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CONTENTS OIL, GAS & ENERGY : NEWS & VIEWS
Editorial Note Editor’s Choice • Neutral Fuel Alternative • Carbon Intensity of Global Economy Fell in 2014
Editor's Pick • The Good, the Bad and the Ugly When Oil Giants Shift to Natural Gas
IndiScan • Fuelling Kerosene Reform • FinMin not for granting ‘declared goods’ status for Natural Gas, ATF • OVL TARGETS 10-12 b$ investment Outside India • Move to Sweeten Oil, Gas Search • MRPL plans to set up LNG Terminal at Mangalore port October 8, 2015 • IOC to sell subsidised 5 kg LPG cylinders in rural India • Paradip-Durgapur LPG link to be ready by next year: IOC • IOC to spend $5 bn on oil exploration, production
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GlobeScan • Yantai Xinchao, China to buy oil fields in Texas for $1.3 bn • Toshiba to sell sensor business to Sony for around $165 mn • Nigeria’s Buhari to split NNPC in fight against corruption
TrendScan • • • •
Oil prices extend losses as glut worries persist U.S. Shale Profits Beating Big Oil Rivals Investor-friendly India?: World Bank Global commodity price slump sends ripples around the world
TechScan • Perovskite Seeks its Place in the Sun as Solar Panel Element • Solar Window Covering Boasts ‘Transparency’ • 3M Speeds Up Development of Glass Bubble Product to Meet Oil, Gas Needs • Catalyst development enables innovative OCM technology application • Nanopores Could Take the Salt out of Seawater • Stanford, IBM test limits of toughness in nanocomposites • UK set to lower blade erosion costs though new analysis tools • Liquid air 'offers energy storage hope’
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ALTERNATIVE & RENEWABLE ENERGY • DuPont Opens ‘World’s Largest’ Cellulosic Ethanol Plant • Energy Trends Driving Climate Progress in 2015 • India signs MoU with Mozambique for cooperation in renewable energy • ISR- Institute of Seismological Research, hopeful of tapping geothermal energy, starts survey • Welspun Renewables receives $617m in funding for clean energy development • Sany to invest $5bn in Indian clean energy market • Punjab’s largest solar power plant commissioned at Bathinda • China raises 2015 solar installation target by 30 percent to 21.3 GW October 12, 2015 • DC Water develops $470m waste-to-energy project in US • Outotec selected to support renewable energy projects in UK and Canada • Enerkem raises $115.4m funding for future expansion of biomethanol production
HSE, CLIMATE CHANGE & SUSTAINABILITY • Vapour cloud from Exxon Mobil refinery in California triggers alarm • Shale Gas Methane Leakage 'Seriously Overestimated': UK Think Tank
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• How eBay's radical efficiency plan benefits from employee engagement • How does Duke Energy measure up among green utilities worldwide? • HPCL initiative on sustainable environment • GE Partners with Walmart, Intel, Statoil, 5 Others on Water, Energy Efficiency • Hawaii Energy program saves almost $1B over last six years • Shale Gas and GHG Emissions: What’s the Deal?
THE BANYAN TREE • What might “the best workplace on earth” look like? • Authentic Leadership Rediscovered • “Authenticity has become the gold standard for leadership” • The journey to authentic leadership • Before you can lead others, you need to manage yourself
F2F • Does "disruptive innovation" need disrupting? • 'India's 175 gw renewable target possible' • ‘India must ensure cheap drugs for Africa’
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Editorial Note Dear Patrons of Petrotech I had the opportunity to participate in ADIPEC -2015 from 9th to 12th of this month. It's the largest event of its kind showcasing the state of art in upstream oil and gas industry, yet very useful for the down and mid stream bits vast range of coverages during its plenary and technical sessions and over 100 exhibitors of state of art technologies and country pavilions, are great learning for the people from the industry irrespective of which segment of industry one works with - design, engineering, EPC, operations, refining, petrochemicals, pipelines, logistics, manufacturing, consultancy, HRD, HSE, quality, sustainability, CSR, you name one you have one. Organization of Sessions of the conference was entrusted to SPE, which had resulted in excellent quality of technical sessions on all topics. Best part of the whole event was t item management. Each session would start dot on time, without waiting for hall to get filled. The quality of audio visual was great, crisp, audible and leasing to eyes. There was standard format used by all presenters of papers. The entire event was under one roof, and that provided great synergy and wide choice for the participants to plan their daily activities, otherwise , it was impossible to attend so many simultaneous sessions and visiting over 1000 exhibitors stalls. As indeed impossible, and we planned it daily as per the topics of interest and objective of participation I.e selling Petrotech-2016 and identifying and connecting with some of possible speakers and panelists. The lesson for visits ting ADIPEC and WPC is that to raise the bar and performance of Petrotech2016, we must have one Conference partner, like ADIPEC ,which has SPE and WPC which has PWC, or Calgary which has Deloitte. It not only ensures Martian high quality of papers but also Leo's in international branding of the conference, besides providing opportunity to to the organizing committee meme bets to network with best industry minds available globally.
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Another high point of the ADIPEC was that every part of organizing sessions and exhibition was entrusted to a single entity, which worked in great harmony and synergistically. A model which Petrotech should adopt, which was great experience for the participants and invited delegates. An unique feature I observed was the 'Petroleum Club' specially created enclosure for the speakers, panelists and VIPIN Delegates and invitees, which has a small auditorium, refreshment and lunch lounge, B2B meeting rooms, all well attended and excellently stocked, with special counters for travel and tour assistance to the members of this club, most of which were temporary members. We returned with great learning and enriched Knowledge and good expanse of network. My only regret was low participation from Indian PSEs. Indian we met a plenty but mostly working in Mod East companies. There was indeed Indian enclosure, in which some of small and medium level manufacturing companies had put up stall, and EIL was only PSE which marked there presence, but the entire India Pavillion put by CII was in low key. The FICCI show on MAKE IN INDIA theme was a whimper, not attracting many eyebrows. Most of participants were the Indian delegates, with few outsiders. However Mr Shashi Shanker Dir ONGC made a very impressive presentation, in a obscure hall at the dead end of the halls, where reaching it self was a very long walk. Even Africa Investment made their presentations in the Auditorium of Petroleum Club. FICCI should have tried for one of better places, to attract participation other than captive audience. It's stall was big enough to accommodate some of Indian participants, but most of the time would be no one to attend to stray visitors to this enclosure. There a lot to learn from the experiences we had, only we should have resolve to Lear, from the past to improve the future. The year is coming to close, we come closer to PTEROTECH-2016, which is not only a showcase event of our O&G industry but that of the O&G vision, mission and resolve of our country to achieve energy
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independence and improve quality of life of people with cleaner and better energy at the earliest. Our country's plans will be presented in the Paris this month, which has been prepared involving every segment of stakeholders. In view of whatever shall be agreed here, and even irrespective of that, our industry has to work very hard to live up to global competition and expectations and over- deliver on the commitments India shall make at Paris-2015, which will certainly help us sustain our business in fast changing energy scenario. The month December is the dawn of rising New Year, and a month to revisit our resolutions and make new wish list and resolutions, and Christmas holidays is time to set the ball rolling. Wishing you merry Christmas and very HAPPY NEW YEAR, Sincerely (ANAND KUMAR) Director, Petrotech
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Editor’s Choice Neutral Fuel Alternative Lindsay Hock, Editor, R&D Magazine
As early as the 1950s, researchers were looking at algae for methane gas production. The algae was grown on rooftops of Institute Massachusetts Technology (MIT).
Drawings and illustrations of open pond raceways on the roof of Harvard Univ. were also recovered from the 1950s. The reason for this research was algae naturally make oil, and this intrigued researchers as a feedstock for biodiesel. In the 1970s, algae for use as an alternative fuel had another push, this time related to gas-related fuels. And this push came when the U.S. Dept. of Energy (DOE)’s National Renewable Energy Laboratory (NREL) started a program called the Aquatic Species Program. The program was originally meant to evaluate photosynthetic organisms that grew in or near water—including algae, seaweed, swamp-type plants and more. The program was looking for ways to supplement the amount of terrestrial biomass that could be grown, looking at different aquatic species. And very quickly into this process, NREL settled on algae, more specifically microalgae, due to their ability to produce lipids, which were known as a potential source of biofuels. The project lasted from 1978 to 1996, at which point the price of oil had gone down to about 9
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$10 to $20/barrel. And the price was thought to stay at that price for a long time. Since the interest dried up due to the decreasing price of gasoline/oil, the DOE could no longer hold funding across the board on biofuels, so they terminated the algae part of the program to continue focusing on cellulosic biofuels. From 1996 to 2006, little work was done on algal biofuels. Then, starting in 2007, interest was, yet again, sparked when the price of oil rose to $40 to $50/barrel; and companies started to form the Algae Biomass Organization in 2008. From there, algal research started up again with a vengeance. Despite the ups and downs, this alternative fuel source has seen its renaissance today, with similar funding (over $18 million spread across national labs, universities and industrial companies from the DOE and more from private sources) and more interest from companies in its potential. The trouble of commercialization stunts benefits The onset of the rise in algal biofuels research in 2006 and 2007 was the publication of the first billion ton study, which was a joint effort between the USDA and the DOE. The study posed the question of how much terrestrial biomass or lignocellulosic biomass could be sustainably produced in the U.S? And the answer, according to the study, was about a billion tons per year. “Looking at the different conversion properties and processes to turn cellulosic biomass into fuel, you can basically assume a billion tons a year could be used to produce about 60 billion gallons of gasoline equivalent a year—whether that is ethanol or some other fuel molecule,” says Philip Pienkos, Group Manager of the Bioprocess R&D Group at NREL in an interview with R&D Magazine. As a nation, we burn about 140 billion gallons of gasoline a year. We also burn 40 billion gallons of diesel, and 20 billion gallons of jet fuel. “Cellulosic biomass can only cover a small fraction of this,” says Pienkos. “Our calculations show algae could easily match cellulosic biofuels in terms of overall production. It could actually exceed the 10
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cellulosic biofuels we produce because of the lipids, sugars and other components found in algae. There is enough free space in the U.S. that isn’t being used that can cultivate algae; so, easily, 60 billion gallons of biofuels could be produced in the U.S.” However, the DOE has set a more conservative target, and is looking to establish 5 billion gallons of algal biofuels a year, with a notion it could be an order-of-magnitude higher. Yet, the commercialization of algal biofuels has proved much harder than expected. And some view algal biofuels as more hype than a reality. “The joke is algal fuels are 10 years off, and they always will be,” says Pienkos. However, the main reason why algal biofuels haven’t exploded yet is the reason why most are getting their funding: Algal biofuels aren’t quite economically viable to compete with gasoline. “They are getting there,” says Rhona Stuart, Postdoctoral Researcher at Lawrence Livermore National Laboratory in an interview with R&D Magazine. “And there’s research being conducted in all different pipelines, not just in the growth of algae, but also the production and conversion of algal biofuels to get it to the point where it competes with gasoline at a cost per gallon.” To help alleviate this issue, there has been much effort from the national labs and DOE-funded projects that look at techno-economic analysis and lifecycle analyses of algal biofuels. And these projects have identified two key barriers to getting these biofuels within the cost per gallon range of gasoline: low yields of algae biofuels and high costs of producing algal biomass. “The goal for the funding provided by the DOE is getting the gasoline gallon dollar equivalent of biofuel product down to less than $5/gallon,” says Stuart. “And right now, by some estimates, it’s at around $8/gallon.” “If you look at the petroleum industry, worldwide it’s a trillion dollars a year industry,” says Pienkos. “And that’s the magnitude of the opportunity for biofuels and bio-based chemicals. We are talking 11
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about an algae industry that could be on the same order of magnitude, or thereabouts, as the petroleum industry. And it’s going to take a lot of money.” The industry is starting small, and it will take success at the higher-value, smaller-market products to establish commercial revenue streams. In response, high-value products will be the main focus for near-term commercial success. And it is hoped that those revenue streams will lead to further R&D progress, eventually ushering large-scale algal biofuel production (and some companies are well on their way, such as Sapphire, Cellana and Algenol). Yet, despite the cost issue, there are many benefits to using algae instead of gasoline. How algae compares to gasoline is highly determined on the strain of algae used and chemically what oil that strain makes. Currently, some companies are engineering algae to produce oil very similar to a gasoline equivalent biodiesel that could be dropped into a car. Other downstream processes harvest the biomass, not just the oil, and convert it into ethanol. “In general why algae is a good alternative is because it’s carbon neutral,” says Stuart. “Algae is grown on non-potable water, maybe even wastewater, so you’re not using water and you’re not using arable land, because you are growing this algae in ponds. This means the cultivating of algae isn’t interfering with our food source. The algal biofuels, once produced, will take up carbon dioxide and burn that carbon dioxide immediately in a car, showing a carbon neutral process.” Essentially, the algae is taking up the same amount of carbon that’s released. In addition, algae can produce mass quantities of lipids and fats, making them easily convertible into liquid fuels, such as biodiesel or jet fuel. The barrier of pond crashes A large barrier to the commercialization of algal biofuels is pond crashes, where algae will begin to grow and then suddenly die off. The reason ponds crash is because they are open to the atmosphere and many deleterious species come into the pond and either eat or infect the algae. These pond crashes are unpredictable and must be 12
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understood to minimize their devastating impacts—basically losing whole algae harvests and starting over again Since theses crashes are unpredictable, they also are an economic barrier to making algal biofuels viable to replace gasoline, and the process to developing algal biofuel ponds and cultivating the algae is a time-consuming process, taking months.
“The reason the process takes months is researchers must clean these ponds from any infected deleterious species that may have gotten in and caused the crash,” says Stuart. “That is a huge liability. So, if we can prevent even 10% of those crashes, we can really improve the annual yield.” Annual productivity is a key metric for algal biofuel production that, if optimized, could significantly decrease and stabilize biofuel price per gallon. Larger yields give algal biofuels the competitive boost they need to compete with gasoline. To study these pond crashes, the DOE has awarded Lawrence Livermore National Laboratory $1 million over the next three years. “This is new area for us at Livermore Lab, and we are only just beginning to understand the pond microbiome isn’t only an indicator of health, but also a tool for crop protection. The project will start officially on Oct. 1, 2015,” says Stuart. “But we are leveraging some other work that got funded last year in October that’s much more basic research—it’s not as applied as our project—to look at algae and the bacteria that are attached to the algae.” The research will focus on a special region called the phycosphere, a boundary layer around an algal cell, where there are many important interactions between algae and the beneficial bacteria that can attach to the algae and help them grow. “We are trying, at a very fundamental level, to understand how these beneficial bacteria attach
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and interact with the algae in the phycosphere, which surrounds an algal cell,” says Stuart. While still in the early stages, Livermore Lab is hoping to identify and employ what Stuart calls “probiotic bacteria,” or probiotics for algae, to increase microalgal survival by two-fold when under attack by rotifiers or chytrids in mass algal cultures. According to Stuart, rotifiers and chytrids are the common culprits of algae grazing. And by using probiotic bacteria to increase algal resistance against these grazers, Stuart estimates a 5 to 10% increase in annual productivity. “The proposed tool has several advantages over the baseline, including minimal risk of pest evolution, tailored microbiome diversity to increase ecosystem resilience and productivity and probiotics that can increase algal productivity and outgrow pests,” says Stuart. “We need to establish big algae farms to expand the future of algal biofuels,” says Pienkos. “We literally need hundreds of algae farms situated in areas around the U.S. where there is open land, some light and water availability and carbon dioxide availability.” Overall, the U.S. needs the same amount of algae farmland comparable to the acreage the U.S. plants corn on today. And keeping those algal ponds/farms safe is a first step to commercialization. But the area of algal biofuels is ripe for innovation. Two-pronged approach The importance of open ponds for algae research isn’t unnoticed, as seen in Lawrence Livermore’s upcoming work on pond crashes. And, in fact, most industrial companies looking to commercialize algal biofuels use open ponds for their research and cultivation, as the technology has been tried-and-true for decades. Yet, the issue of contamination by undesirable algae strains still looms over the technology. However, Cellana, a San Diego-based developer of algae-based bioproducts, looks to produce algal biofuels in a new way.
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The company’s approach presents a different way to growing algae biomass that opens research into multiple types of species never grown at the commercial-scale before. “Our approach relies on what products we want to make, and finding the right strain(s) that haven’t been produced at industrial scale before to address those products,” says Martin Sabarsky, CEO, Cellana in an interview with R&D Magazine. “This is an overall 180-degree flip on R&D and product development that has been done to date in algal biofuels research.” The technology, called ALDUO, relies on closed-culture photobioreactors (PBR) with open ponds in a two-stage process. “Most attempts of scaling-up algae production use a PBR or open pond individually, not coupled,” says Sabarsky. “PBRs by themselves are generally unable to produce algae at an acceptable rate and tend to be too costly to be commercially viable for commodity products.” With a large production plant in Kailua-Kona, Hawaii, Cellana has access to unique and naturally occurring algae strains from the Univ. of Hawaii, in addition to strains collected in Hawaii, that have been selected for high production of algae oil and rapid growth under targeted commercial production conditions. And the ALDUO process works where, first, the PBR is used to maintain constant conditions that favor continuous cell division and prevent contamination of the culture by other organisms.
“The PBR is like a thin-film bag that protects the crop and culture, but still allows light to pass through so photosynthesis can be used in production,” says Sabarsky. “Continuous to semicontinuous production is happening in these protected
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PBRs, where you are only growing the strain of algae you want. You aren’t subjecting or exposing that strain to any other species that would affect your crop.” I n the second step, the algae is transferred, at dawn, after growing in the PBR for a few days, without contamination, to an open pond system of nutrient-depleted culture medium. The open pond is a paddlewheel-driven, recirculating raceway, fitted with a durable plastic liner. The goal is to expose the cells to nutrient deprivation and other environmental stresses that lead to synthesis of products, such as oils for nutraceuticals and biofuels. After two or three days, the algae cells are concentrated by gravitation into a slurry, excess water is removed and the mixture is further concentrated. “The wet biomass is then dried,” says Sabarsky. “And that dried algae biomass can then be used as a supplement for aquaculture hatchery feeds or functional foods. If the components contained within the algae are desired instead of whole algae, the algae oils, or other components, can instead be extracted for nutraceuticals, animal feeds, biofuels or other desired products.” “We pride ourselves in cutting our algae production into multiple products and maximizing the value of the entire barrel of algae, rather than just going after the low-value products like fuel,” says Sabarsky. “And by doing this, we will be able to see, in the near future, pricecompetitive crude oil and fuels, but also high-value products.” Four fuels are better than one Algae naturally makes oil, and they are quite good at it. And this has intrigued people as a replacement for biodiesel for over 60 years. However, another approach towards algal biofuels is producing ethanol instead of biodiesel. Algenol, Fort Myers, Fla., entered the algal biofuels arena in 2006 trying to produce ethanol, not biodiesel. “If ethanol were made directly inside the cell, then it would leak out of the cell and evaporate from a culture,” says Paul Woods, Founder and CEO of Algenol in an
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interview with R&D Magazine. “So that was the impetus of Algenol 10 years ago.” Making ethanol that leaves the cell is obviously different than making a heavy oil trapped inside a cell. But the company’s original approach back in 2006 wasn’t that different as they used a horizontal closed and sealed bioreactor. There algae wasn’t cultivated in a pond, but it was still produced horizontally. “And, at that point, we had made about 3,600 gallons of ethanol a year; which considering corn ethanol does 420 gallons a year, we are a world leader,” says Woods. However, that number was still far from the company’s goal of 6,000 gallons per year. And, in 2010, Algenol embarked upon an important evaluation. The company wanted to know why they weren’t getting the numbers they wanted and why they weren’t scaling up the way they wished to. “And I think this evaluation forever separated us from the competition,” says Woods. “We had the man power and money to critically examine the question of why companies fail to scale-up. And when we really examined the problem, we found the true problem with commercialization and industrialization set us apart.” Upon switching their production method from a horizontal to vertical process, Algenol began to overcome the problems commonly seen in commercialization and scale-up. Horizontal systems can never address light distribution, and when Algenol moved to a vertical panel system it addressed this problem as algae don’t want 2,000 microEinsteins of direct sun, they want 300. “And our technology really addressed these issues of heat dissipation, light distribution and photoinhibition, and it did so simultaneously,” says Woods. Algenol’s DIRECT TO ETHANOL technology uses sunlight, algae, non-arable land and carbon dioxide to produce ethanol and spent algae that can be converted into other biofuels. The technology employs enhanced blue-green algae (cyanobacteria) and photosynthesis to convert carbon dioxide and seawater into pyruvate and then into ethanol and biomass.
