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December 2015

CONTENTS
OIL, GAS & ENERGY: NEWS & VIEWS

Editorial Note
Editors Choice
10 Reasons Why Your Strategy Isnt Working
Scientists develop new reusable polymer to purify
water in seconds
Top Board Priorities for 2016

Editor's Pick

Why don't gas prices fall?

Who benefits from lower oil prices?
COP21 Climate Deal: Whats Next for Business
5 EHS, Quality Management Predictions for 2016
HR technology innovation brings employee
engagement to the fore

IndiScan
Telecom Towers in India Switching to Hydrogen
Fuel Cells
Indian Oil Corporation to invest Rs 1.75 lakh cr in
expansion projects
Sweeter gas pricing likely to spur search
Cleaning up coal
IOC gets regulators nod for Ennore LNG pipeline
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December 2015

 BPCL commissions Rs 1,419-cr crude distillation

unit
ONGC to invest Rs 3500 crore for developing 3 CBM
blocks
Minister of State(I/c), MoP&NG launches LPG
emergency helpline and declares 2016 as the Year
of the LPG consumer
Cheaper LNG: Renegotiated Ras gas

GlobeScan

Dow Chemicals in merger talks with DuPont

ConocoPhillips exits Russia
Rig count drops as drillers pull back production
Enterprise says the first shipment of export crude
will sail from Houston
Iran bracing for $30 oil
Jacobs as global engineering partner
Indonesia announces new policy allowing private
sector to build refineries
Nigeria to revamp refineries for greater efficiency
before deciding on sale
Shell cuts 2016 spending plans by $2 billion in
preparation for BG deal

TrendScan
Fracking research collaborative cuts across state
lines
Shale gas hit a few peaks in 2015, but drillers mostly
pulled back
OIL AT 11-YEAR LOW
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December 2015

 Revises U.S. shale durability upward

Downplay new role of US light oil
`Global M&A deals hit record high in 2015 at $4.86
trillion

TechScan
Progressive Water Treatment System Begins
Operation at Texas Refinery
CB&I ANNOUNCES STARTUP OF SOLID-ACIDCATALYST ALKYLATION UNIT
Theoretical Screening Good Sorbents for CO2
Separation
Life cycle assessment of nanocellulose-reinforced
advanced fibre composites
Rechargeable paper sheets could help rewrite the
book on electricity storage
LEDs Should Be an Essential Part of Efficiency Plan
Pushing Hydrogen, Fuel Cell Research
Scientists seek more data on existing water in shale
formations
High Pressure Reactors for Research Labs
Software for Administration of FT-NIR Spectrometer
Networks
New Reusable Polymer that can clean water

ALTERNATIVE & RENEWABLE ENERGY

Right Time
Combining Fuel Cells with Solar for Telecom Pilot
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December 2015

 In the shadows: Domestic solar power developers

feel the heat
Shell to build biofuels demonstration plant in India

HSE, Climate Change & Sustainability

Attention Sustainability Executives : Who has been
your best internal ally?
Cyprus Water Crisis Shows Climate Change Is Here
and Businesses Must
Transforming a Childs Life With Glasses
COP21: 114 Companies Set Science-Based
Emissions Targets, Business Climate Tool
Launched
Kellogg Pledges to Slash Operations Emissions
65% by 2050By: Karen Henry
COP21: Strong Climate Policy Leads to Lower
Business Costs, CEOs SayBy: Jessica Lyons
Hardcastle, Dec4, 2015
Unilever: Eco-Efficiency Saves $438 Million
VF Corp: $25 Million Savings on Low-Carbon
Initiatives
Mars: Clean Energy Cuts Electricity Costs
EcoVadis: Target Your Supply Chain
Arizona Chemical Begins Construction on 100%
Recycled Asphalt Bike Lane
Your Office Is Too Cold. Or Too Hot. But Science
Wants to Help
Toyota Surpasses Water Reduction GoalBy: Karen
Toyota Targets Zero Carbon Emissions from Vehicle
Lifecycle, Plants by 2050
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December 2015

 $16.5t required to combat pollution

After climate agreement, world faces a carbon diet
Energy Efficiency Goal for 2016: Bridge the
Knowledge Gap
Business School Students Want to Work For
Companies Taking Action on Climate Change
Roofs over Guangzhou Can Reduce Heat Wave
Temps

F2F
India likely to push oil demand growth: IEA
What Have the Past 30 Years Taught Us About
Managing Risk?
Zero waste: An attainable goal?

BookScan
What Your CEO Is Reading: The Case for
Philanthrocapitalism; Better Negotiating Through
Power Poses; Santas CIO

The Banyan Tree

Good strategy requires people asking tough
questions
10 Things We Know About People Analytics

Petrotech Activities
You Said It
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December 2015

Editorial Note
Dear Patron of Petrotech,
The year 2015 ended with a happy note at COP 21 in Paris, with
the world broadly agreeing for putting themselves on carbon diet,
with collective objective of arrest global warming.
In December 2015, nearly 200 nations across the world approved
a first-of-its-kind universal agreement to wean Earth off fossil fuels
and slow down global warming.
The objective of the agreement is to make sure that the rise in
Earths temperature stays well below 2 degrees Celsius, and to
pursue efforts to limit the temperature rise to 1.5 Celsius.
Temperatures, however, have already increased by about 1.1
degrees since preindustrial times.
The big question is how we do it, when the scientists, who
analyzed the pledges made by nations so far to cut greenhouse
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December 2015

gases, believe emissions will be reduced only about half the

amount necessary to get to the goal. It may call for to target for a
Zero emission World. Time is running out the northern countries
had warmest Christmas this year, and India too had its share of
untimely and unprecedented rains in 2015 and warmer winter.
The New Year 2016 started on a good note of crude oil becoming
cheaper than mineral water. At R 12 / liter crude oil 20 % cheaper
than mineral water, we buy at R 15/ liter, and the trend remains
southwards. With sanctions on Iran having been lifted, the oil
prices do not seems to have yet bottomed out. Best is yet to
come?
It is certainly good news for oil importing countries like ours and
OMCs, but we can also see its effect on the upstream companies
and other commodities, and uncertainties it has led to in the oil
driven world economy. Globally, this trend and its effect has been
a topic of primetime discussion and more is in store as the year
unfolds.
Both of these developments offer great opportunity for reworking
our strategies for ensuring energy security and sustainability.
With the finalization of dates for hosting Petrotech-2016 on 5-7
December, related activities have been rolled out, with calling of
papers for presentation in this biennial international conference
and exhibition. You may like to send abstract of your papers on
www.petrotech.in or contact Dr G S Kapur (kapurgs@indianoil.in).
With best wishes for a Happy New Year and regards,
(Anand Kumar)
Let us work for Zero Waste, Zero Emission:
"As long as we view waste as trash it will end up in the
landfill. We must recognize it as valuable material."
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December 2015

That may involve something called negative emissions. Thats

when the world technology and nature combined take out
more carbon dioxide from the air than humanity puts in.

Is Zero Waste attainable? And if so, how do we get there?

HOLLY ELMORE: I do think zero waste is attainable. To get to
zero waste, you must recognize which materials have value. Set
up a system to recycle it. And reduce
If you are a corporation, begin for instance by asking yourself, are
you printing more than you have to?
Then you replace.
An example: with shipments, tell companies you purchase from
you want recyclable packaging. There is power in consumer
demand. Once you have reduced and replaced, separate
valuable material and find a local recycling option.

December 2015

Editors Choice
10 Reasons Why Your Strategy Isnt Working
Todd Garretson
Source: http://circlemakers.co/blog/10-reasons-why-your-strategyisnt-working/

Recently, two statistics caught my eye. Not only do they signal

missed opportunity and blatant underperformance, but more
importantly, they reveal a door that is wide open for your
organization to make your move.
Kaplan and Norton reports that 90% of organizations fail to
successfully implement their strategies. Even more, the
Economist Intelligence Unit shares that organizations realize just
60% of the potential value of their strategies.

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The surface conclusion would assume the organizations cited are

simply failing to adequately mobilize their people to deliver
results. Be very careful with that assumption. Theres a whole
litany of reasons for poor execution, of which several can be
traced back to the decisions and choices made during strategy
design.
As an advisor to executive teams leading organizations of all
sizes, I am frequently exposed to frustrations, obstacles and traps
executive teams face when it comes to getting strategy right. And
now (September and October) is the time to get it right well in
advance of 2016.
To help you prepare for your best results ever, Ive put together a
list outlining 10 questions you can use to get beneath
underperformance and identify the gaps in your strategy
approach.
In no specific order, they are as follows:
1. Do You Have A Strategy Or A Strategic Plan?
Leaders that fall into this particular trap are guilty of running the
engines and propellers before theyve decided where to sail the
ship. Putting the tactical in front of the strategy can lead to
disaster. The ship ends up lost at sea and full of frustrated
sailors.
Your strategy should define a strong value proposition for your
target market, the distinctive capabilities you will activate to win in
that market, and a picture of how you need to organize your
business to make it happen. Here are 4 great questions to get
you started down this path.
Your strategic plan should feel like an instruction manual for your
overall strategy. Essentially, it should tell you the specific, tactical
action steps and plans you will deploy to bring your strategy to
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life. It turns the strategy into specific actions. For a great

strategic planning template, click here.
2. Have You Put Strategy Before Structure?
Many organizations insist on developing a strategy that works for
their organization, instead of building an organization that works
for their strategy. Do you see the BIG difference?
With football season in gear, journey across the NFL to read
stories of new coaches bringing new systems and strategies to
their respective teams. The new strategies often require unique
talents and skills in specific positions to which the management
needs to acquire in order to be successful. To think they might be
able to execute a new system with the exact same talent and skill
at every position is insanity.
Are you bold enough to make the change thats needed to deliver
the strategy? People decisions are difficult decisions. In order to
release the full potential of the organization in pursuit of the new
strategy, it will require change. A number of the organizations
sitting in the belly of those statistics are not making tough
decisions.
3. Who Is Accountable for Growth?
Business leaders need to find a way to keep growth at the
forefront of the organization and ultimately, from slipping into the
shadows of the day-to-day priorities. The current approach to
strategy typically tasks functional leaders with figuring out where
and how the organization will grow. While this has served well in
the past, the fast moving external environment coupled with
unstable economic conditions and rapid entrepreneurial disruption
demands a new approach.
Organizations need to establish single accountability for driving a
cohesive approach to strategy and growing the business
unencumbered by political lines, territories or self-promotion. For
a few ideas on how to do this in your organization,
read The Secret Growth Strategy of the Ant Colony.
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4. Have You Made New Discoveries?

One of the biggest reasons for developing a strategy is a new
discovery. Every great strategy, business, or billion-dollar start-up
success is traced back to a big learning or unearthing of
opportunity. Whether it be a new product, service, technology, or
experience, someone spent untold hours slaving over the target
market to understand their fits, needs and unexpressed wants.
If on-going learning and discovery is not part of the way you
operate your business, it needs to be. Or, you run big risk in
being out-discovered. With the data capture capability thats
available through CRM and other real-time feedback platforms,
organize your business to get intelligent. For more on how
discovery drives the right strategy choice, read Choosing The
Right Growth Strategy For Your Business.
Big discovery is the fuel for strategy.
What Capability Will You Add Or Leverage?
They key word here is capability. Too often, I see cases where
leadership has identified opportunity to win share in existing and
new markets without having done enough of the necessary
research to understand the capabilities they need to win.
Whether its leveraging an existing core capability or building a
new one, business leaders need to spend more time on this topic
as it relates to strategy. Tactical efforts are falling short and
failing altogether as companies try to expand their products and
services only to discover that they dont have the firepower to get
the job done.
6. Are Your Leaders Creating More Leaders?
Perhaps the widest capability gap in any organization in our
present day is talent. Stated further, the inability to identify and
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develop future leadership in organizations is pervasive. The

Graying of Corporate America (40% of top leadership headed to
retirement) will lead to a lot of vacant seats on the organizational
chart are you ready?
This runs way deeper than the annual, high potential meeting that
you started a few years ago. Its a mindset or DNA of the
organization that you need to hire-to. In other words, you should
only be hiring leaders into your organization who can show you or
point to specific leaders (by name) who theyve developed and
created in previous roles.
Of the entire list here, this is the one that gets the most talk and
the littlest action. Organizations that consistently perform at a
high-level inherently believe, with every fiber of their being, that
the role of a leader is to create more leaders.
If you or someone you know is a strong task-oriented manager
who has recently been moved into a leadership role where he /
she will be called to develop people, then they need to attend
the Remarkable Leadership Program.
7. Where Will You Place Your Bets?
Leaders are spreading resources too thinly across their portfolio
of products or services instead of prioritizing and placing bets on
a few to go big and deep. Ultimately, this leads to a vicious cycle
of creating lots of little initiatives to grow your entire portfolio. As
you continue to chase, you fall further behind the curve in core
businesses that represent a large percentage of your profit.
In your race to be meaningful to all, you risk being everything to a
few.
8. Is Personal Growth On Your Radar?
Realizing that lack of growth in our personal lives ultimately
impedes professional growth, and then doing something about it,
could be the trigger point for leaders to start building the kind of
cultures that perform consistently. The easy way out is to assume
that everyone is accountable for owning their personal growth.
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The research in this area is compelling and worth your time not
matter what size organization you lead.
At CircleMakers, were devoting time and resources to personal
growth topics, as we believe it is the top limiting factor to strong
and consistent performance. However, if organizations even have
it on their radar, its last on the list. Weve recently launched
Project 24, an initiative designed to bring awareness and best
practices to personal growth challenges leaders face. You can
learn more about Project 24 HERE.
9. Are You Simultaneously Running And Building?
The self-assessment version of this question is worded slightly
different does running your business get in the way of building
your business? Within your strategy process, you need to be
having open discussions about the best methods to run and build
at the same time. Every company should be chasing a market
and creating a new market simultaneously in fact, its the secret
recipe for sustainable growth. Becoming an organization that can
create, incubate and build new ventures is not easy, but certainly
an attribute that will be table stakes in the future.
10. Do You Possess A High-Performance Team?
There is no question that designing a high performance team is
vital to your organizations ability to deliver beautiful, resultsgenerating strategy. However, its far too easy for leaders to be
lulled into organizational silos, waiting too long to make necessary
people changes, and missing opportunities to build a team
instead of just filling positions. Every leader has experienced
themselves stuck in one or all of these ruts at sometime in their
career. For more encouragement and ideas on building a highperformance team, check out these 4 traits.
In Closing
Now that that youre in the final stretch of 2015, have you done a
thorough, top-to-bottom progress evaluation on your strategy and
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results? Where are the big misses? Whats behind or

underneath the numbers? What needs to be done differently?
Which of these challenges will you take into consideration as you
plan for 2016? Pick one or two to bring to your next executive
whiteboard session.
The door is wide open.
Time to make your move.

Scientists develop new reusable polymer to purify

water in seconds
NEW YORK, DEC 26:
Scientists have developed a new reusable polymer that can
remove pollutants from flowing water within seconds, just like air
fresheners trap invisible air pollutants at home and remove
unwanted odours.
Researchers have used the same material found in air
fresheners, cyclodextrin, to develop a technique that could
revolutionise the water-purification industry.
The team, led by Will Dichtel, associate professor at Cornell
University in US, developed a porous form of cyclodextrin that has
displayed uptake of pollutants through adsorption at rates vastly
superior to traditional activated carbon 200 times greater in
some cases.
Activated carbons
Activated carbons have the advantage of larger surface area than
previous polymers made from cyclodextrin but they do not bind
pollutants as strongly as cyclodextrin.
What we did is make the first high-surface-area material made of
cyclodextrin combining some of the advantages of the activated
carbon with the inherent advantages of the cyclodextrin, Dichtel
said.
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These materials will remove pollutants in seconds, as the water

flows by, he said.
The cyclodextrin-containing polymer features easier, cheaper
regeneration, so it can be reused many times with no observed
loss in performance.
Recyclability
Recyclability is another advantage of the cyclodextrin polymer,
Dichtel said. Whereas activated carbon filters must undergo
intense heat-treating for regeneration, cyclodextrin filters could be
washed at room temperature with methanol or ethanol.
The findings were published in the journal Nature.
(This article was published on December 26, 2015)

Top Board Priorities for 2016

By Ruby Sharma & Ann Yerger,
EY Center for Board Matters, Ernst & Young LLP,
December 21, 2015
Ruby Sharma is a principal and Ann Yerger is an executive
director at the EY Center for Board Matters at Ernst & Young
LLP. The following post is based on a report from the EY Center
for Board Matters, available here.
Organizations are faced with many critical challengesincluding
rapidly changing technology, environmental risks, regulatory and
legal requirements, major shifts in markets, ethical breaches, and
big data and cybersecurity issuesthat threaten their long-term
success and sustainability. Directors have a unique opportunity to
step forward and proactively oversee the development and
implementation of effective, long-term strategies responsive to
these challenges.

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As a result, the trend of expanding board agendas will continue in

2016. As boards balance multiple priorities, most will heighten
their focus on the following:

Board effectiveness, composition and refreshment

Investor and stakeholder engagement
Cybersecurity preparedness
Oversight of Enterprise Risk Management (ERM)
Oversight of talent risk management

Board effectiveness, composition and refreshment

It is a recurring question for directors and their organizations
how do good boards become great? Improving board
effectiveness, making sure boards maintain the right combination
of skills and experience, and enhancing transparency and
accountability will characterize exceptional boards in 2016.
Performing robust and thoughtful board self-assessments, with
consideration of peer and individual director evaluations, will be
critical for board effectiveness.
Effective boards will balance the viewpoints of tenured directors
with the fresh perspectives of new members. These boards will
make certain that the appropriate breadth of industry expertise is
represented in the boardroom and that the composition of the
board reflects the increasing convergence of sectors. Boards will
seek directors with a greater diversity of knowledge and
experience in order to match boardroom talents with evolving
business strategies reflective of the interconnected global
economic environment and technological and demographic
changes.
We recently found that among Fortune 100 companies with
retirement-age policies, 19% of directorships are held by
individuals within five years of reaching the boards designated
retirement age. [1] Since a significant number of directors are
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currently approaching retirement, boards will have an

opportunity to review their oversight needs and engage in
strategic director succession planning in the coming year.
Investor and stakeholder engagement
The day of the passive investor is behind us. Investors around the
globe are increasingly asking tough questions on the issues that
matter most to them. They want to understand the boards role in
the oversight of enterprise risk, including emerging risks, strategy
and execution. They want to know if boards are robustly
evaluating their own performance and confirming that the right
portfolio of skill sets aligned with company strategies are
represented in the boardroom.
Investors will continue to seek meaningful communications and
engagement with board leadership and committee chairs on
issues such as company strategy, board composition (including
diversity), director tenure, succession planning and executive
compensation.
As a result, effective communication is emerging as a growing
responsibility of corporate directors. Boards will focus on
shareholder communication plans to ensure first, that required
filings are not merely compliance documents but effective
communication tools, and second, that designated directors are
fully prepared to engage directly with investors on appropriate
governance matters such as oversight of strategy, disclosure
effectiveness and board refreshment processes.
Cybersecurity
The advent of new technologies and an ecosystem of digital
interconnectedness significantly increase an organizations
exposure to theft of its most valuable assets, which include
confidential customer data and vital information such as
intellectual property and strategic blueprints. Preparedness is the
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first line of defense. Yet only 7% of organizations claim to have a

robust incident response program that includes third parties and
law enforcement and is integrated with their broader threat and
vulnerability management function. [2]
The emphasis for boards will be to make sure that companies are
shoring up critical infrastructure, enhancing crisis response and
mapping a strategy that emphasizes a good balance of preventive
and responsive tactics. This means being able to efficiently guide
an organization through the layers of risks and threats, and
boards should appropriately set the risk appetite and be prepared
to swing into decisive action to handle any incidents.
Boards accept that the risk of a cyber breach needs to be
continually managed, and adequate preparation that enables an
organization to get back up and running quickly following an
attack will be a key consideration for boards.
Knowing where the vulnerabilities lie is vital. Boards will continue
to confirm that companies have a system and backup plan that
facilitates data migration in a crisis. They will also need to make
sure that their organizations firm up relationships with federal
investigating authorities, who can move swiftly in response to
attacks and minimize exposure and damage.
Oversight of ERM
As boards continue to focus on their roles in long-term value
creation, effective oversight of ERM will be high on their agendas.
Oversight of ERM will comprise operational, financial, strategic,
compliance and reputational risks.
Board oversight will entail setting the tone at the top
by promoting, assessing and monitoring risk culture and appetite.
Oversight of talent risk management
Boards recognize the crucial role they play in human capital
matters as they relate to overseeing the management of three key
risks: culture, talent and strategy. The business reason is
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compelling since talent and culture are arguably the biggest

drivers of innovation, growth and the ability to outperform the
competition. In recent conversations we have had with board
directors, three out of four said that human capital strategy will be
one of the top emerging risks that boards will face in 2016.
Boards will play an important role in ensuring that leadership
stays focused on building the right talent strategy. Boards will
focus on how to prepare for generational transitions in their
organizations and anticipate the changing dynamics at the
boardroom and management levels. As new and complex
opportunities and risks emerge with evolving strategies and
growth markets, having the right people to execute on strategies
is an important imperative for success.
For many boards, talent management remains a big challenge.
Failure to understand and mitigate human capital risks and
complexities will impact strategy and value creation.

Editors Pick
Why don't gas prices fall?
By STEVE AUSTIN for OIL-PRICE.NET, 2015
Since the price of crude oil started to tumble in June 2014, almost
$80 has been wiped off the cost of a barrel of oil from the peak to
the trough of oil market indices.
As a barrel of oil represents 42 gallons, that price fall works out at
about $1.60 per gallon. However, the pump price of a gallon of
gasoline only decreased by $1.20. Why?
Oil-price.net investigates the reasons why drivers aren't benefiting
from lower crude oil prices. Economic concepts of the inelasticity
of demand, the price the market will bear and supply shortages all
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seem to have played a role in preventing gasoline prices from

falling in line with crude oil.
Crude Oil Indices
Crude oil price changes are registered by two indices. The West
Texas Intermediate (WTI) is used by the North American oil
industry and the Brent Crude Index is used by the rest of the
world.
Generally the Brent Crude price is a little higher than the WTI. US
oil refiners deal with both the WTI and the Brent price because
they buy crude oil from the US and Canada and also from other
regions in the world, such as the Middle East. However, both
indices have fallen sharply over the last year, which means that
crude oil has gotten cheaper. Historically, the price of gas at the
pump tends to move in the same direction as the Brent price,
rather than the WTI index.
Price Changes
The WTI oil price peaked at $105 per barrel in June 2014 and fell
to a low of $44 at the end of January 2015. The Brent crude oil
price peaked and troughed on the same dates, falling from a high
of $112 per barrel to a low of $45 per barrel in January 2015. The
price didn't fall in a straight line, but the overall trend continued
downward.
Both indices rallied a little, fell back and then peaked again at $66
for Brent and $61 for the WTI in June 2015. The price has fallen
again since and analysts including oi-price.net expect the two
indices will remain between the $45 and $60 range until the end
of the year. There aren't any prospects of the price of crude oil
rising until 2016.
Price Justification
A retailer may argue that price falls do not feed through to the
consumer immediately because stock bought at high prices has to
be sold off and lower prices will only kick in once the retailer is
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able to restock at cheaper rates. However, the price has been

considerably lower than the peak for the entirety of the first half of
2015 and pump prices haven't reflected the new normal of lower
crude prices.
Another argument a retailer might give for not adjusting prices
lower lies with the expected duration of lower prices. If a dip in the
supply price for a commodity is only expected to last a short
while, the retailer may justifiably claim that it isn't worth adjusting
all prices lower, only to hike them back up again when the price
anomaly ends. However, the low crude oil price has become
embedded long enough for this justification to be invalidated.
The fact is that the price of gasoline at the pump has fallen over
the past six months, but not by as much as the crude oil indexes.
Gas Pump Prices
Although gas companies passed some of the early falls in the
price of fuel to their customers, they exploited the rise in the price
of crude oil in February to increase pump prices again. In fact gas
prices rose back in March above their mid-December levels, even
though the price of a barrel of crude on the Brent index was $8
cheaper, at a rate of five times the rate at which crude oil prices
were rising. The price of crude then took a downward turn after
that date, while the pump price of gasoline and diesel continued
to rise.
The highest historical average pump price for gasoline this
century occurred in July 2008, when the price hit $4.06 per gallon.
The peak in 2014, occurred in June of that year, at $3.69. Pump
prices fell along with the fall in crude oil prices, bottoming out in
January 2015 at a price of $2.11 per gallon for gasoline. Brent
peaked at $62 in February 2015 and the average US pump price
for gasoline rose to $2.21 per gallon. However, as the Brent crude
index fell back in March, the pump price continued to rise. By May
2015 it had reached $2.71 per gallon, while the Brent crude
recovered a little to $65 per barrel.
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The pump price of gasoline has risen with the price of crude
during 2015, but did not fall with the intervening dips in the Brent
crude index during the year.
Confounding Factors
The pump price of gasoline disconnected from the Brent crude
index price of oil in March 2015. While crude oil prices fell,
gasoline pump prices rose. Here are some reasons why:
Crude oil gets turned into gasoline by refineries and although the
demand from gasoline users should drive the price, the refineries
can distort the price of both crude oil and gasoline. A number of
US oil refineries suffered industrial action in February, cutting their
output right at the time that New England, America's most densely
populated region, encountered freezing temperatures.
The effects of the strike caused a rise in the price of heating oil in
late February and a similar rise in automotive fuel prices at the
beginning of March.
Prices are set by supply and demand. The crude oil market is
currently over-supplied, which depresses the price. Reduced
throughput at America's refineries caused the supply of heating
oil, gasoline and diesel to fall below demand, causing the prices
to rise.
When refinery capacity is reduced, demand for crude oil falls and
oil producers have to send their output to storage. This year's
strike action occurred at a time when the world crude oil
production already exceeded demand, so that put pressure on the
price of storage and cut the price of oil for immediate delivery
because no one had any space left to hold it.
Lower production occurred just at the time when demand for oil
from domestic heating and power stations was at its greatest,
causing a shortfall in supply that also impacted the gasoline
market. Where there are shortages, prices will rise. So strike
action at US refineries caused crude oil prices to fall and gasoline
pump prices to rise.
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Refinery Capacity
The effects of refinery shut downs are becoming progressively
more severe each year because refining capacity in the USA
hasn't expanded over the past decade in line with economic
activity. This gradual tightening of capacity gives any closure
greater impact on the price of gasoline.
The main reason the oil companies are not expanding their
facilities is that idle refineries represent a lot of capital tied up
without producing any income. By setting their throughput
capabilities at maximum demand without room for outages, the oil
industry is able to improve utilization, increase return on
investment and maximize profits. This strategy means that
refineries become bottlenecks during maintenance periods.
The green consumer and happy homeowner compound the
problems of refinery shortages. The investment, planning and
inquiry phases of building new refineries are becoming
increasingly fraught. Everyone wants new refineries built ... just in
someone else's backyard. Environmental opposition makes the
siting of new refineries close to population centers with high
demand for gasolinedifficult to achieve. So higher gas prices are a
sort of a tax. They are the price consumer pays in order to enjoy a
cleaner environment. US drivers could be paying less for gas, but
in reality they are perfectly happy paying a few cents more for gas
in order to have less environmental hazards around their homes,
and fewer birth defects than China.
Scheduled Maintenance
You may not realize it, but without switching brands or grades,
you put a different blend of gasoline in your car in the summer to
the blend you drive on in the winter. Refineries produce a winter
blend and a summer blend of gasoline. Peak heating oil season
runs through to February and peak driving season picks up from
June, so oil refineries schedule their change over to occur
between March and May.
25

December 2015

The refineries don't all switch over at the same time. Some will
start the switch in March, others leave it until May. However, each
refinery will experience a partial or total shutdown during the
turnaround. This results in less gasoline available on the market,
and, therefore, higher pump prices.
The rise in gasoline pump prices happens to varying degrees
every spring. The peak of this maintenance-fueled price rise
usually occurs between May 9 and May 24. The rise is usually
more severe if unexpected factors occur, and this year had two of
those surprises - an exceptionally cold winter and a worker's
strike ran gasoline stocks low.
The turnaround from winter blend to summer blend is very
expensive and complicated. They are often scheduled about two
years in advance and the refineries do not postpone or cancel
their plans because of price-exacerbating factors.
In 2009, the price of gasoline rose by 42.2 percent between
February 2 and a peak on June 22. In 2010 the rise was only 9.2
percent measured from February 1 to its peak on May 10. Lower
refinery capacity accounts for the price rises that occurred from
March to May. Crude oil prices started to fall again at the
beginning of July, so, now that the turnaround season has
finished, gasoline prices should start to fall again.
Other Pricing Factors
By our calculations, 51 per cent of the price you pay for gasoline
derives from the price of the crude oil that went into making that
fuel. The refining process accounts for 23 per cent of the gas
gallon price, while transport and retail margins add 8 per cent and
taxes account for 18 per cent of the price.
Those figures are averaged across the country, however.
Different states levy different levels of tax and different locations
cost more for premises and so add on costs for the retailer. So
26

December 2015

those living in San Francisco pay more per gallon than people
who live in Austin.
Prospects
As previously mentioned, our oil price analysts do not foresee any
major rise in the price of crude oil right through to the end of the
year. So far this year, the price of a barrel of crude on the Brent
index has gone from a low of $45 in January, up to around $60
through February and March, down to $52 in mid-March and up to
around $65 through May and early June. The price fell again
down towards $55 in early July.
When analysts say they expect crude oil to be at $45 to $50 by
the end of the year, that doesn't mean that prices will fall
constantly from $55 to $45 in a straight line over the second half
of 2015. Market sentiment, or panic, can temporarily raise crude
prices above that line. Gluts and storage shortages will knock the
price below that line.
Gas stations are unlikely to lower and raise their prices exactly in
synch with the crude oil price. They tend to bridge over the dips,
which means they leave their prices where they are for a few
weeks to see whether the price of crude will rise. If it doesn't, they
may shift their prices downward.
Despite the price smoothing performed by gas stations, the
general trend in gas prices will be lower over the second half of
2015. Thus, the temporary price hike caused by lower refinery
capacity will age out of the price and reappear in March of 2016.
Demand for gasoline is relatively inelastic, which means rising
prices don't tend to lower sales turnover. Consumers are happy
with any price fall, no matter how small, but resent price rises.
This factor makes gasoline retailers more likely to push up prices
quickly with any increase in costs to get the pain over with quickly.
They squeeze as much kudos from their customers with any
supply price decrease by reducing pump prices in smaller,
graduated steps. In other words, people are charged what they
are willing to pay for gasoline, not what it costs.
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December 2015

Who benefits from lower oil prices?

