emissions of greenhouse gases
(GHGs). After all-night deliberations, the UNFCCC agreement
to hold the increase in the global average temperature to well
below 2C above pre-industrial levels and to pursue efforts to limit
the temperature increase to 1.5C above pre-industrial levels
was adopted by all parties on December 12.
Already by last October, 120 countries had submitted to the U.N.
their Intended Nationally Determined Contributions (INDCs),
which are their national targets for reducing GHGs. The U.S., for
example, intends to achieve an economy-wide target of reducing
its GHG emissions by 2628% below its 2005 level in 2025, and

January 2016

to make best efforts to reduce its emissions by 28%. The target

covers all GHGs in the 2014 Inventory of the U.S. GHG
Emissions and Sinks: CO2, CH4, N2O, perfluorocarbons (PFCs),
hydrofluorocarbons (HFCs) SF6 and NF3. Similar INDCs were
issued by: Japan (26% reduction of GHGs by 2030 compared to
2013 (25.4% reduction compared to 2005); Canada (30%
reduction of GHG emissions below 2005 levels by 2030); and
Australia (2628% below 2005 levels by 2030). China pledged to
peak emissions by 2030 and increase its share of non-fossil fuels
in primary energy consumption to around 20%. The E.U. aims for
at least 40% domestic reduction in GHG emissions by 2030
compared to 1990.
Achieving such targets will require the efforts and expenditures
across all sectors of the chemical process industries (CPI): oiland-gas (CO2 and CH4), petroleum refining (CH4and CO2),
chemicals (CO2, CH4, N2O), power generation and transmission
(CO2, PFCs), semiconductor fabrication (SF6 and NF3), as well
as iron, steel and cement making (CO2). Consumers, too, will
ultimately feel the effects on their pocketbooks, with higher costs
for electricity, more fuel-efficient transportation, and greener
buildings. The priority areas listed by the parties submitting
INDCs is shown in Figure 1.

Figure 1. Renewable energies and energy efficiency were

priorities for the majority of countries Intended Nationally
Determined Contributions
INDCs; source: http//unfccc.int/files/adaption/application/pdf/all_p

January 2016

In the buildup to COP21, The Institute of Chemical Engineers

(IChemE; Rugby, U.K.; www.icheme.org) Energy Center Board
issued a statement (December 2) that outlines five priority topics
for the climate talks: energy efficiency; energy storage and grid
management; carbon capture, storage (CCS) and utilization;
nuclear energy; and sustainable bioenergy. The technologies
exist now to deliver massive energy savings and GHG emissions
reductions in all five priority areas. Taken together, they represent
a pathway to a decarbonized energy system that can be
realized now, as long as the agreement made at COP21
recognizes that the time has come for deployment of such
technologies (emphasis IChemEs).
Chemical engineers already understand the technology needed
to limit atmospheric CO2 levels. Now is the time to start using it,
says professor Stefaan Simons, chair of IChemEs Energy
Center. World leaders can shift the focus from research and
development (R&D) to demonstration and deployment. We can
give policy makers the solutions needed to mitigate climate
change, he says.
This position was supported by U.N. Secretary General, Ban KiMoon during COP21, who said The solutions to climate change
are on the table. They are ours for the taking. Let us have the
courage to grasp them.
Because fossil-fuel-based power generation represents the
largest source of CO2emissions around the world, most experts
and authorities agree that CCS will be required to prevent global
temperatures from exceeding safe levels. However, two main
challenges to widespread deployment of CCS technologies in the
power sector are the need to bring down the cost to a level that
sustains competition with low-carbon technologies and to
establish plant sites where CO2 storage is available and
economic, according to the 2015 World Energy Outlook Special
Report: Energy and Climate Change, published last October by
the International Energy Agency (Paris, France; www.iea.org).
Nevertheless, efforts are continuing to address these two

January 2016

challenges, as well as increasing the acceptance of the

Last September, the U.S. Department of Energys (DOE) National
Energy Technology Laboratory (NETL; Morgantown, W.
Va.; www.netl.doe.gov) released the fifth edition of its Carbon
Storage Atlas (Atlas V), which shows prospective CO2 storage
resources in saline formations, oil and natural gas reservoirs,
and un-mineable coal seams of at least 2,600 billion m.t. an
increase over the 2,380 billion m.t. reported in the 2012 Atlas.
This vast resource has the potential to store hundreds of years
worth of industrial GHG emissions, permanently preventing their
release into the atmosphere, says NETL.

SaskPowers Boundary Dam Unit 3 in Canada. This plant, with
more than one year of operation, is the worlds first coal-fired
power plant to capture and store the CO2 from the fluegas
CCS achieved an important milestone in the fall of 2014, with the
startup of SaskPowers Boundary Dam Unit 3 (120 MW) in
Canada (Figure 2) the worlds first commercial power plant to
come online with CO2 capture (for more details, see CO2Gets
Grounded, Chem.
Eng., April
23; www.chemengonline.com/co2-gets-grounded).

January 2016

More recently (last November), Fluor Corp. (Irving,

Tex.; www.fluor.com) completed the construction of Shells (The
Hague, the Netherlands; www.shell.com) Quest CCS project near
Fort Saskatchewan, Alberta, Canada. The Quest CCS project is
designed to capture more than 1 million m.t./yr of CO2from the
Scotford Upgrader, which turns oil-sands bitumen into synthetic
crude oil. The CO2 from the upgraders hydrogen-production
plant is captured by an amine solution, and then released and
liquefied so it can be pipelined 65 km north to be injected 2 km
underground for permanent storage.
State of the Union Pushes Clean Energy, Calls for Coal-Lease
By : Jessica Lyons Hardcastle. Jan12, 2016
President Obama took on big oil in last nights State of the Union,
emphasizing the US transition to clean energy.
Rather than subsidize the past, he said, we should invest in the
future especially in communities that rely on fossil fuels. Thats
why Im going to push to change the way we manage
our oil and coal resources, so that they better reflect the costs
they impose on taxpayers and our planet.
Not surprisingly, his comment drew praise from environmentalists
and clean energy interests and criticism from fossil fuel and other
industry groups.
The American Petroleum Institute president and CEO Jack
Gerard warned new regulations could raise costs for consumers.
The majority of new oil and natural gas production that has done
so much to grow our economy and save consumers money has
occurred primarily on private and state lands, Gerard said. On
federal lands controlled by the administration, crude oil production
has remained flat and natural gas production has declined.
Furthermore, the administration has advanced nearly 100
regulations impacting all aspects of the oil and natural gas
industry over the past year, which hinders production. Instead of

January 2016

bombarding our economy with duplicative, job-crushing new

regulations, President Obama should embrace policies that
recognize Americas energy resurgence, including environmental
The National Association of Manufacturers president and CEO
Jay Timmons also cautioned about new environmental
regulations, which he said will hurt manufacturers.
Instead of imposing new rules on business, including
environmental regulations, providing regulatory relief could
unleash billions of dollars of investment in the US economy,
Timmons said. Pursuing a comprehensive energy strategy that
addresses current market realities would allow us to harness
growth opportunities.
On the other side of the isle, Tom Sanzillo, director of finances for
the Institute for Energy Economics and Financial Analysis, said
President Obamas coal-lease reform does for the coal industry
what it cannot do for itself discipline production, shrink supply
and better manage the nations energy security and this vital
Center for Climate and Energy Solutions president Bob
Perciasepe said the next steps in transitioning to a clean energy
future is to implement the Clean Power Plan and flesh out the
details of the Paris climate agreement. On both fronts, strong
leadership from business will be critical, Perciasepe said.
In his final State of the Union address, Obama also took a parting
shot at climate deniers. Look, if anybody still wants to dispute the
science around climate change, have at it, Obama said. Youll
be pretty lonely, because youll be debating our military, most of
Americas business leaders, the majority of the American people,
almost the entire scientific community, and 200 nations around
the world who agree its a problem and intend to solve it, he said,
referencing the Paris climate deal.

January 2016

Like Not Having The Next Ice Age?

Thank Global Warming
By News Staff | January 13th 2016
Though 90,000 out of every 100,000 years in recent geological
cycles have been Ice Ages, and it has been 12,000 years since
the last one, a new glacial inception hasn't happened.
That's because humanity has become a geological force that is
able to suppress the beginning of the next ice age, according to a
paper in Nature.
Scientists of the Potsdam Institute for Climate Impact Research
found the relation of insolation and CO2 concentration in the
atmosphere to be the key criterion to explain the last eight glacial
cycles in Earth history. Even moderate human interference with
the planet's natural carbon balance might postpone the next
glacial inception by 100,000 years.
"Even without man-made climate change we would expect the
beginning of a new ice age no earlier than in 50.000 years from
now - which makes the Holocene as the present geological epoch
an unusually long period in between ice ages," explains lead
author AndreyGanopolski. "However, our study also shows that
relatively moderate additional anthropogenic CO2-emissions from
burning oil, coal and gas are already sufficient to postpone the
next ice age for another 50.000 years. The bottom line is that we
are basically skipping a whole glacial cycle, which is
unprecedented. It is mind-boggling that humankind is able to
interfere with a mechanism that shaped the world as we know it."
For the first time, research can explain the onset of the past eight
ice ages by quantifying several key factors that preceded the
formation of each glacial cycle. "Our results indicate a unique
functional relationship between summer insolation and
atmospheric CO2 for the beginning of a large-scale ice-sheet
growth which does not only explain the past, but also enables us

January 2016

to anticipate future periods when glacial inception might occur

again," Ganopolski says.
Humanity as a geological force
Using an elaborate Earth system model simulating atmosphere,
ocean, ice sheets and global carbon cycle at the same time, the
scientists analyzed the effects of further human-made CO2emissions on the ice volume on the Northern Hemisphere. "Due
to the extremely long life-time of anthropogenic CO2 in the
atmosphere, past and future emissions have a significant impact
on the timing of the next glacial inception," co-author
RicardaWinkelmann says. "Our analysis shows that even small
additional carbon emissions will most likely affect the evolution of
the Northern Hemisphere ice sheets over tens of thousands of
years, and moderate future anthropogenic CO2-emissions of
1000 to 1500 Gigatons of Carbon are bound to postpone the next
ice age by at least 100.000 years."
The quest for the drivers of glacial cycles remains one of the most
fascinating questions of Earth system analysis and especially
paleoclimatology, the study of climate changes throughout the
entire history of our planet. Usually, the beginning of a new ice
age is marked by periods of very low solar radiation in the
summer, like at current times. However, at present there is no
evidence for the beginning of a new ice age: "This is the
motivation for our study. Unravelling the mystery of the
mechanisms driving past glacial cycles also facilitates our ability
to predict the next glacial inception," Winkelmann says.
"Like no other force on the planet, ice ages have shaped the
global environment and thereby determined the development of
human civilization. For instance, we owe our fertile soil to the last
ice age that also carved out today's landscapes, leaving glaciers
and rivers behind, forming fjords, moraines and lakes. However,
today it is humankind with its emissions from burning fossil fuels
that determines the future development of the planet," co-author
and PIK-Director Hans Joachim Schellnhuber says. "This

