November 2014 Port Bureau News

Port Bureau November 2014

Greater Houston Port Bureau

News

Spotlight on Keith Meyer, President & CEO, LNG America MISNA

Providing Data, Research, and Expertise to Keep Port Operators Sea Savvy

Drivers Wanted

The U.S. Trucking Industry Is Facing a Serious Driver Shortage

2014 Captain’s Cup Winners and Photos

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Port Bureau

News

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3 Captain’s Corner

10 Drivers Wanted

The U.S. Trucking Industry Is Facing a Serious Driver Shortage

Spending Our 15 Minutes

4 Port Watch

Fall: A Time to Pause, Reflect, and Prepare to Consume

6 MISNA Provides Data,

Research, and Expertise to Keep Port Operators Sea Savvy Publisher/President CAPT Bill Diehl, USCG (Ret.), P.E. Editor Christine Schlenker Copy Editors Emily Mitchell Judith Schultz Art Director Christine Schlenker For information about the Port Bureau:

Phone: (713) 678-4300 Email: info@txgulf.org

14 Spotlight on

Keith Meyer, President & CEO, LNG America

Writers Dave Cooley Matt Logan Emily Mitchell Christine Schlenker Judith Schultz Patrick Seeba

Front Cover Photo courtesy of Lou Vest

Photographers Megan Essenmacher Christine Schlenker Patrick Seeba

Port Bureau Staff Jeannie Angeli Al Cusick Megan Essenmacher Cristina Gomez Janette Molina Printing Company DiPuma Printing and Promotional Products www.dipuma.com

For information about the Port Bureau News stories or advertising:

Email: editor@txgulf.org

2 | November 2014

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24 The 6th Annual

Captain’s Cup Golf Tournament

26 Texas Leads Nation

in 2013 Oil and Natural Gas Production Job Growth

32 Greater Houston

Coffee Association 2014 Annual Luncheon A Publication of the Greater Houston Port Bureau The Port Bureau News magazine is a monthly publication of the Greater Houston Port Bureau, a member-driven nonprofit dedicated to promoting the maritime community, providing vessel movement information and offering members premier networking and advertising opportunities to drive business.

The magazine is distributed to over 7,000 professionals in the Houston maritime community via U.S. mail and email. Advertising is available for members.

Captain's Corner Spending Our 15 Minutes I

had the pleasure of attending the annual meeting of the Maritime Information Services of North America (MISNA) group last month in Los Angeles (see page 6 for more information on this great organization). As expected, the West Coast was sunny, beautiful, and laid back. It was a great place to relax and compare notes on the various ports. It was clear from the discussions that each port has unique needs, but many issues, such as security, equipment, and environmental concerns, are shared by all.

We toured the immense twin ports of Los Angeles and Long Beach. At first, I marveled at their size and infrastructure, but then I became sympathetic as I learned of their current logistical struggles. As I gazed at the endless stream of truck traffic lining the road leading to the entrance gates, I saw first-hand the congestion implications a 12,000 TEU ship brings as it ties up in port.

While labor issues were discussed, the more formidable issue seemed to stem from the hardline environmental activists. Even common sense suggestions to ease growth issues face almost insurmountable obstacles from the environmentalist faction. My impression was they are focusing more on shutting the port down entirely rather than working to find solutions.

On the flight back, I realized it was not too farfetched to think as Houston continues to expand and our ships grow even bigger, that the West Coast’s traffic congestion and environmental concerns could soon be mirrored in our own port. Despite our success, getting

bigger does not always mean getting better. If we are going to be successful in managing the growth of the port, we must double our efforts in emphasizing mutual CAPT Bill Diehl, USCG (Ret.) cooperation and communication both within the port and the larger community.

The port will take center stage this month with its well-deserved turn in the spotlight as our 100year history is celebrated in the local media. These celebrations offer a prime opportunity to keep interest focused on the value of the port and to invite wider participation in our efforts to work together towards successful growth.

To get the conversation started, this month we decided to delve into the topic of LNG bunkering in the magazine. As the increasingly stringent marine emissions control standards kick in on January 1, 2015, LNG is poised to play a major role in the future of the maritime industry. A substantial amount of work lies ahead in planning and managing our transition to alternative fuels, and we hope this article helps in disseminating a healthy, port-wide discussion on the topic.

Regardless of the role LNG plays in the future, my key point is that industry and environmentalists’ interests do not have to be mutually exclusive. The value that each party brings to the table makes our goals harmonious. We all want Houston to stay a great place to work – AND a great place to live.

How will we spend our 15 minutes of fame while the increased public focus shines on the Port? Let us parlay this time into continued collaboration and harness the complete resources of the Houston region for sustainable success. Public support and the creative, forward-thinking input of all will ensure prosperity does not lead us into profit-draining congestion or environmental gridlock. ò Greater Houston Port Bureau | 3

© Christine Schlenker

PORT WATCH

Fall: A Time to Pause, Reflect, and Prepare to Consume Tom Marian, Buffalo Marine Service

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othing underscores the reality of fall better facilities throughout the Gulf of Mexico. To that end, than a brisk evening following the passage of September followed the standard rhythm and featured a mid-October cold front. Thus, as shadows lengthen either vessel arrival decreases or no gains in every Texas during the shortened days, air conditioners are idled, port. and holiday decorations are retrieved from storage Houston’s September dip was significant enough spaces in neighborhoods big and small. Even the proto tug the year-to-date numbers below that of last year, lific St. Augustine lawns pause to enjoy the lack of albeit by less than half a percent. Tank vessels were the humidity and deep blue hue of a southern fall sky. This hardest hit, registersame pause — for ing the lowest daily Texas Ports Deepdraft Vessel Arrivals much different reaaverage for the year.