By STEVE AUSTIN for OIL-PRICE.NET, 2015
Lower fuel prices are great for the consumer, but we know that
not all of the cost saving of lower crude oil and gas prices have
been passed on to the general public. Oil and gas refiners
prosper from lower oil prices. Like the rest of the oil industry,
refiners' revenues are down, but their profit margins are up
significantly.
Refiners are using lower crude prices to widen their cut of the
pump price of oil. In other words, the lower price of oil is not
entirely passed down to consumers at the pump, instead the
difference is enabling refiners to increase their profits.
Price Falls
Crude oil prices have been plummeting since June 2014. The
initial
fall
was
rapid
and
unexpected.
This
was
because production grew faster than projections and demand
deteriorated faster than expected, resulting in an excess of oil for
sale in the world. Periodic rumor-fuelled rallies in the market since
June 2014 have proved to be the result of wishful thinking. Recent
events, such as the fall in Chinese growth projections and the end
of sanctions against Iran, have given economists reason to
downgrade their expectations for crude oil prices.
The lurches in the consensus of opinion for demand for oil over
the past year have caused temporary opportunities for price rises
at the gas pump. The retail gas industry tends to raise prices
quickly when crude prices rise and drop prices slowly when crude
prices fall. This variable speed of price movements has given the
refineries and the gas stations opportunities to extend their profit
margins.
The fall in the price of crude oil from June 2014 to June 2015 was
around $80 per barrel. This shaved $1.60 off the cost of a gallon
of gasoline. However, the pump price only fell by $1.20 during
that period.
28

December 2015

The Losers
High prices for crude oil from 2010 to 2014 gave great incentives
to US explorers to invest in locating new sources of oil and gas.
The practice of hydraulic fracturing rapidly expanded the USA's oil
production and contributed to the current glut. High sales prices
meant that fracking companies could bowl into town, rich with
easy money. They sprayed money around the communities they
moved into and offered high prices for mineral rights and site
access. Those gold rush bonanza days ended in June 2014. The
price fall in crude oil did not squeeze frackers out of business,
they caused them to be a lot more careful with their money.
Frackers learned to extract more oil from each rig, thus reducing
the start up overhead costs of each well. The increased tightness
of financing meant the idea of spending millions to get access and
buy friends was off the table. A lot of the largesse of fracking has
been wiped off the books and so local communities in the vicinity
of fracking plays benefit a lot less from a new well, than those
lucky citizens reaped back in 2012 and 2013.
Fewer rigs mean fewer workers. It also means that less
equipment needs to be sold. Thus, oil service companies make
fewer sales, and also require fewer employees to maintain their
reduced output. Employment in the oil industry has suffered as
plans get put off and exploration is cut back. As examples of this
phenomenon, consider Schlumberger, which is the largest oilfield
service company in the world. Schlumberger has cut its workforce
by 9,000 this year. Weatherford International cut their payroll from
60,000 staff to 46,000 in 2014 and then made a further 5,000
employees redundant in 2015.
By squeezing margins and employing new technology, US
frackers have been able to stay in the game. Their success at
maintaining profitability at lower market prices has put pressure
on conventional producers around the world to reduce profits and
29

December 2015

slash costs. So, although no producers have gone bust yet, their
drive to survive has returned a lot of oil workers to the
employment lines.
Unemployment reduces the wages of employed oil workers,
because there are plenty of other who would fill the shoes of
specialists who walk off site rather than reducing their fees. Thus,
the oil industry's workforce has become a major loser in the low
crude price era.
Middle Eastern OPEC members are said to be driving the price
fall in order to squeeze out their fracking rivals. This strategy has
lost those governments the income they need to keep their
economies running with very little alternative sources of income.
They must now subsidize their governments with their foreign
currency reserves. Drawing down bank deposits means there is
less money available for banks to lend, thus squeezing credit and
reducing global economic expansion further.
As Arabian governments start to draw down their savings, they
will be forced to cut government spending. Oil producers in the
Middle East buy off their citizens' ambitions for democracy with
petrodollars. Of course when the money runs out, instability will
increase even further in those countries.
The Winners
The recorded fall in the gas pump price of $1.20 per gallon is a
definite benefit to the American consumer. Under normal
circumstances, economists would expect this saving to boost
spending on consumer goods. However, this time around, people
don't seem to be spending their gas savings on buying larger gas
guzzling vehicles. This may be because the trend towards energy
efficiency is finally starting to lodge in the American psyche.
Recent memory of economic uncertainty also seems to have
made the average American nervous about spending.
An increasing fraction of American consumers has decided to
pocket that saving and pay down debt, rather than splurging on
30

December 2015

household gadgets or luxury vacations. Therefore, families will

also be long-term winners from the crude price fall. Parents now
rate financial security over comfort spending.
By far, refiners have been the biggest winners of the crude oil
price downturn. This position is reflected in the stock valuations of
refining companies. The stock price of the refiners, Valero
Energy went from $43.76 per share in November 2014 to $70.43
in August 2015. This rise was mainly due to the company's surge
in profits. In June 2014 the business reported a profit margin of
1.68 per cent. By June 2015, that figure had risen to 5.38 per
cent. Refiner Tesoro Corporation has risen in value from $56.20
in June 2014 to $102.08 in August 2015.
As an illustration of the increased margins the refiners
experienced, figures from Total S.A. show a margin of $3.75 per
barrel in the final quarter of that year. Profitability took off through
2015 and the company reported its refining margins at $6.73 in
the first quarter and $7.36 in the second quarter.
The oil price fall was a symptom of an excess of production. As
wells kept pumping oil into a saturated market, stockholdings
rose. This resulted in a shortage of storage capacity, and so the
price of storage rocketed. Storage fees rose from 20 cents per
barrel to 80 cents by March 2015. The shares in Vopak NV, an oil
storage provider, rose by 33 per cent between August 2014 and
April 2015. Kinder Morgan rose by a similar margin and rival
storage companies also rose in value over the same period.
Is this Profiteering?
There are laws in place to protect against profiteering. These laws
prevent gas stations from overcharging for gas during crises and
natural disasters, such as tornadoes. Shouldn't they be applied?
By definition, a business can be accused of profiteering when it
raises prices during awar or emergency. Although the current oil
price is a matter of global economic importance, it cannot be
defined as a crisis or an emergency.
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December 2015

In fact the pump price for gasoline is slightly cheaper than it used
to be a year ago so the prices were not even raised. This is called
capitalism, not profiteering and is central to a free market
economy. This is the American way. If you too want to benefit
from this situation you can -- buy refiner or oil storage stocks.
Logistics
Profit derives from the gap between what it costs to produce
something and what someone is prepared to pay for that product.
No one considers himself a charlatan if he sells his home for more
than he paid for it. That profit probably came from nothing more
than the increase in the amount that buyers were prepared to pay
and not from any decoration or maintenance work performed by
the seller.
Demand for gasoline is inelastic, but supply levels can vary
widely. Shortages of crude oil cause the price of crude oil to
rise and excess production causes the price to fall. Thus, in the
current market, refineries can force the price of their raw materials
down and they do not lose sales by maintaining sale price
levels. The crude oil market is currently in oversupply, but the
automotive user can't profit fully from that price-depressing factor,
because they can't pump crude oil into their vehicles. This is the
classic formula for profit.
The intermediary sectors of the oil industry - transport refining and
tanking - usually profit most during a crude oil price downturn.
This is a common pattern noted by economists. As the
gatekeepers to the consumer market, this sector gains power
when producers need to compete to sell, and thus they are able
to force down their input costs.
Logistics companies usually integrate the functions of refining,
transport and storage, because that gives them a win-win
situation. Producers that are prepared to drop their prices will sell
their output to the refiners, who then have lower costs. Those that
32

December 2015

hold out for better prices need storage, thus the tanking divisions
of the logistics companies can raise their prices thanks to excess
demand for their services.
Oil production is slow to turn around. An oil well takes years to
plan and established shipping agreements are hard to break.
Over time, producers will reduce their output and put more effort
into finding other regions in the world where they can send their
crude oil. These activities will eventually bring supply and demand
for crude oil back into equilibrium.
Although demand for gasoline is fairly fixed, long-term changes in
the fuel market will eventually have an effect there too. The cost
of different types of fuel is a major factor when families and
businesses decide to purchase vehicles and heating systems. An
enduring lower oil price will eventually increase demand for the
product as furnaces, trucks, buses and cars get replaced. Higher
demand for gasoline puts pressure on logistics companies to
source more crude oil, which returns some power to the crude oil
producers and reduces the negotiating power of refineries.
Similarly, when demand rises against falling availability, the need
for storage falls and logistics companies have to start pricing their
services competitively in order to maintain throughput in their
high-cost facilities.
The share prices of tanking giants Vopak NV and Kinder Morgan
peaked in April 2015 and then started to fall. The excess profits to
be made from storage already seem to be petering out. The end
of the imbalance in the oil sector seems to be within view for stock
investors, so margin gains of the logistics companies will now
start to decline.
Conclusion
Different oil price conditions generate larger profits at different
points in the supply chain. This year, and for at least another year
to come, the processors, transporters and retailers have their turn
to ramp up their share of the sales price. In other years, oil
brokers make all the money and at other times oil producers can
33

December 2015

name their price. No matter which particular stakeholder has a

periodic opportunity to profit, there is one organization that will
always profit from crude oil and gasoline - the government

COP21 Climate Deal: Whats Next for Business

By: Jessica Lyons Hardcastle
Source: http://www.environmentalleader.com/2015/12/15
The worlds 195 countries signed a historic climate agreement this
weekend in Paris at COP21. And although the agreement doesnt
bind businesses to making and reporting on emissions cuts, it will
require ambitious efforts by private corporations, according to
COP21 attendees.
At COP 21 businesses showed they supported an ambitious
agreement and were ready to step up and make bold
commitments to tackle climate change, Kevin Moss global
director business center, World Resources Institute, told
Environmental Leader. These commitments ranged from rallying
behind carbon pricingand setting science-based emission
reduction targets to responsible corporate engagement in policy
and major investments in renewable energy. The momentum this
created contributed to the ambitious agreement that was reached
in Paris. In 2016 businesses need to reinforce their resolve to
lead on climate change by continuing to turn their commitments
into action.
In other words: now the real work begins for companies.
The private sector played a leading role in the climate talks. This
included commitments from more than 5,000 global companies
that together represent over $38 trillion in revenue.
Also in Paris the Science Based Targets initiative announced that
114 companies including Ikea, Coca-Cola Enterprises,
Walmart, Kellogg and Dell committed to set emissions
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December 2015

reduction targets in line with what scientists say is necessary to

keep global warming below the threshold of 2 degrees Celsius.
The Science Based Targets initiative, a joint effort of CDP, WRI,
WWF and UN Global Compact, works with companies to set
science-based emissions targets and only approves corporate
targets that meet its strict criteria.
However only 10 companies targets have been approved: CocaCola Enterprises, Dell, Enel, General Mills, Kellogg, NRG Energy,
Procter & Gamble, Sony and Thalys. In addition to the remaining
104 that have pledged to set and seek approval for their sciencebased targets, hundreds of other of companies publish annual
sustainability reports that cite emissions reduction targets
and 8,000 companies have signed the UN Global Compact, which
asks its members to address and report on a range of ESG
issues.
Reporting on this discrepancy, The Guardian says: Companies,
while eager to save money by becoming more energy efficient,
remain reluctant to spend money on low-carbon energy so long
as fossil fuels remain cheaper. Put simply, the environmental
imperatives and the short term business case are not aligned.
Plus, the Paris Agreement set the bar for climate change action
even higher, by aiming to keep global warming well below 2
degrees Celsius and striving towards 1.5 degrees Celsius above
pre-industrial levels. This will require major investments in
renewable energy and clean technology.
The climate deal sends a very strong signal to business and
investors that there is only one future direction of travel to reduce
emissions in line with a 1.5 degree pathway, said Stephanie
Pfeifer, chief executive of the Institutional Investors Group on
Climate Change, whose members manage assets valued at over
13 trillion euros, in a statement to the Washington Post. Investors
across Europe will now have the confidence to do much more to
address the risks arising from high carbon assets and to seek
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December 2015

opportunities linked to the low carbon transition already

transforming the worlds energy system and infrastructure.
Unilever chief Paul Polman says keeping global warming below 2
degrees Celsius presents an opportunity for business. Achieving
a zero emissions economy is the greatest business opportunity of
the century, he says, adding that the consequences of this
agreement go far beyond the actions of governments. They will
be felt in banks, stock exchanges, board rooms and research
centers as the world absorbs the fact that we are embarking on
an unprecedented project to decarbonize the global economy.
This realization will unlock trillions of dollars and the immense
creativity and innovation of the private sector who will rise to the
challenge in a way that will avert the worst effects of climate
change.
The next step for businesses is to decrease their own emissions,
says Tom Murray, vice president, Corporate Partnerships
Program at Environmental Defense Fund.
The climate deal is a strong step that signals to business that the
nations of the world are serious about reducing the impacts of
climate change, Murray told Environmental Leader. Business
has played a key role in pushing for a strong climate agreement,
and the outcome shows the power of their support. But with the
ambitious deal comes the hard work of making this agreement a
reality. The next steps for companies are to continue to decrease
their emissions, to continue to innovate and, crucially, to work
toward a low-carbon world. In the United States in particular,
business support for the Clean Power Plan will be key to helping
the US fulfill its commitments under the Paris Accord.
Readmore: http://www.environmentalleader.com/2015/12/15/cop21climate-deal-whats-next-for-business/#ixzz3vBdUs4YC

5 EHS, Quality Management Predictions for 2016

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December 2015

The environment, health and safety sector saw significant

changes in 2015, with increasing regulatory pressures such as
changes to the OSHA fine structure and updates to ISO 9001
quality management systems and ISO 14001 environmental
management systems, according to an Intelex Technologies.
The EHS software provider says the macro trends driving these
changes consumer awareness of workplace safety, product
quality and consumer safety, along with increasing EHS
regulations from governments are prompting some businesses
to reevaluate how they operate.
Technology also saw advancements this year, with industries
from oil and gas to agriculture relying on big data-driven
decisions.
In the post, Intelex also makes five EHS and quality management
predictions for 2016:
1. Increased reliance on data driven decisions.
2. Increased scrutiny on data quality
3. Executive level visibility for safety initiatives
4. Breaking down departmental and information silos
5. Oh yeah and mobility
Intelex is one of the top EHS software brands according to an
October report by Verdantix.
Read more: http://www.environmentalleader.com/2015/12/22/5ehs-quality-management-predictions-for-2016/#ixzz3vBf602CR

10 Disruptive HR Technology Trends for 2016

HR technology innovation brings employee
engagement to the fore
The transformational changes taking place across the HR
technology landscape have the potential to provide CIOs with
better tools for managing the people side of their IT
organizations.
Imagine a human resources application that runs on employees
smartphones, recommends nearby people with whom they can
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December 2015

network, helps to boost their productivity by evaluating their time

management, offers suggestions for improving work-life balance,
and provides targeted, on-the-job training. It may even share
exercise and healthy eating tips when and where employees
need them.
This scenario illustrates the consumer-focused direction of HR
technology, one that centers on employee productivity and
engagement. Given the strides vendors are making to provide
those capabilities, they may become reality for large enterprises
sooner than many executives think, according to a new report
from Bersin by Deloitte, HR Technology for 2016: 10 Big
Disruptions Ahead.
Indeed, HR technology providers are increasingly designing
applications for employees first, to enable workers to learn and
develop, collaborate, share feedback, steer their careers, and
even manage other people more effectively. The trend reflects a
major shift from a decade ago, when vendors designed HR
systems primarily to streamline HR administration, improve
record-keeping, and help redesign HR processes. Today, digital
technologies are transforming nearly every aspect of HR, from
sourcing and recruiting to talent and performance management.
The current wave of technology-led HR transformation has two
primary implications for CIOs. One, it offers a range of potentially
promising new tools to help IT leaders better manage and
engage the talent inside their organizations. Two, it creates
opportunities for increased HR-IT partnership as HR leaders seek
vendor selection and technology integration advice from CIOs.
In addition to technology aimed at engaging employees, several
other trends are likely to influence CIOs and CHROs purchasing
decisions:
Mobile emerges as a new HR technology platform. With
smartphone use surging and employees across a range of
functions seeking access to corporate applications via their
mobile devices, companies are scrambling to adapt their HR
systems accordingly. In some cases, they may create their own
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December 2015

appspared-down versions of enterprise software that offer

users streamlined access to basic HR functionality, such as
submitting time sheets or expense reports. In cases where
companies are ready to replace existing HR systems, they may
look for vendors that offer mobile apps as part of their core
services. Regardless of whether companies build or buy,
delivering HR functionality via mobile platforms requires
companies to consider the different features, mechanics, and
user dynamics associated with mobile devices.
ERP vendors catch up as credible talent management
providers. A decade ago, the talent management market was
dominated by best-of-breed providers selling licensed software.
Recruiting, learning, and performance management tools were
sold as separate products, forcing companies to stitch those
systems together and integrate them with their ERP systems.
Then ERP vendors began acquiring these smaller companies
and weaving specialized talent management products into their
broader suites. As a result, many ERP vendors now provide endto-end talent management solutions that meet the requirements
of large, complex organizations.
Built for the cloud technology providers redefine HR
functions. Even as ERP providers expand their HR product
lines, a third wave of vendors is emerging with cloud-based
talent solutions that are user-friendly, inexpensive to buy, and
built for mobile devices from the start. These new vendors target
a range of core HR activities, including payroll, recruiting,
learning, and employee engagement.
New software categories include feedback, engagement, and
culture management. Companies have grown increasingly
concerned about low levels of employee engagement. In
response, a plethora of software vendors have popped up that
provide new tools for soliciting real-time employee feedback,
assessing culture, monitoring engagement, and managing
employee performance and goals. These tools allow
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December 2015

organizations to more promptly uncover and respond to

employees issues, needs, and suggestions.
Performance and goal management are reinvented with
feedback and check-ins. Dozens of large companies that have
replaced traditional, year-end performance management
practices with more agile, real-time, and feedback-driven
approaches have found their existing performance management
software doesnt support their new processes. Startups see an
opportunity to fill this gap but, to date, they have yet to build into
their products many of the features that large companies typically
want, such as reviews and ratings. As a result, companies may
have trouble finding the appropriate tools to support a
performance management redesign.
Startups move to integrate learning content from disparate
sources. The growing need for training has created tremendous
demand for easy-to-use, Web-based professional development
content. Companies are increasingly offering online training from
a range of sources and platforms, but the challenge many now
face is bringing this content together to create an integrated
learning experience for employees. As with the areas of
performance, engagement, and culture management, small
vendors are stepping in to address this need.
The field of predictive analytics continues to grow. Predictive
analytics is likely to become one of the most important features in
HR technology platforms over the next several years. Even
though many HR organizations have been slow to adopt people
analytics, a wide variety of vendors offer impressive capabilities
in that area, including the ability to identify toxic employees,
recommend training, predict attrition and unplanned absences,
and highlight the promotions and transfers most likely to produce
high-performing employees.

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December 2015

Cloud computing hasnt dampened demand for technology

services. While cloud-based software is generally easier than
on-premise systems to implement and maintain, it still requires
significant effort to roll out. Bersins research shows organizations
that purchase new cloud-based HR systems experience many
unexpected challenges during the transition: New systems have
to be harmonized with existing processes, integrated with
existing systems, and introduced to users with vast amounts of
training and communication. To ease the switch from on-premise
to cloud, select HR vendors that offer high levels of service,
products with open-programming interfaces, and industry-specific
experience.
HR technology innovation brings employee engagement to
the fore. The HR technology landscape is changing more rapidly
than ever. As CIOs and HR leaders look to upgrade and replace
existing HR systems, they should consider vendors and tools that
offer consumer-like experiences, mobile capabilities, and
predictive analyticsand allow employees to test them for ease
of use, not just for features and workflow. The number of
employees using HR tools and the duration and frequency of
their usage will become important measures of engagement and
effectiveness.
by Josh Bersin, founder and principal, Bersin by Deloitte,
Deloitte Consulting LLP
December 23, 2015, 12:01am
Questions? Write to Deloitte CIO Journal Editor
Source: http://deloitte.wsj.com/cio/2015/12/23/10-disruptive-hrtechnology-trends-for-2016/

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December 2015

IndiScan
Telecom Towers in India Switching to Hydrogen Fuel
Cells
October 5, 2015 By Carl Weinschenk
Intelligent Energy
saysthat
it
is
purchasing
contracts from GTL
Limited to provide
hydrogen fuel cell
technology to more
than
27,400
telecommunications
towers in India.
More
than
70
percent of the 425,000 telecom towers in India go offline for about
eight hours per day, according to the release. That impacts
almost half of the 935 million phones used across the country.
The main backups today are diesel generators. This approach is
costly, inefficient and emits large amounts of CO2, NOx and
carcinogens.
Hydrogen fuel cells are thought to be both less expensive and
safer. Intelligent Energys Indian subsidiary Essential Energy will
assume power management of the towers. About 70 percent of
the towers will be transitioned from diesel to hydrogen during the
life of the contract.
The move of the contracts from GTL to Intelligent Energy appears
to be part of a larger deal. The Economic Times reports that GTL
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December 2015

is selling its energy management business to Essential Energy

India. The story says that the regulatory process soon will start

Indian Oil Corporation to invest Rs 1.75 lakh cr in

expansion projects

IOC, Indias largest oil firm, will invest Rs 1.75 lakh crore over the
next seven years on expanding refinery capacity, building
petrochemical plants and laying pipelines, a company official said.
The plan includes spending Rs 34,555 crore in the 15 million tons
a year Paradip oil refinery in Odisha that has recently started
producing fuel.
Besides, the refinery expansion projects planned include raising
Panipat refinery capacity to 20.2 million tons from 15 million tons
currently at a cost of Rs 15,000 crore as well as raising capacity
at Koyali, Mathura and Barauni units by 2020, the official said.
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December 2015

Paradip has started producing fuel and helped Indian Oil Corp
regain the top refinery slot in the country, the official said.
Prior to Paradip, its eight refineries had a cumulative capacity of
54.2 million tons of crude oil. Paradip helped IOC
overtake Reliance Industries, which has twin refineries at
Jamnagar in Gujarat with a capacity of 62 million tons.
Essar Oil is the only other private refiner having a 20 million tons
a year unit at Vadinar in Gujarat.
The official said IOC is looking at raising capacity of its 13.7
million tons a year Koyali refinery in Gujarat by 4.3 million tons as
well as hiking capacity of Mathura refinery in Uttar Pradesh by
three million tons to 11 million tons in two stages first to 9.2
million tons and than to 11 million tons.
A small capacity addition of 0.5 million tons is also planned at 7.5
million tons Haldia refinery in West Bengal.
Also Barauni refinery in Bihar will be expanded from 6 million tons
to 7 million tons in first phase and than to 9 million tons in second,
he said.
We are also setting up a 700,000 tonnes per annum
polypropylene (PP) plant at a cost of Rs 3,150 crore at Paradip.
The plant is to be built by 2017-18, the official said.
IOC will use propylene from cracked LPG and ethylene from
refinery offgas to produce plastic that is used in making furniture,
disposable cups and trays, printed packaging material, plain and
transparent films, currency notes, food packets and pressuresensitive tapes.
The official said the company is also looking at setting up a 5
million tons a year LNG import terminal at Ennore in Tamil Nadu.
44

December 2015

New pipelines planned include Paradip-Raipur-Ranchi product

pipeline, debottlenecking of Salaya-Mathura crude oil pipeline,
augmentation of Paradip-Haldia-Barauni crude oil pipeline,
Paradip-Hyderabad pipeline and Jaipur-Panipat naphtha pipeline.
The new expansion planned will cater to fuel needs of north and
western India, he added.

Sweeter gas pricing likely to spur search

By Subhash Narayan, Dec 21 2015 , New Delhi
Policy changes may help ONGC, RIL
The government is poised to take several key initiatives to prevent
the current slump in global oil prices from impacting the countrys
exploration and production activities.
For one, it is exploring an option to relax provisions in the
proposed gas pricing policy for difficult deepwater and ultra
deepwater blocks so as to allow premium pricing of gas even for
blocks discovered prior to November 2014, but are yet to be
developed.
Sources in the government said that the issue was being
discussed and could be rolled out later after getting the finance
ministrys approval. The move to sweeten policy provisions is
being considered in the wake of a slowdown in exploration and
production activities following a sharp decline in global energy
prices.
As per organisation of petroleum exporting countries (Opec)
secretary-general Abdullah al-Badri, the current phase of low oil
prices has already sucked out investments worth $130 billion from
the oil and gas sector.
The premium gas pricing policy for production from difficult
deepwater blocks is being considered by the oil ministry to
encourage investments in exploration.
45

December 2015

As per the initial policy formulation, the government proposes to

allow market price for a part of the discoveries made in future
from these fields.
While approving the new gas pricing formula based on an
average of international hub rates in October last year, the
government had decided that all new discoveries in deepwater
blocks would be treated differently and would command a
premium over normal blocks. But it had also indicated that this
premium would only be offered to discoveries made after the
finalisation of the formula or from November 2014.
The likely changes in the premium gas pricing policy would help
companies like ONGC, Reliance Industries and GSPC, all of
whom have several discovered blocks in difficult areas prior to the
November 2014 cutoff date.
ONGC has its ultra deepwater east coast blocks that are
estimated to have a capacity of about 6-9 million standard cubic
metres of gas. Similarly, most of RILs exploration blocks are in
difficult deepwater areas in the Krishna-Godavari basin.
RILs hydrocarbon blocks such as CYD5 in the Cauvery basin,
NEC25 in the Mahanadi basin and the D6 block in the KrishnaGodavari (KG) basin are all deepwater blocks. GSPC also has
deepwater blocks in the KG basin.
While the exact features of the new gas pricing formula for
deepwater blocks are still being worked out, sources said it would
incorporate a graded premium over and above the existing price
of natural gas based on the level of difficulty encountered for
extracting gas.
This the degree of difficulty could be based on whether the
exploration block is located in ultra deepwater/high pressure high
temperature field, deepwater/high pressure high temperature
field, deepwater field, ultra deepwater field and high pressure-high
temperature field.
The first category would have permission to sell the maximum 50
per cent of gas output in the open market while the last category
would get to sell the lowest.
46

December 2015

Contractors of other categories could be allowed to sell about 2040 per cent of the gas output at the market-determined rate.
Deepwater blocks are those located at depths of more than 1,000
metres, unlike shallow water blocks that are at 100-500 metres.
Blocks at depths beyond 1,500 metres are classified as ultra
deepwater ones. These blocks are typically more expensive to
develop.
subhashnarayan@mydigitalfc.com

Cleaning up coal
By BusinessLine, December 27, 2015
Allowing limited commercial mining is a good start
The decision to allot coal mines to States marks the first step in
ending the Centres four-decade old monopoly over the mining
and sale of coal. Public sector undertakings both Central and
State will now be allocated coal blocks and the Centres stated
objective in doing this is to provide small and medium industries in
various States with easier access to coal supplies. This is
certainly a laudable goal, although it will be a secondary outcome
of the move. So far, States have been allocated coal blocks, but
such allocations are tied to specific end uses such as power, steel
or cement production. By now allowing merchant mining of coal,
even if in a circumscribed fashion, the Centre has taken a step
forward in reforming the market for Indias largest energy
resource; at the same time, it has opened up additional revenue
earning opportunities for coal-rich States.
While the Centres de jure monopoly over coal may have ended,
its de facto monopoly is assured for years to come as it controls
90 per cent of the countrys total coal output through the centrallyowned Coal India Limited and Singareni Collieries, a Central
government joint venture with the Telangana government. CIL is,
47

December 2015

for all purposes, a monopoly, leading to many market distortions.

