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As I write this, I am amazed at how nature is distributing water around the world

+ Western Europe has just been hit with a very large snowfall that has crippled aviation and transportation

+ At various times in December, parts of North America also received very large snowfalls, and aviation and transportation has also been crippled

+ The northeast of Australia is receiving record floods

Read more »

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I am sure you have experienced them … the short periods of time where you really do have too much work, and you need to delegate some in order to meet all of your deadlines. If you are like most organisations, your co-workers are also fully loaded with their own obligations, so the only way to delegate is to outsource.

I have found an interesting demographic to receive some of my surplus tasks … Mothers that are engineers that are also on Maternity Leave. Now … this is a special demographic in many ways, but I have found them to be an excellent option for many tasks.

The key is flexibility. While many organisations talk about the need to be flexible, the flexibility requirements of Mothers on Maternity Leave is much higher. Consider some of these issues:

+ She cannot come to you for a meeting. You must go to her home for a meeting. This means there is the potential for the meeting to be cancelled because baby does not “cooperate” (baby does not go to sleep for nap-time, baby gets sick, baby does not like you and cries, etc). At the workplace, work is often the highest priority, but with a Mother on Maternity Leave, baby is always the highest priority.

+ She cannot give firm time commitments to deadlines. Some days she can find some time to do constructive work, other days (again because of the requirements of baby) she cannot.

+ She has had her world changed, and her confidence may be different. Her technical skills will not suffer during maternity leave, but her confidence to do the work might.

There are other issues, but the key is to recognise the ability of the person receiving the task. While it is no different from any delegation or outsourcing, there are some differences.

I have had success in the past for a variety of reasons, and here is one examples.

+ I am in the process of developing a training course, and needed a course booklet to accompany the course. The Mother on Maternity Leave that I approached was in her late 20s with one child. She had about 6 years of experience (the target audience would have 3-10 years of experience, so she was the correct demographic). I provided her the course slides, images, etc, and a description of how I wanted the course notes. We agreed on a lump sum price with a long schedule. The result was a 130 page booklet that was a couple of weeks late but of good quality. It was very easy for me to check her work – she had done a good job for me.

+ And there are several times I have used Mothers on Maternity Leave to check my written reports.

There are other examples, but I think I have had a high enough success rate, and I will share some of my key things that I think have made this successful.

+ Negotiable scope. Give her something that she thinks she can do. Challenge but not overwhelm. If possible, have her write the job scope based on her understanding of what is needed.

+ Communications by phone and email. Very rarely have I needed to go to her home, and the one time I did I was invited, instead of me insisting on a face-to-face meeting.

+ Flat fee. A $/hour payment structure will not work because she will have many distractions.

+ Very flexible and long deadlines. While this is not always possible, she will probably only be able to give you 6-15 hours per week, and the time will vary from day-to-day and week-to-week.

+ Include her in as many decisions as possible. This will help her deliver a finished product to you.

+ No means no. Remember, you are asking her for help, not the other way around. If she cannot help you, that is that. It may be because the job is too hard, or because of baby, or because of her health.

+ Advance notice is vital, more so than other people because of her reduced potential to work.

+ Be prepared for her to not deliver because of a variety of reasons – for example, baby goes to hospital. With baby in hospital, your little project will be the last thing on her mind, and you may find out when it is too late. Thankfully, this has not happened to me yet.

And … the Mothers have a chance to convince themselves they have not lost their engineering skills. It keeps their confidence up, making the return to the work force easier for them. Truly a win-win.

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Recently I was listening to the musical comic Allan Sherman sing “Good Advice”. It is a silly song about how he (Allan Sherman) travels through history, and gives advice to some of the greats of the past – which results in the greats of history achieving their destiny. Here is one verse about the great Austrian psychiatrist Sigmund Freud (considered by many to be the father of psychoanalysis) …

“Sigmund Freud, he had an unfurnished house.
He was a very nosy fellow, so it seems.
He had no chairs,
So he made all his friends stand around all day
And tell him about their secrets and their dreams.
Well, while they stood there talking ‘till they got fallen arches,
They yelled, ‘My feet are killing me. Ouch!’
I said, ‘Sigmund, don’t you realize you’ve got a gold mine here.
Go out and buy yourself a leather couch.’”