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The heart of the company’s technology is a proprietary flexible plastic film PBR that facilitates product creation and collection. According to Algenol, the plastic used for the PBR construction is engineered and enhanced with resins and other features designed to optimize a variety of performance metrics. Each individual PBR consists of ports for ethanol and biomass collection and the introduction of carbon dioxide and nutrients. The technology works where gravity facilitates the collection of ethanol and spent algae from the PBRs and Algenol’s Vapor Compression Steam Stripping technology further purifies the ethanol for downstream processing using standard distillation and, potentially, novel energy-limiting membrane technologies producing fuel-grade ethanol. “Overall, the process has a carbon footprint that’s 80% less than that of gasoline,” says Woods. Algal biomass collected following the ethanol production provides the feedstock for the biomass-to-hydrocarbon fuels process. “The biomass is dewatered before it’s fed into a hydrothermal liquefaction (HTL) unit,” says Woods. “The primary output from the HTL unit is a green crude oil. And this crude oil is upgraded in a hydrotreater unit to a hydrocarbon product that contains a mixture of liquid hydrocarbons in the range of diesel, jet and gasoline fuels.” “This is what sets Algenol apart. We make four fuels. And this is far more economic than making one,” says Woods. In addition to making four fuels, the company can do this for as little as $1.30/gallon. “At this day and age, petroleum prices are very low, but at $1.30/gallon we can still be profitable and bring the benefits of algal biofuels to customers,” says Woods. 18
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And even though Algenol has produced algal biofuels at the cheapest price, Woods sees a huge benefit to making it for $1.20 or $1.00. “R&D is key to this goal,” says Woods. “And, ultimately, our key to success was R&D and optimizing the process both upstream and downstream.” Conclusion And while for some companies might still be 10 years out on the commercialization of algal biofuels, the research is there for innovation, and many companies are making great strides to nearfuture commercialization. The truth remains that if petroleum prices keep their upward climb, products like algae biodiesel will have value, and will be both cost-competitive to public and cheap to produce.
Carbon Intensity of Global Economy Fell in 2014 Reuters, October 13, 2015, Source: Pixabay
Carbon intensity fell 2.7 percent last year but a decline of 6.3 percent a year needed for climate goal
OSLO, Oct 12 (Reuters) - Governments took a step towards greener economic growth in 2014 but will need to do far more to limit rising temperatures to a United Nations goal of two degrees Celsius (3.6 Fahrenheit), a study by accountancy firm PwC said on Monday. The carbon intensity of the world economy - the amount of greenhouse gases emitted per dollar of gross domestic product (GDP) - fell by 2.7 percent in 2014, the steepest decline since PwC started issuing reports seven years ago, it said. "The 2014 numbers suggest a turning point" towards making growth less dependent on fossil fuels, said PwC, a network of firms in 157 countries in assurance, advisory and tax services. World GDP rose by 3.2 percent in 2014, while carbon emissions rose by just 0.5 percent, it said. 19
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Britain was best of the Group of 20 nations with a steep 10.9 percent fall in its carbon intensity last year, a shift PwC linked to strong economic growth, a warmer winter that reduced energydemand and lower use of coal. France, Italy and Germany also had big falls in carbon intensity last year. Almost 200 governments will meet in Paris from Nov. 30-Dec. 30 to agree a pact to curb greenhouse gas emissions, mainly from burning fossil fuels, that are blamed by a U.N. panel for causing downpours, heat waves and rising seas. PwC said the rate of decarbonisation needed to more than double, to 6.3 percent a year, to get on track to limit rising temperatures to a U.N. target of 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial times. That would be a wrenching pace of change. Even in Germany in the 1990s, when inefficient Soviet-style factories were shut in the east after reunification, decarbonisation rates were only about 3 percent a year, the report said. "You need revolutions in the energy sector in every country, every decade," Jonathan Grant, PwC sustainability and climate change director, told Reuters. Since the year 2000, the report said that global carbon intensity had fallen by an average 1.3 percent a year. At that rate, PwC estimated that the amount of carbon that could be emitted before exceeding 2C would run out in 2036. (Reporting By Alister Doyle, editing by William Hardy)
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Editor’s Pick The Good, the Bad and the Ugly When Oil Giants Shift to Natural Gas June 11, 2015 By Ben Ratner , Environmental Leader Six large European oil and gas companies recently announced a commitment to engage on climate policy, calling for a price on carbon. The now-emerging picture of their coordinated corporate talking points, however, leaves no doubt that promotion of natural gas is a core part of the group’s position. Is this development a beneficial push to help the planet transition to a low carbon economy – or just another marketing campaign? The truth, so far, lies somewhere in between. Here are the good, the bad and the ugly highlights of what we’ve learned over the past week and what it all means. The good: Establishing a carbon price and cutting carbon dioxide emissions Make no mistake about it: The world’s leading economies need to establish a price and limits on greenhouse gas emissions, and leadership from the private sector is instrumental in achieving that policy objective. For large companies such as Shell, BP and Statoil to join forces and unequivocally state, as they now have, that a price on carbon should be a “key element” of climate policy frameworks is a refreshing boost to pre-Paris United Nations climate talks. It is a potentially powerful validation that even some of the world’s largest corporate emitters see an upside to carbon pricing and will weigh in to make it a reality. 21
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As to promoting natural gas a solution, it is well documented that in many cases natural gas will replace coal for power generation – a shift already underway in the United States and partly responsible for driving down carbon dioxide (CO2) emissions. The bad: Paying short shrift to natural gas’s Achilles heel Notwithstanding the economic and carbon-dioxide benefits of coal-togas switching, there is a missing piece of the puzzle in the companies’ formulation to date. One of the oil executives said “The enemy is coal.” Respectfully, that is incorrect. The enemy is climate pollution; coal is merely its most pernicious face. Methane is natural gas’s Achilles heel. At close to 85 times more potent of a climate change forcer than carbon dioxide, methane emissions from the oil and gas industry undermine the very climate performance of natural gas that companies tout as a chief benefit relative to coal. Indeed a recent report found that the 20-year global warming potential of methane emissions from the global oil and gas sector have the same near-term impact as about 40 percent of total CO2 emissions from global coal combustion in 2012. And that’s on top of the carbon dioxide from burning the natural gas. Fortunately, the bad methane story can be solved at little economic cost, and while creating jobs in the process. If the companies put a fraction of the effort of promoting gas into promoting methane solutions – including the regulations we need to establish basic environmental safeguards – this bad news story could disappear. A bold methane action plan that all companies embrace, and that includes strong regulatory assurances, is the missing ingredient – the elephant in the room.
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The ugly: A leadership shortage But we have a problem. American companies (think Chevron and Exxon) are among the most well-resourced and inventive oil and gas companies. With a large stake in natural gas, they share an interest with European corporate peers when it comes to promoting a carbon price that displaces coal and resolving the methane issue before it gets worse. However, these “super majors” have remained conspicuously on the sidelines of the European companies’ efforts. They’re even signaling an intent to stay there even as peers move closer toward embracing a lower carbon future It is a missed leadership opportunity, but one they can still seize. Ben Ratner is a senior manager at the Environmental Defense Fund. He manages corporate engagement initiatives to minimize methane emissions from the oil and natural gas industry. His focus is developing innovative collaborations across diverse stakeholder groups to build the leadership, technology and information necessary to reduce emissions aggressively and cost effectively.
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IndiScan
Fuelling Kerosene Reform Direct benefit transfer, by linking Jan Dhan accounts to BPL ration cards, can help target subsidies and stem leakage
Reforms in fuel subsidies, especially the freeing of diesel pricing and direct benefit transfer on cooking gas, have certainly been one of the accomplishments of the Modi government. A benign global crude oil price regime certainly helped push through difficult reforms in the sector, but credit has to be given to the Centre for seizing the opportunity. The job of cleaning up the oil mess, though, is only half done. There still remains the contentious issue of reforming subsidies on kerosene, seen as the poor man’s fuel.
This, together with rationalisation of subsidy on cooking gas by gradually whittling it down to zero for all except the needy segment, should be done without further delay. Subsidy on the two products â‚š64,000 -15; it might crore bein 2014 together accounted for close to much lower this year thanks to the lower average price for crude oil. Thankfully, this has not lulled policymakers into complacency. Efforts are apparently on to complete the agenda of reform in the oil sector by rationalising and targeting kerosene subsidy. The Centre has constituted an expert committee in the petroleum ministry to discuss with the States its plan for kerosene subsidy reform. Unlike other petroleum products, the States allocate subsidy on the fuel which is sold through the public distribution system (PDS) outlets.
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The Centre has absolutely no say in who gets the subsidy or how it is handed out. As a result, the Centre has no way of eliminating fake beneficiaries of the subsidy which is allocated to States on the basis of the number of BPL cards it has issued. The States also have little interest in setting this right as they don’t bear the subsidy tab anyway. This has proved to be the biggest obstacle in cleaning up the mess in kerosene. Reform is impossible without the buy-in of the States. This is where the expert committee now constituted comes in. One way of overcoming resistance is to begin with States where the BJP or its alliance partners are in power. The Centre can start working with Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Haryana, Andhra Pradesh and Chhattisgarh to target subsidies riding on the Jan Dhan account platform which has achieved impressive penetration among the financially excluded. Just as it did in the case of cooking gas where the subsidy is delivered directly into the bank accounts of the beneficiaries, the Jan Dhan accounts of BPL cardholders can be linked with their ration cards to deliver kerosene subsidy directly. A pilot done in Alwar district of Rajasthan in 2011 showed that kerosene demand fell by 67 per cent when the subsidy was directly transferred to the beneficiary. The picture may not be very different across the country. Eliminating kerosene subsidy is important not just for the Centre’s finances but also for its environmental action plan as the fuel pollutes the atmosphere when adulterated with diesel — a common practice due to its low price. (This article was published on October 19, 2015, Businessline)
FinMin not for granting ‘declared goods’ status for Natural Gas, ATF New Delhi, November 12:
In no mood to dole out tax sops in the forthcoming Budget, Revenue Secretary Hasmukh Adhia has told industry and financial consultants
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not to press with their demand for including natural gas and LNG as ‘declared goods’. Declared good status would mean a flat tax rate of 5 per cent across all States. Five per cent is at the lower end of the Central sales tax/value added tax rates. With the government’s focus shifting to use of natural gas as a preferred fuel, the industry has been demanding for adding natural gas and LNG to the ‘declared goods’ list. A senior Finance Ministry official told BusinessLine that “the request has been turned down… this is a long-standing demand for providing ‘declared goods’ status to gas pipelines, liquefied natural gas. The industry is also seeking the same for aviation turbine fuel (or jet fuel). But at present the government does not want to complicate the tax structure, when it is looking at a uniform Goods and Services Tax (GST) regime.” Tax rates vary Besides, States also need to come on board as fuels flow from one province to another and the tax rates vary from territory to territory. For example, natural gas is subjected to value added tax of 15.5 per cent in Gujarat, 14.5 per cent in Andhra Pradesh, and 5 per cent in Tamil Nadu, thereby increasing the delivered price of natural gas to customers at unaffordable levels. In the case of the fertiliser sector, which is dependent on gas as feedstock, a high level of sales tax increases the extent of subsidy from the government. This is also the case with jet fuel, which is the key component in the operations; it has been of major concern to the aviation industry.
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“The government’s reluctance emerges from the ongoing thrust to promote GST and in the interim not to materially change the rules of the game which can disturb the finances of State governments. “The industry will have to live with the status quo in this period. Fortunately, energy prices are currently ruling low,” said Gokul Chaudhri, Leader, Direct Tax, BMR & Associates LLP.
OVL TARGETS 10-12 b$ investment Outside India Reuter, Oct 21,2015 The Hindu
The company aims to capitalise on cheaper assets after a slump in oil prices. NGC Videsh Ltd (OVL), foreign investment arm of Indias top oil explorer ONGC, is targeting $10-$12 billion of oil and gas asset purchases over the next three years, including more corporate acquisitions, its Managing Director said. It hopes to capitalise on cheaper assets after a slump in oil prices and Prime Minister Narendra Modi's diplomatic efforts to boost the global presence of Indian firms. "Earlier it was an asset-based (strategy) but now we are giving good consideration to M&A," Narendra K Verma, managing director of OVL, told the Reuters Global Commodities Summit. "Our mandate is huge and we can acquire a larger portfolio through the corporate acquisition route," added Verma, who has overseen $7 billion in deals over four years. OVL, which produces about 175,000-180,000 barrels per day (bpd) from its overseas assets, wants to double output by 2018 and increase it six-fold by 2030.
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The firm has stakes in 33 oil and gas projects from Venezuela to South Sudan but its first corporate investment in 2008, buying Russia's Imperial Energy for $2.6 billion, did not turn out as planned with output slumping to 8,000 bpd from an estimated 60,000 bpd. Still, Mr. Narendra Verma said the firm was not put off and was "working on some opportunities where we could see a broader portfolio being available to us." OVL last month concluded a deal to buy a 15 percent stake in Rosneft's Vankor field to secure access to about 66,000 bpd of oil production at the Siberian field. But Verma said Africa and Latin America were likely to be the hotspots for new investment with some companies financially stressed due to high capital expenditure and low oil prices. OVL is also better placed than some of its global peers to invest due to the financial strength of its parent, state-run Oil and Natural Gas Corp (ONGC). The firm was in talks with overseas partners to reformulate exploration and development expenditure as current revenue at oil firms had halved due to weaker oil prices, he said. OVL also hoped to wrap up talks in two months to refinance $1.7 billion in loans at LIBOR plus 120 basis points maturing in 2021, versus the current LIBOR plus 195 basis points running to 2020, he said. ONGC and its Indian partners have submitted a $5-billion revised plan to Iran seeking development rights of Farzad B gas field, Mr. Verma said. The revised contract offered more flexibility and included a mix of production sharing and service contracts, he said, adding investment could double if infrastructure is built to supply gas to New Delhi.
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Move to Sweeten Oil, Gas Search By Mukesh Jagota Nov 16 2015 , New Delhi
Switch to revenue sharing, freedom in gas pricing
greater
In a major overhaul of the system of awarding oil and gas blocks in the country to render exploration more attractive to investors, the government has proposed to simplify the rules for award of exploration rights and provide freedom in pricing their gas output.
The ministry of petroleum and natural gas, in a discussion paper floated on Monday for comments, has proposed to move away from the current system where the government decides the price at which the operator of a gas field sells the output. Instead, the major change in norms now proposed is that the gas field operator-producer will have full freedom in marketing and pricing the gas. This will hopefully in future reduce all the political action and drama that was witnessed around the KG basin gas fields of Reliance. First the government had set a price at which the company was allowed to sell its gas. Later, when revision in price was sought by Reliance, it became a big political issue. In its discussion paper, the ministry has also said that it intends to award acreages instead of identified blocks for exploration. The hydrocarbon bearing areas have been mapped and divided into areas covering 336 sq km.
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Instead of inviting bids for them in stages like in the current system, companies will be allowed to apply for rights to explore any part of the mapped areas. Once a company expresses its interest in an area, bids will be invited from others too, before the rights are awarded. The award will be on the basis of how much revenue they agree to share with the government. While moving to the system of revenue sharing on gas, the government has also protected its interest if the revenue realisation of the company from the gas sold openly goes up substantially. If a company earns higher revenue, the government will also have a higher share of revenue. A company winning rights to explore acreages will be free to explore all conventional and unconventional hydrocarbons like oil, gas, coalbed methane, shale oil and gas, gas hydrates and any other mineral that falls under the category of oil and natural gas. At present, permission to explore and extract each resource has to be taken separately. The last date for submitting comments to the proposed policy changes is November 30. In September, the government had announced a similar regime for 69 oil and gas fields of state-run ONGC and OIL that the companies could not monetise.
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MRPL plans to set up LNG Terminal at Mangalore port October 8, 2015 Mangalore Refinery and Petrochemicals Limited (MRPL) will conduct feasibility studies for setting up a liquefied natural gas (LNG) terminal at Mangalore port. MRPL, a unit of Oil and Natural Gas Corp (ONGC), will explore a possibility of setting up a fixed or land based LNG import terminal as well as a floating receipt facility on high seas. The company signed an MoU with New Mangalore Port Trust (NMPT) to study the feasibility of setting up an LNG re-gassification terminal at Mangalore, the company said. In March 2013, MRPL's partent firm, ONGC along with its partners Mitsui of Japan and BPCL had signed an agreement with NMPT to conduct feasibility of setting up USD 500-750 million LNG import terminal at Mangalore. The ONGC terminal was to have an initial capacity of 2-3 million tonnes, which can be expanded to five million tonnes later. In 2005, ONGC planned to build a LNG terminal, which was then shelved in 2006 due to change in leadership. But the company in 2013 started looking actively at the plan of LNG import, with the clear idea that domestic gas availability at 160 million standard cubic metres per day (mmscmd) in 2018 will be way short of demand of 290 mmscmd. MRPL itself will be a big consumer of gas. Also, its petrochemical plants will also use gas. (timesofindia.indiatimes.com) Source: ORF
IOC to sell subsidised 5 kg LPG cylinders in rural India October 12, 2015. Indian Oil Corporation (IOC) plans to sell subsidised 5-kg LPG cylinders in rural India in an effort to increase usage of clean fuel for cooking. The state-owned oil marketing company is in the process of setting up infrastructure and working out the logistics. It plans to sup pipelines at major centres that will connect either LNG terminals or bottling plants and refineries to cut on the cost of transportation and
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increase the speed of delivery. IOC sells 14-kg cylinders in urban areas at subsidised rates. It has come up with subsidised 5-kg cylinders for families below poverty line that are not sold to any other category at present. These cylinders are made available at market price through petrol pumps and kirana shops for families with temporary residency in cities. The company is planning to sell subsidised 5-kg cylinders in large numbers to people living in rural areas. These rural consumers will be eligible for 112 kg of subsidised cooking gas in a year which will be delivered in 5 kg containers. (timesofindia.indiatimes.com) Source: ORF
Paradip-Durgapur LPG link to be ready by next year: IOC October 10, 2015.
The proposed Paradip-Durgapur LPG pipeline will be ready by the next year to boost supplies, Indian Oil Corporation (IOC) said. IOC said that after the pipeline construction is over, it is expected that there would be no backlog in supplies. IOC said the overall demand of LPG connections would rise from 18 million tonnes (mt) to 25 mt by 2022-23, potentially growing at 11-12 percent each year. Fifty percent of India's LPG requirement is being imported. IOC said that to cater to rising demand, IOC has drawn up plans on infrastructure development and improving logistics for movement of gas. Towards this, IOC will construct one pipeline from Paradip to Muzzafarpur touching Haldia, Durgapur and Patna involving a total cost of ` 2,700 crore. (profit.ndtv.com) Source: ORF
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IOC to spend $5 bn on oil exploration, production October 12, 2015. Indian Oil Corporation (IOC) planning to spend about $5 billion (` 32,500 crore) to expand, its exploration and production business, with half the amount slated to go into acquisition of new assets that are increasingly becoming available in the wake of a global crude oil crash. About 50 percent decline in crude oil prices in a year and the expectation that the prices may not go up in a hurry has shaken the faith at many oil firms, which have been redrawing plans, shelving projects and touching only those projects that are viable at current prices. But energy-starved economies like India have been encouraging their firms to go out and buy equity, mainly in producing fields with an aim to aid the country's energy security. ONGC Videsh Limited (OVL) recently acquired 15 percent stake in a prolific Russian field. And now IOC hopes to acquire some oil equity overseas. The company, which is in talks with potential strategic partners internationally, will prefer a producing or a near-producing asset since this eliminates much risk. IOC is a late entrant and still a peripheral player in the exploration and production business. It mostly has a lower minority stake in the 10 blocks at home and seven overseas. Just three of its projects are producing. Its biggest overseas purchase happened last year when it bought a 10 percent stake in the Pacific Northwest LNG, an integrated upstream and liquefied natural gas project in Canada in which it committed an investment of about $4 billion. $1.6 billion has already been invested in the Canadian project and another $2.4 billion will go in two-three years. The balance $2.6 billion or so, part of the $5 billion planned for the next five-seven years, will be spent on acquiring new assets in India and overseas. Source: ORF/ENM
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GlobeScan
Yantai Xinchao, China to buy oil fields in Texas for $1.3 bn PTI Beijing, Oct 25: A Chinese investment holding company says it has signed a letter of intent to purchase oil fields in Texas for $1.3 billion through a limited liability partnership. In a disclosure to the Shanghai Stock Exchange, Yantai Xinchao Industry Co. Ltd. says the oil fields in Howard and Borden counties will be bought from Tall City Exploration and Plymouth Petroleum, two Nevada-based companies. In the Saturday filing, Yantai Xinchao said it had signed a letter of intent on Friday with Ningbo Dingliang Huitong Equity Investment Center, a limited liability partnership, and its seven shareholders to buy the oil fields through a Ningbo Dingliang subsidiary, Moss Creek Resources LLC. It said the transaction has been approved by the Committee on Foreign Investment in the United States.