Sept. 2014 Year-to-Date Percent Change sons — unfolds on Fortunately, the BROWNSVILLE, -9.7% the waterways that category remains CORPUS CHRISTI, 18.5% lead to the ports of Texas. in positive territory FREEPORT, 17.0% The pause is typically not on a year-to-date significant but it does reflect GALVESTON, 15.3% basis due in no small the final trade tapering of the HOUSTON, -0.4% part to the export of year before the fourth quarter distillates; however, this could reflect the bePORT LAVACA, 4.3% commercial push to restock ginning of a softening in the export market as SABINE, -2.1% shelves, supply raw materials oil prices continue to slide. Meanwhile, on the TEXAS CITY, -6.6% for overseas economies, and opposite end of the petrochemical spectrum, GRAND TOTAL, 2.7% prepare for end-of-year invenchemical tank movements dipped by 17%, addtory reconciliations at storage 4 | November 2014

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port watch

Port of Houston Deepdraft Vessel Arrivals 2,500 2,000

Sept. 2014 vs. Sept. 2013 Sept. 2014 YTD (Total: 6,196)

1,500

Sept. 2013 YTD (Total: 6,218) 1,000 500 -

ing to an already substantial yearly decline. The only bright spot for the month in Houston’s energy trade was LPG. Granted, it was a tad better but the number of LPG calls for the year is up over 35% due to high demand overseas attributable to very competitive pricing. Bulk vessel movements, which have enjoyed a very active year, fell 12% over the course of the month. Similarly, general cargo vessels were off by 4% and are also down for the year despite record levels of steel and various construction materials that have entered the port.

Nonetheless, consistent with a burgeoning economy, car carriers and container ships both posted monthly gains of 25% and 7% respectively — a further indicator that a booming housing market is being driven by an evergrowing work force.

Steaming south along the Houston Ship Channel and across Galveston Bay, the ports of Texas City and Galveston ended the month of September with marked declines in vessel arrivals. Texas City’s monthto-month tally fell by nearly 16% which aggravated its year-to-date loss picture to -6.6%. Waning oil imports were much to blame for this lackluster picture. Galveston’s 2014 performance is far rosier than Texas City but its monthly arrival numbers were worse as Galveston logged a record low number of port calls, resulting in a 17% plunge for the month. Just to the west of Galveston, Freeport held steady as September equaled August’s haul. Freeport is experiencing a rather impressive rebound year and remains 17% above 2013’s arrival

totals. In fact, the only port that has outperformed Freeport on a year-to-date basis is Corpus Christi with a 18.5% uptick. Yet, Corpus Christi appears to be experiencing the effects of falling oil prices as the shipborne movement of shale gas crudes has dampened. Hence, the port saw 17% fewer vessels for the month.

The bookends of the state, Brownsville to the west and Sabine on the opposite border, posted large enough declines to drag 2014’s marine commerce numbers further into negative territory. Brownsville tied its worst arrival totals in September causing it to have the greatest percentage drop of the Texas ports and take the lead for the largest year-to-date percentage loss at nearly 10%. Sabine did not fare as poorly as it only saw 9.3% fewer vessels for the month. This refinery-centric port is still over 2% off last year’s vessel count. As to the waterway that connects these two ports and the tows that rely upon its sheltered route, the overall numbers near the center of the Gulf Intracoastal Waterway were very solid despite a slight decline since August posted the best transit numbers for the year. That is, the September tow count was the second highest for 2014.

Thankfully, the chill we all yearn for to cast the humidity aside until the arrival of spring will not descend upon the maritime commerce picture. The holiday spending spirit that commences with Halloween costumes and candy and ends with stacks of Christmas gifts needs to be fed directly and indirectly by the scores of ships that call upon the Lone Star State. In fact, October has already picked up steam as it fades into November. Perhaps that is all well and good in the consumption and construction arena, but what of energy and the impact of the falling price of oil? No need to worry, chemicals will certainly fill the void created by any fall in the movement of crude and distillates as $100 billion in infrastructure projects begin to deliver their bounty to market. So relax, enjoy the crisp evenings, falling leaves, and the anticipation of the holiday season. ò

Greater Houston Port Bureau | 5

MISNA

MISNA Provides Data, Research, and Expertise to Keep Port Operators Sea Savvy

Above: The Greater Houston Port Bureau licenses the Harborlights Vessel Tracking System to its members to provide reliable, real-time vessel movement information for the Port of Houston.

Patrick Seeba, GHPB

W

ith a reach spanning from Juneau to Jacksonville, the Maritime Information Services of North America (MISNA) draws upon centuries of experience and tradition to provide information to port operators around the U.S. and Canada. Though no two members of the non-profit coalition offer an identical scope of services, the Marine Exchange business threads each of the entities together and allows the group to meet the ever-changing needs of customers along an continually-expanding and busy waterfront.

6 | November 2014

“Last year, MISNA tracked over 63,000 vessel movements over fourteen distinct areas of responsibility, a seven percent increase over 2012’s numbers,” said Captain John Veenjer, Executive Director of the Marine Exchange of Puget Sound (MXPS).

“We’ve worked hard to ensure that Marine Exchanges provide value by having on-call subject-matter experts available,” explained Captain Bill Diehl, President of the Greater Houston Port Bureau and current President of MISNA. “With over 150 AIS sites

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Misna around the country, and exchanges that have been operating as far back as the late 1700s, we provide reliable, timely, and accurate information to agents, stevedores, carriers, terminals, and anybody else who needs to know what’s going on in the port.”