And then he goes into the chorus

“And that was good advice, good advice.
Good advice cost nothing, and it’s worth the price.”

Now, I am telling you this because it relates to some advice I gave to a client. And I gave the client advice for free. I will let you decide if I did the right thing, but I am trying to build a relationship with this client.

The client contacted me, describing how they needed to increase the flowrate through their pumping systems. The pumping system (all constant speed motor driven centrifugal pumps) had a booster pump and a main pump in series (pump pair), and they had four pump pairs (duty, duty, duty, standby … 4×33% pairs). The booster pump was significantly smaller than the main pump. The pump pairs were required because of the combination of high pressure rise, high flowrates, and volatile fluids, and flowrate flexibility. He said he needed to increase the flowrate and was going to achieve this increase by upsizing the impellers.

Well … upsizing the impellers is a viable option for increasing the capacity of the pump, but it has the potential to overload the system (motor too small, motor cables too small, extra flowrate / pressure can overload downstream safety systems, etc). I told him this, and he replied that he was only looking for a 5% increase in flow. While my list was valid, the magnitude of my concern could be reduced – as many of these issues were changed from a detailed engineering study to a simple check (with potential follow-up work on items that were identified as marginal).

He was going to upsize 8 impellers – one for every single pump.

At this point, I decided to give him what I considered good advice. For free. My effort was about 45 minutes. I will let you decide if I succeeded in giving him good advice.

I asked for the pump curves. He sent me two pump curves (one typical curve for the booster pumps, and one typical curve for the main pumps). The curve was for a constant impeller size with various speeds. Using the affinity laws and a simple spreadsheet, I made four pump curves.

+ the current composite curve for the existing booster and main pump

+ a composite curve for a booster pump with a new impeller and an unchanged main pump

+ a composite curve for an unchanged booster pump and a main pump with a new impeller

+ a composite curve for a booster pump with a new impeller and a main pump with a new impeller (his base case).

The third option (unchanged booster pump and a main pump with a new impeller) provided about 95% of the benefit, and for about 65% of the cost (eliminating the need to modify four small pumps).

As I write this, I do not know if he has used my “good advice”, but he did acknowledge receipt, and clearly understood the implications.

Companies must make strategic decisions, which are often not based on simple economic decisions. This was one – I decided I wanted to invest in this company as a client, and hopefully build a better and longer lasting relationship with them.

Anyway … was my advice good advice, and did I do the right thing to give it for free?

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I have been observing many debates about “industry going green”, but one I have not heard is … “what is the more green basic cooling utility – air or water?”

Anecdotally, I think the current (overly simplistic) answer is … if you have steam, it is probably better for you to have cooling water. If you do not have steam, you do not need to have cooling water. But does this give the “most green” answer?

This discussion could fill volumes – and I am going to limit my discussion to 2 points for and against both water and air. There are other reasons that may be specific to your location which I have not mentioned, and the items I have selected may not be relevant to your location, but I must start someplace. When you have this discussion, some of the advantages and disadvantages may be obvious, but they may not be obvious from a green reason. As society increases the value of being green (even if there is currently no “direct tangible financial benefit”), it may be to your benefit to try to stay one step ahead.


Water is easy to control. The temperature of cooling water will vary little from winter night to summer day, which allows for process stability. It is not only possible but relatively easy to optimise a process 24/7/365 because of the stability of the system. From a green perspective, optimisation means minimising waste, so water discharge and chemical consumption is reduced.

Water is also cooler than air in the summer. For temperature sensitive applications (such as refluxing a distillation column or condensing steam in a condensing turbine to make electricity) the lower temperature offered by cooling water in the summer means systems will be more efficient than systems supported by cooling air, which increases profit. In addition, because water can be cooler than air in summer, it means we may be able to either avoid a refrigeration system, or make the refrigeration system smaller. From a green perspective, this means less thermal energy input into systems, and higher efficiency (which further reduces fuel consumption).