Toshiba to sell sensor business to Sony for around $165 mn Reuters, Tokyo, Oct 24 Toshiba is undergoing a restructuring after revelations this year that it overstated earnings by $1.3 billion going back to fiscal 2008-09. Toshiba Corp is set to sell its image sensor business to Sony Corp for around 짜20 billion ($164.68 million) as part of a restructuring plan laid out earlier this year, sources with knowledge of the deal said on Saturday.
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Toshiba, whose businesses range from laptops to nuclear power, is undergoing a restructuring after revelations this year that it overstated earnings by $1.3 billion going back to fiscal 2008-09. Image sensors, which are used in digital cameras and smartphones, are part of Toshiba's system LSI semiconductor business. Toshiba plans to sell its image sensor manufacturing plant in Oita, southern Japan, and pull out of the sensor business altogether, said the sources, who declined to be identified. The sale is likely to be finalised soon, the sources said. Toshiba is considering several options for its system LSI semiconductor business and its discrete semiconductor business and that debate is ongoing, a Toshiba official said when contacted. An official from Sony declined to comment. Masashi Muromachi, who became Toshiba's CEO following the accounting scandal, has promised to restructure lower-margin businesses. The deal for the image sensor business would be the beginning of the restructuring, Nikkei reported earlier on Saturday. Sony is already a dominant player in the image sensor market, with its products used in phones made by China's Xiaomi and India's Micromax Informatix Ltd
Nigeria’s Buhari to split NNPC in fight against corruption Preoccupied during his initial months in office with the battle against Boko Haram, which seems finally to have swung in favour of Nigeria and its regional allies, President Muhammadu Buhari is turning to domestic politics, even if he has yet to nominate a government. Buhari in late July finally outlined some of his eagerly awaited plans to combat corruption, notably by reforming Nigerian National Petroleum Corporation (NNPC). However, the extent of the challenge is underlined by the electricity supply industry, which remains paralysed despite Buhari’s determination to make its overhaul a key feature of his mandate. Source: crossborderinformation.com 35
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TrendScan Oil prices extend losses as glut worries persist Reuters, SINGAPORE, Oct 27
U.S. crude for December delivery dropped 51 cents to $43.47 a barrel. Oil prices fell on Tuesday, on course for a third week of losses as U.S. inventory data is expected to show another increase in crude stocks. Brent for December delivery had fallen 38 cents to $47.16 a barrel by 0225 GMT, after settling the previous session down 45 cents, or almost 1 per cent. U.S. crude for December delivery dropped 51 cents to $43.47 a barrel, having ended the day before down 62 cents, or 1.4 per cent. The fall in U.S. crude pushed it below technical support levels, said Ric Spooner, chief market analyst at Sydney's CMC Markets. "While you can never be certain, (charts) suggests this is not going to be a false break. The latest breakdown follows failure at the 200-day moving average a couple of weeks ago," he said in a blog post. U.S. commercial crude oil stockpiles likely rose for a fifth straight week, by an average of 3 million barrels to 479.6 million, in the week ended Oct. 23, a preliminary Reuters survey taken ahead of industry and official inventory data, showed on Monday. 36
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While stocks of distillates, which include diesel and jet fuel, were seen falling 2 million barrels, storage utilisation for distillates in the U.S. and Europe is nearing historic highs, according to a report on Monday by Goldman Sachs. "Oil is still in a bit of a funk," said Ben Le Brun, market analyst at Sydney's OptionsXpress. "Inventories ... (and) U.S. production numbers continue to disappoint the market," he said. "Producers are squeezing as much production as they can." Investors are also waiting for the outcomes of key policy meetings this week to give some direction to the market, Le Brun said. That includes the outcome of a two-day U.S. Federal Reserve Open Market Committee policy meeting which starts later on Tuesday and China's fifth plenum, a four-day meeting of the Communist Party's central committee, that began on Monday. China's policy meeting is expected to set a 7-per cent annual growth target in its 13th Five-Year plan, a blueprint for economic and social development between 2016 and 2020. (This article was published on October 27, 2015)
U.S. Shale Profits Beating Big Oil Rivals By Matthew Rocco, October 27, 2015 FOXBusiness
(Reuters) Slumping oil prices have cast a shadow over the U.S. shale oil boom, but fast-growing domestic producers and other shale firms still dominated an annual survey of global energy companies from Platts. The Platts Top 250 Global Energy Company Rankings, which measured 2014 financial performance in a variety of sectors, showed that it was a strong year for U.S. shale players, whose earnings growth outpaced industry heavyweights. 37
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Although corporate growth rates across the board fell slightly, America’s top shale players booked significant gains. They recorded a three-year compound growth rate of 56%, up from 46.8% in 2013, according to Platts. Eight of the 10 energy firms with the best growth rates were North American shale or tight oil companies. In the overall rankings, energy companies in the Americas accounted for 45% of the top 250, increasing their footprint at the expense of rivals in Europe and Asia. “There is a whole suite of companies that have been brought along by the shale boom,” said Robert Perkins, Senior Editor of Platts’ EMEA Oil News. Global oil prices are down more than half compared to levels seen last year. U.S. futures touched a high of around $108 a barrel in July 2014, but swelling crude inventories ignited a swift decline. The flow of shale oil, which brought U.S. production growth to its highest annual rate since 1940, was the primary catalyst. Global oil prices are down more than half compared to levels seen last year. U.S. futures touched a high of around $108 a barrel in July 2014, but swelling crude inventories ignited a swift decline. The flow of shale oil, which brought U.S. production growth to its highestannual rate since 1940, was the primary catalyst. Even with oil prices hitting lows in the final months of 2014, the U.S. energy industry appeared to navigate rough waters. “It has surprised many as far as resiliency of U.S. shale,” Perkins said, but “there are expected to be many more casualties in the pipeline. When we revisit these numbers next year, I expect a different picture. We are probably going to see some absentees that were on the list this year.” As far as 2014’s results, shale-linked companies including drillers, pipeline operators and utilities emerged from the tumult to report solid gains.
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Take AGL Resources (GAS), a natural-gas utility that has pushed more volume to customers amid a period of widespread production. Georgia-based AGL, No. 115 in Platts’ Top 250, ranked as the ninth fastest-growing energy company. Colorado-based shale gas player Antero Resources (AR) registered the best three-year growth rate of any company worldwide, 110%, and made Platt’s Top 250 list for the first time at No. 153. Antero has acreage in the Marcellus and Attica shale formations. Oasis Petroleum (OAS), another shale exploration and production firm, put up the third-best mark for 2014 growth, 61%. Fellow shale E&P competitors Continental Resources (CLR), Pioneer Natural Resources (PXD), EOG Resources (EOG), Chesapeake Energy (CHK) and Devon Energy (DVN) were also among the world’s fastest-growing companies last year.
Investor-friendly India?: World Bank For a government overtly committed to shredding red tape to smoothen matters for business, it is a trifle disappointing that India has moved up only four places (not by 12 as reported in a section of the media) in the World Bank’s annual ranking on this count. A ranking of 130 out of 189 countries in terms of ease of doing business is unflattering for an economy that seeks to replace a slowing China (ranked 84) as the preferred destination for investors. Nor is it good news for an economy in which investment has stagnated for four years. Whether it is startups or investment by existing concerns, small or big projects, domestic or foreign capital — we need them all. Yet, India’s (or rather, Mumbai’s and Delhi’s) performance across a range of indicators tells us that except perhaps for being able to secure electricity without breaking into a sweat, there has been virtually no improvement in other parameters over last year. These are: starting a business, dealing with construction permits, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.
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The Modi government has set its sights on breaking into the first 50 in the next three years and has promised changes in income tax procedures, bankruptcy laws and the Companies Act. Add GST to this list, and it may help improve our ranking in contract enforcement (a reflection also of our judicial machinery), where we are placed at an appalling 178. Construction permits remain another area that needs to be addressed, India’s rank being 183. If this is how matters stand in Mumbai and Delhi, it only shows that ‘investor-friendliness’ is a just a slogan in most other parts. Procedural reforms have been neglected for too long. The Centre should seize the initiative, all the more because such moves are politically non-controversial. It, however, involves taking on vested interests in the bureaucracy, the regulatory hurdles, and sections of industry that have learnt to game the system. Once a momentum is established, States across the political spectrum are likely to act on cue. However, there is more to improving conditions for business than simplifying procedures. If the OECD countries are at the top of the table, it is because of the maturity of their institutions — social, political and economic. A similar distinction marks out India’s southern and western States from the rest. Long-term investors would prefer a place where the workforce is skilled and healthy and where the government delivers on civic amenities, social and physical infrastructure, and law and order. An issue that does not figure in the report is the need for an ecosystem that spurs innovation and research. As the World Bank’s chief economist Kaushik Basu observes, the debate is not about more or less government, but how it can facilitate private initiative rather than hamper it. (This article was published on October 29, 2015)
While the E&P sector grew the most, refining and marketing struggled due to sluggish demand that led to overcapacity, thereby hurting profit margins. Yet North American refiners got the better of international 40
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rivals, benefiting from cheaper crude and natural gas. Perkins noted how lower input costs have helped North American refineries run cheaper than international peers. Phillips 66 (PSX) is a case in point. The refiner contracted 7% over the last three years, and it still managed to jump to No. 6 from No. 13 in the Top 250. U.S. companies comprise 89 of the Top 250 this year, led by Exxon Mobil (XOM), which topped the list for the 11th consecutive year. Platts ranked Chevron (CVX) second worldwide, up one slot from the prior year, followed by Royal Dutch Shell (RDS). China’s CNOOC (CEO) and PetroChina.
Global commodity price slump sends ripples around the world By Reuters | 3 Oct, 2015,
Many producer countries are paying the price for failing to predict the end of the cycle and not reducing their dependence on commodities. TARKWA: In the boom
times when the price of gold was
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soaring, Ebenezer Sam-Onuawonto had a dream job and a dollar salary many times the national average in this mining town in southwestern Ghana. When the price fell, he lost his job as human resources chief at a mining company that closed its local operations and could only find work in a construction firm in another city, far from the house he built in Tarkwa for his wife and six children. "I hardly see my kids now," said Sam-Onuawonto, his life changed as a result of a slump in global commodity prices whose impact is being felt around the world on currencies, companies, consumers, national economies and - potentially - governments. At one end of the wealth scale, the rout has affected huge companies such as Swiss-based trading and mining company Glencore, whose market value has shrunk in the past year. At the other end, it holds the key to the fate of entire communities dependent on the raw materials they produce. In Tarkwa, a town of 34,000, production of gold continues but several firms have stopped work or laid off staff in the last two years as the effects of the price slump trickled down. One African bank has shut its Tarkwa branch, bars and hotels are emptier and the streets are less clogged with traffic as people struggle with new financial problems. "Since the fall in the gold price, things have never been the same," said Yvonne Mensah, who has seen business wilt at the stationary shop she runs from a converted shipping container. Ghana as a whole, once Africa's star economy, is suffering. Not only is gold it biggest source of foreign exchange but the price of oil, which it also produces, has sunk, it has double-digit inflation and the value of the cedi currency has declined. 42
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There are similar tales of misfortune across the continent, with the impact felt on both the poor and the middle class. A HUGE BUBBLE The United Nations Conference on Trade and Development (UNCTAD) says falling commodity prices threaten economic and political stability in developing economies across Latin America, Africa, the Middle East and Asia. The events are seen by some experts as signalling the end of a commodity "super-cycle" in which prices surged following the rapid industrialisation of China after it opened up in the 1980s. Countries and companies made huge investments in commodities while prices were still high in almost all energy and raw material markets, but this resulted in oversupply when economies stalled in what had been booming markets. Many producer countries are paying the price for failing to predict the end of the cycle and not reducing their dependence on commodities. The most important factor in the price slump is seen as the economic slowdown and drop in demand in China, though downturns in Indonesia, Malaysia and developed economies such as Japan and South Korea have also contributed to the situation. Commodity-producing powerhouses such as Brazil, Australia, South Africa and Russia are now in economic downturns. A halving of the oil price in the past year has been especially painful for Russia, also hit by sagging metals and mining prices. "Hundreds of billions of dollars were spent in new oil, natural gas, iron ore, coal and many other commodities in the expectation that China would continue to grow insatiably forever," said Frederic Neumann, Co-head of Asian Economic Research at HSBC in Hong Kong. "That's changed, so many of the investments made by governments and companies now look really bad, and that's hitting economies and
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company stocks hard ... It's been a huge bubble, a massive misallocation of capital which now has to be wound down." There are some beneficiaries, such as consumers in developed nations including the United States who are enjoying lower gasoline prices at the pump, but the developed world is far from immune to the decline in prices. U.S. Federal Reserve Chair Janet Yellen said last month the decline in commodity prices was one of the main reasons a 2 percent inflation target had been missed. The Fed is keeping Americans waiting for a long-expected interest rate rise. Britain has also felt the impact. SSI UK, a unit of Thai steelmaker Sahaviriya Steel Industries, announced last month that it was mothballing its iron and steelmaking plant at Redcar in northeastern England after the fall in steel prices this year and axing about 1,700 jobs. Eugene Purvis, 56, a planner for crane maintenance who is being made redundant, said the town of more than 35,000 had been gradually declining and may never recover. "It could be the demise of the place," he said by telephone. "Redcar was a lovely place. If you go on the Internet and look through old photographs, it was a lovely place. If you see any photographs now it's decimated," he said. "It was that bad that even McDonald's closed. Shop after shop, even charity shops are closing."
LOSS OF FAITH Even wealthy countries in the Middle East are feeling some impact, with low oil prices hitting government revenues, creating huge budget deficits in some countries. Some governments in the Gulf are being forced to run down assets abroad and to consider rationalising spending, with some even 44
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starting to cut consumer subsidies for fuel and energy long seen as part of a social contract with their citizens. It would take a long downturn for the Middle East to suffer more but investors globally are increasingly losing faith that there will be a strong recovery by commodity prices and expect companies and countries reliant on the sector to hit trouble. The World Trade Organization (WTO) has downgraded its global trade forecast from 3.3 percent to 2.8 percent for 2015, half the annual average of 1990-2008. Specialised commodity merchants, which have less stable income from assets and rely on healthy trading activity, are feeling the heat. Publicly listed firms such as Glencore, one of the world's largest resource companies, and commodity merchant Noble Group have seen their stock price and market capitalization evaporate while their credit default swap (CDS) prices - the cost of insurance against a firm's bankruptcy - have soared. Some experts watching the fall in the value of Glencore have asked whether this is a "Lehman Brothers moment", a reference to the financial services firm whose collapse in 2008 was followed by a global financial crisis. Most say the answer is "No". Even so, traders, companies and even governments are watching nervously. "The energy and commodity complex is being shaken to its very core. The cause is a combination of geopolitics, supply and demand imbalances, technological advances and leverage," investment bank Jefferies said in a note to clients. "A further collapse in energy prices could bring an increase in geopolitical risk, and clearly the most leveraged players will need to quickly address their capital structures or succumb to the marketplace, which can be both swift and unforgiving. 45
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TechScan
Perovskite Seeks its Place in the Sun as Solar Panel Element November 2, 2015 By Carl Weinschenk Perovskite could give silicon a run for its money as the dominant material for solar panels, according to Stuff. The story says that perovskite (which is named after a Russian mineralogist) is a calcium titanium oxide mineral that is found around the world. The mineral has two advantages over silicon. The first is in manufacture. Silicon must be heated to temperatures of about 900 degrees. The process for Perovskite, on the other hand, requires only 100 degrees. Some elements of perovskite are superior as well, the story says. Its crystalline structure purer and the material can be rolled into sheets. The mineral has disadvantages. No successful production method has been found. The mineral is sensitive to water and therefore must be encased in a watertight seal. It also requires some lead for performance, which raises environmental issues. Chemistry World reports on the progress and challenges in perovskite development. The piece makes clear that the area is promising – but has a long way to go. -----------------------------------------------------------------------------
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Solar Window Covering Boasts ‘Transparency’ By Linda Hardesty, Enviornmentalleader.com
Scientists at Michigan State University have invented a solar concentrating module that can be placed on windows to generate energy, while at the same time being transparent enough for people to have a clear view, according to Michigan State’s website. It is called a transparent luminescent solar concentrator and has the potential to scale for use on large buildings. Research in the production of energy from solar cells placed on clear materials is not new. New Energy Technologies, which develops seethrough solar window coatings capable of generating electricity on glass and flexible plastics, recently said its technology can now cover a piece of glass measuring 36 square inches. The Michigan researchers are focusing on making their solar technology as clear as possible and also making it feasible on a large scale. Richard Lunt, an assistant professor of chemical engineering and materials science at MSU, said “With our new transparent luminescent concentrator approach, we are focusing on selectively harvesting the invisible components of the solar spectrum by designing systems that both absorb and glow outside the visible spectrum. The large area harvesting is done optically with a concentrator architecture, so we have very high defect tolerance, the fabrication becomes much simpler (think lower cost and rapid scaling), and for many of our designs the efficiency actually increases
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as we scale up. In addition, the transparency and aesthetic quality is nearly identical to that of glass.”
3M Speeds Up Development of Glass Bubble Product to Meet Oil, Gas Needs Rigzone Staff Thursday, October 15, 2015 URL: http://www.rigzone.com/news/oil_gas/a/141123/3M_Speeds_Up_Development_of_Gla ss_Bubble_Product_to_Meet_Oil_Gas_Needs
3M accelerated development of one of the new glass bubble products in response to requests by oil and gas customers for a lower cost, more efficient product. The company sped up development of its glass bubble product, HGS4K28, to respond to the industry’s need for a lower costing more efficient product to cope with lower oil prices. HGS4K28 is a highstrength, low-density additive specially designed to afford greater density reduction capabilities than other lightweight additives under similar downhole conditions, 3M said in a Sept. 28 press statement. HGS4K28, which will be commercially available later this year, will be available for order in sample and field trial quantities, said Clara Mata, senior product development specialist with 3M’s Glass Bubbles Laboratory. 3M debuted the new product at the Society of Petroleum Engineers’ Annual Technical Conference and Exhibition in Houston last month. Customers can reduce costs using HGS4K28, as they only need to use one-third of the additive, compared to competitive products under similar downhole conditions, Mata told Rigzone in a statement. Other benefits include stronger, higher-performing set cements that mean less product needs to be purchased. HGS4K28 also has lower shipping, handling and inventory costs. Like its predecessors, HGS4K28 is a lightweight additive for downhole applications – regardless of reservoir type – and can be used either inland or offshore. With a density of .28 gram/cubic centimeter (g/cc) and a crush strength of 4,000 pound per square 48
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inch (psi), HGS4K28 is ideal for operations in low to intermediate pressure wells, 3M said. HGS19K46, another glass bubble product released worldwide earlier this year, has a density of .46 g/cc and a crush strength of 19,000 psi. Because of its density and strength, this product can be used with higher pressures and is particularly ideal for deep and ultra-deep wells onshore and offshore, Mata said. When combined, HGS4K28 and HGS19K46 demonstrate that less can be more, even under pressure, as the products reduce costs by creating lighter cement slurries and drilling fluids while requiring less additive to achieve target density at pressure, 3M said in a Sept. 28 statement. The two new products might make some of the company’s older gas bubble products obsolete. With a density of .28 g/cc and crush strength of 4,000 psi, HGS4K28 can replace HGS2000, HGS3000, HGS4000, and possibly even HGS5000, which have densities ranging between .32 g/cc and .38 g/cc. HGS19K46, which has a density of .46 g/cc and crush strength of 19,000 psi, can replace HGS6000, HGS10000 and HGS18000, with densities ranging between .46 g/cc and .60 g/cc. HGS4K28’s use as a density reducing agent for completion, workover and cement slurries offers the potential for improved well integrity, reduced non-productive time and increased well productivity when drilling in highly depleted zones and weaker formations, Mata said, as it may help minimize or eliminate problems associated with fluid loss, lost circulation and formation damage. The Gulf of Mexico, where oil and gas production has taken place for many years, would qualify as a highly depleted area, as would the Permian Basin. Other areas that have highly depleted zones and weaker formations include Southeast Asia, India and the Middle East. HGS19K46 can be used with 20,000 psi wells, said Mata. According to 3M’s specs, HGS19K46 has a 19,000 psi crush strength, meaning that at least 80 percent of a finite amount of this glass bubbles product would survive a pressure of 19,000 psi under isostatic conditions.
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Catalyst development enables innovative OCM technology application J. Wood and R. Black, Siluria Technologies, Houston, Texas Access to shale reserves and advances in hydraulic fracturing technology have created an abundance of recoverable natural gas and lightweight NGL in various regions of the world (Fig. 1), but nowhere has the impact been more pronounced than in the US. Fig. 1. Global recoverable natural gas reserves. Sources: IEA (Advanced Resources International), BP, Reuters.