Since customers do not have an effective grievance redressal
mechanism in the absence of a coal regulator empowered to
regulate prices, this has also led to undue pricing power in the
hands of the State-owned miner. Another undesirable outcome
has been a steady rise in coal imports, despite India having over
a tenth of the worlds total reserves of the fuel.
We need to ramp up our coal production considerably if we are to
meet the target of 1.5 billion tonnes by 2020. Coal Indias output
has shown an impressive growth rate in recent months, but there
are still challenges to contend with. Lack of modern technology,
issues with manpower, land acquisition and problems with
environmental clearances need to be addressed if the country is
going to get anywhere close to its ambitious target. Added to this
is the issue of productivity; CILs is among the lowest among
organised miners in the world, at just 0.8 tonnes per man-shift.
Also, although 60 per cent of CILs manpower is deployed in
underground mining, such mines account for only 10 per cent of
its output. While the Centre has taken commendable steps to
reform the coal sector by auctioning coal blocks, making a small
disinvestment in CIL, and now allowing limited commercial
mining, the task has only just begun. The next step is to have an
independent regulator for the sector. Although coal prices have
been nominally deregulated since 2000, given CILs monopoly,
this has meant little. An independent and statutorily empowered
regulator, and further opening up of commercial mining to the
private sector can provide the necessary impetus to the sector
and attract fresh investments.
(This article was published on December 27, 2015)

48

December 2015

IOC gets regulators nod for Ennore LNG pipeline

R. BALAJI

Natural gas to be available to fuel industry and homes in Tamil

Nadu by mid-2018
CHENNAI, DECEMBER 28:
The proposed 5,150-crore Ennore LNG Terminal project has
crossed a key milestone with the promoter Indian Oil Corporation
getting the authorisation to lay the Ennore-Tuticorin pipeline for
the project.
The Petroleum and Natural Gas Regulatory Board has authorised
IOC to lay the 1,170-km pipeline linking the terminal to come up at
Ennore to important consumption centres.
The pipeline will link Ennore-Thiruvallur-Bengaluru-PuducherryNagapattinam-Madurai-Tuticorin. The pipeline is a 2,800-crore
project to be implemented by IOC. This is a crucial stage in IOC
49

December 2015

making available natural gas to fuel industry and houses in Tamil

Nadu by mid-2018 using LNG imported at the proposed Ennore
Terminal.
The public sector oil company is confident of having the
infrastructure to supply the fuel in the State by mid-2018,
according to the company officials.
At a recent meeting with industry representatives from chemical
and petrochemical industries in Chennai, an IOC official said that
the five-million-tonne-a-year natural gas terminal coming up to the
north of Chennai is on schedule for completion in mid-2018.
Natural gas will be available up to 50 km on either side of the
trunk line.
Survey, tariff
The oil company has called for bids to carry out a Right-of-User
survey for the pipeline and this is likely to be awarded within a
month. IOC has the Right-of-Use for the Madurai-Tiruchi section
which will run along an existing route for a petroleum products
pipeline.
The pipeline tariff will be at an aggressive 6.40 per million British
Thermal Unit which is among the cheapest, according to the
official.
Shift to natural gas
Availability of LNG as fuel for industry has emerged a critical
factor. Industries that use furnace oil, naphtha, LPG and diesel
fuel are expected to shift to natural gas. IOC has a captive user
base in Manali area to the north of Chennai with its own
subsidiary refinery, Chennai Petroleum Corporation, and other
units such as Madras Fertilizers Ltd and the major power plant
keen on using natural gas.
For naphtha-dependent urea manufacturers such as MFL and
SPIC in southern Tamil Nadu availability of natural gas is key to
survival as government policy provides for fertiliser subsidy based
on gas prices.
The Ennore LNG terminal coming up within the Kamarajar Port is
progressing with major contracts for tankages and regasification
50

December 2015

facilities awarded. LNG storage facility construction has been

awarded to Mitsubishi Heavy Industries and regasification
facilities to Black & Veatch.
(This article was published on December 28, 2015)

BPCL commissions Rs 1,419-cr crude distillation unit

MUMBAI, DEC 28:
State-run oil refiner and marketer Bharat Petroleum Corp
(BPCL) today commissioned a new 6-million tonne crude
distillation unit (CDU) at its Mumbai refinery, which will
take the capacity of its oldest facility to 12 million tonne
per annum.
The Rs 1,419-crore CDU, fourth unit was completed as
per schedule.
BPCL Chairman and Managing Director S Varadarajan
said the modern technologies employed in the unit will
help the PSU save Rs 128 crore annually by way of lower
(a whopping 30 per cent less from the current levels) fuel
consumption alone.
The facility was dedicated to the nation by Chief Minister
of Maharashtra DevendraFadnavis in the presence of
Petroleum Minister Dharmendra Pradhan at Mahul on the
eastern fringe of the megapolis.
Varadarajan said with the new CDU, the Mumbai facility
has the lowest sulphur dioxide emission levels, at 10.5
million tonne per day, amongst all refineries in the country.
Following this commissioning, BPCL will dismantle two
older crude vacuum and distillation units that were set up
in 1955 by Burma Shell, the private sector parent of BPCL,
51

December 2015

and create space for modernisation at the landstarved

refinery.
BPCL has only 454 acres for the entire refinery.
The Mumbai refinery was set up by Burma Shell way back
in 1955 with a capacity of 2.2 mtpa. A decade later, the
Government nationalised the oil sector and Burma Shell
was renamed as Bharat Petroleum Corporation.
(This article was published on December 28, 2015)
ONGC to invest Rs 3500 crore for developing 3 CBM
blocks
State-owned Oil and Natural Corp (ONGC) today said it
will invest Rs 3,500 crore in extracting gas lying below
coal seams (CBM) in three coal-bed methane blocks in
eastern India.
"We see a peak production of 3.2 million standard cubic
meters per day of gas from the three CBM blocks," ONGC
Director (Onshore) Ved Prakash Mahawar told reporters
here.
ONGC will drill over 350 wells in three blocks in Jharia,
Bokaro and North Karanpur in Jharkhand. A fourth block in
Ranigajan North in West Bengal may be relinquished as it
may fall in way of a planned air-strip.
"Production will start in three years and peak output of 3.2
mmscmd is likely in 2020-21," he said. On pricing, he said
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December 2015

CBM production is viable at USD 4.8 per million British

thermal unit gas price.
In comparison, the current government mandated rate is
USD 4.24. ONGC sells CBM gas from wells at Parbatpur
in the Jharia block at an approved price of USD 5.1 per
mmBtu. Mahawar said the company board has approved
an investment of Rs 1,200 crore in the Bokaro block to
produce a peak gas of 0.7 mmscmd.
In all, 160 wells are to be drilled on Bokaro block, of which
9 have already been drilled, he said. ONGC is the
operator of Bokaro as well as North Karanpur blocks with
80 per cent interest. Indian Oil Corp (IOC) holds the
remaining 20 per cent.
It is the operator of the Raniganj North block with a 74
percent stake and Coal India Ltd holds the rest. In Jharia,
ONGC holds 90 percent and Coal India the remaining 10
per cent. The Jharia block is estimated to hold 85 billion
cubic metres of gas reserves, North Karanpura 62 billion
cubic metres, Bokaro 45 billion cubic metres and Raniganj
North 43 billion cubic metres.
Oil Secretary K D Tripathi said India's current CBM output
is around 1 million standard cubic meters per day or one
per cent of the total natural gas production. The output is
targeted to be raised to 5 mmscmd in three years, he
added.

53

December 2015

Minister of State(I/c), MoP&NG launches LPG

emergency helpline and declares 2016 as the Year of
the LPG consumer
Mr.Dharmendra Pradhan, Minister of State (Independent Charge)
for Petroleum & Natural
Gas,
addressing
the
gathering during the launch
of 1906 - All India LPG
Emergency
Helpline
number in New Delhi.
Mr.Dharmendra
Pradhan,
Honble Minister of State (Independent Charge) for Petroleum &
Natural Gas launched 1906 - round-the-clock
LPG Emergency Helpline Number for enhanced customer safety
and convenience in a programme held in New Delhi today in the
presence of Mr. K. D. Tripathi, Secretary, Ministry of Petroleum &
Natural Gas, Mr. A. P. Sawhney, Additional Secretary, MoP&NG,
Mr.Ashutosh Jindal, Joint Secretary (Marketing), MoP&NG, Mr. B.
Ashok, Chairman, IndianOil, Mr. B. S. Canth, Director (Marketing),
IndianOil, and other senior officials from MoP&NG and oil
marketing companies.
The number 1906 is a call-centre based service, available panIndia for all LPG customers of the three public sector Oil
Marketing Companies (OMCs). The centralised Emergency
Service Cell (ESC) is operational through a call centre operating
24x7 to attend to LPG leakage calls. The helpline offers services
in nine vernacular languages Marathi, Gujarati, Bengali, Oriya,
Assamese, Tamil, Telugu, Kannada, and Malayalam, except Hindi
and English, to ensure that the callers are comfortable in
registering their grievances. The call centre is also equipped with
a setup for outbound calls for contacting mechanics and
distributors and oil company officials.
54

December 2015

Though customers can access the ESC only through voice calls,
the call centre is equipped with a web-based application for
logging and viewing complaints. The portal houses an exhaustive
data on the contact details of all LPG distributors, emergency
service mechanics, and field officers, across the OMCs. The LPG
area in-charges of the three OMCs have been provided access to
the portal to constantly monitor call logs, and update contact
details of the mechanic and field officers on a regular basis.
Mr. Pradhan said on the occasion said that the initiatives taken by
Petroleum Ministry in 2015 have enhanced coverage of LPG and
also have extended better services to the customers. The policy
initiatives implemented by Government of India in LPG sector has
brought a paradigm shift in the LPG marketing and has taken us
closer to the target of achieving 70% LPG penetration as
envisioned by our Prime Minister, Mr.NarendraModi, he added.
The expansion of PAHAL, a scheme aimed to improve the
subsidy administration of LPG across the country, has ensured
smooth transfer of subsidy on LPG cylinder directly to the
customers bank accounts.
Mr.Dharmendra
Pradhan,
Minister of State (Independent
Charge) for Petroleum & Natural
Gas being welcomed by Mr. B.
Ashok, Chairman.
Mr. Pradhan mentioned that a
host of other such initiatives for
customer convenience would be
offered and that the year 2016
would be celebrated as the Year of the LPG consumer. Mr.
Pradhan also urged to oil marketing companies to make the
helpline number 1906 toll-free.
55

December 2015

Cheaper LNG: Renegotiated Ras gas

By BusinessLine, January 1, 2015
The RasGas deal has been well renegotiated, but it is a reminder
that domestic gas pricing must be linked to the market
The best thing about the renegotiated liquefied natural gas (LNG)
supply deal with RasGas of Qatar is that it brings down the
benchmark rate for natural gas in the country to more realistic
levels.
There are two major components to the new deal that has been
signed between RasGas and Petronet LNG.
First, the LNG price will be linked to a three-month average of
Brent crude oil prices, replacing the earlier formula based on fiveyear average of a basket of crude imported by Japan. It is this
change that has been primarily responsible for the sharp fall in the
import price.
Second, RasGas has agreed to waive a 12,000 crore penalty
payable by Petronet for not taking up the contracted supplies in
2015. The shortfall will be made up by Petronet through higher
volumes of purchase over the remaining term of the contract that
runs until 2028.
As a sweetener for the whole deal, the total quantum of LNG that
Petronet will buy from RasGas has been bumped up by a million
tonnes to 8.5 MT per annum through the term of the contract.
While the Centre deserves credit for renegotiating the contract, it
should proceed to afffix accountability for what was fundamentally
a bad deal. The original agreement between RasGas and
Petronet was a 25-year fixed price contract linked to crude oil
prices, with a floor price of $3 and a cap of $4 per million metric
British thermal unit (MMBTU).
Why were the pricing terms changed to the countrys detriment
when the deal was renegotiated in 1999 for higher volumes of
LNG?
56

December 2015

Why did Petronet agree in 2006 to buy lean gas or gas with a
lower component of hydrocarbons such as ethane, propane and
butane, for a volume of 2.5 million tonnes of the overall contracted
quantum of 7.5 million tonnes?
These, and related issues, were investigated by a government
committee in early 2015 and the Petroleum Minister is on record
in Parliament that its findings, arrived with the help of the Central
Vigilance Commission, were under examination.
Of course, an impediment for further action is the fact that since
less than half of Petronets equity is held by PSUs, it remains
strictly outside the purview of the CVC and the Comptroller and
Auditor General.
The $14-18 per MMBTU price of imported LNG was cited by
Indian gas producers as proof that domestic gas was priced
artificially low as per the formula fixed by the Centre.
That argument has been weakened with the renegotiated price of
$6-7 per MMBTU being very close to the domestic price of $4.24
per MMBTU. Consumers such as power plants and fertiliser units
which had shunned LNG following the price spiral may once again
find the fuel viable for use. Eventually, gas pricing in India should
be linked to the market rather than to artificial formulae with their
inherent biases. That would be true reform.
(This article was published on January 1, 2016)

57

December 2015

GlobeScan
Dow Chemicals in merger talks with DuPont
By Greg Roumeliotis, ReutersDec 09 2015 , New York
Firms look at creating a chemicals giant of more than $120 billion
Dow Chemical and DuPont are in talks to merge, creating a
chemicals giant with a market value of more than $120 billion that
could then break up into different businesses, people familiar with
the matter said on Tuesday.
A deal, which would face regulatory approval in several countries,
would allow the two US companies to rejig their assets based on
their diverging fortunes. Their plastics and specialty chemical
businesses have benefited from lower energy costs, while their
agrochemicals divisions have struggled to cope with weak
demand for crop protection products.
Following what would be structured as a merger of equals, the
combined company could split into material sciences, specialty
products and agrochemicals, the people said, cautioning that the
plans have not been finalised.
Dows CEO Andrew Liveris and DuPont chief executive Edward
Breen would have the two top jobs in the combined company, one
of the people said.
An agreement could be reached in the coming days, that person
added. Dow and DuPont declined to comment. The Wall Street
Journal first reported on the merger talks earlier on Tuesday.
The possible merger may see cost synergies worth about $3
billion, CNBC reported citing people familiar with the matter. As of
Tuesdays trading close, Dow had a market valuation of $58.97
billion, while DuPont was valued at $58.37 billion.DuPont, under
58

December 2015

Breen, who took over as CEO last month, had already been in
talks with rivals, including Dow, about exploring options about its
agriculture business.
Dow had also been reviewing all options for its farm chemicals
and seeds unit, which has reported falling sales for nearly a year.
In August, the worlds largest seed company, Monsanto,
abandoned a $45 billion bid for rival Syngenta as declining grain
prices and farm income led to the major players in the farm
chemicals and seeds business becoming the subject of
consolidation talks.
However, even before the merger is announced, speculation is
rife that the potential combination, which could overtake
Germanys BASF in revenue, may come under intense scrutiny by
antitrust regulators.
A deal like this will definitely be subject to close antitrust scrutiny
by Chinese regulators -- not just Mofcom -- but many other
government actors will be involved in the process. That doesnt
mean the deal will necessarily be prohibited, said Angela Zhang,
an antitrust expert at Kings College in London.
Zhang warns that the merger review process will be protracted.
However, if the companies can offer remedies that satisfy the
Chinese regulators, they could obtain clearance, subject to
conditions, Zhang said.
Breen took over after his predecessor and company veteran Ellen
Kullman resigned abruptly in October. Best known as a
turnaround expert, Breen was the CEO of Tyco between 2002
and 2012 and split Tyco into six companies, a sprawling
conglomerate beset by scandal and strategic flip-flops
DuPont, which gets about 60 per cent of its sales from outside
North America, has seen a strong dollar chip away 53 cents per
share from its earnings this year. The company has been facing
sliding sales for nearly two years.

59

December 2015

ConocoPhillips exits Russia

HOUSTON, December 23, 2015
US independent ConocoPhillips announced on Tuesday that it
would be exiting Russia after more than 25 years of operations in
the country. The company sold out of its Polar Lights joint venture
with Russias state-owned Rosneft.
Russias energy industry has suffered from political tensions, the
tumble in oil prices and a volatile currency, making it difficult for
foreign players to succeed. The ruble rose 42% from January to
May, and then fell 25% by August against the US dollar.
ConocoPhillips confirmed the sale of its 50% stake in Polar
Lights, in the far northwest of the country. Rosneft also sold its
stake in the asset last week in a USD 150 million-200 million deal,
according to an unnamed Financial Times source.
The US Company made a string of dry investments in Russia and
has been increasingly drawn to the shale boom in the US. Several
Western companies have recently signed deals with Russian oil
companies to develop the vast, but challenging resources in the
Arctic and in unconventional plays. These projects have been
frozen due to Western sanctions over the annexation of Crimea,
falling oil prices, and Russias shift in business co-operation with
Chinese and Indian groups.

Rig count drops as drillers pull back production

December 22, 2015
In the last 12 months, the number of active rigs operating on land
in the United States has dropped significantly.
Thats due to two factors. One is that oil and gas companies are
reeling from plummeting commodity prices. The other is
60

December 2015

that drillers have become more efficient at tapping shale

formations. They can extract more oil and gas with fewer rigs.
Still, its been a tough year, marked by exploration and production
companies scaling back drilling plans and announcing layoffs. Its
hit the smaller players, like Cecil-based Consol Energy and State
College-based Rex Energy, as well as energy giants like
Chevron, and oilfield service companies Halliburton and
Schlumberger.
As of Friday, the national oil rig count shed just shy of 1,000 rigs
in the last 12 months. Meanwhile, the number of rigs targeting
natural gas has dropped by 170, according to Baker Hughes Inc.
Some more pain may be in store for 2016. Moodys Investor
Services expects a prolonged period of oversupply will keep oil
prices lower for longer and continue to pressure issuers in the oil
and gas industry in 2016, particularly those in the exploration &
production and drilling and oilfield services sectors. The rating
agency is maintaining its negative outlook on these sectors.

United States
Gulf of Mexico
Canada
North America

Enterprise says the first shipment of export crude will

sail from Houston
By Robert Grattan on December 23, 2015
HOUSTON Enterprise Products Partners plans to fill a tanker
with of U.S. crude in early January and send it overseas laying
claim to the first shipment of domestic oil from the Gulf Coast
since the government lifted a 40-year ban on such exports last
week.
The Houston-based midstream company said it will transport
about 600,000 barrels of domestic light crude oil to Houston and
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December 2015

load it onto a tanker at the Enterprise Hydrocarbon Terminal in

the first week of 2016. In its announcement Wednesday,
Enterprise didnt identify the source of the oil or its destination.
We applaud the actions of Congress and President Obama to
remove the ban on U.S. crude oil exports, said Jim Teague, chief
operating officer of Enterprises general partner, in a prepared
statement. Enterprises integrated system enabled us to quickly
respond to customer demand for U.S. crude oil by international
markets.
The U.S. government OKd sending domestic oil abroad last
week, after years of political pressure from independent oil
producers. A rider ending the ban passed along with a $1.8 trillion
tax and spending omnibus bill.
Oil producers who stand to benefit as they gain access to
international markets have been the loudest cheerleaders for
allowing exports. But Enterprise and other midstream companies
also are positioned well for exporting oil. Houston and Corpus
Christi are likely staging areas for U.S. oil headed abroad, and
Enterprise owns a significant amount of infrastructure in and
connecting to the cities.
Previously, Enterprise had used its Texas terminals to export an
ultralight oil called condensate. In summer of 2014, the
Commerce Department permitted companies to ship condensate
after minimal processing. The export ban didnt apply to refined
products.
Most Gulf Coast refineries are configured to process heavier
crude than condensate. But the lighter oil flows in large quantities
from the nearby Eagle Ford Shale in South Texas, making
condensate an attractive product for export to more suitable
refineries overseas.
This year, condensate shipments have averaged about 100,000
barrels a day, according to figures from ClipperData, a company
that tracks global oil movement.

62

December 2015

Iran bracing for $30 oil

Crude oil production from Islamic republic up about 4 percent
from 2013.
By Daniel J. Graeber
| Dec. 23, 2015

Iranian President Hassan Rouhani's administration preparing for lower-forlonger slump in crude oil prices. Photo by Ali Mohammadi/UPI

TEHRAN, Dec. 23 (UPI) -- Financial planners in Iran need to be

prepared for crude oil prices moving potentially below $30 per
barrel, the Iranian minister of the economy said.
Minister Ali Tayyebnia described the slump in crude oil prices as
a fiscal act of war, but stressed the administration of
President Hassan Rouhanihas been able to control inflation and
achieve positive economic growth.
"The inflation rate was lowering in Iran, but a [potential] oil price
below $30 per barrel is an indication of an all-out war which
requires the use of all the country's capacities to confront it," he
was quoted by the Oil Ministry's news website SHANA as saying.
Iran has been at odds with Saudi Arabia, the de facto leader of
the Organization of Petroleum Exporting Countries, over
production levels. Tehran suggested rival members should make
room for the eventual return of Iranian crude oil to an eventual
post-sanctions market.
The minister said oil revenue for Iran is expected to drop from
$120 billion recorded in 2011 to below $20 billion for the Iranian
calendar year ending March 20. Nevertheless, Tayyebnia said the
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December 2015

administration was taking steps to reduce the dependence on oil

revenues.
A world market outlook from OPEC, published Thursday, said
there is some upside potential for the Iranian economy over the
medium-term. In its monthly market report for December, OPEC
said Iranian crude oil production was around 2.8 million barrels
per day, a 4.2 percent increase from 2013.
Sanctions pressure was tightened on Iran early this decade in
response to the country's nuclear program. That pressure will
ease as a result of a July agreement to curb nuclear activity
reached between Iran, the five permanent members of the U.N.
Security Council, plus Germany.
The International Monetary Fund said in a review of the Iranian
economy that oil prices and postponed investment decisions
have slowed economic growth for Iran. Real growth in gross
domestic product is expected to decline from 3 percent to
somewhere between 0.5 percent and -0.5 percent in the coming
year.

Jacobs as global engineering partner

12.23.2015 | HP
Under a three-year contract, Jacobs is providing engineering,
procurement and construction management (EPCM) and
integrated project management services to BASF for global
projects.
Keywords:
Jacobs Engineering Group was chosen by BASF as a global
engineering partner, officials with both the contractor and global
chemicals company confirmed on Wednesday.
Under a three-year contract, Jacobs is providing engineering,
procurement
and construction management
(EPCM)
and
integrated project management services to BASF for projects
around the world.

64

December 2015

The selection follows a rigorous process in which Jacobs was

able to demonstrate extensive project execution capabilities
in India, Southeast Asia, North America and Europe.
Jacobs international experience in these markets is expected to
prove beneficial to BASF, as it opens opportunities for further
growth and expansion.
Our relationship with BASF spans many years, and we are
delighted to further strengthen our relationship across the globe,"
said Gary Mandel, president of Jacobs' petroleum and chemicals
business.
"This selection represents a strong endorsement of our
international reach and EPCM capabilities, and we look forward to
working alongside BASF to support its continued growth and
success," he added.

Indonesia announces new policy allowing private

sector to build refineries
12.23.2015 | HP
Under the countrys eighth policy package announced on
Monday, private-sector companies will be allowed to build oil
refineries as long as they sell the end product to state-owned
PT Pertamina.
Keywords:
By YUDITH HO
Bloomberg
Indonesias rupiah rose for a fourth day in the longest stretch of
gains in more than two months after the government took
measures to support growth in Southeast Asias biggest
economy.
Under the countrys eighth policy package announced on
Monday, private-sector companies will be allowed to build oil
refineries as long as they sell the end product to state-owned PT
Pertamina, said Coordinating Minister for Economic Affairs
DarminNasution.
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December 2015

The nation will also scrap import taxes on aviation spare parts to
support that industry, he said. The rupiahs advance was also
underpinned by a new economic roadmap for China, which is
Indonesias largest trading partner, according to Australia & New
Zealand Banking Group.
The policy on refinery development would attract investment and
support growth, while China saying it will spend more is also a
small positive, said Irene Cheung, a currency strategist at
Australia & New Zealand Banking in Singapore. But were still
bearish on the rupiah as US rates continue to rise next year.
The rupiah strengthened 0.8% to close at 13,675 a dollar in
Jakarta, prices from local banks compiled byBloomberg show. It
rose as much as 1.6% to 13,565, the highest since Nov. 12 and is
leading gains in Asia this quarter.
Investors are looking closer into coming back to Indonesian
assets as there are enough positive domestic reasons to do so,
said WellianWiranto, an economist at Oversea-Chinese Banking
Corp. in Singapore. The big question is, can the global market
stay calm enough for emerging markets to benefit?
Inflation may ease further as the government plans to cut
regulated fuel prices in January, I GustiNyomanWiratmaja Puja,
director general of oil and gas at the Energy and Mineral
Resources Ministry, was cited as saying on Tuesday by Investor
Daily Indonesia. Prices rose 4.89% in November from a year
earlier, the slowest pace since October 2014.
The central bank estimates the economy will expand 4.8% in the
fourth quarter from a year earlier, compared with 4.73% in the
previous three months. Thats below the full-year target of 5% to
5.2% in the revised state budget.
OCBC expects growth of 4.8% this year and 5.1% in 2016,
Wiranto said.

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December 2015

Nigeria to revamp refineries for greater efficiency

before deciding on sale
12.18.2015 | HP
Nigeria is determined to revamp its refineries and make them
work efficiently before deciding if they should be sold, petroleum
minister Emmanuel Kachikwu said.
By ELISHA BALA-GBOGBO
Bloomberg
Nigeria plans to pump 2.4 million bpd of oil in 2016 as it pursues
low-cost production to offset revenue losses from falling crude
prices, Emmanuel Kachikwu, petroleum minister of state, said.
We must bring down substantially the cost per barrel of oil in this
country, Kachikwu, who is also the head of the state oil company,
told reporters on Thursday in the capital, Abuja. In an era of
declining price of oil its going to be very essential that were able
to produce the most competitive oil in the market. We must be the
lowest-cost producer.
Africas biggest oil producer depends on exports of the commodity
for more than 90% of its foreign earnings and two-thirds of
government revenue. A 68% drop in the price of Brent crude from
its 2014 peak, has seen government revenue plummet, piling
pressure on the countrys currency, the naira. Kachikwu sees
average prices of crude per barrel at $45 next year, higher than
the budget estimate of $38.
With the government unable to fund new oil and gas investments
in the face of limited income, new financing models are being
considered for capital investments, Kachikwu said. A longdelayed reform bill for the oil and gas industry will be split into two
parts, separating its fiscal and non-fiscal aspects for easier
passage by lawmakers, he said.
Nigeria, which holds Africas largest gas reserves of more than
180 trillion cubic feet, will give low-tax incentives for investments
to help boost gas revenue in the face of falling crude prices,
Kachikwu said.
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December 2015

Revamp Refineries
Nigeria is determined to revamp its refineries and make them
work efficiently before deciding if they should be sold, Kachikwu
said. The refineries with a combined capacity for 445,000 bpd
only managed to operate at an average of 5% of their capacity in
the first 10 months of this year, leaving a loss of 67.4 billion naira
($338.6 million), according to a report published by the owner,
Nigerian National Petroleum Corp.
We cant sell the refineries in their current state because theyll
be sold as scraps, he said. We have to get the refineries to
work. If they dont work, we close them down.
For an average daily consumption of 40 million liters of gasoline,
Nigeria has paid subsidies of more than 1 trillion naira this year to
maintain a fixed price, according to the petroleum minister

Shell cuts 2016 spending plans by $2 billion in

preparation for BG deal
By RAKTEEM KATAKEY
Bloomberg
Royal Dutch Shell, Europes largest oil company, further reduced
spending plans for this year and 2016 as it prepares to take over
BG Group amid slumping prices for crude.
The combined company plans $33 billion of capital spending next
year, lower than Shells previous guidance of $35 billion, it said
Tuesday. Shell also cut its spending forecast for this year by $1
billion to $29 billion.
Crudes collapse to less than $37/bbl from about $55 on the day
the deal was announced in April has prompted some investors to
question whether Shell is paying too much. The oil producer has
justified the deal by saying that it boosts its ability to maintain
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December 2015

dividends, makes it the worlds biggest liquefied natural gas

company and gives it oil and gas assets from Australia to Brazil.
The two companies are combining during a low oil-price
environment and cutting their spending plans makes a lot of
sense, said Jason Gammel, a London-based analyst with
Jefferies International. This moves the plans for the deal
forward.
Shell expects operating costs to fall by $4 billion this year, about
10% lower than last year, and by $3 billion in 2016. The
acquisition will break even with Brent crude prices in the low $60s
and add to operating cash flow per share at $50/bbl in 2016, the
company said in a statement. It expects the deal to be accretive
to earnings per share, excluding identified items, in 2017 at $65
Brent.
Shares Rise
Shells B shares, the class of stock used in the deal, rose 2.9% to
1,536 pence at 9:51 a.m. in London, adding to Tuesdays 2.9%
increase. BG gained 3.3% to 960.7 pence, also rising for a
second day.
Shell in April offered to pay 0.4454 of its B shares and 383 pence
in cash for each BG share in a deal valued at $70 billion. A
decline in Shells stock has cut that to about $53 billion as of Dec.
18, the company said in the statement.
Shells shareholders are scheduled to vote on the acquisition on
Jan. 27 and BGs the next day. Shell requires the backing of 50%
of its holders. In BGs case, votes in favor must represent at least
75% of the total value of BG shares. The merger is likely to
become effective Feb. 15, Shell said.

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December 2015

TrendScan
Fracking research collaborative cuts across state
lines

A drilling site in the Marcellus Shale.