Similarly, the Merchant’s Exchange of Portland, Oregon, manages the state’s Maritime Fire and Safety Association – an organization which provides an umbrella oil spill contingency plan/vessel response plan to members transiting Oregon’s coastal and inland waters.

Like MAPONY, and other member-based organizations such as the Virginia Maritime Association, the Port Bureau in Houston divides its efforts between vessel movement information, maritime advocacy, and providing a forum for networking in the busiest port in the country. “We’re the 4-1-1 of the port down here,” Captain Diehl said. In addition, the Port Bureau manages the Houston Ship Channel Security District, a political subdivision of the State of Texas dedicated to funding law enforcement and risk mitigation operations through assessment-based initiatives.

A more traditional Marine Exchange, the Marine Exchange of the San Francisco Bay Region, balances its non-VTS vessel tracking responsibilities with close working relationships with local, state, and federal authorities. “The Coast Guard’s Harbor Safety Committee was a product of the Marine Exchange and has served as a model for the state committee,” noted Captain Lynn Korwatch, Executive Director of the

Around the country, each marine exchange provides services tailored to the needs of their particular community. In New York City, Captain Ed Kelly’s Maritime Association of the Port of New York and New Jersey (MAPONY) is a membership-based advocacy group. “This is a constantly changing and developing mission,” Kelly noted. “Security, for example, has changed a lot in the last few decades, and nowhere is that more evident than here in New York.”

8 | November 2014

Captain Kip Louttit, Executive Director of the Marine Exchange of Southern California (MXSoCal) runs a very different operation in Southern California: “If you’re working in our AOR, or carrying passengers for hire, we have a mandate to ensure that you’re an active user of the Los Angeles-Long Beach Vessel Traffic Service.” Operated by MXSoCal in a public-private partnership with the United States Coast Guard – which maintains active duty billets at the Marine Exchange – the LA/LB VTS (Vessel Tracking Service) tracks vessels, maintains traffic lanes, and checks transients in and out of the nation’s largest container port complex.

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misna Exchange. Similarly, Baltimore and Jacksonville both provide ship-to-shore communications and real-time traffic information while working with the local Coast Guard to coordinate local Harbor Safety Committees.

In Delaware, the Maritime Exchange for the Delaware River and Bay have added to their portfolio of member and information services by providing 24/7 access to CBP’s Automated Commercial Environment through their TRACS program, and developed an automated electronic tool to submit advanced vessel arrival, departure, and crew list information to the Coast Guard to meet federal reporting requirements.

Perhaps the most expansive, and certainly the most technically challenging, vessel tracking projects belong to the Marine Exchange of Alaska (MXAK). From their homeport in Juneau, Captain Ed Page and his team have established over 90 Automatic Identification System (AIS) sites over a 2,000 mile expanse from the

Canadian Border to the remote Aleutians. “We have a team of adventurous men who think nothing of packing a sleeping bag, bear protection, and tools, and heading off to remote areas of Alaska on a boat, helicopter, or float plane to build an AIS site,” explained Captain Page. Using their AIS network, MXAK has been able to provide an extensive set of services ranging from notifying the FAA when high-masted vessels transit an airport approach during low-visibility conditions to providing the Coast Guard with AIS visibility during the conduct of search and rescue missions.

With products and services ranging from research and advisory roles to active administration and management to 24-7-365 vessel tracking, MISNA is a vibrant organization with tangible impacts in ports across the country. Have questions? No matter what port you are operating in, the answer is probably just a local phone call away.ò

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driver shortage

Drivers Wanted

Š Louis Vest

The U.S. Trucking Industry Is Facing a Serious Driver Shortage

Matt Logan, GHPB

D

river shortage was voted as the number one difficulty in the 2014 American Transportation Research Institute survey of the 10 most critical issues facing the trucking industry. Driver shortfalls are estimated to be between 200,000 and 300,000 in the next ten years. The driver shortage problem for the trucking industry is very complex with a number of different factors.

Driver retention and turnover rate measure how well a trucking company keeps or acquires new drivers in a given period of time. Like most employers, trucking companies prefer to retain qualified drivers rather than recruit new ones. Driver turnover rate in the most recent quarter jumped up to 103%, meaning trucking companies are losing more drivers than they are hiring, and not by choice. The 103% turnover rate is the second highest ever, only surpassed by the second quarter 2012 turnover rate of 106%.

An aging workforce is another major factor exacerbating the driver shortage. Today, the average age of a truck driver is 50, and the percentage of the driver 10 | November 2014

workforce under 45 years of age has dropped from 52% in 2004 to 48% in 2014. Along with this, the number of drivers above the age of 55 has risen from 21% in 2004 to 26% in 2014. Combine these two statistics and you get nearly a 10% swing in the age of the driver workforce in the wrong direction.

A third major factor in the driver shortage is the Hours of Service (HOS) requirements passed by Congress in 2013. This legislation limited the number of hours truck drivers could spend behind the wheel in given time periods, resulting in an increase in the number of truck drivers doing the same amount of work. In actuality, more drivers are needed for more work, as the demand for trucking services has increased in the past few years.

Does a Rising Tide Lift All Trucks?

The trucking industry suffered during the recession, but has since seen a healthy recovery. In the third quarter of 2014, the U.S. economy grew at a rate of 3.5%, the highest in six years. Consumers are spending more, which means more goods are moving throughout

www.txgulf.org

driver shortage

Source: U.S. General Services Administration

the United States, causing increased trucking demand and revenue. JOC.com tracks the 21 publicly-owned trucking companies and saw these companies’ revenues increase by 12.2% in the past year.