During the past six years, US dry natural gas production increased significantly, from a low of 50 Bcfd in 2008 to more than 70 Bcfd to date. According to the US Energy Information Administration’s (EIA’s) Annual Energy Outlook 2014, natural gas production in the US is expected to climb by 56% between 2012 and 2040, to an estimated 37.6 Tcfy (103 Bcfd). Similar trends are expected to occur in other geographies. The geographical diversity of shale reserves across the country, including abundant resources in areas such as the Northeast, has constrained natural gas prices and reduced basis spreads. Changing NGL landscape. The development of shale reserves has also resulted in substantial growth in domestic NGL production. The most pronounced increase has been in ethane, which typically represents more than 40% of the total NGL in the raw natural gas stream by volume. Fig. 2shows the substantial increase in both natural gas and ethane production. Average ethane production from US gas plants from 2008 to early 2015 increased by 59%, from 702 MMbpd to 1,116 MMbpd.
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Fig. 2. Historical US natural gas and ethane production volumes. Sources: EIA, Genscape. As shown in Fig. 3, although natural gas prices have declined considerably, ethane prices have fallen much more as production volumes of both have ramped up. Since early 2013, ethane has traded at or even below relative parity with natural gas on a Btu basis. Fig. 3. Historical natural gas and ethane prices. Source: Bloomberg. The demand response has been to open more markets for the same product. Natural gas use has increased in power generation, and major new projects are underway for the large-scale export of natural gas and light NGL. In response to the low-ethane-price environment, a number of new ethane cracking facilities have been announced. GTL technology. In addition to these traditional demand responses, renewed attention to new and innovative uses for natural gas has come into focus. For nearly a century, engineers and scientists have sought to convert natural gas into higher-value products, such as transportation fuels. The shale gas revolution has highlighted the importance of such efforts, particularly as geopolitical concerns over supply and growing worldwide demand have kept the ratio between crude oil and natural gas prices elevated. 51
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Today’s world-scale GTL technology is based on the Fischer-Tropsch (FT) pathway. FT GTL is an indirect approach using high-temperature steam to reform natural gas to a syngas intermediate (a high-energy mixture of hydrogen and carbon monoxide), followed by conversion via the FT process to hydrocarbon products. The syngas intermediate is typically produced from methane, limiting the potential use of light NGL. The hydrocarbon products that result have a broad product distribution, typically ranging from C1 to C40, which includes desirable high-cetane, low-sulfur diesel and saturated straight-chain waxes. The complexity of FT products requires significant additional refining and separations, leading to additional capital and operating costs. Furthermore, many of the high-value co-products, such as waxes, have very small market sizes. This creates compounding effects of higher capital costs for coproduct recovery and marketing, further complicating business models and adding commercial risk. Historically, commercial FT deployments have been characterized by large-scale facilities aimed at diesel production. A number of new companies are pursuing small-scale FT-GTL projects by focusing on technology solutions to address capital intensity, operating costs and product slate complexity. These approaches are enabled by process intensification and other advances, but the fundamental chemistry of syngas production and FT synthesis remains in place. A new chemistry for gas conversion. Advances in catalyst technology have enabled the direct conversion of natural gas into high-value commodity chemicals and transportation fuels. These solutions address many of the historical challenges associated with existing GTL solutions. One solution is a proprietary oxidative coupling of methane (OCM) technology. While the benefits of OCM have been known since the early 1980s, past efforts did not result in a viable catalyst with the performance needed for commercialization. These catalysts, while at times achieving promising yield and selectivity, were hampered by very high operating temperatures, low activities and short lifetimes on the order of hours to days.
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However, a combination of new innovations in catalyst development and high-throughput screening techniques has recently led to the development of a unique catalyst to enable OCM to be commercialized. In OCM, methane and oxygen react exothermically over a catalyst to produce ethylene, water and heat. In addition, the technology can enable a cofeed of ethane for conversion into ethylene, thus providing feedstock flexibility. The OCM ethylene stream can then be converted into liquid fuels in a second step, called ethylene-to-liquids (ETL). In ETL, the ethylene is oligomerized over a catalyst to selectively produce a targeted product, such as gasoline. Overall, the result is a simpler process, lower capital costs, greater feedstock flexibility and a more marketable product slate. Midstream gas processing plant configurations. An example integration of the OCM and ETL processes in an existing or conventional gas processing plant is shown in Fig. 4. Gas processing plants receive NGL-rich natural gas, remove impurities, extract the NGL by expanding the gas to the demethanizer tower pressure, and then recompress the residue gas to sales pipeline pressure. Fig. 4. Flow diagram and integration scheme for midstream OCM plus ETL.
Additionally, gas processing plants are capable of producing ethane with a deethanizer tower. An integrated OCM process takes advantage of the low-pressure demethanizer tower gas and available ethane, converting a portion of these streams to ethylene, heat and water. If the gas processing plant is located near existing downstream ethylene infrastructure, then the dilute ethylene stream produced by the OCM process can be purified by conventional methods into chemical-grade ethylene and sold to derivative chemical producers. 53
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In all other locations, the ETL process converts the ethylene to fuels, such as RBOB and butane, which are recovered in a simplified gas separation unit. The remaining non-condensed gas is returned to the gas processing plant for recompression utilizing existing equipment. This integrated method converts methane and ethane into valuable long-chain hydrocarbons. An integrated OCM-plus-ETL facility can be scaled to align with existing infrastructure, leveraging unit operation, feedstock and product compatibility. This integration enables a relatively modest capital investment. For example, a modular facility is designed to accommodate a 200-billion-Btu-per-day (BBtupd) inlet feed of residue gas from an existing processing plant and to maximize ethane intake. Such a facility can convert approximately 12 BBtupd of the gas and 5.6 Mbpd of ethane into approximately 3.6 Mbpd of gasoline and butane. Excess heat for the host processing plant has a capital outlay of approximately $250 MM. Even at present prices, this would result in a gross margin of more than $45 MM/yr, with significant upside as crude oil prices continue to recover. An added benefit of the OCM-plus-ETL pathway from natural gas and ethane to transportation fuels is a lower environmental footprint. Since the OCM process builds longer-chain hydrocarbons as opposed to conventional refinery processes that require energy to break molecules apart, environmental emissions are significantly reduced. For instance, the OCM-plus-ETL process provides lower greenhouse gas, NOx, particulate and SOx emissions, and it yields cleaner fuel products with near-zero-sulfur content compared to petroleum-derived fuels. Takeaway. OCM technology is a solution for changing natural gas and ethane supply dynamics. It presents an attractive path to a more natural-gascentric means of energy production in terms of capital intensity, product slate and value uplift. 54
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Growth in the gas processing industry has been revolutionized by shale gas, but that success has created new challenges with depressed natural gas and ethane prices. Midstream companies that are able to convert methane and ethane into longer-chain, highervalued hydrocarbons will be better able to compete for business and enjoy superior profitability. The midstream industry has a history of technical innovation to address pricing challenges, including plant modularization and lowcost cryogenics. Now, advanced process technologies can catalyze the next generation of growth by creating real product value for the midstream industry. GP Jeff Wood is the CFO of Siluria Technologies, which is pioneering the commercial production of fuels and chemicals from natural gas. He is focused on the company’s financing strategies and on external communications. Prior to joining Siluria, Mr. Wood spent 14 years focused on the midstream industry with Eagle Rock Energy Partners and as an investment banker with Lehman Brothers. Mr. Wood holds a BA degree from Baylor University and an MBA degree from the University of Chicago Booth School of Business. Richard Black is Siluria’s executive vice president for midstream, responsible for commercializing OCM and ELT technology in the midstream industry. Prior to joining Siluria, Mr. Black was the principal of Blackhawk Energy Consultants. He began his career with ARCO/Vastar Resources in various engineering, operations and supervisory roles. He then joined BP America, leading the company’s Deepwater Development Pipeline commercial organization, prior to forming Blackhawk in 2003. He holds a BS degree in mechanical engineering from Oklahoma State University. Source: http://www.gasprocessingnews.com/features/201510/catalystdevelopment-enables-innovative-ocm-technology-application.aspx
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Nanopores Could Take the Salt out of Seawater Wed, 11/11/2015 - University of Illinois From: R&D headlines and news
A computer model of a nanopore in a single-layer sheet of MoS2 shows that high volumes of water can pass through the pore using less pressure than standard plastic membranes. Salt water is shown on the left, fresh water on the right. Photo: Mohammad Heiranianniversity of Illinois engineers have found an energy-efficient material for removing salt from seawater that could provide a rebuttal to poet Samuel Taylor Coleridge’s lament, “Water, water, every where, nor any drop to drink.” The material, a nanometer-thick sheet of molybdenum disulfide (MoS2) riddled with tiny holes called nanopores, is specially designed to let high volumes of water through but keep salt and other contaminates out, a process called desalination. In a study published in the journal Nature Communications, the Illinois team modeled various thin-film membranes and found that MoS2 showed the greatest efficiency, filtering through up to 70 percent more water than graphene membranes. “Even though we have a lot of water on this planet, there is very little that is drinkable,” said study leader Narayana Aluru, a U. of I. professor of mechanical science and engineering. “If we could find a low-cost, efficient way to purify sea water, we would be making good strides in solving the water crisis. A computer model of a nanopore in a single-layer sheet of MoS2 shows that high volumes of water can pass through the pore using less pressure than standard plastic membranes. Salt water is shown on the left, fresh water on the right. Graphic courtesy of Mohammad Heiranian
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“Finding materials for efficient desalination has been a big issue, and I think this work lays the foundation for next-generation materials. These materials are efficient in terms of energy usage and fouling, which are issues that have plagued desalination technology for a long time,” said Aluru. Most available desalination technologies rely on a process called reverse osmosis to push seawater through a thin plastic membrane to make fresh water. The membrane has holes in it small enough to not let salt or dirt through, but large enough to let water through. They are very good at filtering out salt, but yield only a trickle of fresh water. Although thin to the eye, these membranes are still relatively thick for filtering on the molecular level, so a lot of pressure has to be applied to push the water through. “Reverse osmosis is a very expensive process,” Aluru said. “It’s very energy intensive. A lot of power is required to do this process, and it’s not very efficient. In addition, the membranes fail because of clogging. So we’d like to make it cheaper and make the membranes more efficient so they don’t fail as often. We also don’t want to have to use a lot of pressure to get a high flow rate of water.” One way to dramatically increase the water flow is to make the membrane thinner, since the required force is proportional to the membrane thickness. Researchers have been looking at nanometerthin membranes such as graphene. However, graphene presents its own challenges in the way it interacts with water. Aluru’s group has previously studied MoS2 nanopores as a platform for DNA sequencing and decided to explore its properties for water desalination. Using the Blue Waters supercomputer at the National Center for Supercomputing Applications at the U. of I., they found that a single-layer sheet of MoS2 outperformed its competitors thanks to a combination of thinness, pore geometry and chemical properties.
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A MoS2 molecule has one molybdenum atom sandwiched between two sulfur atoms. A sheet of MoS2, then, has sulfur coating either side with the molybdenum in the center. The researchers found that creating a pore in the sheet that left an exposed ring of molybdenum around the center of the pore created a nozzle-like shape that drew water through the pore. “MoS2 has inherent advantages in that the molybdenum in the center attracts water, then the sulfur on the other side pushes it away, so we have much higher rate of water going through the pore,” said graduate student Mohammad Heiranian, the first author of the study. “It’s inherent in the chemistry of MoS2 and the geometry of the pore, so we don’t have to functionalize the pore, which is a very complex process with graphene.” In addition to the chemical properties, the single-layer sheets of MoS2 have the advantages of thinness, requiring much less energy, which in turn dramatically reduces operating costs. MoS2 also is a robust material, so even such a thin sheet is able to withstand the necessary pressures and water volumes. The Illinois researchers are establishing collaborations to experimentally test MoS2 for water desalination and to test its rate of fouling, or clogging of the pores, a major problem for plastic membranes. MoS2 is a relatively new material, but the researchers believe that manufacturing techniques will improve as its high performance becomes more sought-after for various applications. “Nanotechnology could play a great role in reducing the cost of desalination plants and making them energy efficient,” said Amir Barati Farimani, who worked on the study as a graduate student at Illinois and is now a postdoctoral fellow at Stanford University. “I’m in California now, and there’s a lot of talk about the drought and how to tackle it. I’m very hopeful that this work can help the designers of desalination plants. This type of thin membrane can increase return on investment because they are much more energy efficient.”
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Stanford, IBM test limits of toughness in nanocomposites Tue, 11/17/2015, Andrew Myers, Stanford Univ. From: R&D headlines and news
Stanford and IBM researchers inserted chain-like molecules of polystyrene – the same material in a Styrofoam coffee cup – between layers of nanocomposites to make these materials tougher and more flexible. Source: Stanford UniversityIn the future, the wings of jets could be as light as balsa wood, yet stronger than the toughest metal alloys. That's the promise of nanocomposite materials. Nanocomposites are a true example of nanotechnology. They are a special class of materials made from components smaller than onethousandth of the thickness of a human hair. Controlling these nanometer-sized components offers countless possibilities for developing materials with unique properties. Nanocomposites can be made flexible and strong, or resistant to heat and chemicals. Nanocomposite materials are designed to exhibit physical properties that greatly exceed the capabilities of the sum of their constituent parts. Researchers at Stanford and IBM have tested the upper boundaries of mechanical toughness in a class of lightweight nanocomposites toughened by individual molecules, and offered a new model for how they get their toughness. The potential applications for nanocomposites cut across many industries, from computer circuitry to transportation to athletics. They could even revolutionize spaceflight with their ability to withstand tension and extreme temperatures. The study was published Nov. 16 in the journal Nature Materials by an engineering team led by Reinhold Dauskardt, a professor of materials science and engineering at Stanford, and Geraud Dubois, of IBM's Almaden Research Center. The study was sponsored by the Air Force Office of Scientific Research. 59
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Welcome to the matrix The nanocomposite in this study began with a glass-like molecular skeleton, called a matrix. On its own, the matrix is like a sponge, interlaced with billions of nanometer-sized pores cutting through and among its molecular structure. "This sponge is not soft or pliable like those in your kitchen, however, but very brittle," Dauskardt said. The researchers then infused the matrix with long, chain-like molecules of polystyrene – the same material in a Styrofoam coffee cup. The Stanford/IBM team departed from convention in the way it diffused the polymer into the matrix. "We took these extremely large molecules, many, many times larger than the pores themselves, and confined them in these tiny spaces," Dauskardt said. "It was quite special. Typically, if you heat these molecules too much they break, but we figured out how to heat them just enough so that they diffuse uniformly into the matrix." Molecular bridges In the paper, the team describes a previously unknown toughening mechanism that diverges from existing understanding of how composites get their toughness, a quality defined as the ability to resist fracture. As a composite bends, twists and stretches, the long polymers are drawn out of the confines of the pores, extending as they go. "The molecules act like a special kind of spring – what engineers would call 'entropic springs' – to hold the composite together," Dauskardt said. The findings do not upend existing theories so much as expand them. Conventional understanding was that the long polymers become entangled with one another to provide toughness, similar to the way the entangled fibers of a thread provide tensile strength. In the Stanford/IBM composite, however, the polymer molecules are dispersed and surrounded by the pore walls, preventing and limiting the effect of entanglement. There had to be another explanation for 60
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the toughening effect, leading to the team's new theory of confinement-induced toughening. "In our model, the polymer segments bridge across potential fractures, stuck inside the matrix pores to hold the material together," Dauskardt said. "If a crack were to propagate, the confined chains pull out from the pores and, collectively, elongate by large amounts to dissipate energy that would otherwise break the material." Taking it to the limit The amount of toughening depends on the molecular size of the polymer used in the nanocomposite and how confined the molecules are in the pores. Ultimately, however, like all things, there are limits to their toughness. "We've shown that there is a fundamental limit that these molecules eventually reach before they break, which depends upon the strength of the individual molecules themselves," Dauskardt said. Knowing such limits, he said, helps scientists and engineers understand exactly how tough a material might possibly be made and why – knowledge that could lead to greater advances. "Once you understand that, there is the potential to work around these limits by controlling the way the molecules interact with the pores and preventing them from breaking," Dauskardt said. "If we can do that, then there is a real possibility of creating colossal toughening in low-density nanocomposites. That would lead to some very promising new materials." Source: Stanford University
UK set to lower blade erosion costs though new analysis tools Oct 23, 2015
The UK Offshore Renewable Energy (ORE) Catapult center is in talks with a number of firms to join its $1.5 million (GBP1 million) project aimed at reducing the impact of turbine blade erosion and cutting
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electricity output costs, Andy Kay, ORE’s engineering lead for the program, said. Offshore wind farms face particularly challenging weather conditions. In July 2015 the independent ORE Catapult technology and innovation center launched a 24-month joint industry project (JIP) to reduce the adverse impact of blade erosion on offshore wind farms, viewed as a major cost risk for Operations and Maintenance (O&M). The Blade Leading Edge Erosion Program (BLEEP) will analyze the impact of blade erosion on aerodynamic performance and structural integrity and assess its impact across the offshore wind sector. The program aims to de-risk techniques for protection and repair, and also develop an independent UK-based facility to test the performance of current solutions to blade erosion and standardise the evaluation process. “We are currently in talks with a number of organizations to join the project,” Andy Kay, engineering lead for the BLEEP, told Wind Energy Update. Leading-edge erosion (LEE) is a term used to describe premature degradation of turbine blade surfaces. “The primary drivers for blade erosion are thought to be high-speed impacts with rain droplets and other airborne particulates, such as sand and hail,” Kay said. “LEE is a problem both on- and offshore, but the erosion seems accelerated offshore, most likely due to harsher environmental conditions and higher tip speeds of turbines. Erosion affects the aerodynamic performance and structural integrity of the blade.” Wind turbine blade tip speeds as a function of rotor diameter Source: Garrad Hassan
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Wind tunnel studies carried out at the University of Illinois, US have suggested blade erosion can reduce the annual energy production of a wind turbine by between 4% and 20%, depending on the level and severity of particle impacts on the blades. This would equate to a loss in productivity worth between $168 million and $842 million a year across the whole of the European offshore wind sector, according to the ORE Catapult center. Operators are faced with the significant challenge of identifying the level and pace of blade erosion, so they can determine how soon they will need to take remedial action. “It’s a slow, progressive degradation over a number of years,” said Stephen Bolton, managing director of Stroam, an offshore wind consultancy. “We can’t measure directly the drop in performance on every blade.” Responsibility for dealing with leading-edge erosion usually lies with the wind farm operator since it does not usually show up within the original equipment manufacturer’s warranty period and the condition is not covered by insurance. “Various operators have approached us with concerns about how leading-edge issues might develop in future,” Jonny Allen, underwriter with GCube Underwriting, told Wind Energy Update. “GCube is looking into ways to cap unscheduled maintenance expenditure for projects both on- and offshore. Leading-edge issues are often not highlighted until end-of-warranty inspections, at which point the operator suddenly finds out half the blades have issues,” Allen said. In May 2015, the insurer launched an unscheduled wind maintenance protection plan that insures against serial defects, business interruption, mechanical and electrical breakdown and cover for replacement parts, repair and reassembly.
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The policy is targeted specifically at the US onshore market, in which many turbines are coming out of warranty, but similar products could potentially be introduced in the European offshore sector. Replacing blades Replacing the offshore windfarm blades, or carrying out remedial action, can lead to “significant downtime” and incurs a significant cost,” Allen said. “A large amount of the cost in this eventuality would be connected to vessel access and weather.” According to the report “Guide to UK Offshore Wind Operations and Maintenance,” published by ScottishPower and the UK Crown in 2013, an operator of a 500 MW Offshore windfarm spends between £2 million and £8 million per year on turbine maintenance alone. “The bulk of preventive works will typically be carried out during periods of low wind speeds to minimize the impact on production, however, in practice, this is not always achievable. Corrective maintenance is performed in response to unscheduled outages and is often viewed as more critical, due to accruement of downtime until the fault is resolved,” the report said. As blade performance deteriorates, an offshore operator faces the uncomfortable prospect of losing money through either lower production levels or increased preventative O&M expenses. “It is important to repair erosion to avoid loss of performance and longer-term structural integrity risks,” according to Kay. “However, it is expensive to perform repairs offshore, therefore it is important to plan and action maintenance only when the cost of lost production and structural risks outweigh those of repair materials and service technicians,” he said. Understanding when that crossover point occurs is one of the aims of the BLEEP Joint Industry Project. New solutions According to Bolton, the key to dealing with leading-edge erosion in operational turbines is to introduce improved blade inspection techniques within plant O&M schedules, so the issue can be detected 64
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early on and remedial action can be taken when the cost will be lowest. Several methods of inspection are being tested. Drones could play a role, given their low cost and high maneuverability. However, currrently “drones offshore have an issue with battery life and wind speed,” said Bolton. The battery life of non-military drones rarely exceeds more than 20 minutes, with the DJI Phantom 2 Vision+ providing up to 25 minutes. Companies are also developing high-resolution imaging services. At least one company, the French startup Cornis, has developed a photographic scanning system specifically for the wind industry. The Cornis system is positioned on the access platform right next to the offshore turbine tower and it takes 1.5 to 2.5 hours per turbine (depending on turbine type) to scan the 2 surfaces of the 3 blades, according to the company’s website. The technology has the advantage that it can be used in high winds, low light levels, and does not require the turbine to be taken off-line. “Getting a system like that into your maintenance routine is important,” said Bolton. Bolton said at least one major European was pursuing this O&M strategy after issuing a tender for camera-based inspection systems. However, Bolton warned that even a high-definition image might fail to capture incipient signs of leading-edge erosion since weathering is gradual and the early stages are hard to detect from afar. Furthermore, remote analysis does not allow for assessment and repair in one operation. A worker might still need to be hoisted up to the turbine to apply a solution such as weather-resistant epoxy filler. “Tying someone on a rope is the ultimate way of inspecting,” Bolton said, because repairs can be carried out there and then. Human inspections are potentially dangerous, though, so in the long term the industry will need to come up with a better way of dealing with leading-edge erosion. To do this, ORE Catapult is developing methods to gauge the likely damage that LEE could cause, and issue guidance on protective measures and O&M schedules.