January 2016

illustrates very clearly that we have long entered a new era, and
that in the Anthropocene humanity itself has become a geological
force. In fact, an epoch could be ushered in which might be
dubbed the Deglacial."
Source: Potsdam Institute for Climate Impact Research (PIK)
Companys initiative to bring safe drinking water to more a
million lives in parched districts of Rajasthan
Barmer, Rajasthan: Hundreds of villages in the desert district of
Barmer, got what they needed the most, clean and safe drinking
water. A Memorandum of Understanding (MoU) was signed today
between the Public Health and Engineering Department (PHED)
of Rajasthan and Cairn Enterprise Centre Society. As per the
MoU, water purification plants will be established and maintained
to provide clean and safe drinking water to more than 800 villages
in Barmer.
The MoU was signed in presence of Principal Secretary PHED, J
C Mohanty and Manoj Aggarwal the Head of CSR, Cairn India.
Given that the Barmer district has an acute shortage of quality
drinking water with available underground water being unsuitable
for drinking (highly saline total dissolved solids (TDS) content
>3,000 with high fluoride content), there are several prevalent
water borne diseases that impact the quality of life. These also
lead to a high incidence of diarrhoea, which in turn leads to a high
Infant Mortality Rate (IMR) as well as Maternal Mortality (MMR) in
the area, besides widespread incidence of fluorosis, etc.
Hence, Cairn has planned a major CSR intervention to support
the Government of Rajasthan (GoR) on water treatment to make

January 2016

the available water safe for drinking and ensuring delivery of the
safe drinking water to households.
The initiative will involve setting up of 333 small scale Reverse
Osmosis (RO) plants (1,000 to 3,000 litres per hour capacity) over
the next three years to provide safe drinking water to a large
number of people (estimated in excess of 1 million) living in ~800
Cairns intervention to provide safe drinking water to the
community focuses on the Barmer district, part of the Thar Desert,
said to be the most densely populated arid zone in the world with
a population density of ~90 people per square km. Temperatures
can reach more than 50 oC during summer.
Accordingly, Cairn India initiated the JeevanAmrit pilot project in
collaboration with PHED, GoR, to ensure safe drinking water to
the communities in the districts of Barmer and Jalore through the
establishment of RO facilities. Due to the extremely positive
community feedback, Cairn is now substantially increasing the
scale and scope of our project. In partnership with PHED, GoR,
Cairn will establish as many as 333 water purification units across
the district over three years; this would make our intervention one
of the largest in the country, impacting as many as a million-plus
At present, for the pilot project, Water Committee is responsible
for collecting all user charges and operations and maintenance of
the RO facility. The model Cairn has adopted ensures widespread
distribution at the point of consumption. Water ATW (Any-time
Water) kiosks have been established at a number of access
points; the community is provided with pre-paid smart cards with
which they can access water at their convenience in a manner
similar to the access provided by bank ATM machines.


January 2016

In addition, Cairn has partnered with a few local entrepreneurs to

run a water on wheels system (called jalrath). Power availability
remains unreliable in some areas in Barmer; to address this
issue, Cairn is providing for solar-powered RO plants in this
These plants allow for remote monitoring in which the health of
the plant and quality of water can easily be monitored though
SMS alerts or through the Android platform. This provides realtime access of crucial parameters such as TDS levels, input and
output water quality and flow rates etc., ensuring quick action can
be taken in case of any issue.
12-Year-Old ShrustiNerkars Invention Can Save Upto 80%
Water In Showers
ShreyansDodia, December 21, 2015
A 12-year-old Nasik girl has taken it upon herself to solve the
water woes of the world. Quite literally. ShrustiNerkar, a Std VI
student of RachnaVidyalaya has invented a shower with special
nozzles that actually saves water.
According to Nerkar, it was her concern for environmental issues
that prompted her.
A car wash inspired her
ShrustiNerkar told the DNA that it was when she accompanied
her father to a car wash that she realised that saving water is not
that difficult.
She says, I heard them announce that they will wash the car with
just two litres of water. That really made me curious and I asked
them they would go about it. Thats when I found out that they use
special sprinklers. Later, I spoke to my father about whether we
could use such sprinklers in our shower as well.
She experimented with electric wire pipes and PVC pipes before

January 2016

finally settling for foldable pipes. It took her about four models
before the fifth one finally worked.
How does it work?
According to media reports, thanks to her design, the shower
uses only 15 litres of water for one person as opposed to the 80
litres that is normally used. So effectively, 65 litres of water per
It seems the technology can supply water to a population of 17
lakhs for 34 days.
Nerkars invention was noticed by District Collector Dipender
Singh Kushwah. She has now applied for a patent as well.
The young inventor is also a good painter, has a collection of
3,000 erasers, plays the keyboard, likes basketball and is also an
amateur magician!
She says, My next step to improve this innovation and make it
more environment-friendly is to develop a sensor which will save
water when the person is not under it!
Meet 12-year-old girl who has invented a shower that saves
up to 80% water

Twelve-year-old ShrustiNerkar is a standard six student in

NashiksRachnaVidyalaya. She has invented a shower with
special nozzles, which can save up to 80% water. Shrustis
shower uses approximately 15 liters of water per person when
compared to the 80 litres that is normally used, thereby saving 65
litres of water per shower.

January 2016

Shrusti has applied for a patent of her new invention. Her older
brother Amey who studies in standard 12 already holds a patent
for devising a smart helmet that would not allow ones scooter to
start till it is worn by the rider. Their father, NarendraNerkar, a
professor of electronics at the government polytechnic college,
swells with pride at the accomplishments of his children.
Why your Organisation Needs a Chief Sustainability Officer
Organization charts normally have boxes for lots of chiefs
whether its chief executive officer (CEO), chief financial officer
(CFO), chief operating officer (COO) or even chief technology
officer (CTO) to indicate positions of senior responsibility for
large areas the organizations day-to-day and strategic
operations. However, organizations that are making an explicit
commitment to more sustainable business practices have not yet
granted the same seniority to the person in charge of those
sustainability initiatives. There are a growing number of chief
sustainability officers (CSOs) out there DuPont appointed
Linda Fisher as CSO as far back as 2004 but for many
organizations, sustainability is seen as being part of other
strategic responsibilities such as compliance or environmental
health and safety, corporate affairs, marketing, community
relations, which precludes the creation of an entirely separate
As we have discussed in other blog posts, greenwashing is the
practice of using advertising and PR messages to promote a
commitment to sustainability that has no real evidence in
operational practice. Companies say all the right things but make
no significant changes to their business practices to support those
commitments. On that basis, many companies see no need to
support sustainability initiatives with a formal organizational
structure or operational metrics. The compliance department can
make sure that the company isnt breaking any rules, and
marketing can make sure that we are promoting all of our good

January 2016

community efforts in the name of sustainability and corporate

social responsibility (CSR). However, sustainability and CSR
are about exceeding what is required by law and going beyond
ordinary compliance.
Changing Expectations
Customers, partners and investors are no longer willing to settle
for PR messages and advertising slogans. They now expect to
see firm commitments, disclosures and sustainability reports as to
how the company is meeting those commitments. It may make
sense for your supply chain manager to monitor better use of
recyclable packaging and for your operations manager to monitor
energy and water usage, but these are internal procedures and
do not cover the full spectrum of sustainability topics, like social
value created, investment in local community or stakeholder
engagement. If your company plans to incorporate sustainable
business practices as a core value, it should also embrace the
accountability of a public commitment to that value.
A Strategic Approach
Of course, putting a CSO in place in a small organization may
seem like youre trying to run before you can walk, but there is a
clear path to follow. Compliance is a great place to start. Actively
promoting the fact that you devote time and resources to
maintaining compliance with any and all regulations can be a
good first step on your path to sustainability. This compliance will
involve all departments that are subject to such regulations. In
that sense, sustainability acts as a risk management mechanism.
The next step will be to move beyond basic compliance into cost
efficiency in order to realize financial savings while incorporating
greater sustainability. Moving to wind or solar power to reduce
carbon emissions would be a good example here. This will enable
opportunities. To gain a strategic advantage, though, would
involve a formal transition to sustainability as a core
value. Products and services that you offer to your customers
need to truly reflect your commitment. This typically involves

January 2016

innovation as you start to redesign existing products, services,

management and engagement methodologies in addition to
expanding your offerings. At this point, you may be ready to post
that CSO vacancy!
AglaiaNtili is the managing director of Sustainability Knowledge
Group, providing sustainability and CSR advisory and training
services at international corporate level. She is the founder
of CSR Coaching, supporting professionals in corporate
responsibility and sustainability, and the founder of the CSR
& Sustainability meetup, an open platform to support learning and
knowledge sharing in the UAE.
She holds a master of business administration degree, a master
of science degree total quality management and business
excellence and a degree in business administration. She is an
ISO9000 Lead Auditor, an EFQM Accredited European
Excellence Assessor, and an IEMA, GRI and ILM approved
more: http://www.environmentalleader.com/2016/01/13/why-yourorganization-needs-a-chief-sustainability-officer/#ixzz3x91EgWAf
Sustainability is impossible until companies Account for
Jan 13,2016 The Guardian
On holiday recently, I visited the Japanese sacred area
of Kumano Kodo. Miles of treks mark pilgrim routes from the
ancient capital of Kyoto to a number of shrines located around the
Wakayama peninsula.
We were walking on a high ridge and stopped to look and to listen
to the forest sounds bird song, a variety of insect noises and
large butterflies.
But something was strange. The sound was coming at us in mono
not in stereo. One side of the ridge fell off steeply. The forest was

January 2016

lush, varied and full of animal and insect life. It was from this side
that the cacophony of sound was coming. The other side of the
ridge was less steep and had been commercially exploited as a
wood plantation: a monoculture of pine trees. No or very little life
other than the pine trees themselves could survive here.
By some standards, the pine plantations can be considered
"sustainable". They are well managed, re-planting takes place
and the soil is maintained in good condition. But what of the vast
amount of other life that has been driven out and destroyed in the
process of turning whole mountain ranges into managed forests?
Who bears the cost of that? The management of "externalities"
as such damage is un-emotionally labelled by economists has
proven to be one of the most intractable issues in moving towards
Neither does the ability for businesses to do damage or dump
their waste unhindered only hurt the environment. It can lead to
the creation of products that can be harmful to human health.
Take the Norwegian salmon farming industry and most salmon
farming elsewhere, much of which is controlled by Norwegian
companies. A report on farmed salmon by Green Warriors of
Norway, stated that "farmed fish is Norway's most toxic product."
Some salmon farms dump toxic waste into rivers and oceans.
Besides the obvious and substantial damage both to the oceans
and to ocean life, the ability to dump waste unhindered allows the
use antibiotics and carcinogenic
chemicals in the farms in order to "optimise" the commercial value
of their product.
A proportion of these chemicals remain in the fish and, as a
result, the salmon we all eat may be far from the clean, healthy,
natural, product it is positioned as. Even the typical salmon
colouring is often chemically added as farmed salmon emerge
with dull, grey flesh. The issue of imposing costs on others has

January 2016

been one of the most intractable in the sustainability debate.