While revenues have increased significantly since the recession, driver pay has not. In 2001, the average truck driver salary was $33,690, which was 99% of the average U.S. salary. Fast forward to 2013, and the average truck driver yearly salary was $40,940, or only 88% of the average U.S. salary.

This considerable discrepancy in pay was identified by truck drivers as one of the main factors for leaving the industry to pursue different careers.

The two other factors most identified by truckers for the driver shortage are time at home and driver benefits. Because of this, small local trucking companies have been able to lure away good drivers from larger companies by promising the drivers they will get to spend each night at home with their families. Benefits for truck drivers and their families have also now become commonplace for trucking companies. Another strategy of some trucking companies is new, “cooler� and high tech trucks and trailers to attract and keep drivers.

Source: Bureau of Labor Statistics

the demand for trucking in the region, but Houston and the surrounding area are suffering from a truck driver shortage just like the rest of the country. One cause is the growth of regional industries that provide

THE HOUSTON PILOTS Silent Servants of Progress

www.houston-pilots.com

Houston-Specific Problem

Houston is the top port in the country by foreign tonnage and ranks 7th in the U.S. in container cargo, moving nearly 2 million twenty-foot equivalent units in 2013. All this cargo has increased Greater Houston Port Bureau | 11

driver shortage competing employment opportunities for truckers. The oil and gas industry in Eagle Ford, for example, offers

much higher earning potential at an entry level position than does the trucking industry.

The Houston area is already experiencing a skilled labor shortage. Various organizations, community colleges, and even large companies like ExxonMobil and Shell have started initiatives to attract and educate skilled laborers.

Trucking and logistics companies in the Houston area would be wise to get on board with these initiatives, or start programs of their own to recruit, train, and retain drivers. Not doing so would risk widening even further the gap which already exists between the industries.

Conclusion

As the U.S. economy continues to expand in the coming years, more goods will need to be moved, which will in turn increase the demand for the transport of those goods. While many goods currently are transported most economically by truck, if the driver shortage continues, other forms of transportation could creep in and steal some of trucking’s market share. Rail companies are already looking for ways to cut costs and compete with other forms of transportation and are poised to fill a void for long-distance transport if the current trucking trends continue.

12 | November 2014

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driver shortage Ultimately, driver demand will eventually equal driver supply, though there are several ways the driver market may come into balance.

One is that an increase in driver pay, personal benefits, and other incentives will increase the number of new and younger truck drivers, and supply will move up to meet truck driver demand. Another possibility is that other modes of transport, like rail, will take market share from the trucking industry and drop truck driver demand to where it meets supply. These are just two of many different scenarios that

Source: American Trucking Associations

could happen as the truck driver shortage issue plays out. As these two scenarios illustrate, how trucking companies address the issue will largely influence the industry’s future.ò

Greater Houston Port Bureau | 13

spotlight

Spotlight on Keith Meyer President & CEO, LNG America Christine Schlenker & Judith Schultz, GHPB

L

NG America announced plans with Greater Houston Port Bureau member Buffalo Marine on October 20, 2014, to cooperate on the design of an LNG bunker fuel network for the U.S. Gulf Coast region. It’s exciting stuff for all involved, but a passion for what he is doing began early for Keith Meyer, president and CEO of LNG America. He credits his father with instilling an enthusiastic and solid work ethic while growing up in Royal Oak, a suburb of Detroit, Michigan.

“As a very young child,” said Meyer, “I remember him telling me that he worked for the greatest company in the world, and I thought ‘wow, how lucky he was to have gotten a job at the greatest company in the world.’

Later in life I realized that whatever company you work for is the greatest company in the world and you should regard it as such and be happy that you work there.”

It’s a value he now passes on to his own five children: “I tell my kids: be passionate about what you do; don’t just do what you are passionate about.”

Meyer’s interest in the energy industry sparked while obtaining his B.S. in Finance at Wayne State University through a co-op program with American Natural Resources in their pipeline subsidiary (Michigan Wisconsin Pipeline Company, which later became ANR Pipeline). Through the co-op program, he worked one quarter, returned to school, then worked another quarter.

“They were a large interstate pipeline company and that was my first introduction to the gas business; I worked at ANR for 10 years,” recalled Meyer. “A co-op or internship program is a great way for a student to be exposed to the ‘real world’ and a great way for companies to ‘test drive’ potential future workers.”

14 | November 2014

Keith Meyer, President & CEO, LNG America

Meyer began his career with a position in corporate planning at the ANR Pipeline Company. Executive level retirements soon brought changes in upper management, with a new president heading ANR. P. Chrisman Iribe, a newcomer to ANR, became the Corporate Planning department’s new VP. Meyer greeted Iribe on his first day on the job by showing up at his door and offering his help. Iribe took him up on the offer and Meyer was soon drafted to work on every special project coming down the pipe. He was next assigned as manager to a new group: strategic planning.

Meyer defined the mission of the new strategic planning group as “to look on the horizon to see what might be coming up and then to develop a strategy to position the company to take advantage of it when it did come up.” It is a mission he is still practicing today.

Price decontrol and pipeline industry deregulation created tumultuous times in the early 1980s. Deregulation took the pipelines out of their traditional role of buying and selling gas and limited them to transporting. However, thousands of potential new customers emerged as industrial and commercial companies were

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Spotlight free to buy gas directly and have the pipelines haul the gas for them.

“Most of the large pipeline companies were fighting deregulation at the federal level but at ANR – largely by the urging of the Strategic Planning Department - we decided to embrace the change,” said Meyer. “I spent many nights and weekends developing an initiative I called ‘operation airdrop’ which was a multifaceted marketing campaign targeting the new industrial community to let them know we were there for them.”

