Conference examines state of the ethanol industry

Bob Dinneen, president of the Renewable Fuels Association, expects the US ethanol industry will survive the world's financial crunch, coming out as a stronger, more competitive, and more sustainable industry.

Speaking to the National Ethanol Conference in San Antonio, Tex., on Feb. 24, he reported the US has 171 ethanol plants in operation and 21 more under construction.

“While I also see the 23 [ethanol plants] that are currently idled and know that more may well follow, I firmly believe that is a temporary misfortune that will be corrected when the economy turns around and the market rebounds,” Dinneen said.

Several companies are racing to be the first to produce commercial volumes of cellulosic ethanol in the US. Currently, nearly all the ethanol produced in the US comes from corn.

Dinneen noted a few pilot plants in the US produce cellulosic ethanol along with at least one demonstration plant in Canada. The ones of most interest to Oil & Gas Journal are companies having joint ventures with oil companies.

Verenium Corp. is producing ethanol from bagasse and sugar waste at a demonstration plant in Jennings, La., that can produce 1.4 million gal/year. Verenium and BP PLC formed a joint venture to commercialize cellulosic ethanol from nonfood stocks.

Iogen Corp. is producing ethanol from wheat straw at an Ottawa plant and has plans to build commercial scale facilities in the US and Canada. Iogen and Royal Dutch Shell PLC have a cellulosic ethanol alliance.

Meanwhile on the international front, three of the world’s largest ethanol trade associations have formed a global biofuels organization called the Global Renewable Fuels Alliance (GRFA). Its 29 member countries represent 60% of the world’s renewable fuels production.

Dinneen’s RFA, the Canadian Renewable Fuels Association, and the European Bioethanol Fuel Association cooperatively formed the GRFA. Brazil is not yet a member but Dinneen said GRFA is in talks with Brazil’s sugar cane ethanol industry.

A.T. Kearney: Sustainable companies outperform peers

Oil and gas companies committed to corporate sustainability outperformed their industry peers financially during the economic slowdown, A.T. Kearney Inc. said in a recent report.

The management consulting firm examined a total of 99 companies across various industries. A.T. Kearney’s report is entitled “Green Winners: The Performance of Sustainability-focused Companies in the Financial Crisis.”

The study defined sustainability practices as protecting the environment and promoting social well-being while achieving shareholder value. Sustainability companies were identified based upon the Dow Jones Sustainability Index and the Goldman Sachs Sustain Focus List.

Researchers examined 3 months (September to November 2008) and 6 months (May to November 2008). Performance differentials were calculated in each industry by comparing the percentage point difference of average sustainability companies’ indexed performance to the market indexed performance.

Over the 3-month period, the overall performance differential for index stock prices across all industries came to 10% and the 6-month differential came to 15%. For oil and gas companies, the 3-month performance differential was 12% and the 6-month performance differential was 15%, A.T. Kearney said.

“If sustainability is transforming the business, it makes sense to maintain this commitment and, where possible, even consider increasing investments to improve future positioning,” the report said. “The most sustainability-focused companies may well emerge from the current crisis stronger than ever—recognized by investors who appreciate the true long-term value of sustainability.”

IADC’s first competence accreditation goes to Rowan

Rowan Drilling UK Ltd. last year became the first company worldwide to gain full competence accreditation for its drilling personnel training through the International Association of Drilling Contractors.

Brenda Kelly, IADC director of accreditation and certification, said the Competence Assurance Accreditation Program (CAA) helps assure that worker competence programs designed by drilling and service companies meet accepted practices.

In February 2008, Rowan received conditional accreditation. The company made some minor revisions to its program and achieved full accreditation in November 2008, Kelly said.

Rowan’s CAA applies to 16 rig positions and the personnel holding those positions who work in northern European waters. Kelly said the positions are wide ranging and include roustabouts, crane operators, drillers, electricians, and medics.

Currently, another company has conditional accreditation. Three others have applied for accreditation and await site visits to verify the quality of their competence programs, Kelly said. A fourth company is in the program application review process.

The CAA is a way to help ensure the flow of knowledge and skills from industry’s aging workforce to its newer recruits.

Missing H in HSE

Most of industry's health, safety, and environment initiatives focus on the safety aspect or the environmental aspect, reported speakers at the International Association of Drilling Contractors HSE conference in Houston this week.

But the health aspect of HSE either is sometimes overlooked or is sometimes the last element to be addressed by HSE managers and top executives.

Doyle R. Galloway, Shell International Exploration and Production Inc. operational HSE manager, noted that companies talk about occupational health and about the well being of their workers. But individuals need to be motivated to take care of themselves and to exercise, he said.

Although many corporations offer wellness programs, Galloway suggests that these companies question themselves about whether their existing wellness programs work long-term in encouraging employees to stay fit and healthy.

Statistics from Partnership for Prevention show a $5.93 to $1 savings-to-cost ratio for companies that provide voluntary wellness at work programs. Once a sedentary employee becomes fit, statistics indicate an average 28% decrease in sick leave, which translates into corporate cost benefits.