Mid-October, a trio of shale drilling states Ohio, Pennsylvania
and West Virginia signed an agreement to grow the natural gas
industry on a regional level, focusing on job training, infrastructure
and other areas.
As that tri-state connection forms, a grassroots network of
independent policy organizations and research groups located
within the affected region are shaping a more holistic dialogue
about the long-term consequences of hydraulic fracturing.
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December 2015

The Multi-State Shale Research Collaborative, with member

groups in Ohio, New York, Pennsylvania, Virginia and West
Virginia, monitors economic development and the community
impacts of energy extraction in the Marcellus and Utica shales.
Affiliates of the coalition, launched in 2013, include the Fiscal
Policy Institute (New York), Policy Matters Ohio, Keystone
Research Center/Pennsylvania Budget and Policy Center,
Commonwealth (Virginia) Institute for Fiscal Analysis, and West
Virginia Center on Budget and Policy.
"You have pro- and anti-fracking camps, but our goal is to
navigate the middle ground," said Amanda Woodrum, a
researcher with Policy Matters Ohio. "We document and
acknowledge both the benefits and the costs."
The group's research focuses on four heavy shale-drilling
counties: Carroll County in Ohio, Tioga and Greene counties in
Pennsylvania, and Wetzel County in West Virginia.
Interviews with township and county officials revealed the
consequences of rapid industrial development of shale gas on
municipal services and community institutions such as hospitals.
While this data has been previously collected at a county level,
there has never been a systematic attempt to aggregate these
sources over fracking regions, Woodrum said.
Tackling these issues on a larger scale can aid communities in
making the most of extractions boom while mitigating the effects
of an inevitable "bust" cycle, research group members believe.
Next year, the collaborative will amass information on housing,
traffic, local access to jobs and other shale industry concerns for a
"scorecard" that will be sent to legislators.
"Troubling practices and negative impacts from shale
development look similar in all our states," Woodrum said. "By
working together, we can share experiences and best practices
and promote high standards."
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December 2015

One small step

The recent interstate pact, signed by West Virginia Gov. Earl Ray
Tomblin, Ohio Lt. Gov. Mary Taylor and Pennsylvania Gov. Tom
Wolfe, is a solid step in getting a regional conversation going
about issues like job creation and damage done to road systems
by trucks carrying fracking-related equipment, said Woodrum.
However, collaborative members urge more cooperation among
states on these questions as well as implementation of a 5
percent severancetax the coalition believes is a reasonable
proposal for oil and gas companies to pay their portion of costs
associated with the shale boom.
A commitment to consistent policies on taxes and compensation
for areas impacted by drilling would strengthen the recently inked
tri-state agreement, said collaborative supporter Ted Auch, a
Cleveland-based program coordinator for the drilling watchdog
group FracTracker Alliance.
Auch, who has worked with the collaborative as an advisor, said
the group could be even more ambitious in its call for a severance
tax hike. A 5-percent drilling tax, though an improvement on
Ohio's present half-percent marker, is still well below the national
average of 9.5 percent. Proceeds could be sunk back into
fracking areas to provide sufficient oversight, resources for job
training and needed infrastructure.
"These are five- to 10-year wells when you look from an
ecological and geological standpoint," said Auch. "It's worth trying
to extract flesh now rather than trying to get it over the long run."
Working as a team
A wider approach to oil and gas production also applies to
expansion of the industry workforce, collaborative members said.
In Ohio, the Utica shale formation is expected to generate 10,505
full-time jobs in state by 2019, according to a study released in
September by Cleveland State Universitys Maxine Goodman
Levin College of Urban Affairs.
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December 2015

Even with the uptick, companies will continue to use transient

workers for well-field development and construction of interstate
pipelines, the report stated. While locally produced employment
could include well maintenance and other post-production activity,
Ohio will need more than the approximately 3,000 jobs grown
thus far through drilling activity, said Woodrum.
Policy Matters Ohio has brought in collaborative partners from
Pennsylvania and West Virginia to discuss the matter further. In
Pennsylvania, direct employment in oil and gas more than tripled
(from 9,659 to 33,137) in the seven years since the Marcellus
Shale boom began, according to a state Department of Labor and
Industry study.
From a regional standpoint, those numbers are not as impressive
as they sound, Woodrum said. Shale-based employment
accounts for one out of every 795 jobs in the Appalachian Basin,
as stated in a 2013 collaborative report.
A parameter of the Oct. 13 state agreement is the creation of
industry-supported training programs akin to ShaleNET. Paul
Kaboth of the Federal Reserve Bank of Cleveland, which hosted
an economy-focused shale symposium with the collaborative in
March, said building "cracker" plants in drilling areas would spur
additional job growth. Cracker plants turn ethane, a component of
natural gas, into ethylene, a chemical used in plastics.
"We should be working together to bring those processing
facilities to the region rather than have that fuel piped elsewhere,"
said Kaboth. "The secondary and tertiary effects of extraction are
what the collaborative needs to be working toward."
State lawmakers, with the collaborative's advice, should also set
high environmental standards for the industry, said Melanie
Houston, director of water policy and environmental health with
the Ohio Environmental Council. Houston points to air emissions
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December 2015

and protective distances between fracking wells and water

sources as problems that can now be addressed in full.
"We need to learn from our sister states about the impacts
residents are feeling," Houston said. "These issues cut across
borders."
Ultimately, the multi-state research network can be a powerful
force in translating data for legislators unschooled on the ins and
outs of natural gas, said Auch of FracTracker.
"It's a chance to hold policymakers' feet to the fire," he said.
"Increasing their scientific literacy rate should be a goal, too."

Shale gas hit a few peaks in 2015, but drillers mostly

pulled back
December 22, 2015

Range Resources workers stand near the rig that drills into the shale at a
well site in Washington, Pa. in this 2011 photo. Range Resources was
among five of the top 10 producers in Pennsylvania showing double-digit
gas production growth in October compared to January.

Shale gas companies pumped the brakes in 2015 after years of

rapid increases in the amount of natural gas they pulled from
Pennsylvanias Marcellus and Utica shales, new production data
released by the state shows.
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December 2015

Unconventional gas production in Pennsylvania this year hit its

highest point in March then dipped to its lowest point in June
during a three-month slide, according to monthly figures that
shale operators reported to the Department of Environmental
Protection. Production rose in July, August and September before
dropping off again in October.
The October figures, the most recent available, were released by
DEP last week. Average gas production in October 12.5 billion
cubic feet per day (Bcf/d) was 1 percent lower than September
and roughly on par with January.
The stuttering production volumes are evidence of companies
drilling and completing fewer wells, and choking back the flow of
gas at wells already connected to pipelines. Several companies
announced their intentions to curb production in response to low
prices, oversupply and tepid demand amid warmer-than-normal
temperatures.
By our estimates, there is up to almost 1.5 billion cubic feet of
choked production in the Northeast alone, said Sami Yahya, an
energy analyst with PlattsBentek. A lot of producers are saying,
were going to wait until the first quarter of 2016 to come back into
the game. They are just waiting for better demand, better prices to
bump it out again.
Chesapeake Energy, Cabot Oil and Gas, and Southwestern
Energy shale operators focused on the dry gas region in
Pennsylvanias northeastern counties led production for the
first 10 months of 2015, although Chesapeake and Cabot both
showed signs of pulling back after years of nearly uninterrupted
production increases. Both companies reported producing less
gas in October than they did in January.
Of the states top 10 producers for the year so far, Woodlands,
Texas-based Anadarko Petroleum showed the biggest drop in
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December 2015

production compared to the first month of the year, reporting 62

percent less production in October than in January.
Other companies continued to post production gains each month
or they cut back mid year only to rebound in the fall. Five of the
top 10 producers showed double-digit production growth in
October compared to January, with Cecil-based Consol Energy
producing 51 percent more and Chief Oil and Gas, Chevron,
Range Resources and Southwestern showing increases of
between 21 and 36 percent.
This was the first year that gas companies reported monthly
production to the state. Previously, companies reported their
production in six-month blocks.
Some growth on the horizon
The U.S. Energy Information Administration predicts that natural
gas production from the broader Marcellus region will drop from
15.6 Bcf/d in December to 15.4 Bcf/d in January, as production
from new wells wont be enough to offset declines in older wells.
The agency expects Utica production to grow from 3.1 Bcf/d in
December to 3.2 Bcf/d in January.
In its most recent short-term energy outlook, the statistics agency
forecast that natural gas production will grow nationally in 2016,
despite low natural gas prices and declining rig activity, because
companies continue to become more efficient at drilling wells
quickly and getting more gas out of fewer wells.
Most of the growth is expected to come from the Marcellus
Shale, as the backlog of uncompleted wells is reduced and as
new pipelines come online to deliver Marcellus natural gas to
markets in the Northeast, the EIA said.
Mr.Yahya said efficiency improvements were a defining trend this
year. The number of active drilling rigs in the region has been cut
in half since this time last year, he said. And yet our production
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December 2015

grew significantly and were still producing over 21 billion cubic

feet per day. Which is a testament to the efficiency gains and the
resilience of producers.
The northeast region also has a backlog of wells PlattsBentek
puts the number at close to 2,800 that have been drilled and
are waiting for better prices or a connecting pipeline to arrive.
Some of the wells have also been completed, which will make
unleashing their gas that much easier when the time is right.
Basically its a matter of flipping a valve to bring those volumes
on line, Mr.Yahya said.

OIL AT 11-YEAR LOW

Oil still hasn't found the bottom.
Brent crude broke through the symbolic 7-year low mark of
$36.20 (24.29) in overnight trade on Monday to touch an 11-year
low of $36.18 (24.27) a barrel, down 1.9% from Friday's close.
It initially pulled back but now, in early trade in London, it's even
lower - down 1.36% at $35.16 (23.59) at 7.50 a.m. GMT (2.50
a.m. GMT).
West Texas crude oil, the US measure of oil prices, is also getting
crushed. Crude is currently down $0.41, or 0.93%, at $35.66
(23.93).
Prices keep falling because of one simple reason - the market is
saturated with oil right now. OPEC is pumping out cheap oil in a
big to strangle the US's nascent shale oil boom by making
production prohibitively expensive for many operators.
But, as CLSA's Christopher Wood pointed out in a note over the
weekend, the efforts have so far had relatively little effect. US
crude production has fallen by just 4.5% since its peak in June,
even while oil prices have fallen by over 40%.
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December 2015

CLSA is predicting we'll get to $20 (13.40) oil. We certainly

haven't found the bottom yet.

Investing.com

Revises U.S. shale durability upward

World Oil Outlook finds U.S. shale output by 2040 better than
previous estimates.
By Daniel J. Graeber
| Dec. 23, 2015

In its latest world oil report, the Organization of Petroleum Exporting

Countries says it expects U.S. shale oil production will be more resilient
than previously expected. File photo by Gary C. Caskey/UPI
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December 2015

VIENNA, Dec. 23 (UPI) -- Oil production from inland shale basins

in the United States is expected to be more robust than previously
thought, OPEC said in its global outlook.
The Organization of Petroleum Exporting Countries released its
much-watched World Oil Outlook report for 2015, outlining its
expectations for the global energy sector. OPEC has defended its
market share during the past year as higher U.S. oil production
pushed sector dynamics heavily toward the supply side. Coupled
with weak global economic growth, crude oil prices have
plummeted from above the $100 per barrel mark in mid 2014 to
below $40 per barrel.
In its latest outlook, OPEC said it expects U.S. crude oil
production from shale deposits to increase from 3.8 million barrels
per day in 2014 to 4.9 million bpd by 2023. By 2040, the trend will
start to reverse as U.S. shale output falls to 4.2 million bpd.
"Although the updated forecast for the 2015 outlook shows that
U.S. tight crude [oil production] will decline gradually over the
long-term to 4.2 million bpd in 2040, in the 2014 outlook, it was
projected at only 2.8 million bpd in 2040," the report said.
From the U.S. perspective, a drilling productivity report from the
U.S. Energy Information Administration found that, of the seven
inland shale basins that accounted for domestic oil production
growth, few are expected to report gains next year. Only the
Permian shale basin that straddles the border of Texas and New
Mexico and the Utica shale in the U.S. Midwest are expected to
report increased in production from November.
A full-year 2014 profile from the EIA found total U.S. proved oil
reserves of 39.9 billion barrels marked a 9 percent increase from
the previous year. Total reserves for that year where their highest
since 1972.
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December 2015

Downplay new role of US light oil

12.21.2015 | HP News Services
Asian buyers will likely have a limited appetite for the quality of
crudes on offer, since many refiners are geared to process
heavier, cheaper crude oils with higher sulfur content.
NEW DELHI (Bloomberg) -- In the world's biggest oil market,
buyers have better options than US crude.
As the country inches toward ending the last restrictions on
exports, Asian buyers will probably have a limited appetite for the
quality of crude on offer. Many of the region's refiners are geared
to process heavier, cheaper oil with higher sulfur content.
The lighter and cleaner shale oil from the US has also got about a
third farther to come than alternative supplies from the Middle
East and that represents an additional cost.
"US light oil economically is not viable for most of Asian refiners,"
B.K. Namdeo, head of refineries at state-run Hindustan Petroleum
Corp., said by phone from New Delhi. "The majority of the refiners
in this region are not configured to use light oil, plus there is a
long charter time and high freight costs involved."
Horizontal drilling and hydraulic fracturing has unlocked a flood of
light, sweet oil from shale rock, pushing the US toward ending its
40-year export ban. President Barack Obama is expected to sign
legislation that will end the restrictions, the culmination of years of
lobbying by an industry faced with a domestic oversupply.
Oil buyers in Asia are already reaping the benefits of a global glut
that's driven prices down about 35% over the past year. The
Organization of Petroleum Exporting Countries, which supplies
the region with most of its oil, has effectively decided to abandon
production limits in the hope that unrelenting stream of cheap
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December 2015

crude will squeeze out rivals. That's treated Asia to a steady flow
of cargoes from the Middle East to Mexico, Nigeria and Russia as
producers compete for market share.
For Japanese refiners, buying US crude isn't profitable relative to
Middle East supplies, according to Masashi Nakayama, the
general manager for crude oil and tanker department at Cosmo
Oil Co. It takes a tanker approximately 27 days to reach the
Japanese port of Chiba from Saudi Arabia's RasTanura terminal,
versus 38 days for a ship departing from Houston, according
to Sea-Distances.org.
US benchmark West Texas Intermediate crude cost about
$2.80/bbl more than the Middle East's Dubai oil on Thursday,
according to data compiled by Bloomberg. As recently as March,
it was US$7 cheaper. The US marker grade was 79 cents below
Brent, up from a discount of about $7.50 at the end of March.
Higher shipping costs add to the premium for US oil. An Aframaxsized tanker, which is typically used to carry American supplies to
northeast Asia, costs about $5/bbl from the US, compared with
about $2.25/bbl for a Very Large Crude Carrier from the Middle
East, the most-frequently used ship for that route, according to
Clarksons and Braemar ACM shipbrokers.
"For Asian refineries, it won't be cost effective to use US light oil,"
said Arun Kumar Sharma, finance director at Indian Oil Corp., the
country's biggest refiner. "But Asian refiners will benefit from
those displaced volumes that US tight oil will replace," which may
come from the Middle East or Africa, he said.
Some cargoes of US condensates, a very light type of oil typically
produced along with natural gas, have been making their way to
buyers in Asia this year. The shipments aren't profitable with
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December 2015

current regional price differences and freight rates, according to a

survey Wednesday of three buyers and producers.
The Asia-Pacific region will consume 31.93 million bpd of oil in
2015, exceeding demand of 31.17 million bbl from the Americas,
the International Energy Agency said in a report on Dec 11.
China, India, Japan and South Korea will be among the biggest
users of crude, according to the Paris-based agency.
Both Japan and South Korea relied on the Middle East for about
84% of their oil imports last year, according to the US Energy
Information Administration. The region accounted for about 62%
of India's overseas supplies and 52% for China.
China, Asia's biggest importer, may purchase US oil as the
country's independent refiners seek lighter crudes to mix with
heavier, cheaper feedstocks, according to Wu Kang, a Beijingbased analyst with FGE, an energy researcher. Smaller plants,
known as teapots, account for almost a third of the nation's
processing capacity and 13 of them have been granted import
quotas totaling a combined 55 million tons, or 18% of the nation's
annual imports.
US producers may find a more attractive outlet in Latin America,
where refiners are in need of light, sweet shale oil that can help
dilute heavier crudes common to the region, said EhsanUl-Haq, a
senior analyst at KBC Energy Economics.
It's also not always about money. Buyers in Japan and South
Korea have welcomed the arrival of US barrels because it adds
another option to choose from for countries that rely heavily on
the Middle East.
"If US crude exports become reality, supply sources will be largely
diversified," YoshihideSuga, Japan's chief cabinet secretary, said
Thursday. "That will result in contribution to Japan's energy
security."
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December 2015

`Global M&A deals hit record high in 2015 at $4.86

trillion
NEW DELHI, DEC 28:

The 2015 was a record year for global merger and acquisitions
(M&A) as corporates announced deals worth $4.86 trillion and a
significant portion of this came from Asia Pacific targeted deals,
says a report.
According to global deal tracking firm Dealogic, global M&A
volume at $4.86 trillion in 2015 was the highest on record for any
year, surpassing the previous record of $4.61 trillion in 2007.
Moreover, this years total is a good 33 per cent higher than the
last year.
In another first, the Asia Pacific targeted M&A broke the $1 trillion
mark, reaching $1.16 trillion in 2015 and accounted for a record
24 per cent share of global M&A.
Sector wise, healthcare was the top ranked sector in 2015 with
$708.7 billion, up 62 per cent from 2014 when deals worth $436.3
billion were announced.

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December 2015

Technology was a close second with record high volume and

activity ($697.4 billion by way of 9,038 deals), almost double 2014
volume ($326.1 billion).
The four largest technology deals on record were all announced
in 2015, led by Dells $66 billion bid for EMC, announced on
October 1.
Meanwhile, Goldman Sachs ($1.76 trillion), Morgan Stanley
($1.49 trillion), JPMorgan ($1.48 trillion) and Bank of America
Merrill Lynch ($1.12 trillion) all recorded their highest annual
advisory volumes on record.
(This article was published on December 28, 2015)

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December 2015

TechScan
Progressive Water Treatment System Begins
Operation at Texas Refinery
By: Karen Henry
Progressive Water Treatment (PWT), a wholly owned subsidiary
of OriginClear, has put into operation a 750 gallon per minute
Multiple Media Filtration, Softener and Reverse Osmosis (RO)
system for a 75,000 barrel-per-day refinery operated by Delek
Refining in Tyler, Texas. Valued at more than $1 million, the water
processing system is PWTs largest single unit to date and
includes advanced process technologies that are new to the
refinery and its operators.
The new system replaces a water softening system that had been
in service for more than 30 years. It treats boiler feed water by
removing suspended solids and dissolved particles, creating
steam for refinery processes.
PWT engineers designed an RO skid that is physically the largest
single piece of equipment the company has ever built. PWT
responded to the clients request to combine all three RO units
onto one common frame.
Research shows that upgrading wastewater systems to new
technology can reduce operating costs and has the potential to
reduce industry CO2 emissions. OriginClear completed the
acquisition of PWT in October. The refinery project was paid for
prior to the acquisition.

85

December 2015

CB&I ANNOUNCES STARTUP OF SOLID-ACIDCATALYST ALKYLATION UNIT

By Mary Page Bailey | December 10, 2015
CB&I (The Woodlands, Tex.; www.cbi.com) has announced that
the worlds first commercial-scale, solid acid catalyst alkylation
unit was started up in August at Zibo Haiyi Fine Chemical Co., a
subsidiary of Shandong Wonfull Petrochemical Group Co. Ltd.
(Wonfull).
The unit employs CB&Is AlkyCleantechnology, jointly developed
by CB&I, Albemarle Corp. and Neste Corp. The unit has a
capacity of 2,700 barrels per day of alkylate production (100,000
metric tons per year).
The unit, which is located in Zibo, Shandong Province, China, has
achieved all performance expectations thus far. Since the startup,
the alkylate product has demonstrated excellent quality, including
an octane value (RON) between 96 and 98 a considerably
higher RON than typical alkylate products, according to CB&I.
RON is considered an indicator of the alkylates value as a
gasoline blending component.
AlkyClean technology uses Albemarles AlkyStar catalyst, a
robust fixed-bed zeolite catalyst. By pairing this catalyst with
CB&Is novel reactor scheme, the AlkyClean process is able to
produce a high-quality alkylate product without the use of liquidacid catalysts typical of other alkylation technologies, which
makes the process inherently safer.
Without the need for post treatment, and the elimination of waste
streams such as acid soluble oils, the AlkyClean process offers a
more efficient technology for the production of alkylate.

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Theoretical Screening Good Sorbents for CO2

Separation
Developed by: CEI - Center for Energy Initiatives
Carbon dioxide is the major product from coal combustion and is
released into the air and causes global climate warming which we
are facing today.
Current technologies for capturing CO2 including solvent-based
(amines) and CaO-based materials are still too energy intensive.
Hence, there is critical need for new materials that can capture
and release CO2 reversibly with acceptable energy costs.
Accordingly, solid sorbent materials have been proposed for
capturing CO2 through a reversible chemical transformation and
most of them result in the formation of carbonate products.
By combining first principles density functional theory and phonon
lattice dynamics calculations, the thermodynamic properties of
solid materials are obtained and used for computing the
thermodynamic reaction equilibrium properties of CO2
absorption/desorption cycle based on the chemical potential and
heat of reaction analysis.
According to the pre- and post- combustion technology and
conditions (such as CO2 partial pressures and temperatures) in
power-plants, based on our calculated thermodynamic properties
of reactions for each solid capturing CO2 varying with
temperatures and pressures, only those solid materials, which
result lower energy cost in the capture and regeneration process
and could work at desired conditions of CO2 pressure and
temperature, will be selected as promised candidates of CO2
sorbents and further be sent for experimental validations.

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By combining ab initio calculations with molecular dynamics or

Monte Carlo simulations, the CO2 capture behavior of solutions
(such as amino acids, peptides, salts, etc.) also can be evaluated.
The results can provide some guidelines for improving aminebased CO2 capture technology. Here, we first present our
screening methodology and report our results on alkali and
alkaline
earth
metal
oxides,
hydroxides
and
carbonates/bicarbonates
and
compare
with
available
thermodynamic data. Then, we apply our methodology to predict
good candidates of CO2. sorbents from vast of mixing and
substituted/doped solids which thermodynamic data are usually
not available.[1-3] Lastly, we will present some preliminary results
on arginine amino acid capturing CO2 by comparing with MEA.

Life cycle assessment of nanocellulose-reinforced

advanced fibre composites

Martin Hervy1, Sara Evangelisti, Paola Lettieri, , Koon-Yang

Lee, 1,
Open Access funded by Engineering and Physical Sciences
Research Council

Abstract
The research and development of nanocellulose-reinforced
polymer composites have dramatically increased in recent years
due to the possibility of exploiting the high tensile stiffness and
strength of nanocellulose. In the work, the environmental impact
of bacterial cellulose (BC)- and nanofibrillated cellulose (NFC)reinforced epoxy composites were evaluated using life cycle
assessment (LCA). Neat polylactide (PLA) and 30 wt.-% randomly
oriented glass fibre-reinforced polypropylene (GF/PP) composites
were used as benchmark materials for comparison. Our cradle-togate LCA showed that BC- and NFC-reinforced epoxy composites
have higher global warming potential (GWP) and abiotic depletion
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December 2015

potential of fossil fuels (ADf) compared to neat PLA and GF/PP

even though the specific tensile moduli of the nanocellulosereinforced epoxy composites were higher than neat PLA and
GF/PP. However, when the use phase and the end-of-life of
nanocellulose-reinforced epoxy composites were considered, the
green credentials of nanocellulose-reinforced epoxy composites
were comparable to that of neat PLA and GF/PP composites. Our
life cycle scenario analysis further showed that the cradle-tograve GWP and ADf of BC- and NFC-reinforced epoxy
composites could be lower than neat PLA when the composites
contains more than 60 vol.-% nanocellulose. This suggests that
nanocellulose-reinforced
epoxy
composites
with
high
nanocellulose loading is desirable to produce materials with
greener credentials than the best performing commercially
available bio-derived polymers.
Keywords
Nanocellulose;
Nanocomposites;
Polymer-matrix composites (PMCs);
Mechanical properties;
Modelling
1. Introduction
The growing awareness on the consequences of depletion of
fossil resources and the increasing demand for more
environmental friendlier products have led to the development of
sustainable and/or renewable composites to replace petroleumderived plastics [1], particularly in the automotive industry [2]. In
this context, nanometre-scale cellulose fibres, or nanocellulose,
are emerging green nano-reinforcements for polymers[3]. The
major driver for utilisingnanocellulose as reinforcement for
polymer is the possibility of exploiting the high tensile stiffness
and strength of the cellulose crystals [4]. Theoretical
predictions [5], [6] and [7] and
numerical
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December 2015

simulations [8], [9] and [10]estimated the tensile moduli of single

cellulose crystal to be between 58 and 180 GPa. X-ray
diffraction [11], [12] and [13] and
Raman
spectroscopy [14], [15] and [16] further showed experimentally
that a single cellulose nanofibre possess tensile moduli of
between 100 and 160 GPa. The tensile strength of a single
cellulose crystal has also been estimated theoretically to be
between 0.3 and 22 GPa [17], [18], [19] and [20]. The high tensile
modulus and strength of nanocellulosefibres suggest that they
could potentially serve as replacement for glass fibres given their
low toxicity and low density (1.5 g cm3 for nanocellulose versus
2.5 g cm3 for glass fibres). As a result, numerous research effort
has been poured into the use of nanocellulose as reinforcement
for polymers [21] and [22].
Nanocellulose can be produced via two approaches: top-down
and bottom-up. In the top-down approach, (ligno)cellulosic
biomass, such as wood fibres, is disintegrated into nanofibres.
The earliest report on the preparation of wood-derived
nanocellulose from (ligno)cellulosic biomass was presented by
Wurhmann et al. [23]. The authors disintegrated ramie, hemp and
cotton fibres using high intensity ultrasound into their respective
elementary fibrils with diameters as small as 6 nm. Later, Herrick
et al. [24]and Turbak et al. [25] used high pressure homogenisers
to reduce the diameter of wood pulp to 10 nm. Wood-derived
nanocellulose, herein termed nanofibrillated cellulose (NFC), can
also be produced using stone grinders [26], whereby the high
shearing forces generated by the static and rotating grinding
stones fibrillates micrometre-sized pulp fibres into cellulose
nanofibres. The bottom-up approach, on the other hand, utilises
the fermentation of low molecular weight sugars using celluloseproducing bacteria, such as from the Acetobacter species, to
synthesisenanocellulose [27].
Nanocellulosesynthesised
by
bacteria, herein termed bacterial cellulose (BC), is pure cellulose
without impurities that are typically present in wood-derived
nanocellulose, such as hemicellulose, pectin and traces of lignin.
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December 2015

In addition to this, both BC and NFC possess cellulose-I

structure [28]. Even though BC possesses higher degree of
crystallinity compared to NFC (72% for BC and 41% for NFC,
respectively, based on area under the X-ray diffraction spectra),
both BC and NFC were found to possess similar reinforcing ability
for polymers [29].
The first use of nanocellulose as reinforcement in polymers,
namely polypropylene, polystyrene and polyethylene, was
reported by Boldizar et al. [30]. The authors found that the tensile
modulus increased from 2.4 GPa for neat polystyrene to 5.2 GPa
for polystyrene reinforced with 40 wt.-% NFC. Yano
et al. [31] reported tensile modulus and strength of up to 20 GPa
and 325 MPa, respectively, for BC-reinforced epoxy composites
containing 65 wt.-% BC loading. Tensile modulus and strength of
up to 8 GPa and 202 MPa, respectively, have also been obtained
for NFC-reinforced hydroxyethyl cellulose composites containing
68 wt.-% NFC loading [32]. It is therefore evident that high
performance BC- and NFC-reinforced polymer composites can be
produced. However, one major question still remains: Are
nanocellulose-reinforced
polymer
composites
truly
environmentally friendly compared to commercially available
renewable
polymers
or
engineering
materials?
Li
et al. [33] recently used life cycle assessment (LCA) to analyse
the environmental impact associated with the production of NFC
using high pressure homogenisation and high intensity sonication.
TEMPO-oxidised and chloroacetic acid-etherified kraft pulp were
chosen as the starting materials in their LCA model. The authors
found that NFC produced from high-pressure homogenisation of
TEMPO-oxidisedkraft pulp has the lowest environmental impact
among all the NFC production routes studied. In a recent LCA
study conducted by Hohenthal et al. [34], the non-renewable
energy consumption associated with the production of NFC
nanopaper was estimated to be 107.5 MJ kg1. This is
significantly higher than the energy consumed for the production
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December 2015

of polylactide (PLA), which is estimated to consume only

42 MJ kg1[35] of energy.
With increasing demand for environmental friendlier materials, it is
timely to investigate the environmental impact associated with the
manufacturing of nanocellulose-reinforced polymer composites.
Therefore in this work, we quantify the environmental impact
associated with the manufacturing of BC- and NFC-reinforced
polymer composites through a life cycle assessment approach,
starting from the production of nanocellulose (i.e. the cradle) to
the end-of-life (i.e. the grave) of the nanocellulose-reinforced
polymer composites. Joshi et al. [36] have suggested that natural
fibre composites could potentially compete environmentally with
glass fibre-reinforced polymer composites in most applications. In
this work, a comparison of environmental impact between BC/NFC-reinforced polymer composites and glass fibre-reinforced
polymer composites is also reported.
Read More:
http://www.sciencedirect.com/science/article/pii/S0266353815300
725

Rechargeable paper sheets could help rewrite the

book on electricity storage

COLIN JEFFREY, DECEMBER 7, 2015

Using millions of tiny fibers of nanocellulose sheathed with a
conductive polymer coating, scientists have created sheets
of paper that can store significant amounts of electric
charge. Dubbed "power paper," the material is able to be
recharged many hundreds of time, and in mere seconds. It is
also lightweight, requires no toxic chemicals or heavy metals
to create, and may offer a renewable and prolific way to
provide energy to all manner of devices.
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Lightweight, extremely thin, and foldable, sheets of "power paper" have

been created by scientists that can store significant amounts of electric
charge and may one day provide ultra-thin electricity storage for modern
devices (Credit: Linkoping University)

According to one of the groups of researchers working on the new

material in the Laboratory of Organic Electronics at Linkping
University, power paper has the characteristics of ordinary paper
with a slight plastic sheen. To demonstrate its flexibility and
strength, the researchers claim they were even able to use one
piece to fold an origami swan.
Just one sheet of the new electric paper, some 15 cm (6 in) wide
and mere tenths of a millimeter thick, is able store as much as
electric charge as a 1 Farad capacitor; an amount similar to
currently available supercapacitors. According to the researchers,
the new paper also holds four world records for any
supercapacitor the highest charge and capacitance in organic
electronics, of 1 Coulomb and 2 Farad, the highest measured
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December 2015

current in an organic conductor of 1 Ampere, along with the

highest capacity to simultaneously conduct ions and electrons,
and the highest transconductance in a transistor.
"Thin films that function as capacitors have existed for some
time," said Xavier Crispin, professor of organic electronics. "What
we have done is to produce the material in three dimensions. We
can produce thick sheets."
The primary construction material used is nanocellulose, which is
composed of cellulose that has been broken down into fibers
around 20 nm in diameter. These nanocellulose
fibers are then soaked in water, and an electrically charged
polymer, PEDOT:PSS (the same ingredient recently used in the
production of weavable LED fibers and the creation of semitransparent solar cells) in solution is added. The ensuing process
then sees a thin patina of polymer form around the fibers.
"The covered fibers are in tangles, where the liquid in the spaces
between them functions as an electrolyte," said Linkping
University doctoral student Jesper Edberg.
With an exceptional capacity for energy storage, the researchers
believe that continued development will eventually produce even
higher capacity units. And with the new power paper being
prepared like ordinary paper using regular cellulose pulp, which is
dehydrated in the same way, the most significant challenge is to
produce an industrial-scale process to accommodate this.
"Together with KTH, Acreo and Innventia we just received SEK
34 million (US$4 million) from the Swedish Foundation for
Strategic Research to continue our efforts to develop a rational
production method, a paper machine for power paper," says
Professor Berggren.
Financed by the Knut and Alice Wallenberg Foundation since
2012, the power paper project also included researchers from the
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December 2015

KTH Royal Institute of Technology, Innventia, the Technical

University of Denmark and the University of Kentucky.
The results of this research were recently published in the
journal Advanced Science.
Source: Linkping University

LEDs Should Be an Essential Part of Efficiency Plan

December 7, 2015 By Jay Black

Jay Black
Vice President of Development and Communications, Revolution
Lighting Technologies
As 2015 comes to a close and the New Year begins,
organizations begin assessing budgets to search for ways to
control or cut costs across the business. Energy usage is a
tremendous expense in many industries, where electricity and
utilities account for big dollars spent every year, so a move to
more energy efficient technologies could provide tremendous
financial benefits.
One such technology to consider is LED lighting, with some
commercially available offerings able to help business cut energy
costs by up to 60 percent, while also producing a healthier lighting
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December 2015

experience. Most non-LED lighting solutions currently installed

can be easily converted to LED technologies, reducing energy
consumption, carbon emissions, maintenance costs and other
indirect costs associated with the consumption and generation of
electricity, while improving light output with negligible depreciation
over time.
There are a number of health and productivity related
benefits reportedly associated, as well. But the biggest payback
comes from efficiency. LED technologies are exceeding 70,000
hours compared to the 15,000 hours of fluorescent lighting.
While organizations in any industry can benefit from LED lighting
technologies, there are several untapped market opportunities
where LED could provide significant savings for organizations and
revenue for the companies that complete the installations.
Education
Lighting represents 31 percent of $7 billion annual energy and
utility expenses for higher education within the US. LED lighting
products offer a critical opportunity for the 4,700 U.S. colleges
and universities to save $1.2 billion annually by improving lighting
efficiency more than 60 percent, while providing superior
photometrics, eliminating UV radiation and visible lamp light
depreciation to increase motivation, positively impact mental wellbeing and improve concentration and productivity for students.
The benefits of LED lighting extend beyond the higher education
market. According to the US Department of Energy, lighting is a
significant consumer of energy use in K-12 schools as well,
second only to space heating. According to a US Environmental
Protection Agency report, school buildings are often able to
achieve upwards of 40 percent energy cost savings through
lighting installations and retrofits. These savings can be further
enhanced by introducing LED lighting controls to address
occupancy, dimming and daylight harvesting. It is estimated that
lighting control systems can improve lighting energy savings by
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December 2015

an additional 20 percent. With approximately 98,000 public

schoolsnationwide, the market for energy efficient lighting
solutions is significant, as is the opportunity for cost savings for
the schools and districts installing the technology.