Meyer secured the 800 number, “1-800-Haul Gas” and designed a direct mail and advertising program.

He then moved to head up another new group within the marketing department called market services, which would oversee the campaign.

ANR’s marketing strategies were very successful, winning an AGA award. ANR pipeline earnings were way up, catching the eye of Oscar Wyatt and the Coastal Corporation, and becoming an irresistible takeover target.

Those years in the 1980s were an experience Meyer believes taught him “the importance and the achievability of strategy combined with execution competency can lead to superior results.” Meyer became vice president of marketing for yet another new project: the Empire State Pipeline, a new pipeline in western New York – an area new to ANR and Coastal. It was in that role that melded strategy, business development, and overall project execution for a major infrastructure project.

LNG caught Meyer’s attention in 1990 when he went to work for CMS Energy, a large utility holding company. It was a new subsidiary charged with developing a gas pipeline and storage business. The utility company (Consumers Power) was served by a large interstate pipeline (Panhandle Eastern/Trunkline Gas) that owned one of the four original U.S. LNG import terminals located at Lake Charles, Louisiana.

The company considered buying the Trunkline LNG terminal in 1994, but decided it was still early days. CMS also made a decision to go international, so with the knowledge gained from the Trunkline study,

BARGING AHEAD ever so politely.

B

Buffalo Marine Service, Inc.

www.BuffaloMarine.com

Greater Houston Port Bureau | 15

spotlight Meyer considered using small scale LNG as a means to move gas out of the Amazon, down the Amazon River, to displace oil in the power stations.

“I still think it was the best idea,” stated Meyer, “but Petrobras -- the Brazilian state-owned company that owned the gas -- wanted to build their own pipeline.”

Meyer moved to Houston in 1998 to direct marketing, supply, and business development and LNG for CMS Panhandle when CMS bought the entire Panhandle Eastern/Trunkline system. The purchase included the LNG import terminal in Lake Charles.

This became Meyer’s opportunity to pursue his ideas of LNG development.

“My boss, Bill Haener, sent me down with a mission to ‘see what you can do with the LNG terminal,’” Meyer recalled. “We called it the prize in the box of Cracker Jacks.”

A few changes, combined with what Meyer named “an outstanding operating team at Lake Charles” and a little good fortune, proved their “prize” to be a big

16 | November 2014

winner. “We became the number one spot importer of LNG, and then did a long term deal with BG for the entire capacity of the facility.”

Meyer’s successes have come with their share of significant challenges over the years. “It is hard to take market share from an incumbent fuel, particularly when the incumbent fuel is such a large industry with so much installed infrastructure as the oil industry,” stated Meyer. Despite the environmental benefits of reduced emissions, particulate matter, and greenhouse gases, financing has not always been readily available for LNG investments. “If the clean fuel or technology does not have a direct positive impact on the bottom line,” said Meyer, “it has a hard time being adopted without a government mandate or incentive.”

Meyer often considered pursuing his MBA, but it didn’t happen for 20 years. After his relocation to Houston, he became acquainted with the executive MBA program at Rice University. The time was right, and he found the experience useful.

www.txgulf.org

Greater Houston Port Bureau | 17

spotlight “The program was very intense but the experience was very beneficial. The program is geared towards executives, so the lessons learned were immediately applicable at work. “

In turn, Meyer has been a lecturer of management courses at several universities. He has used these opportunities to share the value energy brings to society. “Energy is a fundamental building block in the health and quality of a civilization,” explained Meyer.

“Through energy comes clean drinking water, comfort from the elements, medicines and diagnostics, transportation and communication, and many other benefits.”

Meyer does offer his students a few caveats: “But energy wasted or exploited improperly or taken from a local community without giving back to the community gives energy a negative side,” cautioned Meyer. “No matter what the energy source is, there will be some people that oppose it for some reason. It is important that we in the energy industry communicate clearly and accurately, and operate in a manner using best practices

and to the best of our ability.”

Big plans are underway for LNG America to introduce LNG as a fuel for marine vessels and other high horsepower users at ports, such as locomotives and trucks. LNG fuel systems are projected to prepare vessels to fulfill upcoming U.S. emissions control mandates. “Using LNG as a fuel allows the ships to meet the new 2015 emissions requirements associated with the U.S. becoming an Emission Control Area (ECA) and happens to be an economical choice as well,” said Meyer.

Sea & Shore

Ship & Store

www.odfjell.com

18 | November 2014

The Odfjell Group is a leading participant in the global market of seaborne transportation and storage of chemicals and other specialty bulk liquids. The Odfjell Tankers fleet of about 90 ships, trades globally and regionally. The Odfjell tank terminal division of 12 partially owned tank terminals is in a network with 12 other tank terminals partly owned by related parties. The terminals are all strategically located around the world, and with Odfjell Group headquarters in Bergen, Norway, the Company has more than 20 offices world wide.Odfjell has about 3,500 employees and annual gross revenue of about $1.2 billion.

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spotlight into an agreement to develop a North American LNG bunkering strategy for a major Asian shipping firm.

“Shipping is a global business,” Meyer elaborated.

“Europe and Asia are both making headway on installing LNG fueling infrastructure, so the U.S. ports have a great opportunity with our domestic gas position to become a much larger factor in global ship fueling.”

Meyer believes tugboats are also great candidates to run on natural gas. He points to two 100 percent LNG-gas fueled tugboats just christened by Norway’s Statoil as evidence of things to come. According to Rolls-Royce, manufacturer of the tugboat engines, they

Europe is the leader in utilizing LNG as a marine fuel, with Asia close behind. Meyer’s expectations are that North America will soon follow in their footsteps.