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“We will establish the correct procedures, measurement infrastructure and modeling to support this kind of analysis during the BLEEP JIP,” said Kay.
Liquid air 'offers energy storage hope’ By Roger Harrabin
Environment analyst Renewable power generation, such as wind turbines, can produce electricity when it is not in demand Continue reading the main story Related StoriesPaying for wind we don't use? [/news/business-13710986] 'Wind bags' tested in energy plan [/2/hi/uk_news/england/nottinghamshire/8500075.stm] Can we go 100% renewable? [/2/hi/business/8388669.stm] Turning air into liquid may offer a solution to one of the great challenges in engineering - how to store energy. The Institution of Mechanical Engineers says liquid air can compete with batteries and hydrogen to store excess energy generated from renewables. IMechE says "wrong-time" electricity generated by wind farms at night can be used to chill air to a cryogenic state at a distant location. When demand increases, the air can be warmed to drive a turbine. Engineers say the process to produce "right-time" electricity can achieve an efficiency of up to 70%. IMechE is holding a conference today to discuss new ideas on how using "cryo-power" can benefit the low-carbon economy. The technology was originally developed by Peter Dearman, a garage inventor in Hertfordshire, to power vehicles.
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A new firm, Highview Power Storage, was created to transfer Mr Dearman's technology to a system that can store energy to be used on the power grid. The process, part-funded by the government, has now been trialled for two years at the back of a power station in Slough, Buckinghamshire. More than hot air The results have attracted the admiration of IMechE officials. The energy storage technology has been tested for two years at a power station "I get half a dozen people a week trying to persuade me they have a brilliant invention," head of energy Tim Fox told BBC News. "In this case, it is a very clever application that really does look like a potential solution to a really great challenge that faces us as we increase the amount of intermittent power from renewables." Dr Fox urged the government to provide incentives in its forthcoming electricity legislation for firms to store energy on a commercial scale with this and other technologies. IMechE says the simplicity and elegance of the Highview process is appealing, especially as it addresses not just the problem of storage but also the separate problem of waste industrial heat. The process follows a number of stages: "Wrong-time electricity" is used to take in air, remove the CO2 and water vapour (these would freeze otherwise) the remaining air, mostly nitrogen, is chilled to -190C (-310F) and turns to liquid (changing the state of the air from gas to liquid is what stores the energy) the liquid air is held in a giant vacuum flask until it is needed 67
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when demand for power rises, the liquid is warmed to ambient temperature. As it vaporizes, it drives a turbine to produce electricity no combustion is involved IMechE says this process is only 25% efficient but it is massively improved by co-siting the cryo-generator next to an industrial plant or power station producing low-grade heat that is currently vented and being released into the atmosphere. The heat can be used to boost the thermal expansion of the liquid air. More energy is saved by taking the waste cool air when the air has finished chilling, and passing it through three tanks containing gravel. The chilled gravel stores the coolness until it is needed to restart the air-chilling process. Delivering durability Highview believes that, produced at scale, their kits could be up to 70% efficient, and IMechE agrees this figure is realistic. "Batteries can get 80% efficiency so this isn't as good in that respect," explains Dr Fox. "But we do not have a battery industry in the UK and we do have plenty of respected engineers to produce a technology like this. "What's more, it uses standard industrial components - which reduces commercial risk; it will last for decades and it can be fixed with a spanner." In the future, it is expected that batteries currently used in electric cars may play a part in household energy storage. But Richard Smith, head of energy strategy for National Grid, told BBC News that other sorts of storage would be increasingly important
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in coming decades and should be incentivised to commercial scale by government. He said: "Storage is one of four tools we have to balance supply and demand, including thermal flexing (switching on and off gas-fired power stations); interconnections, and demand-side management. Ultimately it will be down to economics." Mr Dearman, who also invented the MicroVent resuscitation device used in ambulances, told BBC News he was delighted at the success of his ideas. He said he believed his liquid air engine would prevail against other storage technologies because it did not rely on potentially scarce materials for batteries. "I have been working on this off and on for close on 50 years," he told BBC News. "I started when I was a teenager because I thought there wouldn't be enough raw materials in the world for everyone to have a car. There had to be a different way. Then somehow I came up with the idea of storing energy in cold. "It's hard to put into words to see what's happening with my ideas today." John Scott, from the Institution of Engineering and Technology (IET), added: "At present, pumped-hydro storage is the only practical bulk storage medium in the British grid. "However, locations are very restricted," he told BBC News. "In the future, if new storage technologies can be deployed at a lower cost than alternatives, it would benefit the power system." A spokesman for the Department of Energy and Climate Change (Decc) said it would shortly launch a scheme to incentivise innovation in energy storage. Other grants are available from Ofgem. Follow Roger Harrabin on Twitter: @RogerHarrabin 69
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ALTERNATIVE & RENEWABLE ENERGY DuPont Opens ‘World’s Largest’ Cellulosic Ethanol Plant DuPont has opened its cellulosic biofuel facility in Nevada, Iowa. The company says this biorefinery is the world’s largest cellulosic ethanol plant, with the capacity to produce 30 million gallons per year of clean fuel that offers a 90 percent reduction in greenhouse gas emissions as compared to gasoline. The raw material used to produce the ethanol is corn stover — the stalks, leaves and cobs left in a field after harvest. The facility will demonstrate at commercial scale that non-food feedstocks from agriculture can be the renewable raw material to power the future energy demands of society, DuPont says. About 500 local farmers will provide the annual 375,000 dry tons of stover needed to produce this cellulosic ethanol from within a 30-mile radius of the Nevada biorefinery. Earlier this year DuPont announced its first licensing agreement with New Tianlong Industry to build China’s largest cellulosic ethanol plant, and last fall a memorandum of understanding was announced between DuPont, Ethanol Europe and the government of Macedonia to develop a second-generation biorefinery project. The company also is working in partnership with Procter & Gamble to use cellulosic ethanol in North American Tide laundry detergents. The majority of the fuel produced at the Nevada, Iowa, facility will be bound for California to fulfill the state’s Low Carbon Fuel Standard where the state has adopted a policy to reduce carbon intensity in transportation fuels. Source: http://www.environmentalleader.com/2015/10/30/dupont-opens-worlds-largest-cellulosic-ethanolplant/#ixzz3qR
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Energy Trends Driving Climate Progress in 2015 November 2, 2015 By Ben Ratner
Ben Ratner Senior Manager, Environmental Defense Fund
Share on facebookShare on twitterShare on emailShare on gmailMore Sharing Services9 What a difference a year can make. Even before the last weeks tick away, 2015 stands out as a remarkable and dynamic year for climate and energy in the United States. Read on for five bold trends that are beginning to reshape our economy – and our national discourse on climate change. 1. Investments in Renewables Soar I admit it: For years, I thought renewable energy was more hype than reality. I’m happy to report that recent data proves me wrong. In just five years, solar panel prices have fallen 80 percent, and solar capacity installed worldwide grew more than six-fold. The overall cost of solar per kilowatt-hour, meanwhile, plummeted 50 percent. For the first time in history, energy from the sun is as cheap as traditional energy in states such as Arizona, California and Texas. The proof is in the pudding. Apple, for example, recently signed an $848-million power agreement with a solar provider – bypassing the electric grid. A deal of this magnitude shows where solar is today, and where it is headed.
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2. Energy Storage Bursts onto the Scene If price has been the main barrier to clean energy adoption at vast scale, variability remains a second obstacle – though likely not for much longer. Because the sun shines when people are at work, and goes down before they get home and fire up air conditioners, furnaces and electronics, there is a mismatch between when most solar energy is produced and most is needed. The key to unlocking a match is energy storage – what Deutsche bank calls “the missing link of solar adoption.” This was the year that breakthroughs in energy storage became inevitable with Tesla first out of the gate and other companies following close behind. With firms such as GE and Lockheed Martin now part of the contest, hundreds of millions of dollars of capital is flowing toward research, development and commercialization. In fact, Deutsche Bank predicts energy storage is headed toward market readiness, with incremental storage costs likely to drop from about 14 cents per kilowatt-hour to about 2 cents within the next five years. 3. Clean Power Plan Enjoys a Head-Start The recently finalized Clean Power Plan puts long-overdue limits on carbon pollution from America’s power plants and will cut emissions by more than 30 percent by 2030, while preventing 90,000 childhood asthma attacks annually. The interesting trend here is that while compliance is not required until 2022, many states are earning a big head start. Just look at Texas. While some politicians in Austin were quick to denounce the pollution limits as unaffordable, the facts paint a very different story. The sky is not falling, it turns out. The sky is generating wind power. Thanks in part to West Texas wind, current trends alone can carry the state to 88 percent of its 2030 power plant pollution reduction goal, while generating clean energy jobs and economic growth.
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4. Fossil Fuel Scrutiny Ramps Up While trends suggest a bright future for renewable energy, fossil fuels continue to produce two-thirds of the energy we use. But scrutiny is growing from the public, investors and the media. 2015 was the year methane popped on the national energy policy agenda. It’s a key issue because every ounce of methane emissions undermines the potential climate benefits of natural gas relative to other traditional fuels. New federal methane rules are a first step to meeting scrutiny with solutions and mark a needed trend toward regulating this potent greenhouse gas. As New York City Comptroller Scott Stringer recently put it, “As longterm investors, we understand that strong methane emissions regulations will help to stimulate capital investment in the energy sector, reduce reputational risk and improve performance.” 5. Corporate Climate Action Goes Mainstream General Motors. Walmart. Goldman Sachs. IKEA. These are just a few of the 81 companies that are already supporting the White House’s climate initiative in the run-up to the United Nations-led climate talks in Paris this fall. All signed the American Business Act on Climate Pledge. This outpouring of corporate support shows that climate action has finally gone mainstream. And it’s no wonder. With Americans acknowledging the reality of climate change by increasing margins, and supporting action to cut fossil fuel pollution by a clear majority, the signal to business leaders is unequivocal. And because getting ahead of climate can unlock new business models, energy savings and lesser risk, the business case is a stool with many solid legs. 2015 is the year when we can truly say that our national energy landscape began to change in tandem with climate awareness. So much so that even some lawmakers who resisted change may now be reaching a tipping point. Ben Ratner is a senior manager at the Environmental Defense Fund. He manages corporate engagement initiatives to minimize methane emissions from the oil and natural gas industry. His focus is 73
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developing innovative collaborations across diverse stakeholder groups to build the leadership, technology and information necessary to reduce emissions aggressively and cost effectively. This article was republished with permission from the Environmental Defense Fund.
India signs MoU with Mozambique for cooperation in renewable energy Published 14 October 2015 The Indian Government has approved a MoU with Mozambique Government Government for technical bilateral cooperation and investment promotion in the area of new and renewable energy. A Memorandum of Understanding was signed between the Ministry of New and Renewable Energy of the Government of India and the Ministry of Mineral Resources and Energy, Government of Mozambique in New Delhi on 5th August, 2015, during the visit of H.E. Mr. Filipe Nyusi, President of Mozambique to India. The Memorandum of Understanding will help in strengthening bilateral cooperation between the two countries. The objective of this Memorandum of Understanding is to establish the basis for a cooperative institutional relationship to encourage and promote technical bilateral cooperation, investment promotion and partnership on new and renewable energy issues on the basis of mutual benefit, equality and reciprocity. The areas of cooperation will focus on development of new and renewable energy technologies in the field of conducting on-the-job and specialized training courses on renewable energy field, Research & development and of technology transfer in renewable energy, including Labs; Exchange of experience on different kinds of renewable energies, focusing on solar, wind, biomass, biofuels and geothermal; Establish a bilateral private sector renewable energy platform; Scientific visits and any other mutually agreed areas. Source: biofuelsandbiomass.energy 74
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ISR- Institute of Seismological Research, hopeful of tapping geothermal energy, starts survey October 12, 2015.
To find out potential spots for setting up India's first geothermal power plant using heat stored below earth's surface, Institute of Seismological Research (ISR) has started surveys using latest 3D Magentotelluric (MT) imaging technology. With the initiative, the Gandhinagar-based ISR is hopeful of making a breakthrough by finding out the most feasible source of thermal energy to set up a 2 MW geothermal power plant in Gujarat, which will be the first in the country, ISR said. (timesofindia.indiatimes.com) Source: ORG /ENM
Welspun Renewables receives $617m in funding for clean energy development CTBR Staff WriterPublished 14 October 2015
India-based Welspun Renewables Energy Private Limited (WREPL) has received around $617m in funding, which will be used in clean energy development in the country. The funding is a combination of debt and equity infusion by the promoters, existing and new investors. The company received $405m in debt, $47m in line of credit, and $165m in equity investments. This follows investments from the Asian Development Bank and General Electric in the company's operations last year. Welspun Renewables vice chairman Vineet Mittal said: "WREPL's power plants are among the highest generating projects in the country and have been built ahead of committed timelines - thanks to our superior EPC capabilities. "Being the leaders in this space, we have been setting benchmarks for the entire industry to follow.
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"These deals continue to prove that renewable energy sector is a preferred investment choice and global players are willing to commit to help grow the industry." Welspun Renewable plans to set up renewable energy projects with a total installed capacity of around 5GW, of which 1GW will be commissioned within this financial year. Currently, the company operates solar and wind projects in eight different states in the country. To date, Welspun generated over 1.375 billion units of clean energy and mitigated 1.2 million tons of CO2 emissions in the country. The company recently inaugurated a solar power project in the state of Punjab
Sany to invest $5bn in Indian clean energy market CTBR Staff WriterPublished 16 October 2015
China-based construction machinery company Sany Group is planning to inject close to $5bn in the Indian renewable energy market.
The proposed investment is in line with Indian Prime Minister Narendra Modi's goal to have 175GW of renewable energy capacity in the country by 2022. Ministry of Commerce & Industry Department of Industrial Policy and Promotion Secretary Amitabh Kant said: "We are keen on seeing China investing more in India, especially in the manufacturing sector and partnering with India to make India a world class manufacturing base for production. "This initiative is yet another step towards the 'Make in India' drive launched by our Prime Minister." Of the total proposed investment, around $3bn will be used to install 2,000MW of capacity between 2016 and 2020, creating 1000 jobs. 76
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The remainder $2bn will be invested in solar power and equipment. Sany will also install off-shore wind power generation technologies. Sany Group chairman Liang Wengen said: "This investment is a significant step in deepening Sany Group's presence and commitment to India. Green energy industry in India is growing and we see this as a huge opportunity to introduce our wind energy business in the country. "We have invested in a potential market like India, and are excited about the future growth & potential for future investment. We believe that the agreement signing with Indian new energy enterprise will boost the mutual cooperation to a new height." As reported in Bloomberg, SoftBank Group's Masayoshi Son and Foxconn Technology Group's Terry Gou are also planning to invest in the Indian green energy sector. Image: India aims to have 175GW of renewable energy capacity by 2022. Photo: courtesy of Naypong / FreeDigitalPhotos.net.
Punjab’s largest solar power plant commissioned at Bathinda October 9, 2015.
The largest solar power project in Punjab was commissioned at Jaga Ram Teerath village in Talwandi Sabo in Bathinda district by Union Food Processing Minister Harsimrat Kaur Badal. After inaugurating the 32 MW plant in the presence of Renewable Energy Minister Bikram Singh Majithia, Harsimrat said Punjab was the first state in the country to work out a diversification scheme which had turned farmers into green energy entrepreneurs. She said Punjab would target development at least 15 green energy entrepreneurs per block within the next five years ensuring 10 percent of the state’s energy requirement is fulfilled through green energy. Punjab had increased the per acre compensation from ` 3,000 to ` 8,000. Majithia said the Punjab government was coming up with a new scheme under which farmers could themselves set up solar power projects on their own land in collaboration with corporations.
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He said under this scheme a Memorandum of Understanding (MoU) would be signed for a period of 25 years and the farmers and corporations would have a 50:50 partnership. He said to boost this scheme, the Punjab government would even give subsidy and around 500 MW capacity projects would be allocated to farmers. (indianexpress.com) Financing may be a challenge under offshore wind policy: Ind-Ra October 8, 2015. Projects to be rolled out under the offshore wind policy may face challenges in achieving financial closure unless backed by the public sector, India Ratings and Research (Ind-Ra) said. The government approved National Offshore Wind Energy Policy which will pave way for the development of this renewable source of energy, including setting up of projects and research in the area. Ind-Ra said that the policy guidelines have proposed offshore wind generation capacities through public private partnerships. Ind-Ra said that a rollout through engineering, procurement, construction (EPC) route in the initial phase will be a viable option to attract private participation, given the inherent complexities of these projects and the uncertainties around an unexplored area of offshore wind generation. The policy, if implemented well, will provide an impetus to the falling wind capacity additions as offshore wind generation involves limited use of land, and lack of land has been a major impediment to its growth, it said. The policy could also help the country achieve the national installed wind capacity target of 60 GW by 2022, it said. Offshore wind projects could be attractive propositions from a return perspective (18 percent), given the risk return profile, it said. However, these are contingent on timely executions which could face challenges in the initial phase, it said. While globally offshore wind power generation has been in existence across Europe and China, the total capacity set up till date is only 11 GW. Given the limited experience, the sector may witness entry of international players with technical expertise to bid individually or in collaboration with Indian EPC players to gain an early mover advantage, it said. Source:(www.business-standard.com)
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China raises 2015 solar installation target by 30 percent to 21.3 GW October 12, 2015. China has decided to raise by 30% its solar power installation target for 2015, from an earlier national target of 17.8 GW, to 21.3 GW (+5.3 GW). The new power projects are expected to be developed in Inner Mongolia and Hebei (northern China) and in Xinjiang (western China). The National Energy Administration (NEA) requires the project developers to complete construction by the end of 2015 and to get connected to the grid by the end of June 2016. Many solar power projects fail to deliver power due to insufficient grid capacities, which have curtailed the growth of the solar sector; raising the 2015 target could potentially add to overcapacity. In the first half of 2015, 7,730 MW of solar capacities were installed, which would be only 1/3 of the new target. China aims to raise the share of non-fossil fuels in its energy mix from about 11% in 2014 to 15% by 2020, and to cap CO2 emissions by 2030. The Central Bank of China estimates that the country must invest between Cyu 2,000 bn and Cyu 4,000bn (US$315 bn to US$630 bn) every year in green technologies over the next five years. (www.enerdata.net)
DC Water develops $470m waste-to-energy project in US EBR Staff WriterPublished 08 October 2015
DC Water has opened a $470m waste-to-energy project, designed to generate clean, renewable energy from the sewage solids generated after wastewater treatment process, at the Blue Plains Wastewater Treatment Plant, Washington, D.C, US The 10MW power facility is expected to generate power to meet about one-third of energy needs of the Blue Plains plants. DC Water board chair Matthew Brown said: "The Board of Directors approved this voluntary investment to create a better class of 79
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biosolids and generate 10MW of power to cut the electricity bill at the Blue Plains plant, which is the single largest consumer of electricity in the District." Featuring a dewatering building, the facility comprises 32 sleek thermal hydrolysis vessels, four concrete 80ft-high anaerobic digesters with a capacity of 3.8 million gallons of solids each and three turbines equivalent to the size of jet engines. District of Columbia Mayor Muriel Bowser said: "DC Waters Blue Plains facility is converting waste to clean water and a nutrient-rich soil byproduct, producing energy and helping to put the District on the path towards a zero waste future." The CAMBI thermal hydrolysis technology at the facility uses high heat and pressure to "pressure cook" the sewage solids, which are the byproducts of the wastewater treatment process. The sewage solids are treated as a sterile food source (carbon) for the microbes in the digesters, which then converts the carbon to methane. The resulting menthe is then captured and fed to three large turbines in order to produce electricity while the generated steam will be captured and directed back into the process. The solids at the end of the process are a cleaner Class A biosolids product, which can be used as a compost-like material for urban gardens and green infrastructure projects. "Additionally, the cleaner biosolids can be applied locally, saving millions of dollars in hauling costs," Brown added. DC Water CEO and general manager George Hawkins, said "This project embodies a shift from treating used water as waste to leveraging it as a resource. "We are proud to be the first to bring this innovation to North America for the benefit of our ratepayers, the industry and the environment." DC Water also seeking ways to bring a compost-like product to market. Source: http://biofuelsandbiomass.energy-business-review.com/
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Outotec selected to support renewable energy projects in UK and Canada Outotec has received three contracts, worth EUR55m, by different renewable energy producers in the UK and Canada to provide technology and service. Total value of the orders is approximately which has been booked in Outotec's 2015 third quarter order intake. One of the contracts is for a 55 MW thermal energy plant producing synthetic gas from refused-derived-fuel (RDF). Two other plants - 11 and 21 MWe - use Outotec's advanced staged gasification technology with waste heat recovery and gas cleaning trains to produce steam from RDF and waste wood for electric energy. In addition to engineering and technology licenses, Outotec will deliver the main process equipment as well as advisory services for installation, commissioning and start-up of the plants. For one of the customers, Outotec also provides comprehensive operation and maintenance services for the entire energy plant. After two years' preliminary work including the design process, Outotec's personnel will operate and maintain the plant for 10 years on a turnkey basis. "Our target is to deliver sustainable technology and life-cycle solutions to our customers. We are extremely pleased with our strong involvement in renewable energy projects in the UK, where we have already four projects under construction. For two of these plants, we have also made long-term operation and maintenance contracts. Our customers were looking for comprehensive solutions with guaranteed performance and best return on their investments", says Robin Lindahl, President of Metals, Energy & Water business area at Outotec. Source: Company Press Release
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Enerkem raises $115.4m funding for future expansion of biomethanol production CTBR Staff WriterPublished 10 September 2015
Cleantech company Enerkem has raised C$152.6m ($115.4m) in funding for the expansion of its Enerkem Alberta Biofuels full-scale facility in Edmonton and global growth. The announcement comes as the company begins biomethanol production from non-recyclable household garbage at the Edmonton facility. Enerkem uses its proprietary technology to convert non-recyclable municipal solid waste into methanol, ethanol and other widely used chemical intermediates. The funding includes C$29m ($21.9m) debt facility from Integrated Asset Management's (IAM) Private Debt Group as well as C$50m ($37.8m) in private placements from current investors and C$73.6m ($55.6m) of debt from two other lenders, the company said. Enerkem president and CEO Vincent Chornet said: "I must say a huge thank you to our financial partners, employees, as well as the City of Edmonton and Alberta Innovates - Energy and Environment Solutions who believed in us and have accompanied us while we were reaching this pivotal operational milestone. "We are about to fundamentally transform the waste industry over the coming years and allow energy and chemical groups access to a new and competitive source of renewable carbon." In 2013, Enerkem secured funding from Waste Management of Canada, a subsidiary of Waste Management Inc, and EB Investments. Image: Enerkem produces biomethanol from municipal solid waste at the commercial scale. Photo: courtesy of Merle Prosofsky / CNW Group/ ENERKEM INC.