Parking Facilities
There are approximately 40,000 parking garages costing owners
more than $6 billion annually on lighting energy costs across the
US. One of the biggest reasons for the costs is the price tag
associated with current high energy systems and the need to
keep them running for 24/7 as a safety feature. While cost
savings alone may be a prevailing reason to install LED lighting,
the increased light output provides an additional benefit of
improved safety and security for both enclosed open area parking
facilities.
Grocery and Food Preparation
Lighting makes up 18 percent of US supermarket and grocery
store energy use nationwide. With approximately 40,000 stores
nationwide, totaling 1.6 billion square feet, LED lighting could
have a significant impact, reducing the approximately $4 per
square foot spent on energy use to save grocers $691 million
annually. Consider this example: A typical LED installation within
a grocery store could save $28,500 annually. Those savings are
the equivalent of an additional $950,000 in revenue at a 3 percent
profit margin.
There is additional opportunity in this sector for LED technologies
with food safety certifications from NSF International for
example which allows for installation within areas where food is
processed, prepared and handled. Key certifications like these
ensure that the technology meets the highest standards in food
safety, passing stringent testing from both the FDA and USDA.
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LED technologies have become a major factor within the lighting

and energy efficiency marketplace because of the financial and
environmental benefits they produce. Most organizations wait until
something is broken to fix or replace it, but LED technologies
should be installed as part of an efficiency plan before the need
arises. When done so, significant savings, both financially and
environmentally, can occur.
Jay Black is the vice president of development and
communications for Revolution Lighting Technologies.

Pushing Hydrogen, Fuel Cell Research

December 14, 2015 By Carl Weinschenk
The U.S. Department of
Energy is making as much
as $35 million in funding
available to
advanced
hydrogen and fuel cell
technology
research,
according to NGT News.
The funding will go toward research in hydrogen production,
delivery and storage research and development, according to the
story. In addition, the DoE will support demonstration of
infrastructure component manufacturing, support for deployment
of hydrogen and fuel cell technology and other initiatives, the
story said. The DoE says research aimed at increasing durability
and reducing costs also are key goals, the story added.
The advance of fuel cells has been due to the great progress
made by electric vehicles. This research is benefiting other
industries as well. For instance, Intelligent Energy said this
summer that it is purchasing contracts from GTL Limited to
provide hydrogen fuel cell technology to power 27,400
telecommunications towers in India.
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December 2015

Scientists seek more data on existing water in shale

formations
WRITTEN BY Kathiann M. Kowalski, 12/21/2015
Source: http://midwestenergynews.com/2015/12/21/scientistsseek-more-data-on-existing-water-in-shale-formations/
In hydraulic fracturing, what goes down isnt always the same as
what comes back up.
The process, informally known as fracking, pumps millions of
gallons of treated water and sand into deep shale formations so
oil and natural gas can flow out.
Along the way, drilling and production also bring up brine from the
ground super-salty liquid with elevated levels of heavy metals,
radium and other chemicals.
If scientists can learn more about that naturally-occurring water in
the shale formations, drilling companies and well operators might
figure out better ways to protect equipment and well integrity.
More
complete
information
could
also
lead
to
safer disposal options and other actions to protect public health
and the environment.
Researchers from government, academia and industry reported
on new study results looking at shale formations in Ohio and
other states -- at the Geological Society of Americas annual
meeting in Baltimore in November. But more data are needed to
draw definitive conclusions.
Hydraulic fracturing uses lots of water and produces a lot of
water by volume, said Madalyn Blondes at the United States
Geological Survey (USGS). So to be able to understand all these
things, we really need to understand the natural formation water.
What comes up
Fracking and horizontal drilling have led to a boom in oil and
natural gas production. Yet just as the process uses large
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December 2015

quantities of water to crack rock, it also produces huge amounts

of liquid waste as flowback and produced fluids.
Flowback usually is what we get out when we clean the well up
after a hydraulic fracking job, usually within the first week or two,
explained TarasBryndzia, a geologist with Shell International
Exploration and Production, Inc. Flowback typically produces
huge quantities of water in a short time period.
Produced fluid comes up afterward and as the well continues in
operation. The quantities are much less than flowback on a daily
basis.
The composition in the flowback period is not the same as what
comes back later, said Blondes, who presented her research on
produced fluid from the Utica shale at the GSA meeting.
In addition to radium, produced fluid from the Marcellus and Utica
shale usually has higher levels of salt and heavy metals than
fracking fluid does.
As a result, produced fluid could be worse for the environment
than whats being injected in there, Blondes continued. That
could affect disposal.
Produced fluid is also more of a problem for well operators,
Bryndzia noted, particularly when it comes to salt in our
production facilities. Among other things, chemicals could
crystalize inside pipes and reduce the rate of production.
If I know where this stuff is coming from, I can actually mitigate
against having salting out in production, Bryndzia said.
Going deeper
It seems very clear that what were looking at is actually natural
formation water, Blondes said.
Yet knowing that the produced fluid is stuff thats naturally there
doesnt solve the mystery of how it got there in the first place, she
said.
For both the Utica and Marcellus layers, brine in produced fluid
likely started out in an ancient sea.
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The salt content of that ancient sea water would have become
more and more concentrated as water evaporated. Some liquid
may still exist in either deep shale or adjacent rock layers. If the
water evaporated completely, solids could have been left in the
rock.
Pumping large quantities of fracking fluid down into the deep
shale formations could dissolve some chemicals from the rock.
Similarly, some amount of liquid could still remain in the tiny pores
of that rock and then come up after fracking.
Bryndzias research on the Marcellus shale, also presented at the
GSA meeting, suggested that lots of brine likely began in the
shale layer in one of these ways. However, his data also showed
that some brine could come from an adjacent layer.
Indeed, it would be unlikely for the Marcellus shale layer to be the
source for all of the produced water, said Brian Stewart, a
geologist at the University of Pittsburgh who also spoke at the
GSA meeting. Stewarts team analyzed drill cuttings from
Marcellus shale operations in New York.
Theres not enough salt or water in those pores to really explain
the super salty water that comes back, Stewart said.
Instead, the fluid could come from part of the formation thats
maybe not really a shale, like a little lens of sand in there that
might hold more water, he suggested. Or, it could come from
rock formations above or below the shale.
In order for that to happen, some interaction with that other layer
would have to take place. One possibility is the fracking process
itself.
When you hydraulically fracture, you basically create cracks
under those formations, and the water can leak back into your
well, Stewart said.
Its clear that the fractures extend outside of the target formation
in the fracking process, he added. Its not really possible to keep
it within a relatively thin shale unit. Other research presented at
the GSA meeting supports this position.
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In some cases, some upward migration of gas or fluids may be

possible, which is why theres some concern about areas with lots
of older, abandoned oil and gas wells. However, groundwater
contamination would be extremely difficult as a result of
fracturing done in deep unconventional shale layers, Stewart said.
Youre still not getting anywhere close to the surface, Stewart
noted. When groundwater contamination has occurred, the more
likely reason is faulty drilling or well completion, he said.
Data wanted
Getting more exact answers gets tricky, especially because
theres a bit of a chicken and egg problem, Blondes noted.
Fluids from deep shale layers generally dont come up unless
fracking is done, so its harder to figure out what would come up
otherwise.
In the case of produced fluid from the Utica shale, its likely its
from Utica itself, Blondes suspects. It seems somewhat different
from the Marcellus.
We definitely cannot say for sure, though, she said, because
we dont necessarily have samples overlying and underlying the
formation. To get those samples, she and other researchers
need more access to wells, particularly those in the Utica shale.
Were actually mostly interested in some of the older wells that
have been in production for a while, since those would have the
highest proportion of natural formation water, Blondes said.
USGS is not a regulatory agency, she added, and we take
utmost care to not give away any proprietary data.
We only have a couple of data points from the Utica, Blondes
said. Our goal is to be able to sample the Utica and above and
below.

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December 2015

High Pressure Reactors for Research Labs

Fri 12/18/2015
Source: R&D headlines and
news
Supercritical Fluid Technologies
has introduced a new, highpressure reactor specifically
designed
for
small
batch
reaction chemistry. The HPRMicro Reactor is a suitable highpressure reactor for early,
exploratory research. It is
especially
well-suited
for
research, process development
and screening applications when
reagents, catalysts or other
essential
materials
are
expensive or available in very
limited supply. The HPR-Micro
Reactor comes standard with a 10-mL Iconel 718 reactor vessel
for operation up to 10,000 psi (689 Bar/68.9 MPa), inlet and outlet
valves and a pressure gauge. Optional 25- and 50-mL vessels are
available. Depending upon the temperature option selected,
operation from -40 C to 150 C is possible. The vessel closures
are the hand tight type where no wrenches are needed. The
reactor is equipped with magnetically coupled stirring for optimal
mixing. All high-pressure components are ASME compliant
designed and overall assembly is protected by a rupture disc
assembly for safe operation. The Micro Reactor is compact and
can fit into a fume hood. The Micro Reactor can be easily
removed from the mounting stand and brought to a glove box for
reactant and reagent loading under an inert atmosphere. Multiple
inlet ports are included for addition of solvents, reagents, or
gases. An optional Reagent Injection Manifold increases
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versatility by providing a means to add a precise amount of

reagent at anytime during course of the reaction. Standard
addition quantities include 2.0, 1.0 and 0.5 mL.
Supercritical Fluid Technologies, www.supercriticalfluids.com

Software for Administration of FT-NIR Spectrometer

Networks
Wed, 12/17/2014 - Bruker Optics
Source: R&D headlines and news
ONETBruker Optics
has introduced the
new
networking
software
ONET.
The software is a
server application
accessed via a
browser-based Web
interface (WebUI),
allowing users to set up, administrate and control a network of FTNIR instruments from a central remote location anywhere. All data
measured on local spectrometers are stored first locally and
replicated to an ONET database for central access. ONET
supports the connection of LIMS to the central database and is
available in English, Chinese, French, German and Spanish. The
number of clients in the network is limited by the performance of
the server and the network data transfer rate.
Bruker Corp., www.bruker.com

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New Reusable Polymer that can clean water

NEW YORK, DEC 26:
Scientists have developed a new reusable polymer that can remove
pollutants from flowing water within seconds, just like air fresheners trap
invisible air pollutants at home and remove unwanted odours.
Researchers have used the same material found in air fresheners,
cyclodextrin, to develop a technique that could revolutionise the waterpurification industry.
The team, led by Will Dichtel, associate professor at Cornell University in
US, developed a porous form of cyclodextrin that has displayed uptake of
pollutants through adsorption at rates vastly superior to traditional activated
carbon 200 times greater in some cases.
Activated carbons
Activated carbons have the advantage of larger surface area than previous
polymers made from cyclodextrin but they do not bind pollutants as
strongly as cyclodextrin.
What we did is make the first high-surface-area material made of
cyclodextrin combining some of the advantages of the activated carbon
with the inherent advantages of the cyclodextrin, Dichtel said.
These materials will remove pollutants in seconds, as the water flows by,
he said.
The cyclodextrin-containing polymer features easier, cheaper regeneration,
so it can be reused many times with no observed loss in performance.
Recyclability
Recyclability is another advantage of the cyclodextrin polymer, Dichtel said.
Whereas activated carbon filters must undergo intense heat-treating for
regeneration, cyclodextrin filters could be washed at room temperature with
methanol or ethanol.
The findings were published in the journal Nature.
(This article was published on December 26, 2015)

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December 2015

ALTERNATIVEThe
& RENEWABLE
ENERGY
Cogeneration:
Right Technology
at the
Right Time
December 2, 2015 By Carl Weinschenk

Cogeneration also known as combined heat and power

(CHP) is expected to grow, according to a study
released in October by Grandview Research. Its not
surprising: The technique, which uses one process to
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generate electricity and heat, is clean and efficient. That

puts it right in line with the desire of energy managers,
their bosses and society at large.
Grandview found that the global market, which it valued at
$6.25 billion last year, is being driven by increasing
demand at both the commercial and industrial levels.
Drivers include increasing limits on carbon emissions and
low prices and abundance of natural gas, the fuel most
often used in cogeneration.
There are trends within the cogeneration/CHP sector.
Experts say use of coal is expected to slow and biomass
is expected to grow. For example, a 25 MW biogas-fueled
cogeneration
plant
currently
under
construction
will provide all of the steam and electricity to Los Angeles
Hyperion Water Reclamation Plant, according to
WaterWorld. Exelon Generation subsidiary Constellation is
the developer of the plant, which will generate 173 million
kWh of electricity annually and as much as 70,000 pounds
of steam per hour.
Grandview notes that cogeneration is divided into large
and micro/small scale segments. Large scale dominates,
but micro/small scale is growing in its overall size and
proportion compared to the entire segment: It represented
about 15 percent of the market last year and will add
more than 8 percent from this year to 2022. Overall, North
America cogeneration is expected to have a compound
annual growth rate of 3.5 percent from this year to 2022.
The drivers of cogeneration are significant. Russell Ray,
the Editor-in-Chief of Power Engineering and Chairman of
POWER-GEN International, makes the case for
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CHP. Actually, he uses a LinkedIn post to make two. The

first is that the centralized power industry is increasingly
troubled: Costly regulations are proliferating and revenue
is stagnant. The second case is that CHP which he
points out has been a reliable source of energy for
generations is being supported by the Obama
administration, which sees it as a prudent approach to
decentralizing and distributing power generation. The
bottom line is that the industry has a powerful friend:
The Obama administration wants to boost CHP capacity
by 40,000 MW, or 50 percent, by 2020. That was the goal
established in an executive order directing several federal
agencies and departments to encourage more investment
in CHP projects through existing programs and policies.
Its not smooth sailing in Washington, however.
The fate of legislation in Congress will have a big impact
on CHP and waste to power (WHP), a related segment.
Patricia Sharkey and Susan Brodie from the Midwest
Cogeneration Association and The Heat is Power
Association, respectively in a letter to the editor of The
Belleville News-Democrat described the benefits and
drawbacks of the technologies.
The key drawback is high capex. The problem is that
federal tax incentives of 10 percent for CHP (WHP gets
none) simply is not enough. There is hope, however: The
Power Efficiency and Resiliency (POWER) Act (H.R. 2657
in the House and S. 1516 in the Senate), which would give
both CHP and WHP 30 percent investment tax credit, the
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December 2015

same as other low- and zero-emitting technologies,

according to the letter.
The writers say that prospects for the legislation are good.
Brodie, in response to emailed questions from Energy
Manager Today, sounded upbeat but concluded that the
prospects are uncertain:
The POWER Act has gained significant momentum this
year, approaching 50 bipartisan cosponsors (26
Republicans, 17 Democrats), she wrote. Its part of the
discussion as Congress considers a year-end tax deal,
although prospects for enactment this year are uncertain.
If its not included, we will continue the push in 2016.
There is a separate initiative for WHP. Meanwhile,
legislation that would add waste heat to power (WHP) to
the existing 10 percent investment tax credit (ITC) is
poised to be included in the year-end tax package, Brodie
wrote. The bill, S. 913, is co-sponsored by Senators
Carper and Heller, and was reported from the Senate
Finance Committee early this year by voice vote.
It is not a monolithic segment. Companies shopping for
CHP systems face a choice of whether to buy customized
or packaged systems. A story at Cogeneration & On-Site
Power Production which features vendor Veolia does a
good job of describing the benefits of the packaged
approach. A packaged system a simple installation
almost certainly easier than that of a customized system
but there are space requirements to which attention must
be paid. The story quotes a Veolia executive in the United
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Kingdom who says that a vast majority of commercial

CHP systems, especially those bound for new buildings,
are packaged.
The future looks good for cogeneration. Demand for
distributed generation and clean energy options continue
to grow as customers seek more control over how their
energy is produced and supplied to meet budget,
resiliency and sustainability goals, wrote Gary Fromer,
the Senior Vice President of Distributed Energy for
Constellation in response to emailed questions from
Energy Manager Today. Some customers may require
very high resiliency for their specific mission, a critical
sewage treatment plant like LA Sanitations is a good
example.
Combining Fuel Cells with Solar for Telecom Pilot
December 12, 2013 By Linda Hardesty
Ballard
Power
Systems will be
supplying
ElectraGen-ME 2.5
kW
methanolbased fuel cell
systems for a pilot
project in Idea
Cellulars
India
telecom network.
The
fuel
cell
systems will be combined with solar technology to
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December 2015

generate continuous power at five wireless base station

sites.
Funding for a feasibility study as well as the pilot project
has been made available through a grant from the United
States Trade and Development Agency (USTDA). The trial
is scheduled to take place in early 2014.
Idea Cellular is Indias third-largest mobile services
operator with 128 million subscribers and has been
powering telecom base stations in the region of Nadga,
Madhya Pradesh with Ballard Powers ElectraGen-H2
direct hydrogen systems since early 2012. These systems
utilize by-product hydrogen from a nearby chemical
product plant as a low-cost fuel source.
Indias Department of Telecommunications has mandated
that at least 50 percent of all rural cell towers and 20
percent of urban cell towers be powered using clean
energy systems by 2015. The regulation is targeted at
reducing the countrys reliance on diesel generators,
which currently power 60 percent of all wireless base
station sites.

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In the shadows: Domestic solar power developers feel

the heat
DEBABRATA DAS

Solar power tariffs coming down to near grid parity make for great
headlines. But behind it is a growing fear that domestic
developers could be left out of the solar energy story in India.
According to industry estimates 14,000 MW of solar power
projects are in the pipeline; they are yet to be commissioned but
have been allocated, or are in the process of being allocated. A
majority of these projects are of international developers such as
SunEdison, Trina Solar and SkyPower who are outbidding their
domestic counterparts by big margins. And the key factor helping
them bid aggressively is their access to cheap finance.
It is accepted within the industry that to bring down solar power
tariffs, either the equipment cost needs to go down or financing
needs to be cheaper. With the global cost of solar power panels
now having bottomed out after two years of drastic reductions,
finance is only cost aspect left to play with. It is here that
international developers are crowding out domestic players. With
AAA-rated agencies such as NTPC and Solar Energy Corporation
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December 2015

of India turning into power procurers, domestic institutions are

keen to lend to solar power projects. However, the cost of
domestically sourced finance still hovers around 11.5 per cent.
This is after the series of rate cuts announced by the RBI.
International developers have access to finance at an average
rate of 7-8 per cent; in some cases, even lower.
The aggressive bids have also meant that some of the big names
looking to enter the market are still waiting on the sidelines after
signing MoUs as they hope for competition to ease. As a result,
smaller domestic developers who have waited for years for the
market to open up are being increasingly shunted from groundbased solar power projects and forced to look at rooftop projects.
With talks of an upcoming rooftop solar policy, the domestic
industry now hopes for mandatory rooftop solar installation for
buildings to provide them some certainty about the business
model.
Principal Correspondent
(This article was published on November 30, 2015)

Shellto build biofuels demonstration plant in India

12.16.2015 |
The IH2 technology was developed by the US-based Gas
Technology Institute in 2009 and is being further developed
in collaboration with CRI Catalyst Co. (CRI), Shells catalyst
business.
Shell India Markets (SIMPL) will proceed with the installation of a
5 tpd IH2 technology demonstration plant on the site of SIMPLs
new technology center in Bangalore, India, officials confirmed on
Wednesday.
The Shell unit SIMPL will build, operate and own the
demonstration-scale IH2 plant. IH 2 technology is a continuous
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December 2015

catalytic thermo-chemical process which converts a broad range

of forestry/agricultural residues and municipal wastes directly into
renewable hydrocarbon transportation fuels and/or blend stocks.
The IH2 technology was
developed
by
the
US-based
Gas Technology Institute in 2009 and is being further developed
in collaboration with CRI Catalyst Co. (CRI), Shells catalyst
business. CRI will supply the proprietary catalysts for the unit.
The basic engineering package for the plant will be provided by
Zeton of Ontario, Canada.
As the IH2 technology converts a wide range of residual biomass,
the facility in Bangalore will be designed to allow for variation
in feedstock. Highly relevant commercial feedstocks, such as
residual woody biomass and select agricultural and municipal
residues, will be within the intended feed scope. Regardless of
the feedstock, the IH2 hydrocarbons produced span the gasoline,
jet and diesel range.
Hydrocarbons
produced
from
the IH2 technology using
lignocellulosic biomass feed meet the American Society for
Testing and Materials (ASTM) specifications for road transport
fuels, positioned for the US market as an E10 gasoline fully
renewable product and as a 100% fully renewable on-road diesel.
Testing of the neat kerosene (R100) cut indicates that the
material meet specifications for global jet fuel specifications for
Jet A-1/JP8 for those properties tested to date. Ongoing research
indicates a high probability to achieve European Union (EN)
specification fuels, the company says.

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HSE, CLIMATE
Climate
Change CHANGE & SUSTAINABILITY
Attention Sustainability Executives : Who has been
your best internal ally?
Sustainability execs name their most important allies
Executing sustainability projects effectively requires the help of
internal allies, say some of the country's top sustainability pros.
For Tiffany & Co.'s AnisaKamadoli Costa, the most important ally
of all is the chief financial officer. "When you find a clear way to
link sustainability to value creation, they can be your best ally -and they can help fund critical projects," she said.
GreenBiz.com (12/30)
John Davies
Wednesday, December 30, 2015 - 1:45am

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As 2015 ends, we decided to get some advice from members of

the GreenBiz Executive Network, our member-based, peer-topeer learning forum for sustainability professionals, about who
within their companies has been an effective ally.
Judging from their responses, your best ally can come from
anywhere within the organization. And they might even be
someone who previously used to run away from you.
Here's what our members said when we asked, "Who has been
your best internal ally and why?"
John Schulz, AVP, Sustainability Operations, AT&T

The members of our Sustainability Steering Committee made

up of executives from across the company were critical to
successfully launching our new 2025 Goalsplatform.
These long-term goals and targets will help us focus our
resources and keep us accountable for progress.
Were not just focused on outputs, but on outcome and our
impact. That takes focus and time. We stretched ourselves and
made long-term, somewhat aspirational goals. Now, the journey
begins and we are looking forward to chronicling it.
Kim Marotta, director of sustainability, MillerCoors

We have been fortunate to have our CEO be one of our strongest

allies. Sustainability is part of our overall company strategy and is
one of the five platforms that will help us become America's best
beer company.
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December 2015

Nanette Lockwood, global director, climate policy, Ingersoll

Rand Center for Energy Efficiency and Sustainability

Product management because they look to us for market

leadership opportunities. Our climate commitment has positioned
us as a global leader with respect to refrigerant transition and
demonstrates to our businesses how bold commitments can lead
to growth opportunities.
Brandy M. Wilson, global sustainability director, CH2M

My best internal ally is our senior vice president for innovation and
sustainability, who also serves on our Board of Directors.
Our board and senior leadership are committed to CH2Ms
promise of sustainable solutions and corporate citizenship, and
the link my ally provides between my programs work on-theground and our companys chief strategists makes our program
business-relevant, and therefore, sustainable.
Jenny McColloch
McDonald's

director,

restaurant

sustainability,

At the global level, our sustainability team partners with many

branches of our global business. For example, our recent
participation in the White House American Business Act on
Climate Pledge involved input from many groups, such as supply
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December 2015

chain, restaurant innovation and operations and corporate

communications.
Some of the most important allies in our work that Im personally
inspired by are the local sustainability champions across
McDonalds system who are driving innovation at the country and
city
levels. McDonalds
U.K.s
Planet
Championscrew
engagement program has been adopted across several European
countries, and McDonalds UAEs logistics program recently
reached the 5 million kilometer milestone with its closed loop
biodiesel program (see its new video to explain how it works)
I love hearing from our environment lead in Sweden with periodic
Twitter updates about the popularity of McDonalds Swedens EV
chargers network with our customers there. And, of course, we
wouldnt be where we are without the leadership of our restaurant
owner-operators, who are supporting their communities
with green building efforts and connecting with customers through
programs like "Good Neighbor, Good Grounds" used coffee
grounds recycling. As anyone working in sustainability knows, it
takes a village.
Dave Stangis, vice president public affairs and corporate
responsibility, Campbell Soup Company; president,
Campbell Soup Foundation

Chief procurement officer. This person and role has been critical
to our sustainability journey and they have moved from running
the other direction when they saw me coming to working with me
to identify longer-term risks and position them as opportunities.
They have also come to view the discipline as a key risk reduction
strategy and have put resources and accountability behind it.
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December 2015

Jenny Cross, vice

Mohawk Industries

president

corporate

sustainability,

The success or failure of our environmental sustainability

initiatives rests mostly within our manufacturing facilities, so I
would have to say our operations teams. The alliance is frankly a
natural one since these teams are so dedicated to continuous
improvement, increased efficiencies and lean manufacturing.
What Ive been most impressed with is the level of enthusiasm
shown for sustainability. Initiatives require resources and
resources are often quite tight, but our operations teams get it and
make it happen. They truly see the value and realize the benefits
that come from running a sustainable business. They make my
job a pleasure.

Kathrin Winkler, senior

sustainability officer, EMC

vice

president

and

chief

One of the biggest advocates of our sustainability initiatives is our

global head of HR. Our missions are not only aligned, but
mutually reinforcing. Opportunities to make a difference in
creating a sustainable future help engage our colleagues, and the
innovation on which progress in sustainability depends comes out
of more engaged and diverse workforce.
We have representatives on each others working groups, and
she sits on our executive sustainability council.
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December 2015

Above all, we are both passionate about making peoples lives

better and are gratified when we can do something that generates
a smile in another person.
AnisaKamadoli Costa, chief sustainability officer, Tiffany &
Co.