Attempts to move forward have been criticised by all sides.
Businesses have resisted taking on the full costs of their
activities. Even when alternative technologies that could eliminate
and reduce dumping significantly already exist and are affordable
as in salmon farming producers refuse to adopt them.
Regulators prefer to maintain the status quo rather than
discharging responsibilities to environment and human health. On
the other side, some environmentalist groups have objected to
attempts to offset some of industry's externalised costs as
representing a commodification of nature.
Industry cannot absorb previously externalised costs overnight. It
is also clear that continuing to ignore the consequences is no
longer acceptable.
A first step would be a requirement for all corporations to be
transparent about the externalities they generate in financial,
environmental and human health terms. We can then start an
open discussion asking: if corporations do not wish to bear these
costs they generate, how should our society deal with them?
While these costs remain hidden and largely ignored, such a
discussion is impossible.
There are signs of progress. The new UK requirement for quoted
companies to report on their greenhouse gas (GHG) emissions is
a welcome step forward. But the requirement should be extended
to include every sort of externalised environmental impact
throughout the whole of the supply chain.
A few companies have started this process. Puma is probably the
best known for its environmental profit and loss statement.
Patagonia is another company that takes its environmental
responsibilities seriously. They have made great progress but,
they do not yet fully and transparently account for all the costs
they are imposing of the environment and on human health.

January 2016

We are all shocked when we see images of open dumping of

garbage in the streets or waste piles in the cities of many
developing countries. Yet the discussion of the vast amount of
dumping and other externalised costs by industries worldwide
receives little attention.
Until corporations start being fully transparent about the full costs
they impose on the environment and regulators start to take such
dumping seriously, much of the talk about creating sustainable
business will remain just talk. Transparency and an open debate
about how, as a society, we should meet externalised costs are
both long overdue.
Join the community of sustainability professionals and
experts. Become a GSB member to get more stories like this
direct to your inbox
Rigid plastics recycling surges 27%; film recycling grows
The recycling of post-consumer rigid plastics surged 276 million
pounds, or 27%, in 2014 to reach a new high of over 1.28 billion
pounds for the year, according to a report released today at
the 2016 Plastics Recycling Conference. The 2014 National
Postconsumer Non-Bottle Rigid Plastic Recycling Report also
indicated that the reported volume of recycled rigid plastics -tracked separately from bottles or film -- is now four times greater
than the volume reported in just 2007. "This is really exciting
news," said Steve Russell, vice president of plastics for the
American Chemistry Council. "The combination of more advanced
sorting technologies coupled with expanded consumer access is
making a positive difference, and we look forward to seeing
growth in rigid plastics recycling continue."
NEW ORLEANS, LA (February 2, 2016) The recycling of postconsumer rigid plastics surged 276 million pounds, or 27 percent,
in 2014 to reach a new high of over 1.28 billion pounds for the
year, according to a report released today at the2016 Plastics

January 2016

Recycling Conference. The 2014 National Postconsumer NonBottle Rigid Plastic Recycling Report also indicated that the
reported volume of recycled rigid plasticstracked separately
from bottles or filmis now four times greater than the volume
reported in just 2007.
This is really exciting news, said Steve Russell, vice president of
plastics for the American Chemistry Council. The combination of
more advanced sorting technologies coupled with expanded
consumer access is making a positive difference, and we look
forward to seeing growth in rigid plastics recycling continue.
Moore Recycling Associates Inc., which authored the report,
attributes much of the strong gain to a rebound from the 2013
Green Fence effort in China, improved bale quality, and growing
standardization of plastics balesthe unit by which post-use
plastics are sold after collection.
The source of non-bottle rigid plastics collected with the biggest
increase in 2014 was the Pre-Picked Bale, which is generated
from municipal programs and contains a mixture of products with
bottles removed.
The rigid plastics category contains food containers, caps, lids,
tubs, clamshells, cups and bulky items, such as buckets, carts
and lawn furniture, along with used commercial scrap, such as
crates, battery casings and drums. Typical end markets for these
materials include automotive parts, crates, buckets, pipe, lawn
and garden products, and thick-walled injection molded products.
As in prior years, polypropylene and high-density polyethylene
comprised the two largest resins in this category, representing
38.3 percent and 34.1 percent, respectively, of total rigid plastics
Approximately 64 percent of the 1.28 billion pounds of rigid
plastics collected for recycling was processed in the United States
or Canada, down slightly from 2013. The remainder was exported
overseas, primarily to China.

January 2016

A separate report also released today found a minimum of 1.17

billion pounds of post-consumer plastic film was recycled in 2014,
an increase of over 29 million pounds, or 3 percent, from the prior
year. The 2014 National Postconsumer Plastic Bag and Film
Recycling Report, also authored by Moore Recycling, marks the
tenth consecutive year of the report, and a 79 percent increase in
plastic film recycling since 2005. Based on data from the U.S.
Environmental Protection Agency, the recycling rate for film has
grown from 6.6 percent to 17 percent of production during the
same period.
The plastic film category includes commercial film packaging, a
variety of consumer wraps and bagsall made primarily from
thin, flexible sheets of polyethylene. Of the film collected for
recycling in 2014, approximately 45 percent was processed in the
United States or Canada with the remainder going primarily to
Primary uses for recycled plastic film include composite lumber,
new film and sheet, agricultural products, crates, buckets, and
"Were pleased to see growth in these important areas of plastics
recycling, said Patty Moore, president of Moore Recycling.
Continued expansion of a healthy sorting and processing
infrastructure, and further development of end markets for
recycled materials are essential for building on recent gains.
Information on tracking the recycling of plastic bottles is
documented annually in a third series of reports. The 25th Annual
National Post-Consumer Plastics Bottle Recycling Report with
results from 2014 was released in November 2015.
Contact: Jennifer Killinger (202) 249-6619
Email: jennifer_killinger@americanchemistry.com


January 2016

Microsofts Datacenters and the Deep Blue Sea

February 2, 2016 By Carl Weinschenk

datacenter cooling is big news in the consumer media. But it was
yesterday: Microsoft introduced Project Natick, which focuses on
the placement of a datacenter on the ocean floor. The story was
covered everywhere.
The initial research vessel is named the Leona Philpot, a
character from the Halo video game. It was submerged and ran
on the ocean floor about one kilometer off the coast of San Luis
Obispo, CA from August to November of last year.
There are several advantages to the dumping a datacenter in the
Microsoft ways that almost half of people live near the coast.
Serving them from nearby reduces latency and generally builds
The ocean provides a natural source of power. It also cuts costs:
Since there are no people, those associated costs from
cafeterias to parking garages are eliminated.
Real estate costs are less as well.
While each of those advantages is appealing and they
cumulatively add up to tremendous savings the most important
driver of the project is cooling. Natural cold water cooling saves
prodigious amounts of energy.
Bob Johnson at Jilard offers good details on what Microsoft did.

January 2016

Leona Philpot contains a metal pod, eight feet across, which has
a rack of servers. These are surrounded by pressurized nitrogen
which, the piece says, aids in removing heat. Performance is
monitored by more than 100 monitors.
The on-board sensors helped the research team monitor data
such as motion, humidity, and pressure inside the pod. They
discovered that sounds from the pods fans were quieter than
nearby wildlife, and heat dissipated well so that temperatures
were only high about a few inches away from the data center.
It is no slam dunk: Johnson points out that the salty environment
is corrosive and could lead to leaks, storms could bounce the
submergible around and damage the sensitive gear and, of
course, equipment cant be fixed or replaced.
Clearly, there is potential. The question is if those liabilities can be
neutralized to the extent necessary carry the project forward.
Clearly, what Microsoft announced is the highest profile example
of liquid cooling of datacenter equipment. It is far from the only
one, however.
Another approach is being taken by Nautilus Data Technologies.
The company is using the water but not by submerging the
datacenter. Its Waterborne Data Center is mounted on a barge,
which is moored in a secure location.
The system employs a secondary closed-loop heat exchange
technique that does not waste water, which is a considerable
advantage over other implementations. Nautilus claimed this can
save up to 130 million gallons of water a year in comparison to a
mid-size land-based datacenter with a water cooling architecture.
The story says that that datacenter is 30,000 square feet. The
power source, conversion and backup systems are on land. This
means that the equivalent land-based datacenter would be
80,000 square feet.
Thats a bit misleading, of course, because the only space that
truly is saved is for the cooling.
It will be interesting to see if Nautilus eventually creates a version
of the datacenter that is self-contained on the barge. That would