“With the low North American gas prices, the U.S. may become the ‘fuel stop of choice’ for the new vessels which are proposed to be dual fuel or even 100 percent natural gas fueled.”

The European experience with LNG-powered vessels has had a significant influence on the path LNG America is pursuing. European ports and ship owners already have procedures and guidelines in place for LNG fuel usage and bunkering. These guidelines offer the U.S. Coast Guard a starting point for developing effective and efficient procedures.

Port of Houston Authority

Houston: America’s Distribution Center www.portof houston.com/map

“LNG America conducted an in-depth study of LNG bunkering early on and was able to draw on the work done and used consultants that were directly involved in the early European work,” said Meyer.

“LNG America is also a regular presenter at an annual European LNG bunkering conference where we provide an update on what’s happing in America on the LNG bunkering front.”

In addition, LNG America has developed relationships with several major European ports as well as an LNG bunker provider. They recently entered

Greater Houston Port Bureau | 19

spotlight are cleaner, quieter, and will require less maintenance than their oil-burning counterparts.

LNG America is planning a network of LNG fueling depots and shuttle/bunker vessels which will allow LNG to be delivered to the ships at port. “Our initial focus is the major gulf coast ports,” explained Meyer, “but we are also planning projects at other major U.S. ports.”

Houston’s port is sitting pretty to attract competition for LNG fuel dollars. Meyer sees the competition as a good thing for the industry: “At this early stage of the industry, competition is good as it provides greater confidence to the marine community that supply will be available at a competitive price.”

Meyer doesn’t believe CNG fuels will be a threat to the LNG America’s marine fuel market. “CNG is good for light duty trucks and even large trucks that have limited range,” explained Meyer. “But as the fuel needs increase, LNG is desired because of the greater fuel density compared to CNG. LNG is a 600 to 1 volume reduction compared to gas at atmospheric pressure, whereas CNG is only about 200 to 1. For large users like ships, CNG is impractical.”

20 | November 2014

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Of all LNG America’s plans, the recent LNG America collaboration announcement with Buffalo Marine for LNG bunkering infrastructure is probably the biggest attention-grabber for the port region. When asked about the decision,

spotlight Meyer’s reply was eloquent: “We were particularly impressed with Buffalo Marine and their willingness to bring us in to their operation to give us a much better understanding of bunkering while at the same time we give them a much better understanding of LNG. Their input will be instrumental in helping us identify where the best locations for the LNG fuel depots should be and our input will be instrumental in getting them prepared to handle LNG as a bunker fuel.”

As the gas industry and the marine industry get acquainted, Meyer champions collaboration as well as cooperation on each side as the best assurance for the installation of an effective, efficient, and safe LNG fuel network. As a part of these efforts, LNG America recently hired Captain George (“Joe”) Paitl, freshly retired from the U.S. Coast Guard as Captain of the Port for the Port Arthur Marine Safety Unit. “Captain Paitl’s role will be to help oversee the design of the LNG marine fuel network and ensure that LNG

America and our alliance partners, such as Buffalo Marine, have procedures and policies in place that meet the emerging Coast Guard and relevant port requirements for LNG bunkering,” said Meyer.

LNG America’s initial supply for the Gulf will come from Cheniere’s Sabine Pass LNG facility currently under construction in Cameron Parish, Louisiana. Scheduled to be in service by the end of 2015, it will be North America’s largest LNG production facility. Meyer said the first plan called for the bunker vessel to meet that 2015 in-service target, but it was soon realized that equipment design and siting decisions were being pushed faster than necessary. “We are now looking at a 2016 in-service, but could modify that timing to meet market demands. As for quantity, we expect to have supply adequate to meet the demands of the Gulf Coast marine community.”

Meyer cites the next big step for LNG America is to identify the logical places for LNG fuel depots.

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spotlight Considerations such as pinpointing a port that can be served by an optimal number of bunker vessels, with minimal transit time between ship and fuel terminal, take priority. “Our motto,” said Meyer, “which we take to heart, is to deliver LNG when needed, where needed, and in the quantity needed. “ At present, Meyer foresees few problems with regulatory challenges. “There is no code or rulebook for LNG bunkering. There are rules for large LNG cargo ships, but they cannot practically apply to small LNG barges, rules for large LNG terminals which cannot apply to small marine depots, and few, if any, finalized rules for LNG fuel tanks on ships,” he explained. “But fortunately, the U.S. Coast Guard and the ports see the change coming and want to facilitate the introduction of this new clean domestic fuel into the U.S. port system, so the rules and regulations are being written.”

The U.S. Coast Guard statement on making fuels available corroborates Meyer’s views on regulatory challenges: “The United States has agreed to become an

22 | November 2014

Emission Control Area, and therefore it is incumbent upon us to ensure the fuels are available which allow the marine community to meet these new requirements.”

The marine and high horse power fuel markets are not likely to see supply constraints as the export market for LNG continues to grow. “The quantities needed for the fuel sector are still relatively small so are easily accommodated without a significant impact to the overall supply picture,” stated Meyer. “Further, the export facilities will help provide additional markets which will help encourage continued production and stability in the supply arena.”

As the LNG industry continues to grow, Meyer believes it’s important for all players to maintain the industry’s exemplary safety record: “It will be important for the LNG fuel industry to not only have proper procedures in place, but also to police itself to ensure that all participants are engaging in best practices.” ò

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Greater Houston Port Bureau | 23

captain's cup

The 6th Annual Captain’s Cup Golf Tournament HDR, Inc. Wins the Cup

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n November 3, 2014, the Greater Houston Port Bureau hosted its 6th Annual Captain’s Cup Golf Tournament. The sold-out Captain’s Cup invited foursomes to the private BraeBurn Country Club for a top-notch experience, complete with over $100 in giveaways per player. It was a beautiful day to be on the course despite wind gusts up to 20 miles per hour.