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TOP
HSE, CLIMATE CHANGE & SUSTAINABILITY
triggers alarm Vapour cloud from Exxon Mobil refinery in California triggers alarm Reuters Los Angeles, Oct 24: The unexplained release of a large vapour cloud on Friday from an Exxon Mobil Corp refinery near Los Angeles prompted authorities to sound public safety sirens, but no toxic fumes were detected and no one was hurt, a fire official said. The mishap was reported around sunset in Torrance, California, at a refinery that had been largely shut down since an explosion and fire at a processing unit on Feb. 18 injured four workers and destroying emissions-controlling equipment. That blast led state regulators to cite the company for 19 occupational safety violations at the 149,500-barrel-per-day refinery, with $566,600 in penalties. A plan to restart the refinery last month was indefinitely postponed after a Sept. 6 leak of highly toxic hydroflouric acid. As a precaution on Friday, city officials sounded sirens warning area residents to remain indoors with windows and doors closed, and traffic barriers were lowered over a street that runs along the refinery's eastern edge, Torrance Fire Department Captain Bob Millea said. But all-clear chimes were sounded within a half-hour of the first alarm from the incident, Millea told Reuters.
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He said the vapour appeared to be a large steam cloud that rose 150 to 200 feet in the air and drifted eastward from the refinery before dissipating. According to Millea, there were no reports of unusual odors, and airquality sampling afterward found no toxic chemicals present outside the plant. No one was reported to have been injured or sickened, or to have sought medical treatment, he added. While the vapour came from inside the plant, its precise origin and cause was under investigation, Millea said. Company spokesman Todd Spitler said an "upset" in a refinery unit triggered the release, which was "primarily composed of steam" and there was no danger to public health. The Los Angeles City News Service reported the vapour escaped from a leak in an 8-inch line. The company announced last month that it had reached an agreement to sell the Torrance plant and associated facilities, which employ some 1,400 staff and contractors, to New Jersey-based PBF Energy for $537.5 million plus working capital. The refinery is expected to be back to full production by the time the transaction closes in 2016.
SHALE GAS METHANE LEAKAGE 'SERIOUSLY OVERESTIMATED': UK THINK TANK London (Platts)--26 Oct 2015 925 am EDT/1325 GMT
Previous estimates of methane leakage in shale gas production have been "seriously over-estimated," according to a report released Monday by British free-market policy think tank the Centre for Policy Studies. Methane, the main component of natural gas, has a high greenhouse potential, and opponents argue that even if one or two percent of the gas leaks, the advantage of natural gas over coal would be negated, it said. 84
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"This estimate is incorrect; over a 100-year time span, an implausible 12% of the produced natural gas used today would have to leak in order to negate an advantage over coal," the report said. "The best current estimates for the average leakage across the whole supply chain are below 3%; even at 3% leakage natural gas would produce less than half the warming of coal averaged over the 100 years following emission," it said. The UK shale gas industry has struggled to get off the ground despite strong support from the current Conservative Party government. The Centre for Policy Studies, which was co-founded by former Conservative Prime Minister Margaret Thatcher in 1974, said, "there is a concern, held by many thoughtful people and others, that the danger of fugitive methane is a compelling reason to stop all development of shale gas." "Another way of thinking about the same issue is to ask how much better is natural gas than coal at certain leakage rates, and over certain timeframes." The report is authored by Richard Muller, professor of physics at the University of California, and his daughter Elizabeth Muller, who together founded Berkeley Earth in 2010, a non-profit organization focused on climate change.
How eBay's radical efficiency plan benefits from employee engagement Heather Clancy, Dean Nelson of eBay This week, eBay will take the wraps off a data center in Utah that is the first facility of its kind to use fuel cells from Bloom Energy as its primary source of onsite power. 85
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It's just the latest demonstration of the e-commerce giant's radical approach to data center design. That master plan aims to create the highest possible productivity for its roughly 120 million customers -- who generated $175 billion in eBayenabled commerce during 2012 -while having the lowest possible impact on the planet. "We want to make sure that our actual carbon emissions that are coming out of each one of these things is as low as possible," says former Sun Microsystems engineer and real estate guru Dean Nelson, who officially is eBay's vice president of global foundation services. (Not a hint of sustainability in that title.) "Then, that rolls back more into the renewable energy pieces of it." Over the past four years, Nelson has inspired eBay to push the envelope in both energy efficiency and clean power sourcing. Its "Project Mercury" modular data center facility in Phoenix boasts one of the best power usage effectiveness (PUE) measures around, an average of 1.2 depending on the time of year, despite being in the desert. (PUE measures the ratio of electricity needed for cooling IT equipment versus the amount of power needed to run the servers, network and other infrastructure gear. The "ideal" score is 1.) Despite its hot location, the facility can use outside air to "free cool" the technology year-round. "Project Topaz" in Utah boasts similar innovations, including innovative water reuse strategies as well as the company's biggest on-site solar installation at 665 kilowatts. The swatch of panels covers 72,000 square feet, contributing about 10 percent of the power needed to run the facility. eBay actually lobbied for legislative changes within the state in order to make the project happen. Much of this was somewhat invisible to the average eBay developer or product manager until earlier this year, when Nelson unfurled a Digital Service Efficiency (DSE) dashboard that helps interpret the 86
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link between IT infrastructure efficiency and the company's performance along cost, revenue and environmental lines. The methodology (PDF) is applied to pools of servers across the company (about 52,000) and that visibility already has resulted in dramatic results, Nelson says. During the second quarter, eBay's carbon impact per 1,000 URLs was down by 2 percent, while the number of URLs visited per kilowatt-hour rose 12 percent. The DSE metric has enabled teams across the 30,000-person company to gain much deeper insight into the impact of their individual actions and decisions. Nelson's team actually went so far as to create two internally published lists that pinpoint the most and least efficient servers across the company: the Hall of Fame highlights infrastructure worthy of emulation, while the Hall of Shame identifies servers that need to be either retuned for better efficiency or decommissioned. "That drove tons of dialogue internally about utilization, about disaster recovery, about spare capacity, the age of servers, a whole bunch of dialogue that really drove program to drive overall system performance and consistency," he says. How big of an impact can this have? During the first quarter, when one eBay developer made a simple adjustment in the amount of server hardware memory required by a piece of cloud software code, the company was able to shut off 400 servers. That may not seem like a lot, but it helped the company avoid $200 million in cost avoidance (because the servers didn't need to be refreshed or replaced), reduce the power draw required by the related data center by 1 megawatt and eliminate approximately $1 million in operational expenditures. Now, imagine multiplying that impact by the thousands of eBay developers writing software code for the platform. "That visibility changes behavior," Nelson says. "If you can't see it, how do you tune for it? Now, we have a way to measure the entire 87
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fleet of equipment we have, how well it is deployed inside, and then how it is being used. Just like driving your car." Nelson credits his ability to connect the dots for eBay's employees with his varied background at Sun, where he started out debugging chip level components on the company's manufacturing floor after earning a technical degree at DeVry University in Phoenix. Eventually, he worked up through the Sun ranks into his final role managing real estate and technical infrastructure for the multi-billiondollar research and development organization. "That's where I actually started seeing the effects of the equipment that was purchased on results," he remembers. Since releasing the DSE methodology, eBay has had discussions with many other companies across the high-tech ecosystem interested in applying the same concepts to their own business. Nelson long has been inclined to share his best practices: he was the founder of Data Center Pulse, which represents data center owners and operators, and he is also a technical advisor for the Green Grid. Meanwhile, he and his team already are envisioning ways in which DSE can be improved and extended, and they are working on key performance indicators that can be used globally. "The more visibility we get internally, at every layer, the more knobs that come up that are available to turn," Nelson says. "When you start getting people excited because you have shown them the implications of their decisions, there are just amazing things that can happen. The conversations internally, this quarter, are so different than they were last were because people have context, they understand how
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the dots connect, and they can really start driving some extreme efficiency decisions and some extreme productivity decisions."
How does Duke Energy measure up among green utilities worldwide? John Downey,Senior Staff Writer- Charlotte Business Journal+ Nov 2, 2015,
The McGuire Nuclear Station (pictured) is part of the nuclear fleet that helps Charlotte-based Duke Energy (NYSE:DUK) make the "100 Greenest Utilities" list.
Duke Energy ranks among the “100 Top Green Utilities” according to the industry publication EI New Energy. Charlotte-based Duke (NYSE:DUK) was 47th on the global list this year, up two notches from its 49th ranking last year. Among the 24 U.S. utilities on the list, Duke ranked 11th. The annual list grades utilities by their carbon emissions per megawatt hour, their renewable energy capacity and the percentage of total capacity that renewables represent. The Spanish renwable energy giant Acciona took top honors, scoring 234 out a possible 300 points. Next Era Energy (NYSE:NEE), parent of Florida Power & Light, was the top U.S. green utility, scoring 196 out of a possible 300. The United States has three utilities ranked in EI New Energy’s top 20. But that was second to China, which led the way with six. Well behind leaders Duke, like several of the six Southeastern utilities that made the list, ranks relatively well because of a large nuclear fleet, which reduces
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the carbon produced per megawatt hour. Duke also has a good-sized hydro-power fleet and some renewables in its utility mix. Duke has a renewable fleet that exceeds 1,800 megawatts of wind and solar projects on its commercial side. Duke spokeswoman Erin Culbert says Duke has made important strides in moving towards cleaner energy production in recent years, including the closing of a number of coal plants and replacing them with cleaner burning gas plants. "This has helped reduce our carbon emissions by 22 percent since 2005," she says. "Being a ‘green utility’ may mean different things for people, but for us, it’s about providing sustainable energy sources and offering energy efficiency solutions and other programs for our customers that they really value." But though Duke ranks in the top half of the “Top 100,” it falls far behind the leaders. It scored 77 out of a possible 300 points. There are about 290 investor-owned utilities and federal energy agencies (like the Tennessee Valley Authority) in the United States.
HPCL initiative on sustainable environment Our Bureau, Mumbai, Nov 3:
Oil and gas refiner Hindustan Petroleum Corp Ltd (HPCL) is on a mission to increase the environmental sustainability of its operations. Over the next few years, the public sector refiner is planning to reduce its water consumption by a third, marginally bring down its power consumption and increase environmental awareness among its employees. It has also begun processes towards implementing sustainability reporting. HPCL has already implemented CII’s GreenCo Standards at two depots, VVR Narasimham, Executive Director, Corporate Health Safety and Environment, said. The company is working on expanding this to 144 other terminals by developing in-house policy documents.
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From 2008-09 to 2014-15, HPCL reduced its fuel consumption by 1,92,300 tonnes, reducing its equivalent estimated CO2 emissions by about 5,76,900 tonnes. It has opened phyto-remediation (constructed wet-lands) plants to treat sewage water at two marketing locations. By expanding this, the company plans to reduce its fresh water intake and turn water consumption-neutral. It is also helping fuel pump dealers turn to solar power, by footing part of the erection costs involved in switching to solar energy. (This article was published on November 3, 2015)
GE Partners with Walmart, Intel, Statoil, 5 Others on Water, Energy Efficiency November 2, 2015, Environment Leaader
General Electric Ecomagination is partnering with BHP Billiton, Goldman Sachs and MWH, Intel, Masdar, Statoil, Total and Walmart to accelerate innovation in water and energy efficiency. The partners have taken on the following initiatives to improve productivity, reduce impact and increase returns: GE and BHP Billiton will work jointly to develop individual technologies and an overall architecture to replace diesel in mining operations and transportation with the overall goals of lowering fuel costs and emissions in the mining life cycle. Goldman Sachs & MHW will work with GE to bring private sector financing and new financing models to water reuse projects to mitigate growing global water scarcity. By expanding and financing industrial and municipal water reuse, this partnership seeks to achieve global adoption of water saving reuse techniques. To reduce energy and water waste in manufacturing, ďƒ˜ Intel will work with GE to develop advanced manufacturing and digital optimization techniques to increase resource productivity in manufacturing. ďƒ˜ In an effort to decrease the energy intensity of wastewater treatment,
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Masdar and GE will implement the first complete energyneutral wastewater treatment technology. The partners will deploy the pilot program in Abu Dhabi and then scale the solution across the Middle East. Statoil is working with GE to develop technology and techniques to increase resource efficiency and reduce emissions in an effort to find more economical and sustainable solutions for oil and gas production. Total has taken on the challenge of expanding industrial cleaner energy options in emerging markets. The company will work with GE to create hybrid cleaner energy systems for industrial use with the goal of cutting costs and reducing emissions. Walmart and GE are looking to accelerate the commercial adoption of energy efficiency and renewable energy. To that end, the two companies will work together to develop and demonstrate next-generation efficiency, renewables and digital solutions that will scale for wider commercial use. GE met in Paris with executives from all eight companies Read more: http://www.environmentalleader.com/2015/11/02/ge-partners-with-walmart-intel-statoil-5-others-on-water-energy-efficiency/#ixzz3qReb5VCR
Hawaii Energy program saves almost $1B over last six years Oct 30, 2015, HST Tina Yuen PBN Ray Starling, program manager for Hawaii Energy
Duane Shimogawa Reporter- Pacific Business News
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Hawaii Energy, the energy conservation program for Oahu, Maui, the Big Island, Molokai and Lanai, has helped save residents and businesses nearly $1 billion over the last six years. Hawaii Energy, the electric utility customer-funded energy program under the direction of the Hawaii Public Utilities Commission, as administered by Leidos Engineering LLC, recently revealed details from its 2014-15 program year The $965 million in savings equate to nearly 3 billion kilowatt-hours in energy savings, which is enough to fill two Aloha Stadium venues with oil, five years of current solar photovoltaic generation and 90,000 electric vehicles driven for a year, the program said. This year alone, Hawaii Energy has helped save enough electricity to power 9,000 homes for a year, achieved nearly $1 million in energy savings per year for Honolulu International Airport, established 226 participating allies from 140 businesses and reached over 19,000 students through teacher education. Hawaii Energy offers cash rebates and other incentives to residents and businesses to help offset the cost of energy-efficient equipment. It also offers education and training for residents, business and clean energy allies to encourage the adoption of energy conservation behaviors and efficiency measures. PBN recently spoke with Hawaii Energy’s top executive, Ray Starling, about the where the program stands today and in the future, for a feature in Friday's print edition. Hawaii Energy's contract ends with the PUC on June 30, 2016, but it plans to re-apply to keep running the program, as it has been for several years.