CFO. When you find a clear way to link sustainability to value

creation, they can be your best ally and they can help fund
critical projects.
Laura Bishop, vice
sustainability, Best Buy

president,

public

affairs

and

At Best Buy, we are very fortunate to have the complete support

and encouragement of our executive leadership team for our
corporate responsibility and sustainability efforts.
Their endorsement is further reinforced by a broad network of
advocates who hold leadership positions across our company
from finance to marketing to an internal sustainability advisory
council representing a cross-section of Best Buy management.
Laurel Peacock, senior manager, sustainability, NRG Energy

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December 2015

Business operations manager. He sees the business value of

sustainability and can enroll others given that he has "street cred"
coming from the operations side of the business.
He also knows the org structure so well that if I ask him a
question which he doesnt have the answer for, he likely knows
who will.
Deborah Hecker, vice president, sustainability and corporate
social responsibility, Sodexo North America

Our Better Tomorrow Plan Executive Advisory Committee and,

especially, the vice presidents of operations from each of our
business segments. These are the several executives who have
sufficient knowledge and passion to act as champions at the
senior leadership levels of the organization.
They get time on agendas for sustainability topics; they include
practices and processes into their operating standards; and they
provide success stories from their businesses that we can share
and replicate across the enterprise.
Jeff Rehm, LEED-GA, senior manager corporate facilities and
global sustainability, W.W. Grainger

Whether it is a corporate office or in our distribution centers, our

facilities managers are great to work with. They have a
tremendous amount of practical knowledge and ideas around
reducing energy consumption.
They are also always eager to try new things, like renewable
energy, at their facilities.
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December 2015

Susan Rochford, VP, energy efficiency, sustainability and

public policy, Legrand, North America

VP, strategic sourcing who is completely aligned on the

necessity of supplier collaboration to achieve product
sustainability goals and is willing to act upon it.

Cyprus Water Crisis Shows Climate Change Is Here and

Businesses Must
Dec 21,2015 Environmental Leader
With the historic agreement at the recent COP21 climate change
conference in Paris, the worlds leaders finally seem to recognize
the magnitude of the risks we face. One of the most immediate
threats is water scarcity as global temperature increases change
global climatic patterns.
Countries like my own homeland of Cyprus are already
experiencing prolonged and frequent droughts which
demonstrate, as President Obama said, that climate change is not
some far-off future risk, but a danger that we must confront now.
The most recent drought in Cyprus lasted four years between
2004 and 2008, and caused reservoir levels on the island to
plunge. Groundwater and desalination proved insufficient to meet
demand. There were 30 percent cuts to water supplies, giving
households only just enough water to live on. People were fined
for using more than their share.
Farming on Cyprus was badly affected as there was no water for
irrigation and livestock, leading to illegal water abstraction from
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aquifers. At the height of the crisis, the government imported eight

million cubic meters of water over six months from Greece at a
cost of over 40 million (US$43.4 million).
Despite this, policymakers, businesses and citizens see the 2008
situation as a one-off freak event rather than something that
could increasingly become the new normal.
My research suggests that water scarcity is indeed the new
normal on Cyprus. I studied the effect of climate change on the
Kouris Dam reservoir which supplies 40 percent of the countrys
water for agricultural irrigation. The results show that decreases in
rainfall and increases in evaporation mean that water levels in the
reservoir will decrease in future.
While problems due to water shortages become ever more acute,
action is delayed because low water prices mitigate against the
financial case for investing in water conservation. Prices signal
value to consumers, and it is important that policymakers use
prices to reflect the increasing scarcity of water and its importance
to sustaining life.
Working at Trucost has shown me that businesses can act now to
prepare for increasing water scarcity by getting better information
on the water they consume at their production sites and through
their supply chains. They need to understand how their use of
water in drought-prone regions creates risks for their business, so
that these can be factored into plans for business growth
alongside operational costs and revenue forecasts.
At COP21, Frances energy and environment minister Sgolne
Royal said: It is through water that we can measure both the
severity and the acceleration of global warming; however, we can
also see that, through water, solutions can be found.
Companies can work toward these solutions by monetizing water
risks, enabling them to use information about water scarcity to
drive more effective business decisions.
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December 2015

NikolIoannou worked as a research intern at Trucost from

October to December 2015 after achieving a Masters degree in
climate change from University College London.
Read more:
http://www.environmentalleader.com/2015/12/21/cyprus-watercrisis-shows-climate-change-is-here-and-businesses-must-actnow/#ixzz3uycJdVBi
SUSTAINABLE CSR

Transforming a Childs Life With Glasses

By JANE E. BRODY, DECEMBER 14, 2015

Put eyeglasses on children who cant see clearly and you can turn
their lives around. That is the aim of a terrific program
calledChildSight, run by Helen Keller International, which each
year screens up to 100,000 middle school and high school
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December 2015

children in poor communities throughout the country and provides

glasses to those who need them.
In New York City, the program has been expanded to serve older
students in G.E.D. programs, to public schools with a high
percentage of recent immigrants, and to teenagers living in
homeless shelters, where the unmet need for vision services has
been found to be particularly acute.
Through a longstanding partnership with The Childrens Aid
Society in New York, Helen Keller International last year screened
and treated more than 6,000 students in 16 low-income public
schools.
Noting that between 25 percent and 30 percent of students fail
routine vision screening, the city recently committed $10 million
over four years to fund vision screening in 130 additional
community schools, with an estimated 20,000 glasses to be
provided free by the eyewear company Warby Parker.
In addition to New York State, ChildSight now serves high-poverty
communities in California, Connecticut, New Jersey and Ohio and
in thousands of communities in Asian countries, where
nearsightedness is an especially prevalent problem.
The organizations goal is to maximize childrens ability to take
full advantage of their educational opportunities, said Nick
Kourgialis, who heads the Helen Keller program globally. Its an
easy problem to correct that can enable children to succeed
academically.
Children with uncorrected vision problems often struggle in
school. Those with the common refractive error called myopia, or
nearsightedness, may not see what teachers write on the
blackboard. Some children are unable to track words on a page,
which makes reading an arduous, and sometimes impossible,
task. Too often, despite average intelligence, such children
become academic failures or school dropouts or are incorrectly
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December 2015

deemed learning disabled and assigned to special education

classes.
Behavior problems are also common among children with vision
problems, who may be mislabeled as having attention deficit
hyperactivity disorder and mistreated with stimulants. In one study
of 81 elementary, middle school and high school
studentsconsidered at risk because of behavior problems, 97
percent failed at least one test of the New York State Optometric
Association Vision Screening Battery.
You may wonder how children can reach middle school or even
high school and not know that their vision is compromised. But, as
Mr.Kourgialis put it, If a child has always seen the world as fuzzy,
he may not know that he has a problem and that others dont see
it the same way.
For example, when Christian Merchan was a fourth grader in
Queens, said he found life really challenging before the schoolbased ChildSight program revealed a severe myopia and gave
him corrective lenses, which his family could not otherwise afford.
Christians teachers had told his mother that he failed to complete
homework assignments. His mother then realized that he couldnt
see the board well enough to copy them all down. But with
glasses and annual vision screenings to update his prescription,
he is now an honor student attending Cathedral Prep High School
on a scholarship and exploring his prospects for a scholarship to
college.
One in five children who need glasses cant afford them and face
each day without clear vision, the organization reports. Even
among those who get corrective lenses, about half the time the
prescription is outdated and no longer very effective. As children
progress in school, the demands on their visual abilities only
increase.
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December 2015

Although rigorous scientific data on the programs effectiveness is

lacking, Mr.Kourgialis said that teachers see a very positive
effect. They report that children whose vision has been corrected
with glasses are better engaged, participate more in class and
complete their assignments, he said.
A randomized controlled trial conducted in China among 3,177
fourth and fifth grade children with uncorrected myopia found that
providing them with free glasses had a greater positive effect on
math test scores than parental education or family wealth. And
those who received the glasses scored higher than those who did
not.
In this country, nearly 12 percent of people age 12 and older have
an inadequately corrected refractive error, with the problem most
common among Mexican Americans, non-Hispanic blacks and
young people 12 to 19.
While all children should have vision tests early in their school
careers, there is no standardized follow-up to assure that those
who need corrective lenses get them or have them updated as
their visual acuity changes with age. Impediments among children
living in poor communities include insufficient family finances and
a lack of access to the needed professional services, especially in
rural areas, Mr.Kourgialis said.
Even if families can afford an initial pair of glasses, if they are lost
or broken a common problem the cost of replacing them can
be prohibitive. The ChildSight program provides free
replacements, much to the relief of Christian, who accidentally
broke his current pair last month.
To be sure, children in middle and high school, an age when selfconsciousness soars, are not always thrilled to learn that they
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December 2015

need glasses. But it helps when many of their classmates do, too,
and when glasses enable them to participate in sports.
To ensure that children get the glasses they need and wear them,
the organization provides all the services within their schools and
offers a variety of stylish frames.
The initial screening is done by trained personnel who have every
child in the school read the ever-smaller lines on a Snellen chart,
one eye at a time, from a distance of 20 feet. Those with difficulty
seeing below the 20-40 line on the chart are examined by an
optometrist, who provides a corrective prescription that is sent to
an optical lab along with the selected frames. When the glasses
are ready, they are delivered to the children at school.
While the primary task of ChildSight is to screen children for
refractive vision problems revealed by reading the Snellen chart,
other vision problems are sometimes also detected and the
children referred to professionals for additional free or low-cost
care.
Parents should not assume that a child who passes a screening
exam in school has no vision problems. Among signs that a
further check is needed are frequent eye rubbing or blinking,
avoidance of reading and other close activities, holding reading
material close to the face, sitting close to the television, losing his
or her place when reading, difficulty remembering what is read,
frequent headaches and a short attention span.
Climate Change

COP21: 114 Companies Set Science-Based Emissions

Targets, Business Climate Tool Launched
By: Jessica Lyons Hardcastle
Environment Leader, Dec8, 2015
Some 114 companies including Ikea, Coca-Cola Enterprises,
Walmart, Kellogg and Dell have committed to
set emissions reduction targets in line with what scientists say is
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December 2015

necessary to keep global warming below the dangerous threshold

of 2 degrees Celsius, according to the Science Based Targets
initiative.
The announcement was made at the LPAA Business focus
event hosted by Caring for Climate at COP21 in Paris.
The companies participating have combined annual emissions of
at least 476 million metric tons CO2.
Also today WRI released the new CAIT Climate Data Explorer
Business platform, an interactive database of corporate emissions
and emissions reduction targets. This new tool is built on WRIs
CAIT Climate Data Explorer platform, a source for
international climate data and visualizations. Company data is
provided by CDP, a global corporate climate data-reporting
platform, and the Science Based Targets initiative.
The Science Based Targets initiative, a joint effort of CDP, WRI,
WWF and UN Global Compact, works with companies to set
science-based emissions targets and only approves corporate
targets that meet its strict criteria.
Ten companies have already had their targets approved
including: Coca-Cola Enterprises, Dell, Enel, General Mills,
Kellogg, NRG Energy, Procter & Gamble, Sony and Thalys.
Combined, these 10 companies will reduce their emissions from
operations by 799 million metric tons CO2 over the lifetime of the
targets.
These companies have also made commitments to reduce
indirect emissions throughout their value chains.
When the Science Based Targets initiative launched, its goal was
to recruit 100 companies by the end of 2015 to commit to setting
a science-based target.
Today, Kellogg, NRG Energy, and Enel announce that the
Science Based Targets initiative has approved the following
targets:
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December 2015

Kellogg commits to a 15 percent reduction in emissions

intensity (metric tons of CO2e per metric ton of food
produced) by 2020 from a 2015 base-year (scopes 1 &
2). Kellogg commits to reduce absolute value chain
emissions by 20 percent from 2015 to 2030 (scope 3).
NRG Energy commits to a 50 percent reduction of
absolute emissions by 2030 from a 2014 base-year
(scopes 1, 2 & 3). The company also has a long-term
target: a reduction of 90 percent absolute emissions by
2050 from 2014 levels (scopes 1, 2 and 3).
Enel commits to reduce CO2 emissions 25 percent per
kWh by 2020, from a 2007 base-year. The target includes
the decommissioning of 13 GW of fossil power plants in
Italy, and is a milestone in the long-term goal to operate
in carbon neutrality by 2050.

The 114 companies that have agreed to set science-based

targets represent at least $932 billion USD in total combined
profits. Almost a quarter of the companies who have signed up
are from the US, with the UK, France and Canada being the next
most common home locations.
Read more:
http://www.environmentalleader.com/2015/12/08/cop21-114companies-set-science-based-emissions-targets-businessclimate-tool-launched/#ixzz3u2EY6UkA

Kellogg Pledges to Slash Operations Emissions 65%

by 2050By: Karen Henry
Kellogg has announced new science-based emissions targets to
reduce greenhouse gas emissions across its operations 65
percent and help its suppliers reduce their emissions 50 percent
by 2050 against a 2015 baseline.
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December 2015

Science Based Targets is a joint initiative by CDP, the UN Global

Compact, the World Resources Institute and WWF intended to
increase corporate ambition on climate action by changing the
conversation about GHG emissions reduction target setting and
creating an expectation that companies will set targets consistent
with the level of decarbonization required by science to limit
global warming to less than 2 degrees Celsius compared to preindustrial temperatures.
Kellogg is focusing on upstream agriculture emissions and
manufacturing in its new targets because these two areas are the
largest sources of emissions in the companys supply chain. The
company has already reduced GHG emissions from its
manufacturing facilities by approximately 12 percent since 2008.
The new targets are an extension of Kelloggs 2020 global
sustainability goals set in August 2014, when the organization
announced commitments to further reduce greenhouse gas
emissions in its own operations, increase the use of low carbon
energy and require all key suppliers to measure and publicly
disclose their own emissions and reduction targets.
Kellogg has committed to supporting 15,000 smallholder growers
by 2020 to increase adoption of Climate Smart Agriculture.
Read more:
http://www.environmentalleader.com/2015/12/08/kellogg-pledgesto-slash-operations-emissions-65-by-2050/#

COP21: Strong Climate Policy Leads to Lower

Business Costs, CEOs SayBy: Jessica Lyons
Hardcastle, Dec4, 2015
Two new draft texts for a climate deal were released today
at COP21, with additional drafts expected to follow as
governments negotiate a global climate deal in Paris. Business
leaders, meanwhile, continue to step up their efforts to influence
climate policy.
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CEOs of seven apparel companies Levi Strauss & Co., Gap

Inc., VF Corporation, H&M, Eileen Fisher, Adidas Group and
Burton Snowboards yesterday issued a statement urging
government leaders to reach a strong climate change deal. They
called for ratchet mechanism and other measures to ensure
tangible pollution reductions and pledged to reduce their
own emissions.
Drought, changing temperatures and extreme weather will make
the production of apparel more difficult and costly, the statement
says. Climate change mitigation and technological innovation are
vital to the health and well-being of those who make and use our
products, as well as the future supply of materials needed to
make those products.
The statement follows a full-page ad in the Wall Street
Journal earlier in the week signed by more than 100 companies
that asks the US government to: seek a global climate deal in
Paris that keeps global temperature rise below 2 degrees C;
achieve or exceed national emissions reduction commitments,
and; support investment in the low-carbon economy in the US and
abroad.
Victoria Mills, a managing director of corporate partnerships
at Environmental Defense Fund wrote a blog post about the ad
and told Environmental Leader that theres a simple reason why
businesses are advocating for climate policy at COP21.
The reason hundreds of companies are calling for a strong
climate deal in Paris is simple: they want to avoid the risks, costs
and instability of a warming world, Mills says. These companies
see their businesses thriving in a low-carbon future, and they
want to get there as quickly as possible.

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Unilever: Eco-Efficiency Saves $438 Million

Unilever spokesman William Davies told Environmental Leader
that the cost of inaction is greater than the cost of inaction. Last
week Unilever announced it will become carbon positive in its
operations by 2030.
In the last decade, the world spent $2.7 trillion more on natural
disasters than usual; the same disasters are costing Unilever
around 300 million ($328 million) a year, Davies says.
Meanwhile, Unilever and other firms are saving money and
increasing profits by investing in environmentally sustainable
measures, Davies says. Eco-efficiency measures in our factories
have saved us over 400 million ($438 million) since 2008, he
explains. Consumers are demanding it too last year our most
sustainable brands grew twice as fast as the rest of the business.
Sustainable solutions make business sense. More than half of the
Fortune 100 companies are saving in aggregate around $1.1
billion per year from emission reduction initiatives.

VF Corp: $25 Million Savings on Low-Carbon

Initiatives
Ceres spokesperson Meg Wilcox points to last years Risky
Business report, which highlights economic risks to industries
from climate change.
Businesses face a range of costs associated with climate
change, such as physical impacts to buildings and infrastructure
(i.e. from flooding, severe storms or drought), and supply chain
disruptions (e.g. agricultural impacts), loss of business from
severe weather, Wilcox says.
Ceres today hosts a panel at COP 21 titled Corporate Climate
Leadership In Action with investors and business leaders taking
strong climate actions, including pollution reductions, renewable
energy sourcing or public advocacy for strong climate policies.
VF Corp., one of the companies speaking on the panel, can
already point to $25 million in savings that it has accrued by
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December 2015

investing in energy efficiency and other low carbon initiatives,

Wilcox says.

Mars: Clean Energy Cuts Electricity Costs

Another panel presenter, food company Mars, highlights cost
savings from investing in clean energy. Kevin Rabinovitch, global
sustainability director at Mars, told Environmental Leader
reducing the companys carbon footprint leads to lower costs.
For nearly a decade, weve been working toward meeting our
own measurable, science-based sustainability goals, Rabinovitch
says. These include a commitment to eliminate fossil fuel use
from our operations by 2040. To achieve this goal, Mars built a
118-turbine wind farm in Texas, called the Mesquite Creek wind
farm, which now generates the equivalent of 100 percent of the
electricity needed to power Mars US operations.
Its an example of how we are contributing to our sustainability
goals in a way that is also cost-effective for the company,
Rabinovitch says. The fact is, its no longer a cost to business to
switch to renewable energy. In many places the economics are
now equal to or better than fossil energy, and the comparison will
become even more favorable over the next few years. This is the
clean little secret of a sustainable business: preserving the
climate can also save you money.

EcoVadis: Target Your Supply Chain

Strong climate policy can also help reduce supply chain costs,
says Pierre-Francois Thaler, co-founder and co-CEO
of EcoVadis, which is hosting a panel at COP21 today titled
Driving Global CO2 Reductions Through Sustainable Supply
Chain.
With 90 percent of the worlds investments currently managed by
the private sector, the best way to make real progress in
sustainability and reduce the impact of climate change is to act
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through the supply chain and get the worlds top companies to
implement a sustainable procurement program, Thaler, says.
The leverage these companies have on suppliers is tremendous.
On average, a large company spends about 55 percent of its
revenue on purchased materials, and 80 percent in supply chain
activities. This type of investment in a supply base can drive
significant supplier engagement, and the trickle-down effect of
getting these global companies on board with sustainable
procurement can be monumental as they can encourage
sustainable behavior across tier 1-3 suppliers and ultimately the
entire supply chain.
Read more:
http://www.environmentalleader.com/2015/12/04/cop21-strongclimate-policy-leads-to-lower-business-costs-ceossay/#ixzz3u2GFXeva
Sustainability

Arizona Chemical Begins Construction on 100%

Recycled Asphalt Bike Lane
By: Karen Henry, Dec22,2015
Arizona Chemical has started construction on a 100 percent
recycled asphalt pavement bike lane in Rotterdam, Netherlands.
Rotterdam is the first city in the Netherlands to use 100
percent recycled asphalt in a sub, base and top layer of a bicycle
road. This is the first time 100 percent recycled asphalt has been
applied on all three layers of pavement in the country.
Because of road performance issues such as rutting, cracking
and water damage, the percentage of recycled asphalt mixed with
virgin asphalt has been limited to about 30 percent on average
globally. Arizona Chemical developed a biobased rejuvenator for
recycled asphalt that regenerates used bitumen in the mix. The
additive is derived from crude tall oil, which originates from pine
trees. Trials using the rejuvenator have been successful with 70
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December 2015

percent reclaimed asphalt in the mix, and similar results are

expected with 100 percent.
With the higher percentage of recycled asphalt used, there will
be less of it in landfills. Not having to transport fresh bitumen to
the mixing plants will reduce the carbon footprint associated with
asphalt production and result in considerable cost savings.
The project is a collaboration between the Port of Rotterdam,
Rotterdam Municipality, KWS Infra and Arizona Chemical.
Read more:
http://www.environmentalleader.com/2015/12/22/rotterdam-bikepath-first-in-nl-to-use-100-recycled-asphalt/#ixzz3vANaqyp0

Your Office Is Too Cold. Or Too Hot. But Science

Wants to Help
THE FOREVER WAR over the office thermostat has a new
beachhead: the Comfort Suite at the National Renewable
Energy Laboratory, where researchers are chasing detente
between the half of the office that wants the air conditioning on
maximum and the other half shivering in their cubicles, huddled
under sweaters, pointing their toes toward wan little electric
heaters.
In the suiteactually a 250 square-foot office simulator in NRELs
Golden, Colo. headquartersengineers and ergonomics
specialists are testing all kinds of technologies to see if they can
improve comfort while reducing the energy an office building
uses. Desk chairs warm up and cool down in seconds, controlled
via a smart phone app. Infrared cameras show when someones
fingers are starting to chill. Sensors track the concentration of
carbon dioxide as 20 registers alternately blast hot and cold air at
pretend-office workers.
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Some of this kind of tech is already out in the worldheated

computer mice, desk fans, and so on, says Dane Christensen,
manager of Residential Systems Innovation and Performance at
NREL. But the lab wants to see personal comfort bear energy
savings. The purpose of this project is really to try to improve the
interactions between those individual devices, Christensen says,
and the whole building.
As it becomes easier and cheaper to put computer chips in more
devices, systems that previously couldnt communicate will be
able to talk to each other. And thats not limited to electronics.
NREL retrofitted the chairs in the Comfort Suite with a $30
Arduino microcomputer.
Comfort Suite-type technologies arent just experimental. More
and more companies are getting into the business of improving
the office climate. Last month, Personal Comfort Systems shipped
70 Hyperchairs to the Rocky Mountain Institute in Colorado, says
Peter Rumsey, the Oakland-based companys co-founder and
CEO.
Like the ones in the Comfort Suite, Hyperchairs have luxury carlike climate controls built in, controlled from an interface on the
chair or with a smartphone. Sitters charge them overnight, and
they use a maximum power of 15 watts, compared to about 1,500
watts consumed by a space heater.
Of course, a space heater is also a fraction of the cost;
Hyperchairs cost $1,900 a pop. Thats about $750 more than a
top-of-the-line Aeron.
But it might be worth it. When you ask a building facility manager,
whats the No. 1 complaint?
By far its too hot, too cold, Rumsey says. When HVAC systems
are set to maintain a temperature between, say, 72 and 74
degrees, they use extra energy throttling up and down as the
building overheats and then gets too cold. Rumsey thinks that as
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December 2015

more people using devices like the Hyperchair would let buildings
broaden that range while the drones inside stayed comfortable.
Meanwhile everyone in working in a high-fashion collaborative
space (as opposed to offices, which are so 20th century) can also
use an app called Comfy to vote on the temperature setting for
their thermostat. The system considers the time of day and the
weather but has an added dose of instant gratification, cooling
down a stuffy meeting room for about 15 minutes on command.
After debuting Comfy on two floors of the headquarters of
Johnson Controls in Milwaukee1 in January 2014, the building
reduced steam used for heating the space by about 23 percent
over a four-month period. Electricity used for cooling went down
by about the same amount.
And at the Center for the Built Environment at UC Berkeley,
architect Edward Arens is working on adapting standing desks to
the same climate ideas. Arens, director of the center, uses a
standing desk himself. And hes working on insoles that use
electricity wirelessly transmitted from a floor mat to warm a pair of
feet.
Ideally, all this new gear will mesh into the burgeoning Internet of
Things, integrated into energy systems overall. NREL researchers
are now taking what theyve learned from tests of the heatingand-cooling chair and building it into simulations of whole
buildings energy use.
Then theyll try to figure out how to connect the chairs to building
HVAC systems directlyno thermostat resetting required. Well
be able to reduce operating costs for buildings but actually keep
people more comfortable than we do today, NRELs Christensen
says. The work that were doing should make the world better for
occupants of the buildings, as well as for the owner and the
operator. Which all soundspretty cool, actually.

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Toyota Surpasses Water Reduction GoalBy: Karen

Environmentalleader.com Dec 7, 2015
Toyota saved more than 54 million gallons of water in North
America during fiscal year 2015 through reduce, reuse
and recycle efforts, according to its latest North American
Environmental Report.
The automaker had targeted a 6 percent reduction in water
withdrawals by fiscal year 2016 from a 2010 baseline. In FY2015,
Toyota surpassed this goal, achieving an 8 percent reduction.
Installing additional filtration at Toyotas San Antonio, Texas,
assembly plant reduced water use by 80 gallons per vehicle
produced. The companys Chicago, Illinois, service training center
collects rainwater and routes it to a rain garden, which, in
combination with drought-tolerate native landscaping, eliminates
the need for irrigation.
The company also reported impressive recycling and waste
management achievements in 2015. Toyotas North American
facilities reduced, reused, recycled or composted over 96 percent
of non-regulated waste during calendar year 2014. Twenty-eight
of the companys North American facilities meet the US Zero
Waste Business Councils definition of a zero waste business
one with a 90 percent or greater diversion of all waste from
landfill, incineration and the environment.
Toyota is working to reduce is carbon emissions through various
energy-saving initiatives. Toyotas plant in Alabama is the first in
North America to reuse batteries from end-of-life hybrid vehicles
as stationary energy storage.
Toyota has received the Energy Star Partner of the Year
Sustained Excellence Award from the EPA for the
11th consecutive year. Forty-seven Toyota and Lexus dealers
have achieved LEED certification.
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Toyota has set a series of goals to eliminate almost all of

its carbon emissions by 2050.
Read more:
http://www.environmentalleader.com/2015/12/07/toyota-surpasses-water-reduction-goal/#ixzz3vBmuyhg4

Sustainability

Toyota Targets Zero Carbon Emissions from Vehicle

Lifecycle, Plants by 2050
Source: http://www.environmentalleader.com/ Dec2015
Toyota has set a series of goals to eliminate almost all of
its carbon emissions from its new vehicles, production and
plants over the next 35 years.
The Toyota Environmental Challenge 2050, which aims to cut
water use and CO2 emissions, and reduce the negative
environmental impact of manufacturing and driving vehicles as
much as possible, includes six individual challenges.
As a key step toward achieving these long-term
targets, Toyota has announced its Sixth Toyota Environmental
Action Plan, which it says will be enacted between April 2016 and
the end of March 2021.
Toyota has set a goal of reducing global average new-vehicle
CO2 emissions by 90 percent by 2050, compared to its 2010
global average. The company says it will achieve this by
increasing sales of fuel cell vehicles, achieving annual global
sales of over 30,000 fuel cell vehicles around or after 2020.
Earlier this year Toyota launched its Mirai fuel cell sedan the
first mass market fuel cell car in Toyota City, Japan.
Additionally, in partnership with Nissan and Honda, Toyota is
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supporting a project for the development of hydrogen station

infrastructure in Japan, with the companies paying up to $90,000
per hydrogen station.
Other environmental challenges are to completely eliminate all
CO2 emissions, including materials, parts and manufacturing,
from the vehicle lifecycle, and to achieve zero CO2 emissions at
all plants by 2050. To achieve this, Toyota says it will cut
production process-related CO2 emissions per vehicle from new
plants and new production lines to roughly half of 2001 levels by
2020, and roughly a third by 2030. It is also using renewable
energy and hydrogen-based production methods to completely
eliminate CO2 emissions by 2050.
Toyota also has set a goal of effective wastewater management
and minimizing water consumption, taking into account the
conditions in each country and region.
Read more:
http://www.environmentalleader.com/2015/10/19/toyota-targetszero-carbon-emissions-from-vehicle-lifecycle-plants-by2050/#ixzz3vBnZga4c
Climate Change

$16.5t required to combat pollution

By Alex Morales &EwaKrukowska, BloombergDec 13 2015
Spending targets for renewables outlined
The deal struck at United Nations
climate talks requires an overhaul of
historic proportions for energy policies
worldwide and a huge investment in
cleaning up the pollution now
damaging
the
atmosphere.
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Targets outlined in the agreement on Saturday, involving 195

countries, will require $16.5 trillion of spending on renewables and
efficiency through 2030, according to the International Energy
Agency (IEA). To accomplish that, governments will have to offer
incentives for clean energy production, scale back support for
fossil fuels like oil, make emissions more costly and reduce
deforestation. The changes will touch industries from transport to
construction and encourage people to change their behaviour.
The strength of the agreement is that it allows a thousand policy
flowers to bloom, Paul Bledsoe, a climate aide during US
President Bill Clintons administration, said in an interview in
Paris, where the deal was sealed. This sends a powerful
economic signal that fossil fuels will be saddled with financial and
legal premiums to remain part of the energy mix and clean energy
will get subsidies.
The deal aims to limit the rising temperature since the Industrial
Revolution of the 18th and 19th centuries to 2 degrees celsius,
while calling on nations to pursue efforts to limit the temperature
increase to 1.5 degrees. That more ambitious goal implies vast
cuts to emissions from burning fuels.
Politically and technologically, this is no walk in the park, said
OttmarEdenhofer, chief economist at the Potsdam Institute for
Climate Impact Research Institute and a lead author of the UNs
most rigorous assessment of climate economics.
The target may trigger a fundamental shift of investments
towards renewables, energy efficiency, and carbon capture and
storage, he said. Policies such as carbon pricing through markets
or taxes and planting trees while burning biomass rather than
fossil fuels, will also be needed, and in a 1.5-degree scenario,
theyll need to be stepped up, Edenhofer said.
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Pledges to limit carbon from 187 nations arent yet enough to hold
to a 2-degree pathway, let alone 1.5 degrees, according to
researchers at the Climate Action Tracker, a group of four
European institutions, who estimate the measures will cap the rise
at 2.7 degrees. While those changes would be small for a single
day, applied to the world they mark a shift in the climate thats
quicker than the one that ended the last ice age.
That would mean high risks by climate extremes, commitment to
multi-metre sea level rise and detrimental impacts for global
agriculture and food security, said Bill Hare, chief executive
officer of Climate Analytics, a Berlin-based research group. It
would also lead to complete loss of coral reefs and serious
impacts on water resources in many regions.
Keeping that in mind, envoys in Paris established a review
process that would ensure countries look at their targets every
five years, with a view to stepping up ambition based on
advances in technologies and declining costs of clean energy.
National emissions goals enshrined in the pact are voluntary,
though binding transparency rules mean nations risk a pariah
status if they flout their pledges, according to Bledsoe, the former
Clinton aide. The heart of the deal is emissions monitoring. The
only way were going to be able to compel compliance is through
accurate data.
IEAs figures reflect the costs of nations reaching the voluntary
commitments they made under the Paris programme plus an
estimate of what it would take to bring temperatures down to the
2-degree target. The 2-degree target as it stands now is very
challenging to meet, FatihBirol, IEA director general said in Paris
on December 9. We need to accelerate our efforts even further to
reach 1.5 degrees.
The new system will place more rigorous requirements on the
largest developing countries, such as China and India, to monitor
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December 2015

and report their emissions and the progress made toward their
targets. Thats important because developing nations account for
more than half of global emissions and the agreement cant
succeed without them reducing their greenhouse gases.
The new deal doesnt take effect until 2020. Over the next five
years, governments will have to complete the rules for the various
mechanisms set up in the agreement on transparency and
technology transfer. It wont come into force until at least 55
parties, accounting for 55 per cent of global emissions, have
ratified it.
The main work is for every country to go through their domestic
process to ratify and join the agreement, said Jake Schmidt,
international programme director at the natural resources defense
council in Washington. As far as the UN process, they basically
have the guiding principles and need to write the detailed rule
book.
Markets now have the clear signal they need to unleash the full
force of human ingenuity and scale up investments that will
generate low emissions and resilient growth, UN secretarygeneral Ban Ki-Moon said in Paris after the talks concluded.
Climate Change

After climate agreement, world faces a carbon diet

PARIS The world is about to go on a carbon diet. It wont be
easy or cheap.
Nearly 200 nations across the world on Saturday approved a firstof-its-kind universal agreement to wean Earth off fossil fuels and
slow global warming, patting themselves on the back for showing
such resolve.
On Sunday morning, as for many first-day dieters, the reality set
in:
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The numbers are daunting: More than 7.04 billion tons of

carbon dioxide. Thats how much has to stay in the ground
instead of being spewed into the atmosphere for the planned
reductions to happen, even if you take the easier of two goals
mentioned in Saturdays deal. To get to the harder goal, its an
even larger number.
The objective of the agreement is to make sure global warming
stays well below 3.6 degrees Fahrenheit (2 degrees Celsius)
and to pursue efforts to limit the temperature rise to 2.7 degrees
Fahrenheit (1.5 Celsius). Temperatures have already increased
by about 1.8 degrees Fahrenheit since preindustrial times.