HDR, Inc., won first place gross score with players David Weston, Don Welch, Steve Arnold, and Mike McCaffrey. HDR’s winning plaque will be featured in the Port Bureau offices until a 2015 winner is crowned.

First place net went to the Rio Marine, Inc., team with Tony Sansing, Mike Neil, John Sansing, and Tommy Broussard.

Above: HDR, Inc.’s winners of the 2014 Captain’s Cup

Additional team wins went to:

• Second place gross: Alliant (Tim Studdert, Jason Ellis, Sean Wagner, and Tara Battle)

• Second place net: Rickmers-Linie (Bill Wood, Brian Yawn, Rob Silsbee, and Jason Tack)

Thank you to our Premier Sponsors: Lunch Sponsor:

Dinner Bar:

• Third place net: Texas Mooring ( Jeremy Rose, Bryan Burleson, Bob McHugh, and Jeff Kindle).

The Captain’s Cup featured several contests for closest to the pin, hole in one, and longest drive. Two teams came just inches away from winning the $10,000 hole in one challenge. Mike McCaffrey won the longest drive, and closest to pin winners were Ed McDaniel, Shannon Snider, and Jack Higden.

In addition to our generous sponsors and teams, the Port Bureau would like to thank the Golf Committee for their hard work: Tim Studdert (Shamrock Marine), Guy Hitt (Frost Bank), Brad Maxcey (Danner’s Inc.), and Jamie Sylvester (Briggs & Veselka).

If your company is interested in participating in the 2015 tournament, send an email to golf-info@txgulf.org to receive updates. ò 24 | November 2014

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Dinner Sponsors:

Beverage Carts:

captain’s cup

Hole in One:

Closest to Pin:

Practice Ranges:

Putting Green:

Longest Drive:

In-Kind Sponsors: US Trust Wells Fargo

Hole Sponsors: Alliant | Alpha Mar-IMW Co. | Amegy Bank | BB&T | Blank Rome LLP | Briggs & Veselka Co. Citibank | CLM Towing, LLC | Coating Systems | Danner’s Inc. | Friendly Public Warehouse, Inc. Frost Bank | Galloway Johnson Tompkins Burr & Smith | Galtex Pilots | Houston Mooring Co. Houston Pilots | Laborde Products | McCarthy Building | Port of Houston Authority | PTRA Rio Marine | Suderman & Young Towing | Team Services | Texas Mooring Greater Houston Port Bureau | 25

Job Growth

Texas Leads Nation in 2013 Oil and Natural Gas Production Job Growth U.S. Energy Information Administration

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exas added more than 19,000 new private sector jobs in oil and natural gas production in 2013, almost six times the number added in New Mexico, the next highest state for oil and natural gas production jobs added last year. The extraction, drilling, and support jobs categories are a measure of on-theground production jobs, and do not reflect the many jobs at oil and natural gas corporate headquarters based in Texas.

In the past decade, growth of jobs in oil and natural gas extraction, drilling, and support activities has outpaced the national average of private sector job gains. Overall, oil and natural gas production jobs in the United States increased from 292,846 annual jobs in 2003 to 476,356 in 2008, a 63% increase. Following the net loss of 54,323 oil and natural gas production jobs during the 2008-09 recession and relatively little national job growth, jobs in oil and natural gas production increased another 28% from 2009 to 2013, from 422,033 to 586,884. Additionally, average wages of oil and natural gas production jobs were $108,000 in 2013, more than twice the average wage for all private sector industries. Since 2009, average wages from oil and natural gas production jobs have increased by 12%, compared with a 10% increase for all private sector industries.

26 | November 2014

Most of the job growth has occurred in Texas, along with significant contributions from Oklahoma, New Mexico, and North Dakota. These jobs are part of the larger mining sector, which includes the extraction of coal and metals as well as oil and natural gas extraction.

Many of the states that exhibit strong growth in oil and natural gas employment also show growth in mining

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Greater Houston Port Bureau | 27

Job Growth activity and economic activity (measured as gross state product). In 2013, Texas, Oklahoma, and North Dakota were among the top states for growth in gross state product and in the mining sector.

three of the 100 largest oil fields in the United States.

• Pennsylvania has seen significant job growth from natural gas production in the Marcellus region in recent years, although growth flattened during 2012-13.

Much of the growth in oil and natural gas jobs can be traced to growing onshore production in several shale formations in the lower 48 states.

• Colorado and Wyoming share the oil- and natural gas-producing Niobrara formation.

• Texas is home to the Eagle Ford, the most prolific oil-producing play, as well as much of the Permian and Haynesville formations.

Preliminary national data for the first quarter of 2014 show only 1,355 net job additions from the end of 2013 through March 2014, but these data are not a complete count and do not reflect seasonality in employment. ò

• North Dakota contains most of the Bakken formation, whose oil production has spurred significant employment and state product growth over the past decade in what was one of the smallest state economies.

Ed. Note: The above article was originally published by the U.S. Energy Information Administration on November 5, 2014. The principal contributor of the article was Robert McManmon. For more information, visit http://www.eia. gov/todayinenergy.