January 2016

enable it to move in case of a storm and travel to where it is

needed, such as to a natural disaster.
Whenever cool sounding but somewhat out there technology is
mentioned, Googles name generally is mentioned. This is no
different. The company got a patent on floating datacenters all the
way back in 2009. SEO by the Sea had the story way back then.
Conceptually, the idea is similar to Nautilus and fairly well
advanced. The floating datacenter idea often is linked to the
mysterious Google barges thatsporadically pop up in the news.
Several trends make water-based datacenters likely:
The first, of course, is the sheer explosion of demand for
datacenter capacity. The power necessary to meet that demand
is overwhelming in and of itself. On top of that, it is growing in an
era in which energy efficiency and carbon neutrality is paramount.
Putting datacenter on or in the water seems to be very good fit for
meeting demand in an environmentally friendly way.
Finally, the parallel modularization of datacenters will generate
technology and knowhow that will help make these concepts
commercially viable.
In any case, the technology is changing because it has to. The
traditional data center model is unsustainable, Arnold Magcale,
Nautilus Co-Founder and CEO Arnold Magcale told Energy
Manager Today.
Land-based models consume massive amounts of water and
energy to power the facilities, wasting natural resources at an
alarming rate. Innovative and sustainable designs are critical to
ensure global data centers are able to keep up with the demand
of a world increasingly dependent on technology to survive and


January 2016

How Ericsson aligned its people with its transformation
strategy: An interview with chief HR officer BinaChaurasia
A recent shift in strategy required an overhaul of HR.
Ericssons chief human-resources officer, BinaChaurasia,
describes how skills, technology, and processes had to
change on a global scale.
January 2016
Its been more than a decade since Ericsson relied on its own
mobile-phone production, and nearly four years since it sold its
stake in the SonyEricsson joint venture. In 2010, Ericsson
embarked on a journey to reframe its strategy and become a
leader in telecom services, software, and hardware.
This strategic shift brought with it a talent challenge, as new
markets and priorities required different capabilities. In this
BinaChaurasia, Ericssons chief human-resources officer,
describes how the company has revamped HR in response
increasing its agility, coordination, global scale, and ability to
leverage data analytics.
The Quarterly: What was the business context for the
organizational changes human resources has been driving over
the past few years?
BinaChaurasia biography


January 2016

Graduated with a masters degree in management and human

resources from Ohio State University and a masters degree in
philosophy from the University of Wisconsin
Career Highlights
Chief human-resources officer
Vice president of global talent
Various executive positions at Gap, Sun Microsystems, and
PepsiCo/Yum! Brands
BinaChaurasia: When Hans Vestberg started as CEO six years
ago, he decided to get out of the remaining consumer businesses
and grow the software and services segments, which now make
up about two thirds of our total operations. The idea was to
leverage the core network-infrastructure business to develop new
growth areas, including TV and media, cloud services, and
support softwarewhat you might call telecom IT solutions. At
the time, it was very clear to Hans that you couldnt accomplish
this vision without transforming the skills and capabilities of our
people across the organization.
The Quarterly: What were the companys biggest organizational
strengths and liabilities in pursuing this new strategy?
BinaChaurasia: Our culture was our strongest asset. Its a
culture of collaboration and innovation; people are used to
working with colleagues across the globe or taking assignments
in other locations. Our employees are also very clear about our
deeper purposewe are ultimately creating technology for good.
We go where no ones gone before, and we build
communications infrastructure that makes a difference in
communities across the world.


January 2016

At the same time, we were incredibly decentralized. We had 23

regional groups that are now consolidated into 10. Every region
had their own way of doing things. We had no clear systems in
place. From an HR perspective, we had scattered processes and
We had to tackle the problem in three simultaneous waves. One,
we needed a single people strategy that was fully aligned with the
business strategy. Two, we needed an integrated IT platform for
HR. You cant run an efficient global company with disjointed IT
tools. Were now on an integrated platform that can be used by
both managers and employees, where our data can be centrally
gathered and analyzed. And, three, we had to globalize our HR
processes, with the criteria that each one should be simple, user
friendly, and business focused. For example, we created global
learning programs that our employees can access virtually on our
Ericsson Academy portal from anywhere in the world.
We also had a larger vision to build an HR team with the
knowledge and skills to partner with our leaders on implementing
strategic shifts in the business. So we had to clarify roles,
promote from within, bring in some strong external talent, and
provide everyone with thorough training that included business
acumen, financial analysis, and data analytics.
The Quarterly: What kind of insights have you been able to glean
from the data analytics?
BinaChaurasia: Its incredible. Its a guiding indicator in a variety
of areas for the business as a whole. We can pool and crunch
data from all over, not just from recruiting or performance. For
example, in 2014, we did an extensive data analysis across more
than 52,000 job applications for over 2,000 open positions in the
US. We saw that more female candidates were applying to jobs
posted by female managers. So we started looking at what might
be the cause. Is the wording in the female managers job
descriptions different?

January 2016

We decided to use an app to do a gender bias wash of job

descriptions, removing male-focused references. Overall, we
have now increased the percentage of external female applicants
to one of our key global job portals from 16 percent to 21 percent
in just the last 9 months. We have similar analytics insights into
our learning programs, which enable us to develop and deliver
those programs to our employees that best enable knowledge
transfer on the job. Its essentially provided us with an ROI that
we had not previously seen.
These kinds of stats are great, but the key is to move beyond
data reporting and basic analytics to true predictive analytics
make the data a parameter in decision making. And you cant
have that kind of analysis across the whole enterprise, if you dont
go through the initial pain of bringing everyone onboard with
common platforms and processes. And, of course, we build
flexibility into our processes as needed to ensure that we are fast
and relevant across our business lines and regions.
The Quarterly: How did you go about tackling your new people
BinaChaurasia: From a business perspective, it was important
for us to identify the skill gaps that we would need to fill in order to
succeed in our targeted growth areas. And a big part of that is
building a competency model that we could use as a framework.
So, we literally took every single function in the company and all
of its roles, mapped out the stages of each job, and laid out the
competence needed for each one. That took a couple years, as
you might imagine, getting every functional area into the
framework. At that time, many in the company thought it would be
impossible. Today, every position in the company is mapped out.
At the same time, we had to ask ourselves, How do we get an
aggregated assessment of capabilities across the entire
organization? Our answer was to tie in the gap-identification
process with our annual strategy review. Every business unit,
every region develops their annual operating plan and their threeyear plan. We then analyze the competencies needed to deliver

January 2016

those plans, and determine how well fill the gaps. The
aggregated information creates clear demand signals for our
learning and recruiting teams. They know exactly what
competence will be needed by which date, and in which country.
And how you fill those competence gaps is equally important. You
cant just go and hire all of them. You have to have a clear idea of
what talent to hire, what learning programs to develop, and at
what scale. It has always been very important to us as a company
to focus on developing our employees competence instead of
just relying on hiring from the outside.
The Quarterly: How do you manage your talent pipeline?
BinaChaurasia: Hans and I meet annually with every member of
our global leadership team, and their HR partners, to review their
talent and succession plans. The executive-leadership team then
calibrates our top talent as a group and this talent-planning
process culminates in my presentation to the board of directors.
Over the years, our talent pools have been extremely healthy for
any position. So when we look externally, its because we want to,
not because we have to.
The Quarterly: Have you put any directional targets in place
when it comes to geographic presence or diversity?
BinaChaurasia: Along with many leading Silicon Valley tech
companies, we publicized our diversity figures. We werent happy
with the reality, so we put down a milestoneby 2020, at least 30
percent of our global employees will be women, up from 22
percent in 2014. It starts with the tone from the top. Hans has
changed the makeup of his own leadership team. Before, there
was one woman on the executive team; now there are four. If
employees dont see it from the leaders, then it wont happen
across the board. Ive also been very clear in communicating our
philosophy: Not only do you have to send the right signals from
the top, but you have to make it organic so its not about a quota
system; naturally embed it into your hiring and talent-review
process. Finally, make it locally relevant.

January 2016

The Quarterly: What role have social tools played in the

transformation, internally or externally?
BinaChaurasia: Weve invested a lot in collaboration tools for our
internal learning programs. Its increasingly the way people want
to learn, particularly millennials. We created Ericsson Play, a
video learning model, where any employee can upload their own
videos. Today, we have over 30 video channels with over
450,000 video views. We also launched Ericsson Academy
Virtual Campus, which makes online training available to all our
employees, and weve included mobile programs as well so
people can learn on the go.
Externally, weve used social to build the companys employer
brand. When I joined the company, we asked an outside firm to
evaluate our employer brand and in their words it was an
incredibly well-kept secret. So we tried to change that, and our
employees have been our best advocates on social media. We
started winning in rankings for great places to work.
The Quarterly: Looking back, is there anything you would have
done differently?
BinaChaurasia: I would have focused more on change
management. I would have prepared the organization more by
saying up front, This is going to be a year of transition. I kept the
unit heads apprised, and the next level down was also engaged,
but I couldve done better to ensure communication all the way
down the line. Building enterprise-wide tools and processes, and
an HR department engaging on a strategic level, was a big
change. But if we hadnt done that, we would not be able to
transform Ericssons capabilities, or contribute fully to the people
side of our business strategy.
About the authors
BinaChaurasia is the chief human-resources officer of Ericsson.
This interview was conducted by Simon London, McKinseys
digital communications director, who is based in the firms Silicon
Valley office.

January 2016

Unconventionals in Saudi Arabia

January 13, 2016, TOGY
Hani Al Maimani, managing director of National Petroleum
Services (NPS), talks to TOGY about the importance of
technology and investment in Saudi Arabias upstream services
NPS is an oil, gas and petrochemicals services provider, with
operations in more than 15 countries across the Middle East,
North Africa and Southeast Asia.
TOGY: What challenges are facing upstream services companies
in Saudi Arabia?
HAM: In Saudi Arabia, only a handful of providers specialise in
upstream oil and gas services. The high barrier to entry on the
market for the upstream services sector prevents many
companies from starting operations in the market.
Capital expenditure is very high, and continuous investment is
needed for training and keeping up with technological
developments. Not every piece of technology can be acquired off
the shelf. Companies must create alliances and partnerships to
TOGY: How are low oil prices affecting the drilling sector?
HAM: Low oil prices have an impact on every part of the energy
value chain. Operators and services companies are all in the
same boat. We enjoyed the good days together, and now we are
both sharing the same pain.
The crisis has affected some companies more than others. There
have been many redundancies. While it is a difficult time for the
industry, oil and gas resources are still there. This is the third time
in the past 20 years that energy prices have sunk. It is a natural
part of the economic cycle.
TOGY: Will Saudi Arabia develop unconventional gas?