Air is lightweight and requires no piping. The naturally distributed nature of air means it is perfect for point use and does not require collecting into a central point. For facilities where weight is an issue (such as an offshore platform), the avoidance of cold utility piping can be quite economically attractive. Low carbon footprint for manufacture, low environmental impact due to reduced size of facility, reduced water footprint due to less need to paint, etc.

In cold climates, air does not change phase – it is always air. We may have to use special chambers to keep the air temperature up, but the fact that air is always a gas makes it very predictable and easy to manage. By removing a restraint caused by physics, it may be possible to further reduce waste using economics – by removing a technical barrier, systems become more profitable.

For the disadvantages, I will simply focus on the opposite of the advantages, but there are others which are beyond the scope of this simple article.


Water is heavy. The low temperature rise allowed in most cooling water systems means the water flowrate will be quite high. Combined with the density of water (which will probably be higher than almost any hydrocarbon fluid on the site), and cooling water can become a structural headache. In addition, the piping network will need to allow for the effects of water hammer. From a green perspective, this increases the initial construction load on water (more structural concrete) and more pipe that needs to be painted (spill management, loose paint flakes management, etc). And … the large water flowrates require large motors / engines / turbines, which usually mean a large carbon footprint to produce the power to run the cooling water pumps.

In cold weather, water is not longer water – it is ice. Freeze protection is required to keep the water liquid, and the freeze protection is usually the addition of energy (either mechanical energy to maintain circulation or thermal energy to prevent freezing). This extra energy input adds operating expenses and creates greenhouse gases (an issue for this discussion).


The variable temperature of air creates a control dynamic that makes optimisation possible but more complex (and sometimes much more complex). Simple process control may not be adequate to squeeze the last bit of profit out of the process, so income may be slightly compromised. A lack of optimisation means the lack of opportunity to minimise waste, so discharges cannot be truly minimised.

The obvious disadvantage of cooling air is the summer daytime temperatures. Depending upon the location, the temperature can become quite excessive, which adds load to any temperature sensitive system. This higher temperature may require the use of a refrigeration system to justify operation all 12 months of the year. This increases the load on engines and motors, which in turn creates more carbon emissions.


You will note that I often focussed on the secondary effects that have green issues. Water for concrete and the increased need for paint (which can add load to total site emissions) may be a trivial or significant green issue, but it certainly is not the primary issue. The impact of process optimisation on the opportunity to optimise may be another trivial or significant green issue. The ability to optimise may result in annual emissions being the same for both air and water, but instantaneous peak emissions will vary significantly for air (and not for water).

So … is it possible that the “most green” solution is a mix of both cooling water and cooling air?

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One quotation from the great physicist Albert Einstein has become embedded in my training practices:

+ “If you can’t explain it simply, you don’t understand it well enough.”

And this is especially true when explaining subtle technical issues to management. Here in Australia we recently had a federal election, and I had the opportunity to talk to one of the candidates about a very subtle issue that has been bothering me for some time involving renewable energy. I found I could explain it, but not quite well enough. This caused me to return to my desk and understand it better. The result of such practices is often a very good, yet very powerful, one or two line statement.

One example from my training is “Friction is your friend.” I use this when explaining some of the methods of managing noise in high pressure drop control valves, and explain how friction helps manage the velocity generated noise. I am not going to expand on it (you will have to attend the training course) but I think you can begin to understand the principle.

We recently completed a pinch analysis study for a client. It was a very complex study, but we were able to create three simple statements that summarised all of the issues. I can probably tell you more in future updates, but currently it is confidential. In the interim, I can tell you the client is happy, because the message was simple and clear.

A simple message is difficult to create. It often can not be created spontaneously (but sometimes we get lucky). But once it is created, it is powerful, effective, and very useful. Some other excellent but simple messages I have encountered in my career are as follows:

+ “For this process, making the process as cold as possible with this system will result in maximum revenue”

+ “Please maintain the chlorine gas flow so the rotameter is between these two marks. Below the lower mark will not sanitise the water, and above the upper mark will waste chlorine and give the water a funny smell.”

In both examples, a simple explanation of “why” is also included, which adds to the clarity.

Another very powerful but simple message is …

+ “I will trust you to make a good decision.”