Climate deal faces wrath of GOP senators

The immediate reaction of leading Republican critics was a stark
reminder of the conflict that lies ahead.
Scientists who have analyzed the pledges made by nations so far
to cut greenhouse gases believe emissions will be reduced only
about half the amount necessary to stave off an increase in
atmospheric temperatures of 3.6 degrees Fahrenheit.
That is the point at which, scientific studies have concluded, the
world will be locked into a future of rising sea levels, severe
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droughts and flooding, widespread food and water shortages, and

more destructive storms.
Ideally, by sometime in the second half of the century, man-made
greenhouse gas emissions which includes methane and other
heat-trapping gases as well as carbon dioxide should not
exceed the amount nature can absorb.
In practice, the world has to emit close to zero greenhouse gases
by 2070 to reach the easier temperature goal, or by 2050 to reach
the harder one, said John Schellnhuber, director of the Potsdam
Institute for Climate Impact Research in Germany.
Probably the best the world can hope for is overshooting that
temperature by a few tenths of a degree and then somehow
slowly over decades if not centuries come back to the target
temperature.

That may involve something called negative emissions. Thats

when the world technology and nature combined take out
more carbon dioxide from the air than humanity puts in.
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Nearly 90 percent of strategies for establishing a safer

temperature in the world involve going backward on emissions,
but thats not very realistic, said Kevin Anderson, deputy director
of the Tyndall Centre for Climate Change Research in Britain.
Negative emissions involve more forests, maybe seeding the
oceans, and possibly technology that sucks carbon out of the air
and stores it underground somehow. More biomass or forests
require enormous land areas and direct capture of carbon from air
is expensive.
Leading up to the Paris agreement, nearly every nation formed an
individual action plan to cut or slow the growth of carbon pollution
over the next decade or so. Richer nations that have already
developed, including the United States, European countries, and
Japan, pledged to cut now.
Developing nations that say they need fossil fuels to pull
themselves out poverty pledged to slow the rate of growth for now
and to cut later.
China, the worlds top carbon polluter, will eventually have to
make the biggest cuts. Overall, for the world to hit its new target,
global carbon dioxide emissions will have to peak by 2030, and
then fall to near-zero, experts said.
Those levels have been generally rising since the industrial
revolution.
Without any efforts to limit global warming, the world would warm
by 6.3 degrees Fahrenheit from now by 2100, according to
Climate Interactive, a climate modeling group. But Chinas
submitted plan alone would cut that projected warming by 1.3
degrees, according to Climate Interactive. The US plan trims
about six tenths of a degree off the projected warming.
And while China is now the No. 1 carbon dioxide polluter with
more than a quarter of the worlds emissions, carbon dioxide
stays in the air for at least a century, so historical emissions are
important. Since 1870, the United States is responsible for 18
percent of the worlds carbon pollution, compared to 13 percent
for China.
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That all sounds good, but the goals the nations have set arent
enough. Taken together, they would still allow temperatures to
rise 4.5 degrees Fahrenheit by the end of the century, Climate
Interactive found.
Sustainability

Energy Efficiency Goal for 2016: Bridge the

Knowledge Gap
December 24, 2015 By Carl Weinschenk
The
high
level
takeaway
from research
conducted
by
Digital Lumens and
Peerless Research
Group is
that
facility managers
understand
how
important efficiency
efforts are and
have a good idea of
what they want to accomplish but havent yet figured out how to
achieve those goals.
There always is a gap between the time that an industry accepts
a new approach and technology and when it filters down into the
actual day to day operational procedures of technicians in the
field. This is especially true in the case of energy efficiency
because the new approaches rely on the Internet of Things (IoT)
and other technologies that are from outside its realm.
The reality that the new year will dawn with a gap between what
industry leaders advocate and the awareness of people in the
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field is clearly illustrated in the study, which is based upon

responses from 230 facility managers of warehouse and
distribution centers with an average of 330,000 square feet:
Ninety-three percent said that understanding energy
consumption is a top priority for their business but only 29
percent are fully aware of how much power their building
consumes.
Only 20 percent of managers are very familiar with IoT
concept but 48 percent are thinking about, planning or
implementing and IoT-based strategy.
Taken together the numbers suggest a confusing landscape.
How, for instance, can almost half of respondents be on the road
to employing IoT technology, while only 20 percent are aware of
it? That, on the surface, doesnt make much sense. However, it
speaks to the bigger issue: There is a lot of confusion among
managers. It also suggests that current events involving energy
efficiency
issues

the
push
for
renewable
sources, COP21, aggressive federal moves and others is
making an impression on managers and ownership while the
specifics of actually moving buildings in that direction still are
vague.
The finding that more than nine of ten managers understand the
importance of energy consumption while less than three in 10
know what it is in their facility is especially telling. Everybody
wants to be in boat, but they are not all in the boat yet, said
Allison Parker, Digital Lumens Director of Marketing.
This suggests that the focus of the year ahead may be filling in
the details some of which are basic. Interesting but not
surprising to me was the low number of respondents who had
specific data on the energy intensity per square foot in
operations, Parker said. Thats a really important number. To
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me, it means that there is a tremendous opportunity to instrument

facilities, get more data and improve overall efficiency.
The confusion also was identified in survey results released in
October by Mach Energy. The firm found that the 800 commercial
building professionals who responded are struggling, at least with
terminology:
The results revealed widespread confusion amongst property
managers, facility managers and directors on the difference
between energy management software (EMS), which provides
low-cost analytics and reporting software platforms, and building
management systems (BMS), which are costly projects that
physically control equipment.
The confusion isnt only about technology. The financial structures
also must be fleshed out. Parker said that a key step is financial
analysis. She told Energy Manager Today that building managers
tend to rely on return on investment (ROI) analysis and bypass
the broader and more comprehensive total cost of ownership
(TCO) metrics.
The use of TCO may not grow, however. Ron Vokoun, the
Director of Mission Critical Design at RK Mission Critical, in late
December posted his predictions for the data center industry at
DataCenter Dynamics. Growth of TCO measures wasnt one of
them, at least at the design stage:
In 2016, TCO will actually lose ground in data center design
consideration. It defies logic, but I have witnessed a movement
back toward pure capex driven decisions over considerations of
energy efficiency, accelerated depreciation, and other financial
factors. This seems to be more prevalent with enterprises, but I
have seen examples across market sectors. Kudos to those
enlightened souls that understand the benefits to be gained for
years to come.
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The gap revealed in the Digital Lumens research between what

experts say about energy efficiency and what is happening in the
field is not surprising. Things are changing quickly, and 2016
clearly will be an important one in efforts to make the lofty goals
into action.
Sustainability

Business School Students Want to Work For

Companies Taking Action on Climate Change
Dec 21, 2015, John Howell for 3BL Media.
Students at top business schools prefer to work at companies
taking action on climate change. Thats the finding of a new global
study of 3,700 students at 29 top business schools around the
world. The study was conducted by Yale University, with the
World Business Council for Sustainable Development and the
Global Network for Advanced Management.
The survey found that more than two-thirds of students want to
include environmental sustainability in their careers. Eighty-four
percent would choose to work for a company with good
environmental practices. Forty-four percent would work for a
lower salary to do so. Business school students also asked for
more action from their schools. Sixty-one percent thought that
their schools should hire more faculty and staff with expertise in
sustainability. Sixty-four percent asked for more career services
and counseling on sustainability-related jobs.
The driver for these attitudes is the bottom line. Todays business
school students believe that environmental action is a profitable
approach, one that improves economic growth and creates new
jobs.
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Climate Change

Roofs over Guangzhou Can Reduce Heat Wave Temps

Wed, 12/23/2015 - Greg Watry, Digital Reporter
Source: R&D headlines and news
Chinese and Lawrence Berkeley National Laboratory researchers
have found white roofs, or cool roofs, if implemented in
Guangzhou, could significantly reduce the urban heat island
effect.

The greater urban area of Guangzhou is outlined in the center of

each figure. A midday urban heat island effect is clearly visible.
The results of increased roof albedos are shown in the bottom
row. Credit Berkeley Lab
The Chinese mehacityGuangzhou is no stranger to heat waves.
In 2004, heatwaves, on the order of 39 C, left 39 people dead.
With a population of more than 8.5 million people, Guangzhou
suffers from the urban heat island effect. According to the U.S.
Environmental Protection Agency, the term is used to describe
urban areas that are hotter than their surrounding rural areas.
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The annual mean air temperature of a city with 1 million people

or more can be (1-3 C) warmer than its surroundings, according
to the agency. In the evening, the difference can be as high as
(12 C).
The resulting effects include rises in energy demand, air
conditioning costs, air pollution and greenhouse gas emissions,
and heat-related illness and mortality, among others.
Chinese and Lawrence Berkeley National Laboratory researchers
have found white roofs, or cool roofs, if implemented in
Guangzhou, could significantly reduce the urban heat island
effect.
Published in Environmental Science & Technology, the study
combined a regional climate model and urban model that allowed
the adjustment of roof reflectance.
We simulate temperature reductions during six of the strongest
historical heat-wave events over the past decade, finding average
urban midday temperature reductions of 1.2 C, the researchers
wrote. In comparison, we simulate 25 typical summer weeks
between 2004 and 2008, finding average urban midday
temperature reductions of 0.8 C, indicating that air temperature
sensitivity to urban albedo in Guangzhou varies with
meteorological conditions.
As
study
author
Dev
Millstein,
a
Berkeley
Lab
researcher, explained: The hotter it is, the more cooling you get
with cool roofsand it is a significant difference, compared to the
margin of error.
Previous research from the Berkeley Lab found implementing cool
roofs can have a great effect on reducing carbon dioxide
emissions. A cool roof on a 1,500 sq m building in Guangzhou
would save 5 metric tons of carbon dioxide per year.
In the recent study, the researchers made all the roofs in the city
as reflective as an aged white roof. They suggest cool roofs can
be easily implemented over time, as buildings put on new roofs
due
to
wear
and
tear.
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December 2015

F2F
India likely to push oil demand growth: IEA
In an interview to CNBC-TV18's Ronojoy Banerjee, FatihBirol
Executive Director, IEA shared his views on the road ahead for
crude oil.

Ronjoy Banerjee
Below is the verbatim transcript of the interview..
Q: Since you made that prediction about the demand for oil
growing at about 1.1 percent over the next few years we have
seen a further decline in oil price. What implications could
this have in terms of the annual outlook you have made in
the coming two to three years?
A: First of all there will be lot of oil in 2016 still coming from
Organization of the Petroleum Exporting Countries (OPEC)
countries as well as from United States, Canada, Russia but the
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important thing here is to note that there is also a big decline in

the investments for new projects. For example 2015, this year oil
investments declined more than 20 percent compared to last year
and we expect 2016 investments for new projects will decline
again.
We have never seen in the last 30 years oil investments for new
projects, new field decline two years in a row which may mean
that in the next few years of time when the demand gets stronger,
when this supply glut is over we may well see upward pressure on
the international oil price and currently low oil prices are welcome
news for the consumers, very good for the trade balance and
everything but in a few years of time this low prices may be high
cost for the consumers.
Q: You have also mentioned in one of your interviews to
Financial Times you have said that we are approaching end
of the single largest demand growth story in the energy
history. You said it in the context of the 15 year surge in oil
prices primarily owing to China. So, the 15-year run that we
have seen in higher oil prices breaching the USD 110 barrel
mark, do you think that was more of an aberration?
A: China played a very important role here as a engine of the oil
demand growth. Their appetite for oil is still there but it is slowing
down. Having said that there are other countries such as India
now which are going to push the oil demand growth. For example
today in Europe 550 people out of 1000 own a car, in United
States 750 out of 1000 and India it is 20 out of 1000. With
increasing income levels people are going to buy cars which in
turn will fuel the oil demand growth. So, there will be still demand
growth globally but it may be a bit slower than in the past.
However the most important point is in order to incentivise new
oil investments we need prices higher than today. Otherwise a big
chunk of the oil will come from one single region, low cost region
which is the Middle East.
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At these prices, about USD 30-40 to have investments in United

States, in Canada, in Brazil, in other parts of the world would not
make lot of sense. It would only make sense in Middle East and
the worlds reliance on Middle East will increase substantially very
quickly which may not be the best news given the geopolitical
situation today.

What Have the Past 30 Years Taught Us About

Managing Risk?
knowledge.wharton.upenn.edu/article/past-30-years-taught-usmanaging-risk/
Dec 17, 2015 Podcasts Video Global Focus North America
mic Listen to the podcast:
How Managing Risk Has Changed
The problem with many catastrophic risks isnt just that their
impacts, when they hit, are so massive. Its also that their odds of
occurring in any given short time frame are very small, so that
planning for them has to be handled as a long-term priority while
the proverbial sun is shining. And neither companies nor
individuals are particularly apt at taking serious, long-term action
to prepare for low probability, high consequence events.
Enter the Wharton Risk Management and Decision Processes
Center, which was created 30 years ago to help individuals,
businesses, governments and global organizations to be better
prepared for those longer range, more unpredictable dangers.
Knowledge@Wharton spoke with Howard Kunreuther and Robert
Meyer, co-directors of the Wharton Risk Management and
Decision Processes Center, and executive director Erwann
Michel-Kerjan about the centers research and how managing risk
has changed over the past few decades.
An edited transcript of the conversation appears below.
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Knowledge@Wharton: Howard, what led to the starting of the

Risk Center 30 years ago?
Howard Kunreuther: Well, its interesting that our center has
always focused on low probability, high consequence events,
[because] it was a low probability, high consequence event that
actually got the center started. I was in the office of the CEO of
Rohm and Haas with my colleague Ned Bowman [of Wharton].
We were looking at the challenges that the company was facing in
dealing with environmental risks, and when we arrived there, we
were told that there had been a large chemical accident in Bhopal
that the company was very concerned about. It involved Union
Carbide, but every chemical company was involved. And that
really was the start of the center, because we worked very closely
with Rohm and Haas and Cigna to begin to look at issues like
chemical accidents as a way of trying to figure out how we would
deal with extreme events.
Knowledge@Wharton: Thinking about the catastrophic risks that
businesses faced 30 years ago, what were some of the most
important risks in addition to manufacturing accidents like Bhopal
that you were concerned about?
Kunreuther: It was really the chemical accidents that got us
started, and I think technological accidents were clearly a very
important part of how businesses had to think. They werent
thinking as much about it as we would have liked them to. They
were saying it wasnt going to happen to me. But that was
certainly on the agenda, and any time there was an accident like
a Bhopal, they then paid attention to it. The other area we focused
on and that had been the focus of a lot of the research a
number of us had been doing, including my late colleague, Paul
Kleindorfer, who was co-director of the center when we formed it
was natural hazard risks and natural disasters. And those were
risks that were not predictable, but if there was a severe hurricane
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or flood or earthquake, that might have an impact in terms of how

the firms had to react.
When you talk to companies or individuals and ask what risks
they are most concerned about, typically, they are the things that
just happened yesterday. People tend to focus on the disaster
that just happened. Robert Meyer
Knowledge@Wharton: What were some of the research projects
that you took on to look into these risks?
Kunreuther: Well, because of our start with the chemical
industry, we had a very large project with the Environmental
Protection Agency on chemical accidents how one dealt with
them and technological accidents, so we were certainly
working on that. We were also working on the natural hazards
area and why individuals were not protecting themselves and
purchasing insurance. That was something that both Paul and I
had been focusing on with others over a period of time.
The other area that emerged was the siting of the high-level
radioactive waste facility at Yucca Mountain in Nevada. There
was a whole project that was formed, and for 10 years, there was
a group of us who were working together. It was very much an
interdisciplinary group. Paul Slovic, president of Decision
Research, was a part of that. Roger Kasperson, a geographer, a
psychologist, and then there were anthropologists we were all
working with the state of Nevada to try to figure out how to site
this facility, and so the center played a role in that. We had been
looking at siting a liquefied natural gas facility before the center
had been formed.
Knowledge@Wharton: What would you say were some of the
key findings of your earliest research projects?
Kunreuther: The key findings are findings we may want to talk
about even today. Really, what was happening was that it wasnt
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until a disaster occurred that there was really a lot of attention

paid. There was a tendency to say, This is not going to happen to
me, and firms were behaving that way. Certainly, consumers and
homeowners were behaving that way. As a result, we as a center
were trying to figure out the important things to think about
beforehand, and what kinds of programs and policies could be put
forward to try to deal with them so we didnt have to be in a
reactive mode after a disaster occurred.
Knowledge@Wharton: If all of you were to look back over the
past 30 years, how would you say the nature of risk has evolved
and changed? Bob, would you like to start us off?
Robert Meyer: The risks have always been there. To build on
what Howard was saying, one of the things weve observed as a
center is that often, when you talk to companies or individuals and
ask what risks theyre most concerned about, typically, they are
the things that just happened yesterday. People tend to focus on
the disaster that just happened, so one of the things we try to do
as a center is get people and organizations to focus not only on
the event that just happened, but also to refocus on unseen risks.
Just to give you an example, we work with the World Economic
Forum, and every year, they come out with a survey of about 900
academics and ask them what are the risks that they are most
concerned about. Typically, what you find is an awful lot of yearto-year variability in what is hitting the radar screen. For example,
last year, the No. 1 thing that came up was state unrest,
particularly in Europe. If you think about it, that makes sense,
because one of the big news items in Europe last year was unrest
in the Ukraine and so forth. But whats interesting is a risk that
was very important two or three years ago: cyberterrorism. In
some sense, one of our challenges as a center is to get people
and organizations to think about not just the thing that happened
most recently, but to take a good long-term view of what are real
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risks. Often, the things you have to worry about are the things that
youre not currently thinking about.
Knowledge@Wharton: Erwann, what do you think?
Erwann Michel-Kerjan: The nature of risk management has
changed a lot over the past 30 years, from something that was
almost exclusively technical to something that remains technical,
of course, but has become more and more strategic today. More
risk committees are being formed as we speak in many industries
across the world. The topic itself changed, which means that as
researchers, we need to change the way we approach these
issues as well, whether its natural disasters, cyber risk or
interdependencies between these risks.
Maybe you looked at what was happening in Syria and thought,
Oh, its just a geopolitical issue. Then three months later, it
becomes an immigration issue, an economic issue in Europe.
Then maybe in two months, it becomes a big issue in the U.S.
The world is becoming more and more interdependent. Its
somewhat of a cliche, but I think were living it every day. An
earthquake in China 30 years ago would have been an
earthquake in China. Today, an earthquake in China has massive
impact on global supply chains worldwide from Frankfurt to
Detroit.
An earthquake in China 30 years ago would have been an
earthquake in China. Today, an earthquake in China has a
massive impact on global supply chains worldwide from Frankfurt
to Detroit. Erwann Michel-Kerjan
Knowledge@Wharton: I wonder if I could turn to each of you
and ask you to speak about a current research initiative that you
are involved in, and why it is so important to business
practitioners? Howard, could you start?

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Kunreuther: Yes. Let me just add one comment to what Bob and
Erwann have said.
One of the things that the center was focused on was the decision
process. We always are thinking about essentially how people are
behaving whether its a consumer, a homeowner, a manager in
a firm, or the government and the public sector so that we can
develop strategies for dealing with that. In that sense, the center
is somewhat unique in that we are really trying to tie together the
risk assessment part and also risk perception and risk
management. Its that theme coming together.
To talk about a current project, related to some of the points that
were just made: We have been interviewing the CEOs of 100 of
the S&P 500 firms in a large project funded by the Travelers
Foundation, and that involves also the Wharton Center for
Leadership and Change Management that [Wharton management
professor] Mike Useem directs. What weve been asking these
CEOs is what is the most important risk they are concerned about
and have been concerned about not just necessarily
yesterday, but that theyve been concerned might have adverse
or catastrophic consequences to them. And you get a whole
variety of different answers from them.
As Bob had indicated, often, it is a more recent disaster. Just to
illustrate one example, the Fukushima earthquake was something
that you hear of from these CEOs as being important. It highlights
the points that Erwann was raising on interdependencies. These
firms are very concerned. The automobile industry was really hurt
by the supply chain problem with respect to that, so weve been
interested in that.
The reason for doing this project is to try to develop some
benchmarks with respect to how firms could behave differently in
the future. Were finishing it up now and we hope to publish our
results over the course of the next year or so.
Knowledge@Wharton: Bob?
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Meyer: One of the things weve discovered in the course of our

research is that often, one of the reasons that people have a
difficult time making good decisions to prepare for rare events is
that they have very poor mental models of how these events are
going to unfold. A great example was Hurricane Sandy. One of
the real surprising results is, even though this was an event that
everyone in the world knew about, and there were front-page
banner headlines telling people that this huge storm was coming
in, and there was no shortage of warnings, there were an awful lot
of deaths and damage primarily due to flooding.
Just as the storm was approaching, we asked people this is
before the storm actually hit What is the threat that you are
most worried about? And even though the main threat, the actual
threat that they faced, was flooding, what people tended to say
was they were mainly worried about wind. Thats a fundamental
mistake, because the storm is coming in, its a flood threat, and
theyre going out and boarding up their windows while at the
same time leaving their car on the street. The next day, they wake
up and, of course, their car is ruined. Or they dont evacuate, and
they dont understand why theyve been asked to evacuate.
So one of the things we were involved in doing is developing
virtual web-based simulations that allow people to visually
experience events like very severe storms and so forth which they
otherwise wouldnt be able to. In these environments, people are,
for example, put into a virtual living room and theyre told that
theres a storm out in the distant horizon. They have the
opportunity to gather information as they normally would, and they
basically get to experience what it would actually be like to go
through one of these events. We see that as a great vehicle for us
a teaching vehicle and also a research vehicle for studying
very, very rare events. These are things that you want people to
know about before they occur, not learn from unfortunate
experiences after they occur.

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Michel-Kerjan: And you want something that can be used

anywhere in the world.
One of the reasons that people have a difficult time making good
decisions to prepare for rare events is that they have very poor
mental models of how these events are going to unfold. Robert
Meyer
Meyer: Yes, absolutely.
Michel-Kerjan: When you look at natural disasters around the
world, flooding is by an order of magnitude the largest of all, in
terms of number of people affected and economic cost. Thats
throughout the world, and its true in the U.S. as well. So the
center is doing a lot of work on flood-related risk, both on coastal
flooding and inland flooding, trying to better understand the risk.
And weve been doing lot of work on flood insurance as well. For
instance, we have access through our collaboration with FEMA
(the Federal Emergency Management Agency) and DHS (the
U.S. Department of Homeland Security) to their entire portfolio of
data. So we can actually crunch data a few million data points
to try to better understand the national flood insurance
program, then publish the results, and then work with the industry
and also the federal government trying to improve that program.
Related to that project there is a buzzword out there:
resilience. You know, everybody talks about resilience, and
were still having a hard time finding one person who is against
resilience, which tells me that maybe we have an issue here. But
joking aside, we decided as a group to take a serious look at flood
resilience in a more quantitative manner. We have a few projects
related to flood resilience. We have done some work in New York
City. Were doing some work with the Z Zurich Foundation, a
Swiss nonprofit funded by insurers, in five or six different
countries. And in all these projects, I think instead of having one
person or two people working on a paper, which some of us tend
to do, we recognize we need expertise from a large number of
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individuals. So most of our large projects tend to involve five, six,