• New Mexico has four large counties producing from the oil-rich Permian Basin that contains

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Houston, TX 77057

www.txgulf.org

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713.977.7400

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Email: borland@bladesintl.com

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Greater Houston Port Bureau | 29

GHCA

Greater Houston Coffee Association

2014 Annual Luncheon

Featuring Speaker Philip Blaber, Commercial Director of Soluble Coffee, Ecom Agroindustrial Corp. Ltd. Emily Mitchell, GHPB

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n Thursday, October 9, 2014, the Greater Houston Coffee Association held its annual luncheon at Brady’s Landing, in conjunction with the Commerce Club. Philip Blaber, the Commercial Director of Soluble Coffee for Ecom Agroindustrial Corp. Ltd., gave a rousing talk about current trends in the global coffee market as well as the goals of Ecom’s newly rebranded Atlantic Coffee Solutions here in Houston.

Blaber began with the history of the Ecom Group, a family-owned company with an impressive 165-year history. Founded in Barcelona in 1849 by Jose Esteve, Ecom later expanded into the U.S., Brazil, and Mexico, starting out in the cotton business before moving into coffee in 1951. Today, Ecom’s global vision is clear: “From merchants in Australia to production in Vietnam, the Ecom Group covers most, if not all, coffee producing countries and coffee consuming countries.”

Discussing the supply side of the global coffee market, he pointed to crops, droughts, frosts, and investment funds contributing to the intense volatility in coffee prices. According to Blaber, “this market is no longer a club for coffee traders to hedge and minimize risks.” Investors are interested in coffee as an investment because it is a crop whose harvest, barring any major weather events, will remain fairly constant.

However, as Blaber noted, we have a weather market today. One needs only look towards Brazil, the world’s largest coffee producer, where rains this year have 30 | November 2014

Philip Balber addresses attendees at the October 9th Commerce Club luncheon. been almost nonexistent, preventing the trees from recovering fully from last year’s harvest. Coffee trade houses estimate the Brazil crop yielding anywhere from 41 million to 55 million bags this year, revealing the uncertainty surrounding the global coffee supply and contributing to price volatility.

On the demand side, Blaber focused on consumption patterns and the exponential growth of the single serve category, with Nespresso leading the sector in Europe and Keurig here in the U.S. Blaber characterized this growth as a net positive for the coffee market, “as this ensures that most of the coffee is consumed and not wasted.” In fact, he said that “for many years, the largest consumer of coffee was the kitchen sink.”

Along with the growth in demand, however, consumers have not seen a radical change in the brands

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GHCA lining the retail shelf. The average customer is very brand loyal, Blaber argued, so that in the instant coffee sector, for example, Nestle remains number one in the global market, followed by Kraft (known as Mondelez in Europe) and then more regional players. As creatures of habit, coffee consumers lean heavily towards the “same coffee, same vendor, same product,” day after day.

Turning away from the global picture and toward the regional market, Blaber explained why Houston is so special: “It has a superb port, exceptional logistics, and excellent storage facilities.” On top of that “in terms of coffee, it is the U.S.’s second largest import port.”

A major player in this local coffee market is Ecom’s newly rebranded Atlantic Coffee Solutions (formerly Maximus Coffee Group LLC). As Blaber stated in his talk, Atlantic’s “monster of a facility” is actually five factories in one: a natural decaffeination plant, a roast

and ground facility, a roast and ground packing facility, a soluble processing facility, and a soluble packing line.

Along with its new name, Atlantic faces many challenges, primarily due to the age of its Houston facility. According to Blaber, investments are planned to improve the facility as well as quality and processing.

Most importantly, however, Atlantic is focused on becoming a reliable, sustainable, and efficient partner, assisting the brand holders in “further developing their position in this very competitive market.”

In closing, Blaber asked for patience through this process, reminding attendees that Rome was not built in a day. “Rest assured,” he said, “we at Atlantic look to build Rome.” ò Ed. Note: To learn more about the Greater Houston Coffee Association and how to become a member, visit: www.greaterhoustoncoffeeassociation.org.

Annual Luncheon Sponsors:

Greater Houston Port Bureau | 31

Advertising Directory Bank of Texas.................................. 7................ www.bankoftexas.com Blades International............................ 28....................... www.bladesintl.com Blank Rome LLP.................................. 20.............................. www.brlpc.com Briggs Equipment................................ 21........... www.briggsequipment.com Buffalo Marine Service........................ 15................ www.buffalomarine.com Cargoways......................................23....... www.cargowayslogistics.net Cheetah Chassis...............................17........... www.cheetahchassis.com Clark Freight........................................11.................... www.clarkfreight.com Gulf Winds International...................... 12................................www.gwii.com HDR Engineering Inc........................... 22............................ www.hdrinc.com Houston Pilots......................................11............... www.houston-pilots.com McCarthy Building Companies, Inc...... 16........................www.mccarthy.com Odfjell Holdings (US) Inc..................... 18.............................www.odfjell.com Port of Galveston............................ 29.......... www.portofgalveston.com Port of Houston Authority................... 19.............................. www.poha.com Richardson Companies.........................13.....www.richardsoncompanies.com Shrader Engineering............................27............................ www.shrader.net Trustmark National Bank...................... 9........................www.trustmark.com Vopak.................................................. 26.............................www.vopak.com Whitney National Bank........................27.......................... www.whitney.com Wortham Insurance............................. 19......... www.worthaminsurance.com

Greater Houston Port Bureau www.txgulf.org info@txgulf.org 111 East Loop North Houston, TX 77029 T. +713-678-4300 F. +713-678-4839

The Greater Houston Port Bureau Invites You To

Member Appreciation Holiday Party Thursday, December 11, 2014 2 pm - 5 pm Jackson’s Watering Hole

1205 Richmond Ave., Houston, TX 77006 Dress Code: Come as you are

Free beer, wine & hors d’oeuvres.

Come early for door prizes and giveaways!

Open to Port Bureau Members & Their Guests RSVP Required: mlogan@txgulf.org