January 2016

HAM: The low price of oil, coupled with the high cost of
production, makes exploiting shale resources unfeasible at the
moment. However, shale is not going anywhere. As the price of
oil climbs back up and technological improvements make
production less expensive, shale will become more and more
The major oil and gas operators in Saudi Arabia are taking a longterm strategic approach to shale. In the coming five to 10 years,
the majority of investments will be in unconventional gas.
Companies in the downstream sector all need gas, so GCC
countries are dedicated to looking for gas resources.
TOGY: What steps is Saudi Arabia taking to maximise its
resources and boost its output?
HAM: World oil consumption is around 93 million barrels per day.
OPEC contributes 30 percent to the total world production. The
worlds population is increasing. At the same time, production at
major oilfields is decreasing. The big oilfields in Saudi Arabia and
in other countries have been in production for many decades.
Some of them are now in decline.
To compensate for the decline in production, oil and gas
producing countries are investing a lot in production enhancement
activities. I do not see this trend changing in the future.
Saudi Arabia is looking for new discoveries in both
unconventional and conventional resources. While shale has
become a major industry in the US, it is a medium to long- term
strategy for Saudi Arabia due to the high cost of production. For
the moment, Saudi Arabia is relying on its existing reserves and
new conventional discoveries, which are less expensive to
TOGY: To what extent does the upstream sector encourage
technological innovation?
HAM: Oil accounts for a large share of Saudi Arabias economy.
The upstream is a tough sector, made more difficult by the fact

January 2016

that most of the current prospects and discoveries are found in

jungles, deserts or in the deep sea. These harsh environments
have made the upstream sector increasingly expensive to operate
A lot of investment goes towards making operating locations
liveable for personnel. This is why a lot of investment is made to
shorten the exploration time and increase the recovery rate. Until
now, the recovery rate of oil and gas has been less than 50%,
especially oil. Oil operators are investing in research and
Upstream companies need to stay on the cutting edge of
technological developments. To do so, they can collaborate with
institutes or universities. If companies fail to invest in new
technologies, they will quickly become obsolete.
Kellogg President Wendy Davidson on how women can
become leaders in the industry
By Tricia Contreras on June 22nd, 2015 |

Davidson (Photo: Kellogg)

Wendy Davidson has almost 25 years of experience as an
executive in the food and beverage industry, and she
successfully balances her professional responsibilities as
president of the Kellogg Company with volunteer work and
her role as a mother of two. She is a member of the
companys Global Leadership Team, the Kellogg North

January 2016

America Leadership Team, the Global Snacks and Global

the Women
Kellogg network and serves as executive sponsor for the
Global Talent Management Advisory Team.
SmartBrief interviewed Davidson about how she defines
work-life balance and what advice she has for women who
want to become leaders in the industry.
SB:What advice do you have for women who want to become
leaders in the industry?
WD Ive been very fortunate in my career to have a network of
industry colleagues who have provided invaluable coaching and
advice as I explored opportunities to stretch and grow. Theyve
given their time to share their experiences and insights to help me
as I transitioned into new roles both personally (as a mom!) and
For women aspiring to play a larger leadership role in the
industry, my advice is to seize opportunities when they present
themselves, build authentic connections and learn something new
every day. Dont be afraid to take risks. With every new
opportunity comes great learning which will build your skills and
experiences as you move forward in your career. Equally
important, take every opportunity to give back to others as an
advocate, mentor and coach. Just as others have supported me
in my growth, I have a responsibility to provide the same for the
future of our industry.
Im a firm believer it is important to be yourself and be authentic.
Whether you are at a customer meeting or an industry event,
embrace each learning and networking opportunity that comes
your way. When you make connections your world gets bigger,
and your perspective gets broader. You build friendships, find
mentors, collaborate with customers and brainstorm with
SB: How did you balance the responsibilities of your career
with volunteering and raising a family? What is your
definition of work-life balance?

January 2016

WD: Over the years, people have often asked me that question
and I dont believe there is right answer. I think its unique to the
individual and achieving balance is something you have to focus
on every day. What balance looks like for me on one day may not
be the same the next.
I am very fortunate to have a fantastic husband and two beautiful
children who, as my home team, have been very supportive of
my career. We work to make sure that we prioritize our time with
a focus on enjoying the journey together.
For example, when I joined Kellogg and we were planning to
move to Chicago from Baltimore, I knew I would be commuting for
a long period of time, so I asked the kids about activities or events
that were most important to them that I attend. While I knew I
wouldnt be able to be at everything, we agreed that I would do
everything possible to move my schedule to be present at the
things that were most important to them. There are many nights
when I leave work early to attend a school function or sporting
event, and then power up the laptop later in the evening. Those
arent the hours I expect my team to work, but those are the
things that work for me and my family. For me, its all about
communication with those closest to me to ensure clear
expectations and managing the give-and-take on a daily, almost
hourly basis.
SB: Kellogg was named one of NAFEs Top 50 Companies for
Female Executives again this year. What does Kellogg do to
help women succeed in the industry?
WD: Kellogg strongly believes in investing in talent development,
building a pipeline of future leaders and fostering a diverse and
inclusive environment. Our internal employee resource groups
Women of Kellogg and Women in Supply Chain continue to drive
positive change in the organization through professional
development and by fostering stronger engagement across the
business. This helps women build on their leadership skills, drive
organizational excellence and create strategic connections with

January 2016

peers across the industry. We are also a corporate sponsor of

the Womens Foodservice Forum, where I am currently chairelect and a member of the Executive Committee. WFF offers
resources for individuals to build their skills, expand their
knowledge and make meaningful strategic connections to reach
their full potential and accelerate their career growth.
We encourage our employees to leverage all of the resources
available to them to help enhance their skills as they develop and
grow within the company.
SB: You have held leadership positions in the industry for
almost 25 years. How has the industry changed since you
began your career?
WD: I think one of the greatest changes Ive seen is how
consumer preferences have evolved. The food industry continues
to serve as the backdrop for some of the most memorable
experiences for individuals and families. Whether eating meals in
the home, at restaurants, or on the go, consumers are
demanding more convenience and greater variety. Over the last
25 years, Ive watched the adoption of niche foods make their
way into the mainstream, with global foods and flavors becoming
available locally more than ever before.
In the workplace, we have seen a greater emphasis on diversity
at all levels with more women being elevated into leadership
positions across the industry. Companies, like Kellogg, are
implementing workplace initiatives and employee resource groups
to help increase employee development and engagement.
Of course, Id be remiss if I didnt mention the changes
in technology. It has enabled us to become better connected to
the consumer and allowed us to evolve with them over the years.
Its an exciting time and I am looking forward to seeing where the
industry will be in the next 25 years.


January 2016

Employee problems are your problems, too.
Responsibility and accountability
By Marlene Chism on February 1st, 2016 /SmartBrief/SmartBlog
on Leadership
Leaders should view employee problems as opportunities to hold
themselves accountable and take difficult actions, not simply
blame the employee, writes Marlene Chism. "As long as the
problem is Ron, Rick, or Randy's performance, there's no
personal development and no personal responsibility required on
the part of the leader," Chism writes.

This post is excerpted with permission

from No-Drama Leadership: How Enlightened Leaders
Transform Culture in the Workplace, by Marlene Chism
(Bibliomotion, 2015).
The difficult conversations avoided today become the lawsuit the
company fights a decade later. Every single day, supervisors and
managers complain about employees behavior and lack of
accountability, but ultimately the problem is the leaders lack of
responsibility, the evidence of which is the evasion of difficult

January 2016

If leaders are unwilling to take ownership, how can those same

leaders blame the employee?
Signs that indicate a lack of leadership include:
Blaming employees instead of coaching them
Avoiding performance feedback
Gossiping about the employees ineffectiveness
Transferring the troublemaker to another department
Firing a long-term employee who has had no warning
Making excuses for the lack of clear direction
Failing to communicate expectations
There are many reasons individual leaders struggle with
responsibility and accountability. Here are four of the main ones:
1. They do not understand the distinction between responsibility
and accountability.
2. They do not have appropriate support or resources.
3. They have a skills gap.
4. They lack discipline.
Failing to understand the distinction between being responsible
and being accountable is a chief reason leaders struggle.
Responsibility comes from the heart and accountability from the
head. You accept responsibility, but accountability (to superiors,
stockholders, and perhaps the public) can in a sense be forced on
you. We talk about being held accountable, which suggests
punishment, blame, and shame.
The second reason some people resist accountability is that they
have not had the proper support or resources. When someone
has responsibility for a job and is measured on his effectiveness,
he will avoid accountability if he is not confident he can
accomplish the job. The right support and resources fixes this
The third reason leaders sometimes avoid accountability is a
skills gap. They may be disorganized, not know how to delegate,
or simply may not be critical thinkers. Ive seen even high-level

January 2016

leaders who did not get back to people, dropped balls, and made
promises that were not fulfilled unless they were reminded again
and again. These patterns indicate a potential problem with
accountability because the leaders do not have the right skill set.
fourth problem is discipline. Sometimes leaders have too much
power, and because no one seems to be holding them
accountable, they lose awareness that their own lack of discipline
sets a bad example.
The more these kinds of problems are tolerated, the more poor
decisions affect the culture. The only reason an employee is
disruptive, lazy, confrontational, or ineffective is because it is
allowed. When a leader has a drama perspective, she blames the
employee. Initially, blaming feels better than taking responsibility.
As long as the problem is Ron, Rick, or Randys performance,
theres no personal development and no personal responsibility
required on the part of the leader
A leader with a more enlightened approach asks, What can this
employee teach me about my leadership weaknesses? These
kinds of questions are never asked until you shift your identity
from supervisor to leader. Companies that consciously decide to
develop leadership identity have much more success with
creating a culture of accountability.

Marlene Chism is a consultant, international

speaker, and the author of two books: No-Drama Leadership:
How Enlightened Leaders Transform Culture in the
Workplace (Bibliomotion
and Stop
Drama (Wiley 2011). Chisms passion is developing wise
leaders and helping people discover, develop and deliver their
gifts to the world.

January 2016

The Banyan Tree

Vision vs Conceit : Are you a visionary or full of yourself?
Many leaders would like to be the next Steve Jobs, but it is easy
for self-regard to become conceit, fostering fear,
contempt and ego-driven leadership, writes Steve McKee. "If
you're unsure whether you work for someone driven
more by healthy vision or destructive conceit, sit down and have a
frank conversation with them about it," McKee writes.
SmartBrief/SmartBlog on Leadership (1/6)
By Steve McKee on January 6th, 2016 |
Vision or conceit? Sometimes its hard to tell the
Most of the time its just difficult to face.
Ever work for somebody whos convinced hes the next Steve
You know, the all-seeing visionary who was two steps ahead of
the rest of us? The one who could never be dissuaded? Someone
who believed that by sheer force of will he could change the
As you are probably aware, there was only one Steve Jobs. And
one Bill Gates, for that matter. One Herb Kelleher. One Oprah
Winfrey. One Howard Schultz. In fact, the reason we know the
names of these visionary leaders is precisely because the lofty
heights they achieved are rarely reached. And making their
names known was probably not at the top of their to-do lists.