10 people with different backgrounds, which obviously is much
more interesting for us, because you can really tackle large-scale
issues in a way that you couldnt if you were just writing your own
paper by yourself.
Knowledge@Wharton: Now, lets turn from the present to the
next three to five years. Given everything that we have discussed
about the interdependence factor, and not just in the U.S., but
globally, what do you think will be the biggest risks that people
and companies around the world should be thinking about for the
next three to five years?
Kunreuther: Well, theres no doubt that a risk weve all been
thinking about but have a very hard time dealing with is climate
change. Thats something the center has been paying attention to
over the last few years, more so than in the past. It became really
a very important theme in the 30th anniversary that we just had
for the Risk Center. There was a long discussion at the end of our
conference related to a question that had been posed. We did a
little polling exercise over lunch, and one of the questions asked
was, how serious does one think the climate change problem is?
When this was done with MBA students entering a couple years
ago, there was a significant number, maybe 8%, who actually felt
it was not a problem at all, which was very surprising. No one in
the room felt that way. No one in the room felt that it was not
serious. But there were a group of people who felt that it was
serious, but not very serious.
How do you instill the fact that there are these problems that may
not happen for 50 years in terms of very serious impacts, but that
we have to worry about now? How do we deal with them? I think
Bobs simulation project is an example of how you get people to
pay attention. So, we had a discussion on how we could make
everyone feel [climate change] is a very serious problem in this
country so we could take some steps now to deal with it. Because
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if you have enough people believe that it isnt very serious and
this was a group of people who really should have felt that it was
very serious that becomes a problem.
The challenge we face with our center is how do we stimulate
long-term strategies and encourage people to take protection
organizations, countries to take protection but at the same
time, recognize that one has to address the short-run concerns
that people have if were going to be successful. We may have to
use new technologies and videos and pictures rather than words
to be able to get that across.
Meyer: I think one of the issues is that climate change is an
enormously difficult and fascinating topic. One of the things thats
involved in dealing with it is encouraging communities, individuals
and organizations to develop much more of an adaptive mindset
than has traditionally been the case. If you think long-term
historically, human civilization emerged at a time of very extreme,
rapid climate change. For example, as recently as 7,000 years
ago which is not really that long ago if you lived in the
Netherlands, you would walk to Great Britain. During that period,
sea level was coming up very rapidly after the melting of the last
glaciers. What would happen, of course, is that we lived in tents,
and we wandered around anywhere. If the water came up, we
would just move to a new place.
How do you instill the fact that there are these problems that may
not happen for 50 years in terms of very serious impacts, but that
we have to worry about now? Howard Kunreuther
Of course, whats happened since then is suddenly going from
this mindset of the world is constantly changing, and were very
much part of that change, to a more modern view of the world is
static, and we put cities right at sea level and so forth, and we
have an enormous civilization which is built on the premise that
nothing ever changes: number one, that the climate is invariant,
and number two, that we somehow or another are independent of
the climate. That the actions that we take, the things that we build,
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the things we put into the air arent having an effect on climate.
Whats happened is in recent years, there has suddenly come this
big awakening that no, in fact, all of the world is constantly
changing, and if we dont have this adaptive mindset, were going
to be facing enormous trouble. Unfortunately, the cost of getting
from here to there suddenly is a significant one.
Because now, youre going to have to take large cities like Miami
and New York and say, Well, what are you going to do when the
sea level comes up by another six feet? What are you going to do
with all these buildings? And these are fundamental problems.
Michel-Kerjan: In addition to [climate change], which is kind of a
big one, [other risks we need to focus on involve] cyber attacks,
big data, risks related to new technologies, and overregulation.
We havent talked about that, but its clearly something on the
mind of many people around the world although
overregulation, obviously, depends on where you sit.
On the top [of the list] is terrorism. Given what ISIS is doing in
the Middle East, we know its not over. So the list is long. I think
one big question well have in the future, in addition to what has
been mentioned already, is whos paying for all of these
catastrophes at the end? What type of optimal risk-sharing
arrangement can you put together in a world where more and
more governments are running very large public deficits, where
more people ask for their government to help them during disaster
times, but we dont necessarily have the money? Reforming our
own mindset, not only here in the U.S. but around the world. Who
is supposed to pay for these disasters? How do we incentivize
people, firms, governments and cities to start investing before a
catastrophe happens? Again, were not just talking about natural
disasters here.
We talked a lot about risks. There are great opportunities coming
with that as well. By 2050, 80% of the worlds population will be in
cities. So to think about cities as small pockets here and there, its
totally irrelevant. There are great things with concentrating people
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and assets in the same place, but as Bob mentioned, when

something hits that city, well, its a pandemic. An earthquake, a
natural disaster, a terrorist attack that will be a catastrophe
almost by definition. And then, we need the other 20%, because
the other 20% is basically agriculture. We need to feed other
people as well. So there are amazing, amazing challenges and
opportunities ahead of us.
Kunreuther: Let me add one point to what Erwann was just
saying on who should pay, because I think its a really critical
issue that we have been struggling with. And I want to raise the
issue of inequality, which is now a real challenge. Its not just the
low-income people. As we all know, the middle class is a part of
that discussion as well. We focus at the center on case studies
and examples and concrete problems. Take the flooding problem,
as an example, which is obviously related to the climate change
issue, and whats going to happen to a city like Miami, which is
clearly at risk with sea-level rise and some of the things that are
going to occur.
We really have a challenge here related to the affordability issue.
We as a center have been focusing from almost the outset on the
role that insurance can play as a way of getting people to take
protection. But the way that insurance could play that role is the
premiums have to reflect the risk, to let people know how serious
the hazard is, but at the same time, to help them to maybe take
some steps to reduce that risk to elevate their house or to
make their house flood proof in some fashion, because theyll get
a premium discount, for example. Now, the challenge we see in
this relates to the who is going to pay when you have a lot of lowincome and middle-income people who are living in high hazard
areas who cannot afford that insurance when the premiums
reflect risk. So the center has been focusing on that issue, and
well be doing a fair amount more in the coming years with the
inequality issue in terms of answering the questions: Are we going
to in some fashion subsidize low-income people? Should we do it
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through an insurance premium? Should we do it through other

mechanisms such as vouchers or other ways that are now tied to
insurance?
At the end of the day, the question of who should pay is going to
come on the table, which is what we know Congress is facing
when they are making decisions on what programs they are going
to support.
Michel-Kerjan: We also know that the answer will depend on
where you are. I mean, the U.S. may have a different view on the
matter than Great Britain or Germany or India or China.
Meyer: Howard was talking about the importance of decision
processes in all of this, and at the end of the day, a lot of
decisions that people make all the decisions that people make
about whether or not they want to buy insurance or undertake
protection, are rooted very much in what they believe the risks are
that theyre facing. So in some sense, in addition to the
affordability issue, one thing thats compounding it is the fact that
an insurer may come in and say, This is what weve calculated
objectively your risk to be, and so based on that, here is the price
of this coverage. But then, of course, the people who are living in
a home look at that and they say, Well, thats not at all my risk,
OK, and in fact, I dont have anything near the risk that you think I
face, and therefore its grossly overpriced, and so they dont buy
the coverage.
So in some sense, you could do risk-based rates, but basically if
people feel that its mispriced and they dont buy the coverage,
then insurance doesnt work. Then, essentially, you still have to
ask the question: When the disaster comes and you have all
these people that are uninsured, who pays for that at that point?
And thats a major problem.
Kunreuther: And that problem is compounded when you have a
highly subsidized premium, because then people think that theyre
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December 2015

safer than they actually are. So you have a combination of saying,

Heres a premium that has a risk, and they say, That isnt really
my risk. But then you also have the reverse problem, which is
true in the flood case, where the premium is very low for many
individuals and they say, Well, Im really a lot safer than I actually
thought I was, and they arent really that safe.
Knowledge@Wharton: So given all the risks that you identified
that the world will be facing over the next three to five years, what
advice would you give to, say, chief risk officers or security
officers about how to protect people and property against these
risks?
We have an enormous civilization which is built on the premise
that nothing ever changes. Robert Meyer
Kunreuther: Well, I want to just follow on Bobs comment on
decision processes and the challenges, which I think is something
that managers as well as homeowners and people face. The
biggest [questions] that we have been trying to get across are:
How do you get people to think long term? How do you get
managers to think long term? But at the same time, we have to
recognize that there are all sorts of reasons why theyre going to
want to think short term. How do we develop the kinds of
programs with incentives that will enable them to think long term,
but at the same time reward them or reward their company, lets
say, if youre talking about firms, or reward the homeowner if
youre talking about families, to take some steps today? We have
thoughts on that, but it would be one area that we want to think
about.
Meyer: My actual main position [at Wharton is] in the marketing
department, and were trying to think about how do you persuade
people to buy products and undertake certain sorts of actions.
And I think that one of the real challenges that exists in the area
of protective investments is the fact that theres probably no
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harder sell. Because effectively, what youre asking people to do

is to invest a large amount in instruments such as insurance or
protective measures that you hope theyre never going to use at
all. So in some sense, its a very, very difficult thing, and youre
trying to convince them based on credence that somehow or
another, in the long run five years, 10 years, 50 years from
now this investment will prove beneficial in helping you avoid a
loss that you might otherwise face. Thats just such a very difficult
thing to do, to get people to think of those sorts of long-term
benefits. So thats one of the long-term challenges: How do you
get people to shift their mindset from focusing on whats the best
use of my money today which will almost never be to buy
insurance, will almost never be to build a stronger house and
to say, no, no, no, no, you cant think about today, you have to
think about maximizing utility over a 50-year horizon.
Michel-Kerjan: Yes, all of that is right. You only rarely talk about
insurance at the dinner table except to complain about it. Rarely
do you say, Oh my gosh, I got a great insurance contract.
I think your question depends very much on whether youre
talking about individuals versus corporations, especially large
corporations. I think the challenge with individuals is that, yes,
there have been more floods, there have been more natural
disasters around the world. But still, the likelihood of you being hit
by a flood in the next 10 years, hopefully its not 100%, and its
not 20 times during 10 years. So the salience of the event is
important. When you move from these individuals to large,
multinational corporations, what is the likelihood of that firm being
hit by a serious crisis next month? Much higher.
So going back to Howards starting the center 30 years ago
maybe every 10, 20 years, [there was] a big event. It seems like
now, every six months, you have another one. For example, what
is happening in Syria and with the migrants. A year ago, it was all
about Ebola.
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People almost forget about Ebola. Then you have Volkswagen

cheating the system, so the nature of its crisis will be different. But
every time there is a disaster, I think that makes risk management
even more salient at the level of the firm, which explains why so
many companies have created a position called the chief risk
officer, recognizing that we cannot just look at risk in silos. We
have to aggregate risks. And more and more countries or cities, at
least, are starting to think the same way, saying, As a city, as the
mayor of the city, I cannot just think about floods. Unemployment
is a big risk. Health is a big risk.
Knowledge@Wharton: I have one last question. Research
centers exist to do research, but also to make an impact. If you
were to think about the work being done at the Risk Management
and Decision Processes Center, what would you say its impact
has been on the practice of management so far, and what kind of
impact would you hope to have in the future?
Kunreuther: Well, I think Id come back to some of the studies
that weve done that actually are more optimistic than we would
have thought when we started 30 years ago. Ill just use the S&P
500 study that I mentioned earlier, which is looking at how firms
have behaved. I think one of the major changes that has occurred
is that firms are really seeing this issue as being important on the
firm side. Maybe not the consumer yet; although as Bob was
saying, maybe theyre still facing the challenge of how to deal with
it. But firms are really focusing on this now.
I think what weve heard in almost all of our interviews with chief
risk officers, CEOs or high-level people in these firms, is that now
were in a new era of catastrophes. Weve got to be thinking about
these issues. Its an important issue for the board. Its an
important issue for us to pay attention to. And most important,
were learning from our past experience, which is one of the
decision processes that we always focus on. There is a set of
biases that exist when you have a serious disaster, then you pay
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attention. Firms are now paying attention to it in a way that they

havent paid attention before.
I think the challenge for the center is to take advantage of the fact
that people are now thinking about these issues, to begin to
suggest some policies and programs that are a lot harder to
actually adopt, not only for these firms, but for countries. I think
the interdependency, the global issues, are important for our work
not only on climate change, but on a lot of other risks. How do we
actually take some steps so that we are able to change a system
thats not just for the corporations or for the individuals, its for
legislation, its for governments and the public sector? Weve put
a fair amount of attention into trying to work in the U.S. with
Congress, and with other countries governments, to try to deal
with that. The World Economic Forum and the OECD are groups
that we really have an integral working relationship with and are
involved with, in order to make inroads on international and global
problems. Thats what we really have to do, is to try to figure out
how we take advantage of where we are today to make some
very important changes as we go forward.

Zero waste: An attainable goal?

Q&A with Elemental Impact Founder Holly Elmore
By Arlene Karidis |
Source: http://www.wastedive.com/news/zero-waste-anattainable-goal/409441/
Around the globe, we have echoed a decades-old
mantra: reduce, reuse, recycle.
For years, this meant making the effort to compost the food,
recycle the bottle, or reuse the plastic bag. But through the
evolution of the recycling industry, the bar has been raised to
attain a higher goal: zero waste.
It is a philosophy that contends every ounce of salvageable trash
that which can still serve a purpose can be turned into
valued commodities. In embracing this philosophy, its proponents
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say, we can capitalize on resources while taking some of the load

off our landfills.
Holly Elmore, Atlanta GA-based Elemental Impact founder and
CEO, works with the industry on creating sustainable best
practices. Among her work to reach zero waste, she
developed Zero Waste Zones, which was acquired by the
National Restaurant Association.
While the idea has its merits, one may wonder: is zero waste
really achievable? If so, how do you convince a "throwaway" society of this lifestyle? And what are ways to get zero
waste to make sense from a logistics and economic perspective?
Waste Dive caught up with Elmore to address these questions
and more.
WASTE DIVE: Is Zero Waste attainable? And if so, how do
we get there?
HOLLY ELMORE: I do think zero waste is attainable. To get to
zero waste, you must recognize which materials have value. Set
up a system to recycle it. And reduce
If you are a corporation, begin for instance by asking yourself, are
you printing more than you have to?
Then you replace.
An example: with shipments, tell companies you purchase from
you want recyclable packaging. There is power in consumer
demand. Once you have reduced and replaced, separate
valuable material and find a local recycling option.
What is key to getting the public to buy into zero waste?
ELMORE: You need to cultivate a culture. That culture has to
come from the top management down in the case of large
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organizations. In the community it has to start with the mayor and

city council
There should be green team leaders or sustainability leaders who
have zero waste responsibilities written in their job descriptions. It
should be tied to their compensation and evaluations
There should be good signage and recycling bins. Their use and
why we use them should be in newspaper articles. And
community leaders should be talking about this
The Georgia World Congress Center is the worlds largest LEED
certified conference center. They were one of the nations
pioneers in the commercial collection of food waste for
composting in 2009. You cant tell me most people are busier
than them. But they make the time because this is in their culture.
Can you speak to the role of education in changing a
culture?
ELMORE: Education is crucial. Charlotte, NC has an MRF that
had low contamination rates, but the community spent mega time
educating and rewarding residents on clean recycling. The MRF
got great material. When they started accepting from other
communities, who had not been educated and did not have
comprehensive
programs
with
government
support,
contamination increased.
What are the biggest roadblocks to obtaining zero waste?
"As long as we view it as trash it will end up in the landfill.
We must recognize it as valuable material."
ELMORE: It is that mentality that waste is trash. As long as we
view it as trash it will end up in the landfill. We must recognize it
as valuable material determining what is trash and separating it
once you have reduced and replaced is where challenges happen
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 Single-stream recycling is a big problem leading to

contamination. According to the Container Recycling Institute,
about 25% of material sent to MRFs ends up in landfills due to
contamination. And one person or corporation can contaminate
an entire single-stream load, with two main contaminants being
food and glass.
How do you address this road block?
ELMORE: First know that according to US Zero Waste Business
Council, you can only claim 100% zero waste if the entire value
chain is zero waste, which includes suppliers, manufacturers and
consumers
Its important to get manufacturers to understand their
responsibility for packaging. Packaging should be reusable or
recyclable, and labeled as recyclable with clear instructions.
Those instructions should include if items need to be separated
If caps are a different plastic than bottles; well, tell us
Consumers can avoid contamination by removing food, and if
packer trucks are crushing materials, remove glass.
What is the MRFs role in working toward zero waste?
The MRFs "should not be there to clean, but to separate."
ELMORE: First, they should not be there to clean, but to
separate. The MRF is simply the destination. Haulers, citizens,
and government should take responsibility for clean material. So
for MRFs to be affective, consumers [and organizations] must put
only clean material into the stream I think MRFs should fine
haulers. Or reject dirty loads. The hauler would have to go to
landfills and pay tipping fees.

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Can you speak of "benefit of scale" to justify investments

made to reach for zero waste?
ELMORE: You need scale for zero waste efforts to make
economic sense. Its expensive to put trucks out there, so you
need route density. Cluster pickup places where there are
generators of material in a zone. Haulers have to fill that truck to
justify overall cost of their routes. Bales of waste to be sold to end
markets must be large enough to fill tractor trailers of materials
sold by weight If you travel outside your community, especially,
you have to have volume.
How do you get corporations and other business entities to
support zero waste goals?
ELMORE: Look at what material is generated in the community,
corporations, universities, government and other organizations. If
a significant amount of material is generated in the community, for
instance, but you dont have an end market, look at who would
use the commodities." And attract businesses that could
capitalize on it keep dollars in your community to build a vital
local economy, create jobs and new products and remember,
its a team effort between businesses, government, citizens As
far as trash collectors, they have to tell municipalities, your
citizens are sending contaminated stuff ... Lets work together: the
government, businesses, citizens, haulers and MRFs.

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BookScan
What Your CEO Is Reading: The Case for
Philanthrocapitalism; Better Negotiating Through
Power Poses; Santas CIO
By TOM LOFTUS, WSJ

Bill Gates, philanthropist and co-founder of Microsoft, participates in a

session at the Clinton Global Initiative in New York City, Sept. 27, 2015.
Associated Press

The case for philanthrocapitalism. Seconds after Mark

Zuckerberg announced that he and wife Priscilla Chan would be
donating 99% of their Facebook stock to a new nonprofit
organization, a backlash brewed. Some saw the move as a tax
avoidance scheme or, at best, a clever way to separate good
intentions from the social networks more realpolitik actions.
Now heres The New Yorkers James Surowiecki, in a
backlash to the backlash. There is a long history of this: the
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Rockefeller Foundation funded the research that produced a

vaccine for yellow fever, he writes.
The Gates Foundation, since its founding, in 2000, has put
billions of dollars into global health programs, and now spends
more on health issues than the W.H.O. That being said, perhaps
the argument that taxing billionaires to fund social projects needs
to be reconsidered. Its far likelier that those projects would just
go underfunded, he writes.
Five steps to better negotiating. Youre not going to convince
the CEO next year to adopt your ideas of moving the entire
organization to an agile, bi-modal, Spark-enabled, hybrid-cloudish
stance by sending him or her emails from the data center. There
are few actions CEOs and their ilk respect more than meeting
them on the field of battlei.e. the boardroom or, if lucky, an
offsite resort conference room stocked with bottled water and
drinkable coffeefor mano a mano negotiation.
For the CIOs looking to start the New Year off with a victory in the
dark arts, Stanford Business offers Five Steps to Better
Negotiating. Try power poses when negotiating, Elizabeth
MacBride suggests. Also, recall those times when you felt
physically attractive and when you had power over another
person. Focus on what happened, how you felt, and what that
experience was like. Got it? Now go get em Tigerafter New
Years.
Twas the night before Christmas and all through the cluster,
not a vnode was stirring The hardest working person on
Christmas Eve is Santas CIO, according to Hewlett Packard
Enterprise CEO Meg Whitman.
Heres to a happy, healthy, hybrid, secure, data-driven, mobile,
and prosperous 2016! she writes in LinkedIn.

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THE BANYAN
Good
strategy requires people asking tough
TREE
questions

Art of ManagingBeware Lazy Approaches to the Hard Work of

Strategy
by Art Petty
Too many leaders ignore the
tough questions about their
organization's
strategic
direction, seek to answer them
with platitudes or don't even
have specific goals, writes Art
Petty. "Whether you're sitting at
the top of the food chain or
operating from somewhere in
the middle, it's essential to ask
and push for clear, coherent
answers to the hard questions,"
he writes
Not miscalculation, bad strategy is the active avoidance of the
hard work of crafting a good strategy. Richard RumeltGood
Strategy/Bad Strategy

Consider:
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Our strategy is to be more profitable than our competitors.

Our strategy is to grow from 10,000 to 100,000 customers in the
next three years.
Our strategy is to be the leading provider of (insert your category)
to the (insert your market) by (insert your year).
Our strategy is to grow.
The absence of a strategy for us is actually a strategy.
Sadly, Im not making these quotes up. I was present for each
of these utterances from otherwise intelligent senior executives.
The
statements
underscore
the
widespread
misunderstanding of what strategy is coupled with little idea
how to actually generate one thats coherent and legitimate.
Fluff statements dont define a coherent strategy.
The absence of a strategy iswell, a strategy to flail and fail.
Growth is not a strategy.
And big, lofty goals dont define or describe a strategy. In the
meeting where the customer count went from 10,000 to 100,000,
it was like a bidding war to see which executive could propose the
most outlandish number.
20,000, youre thinking too small, crowed one executive. It
should be 50,000.
50,000, weve got to go big or go home. Its 100,000, suggested
the Managing Director. Are we agreed that this is our
strategy, he asked, rhetorically as the bidding war came to an
end.
One senior manager courageously suggested that the
customer count didnt define a strategy. He was verbally
beaten down, run over and ground up by the numbercharged crowd.
Rumelts Kernel of a Strategy:
Rumelts treatment on good strategy is both simple and elegant.
He suggests focusing on developing the kernel of a strategy.
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The Diagnosis answers very clearly, Whats going on

here?
Getting to a clear answer to this question involves considerable
work in sorting through the emotions and opinions and to focus on
both internal and external realities. Youre after clear statements
of the truth.
The Guiding Philosophy frames: What are we going to do
about it? It clarifies the opportunity, amplifies the firms key
leverage points and sets bounds the field of play. Its this absence
of a guiding philosophy that is most common and most fatal to a
firms strategic thinking and actions. Without a clear, sound
guiding philosophy, every option is on the table. The goal of
strategy is to take all but the essential options for success
off the table.
The Coherent Actions are those steps or initiatives (and
progress measures) the firm agrees to take to bring the
guiding philosophy to life. Another leading strategy thinker,
George Day, describes this as: identifying a series of
integrated actions to pursue competitive advantage. The
operative word is integrated.
Whats not apparent (although it is implied) in his kernel
approach is the incredible hard workthe heavy lifting of
debating and deciding and selecting.Its some of the hardest
brain work youll ever do, and the complexity is compounded by
the essential need for a group of high-powered people to move
beyond ego and bias to a place that is more honest and
objective. That last point, the group dynamic, is in my
experience, the most difficult part of the process for a books
worth of reasons.
The Bottom-Line for Now:
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In most of our firms and even in our public matters of state, were
letting our leaders and our executive teams off the hook on the
hard work of cultivating and articulating coherent strategies.
Dont settle for the platitudes and lofty goals and fluffstatementstheyre not strategies, theyre the result of a lazy
approach to a critical topic.
Whether youre sitting at the top of the food chain or operating
from somewhere in the middle, its essential to ask and push for
clear, coherent answers to the hard questions.
Art Petty serves senior executives and management teams as a
performance coach and strategy facilitator. Art is a popular
keynote speaker focusing on helping professionals and
organizations learn to survive and thrive in an era of change.
Additionally, Arts books are widely used in leadership
development programs. To learn more or discuss a
challenge, contact Art.

10 Things We Know About People Analytics

A growing number of organizations are recognizing the
importance of defining the discipline of people analytics and
determining what business problems it can help address.
People analytics, a business intelligence-based approach to
assessing and managing talent, presents a groundbreaking
opportunity for HR organizations. People analytics is in its early
days, but following are 10 lessons weve already gleaned about
this burgeoning discipline.
1. People analytics is even more important than we thought.
Deloittes Human Capital Trends 2015 reportshows that 87
percent of business leaders are highly concerned about retention
and engagement, 86 percent about leadership, and 85 percent
about current workforce skills. Despite the vast number of
engagement surveys in businesses, Glassdoor ratings for the
average company are 3.1 out of 5, with a nearly perfect bell
curve distribution. Companies desperately need data to figure
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out what makes people join and stay with the organization, who
is most likely to be successful, and what can be done to build
more leadership, customer service, and innovation capabilities
all of which can be directly informed by great people analytics.
2. People analytics will grow exponentially, but we are in the
early days. Our research indicates that the maturity of people
analytics in HR has barely budged in the last year. Does that
mean the market is stalled? No, rather the opposite: Many
business trends grow exponentially, and I expect the people
analytics market to start doubling at a larger and larger increment
each year until it is a standard part of HR operations within 10
years.
3. Most companies still cant really define people analytics.
Despite many great articles and references to the
book Moneyball, many HR executives and leaders are still a
little confused about people analytics. Some think it is about
computing retention rates or measuring the ROI of training or
other HR programs. Our research shows that its much more
than that: People analytics brings together a companys
employee-related data to solve specific business problems in
such areas as sales productivity, retention, fraud, and customer
satisfaction.
4. Data management remains the biggest barrier.
Bersin
by
Deloittes High-Impact
Talent
Analytics
research shows that more than 80 percent of companies are
dealing with reporting challenges. Many large companies are
dealing with data integration problems, unable to readily
determine how many salaried and contract employees they have
at a given time. At a recent people analytics conference in San
Francisco, many leading Silicon Valley companies, large
financial institutions, manufacturers, and others agreed that their
HR data was bad, which can mean inconsistent, incorrect, out
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of date, and located in many places. Most agreed that there is a

lot of technical debt to clean up in order to really scale their
people analytics operations.
5. Modeling is valuable, but implementing models is key.
We all love great models that predict retention, guide
compensation decisions for high performers, and the like. These
models are incredibly valuable, but the hardest part of people
analytics is implementing the changes recommended by the
models, which calls for people analytics to be accompanied by
sound change management practices. I recently spoke with a
large company that discovered it was underpaying its high
performers and overpaying its midlevel performers. It took
several years to teach managers (and the organization itself) that
its OK to give somebody a huge raise for high performance and
a middling raise for fair performance.
6. Tools and platforms are here, but the market has yet to
shake out.
As with many emerging markets, there are dozens of new tools,
technologies, and platforms available to help with the analysis of
people data. Almost every major ERP software company is
investing in people analytics; at the same time, there are dozens
of smaller companies focusing on text analytics, retention
analytics, sentiment analysis, and even analysis of employees
physical locations, heart rates, and exercise patterns. As the
market matures, these smaller companies will either grow quickly
or be bought.
7. Geeks will rule this world, but they cannot do it alone.
While we need data scientists and statisticians to analyze and
build models, people analytics is multidisciplinary. In addition to
core IT people, successful teams include process gurus,
organizational development experts, industrial and organizational
psychologists, and visual designers, among others. This team
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can become a new Center of Excellence in HRone that must

report to the chief human resources officer, not be buried in the
HR technology team.
8. We will have to deal with many new types of data, and
new ways of analyzing it.
The days of exclusively analyzing payroll, HR management
systems, and time and attendance data are over. We have to
look at employee engagement survey data, email history data,
employee badge and sociometric data, and all of the information
that will come from wearable devices. Remember: Your
employees are likely walking around with video cameras and
GPS devices all day, so much of the data we will look at over
time will be based on location, time, and visuals.
9. Security and anonymity will become your middle name.
Thanks in part to recent credit card and security breaches,
employees and legal departments are very nervous about how
HR collects and uses data. HR departments and people analytics
teams would be well-served to take a crash course in data
security, privacy, and identity protection.
10. We are all learning and need to work together.
While much of people analytics currently is (and will likely
become) a source of proprietary competitive advantage, we
should share what we are learning now so we can move this
industry past the hobby phase to true industrial scale. Its not
the findings that make companies practicing people analytics
unique, but what you do with them.
by Josh Bersin, principal and founder, Bersin by Deloitte

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Petrotech Activities:
Sl No

Date

Name of the Event

Venue

1.

4th-6th February 2016

11th Program on Latest Trends in Petroleum Exploration in

association with KDMIPE-ONGC

Dehradun

2.

23th-25th February 2016

4th Petrotech - Petronet LNG Program

New Delhi

3.

17th-18th March 2016

8th National Workshop on Health, Safety & Environment

Jaipur

Theme : HSE Operational Integrity Closing the Safety

Loop
4.

10th 11th March 2016

8th Seminar on Hydrocarbon Industry Growth Prospects and

Challenges in North-East in collaboration with NRL

Assam

5.

30th March 2016

Annual Convention of Petrotech Chapters

New Delhi

6.

25th-29th April 2016

Leadership Competencies for Energy Sector in association

with IIM-A

IIM-Ahmedabad

7.

May 2016

R&D Conclave

8.

June 2016

Summer School on Petroleum Refining and Petrochemicals

in association with IOCL-R&D and IiPM

IiPM, Gurgoan

9.

July 2016

Industry Educational Tour to University of Alberta Canada /

India Canada Energy Forum in association with University of
Alberta

Canada

10.

July 2016

Program on Operational Excellence in Oil & Gas Sector:

India 2016

New Delhi

11.

August 2016

Workshop on Human Capital Analytics with SHRM

New Delhi

12.

September 2016

Program on Drilling Technology in association

Dehradun

With ONGC, Dehradun

13.

October 2016

Program on HR Challenges in Oil & Gas Industry in India

New Delhi

14.

November 2016

Seminar on Sustainable Development in association with

ONGC

New Delhi

15.

December 2016

PETROTECH-2016

New Delhi

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You Said It
Dear Mr Anand Kumar,
Let me first wish Petrotech Society and the veterans a very happy
,Healthy and Prosperous New Year.Every year on the New year eve ,I
share my thoughts for the new years with my professional friends.I am
this time including Petrotech Veterans on my mailing list. Hope this
message will give some food for thought to my veteran colleagues
The New Year has already taken possession of the clock yesterday, leaving
memories of Year 2015 behind. Each year on the same day, I pen down my
thoughts with lot of optimism for the New Year. We resolve to achieve
many goals in the new year, some of these are achieved, some are forgotten
and some remain unfulfilled inspite of our best efforts. The one which are
full filled, give us inspiration and the one which remain unfulfilled give
us courage to strive harder.
Looking back in the year 2015, India did have reasonable GDP growth
this year, mainly due to dramatic drop in crude oil prices but
unfortunately the corporate performance and the industrial growth has
been the cause of major worry. Growth in most of the industrial sectors
like Power, mining & metals and even Oil & Gas was not as expected.
Equipment manufacturing sector operated much below their capacity
because of decreased demand which not only escalated the price war but
also encouraged cartelization. Service sector had a major hit because of
dearth of projects. In fact the picture was gloomier than what I thought
and presented in my last New Year-2015 message, thanks to the Policy
makers and so called environmentalists.
Year 2015 has seen major upheaval. Crude price has piercing the $40 per
barrel threshold this year and by the time I press the button to send this
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December 2015

mail, it is expected to fall below $37. Historically, falling oil prices has
been a cause of financial stress for oil producing companies globally but in
countries like India where majority of crude is imported, this has provided
a general boost to the economy. This is largely what is happening today in
India.
One thing which interests all of us at this point of time is which way the
Indian economy going to move in the coming year. In my opinion, the
coming year is going to be a very challenging for the Indian industry
mainly due to internal politics, external uncertainties like volatile crude
oil price and economic data from china (which may surprise the industry
as a whole). Industry is expected to respond differently and to different
degree to this dynamics. Even though, a boost to environmental
technologies after Paris talks and push to Renewable power generation by
Indian Government is a welcome sign but all of us who are closely
associated with or are part of the Indian industry, should get ready for a
rollercoaster ride this new year. Work smarter will only help in
overcoming a potential storm and help industry to overcome this
volatility.
While Oil producing companies in India should quickly review marginal
and discretionary investments and aim their efforts to improve their
performance on the operational, supply chain, and cost fronts to achieve
reductions in their production cost in the coming year, Indian Refining
and petrochemicals companies need to act fast to develop new operating
and expansion strategies. Indian service companiesshould work to offer
innovative value added proposals to their clients for collaborative cost
saving.
It is still remained to be seen whether and, if so, for how long, this
current crisis and its resulting financial endurance challenge persist. It
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December 2015

is presumed that situation will be somewhat clear only after the

announcement of Fiscal year 2016-17 budget and conditions for industry
will start positive signs in the later part of 2016.In my opinion the
industry must respond with long term planning considering little mature
Indian political situation and crude oil price levels closer to those
prevailed through mid-2014.
So, as the night- bells ring for the last time this year, I wish that let this
year signify a year of courage & believes for you and prove to be a year of
realization of your dreams,. Let us plan achieve what we could not achieve in
year 2015 and work toward achieving what we aspire to achieve in the
new year. May this mantra Think smart, Think beyond, Think
Innovative lead our way to success this New year.
My wife joins me to wish you and your family a very happy, healthy and
successful year ahead.
While complementing for regularly bring out excellent and very useful
'PetroScan', I also Wish also Petrotech society a very...very...very
Eventful Year 2016
Have a great Year ahead,
With warm Regards
Peush Mahajan

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