Shale Gas and GHG Emissions: What’s the Deal? October 24, 2015 By Jon Sohn, Counsel, McKenna Long & Aldridge
Few foresaw the rapid emergence of shale gas development as the growing force in the US energy mix that it is today. In four years, shale gas development has boomed in a diverse set of geographic locations. 93
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According to the US Energy Information Agency, the US has 2.214 trillion cubic feet of technically recoverable natural gas — enough to meet a considerable amount of US energy demand for years. Closely associated to the boom, state and federal government entities are actively engaged with public and private stakeholders to set sustainability and other regulatory standards for production of shale (and other unconventional) plays. The scale and cumulative impact of this development in the US is coming into focus and there are an undeniable set of environmental and social risks to be addressed. From an energy security perspective, if the right rules are put in place and a social license to operate is achieved, the shale gas industry is indeed crucial. From a climate change perspective, however, shale gas is most valuable if it significantly contributes to reducing GHG emissions at a scale that meets science-based goals. Below I briefly allude to a few key issues to address if shale gas can effectively lay claim to a “game changer” title in a low carbon economy:
1) Fully Assess Upstream GHG Emissions There is consensus that it is necessary to assess the full lifecycle of the sector’s technologies and systems, not just GHG emissions of end-users of the fuel to understand the total footprint. There are a variety of emerging opinions and analysis on the precise nature and impact of upstream GHG emissions. It is difficult to know all the right answers on upstream production-related emissions at this point as most studies to date have serious methodological and data challenges and conjectures on emissions as opposed to real, independently verified emissions data. Some preliminary analyses have projected upstream emissions to be quite significant, while other reports suggest lower and less significant emissions. Considerable serious, non-politicized research remains to be done on this topic before a definitive way forward can be 94
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developed. EPA has recently promulgated rules that mandate green completions that will likely serve to reduce a significant portion of some identified upstream GHG emissions. A key missing piece is the development of objective, multi-stakeholder reviews of the full upstream GHG emissions footprint of shale production based on real-world operational data. Morgan Bazilian, from the Joint Institute for Strategic Energy Analysis, notes such studies are underway. 2) Set Clear Demand Signals in Power and Other Sectors A mixture of market and regulatory signals are driving an emerging transition towards gas in the power sector. Several US power generators are taking advantage of low natural gas prices and displacing large chunks of their coal fleet with gas. EPA regulatory actions are also playing a role in driving the US power portfolio towards gas. Media reports note that Southern Company anticipates running more power through gas than coal in 2012, for the first time in company history. EIA notes that in February of 2012 power generators consumed approximately 35 percent more natural gas than the previous year, displacing coal as a result. US 2012 GHG emissions are at their lowest point since 1992, which EIA claims is in part due to increased reliance on natural gas in the power sector. With a lower GHG footprint, this transition from coal to gas is a net positive from a climate mitigation perspective. Yet the abundance of shale gas is creating a glut in the market and low prices of natural gas reflect this reality. A new wave of demand signals will need to emerge if fuel switching trends can continue at scale. The manufacturing and chemical sectors (and potentially transportation) are also significant consumers of natural gas and the GHG emissions of those sectors are part of the equation. 3) Embrace Synergy Between Renewable Energy & Natural Gas The large scale of shale gas and increasing role it is projected to play in the overall US power portfolio has some concerned it will delay ambitions for scaled-up solar, wind and other low carbon 95
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sources of energy. There are at least 3 good reasons, however, that gas and renewables should actually partner to design and advocate energy policy: –Scaled-up renewable energy deployment can serve to hedge risk of gas price spikes. –Natural gas is an obvious companion to balance out the grid with more variable sources of electricity production like wind and solar. General Electric, for example, has introduced “FlexEfficiency” systems that enable grid operators to rapidly adapt as renewable energy comes on and off the grid. –A diversified power portfolio in the US can only serve to enhance aspects of energy security. From Pennsylvania to Texas shale development marches forward as does work to ensure it can be developed in a safe and responsible manner. Much more analysis, policy innovation and advocacy needs to acknowledge this reality and ensure shale gas plays a robust role in leading the US down the path to a low carbon economy. Jon D. Sohn is an experienced climate change and clean energy public policy leader. He has first hand experience preparing U.S. domestic and international environmental policy and regulations backed by advocacy and testimony before the United States Congress and Executive Branch. He has in depth understanding of private sector finance, multilateral development banks and United Nations processes in climate and energy policy matters coupled with a unique ability to work collaboratively with private sector, government and non-governmental organization stakeholders to formulate public policy solutions. He also represents clients before the Environmental Protection Agency and the Department of Energy on a broad range of regulatory and policy matters. 96
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THE BANYAN TREE
What might “the best workplace on earth” look like? By Rob Goffee and Gareth Jones on November 17th, 2015 | How to build a better workplace Good workplaces are built around authenticity, honesty and meaningful values, all of which are condensed into simple, wellunderstood rules, write Rob Goffee and Gareth Jones. "The ideal company is not a company without rules. It is a company with clear rules that make sense to the people who follow them," they write.SmartBrief/SmartBlog on Leadership (11/17) inShare This post is adapted from “Why Should Anyone Work Here? What It Takes to Create an Authentic Organization,” (Harvard Business Review Press, November 2015) by Rob Goffee and Gareth Jones. . The key idea in workplace is “place.” And arguably, in a knowledge-based or clever economy (to use our term from a recent book), this is the new task of leadership: less directly to excite others, more to orchestrate or to create environments where others can follow their own authentic obsession. Modern leadership may be as much about an authenticity of task or place as it is about the person leading and what that individual person thinks or does. Consider the depressingly low rates of employee engagement around the world. According to a recent AON Hewitt survey, four in 10 97
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workers on average report being “disengaged” worldwide (three out of 10 in Latin America; four in 10 in the US; and five in 10 in Europe). This finding resonates with our research. But instead of focusing exclusively on the sources of disengagement and dysfunction, we explored people’s positive visions for organizations and how they are attempting to make these a reality. For more than four years now we have been asking people around the world what their ideal organization would be like — that is, one in which they could be their best selves. Although individual answers varied widely of course, we found that the responses grouped naturally around six broad imperatives, which just happen to form a handy mnemonic: • Difference: “I want to work in a place where I can be myself, where I can express the ways in which I’m different and how I see things differently.” • Radical honesty: “I want to know what’s really going on.” • Extra value: “I want to work in an organization that magnifies my strengths and adds extra value for me and my personal development.” • Authenticity: “I want to work in an organization I’m proud of, one that truly stands for something.” • Meaning: “I want my day-to-day work to be meaningful.” • Simple rules: “I do not want to be hindered by stupid rules or rules that apply to some people but not others.” Let’s begin with difference. We recently worked with an organization that had produced a 142-page booklet called “Managing Diversity.” (We wonder how many people will actually read it.) And yet in all those pages the crucial argument that creativity (a key index of performance) increases with diversity and declines with conformity is never really made. For many organizations, accommodating differences translates into this concern with “diversity,” usually defined according to the traditional categories such as gender, race, age, and religion. These are, of course, of tremendous importance, but the executives in our research were after something subtler and harder to achieve — 98
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an organization that can accommodate differences in perspective, habits of mind, core assumptions, and worldviews, and then go beyond accommodation to create a place where difference is celebrated and even leveraged to add value. Get difference right and you are rewarded with higher levels of commitment, innovation, and creativity. What about radical honesty? Organizations are increasingly recognizing the importance of communications—both internally and to wider stakeholders. For example, we now find communications professionals at or near the summit of organizations. This is a step in the right direction: we have learned that reputational capital is becoming more and more important for high performance, even as that capital becomes increasingly fragile. Arthur Andersen was destroyed in a month in the wake of the Enron scandal. More recently, iconic firms like Apple, Nike, and Amazon have come under critical scrutiny for their employment practices. And yet, the growth of the communications profession is actually more evidence that companies are taking a superficial approach to disseminating the critical information that people need to do their jobs. Why? Because so many communications professionals remain stubbornly connected to an old-world mind-set in which information is power and spin is their key skill. Surely information is power, but companies no longer have control of it. In a world of WikiLeaks, whistle-blowing, and freedom of information, their imperative should be to tell the truth before someone else does. When they do, they will begin to build long-standing organizational trust—both inside and outside the organization. How can organizations create extra value? Elite organizations and professions — the McKinseys, Johns Hopkins Hospitals, and PwCs of this world — have been in the business of making great people even better for a long time now. Part of their pact with employees is, “Join us and we will develop you.” Unfortunately, they deal with only a tiny proportion of the workforce. What about the rest of us? Our research shows that high performance arises when individuals all over the organization feel they can grow through their work — adding value as the organization 99
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adds value to them. That means the administrative assistants and cashiers as well as the executives and the shift managers. This is not impossible. If a company like McDonald’s UK finds it profitable to train the equivalent of six full classes of students every week to attain formal qualifications in math and English, surely other companies can do more. What does it mean for an organization to be authentic? This is a big question. It is fair to say that the concept of authenticity runs through all of the characteristics of the DREAMS organization — because authentic organizations encourage you to be your best self at work and to perform at your best. But for looking at authenticity as an individual, specific organizational quality, we have developed three markers. First, a company’s identity is consistently rooted in its history. Second, employees demonstrate the values the company espouses. And third, company leaders are themselves authentic. Where this happens, employees enjoy a sense of purpose, pride in what they do, and higher levels of trust. This is clearly not simple to achieve. Sadly, rather than rise to the challenge, in many organizations the task of building authenticity has collapsed into the industry of mission-statement writing. Some of the people we interviewed despaired that their company’s mission statement had been rewritten for the fourth time in three years! Not surprisingly, this produces not high performance but deep-rooted cynicism. The search for meaning in work is not new. There are libraries full of research on how jobs may produce a sense of meaning— and how they can be redesigned in ways that produce “engagement.” But meaning in work is derived from a wider set of issues than those narrowly related to individual occupations. It also emerges from what we have called the three Cs — connections, community, and cause. Employees need to know how their work connects to others’ work (and here, too often, silos get in the way). They need a workplace that promotes a sense of belonging (which is increasingly difficult in a mobile world). And they need to know how their work contributes to a longer-term goal (problematic, when shareholders demand quarterly reporting). If these deeper issues are not addressed, faddish efforts at increasing engagement will have only fleeting effects. 100
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Finally, the truly authentic organization has simple rules that are widely agreed upon within the company. Many organizations display a form of rule accretion, where one set of bureaucratic instructions begets another, which seeks to address the problems created by the first set. In response to this, organizations have attempted a kind of radical delayering. This at least attempts to address the problem of losing good ideas and initiatives in a byzantine hierarchical structure. But that, too, is only a superficial fix. The ideal company is not a company without rules. It is a company with clear rules that make sense to the people who follow them, and it remains ever vigilant about maintaining that clarity and simplicity — a much larger challenge with a far greater payoff. Good rules maximize discretion which, in turn, facilitates problem solving. They unleash initiative rather than suppress it. These attributes can often run counter to traditional practices and habits in companies, and they’re not easy and simple to realize or implement. Some conflict with one another. Almost all require leaders to carefully balance competing interests and to rethink how they allocate their time and attention. Of course, few if any organizations possess all six virtues — and even if they did, it would be quite a feat for them to excel at all six. Send your views to: anand.iocl@gmail.com ____________________________________________________
Authentic Leadership Rediscovered Is becoming an "authentic leader" just an excuse for practicing a rigid management style? Bill George, who pioneered the idea, says critics don't understand what really constitutes an authentic leader. by Bill George, —Harvard Business Review, January 2015 The true meaning of authenticity There has been a bit of a backlash against the idea of authentic leadership, writes Bill George, who popularized the notion in 2003. 101
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Still, the core principles of authentic leadership remain valid. "If you want to be an authentic leader and have a meaningful life, you need to do the difficult inner work to develop yourself, have a strong moral compass based on your beliefs and values, and work on problems that matter to you," George writes. HBS Working Knowledge (11/10) In the last 10 years, authenticity has become the gold standard of leadership. This is a sea change from 2003 when I wrote Authentic Leadership. Back then, many people asked what it meant to be authentic. Authentic Leadership was intended as a clarion call to the new generation to learn from negative examples like Enron, WorldCom and Tyco. In it, I defined authentic leaders as genuine, moral and character-based leaders: "People of the highest integrity, committed to building enduring organizations … who have a deep sense of purpose and are true to their core values who have the courage to build their companies to meet the needs of all their stakeholders, and who recognize the importance of their service to society." Authentic leaders demonstrate these five qualities: Understanding their purpose Practicing solid values Leading with heart Establishing connected relationships Demonstrating self-discipline The following year the Gallup Institute and Professor Bruce Avolio, a well-known leadership scholar at the University of Nebraska-Lincoln, organized a definitive conference on authentic leadership in which the importance of leaders’ life stories became paramount. In spite of widespread acceptance of authentic leadership—or perhaps because of it—several authors have recently challenged the value of being authentic, claiming it is an excuse for being locked into a rigid view of one’s leadership, being rude and insensitive, refusing to change, or not adapting to one’s style to the situation. These arguments appear to demonstrate a fundamental misunderstanding of what constitutes an authentic leader. Recommendations that
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leaders should accept narcissism, embrace their inner jerk, or focus on themselves will not work in the long-run. In light of this public discussion, it’s important to rediscover authentic leadership as well as examine some of the recent mischaracterizations of it. Authentic leadership is built on your character, not your style. My mentor Warren Bennis said, “Leadership is character. It is not just a superficial question of style. It has to do with who we are as human beings and the forces that shaped us. Style is the outward manifestation of one’s authentic leadership, not one’s inner self. To become authentic leaders, people must adopt flexible styles that fit the situation and capabilities of their teammates. At times, authentic leaders are coaches and mentors, inspiring others and empowering their teammates to lead through the most important tasks without a great deal of supervision. At other times, authentic leaders must make very difficult decisions, terminating people and going against the will of the majority, as required to meet the situational imperative. These difficult actions can be taken while still retaining their authenticity. Authentic leaders are real and genuine. You cannot “fake it till you make it” by putting on a show as a leader or being a chameleon in your style. People sense very quickly who is authentic and who is not. Some leaders may pull it off for a while, but ultimately they will not gain the trust of their teammates, especially when dealing with difficult situations. The widespread adoption of LinkedIn, Google and increasingly networked communities means that every leader has the informal equivalent of a “Yelp” score that will come to light. If people see their leaders as trustworthy and willing to learn, followers will respond very positively to requests for help in getting through difficult times. Authentic leaders are constantly growing. They do not have a rigid view of themselves and their leadership. Becoming authentic is a developmental state that enables leaders to progress through multiple roles, as they learn and grow from their experiences. Like superior performances in athletics or music, becoming an authentic leader requires years of practice in challenging situations. 103
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Authentic leaders match their behavior to their context, an essential part of emotional intelligence (EQ). They do not burst out with whatever they may be thinking or feeling. Rather, they exhibit selfmonitoring, understand how they are being perceived, and use emotional intelligence (EQ) to communicate effectively. Authentic leaders are not perfect, nor do they try to be. They make mistakes, but they are willing to admit their errors and learn from them. They know how to ask others for help. Nor are authentic leaders always humble or modest. It takes a great deal of selfconfidence to lead through very difficult situations. Authentic leaders are sensitive to the needs of others. One author has postulated, and I paraphrase, “What if your real self is a jerk?” People are not born as jerks, nor does this behavior reflect their authentic selves. Rather, these individuals likely had very negative experiences early in their lives that cause them to have difficulty in managing their anger, in part because they feel like victims or feel inadequate. Situations like these indicate the importance of processing one’s crucibles: people need not feel like victims or stuff their experiences deep inside themselves. Rather, by understanding themselves and reframing their experiences, they can find the pearl inside that represents their authentic selves. That’s why exploring who they are and getting honest feedback from their colleagues are essential elements of becoming authentic leaders. That’s what Starbucks’ Howard Schultz did in coping with the severe challenges of his youth. It is also what made the difference for Steve Jobs when he returned to Apple nine years after his 1986 termination. For all these reasons, authentic leaders constitute the vast majority of people chosen today for the key roles in business and nonprofits. Their emergence as the predominant way of leading has resulted from all we have discovered about leadership in the past decade. A Human-Centered Approach to Leadership Development My 2007 book, True North, showed people how they could develop themselves as authentic leaders. Whereas Authentic Leadership was based on my personal experiences in leading, True North was built on field research drawn from in-person interviews with 125 leaders. 104
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With 3,000 pages of transcripts, it remains as the largest in-depth study of leaders ever conducted, based on first-person interviews. Having examined the literature containing more than 1,000 studies of leaders, most of which employed third-person approaches of observations and questionnaires, our research team concluded that learning directly from these leaders about what was important to them and how they had developed would give us much richer insights than prior studies. Indeed, this proved to be the case, as we discovered the paramount importance of leaders’ life stories and the crucibles they had faced. We also learned from them how people develop into authentic leaders. In our research, we embraced the richness of understanding leadership as a fully human endeavor. This approach built upon the pioneering work of Abraham Maslow, Carl Rogers, Douglas McGregor, Daniel Goleman and Warren Bennis. True North assembled this developmental process in an original approach that enabled people to develop themselves as authentic leaders. In order to see how leadership has changed in the past decade, we initiated research in 2014 that focused on 47 new leaders who were more global and diverse than the original cohort. We also followed up on 90 leaders featured in True North to see how they have fared since their 2005-06 interviews. With only a couple of exceptions, we learned these leaders had remained true to their authentic selves, and had performed very well in myriad roles. This research led to my new book, Discover Your True North, which profiles 101 leaders and describes how they developed. It also draws heavily upon classroom experiences in the Authentic Leadership Development courses at Harvard Business School, where 6,000 MBAs and executives have participated in this developmental process. Most significantly, we learned that authentic leaders are constantly growing and learning from their leadership experiences. By taking on new challenges, they become more effective as authentic leaders. When they find themselves in entirely new situations, authentic leaders draw upon their true selves, what they have learned in past life experiences, especially their crucibles, and they learn from their 105
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new colleagues. This enables them to become more effective as leaders. This approach is similar to Stanford’s Carol Dweck's “growth mindset.” If you want to be an authentic leader and have a meaningful life, you need to do the difficult inner work to develop yourself, have a strong moral compass based on your beliefs and values, and work on problems that matter to you. When you look back on your life it may not be perfect, but it will be authentically yours. Bill George is the author of Discover Your True North, a senior fellow at Harvard Business School, and former chair and CEO of Medtronic. Source: http://hbswk.hbs.edu/item/authentic-leadership-rediscovered
The journey to authentic leadership By Bill George on October 29th, 2015 | 392 When I graduated from college, I had the naive notion that the journey to leadership was a straight line to the top. I learned the hard way that leadership is not a singular destination but a marathon journey that progresses through many stages until you reach your peak. I was not alone. Of all the senior leaders we interviewed, none wound up where they thought they would. Former Vanguard CEO Jack Brennan believes that the worst thing people can do is to manage their careers with a career map: “The dissatisfied people I have known and those who experienced ethical or legal failures all had a clear career plan.” Brennan recommended being flexible and venturesome in stepping up to unexpected opportunities. “If you’re only interested in advancing your career, you’ll wind up dissatisfied,” he said. The idea of a career ladder places tremendous pressure on leaders to keep climbing ever higher. Instead, Sheryl Sandberg, chief operating officer (COO) of Facebook, favors the idea of a career “jungle gym” where you can move up, down, or across. Realistically, your development as a leader is a journey filled with many ups and 106
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downs as you progress to your peak leadership and continue leading through the final stage. This post is excerpted with permission of the publisher, Wiley, from “Discover Your True North, Expanded and Updated Edition” (August 2015) by Bill George. Copyright (c) 2015 by Bill George. This book is available at all bookstores and online booksellers.
The leader’s journey follows the new span of life, which often runs into the nineties. Individuals move through three periods of leadership with different types of leadership opportunities unfolding in each. There will be differences in the pace at which leaders navigate the timeline, but there are many commonalities among their experiences. Phase I: Preparing for Leadership Phase I is preparing for leadership, when character forms and people act as individual contributors or lead teams for the first time. Today, very few leaders make career commitments in their twenties. Increasingly, they use the time following college to gain valuable work experience, oftentimes changing jobs every 18 to 24 months to diversify their experience. Many young leaders are interested in going to graduate school in business, law, or government. Even some whocomplete their master’s degrees prefer individual contributor roles 107
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in consulting or finance before committing to a specific company or industry. There is a natural amount of self-absorption in this phase. Measures of success in your teens and twenties are based primarily on what you accomplish as an individual. Your performance determines what schools you are admitted to and how well you do in your work. Here’s how Kleiner Perkins Caufield & Byers’s Randy Komisar described it: We begin life on a linear path where success is based on clear targets. Life gets complicated when the targets aren’t clear, and you have to set your own. By rubbing up against the world, you get to know yourself. Either do that, or you’re going to spend your life serving the interests and expectations of others. He acknowledged that the start of the journey is particularly hard for young people “They look at me and say, ‘Hey, man. All I want to do is to get a good job, buy a house, get married, and have kids.’” Komisar said he wished life were so simple. Instead, he tells them: Let me just plant this seed. Keep it alive and come back to it in 10 years, but don’t flush it. Ask yourself the question “What do you want out of your life?” I want to empower you for that time when it’s relevant to you. Wendy Kopp: Stepping Up at 21 As a student at Princeton, Wendy Kopp developed a passion to transform K–12 education. Growing up in a middle-class family in an affluent Dallas suburb, she lived in a community that was “extraordinarily isolated from reality and the disparities in educational opportunity.” Kopp was influenced by her freshman roommate at Princeton, who was from inner-city New York. Kopp described her roommate as brilliant but unable to keep up with her studies because her high school had not prepared her for the rigors of Princeton. Ultimately, her roommate dropped out of school. As a senior, Kopp burned with desire to transform education but didn’t know how to get there. Not wanting to pursue the typical corporatetraining track, she went into “a deep funk.” As she explored teaching, she realized many others also believed that depriving kids of an excellent education was a national tragedy.
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So she organized a conference of students and business leaders to examine ways to improve K–12 education. During the conference, an idea came to her: “Why doesn’t this country have a national teacher corps of recent college graduates who commit two years to teach in public schools?” Her rhetorical question inspired her to found Teach For America (TFA), the most successful secondary educational program of the past 25 years. Kopp’s journey wasn’t easy. Lacking management experience and permanent funding, Teach For America was constantly short of cash, lurching from one crisis to the next. Time and again, Kopp threw herself into fundraising as she restructured budgets and financing to cover deficits. After working 100 hours a week for five years to build TFA to 500 new teachers per year, Kopp felt overwhelmed by the financial pressures of raising money to keep the organization going. When many initial funders decided not to continue funding the organization, losses mounted to a cumulative deficit of $2.5 million. A blistering critique of TFA in an influential educators’ journal said, “TFA is bad policy and bad education. It is bad for the recruits. It is bad for the schools. It is bad for the children.” Reflecting on the article, Kopp recalled, “It felt like a punch in the chest. I read it more as a personal attack than an academic analysis of our efforts.” When some of her original team left TFA, Kopp thought about shutting it down. “Yet my passion for our cause and fear that we might let the children down kept me going,” she said. Kopp’s experience at such a young age is the essence of authentic leadership: Find something you are passionate about, and inspire others to join the cause. TFA’s crisis accelerated her development as a leader. Twenty years after founding TFA, Kopp’s tireless efforts and passionate leadership have paid off. Today the program has 11,000 corps members who are teaching more than 750,000 students. Ian Chan: Creating a Scientific Revolution Ian Chan is another young leader who discovered his passion to lead at an early age. As his college graduation approached, he knew he wanted “an opportunity that would get me excited to jump out of bed every day and go to work.” After uninspiring experiences in
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investment banking and private equity, he and his younger brother focused on the human genome revolution. The Chan brothers founded U.S. Genomics to revolutionize medicine by delivering personalized genomics on a broad scale. They attracted noted advisers, such as scientist Craig Venter, who originally mapped the human genome, and Bob Langer, a renowned technologist. They began with a $100,000 credit card loan, and subsequently raised $52 million from venture capitalists, several of whom joined the board as the Chan brothers gave up more than half their ownership. Over the next five years the company’s work attracted attention in the scientific community and venture capital world as U.S. Genomics became a pioneer in its field. When the founders presented the company’s exceptional performance in December 2001, the board gave them a standing ovation. Yet, as the full potential of U.S. Genomics became apparent to the venture capitalists, they decided they needed a more experienced executive to lead it. Four months later, Chan was shocked when his board told him he was being replaced as CEO. “To this day, I have no idea why this happened when things were going so well,” he said. I put my heart and soul into it for many years, and then boom, it’s all gone. It was gut-wrenching to have something taken away that I created and believed in deeply. I still had some shares, but I wasn’t part of the enterprise anymore with its mission I believe in. I wanted to continue fighting, but I felt helpless. In hindsight, it was a rich experience I can build on for the next journey. I had been working crazy hours and was very tired. I didn’t have a personal life and needed more balance. To regroup, I spent two years getting my MBA. That provided time for self-reflection and opportunities to interact with some of the world’s top business leaders. I realized I was still fortunate to have my health, family, and the privilege of living in a free country. These should never be taken for granted. My heart is still in entrepreneurship and biotechnology because there are so many untreatable diseases that provide opportunities to make broad impact. Chan was a victim of his own success. Yet for all the heartache and pain, he had an invaluable experience that has been formative on his 110
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leadership journey. He and his brother, Eugene, rejoined forces in 2007 to found Abpro, focusing on producing proteins used in life sciences. They raised $1.5 million in seed capital but have retained more than 50 percent ownership to avoid repeating the U.S. Genomics experience. Chan said he learned from these experiences “the importance of pursuing your passion to make scientific breakthroughs” but also “not to give up control to outsiders.” Unfortunately, fear of failure keeps many young leaders from jumping into opportunities like Kopp and Chan did. Ann Fudge offered a priceless point of view, noting, “Struggle and tough experiences ultimately fashion you.” Don’t worry about the challenges. Embrace them. Go through them even if they hurt. Tell yourself, there is something to be learned from this experience. You may not fully understand it now, but you will later. It’s all part of life, and life is a process of learning. Every challenging experience develops your core of inner strength, which gets you through those storms. Nothing worth doing in life is going to be easy.