January 2016

Every company needs a vision, and its usually the person at the
tops job to articulate it. But having a household name is not a
requirement of a visionary leader; in fact, those who wish to
become one tend to do their organizations a disservice. Having
worked with many struggling organizations over the years, Ive
seen all kinds of leaders, from the humble steward to the arrogant
tyrant. You can guess which behavior is more helpful for returning
a company to its feet.
Weve witnessed firsthand the not-so-fine line between
compelling vision and simple conceit. How to tell whats driving
the leader of your organization? Three questions tend to tell the
Are they confident, or arrogant? When someone is confident in
their vision, they find delight in bringing others along. Theyre
excited to share their thinking, hopeful that it inspires their team,
and motivated to lead them into the future. Arrogance, however,
breeds contempt; contempt for those who dont get it, those who
ask hard questions, or those who dare make a contrary
suggestion. Contempt can be subtle but its impossible to hide.

January 2016

Do they motivate by faith, or by fear?

Visionary leaders inspire faith in their followers. An inspired team
wants to bring the vision to life because they believe in itand
even if they cant quite see it yet, they believe in their leader.
Followers of conceit, by contrast, do so out of fearfear of being
reprimanded, or losing their jobs, or missing out, or being stabbed
in the back. Good fruit cant grow in toxic soil.
Is it about us, or about them?
True visionaries are motivated by whats in it for us, whether that
means the company, its customers, or the world. By contrast,
conceit has the unmistakable stench of me, and the personal
branding thinking thats so popular today can confuse leaders
into believing thats OK. The irony is that those who deserve
approbation most tend not to seek it.
Volumes could be written about whether and to what extent
leaders like Jobs, Gates, Kelleher, Winfrey and Schultz manifest
the characteristics above.
From what I read about Steve Jobs, for example, he sure seemed
arrogant, terrifying, and personally ambitious, but those who knew
him best might characterize him as supremely confident,
genuinely inspiring and motivated to change the world. Either
way, he was the rarest of rare breeds, and emulating his
eccentricities while lacking his genius is unwise, to say the least.
Yet many do.
All who lead do so to achieve lofty goals. But not all do so
effectively, particularly if one of their goals is to be recognized as
a lofty leader. If youre unsure whether you work for someone
driven more by healthy vision or destructive conceit, sit down and
have a frank conversation with them about it. If youre afraid to
approach them or theyre unwilling to engage you may have
your answer.

January 2016

Want to Lead? Consider Becoming a Project Manager

Project management can open the door to leadership roles
Project management can be a rewarding if nontraditional way to
gain leadership experience, writes Art Petty. Project managers
are responsible for turning initiatives into success stories, and
must master skills such as team-building and resource
management, Petty explains. To get started, he advises, learn
from project managers in your organization and learn what
initiatives are
. By Art Petty
Management & Leadership Expert
Project Managers are the quiet heroes of todays organizations.
After all, just about any major new initiative in an organization
takes place in the form of a project. From new product
development to implementing a new software system to executing
on key strategic initiatives, we live and work in a world of
projects. And, its the project managers who shoulder much
of the burden for bringing these initiatives from paper and
presentation to reality. It also turns out that the role is one of the
most challenging leadership positions in any organization.
For anyone interested in developing as a leader, getting involved
in project work and eventually taking on the role of project
manager is a great way to pursue your goals. Here are some of
the core leadership tasks of todays project manager, along with
ideas to help you get started.
8 Core Leadership Challenges of the Project Manager:
1. Dealing with uniqueness.
2. Projects by definition are temporary and unique. They are
all of the work done once to create or complete something
new. Every new product development effort is unique;
implementing a new software system is a one-time affair and
executing on a strategic initiative requires different initiatives
this year than the strategy three years ago. While project

January 2016

managers learn lessons from past projects, they are leading

and guiding something new and unique every time.
1. Assembling a team in a hurry.
2. In many organizations, project team members are drawn
from the different functional areas and assemble as a group
to focus on a new initiative. From assessing and negotiating
for resources with functional managers to assembling the
team and bringing it to life, this is a challenging leadership
issue for the project manager.
3. Navigating complex customer and stakeholder
needs. Project success is often a function of how effective
the project manager is at assessing and meeting the needs
of all involved parties for project quality, timing, budgets and
resources. A stakeholder is any individual or function
touched by a project, and managing these stakeholders,
including executives, is a full-time job in leadership,
negotiation, diplomacy and communication.
1.Scheduling the resources.
2.If youve ever attended a circus or, if like me, you're old
enough to remember the Ed Sullivan show, you may have
seen the plate spinner who strives to start and keep as
many plates spinning on sticks as possible. Most project
managers describe feeling like this circus performer from
time to time, and striving to gain the right resources at the
right time and place is their equivalent of plate spinning.
Creativity, negotiation and diplomacy are once again key
attributes of the effective project leader.

3. Helping the team move from forming to performing.

4. According to Tuckman, teams move through a number of phases
in their lifecycle, from forming to storming and then on to norming
and performing.
5. If youve been a part of a hastily assembled team, you can relate
to the storming phase in particular. Project Managers are

January 2016

effectively team coaches, helping members define roles,

understand their work and then navigate key discussion and
decision pointsall challenging leadership tasks.
1. Forming an environment for success.
2. Teams like individuals do their best work in a healthy environment
where they are trusted and trust their co-workers. Yet the pace
and demands of schedules create stress points and can foster
disagreement and even dissension. The project manager owns
the hard work of ensuring a healthy environment where issues
are resolved respectfully and efficiently so team members can
proceed with their work and provide their creative best in the
3. Managing the money.
4. With leadership comes financial responsibility, and the project
manager is accountable for not only the quality and timeliness of
the work, but the cost of the work.
5. Ensuring quality and delivery.
6. At the end of the day, the team is delivering something new and
unique to a customer or group of customers. The project manager
is accountable for ensuring the completeness and quality of the
offeringon time and at budget.
Project Management as a Career:
Every year I teach an MBA elective course in the fundamentals of
project management. When we started this course, enrollment
was typically 14 to 20 students. Now, the class has exploded to fill
the 48-student maximum with more on the waiting list. One year, I
agreed to teach two combined sections with over 80 students.
The word is outproject management is a great career and a
great way to learn to lead. It also offers a non-traditional entry
point into a leadership opportunity. Instead of competing for the
limited number of functional leadership and management roles,
you can pursue the nearly insatiable need for project
managements skills in most organizations.

January 2016

Im incredibly proud of the number of my former students who

have moved on to earn the challenging and important Project
Management Professional (PMP) certification from the Project
Management Institute. Often, their pursuit of this role and
designation starts with a discussion and assignment around
exploring what it means to be a project manager. Here are some
ideas to help you get started.
5 Ideas to Help You Explore the Role of Project Manager:
1. Interview a project manager in your firm and learn more about the
role and your firms formal practices. Ask about how he/she
moved into this role. Indicate your interest in supporting a project
team and learning more about the role of project participant and
project manager.
2. Meet with an executive and learn more about some of the key
project work in the firm. Are there innovation initiatives underway?
These are most definitely projects. Is the firm installing a new
software system? How are new products developed? Let it be
known that you would like to work on a project team to contribute
and to gain experience.
3. Explore the resources available at the Project Management
4. Read. My favorite source of information comes from an eminently
readable and inexpensive book entitled, The Fast Forward MBA
in Project Management by Eric Verzuh. Ive used Verzuhs book
in lieu of an expensive text for many years and the students give
it glowing reviews for its clarity, ease of reading and usefulness.
5. Volunteer to lead an initiative. Theres no shame in volunteering
to head up the holiday party or company picnic. The same project
management practices apply and you gain valuable project
experience in the process.
The Bottom-Line for Now:
Developing as a leader doesnt require you to follow a traditional
path of supervising and then managing a function. Projects and
project management offer a great way to learn and practice
leadership while actively contributing to the success of your firm.

January 2016

The best way to deal with stress, according to a 69-year-old

monk who scientists say is the 'world's happiest man'
By Alyson Shontell | Business Insider Thu 28 Jan, 2016

(TED) MatthieuRicard
MatthieuRicard, a 69-year-old Tibetan Buddhist monk, has been
called the "world's happiest man."
That's because he participated in part of a 12-year brain study on
meditation and compassion led by University of Wisconsin
neuroscientist Richard Davidson. And Davidson found his brain
waves and activity to be off the happiness charts.
In 2008, Davidson had a group of expert meditators (including
Ricard) and a group of controls (people who were not
experienced in meditation) meditate on compassion, he reported
in Scientific American.
Then he had them listen to the sounds of several stressed-out
voices. Davidson found that two brain areas known to be
involved in empathy showed more activity for the meditators than
for the non-meditators, suggesting that people like Ricard have
an enhanced ability to respond to the feelings of others and
empathize without feeling overwhelmed.

January 2016

He also noted that when he exposed Ricard to an outside

stimulus meant to startle him like an alarm going off
unexpectedly or a stranger accosting you in the street while
he was meditating, he was far less put-off by the stimulus
compared with someone who was not meditating.
So, how does the "world's happiest man" feel happy all the time
and get rid of anger and stress?
We spoke with Ricard at the World Economic Forum in Davos,
Switzerland last Thursday. He says feeling happy comes down to
being altruistic and benevolent. He also believes the mind can be
trained to be happy through meditation.
And as for dealing with stress? Ricard says the key is let things
Most things you think are problems aren't actually problems
Ricard admits that sometimes, feeling stressed is warranted.
"Sometimes there's legitimate stress, like if a rhinoceros is
running behind you, it is maximum stress," he says.
Sometimes there's legitimate stress, like if a rhinoceros is running
behind you, it is maximum stress.
"Or if you are in a situation that is really oppressing and there's a
sense you can't move out of that and you feel so powerless
mentally and physically it's not very pleasant."
Most other kinds of stress ones that don't cause actual
physical or mental harm, Ricard says should be shrugged off.
"This idea of constantly feeling like there's a rhinoceros running
behind you is very unhealthy," Ricard explains. "It will destroy
your neurons, it destroys your immune system. Basically it
happens when we put too much emphasis on our outer condition.
'If I don't have that I can't be happy.' 'If that thing remains, it's just
like hell breaking on me.' So it's underestimating that we can say
to those things, 'Oh, you know, okay no big deal.'"
Living a stress-free life just comes down to the way you deal
with perceived problems.
Don't worry about things you can't change or control
Ricard admits that of course, problems pop up in life. The trick is
to not worry about the ones you can't control, and to focus on
solutions for the ones you can.

January 2016

"Having some kind of inner resources to deal with the ups and
downs of life, whether that's resilience or inner strength that's a
huge advantage against stress," Ricard says.
"If something unpleasant happens, just say: 'First, it won't last.
Second, I can deal with that because I know I can keep my
balance. And after all, it's not such a big deal so okay, no
problem.' Or if people criticize you just say, 'So what? Why is this
going to prevent me from being healthy and from sleeping?'
"The stress doubles the problem. First you have the worry, then
you have to worry about the problem, which is totally unnecessary
because if there is a solution then just do it. If there is no solution,
then why worry? That's just adding to your problems."
Why you should give mentoring all you've got
Mentors should adopt an abundance mindset that assumes the
more they give of themselves, the more they'll receive, writes
Naphtali Hoff. "Such abundance thinking can be felt and sensed
by proteges. They come to quickly recognize how invested the
mentor is in their success and they make sure not to disappoint,"
Hoff explains.
SmartBrief/SmartBlog on Leadership (1/13/2016)
Recently, I wrote two posts relating to mentoring and abundance
theory, respectively. The first article focused on distinguishing
between mentors and supervisors and the important role that
mentors play on the growth and job satisfaction of their
protgs/mentees as well as their own. The latter contrasted
abundance theory from scarcity theory. This post will seek to build
upon those articles by applying abundance thinking to the
mentorship process in order to help both the mentor and protg
gain the most from the experience.
Not long ago I was invited to speak to a group of advancement
professionals on the topic of mentorship. There were
approximately 80 people in the room and I instructed them all to
imagine an ideal mentoring arrangement. Using a scaling

January 2016

exercise, I asked them to tell me, in vivid detail, what a perfect

10 looked and felt like.
The audience listed many attributes of strong mentorship. Some
of the qualities were technical, such as being consistent and
available, as well as being accountable and following through on
Others talked about mentor attitudes. These included treating
protgs as adults, not people to be spoken down to. Another one
mentioned was for mentors to be success-oriented, meaning that
they are driven by a genuine desire to succeed and see the
protgs success as their own.
The largest bucket was filled with relational qualities, such as
being authentic and not trying to put on a show for the protg as
a way of earning respect. To this audience, the best mentorprotg dynamic is natural and fluid. This comes from the mentor
being a good listener and developing trust. Another contributor
was the mentors ability to use their experience to help guide and
support the protg, but in a manner that was guidance-driven
(using a coach approach) rather than imposing solutions.

had also asked participants to tell me what a 1 (lowest score)
looked and felt like. Mostly, the response sounded like the
opposite of a 10. Specifically, some shared that they felt used in
bad mentorship pairings; it was as if the mentor was most
interested in resume building and that the protgs growth didnt
matter. They also cited feeling a lack of validation.

January 2016

Mentoring programs typically fail because one or more positive

ingredients listed above are missing. Without question, the
mentors head has to be fully in the game. When I first began as a
head of school, I was assigned an experienced mentor from a
different school on the other side of the country. He agreed to
help me as a favor, and, predictably, as the school year
progressed and his schedule became increasingly more filled, our
time together dwindled to the point that the relationship had
practically ended on its own.
In addition, a mentor has to be able to earn the protgs trust.
That is not as simple as it sounds. In addition to demonstrating
capacity, effective mentors find ways to make their protgs
genuinely feel that they have the mentors best interests in mind.
One great way by which to build such trust is to think in
abundance. Abundance theory sees the world as offering infinite
possibilities. It suggests that not only is there plenty to go around
(the opposite of scarcity thinking) but it also posits that my helping
others will help me, in terms of sharpening my skillset and
building increased capacity and demand within the field.
Mentors who enter relationships with abundance thinking are
invariably going to give their protgs everything that they can, in
terms of time, attention and advice. They are also likelier to
remain committed for more time and to do their share in making
sure that progress is being made and that the protg follows
through on his/her end. Perhaps most importantly, such
abundance thinking can be felt and sensed by protgs. They
come to quickly recognize how invested the mentor is in their
success and they make sure not to disappoint.
Employers can help mentors by creating structured mentor
programs with clear, quantifiable goals for both parties. In
addition, the more that they can contribute to the creation of a
less competitive work environment that will allow mentors to offer
real help (within reason) without having to worry about time lost
from their own responsibilities, the likelier it is that mentors will
willingly sign up and make the most of the relationship.

January 2016

New Years development goals for leaders: 2016

By Dan McCarthy on December 24th, 2015 |
For many of us, making and breaking promises to ourselves for
the New Year has become an annual tradition. We say were
going to lose that 10 pounds, quit smoking, change jobs, read
more, be more positive, etc., and start off all Tigger-like with
energy and great intentions. Then, when the going gets tough we
lose interest, motivation, and momentum and at the end of the
year were back to where we started.
For next year, lets break that cycle! Lets set our yearly
leadership development goals and put some best practices in
place to help us achieve those goals.
Well start with 10 goals. Dont get too ambitious, just pick one or
two, or maybe these will inspire you to come up with something
better of your own. Then, make sure you include the three goal
boosters at the end.

Credit: Pixabay
1. Pick one thing you like to do or are good at but probably
should not be doing at your level and delegate it. Thats right, let it
go! Just be sure to provide appropriate support and coaching to
your delegee (new made-up word).

January 2016

2. Practice in-the-moment, dont get distracted by shiny

objects, focused active listening. Its called leadership
presence, and its the single most important thing you can do as
a leader.
3. Let someone on your team know where they
really stand.Good or bad, doesnt matter, just commit to some
honest, caring, constructive developmental straight talk.
4. Pick one thing thats not broke and make it better. Look for
an innovative breakthrough solution, not just incremental
5. Look for at least one thing someone is doing well and tell
them about it. While each day would be a nice stretch goal,
weekly may be more realistic.
6. Gain clarity on your leadership values and share those
values with your team.
7. Get feedback on your leadership skills. Take a formal 360degree assessment or use some other method to get more
informal feedback. Then do something about the feedback!
8. Take a leadership course. Whatever program you chose to
attend, just make sure its grounded in solid theory (no flavor of
the month fads), builds self-awareness, and includes lots of
practical on-the-job application.
9. Read at least four leadership books. Thats one a quarter.
Believe me, its harder than it sounds. Keep an action log of new
ideas that you are going to try out.
10. Find a new mentor or coach and/or mentor or coach
someone new. Get a little, give a little.


January 2016

Bonus content: Three proven ways to help you achieve your

leadership goals:
1. Write them down. Be SMART about it specific, measurable,
achievable, realistic, and time-bound.
2. Tell others about them. Make public declarations.
3. Find an accountability partner. Someone to check in with
you once a month to review progress on your goals (or each
others goals).
Dan McCarthy is the director of Executive Development
Programs at the University of New Hampshire and runs
the Management & Leadership channel of About.com. He
writes the award-winning leadership development blog Great
Leadership and is consistently ranked as one of the top digital
influencers in leadership and talent management. Hes a regular
contributor to SmartBrief and a member of the SmartBrief on
Workforce Advisory Board. E-mail McCarthy.
How great leaders balance execution and empathy
By Adam Lloyd on December 11th, 2015 |
Theyre caring. They also get $tuff done.
Its often the great debate of what defines an exceptional
executive, the discussion of EQ (emotional intelligence) versus IQ
(intellectual intelligence).
Go Google it and youll find plenty of mixed reviews and articles
that point in different directions and various forms of
measurement of both EQ and IQ. With all of the compelling
arguments around both, the common sense answer is balance.
Of course, this is the easiest answer, perhaps a cop-out, but the
reality is that the most effective executives have a holistic
leadership DNA. They combine the cognitive ability (which drives
things like revenue) with the caring nature that resonates
genuinely with the employees of the company.

January 2016

The concept of IQ relates directly to business results, practices

and execution. Smart capable leaders get down to efficiencies
and the numbers of the organizations. Its how things get done
and the financial gains of the organization are directly produced.
Capable in their own realm, are the EQ-centric, the leaders who
create a genuine following of people. There are engaged with,
and instinctively think first about, the people that make-up the
company. They often see numeric gains as a direct result of the
value of the cultural well-being.
Not every leader may inherently have an equal balance of both
forms of intelligence, but a conscious effort to avoid being too
heavily weighted to one side will result in a more well-rounded
impact on the company and add depth to the cultural diversity of
the business. Executives who are self-aware in this respect have
a few commonalities in how they lead with a balanced approach.

They set goals and deadlines, but

also embrace creative work styles
Effective leaders understand the
importance of creating a strategic
vision and purpose that resonates
and can be executed by the
organization, but also know that
strategy is only a lofty idea if it is not
measured effectively. Establishing
performance metrics and measurable outcomes is not just a
management exercise to follow productivity, as employees crave
clear direction and tangible objectives. Metrics and measurable
outcomes are tools for self-motivation and, more importantly,
provides real purpose.
The balance is when hard deadlines and concrete goals are met
with the autonomy in howthey are met. If employees can achieve
performance objectives in a work style that suites them, the result

January 2016

is a sense of control and pride in their work. This is where the IQ

and EQ approaches come together. Hard metrics met and
employee fulfillment is high.
They promote a wave of new ideas and explore corporate
Smart leaders know that great ideas and corporate innovation
come from a diverse pool of sources. They know to look for ideas
that come from outside the organization and apply a broad, longterm view to the business. Whether its undergoing a
transformational change to evolve, or to revisit current strategy,
great leaders know how to get the most from their current
employees and attract top talent in areas that lack. To fill the
corporate creative bucket, its necessary to keep evaluating both
internally and externally to ensure a collection of varying views
and suggestions exist. Real cultural diversity must be present in
the organization and, furthermore, people must be encouraged to
speak up and contribute.
Exceptional leaders, whether classed as IQ- or EQ-centric, will
see eye to eye here. The cognitive measure of ideas (business
results) cannot exist without an engaged, culturally rich
environment that is comfortable enough to share with senior
leadership. Again, this balance is where the business outcome of
innovation exists when the cultural dynamic feels appreciated and
They delegate to the interested and ambitious
The importance of delegating the right work to the right people
is critical both for efficient productivity, but also employee
development. Leaders with proportioned balance know how to
feed hungry future leaders. Both EQ and IQ leadership
tendencies can appreciate the desire of future leaders to take on
more challenging assignments. The balance is met is when new
projects are delegated to those who are seeking the work, but
also capable and being set up to succeed.