Bill George is a senior fellow at Harvard Business School and former chairman and CEO of Medtronic.
Before you can lead others, you need to manage yourself By Dan McCarthy on September 24th, 2015 42inShare Before you can earn the right to lead others, you need to “manage” yourself. I know I’m not the first to use that phrase. Steven Covey wrote about it, and it’s taught in leadership programs such as those at my university.
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It’s more than just another nice, pithy little leadership motto. It’s so true! But what exactly does it mean? In plain language and practical application, it means that no one is going to follow or be inspired by someone who is an emotional train wreck, a red-hot mess and can’t punch themselves out of a paper bag without giving themselves a black eye. In addition to the mixed metaphors, here’s what managing yourself means: 1. You know who you are and how you are perceived by others. We leadership development geeks call this “awareness of self”. It’s not as easy as it sounds — most people have “blind spots” as to how they are perceived by others. We overestimate our strengths and expect to be judged by our good intentions, not by how we are really behaving and if we have insulting the hell out of somebody. In Order to improve our self-awareness, we need to stand in the mirror and see ourselves as others see us, not as how we see ourselves or want to be seen. That can only happen withfeedback. In order to get feedback, we need to seek it out, respond nondefensively and with gratitude, and then actually do something about it. 2. Develop your Emotional Intelligence. Daniel Goleman nailed it in his classic 1998 HRB article “What Makes a Leader.” When he examined the elements of emotional intelligence (self-awareness, self-regulation, motivation, empathy, and social skill) he found a direct correlation with leadership effectiveness and business results. I’d recommend taking an emotional intelligence (EI) self-assessment, or even better, an EI 360 assessment, where you ask others to rate your behaviors. The good news is, EI, unlike IQ, can be improved with understanding and practice.
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3. “Control” your emotions. Another way of saying self-regulation. Controlling your emotions doesn’t mean not being emotional – it means not letting the limbic part of your brain take over the rest of you and cause you to go on psychotic rampages. For more on how to maintain your compose, see last month’s post. 4. Develop a set of guiding principles, or core values and walk the talk. Core values could include integrity, honesty, credibility, respect for others, and humility. Great leaders are crystal clear on their values and use their values guide their behaviors and decisions. With a clear and consistent set of values, or guiding principles, leaders demonstrate consistently in their behavior and others understand where they are coming from and why. 5. Balance. By balance, I don’t just mean “work and life balance.” I mean taking care of yourself — your health, practicing mindfulness, managing your stress levels, getting enough sleep and exercise, and building meaningful relationships. We know this when we see it; we say, “you know, that Cheryl really has her %$#& together.” When you are out of balance, it affects your behavior, which affects your ability to lead others. So if you want to inspire, motivate, set direction, and make a difference in the lives of others —to lead — great! But you first need to get your own %&*$ together and learn to manage yourself. 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. He’s a regular contributor to SmartBrief and a member of the SmartBrief on Workforce Advisory Board. E-mail McCarthy. If you enjoyed this article, join SmartBrief’s e-mail list for our daily newsletter on being a better leader and communicator.
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F2F Does "disruptive innovation" need disrupting? By Globe staff OCTOBER 25, 2015
Clay Christensen explains, defends ‘disruptive innovation’ Clay Christensen's concept of disruptive innovation is being re-examined, but Christensen argues that much of the criticism is based on a misreading of his work and on the flawed notion that all innovation is disruptive. "Disruption is not a theory of everything. Most innovations that happen in the world are, in fact, not disruptive," he says. The Boston Globe (tiered subscription model) (10/24), The Boston Globe (tiered subscription model) (10/24)
Globe correspondent Jay Fitzgerald emailed Harvard Business School professor Clay Christensen several questions about his theory of disruptive innovation and recent criticisms of it, including an article publised in MIT Sloan Managment Review. Here are Christensen’s responses. Q: Have you read the MIT Sloan Management Review article and, if so, what are your thoughts on it? A: Yes, I have seen the article. When I first heard from the editor of the Sloan Management Review that there was going to be an article on disruption, I was excited because it was nice to hear of other scholars investing effort into researching disruptive innovation. I think the article had great ambitions for what it initially set out to achieve, but due to a number of flaws it ultimately fell short of those goals and the potentially useful contribution it could have made. Despite the fact that the study conducted a number of interviews for this article, I felt the rigor of their research was greatly lacking. If you look at what they actually did with their study—79 interviews on 77 industries—they essentially only interviewed one person for each industry. In contrast, during our research of the disk drive industry, for 114
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example, we interviewed over 50 industry experts and employees and read every single article written about the industry over the period of our study. When researching the steel industry, we not only interviewed over 25 industry experts and employees, but we also carefully studied industry-wide production data to understand what was happening in that industry. Overall, for each of the industries we research, we have always sought to interview multiple industry experts and executives to ensure that our research isn’t limited or biased by the personal opinion of a single interviewee. A second concern I have with the article is that it doesn’t demonstrate a thorough understanding of how disruption plays out in different industries. Our research over the years has shown that due to inherent differences between industries, the process of disruption plays out somewhat differently in each case. Going back to the steel industry, the process of disruption has taken more than 30 years for minimills to equal the revenue of the integrated mills, whereas the process of disruption took about 15 years to happen in the computer industry. Given those differences in speed alone, in addition to many other differences between the two industries, the minutiae of how disruption will occur will naturally be different. Likewise, over the years we have shown in our study of disruption in education (“Disrupting Class, 2008”) and the health care industry (“The Innovator’s Prescription,” 2008) that even though the performance metrics of non-profit organizations are focused on factors other than shareholder value, the phenomenon of disruption can still occur within those industries, but each in their own way. This kind of nuance is lacking in the SMR article. Andrew King responds to Clay Christensen
Andrew King, of Dartmouth College’s Tuck School of Business, has questioned the soundness of the theory of “disruptive innovation.”
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‘Disruptive innovation’ theory comes under scrutiny Finally, the article claims to test the usefulness of the theory of disruption, but it doesn’t actually do that. Instead, the article provides a flawed test (for the reasons mentioned above) of a different question: do the examples cited in “The Innovator’s Solution” fit the criteria of disruption innovation, as laid out in the [Sloan Management Review] article. Based on this faulty test, the article then makes a logical leap to question the usefulness of the theory. Even if one agreed with the article’s methodology (which we don’t), then one could still only claim that some of the cited examples aren’t good examples of disruption—not that the theory itself is inadequate or not useful. It’s like an instructor using an illustration to teach a math concept and someone else saying, “That isn’t a good example of the concept, so the math concept isn’t true or useful.” Q: I understand you did meet with the main author of the MIT article, Andrew King, before its publication and I understand you both agreed not to disclose details of that meeting’s discussion. But can you just generally tell me if you mutually disagreed about King’s findings and did you express that to him? A: Andy King and I met and had a good conversation about a number of things related to disruptive innovation, but he never told me about the existence of the [Sloan Management Review] article. King has always been uncomfortable with the theory. So, we talked about that. Despite some publicly critical things he has said about my research, this was the first time he actually ever met with me about my research. Q: You’ve said previously that critics of Disruptive Theory don’t seem to understand that the theory, like all theories, has gone through evolutions over the years. Can you expand on the idea that your theory and other theories evolve over time? A: Most management and scientific theories used today have evolved in some fashion from the time they were initially introduced. Our understanding of the theory of evolution, for example, is somewhat different today from when Charles Darwin first published “On the Origin of Species.” The fact that the 116
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theory of evolution has evolved over time doesn’t mean that it’s a bad theory; it just means that we’ve learned more about the phenomenon of evolution over the years and have improved the theory of evolution to account for our new knowledge. Another example from the business world is Benjamin Graham’s theory of value investing. His research and theories of investment in the 1930s and 1940s laid much of the intellectual foundation for how investors think today. As time has passed, of course we have learned more about how value investing operates, as well as its limitations, but just because our knowledge on the subject has evolved doesn’t invalidate the theory of value investing altogether or Graham’s contributions altogether – it just means we know more about it and are better off because of it. Over the last 20 years, we’ve spent hundreds and hundreds of hours with people bringing anomalies to our attention and using them to refine the theory. As a result the theory has become even more detailed and precise. For example, we’ve spent a lot of time thinking about what types of technology are required to enable disruption. This has helped us understand why disruption has occurred in some industries but not others. We now better understand the conditions under which disruption is most likely to occur, and when disruption is less likely to be a threat. But even as we have made these refinements, some have not made the effort to stay up-to-date on my research. For example, the New Yorker article last year was based on the author having only read my first book (“The Innovator’s Dilemma”) and not my subsequent research that demonstrated an improved understanding of disruption. As a result, much of the New Yorker article was based on outdated research. Q: You’ve also previously expressed some regrets about using the phrase “disruptive innovation” to describe your theory. Can you expand on that too? A: The word disruption has many connotations in the English language. I just didn’t realize how that would create such a wide misapplication of the word “disruption” into things that I never 117
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meant it to be applied to. In 1998, the Academy of Management meetings were held in Silicon Valley and the keynote speaker was Andy Grove, then Chairman of Intel. The very first slide in his presentation was about the theory of disruption. During his presentation, Grove said: “We’re not calling it ‘Disruptive Innovation,’ we’re calling it the ‘Christensen Effect.’” They were doing this to be more precise in their language, because they found the term “disruption” to be too broad and easily misapplied. I just couldn’t ever get comfortable with naming the theory after myself. But in retrospect, I wish I had had the wisdom to adopt Andy Grove’s insight and apply a different term that was even more precise and less likely to be misapplied by others. Q: Has “disruptive innovation” almost become a victim, for lack of other words, of misinterpretations and distortions by other people over the years? A: What I’ll say first is that there are some pretty spectacular success stories from individuals who have correctly sought to apply my research. Jeff Bezos, requires “The Innovator’s Solution” for their senior management team. Steve Jobs’ biographer said that the “Innovator’s Dilemma” “deeply influenced” Jobs. Southern New Hampshire University has achieved incredible growth, and their President, Paul LeBlanc, attributes much of their success to the theory. Andy Grove credits my research as having been the main impetus for Intel introducing the Celeron processor back in the 1990s, and that was a tremendous success for their company. Over the past 20 years I’ve had the opportunity to speak with hundreds of other business executives who have likewise found the core ideas of disruptive innovation helpful to their business in some way or another. But it’s true that the theory has been misunderstood and misapplied over the years, and there are some people who have a distorted view of what the research actually says and what it stands for. The New Yorker article was a clear example of this— in trying to critique disruption, the article applies the term 118
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“disruptive innovation” to things that aren’t at all disruptive – creating some clear logical problems with its own arguments. Others have used the term to describe any kind of breakthrough innovation and change within an industry, most of which, in fact, are not actually disruptive innovations. To help address this, we have an upcoming article in Harvard Business Review where we discuss a number of other specific ways in which the term “disruptive innovation” has been misapplied, often at great peril. Disruption is not a theory of everything. Most innovations that happen in the world are, in fact, not disruptive. My research on disruptive innovation explains only how the world works in a very specific set of circumstances. Q: In general, do you still stand by the theory of disruptive innovation and why? A: Of course I do. At the end of the day, the test of a theory is its usefulness, and many companies and executives have found disruption a powerful lens to help them respond to shifts in their industries.
'India's 175 gw renewable target possible' By Subhash Narayan Nov 15 2015
India for ABB is the single biggest research and development country in the world Zurich-based ABB has renewed its focus on India with an eye on the growing renewable sector that is set to add 175 gw of new capacity by 2022. The company is already the dominant equipment supplier to the renewable sector and has further strengthened its global engineering and operations centre at Chennai to evolve new Indiaspecific solutions for the sector. Pekka Tiitinen, global head, discrete automation and motion, ABB Group, told Subhash Narayan, in an interview that India’s ambitious renewable targets were not ‘mission impossible’ and with support of equipment companies and strengthening of the grid, the country would have real chance of becoming the world’s biggest solar power producer. Excerpts:
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What is your view on the 175 gw of renewable power generation that India targets by 2022? Do you think this target is unrealistic? It is not mission impossible. This requires manufacturers like us to step up our production and project development work, which goes along side increased investment in strengthening of the grid. There is no problem in increasing capacity and produce the requisite quantity of components and equipment. If this means stepping up investments, we are ready for it. Does the target to increase renewable capacity and entry of cash-rich state-owned companies eating into ABB’s market share? No, I do not think this is eating into our share. In fact, we see utilities as our customers. If I compare with what happened in Europe in renewable energy where traditional utility companies in the beginning were not exited about the renewable sector, which picked through initial government intervention, a similar development is taking place in India. First to get moving is the central government’s decision that the renewable energy sector needs to be developed. This started with utilities being asked to include a certain share of their operations from renewable. This has helped others and we see a lot of interest even from independent power producers (IPPs). Has there been a change in the way ABB is looking at India as a market? Certainly. India is a key global market for us, and this was evident in the organisation of Automation and Power World 2015 (APW) in Delhi 120
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this year. This event is happening for the second time in India after 2011. The event showcases the whole portfolio of ABB products and offers a platform for technical training of customers and introduction of new products. The event also brings ABB group’s entire management team to one location to provide them a peek into a key global market. Manufacturers in India have raised their voice against the sudden inflow of cheap Chinese equipment into the country. They have also urged the government to levy anti- dumping duty on these imports. How does ABB view the development, as the company is itself a manufacturer in India? Politically, ABB has no statements in this regard, but I can share what has happened in different parts of the world. The European Union has applied an anti-dumping barrier or penalty duty for Chinese panel producers. The same has taken place in the USA. Prime minister Narendra Modi, is expected to announce formation of a Sun Alliance, an group of 110 countries that aims to promote adoption of solar power across developing countries at the Paris climate change summit later this month. What role will companies like ABB play to see that penetration of solar power improves? What we have been doing is to focus on research and development (R&D) activities to make better products that also cost less. India for ABB is the single biggest research and development country in the world. But beyond this, we are also going for solutions that are cost effective. Our concentration is to reduce lifecycle cost of projects by providing better and more efficient products.
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What is your assessment about solar power tariff in India under bidding falling to Rs 4.63 per unit? Are projects sustainable at this level of tariff? The development in India is not unique. In reality, solar power has reached grid parity in huge areas of the world already. But in many places there is no fee to pollute the world. We should actually have a fee to pollute and this itself could help the renewable sector grow. Is the company looking at fresh acquisitions in India given the scale required to meet renewable targets? We have done quite a few acquisitions in the past years. In India, we acquired insulator operations a few years back. We are always looking and analysing all kinds of opportunities. Has the government’s decision to do away with subsidy on equipment-impacted growth of this sector? Projects are being bid now without subsidy. Subsidies exist in many places to speed up the project. Of course, when support goes less, it has an impact. We are also fighting to cut the cost of equipment. Solar power to grow in India will need storage technology. Are we getting close to having a utility scale storage solution? The next major step will actually be a more commercially feasible large-scale storage system. This large-scale storage is on its way. At a smaller level, the company is now launching a new product in India called React where there is a solar inverter plus integrated battery. subhashnarayan@mydigitalfc.com
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‘India must ensure cheap drugs for Africa’
We need to take AIDS out of isolation and look at it in a broader framework, with links to maternal and child health, says Michel Sidibe, Executive Director of UNAIDS.
Speaking on the sidelines of the India Africa Forum Summit, Michel Sidibe, Executive Director, UNAIDS, admitted to being ‘scared’ as pressure mounts on India to relax norms, allowing patent protection. In a conversation with Vidya Krishnan, Mr. Sidibe also spoke about the weakening of the global HIV/AIDS movement, the influence of the right-wing government in India on the national AIDS policy, and said that the HIV movement had become a victim of its own success. Do you think a right-wing government in India, in addition to budgetary constraints, is leading to a collapse of the national HIV/AIDS programme? India, without any doubt, needs catalytic funds from abroad but main investments needs to come from the Indian [financial] budget today. I am not running away from responsibility because we will never win against HIV if we don’t put people at the centre. If you start driving people underground, if people start hiding themselves because of their sexual orientation or drug abuse, we will never end HIV because we will not reach people. We are seeing a decline (in new infections) in almost every part of the world today, except places where people are being discriminated against due to their social status. I, personally, feel that India’s policy has been very well received globally because it has always centred around people. We need to continue to push those types of policies to be implemented.
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India’s HIV community has been vocal and well organised, but that has changed since this government came to power. You think the political environment is affecting our AIDS outreach? We are facing a global problem with HIV networks all over the world — from South Africa, where the activists took the government to court for access to treatment. All those movements against HIV are facing problems. If we are not careful, we will lose the social movement which could help us to work towards Sustainable Development Goals (SDGs). If we want to have a people-centred approach in the future, we need to start thinking of health as inclusive of sanitation and climate, and we need a social movement. We need people at the grassroots, to be able to ask for social change and fight for their rights. That movement should not die. I am scared that from Soweto to New Delhi to Mumbai, we are seeing the HIV movement weaken. Why are leading global voices, such as yours, silent on this? We are victims of our success. For a long time, people were dying, hospitals were full of sick people. We did not have drugs and we did not know what to do. Today, we are seeing this complacency setting in everywhere. In some way we are victims of our own success. We need to take AIDS out of isolation. AIDS needs to be looked at in a broader framework — with links to cervical cancer, maternal and child health and to broader social movements, non-communicable diseases, prices of Hepatitis-C drugs. The drug costs $84,000 — how will we pay for African HIV patients who also have Hepatitis-C? Are you worried about what is happening in India given the current government’s stand on the extant global intellectual property regime? I am scared for the simple reason that India has been one of the first countries to demonstrate solidarity with people without options, and who have been left behind. India has been able to use all the flexibilities under TRIPS to deliver affordable generic drugs. Thanks 124
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to India, we have been able to save more than 10.5 million African lives. I am convinced that we are at a particular moment where we are gunning for ending AIDS. We have nearly 15 million people in Africa who need treatment but don’t have treatment today. Without India’s support, this will mean a collapse of all the investment made in these years. So, I am scared to lose all the investments made during the last 40 years. What happens if India shifts position and tightens its stand on pharmaceutical patents? We need to ensure that whatever mechanism will be put in place, India will continue to protect TRIPS flexibilities by continuing to make sure access to affordable and quality medicines, which will not be compromised in the new regulatory framework. If we lose those, we are losing people. I raised our concerns with the Health Minister. If it happens without any transitory measure, may be a 10-year framework, it will result in disaster for the people in Africa. The dialogue with the Indian government is happening under the looming shadow of various trade dialogues with the developed world. Does that worry you? The bottom line is very clear — the right to health needs to be protected. To protect the rights of the millions of people who are deprived, we should not accept any treaty or any new mechanism which will not help Africa in the transition period to continue to move towards universal health coverage. It means making everyone equal — to protect the right of the poor to access medicine. vidya.krishnan@thehindu.co.in
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