January 2016

It is counterproductive to be stagnant, and it is careless to

proceed without proper training and resources for employees to
tackle larger challenges. With the stage set to delegate, balanced
leaders take an interest in the data and measurement of projects
in addition to the engagement and participation of employees.
If youre intellectually ahead, then youre smart enough to take
note and apply these practices. If youre an empathetic leader,
you care enough about everyones well-being and are already
evaluating how these habits will benefit everyone. Either way,
finding the balance will result in a well-rounded organization.
Adam R. Lloyd serves as president and managing partner
of Webber Kerr Associates. As an executive talent strategist
and consultant, he supports the leadership challenges and
objectives of multi-nationals, private equity held and family-owned
companies. Lloyds experience in CEO and executive
appointments spans multiple industry sectors in the Americas and
EMEA markets. Prior to founding Webber Kerr, he began his
career in financial services and co-founded a midsize human
capital services company. He received his a BS, human
resources, from Michigan State University. Contact Lloyd
on Linkedin, and Webber Kerr on Linkedin and Twitter.
If you enjoyed this article, join SmartBriefs e-mail list for our
daily newsletter on being a better, smarter leader.
Today's actions will matter 15 years from now:
Mark Fields Ford CEO
Ford's Fields tells just auto he wants to revolutionise the
automotive customer experience
Ford is working to improve in-car experiences through the
FordPass system. The effort is inspired by CEO Mark Fields'
belief that companies and their leaders must have "one foot in
today and one foot in tomorrow. One foot in today means
delivering this month's sales, this quarter's financials, this year's
objectives. But one foot in tomorrow means taking a view on what
the world is going to look like 5, 10, maybe even 15 years out."

January 2016

Just-Auto.com (U.K.) (1/14/2016)

Ford did not have a major new product to roll out at Detroit this
week, but it did reveal something FordPass - that CEO Mark
Fields views as vital to a future in which Ford gets closer to the
customer as part of a mission to make their lives "easier". The
ambitious sounding aim is to do for car owners what iTunes did
for music listening. Along with GM's recent announcement of its
$500m investment in ride-share firm Lyft, we're now getting a
sense of how some automakers are beginning to up their game or act faster - to embrace change that is coming.
A range of services will be made available to FordPass members
and Mark Fields envisages a future in which Ford becomes an
information company as well as a technology company and a
maker of vehicles. The relationship with the customer is key.
"The enabling technologies that are available to us today as an
industry will take this industry to the next level, not in terms of the
product itself but in our ability to have that relationship and
provide additional services and benefits to customers."
However, he's well aware of the need to remember what Ford is
good at. "We have our core business and we love our core
business. We are not going to take our eyes off that. That is the
engine that drives our profitability.
"For the foreseeable future, particularly outside of urban areas,
people are still going to shop, buy, drive and own vehicles the
way they have done for many years."
Ford's strategy for the long-term is informed by analysis of
megatrends such as the growth of megacities and how demand
for transportation is changing. Fields explains the nature of the
challenge for an automotive business that has immediate
performance requirements as well as an eye on long-term trends
that impact strategy.
"You have to have one foot in today and one foot in tomorrow.
One foot in today means delivering this month's sales, this
quarter's financials, this year's objectives. But one foot in
tomorrow means taking a view on what the world is going to look
like five, ten, maybe even fifteen years out.

January 2016

"To help us to do that we are looking at societal factors such as

the growth of megacities ([cities with over 10m people]. There are
around 28 of these now and projections for the next fifteen years
suggest there will be over 40. So that means more congestion in
urban areas. There's also the growth of the global middle class
which is going to double in the next fifteen years and a lot of that
is going to be in Asia. And then you think of pollution and not only
the impact on the environment but the impact on basic health.
And there is also changing consumer behaviours to consider. The
millennials, for example, are delaying getting married, delaying
buying houses. In urban areas for them, access to cars is more
important than ownership. So we are looking at these things and
saying 'for us, as a company, how do we embrace these things
and how do we, potentially, provide a solution for customers that
might want mobility but not ownership?'
"I think it is a natural extension of our business but if we ignore it,
we do so at our peril."
Fields also sees the mission ahead as being highly aligned to
Ford's culture.
"Our culture goes back to our founder, Henry Ford. He was all
about how we make people's lives better. Part of that was putting
the world on wheels and allowing people to be mobile and for the
first time in their lives go beyond the three miles where they grew
up. That still drives us today. From a cultural standpoint in the
company, it is part of who we are as a business, which is making
people's lives better, helping change the way the world moves,
just like Henry Ford did a century ago. How do we fulfil a market
need and also at the same time provide a business opportunity."
Is he worried about new entrants to the transportation space? He
says they can motivate Ford to innovate faster (a view often taken
of Tesla's impact on the auto industry). And he also says that
Ford is open to forming new partnerships if they represent the
best way to deliver new services that Ford wants to be at the
heart of.
"In some cases we'll do things on our own and in other cases we
will partner. Ultimately it is very exciting and positive for the

January 2016

Fields stresses the importance of the customer now, something

that perhaps was not always at the heart of the traditional
automotive business model. "We want our customer experiences
and our relationships with customers to be just as strong as our
products. We realise that for many years the focus was on getting
people to buy a vehicle; that was the primary focus. Once they
owned it there wasn't a lot to talk about. I think there is a huge
opportunity in this industry to create lifelong relationships."
He draws an analogy with Apple's impact on music listening.
"Think about what Apple did. They had the iPod and it was a
great device to use to play music. However, what really
revolutionised the whole customer experience around getting your
own music was iTunes. That's what we are trying to do with
FordPass. We are trying to revolutionise and improve the
customer experience. We want to make it a part of people's lives,
so it makes their lives easier. And we want it to be sticky, so they
don't really want to leave and they also have a very favourable
view of us."
Fields is something of an auto industry veteran and sees a pace
of change now that is unprecedented, with Ford having to rapidly
adjust to new market demands that create a positive sense
of transformation inside the company. The good news for Ford
stakeholders is that he also sees new opportunities ahead that
can be tapped as the company embraces change. "The clock
speed at which the industry moves forward is getting faster and
faster. We have gone from an age when we have gone from a
manufacturing industry to a technology industry and ultimately
added to that we are becoming an information company as
customers allow us to take their data and provide services in
response to that."
Don't get mesmerised
If the auto industry is facing unprecedented challenges and is at
something of an inflection point, Fields nevertheless returns to the
theme of a need for perspective. "We are also seeing nontraditional competitors that we never thought would be interested
in our business. So, you mix all that together and you can see
that we are at an inflection point. And we are embracing that and

January 2016

we are embracing it in a way that doesn't lose sight of our core

business, because you can get mesmerised by some of this stuff.
If you take your eye off the core business designing,
developing, manufacturing and marketing great cars, SUVs,
trucks and electrified vehicles you won't be able to take
advantage of those other services. To me, it's not moving from an
old business to a new business, it's just moving to a bigger
Good management habits are the foundation of great
By Bobbie Goheen on January 29th, 2016
SmartBrief/SmartBlog on Leadership
Don't let yourself get stuck in a rut
Leaders shouldn't stop learning and developing themselves,
writes Synthesis CEO Bobbie Goheen, and sustained progress
requires building new habits that plug skills gaps and mesh with
the organization's needs. "If you are going to lead, you have to
own your development process and maintain your personal
motivation through regular reflection," Goheen writes.
Good management habits are the foundation of great leadership.
They grow at the intersection of knowledge, skills and desire.
Leaders are passionate about acquiring the knowledge available
and marshaling the skills needed to get the job done right.
It is work, hard work to cultivate those habits but they pay off by
supporting your goals and by building the confidence to anticipate
and look forward to meeting new challenges to the success of an
Too often, success allows those habits to go fallow. When it is
pointed out that they are not practicing the good habits that
brought them success, some CEOs respond, I have a good team
around me and they need to practice those habits more than I
do, or, I have to focus on strategy, or, My time is needed on
building the new ____.

January 2016

Many CEOs think that applying new

knowledge and utilizing new skills
abandoning what got them to the top.
That is not true. Good management
unchanging content!
A very public example of the
consequences of unchanging content
in its habits is the Old General
Motors. At the time of its bankruptcy,
many analysts believed GM was building the best products in its
history. Yet, they could not sell enough of them to avoid going
under. Comfortable with being No. 1 for so long, management
stuck with the GM way and the tyranny of numbers that silenced
the voice of individual consumers. It became a self-validating
culture that did not adjust to the emergence of more power for
consumers to dictate who, what and where their transportation
needs would be fulfilled.
By contrast, Ford, faced with the same downturn, changed the
contents of its habits. Instead of sticking to the rivalry of fiefdoms,
they did away with the silo mentality and asked its managers to
bring their knowledge and apply their skills to the success of One
Ford. The habits of good management remained but the content
changed to better deal with changing market conditions.
This ability to rapidly acquire new skills and knowledge and
integrate them into your daily interactions accelerates a leaders
growth and team. Here are a few techniques to manage your
positive habits:
Look back at what you have achieved and acknowledge the
practices/skills that supported your achievement.


January 2016

Define where there were gaps ask others for their feedback
and insight on the skills that either help or hinder in closing the
Define the skills you will continue to practice and the new ones
you need to gain.

Provide positive feedback to those who are practicing the
kinds of skills that support your team and goals.
Write down where you notice the organization is thriving and
what practices are supporting those achievements.
Put yourself in situations to test your skills and to keep them
Make sure you get to the front line of how your business or
organization runs dont be so far away you forget what it
takes to deliver on your promises.
Practice your skills in areas where you are uncomfortable and
they dont feel natural.
If you are going to lead, you have to own your development
process and maintain your personal motivation through regular
reflection and by practicing the habits that create success for you
and others.
Synthesis CEO Bobbie Goheen is expert
in focusing top-management dynamics on
a shared vision, specific goals and creative
collaborations to achieve them. She has
done this for Fortune 100 corporations,
clients large and small and across a range
of enterprises here and abroad. Connect
with her onTwitter and Linkedin.


January 2016


January 2016