I have found this extremely effective when working with young engineers. They then realise the gravity of the statement, and start asking questions so they can trust themselves to make a good decision.

Now compare this to some well meaning but difficult to decipher messages from my career …

+ “We need to keep capital cost down.” This is too obvious, and it therefore becomes not a clear statement, but wishful thinking. The receiver of the message is probably confused.

+ “It needs to be better.” The use of the word “better” is subjective, and therefore is not a clear message. Better can be lower cost, quicker delivery, higher quality, etc. For a report it can be more words, fewer words, etc.

+ “We need to minimise emissions.” Again, this is too obvious, but also sends mixed signals. To truly minimise emissions involves a total shutdown, which is not practical.

(And to demonstrate that a clear message should not be too cute) “Show me the money.” Taken directly from the movie Jerry Maquire, I had one boss that went through three stages:
+ Was an excellent boss before he started saying the message
+ Was an excellent but annoying boss while he was saying the message
+ Was an excellent boss when I told him to stop saying the message (and he listened)

And my favourite …

+ “It is not safe enough.” In the coming months, I will discuss the shortcomings of this confusing message.

By the way, I found the Einstein quote on this website (

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A colleague was telling me about her recent rise in work commitments. She was saying that, even though she is normally a well organized person, the ability to manage her schedule over the next few weeks would be much more difficult than normal, but at the same time it was much more critical than normal. Failure to properly manage her schedule will mean MANY projects and studies will be done at the last minute.

Every person is different in the way they deal with the pressure of deadlines. For example, when I have a very tight deadline for ONE task, I tend to get extremely focused and can work exclusively on that one task. My record of ONE task under extreme deadline pressure is not bad. When I have MANY tasks under extreme deadline pressure, I have trouble focusing on only one at a time, and I am sure my work suffers. I have therefore learned the importance of planning. For me, the need to ensure all required actions have enough time to be done well is almost as important as the need to avoid multiple extreme deadlines. Sometimes when planning, we see one extreme deadline is unavoidable, so I plan and do my work accordingly.

Some tasks are more suited to extreme deadline pressure. One that is not well suited at all to extreme deadline pressure is risk assessment. Risk assessments do need some schedule flexibility, or there is a chance the risk assessment will be a hazard. Consider some of the normal consequences of risk assessment to extreme deadline pressure …

+ The “80/20” principle does not apply. The 80/20 principle is getting 80% of the benefit for 20% of the effort. Many people try to work at this point, and are quite successful. However, when doing a risk assessment, we do not want to find 80% of the potential problems, we want to find 99.99% of the potential problems. And often the big problems are not easy to find. I remember one HAZOP where the team found a problem that could happen once every 8-10 years during an obscure maintenance activity. Failure to detect this problem would have resulted in people and the environment being exposed to significant quantities of mercury. There is no way the team could have found this under extreme deadline pressure, and the facilitator would have kept the study moving (the need of the facilitator to keep the study moving and giving the team enough time to analyse is a great balancing skill, and is a subject for another discussion). It is quite clear we cannot risk assess in a hurry.

+ Some tasks can be performed when we are tired. Risk assessment is not one of them. Risk assessment requires a great deal of mental effort. Risk assessing when mentally tired means we cannot comprehend as well the detailed ramifications of problems – they just become too hard. This means the team will probably either miss problems, or spend too much time trying to understand them that they create deadline pressure for later in the assessment. Or maybe both.

+ When we fall behind in a risk assessment, we cannot catch up. If we catch up, it means we are either working too quickly, or we are working too long and becoming tired. In either case, it is extremely likely that problems will be missed. Working into the night in a risk assessment will probably only create a fatigue problem, resulting in missed problems.

The inspiration for this article comes from a customer. Due to conflicts of interest, I was not able to facilitate his risk assessment, but I must admire how he is managing the assessments.

Due to lack of project progress in key areas (vendor issues) he had been forced to delay the risk assessment twice. I am sure he is under deadline pressure to complete the project, but he is resisting the urge to compromise safety. I admire him for that.

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Last month we spoke about how the oil spill in the US Gulf of Mexico will mean the laws will change. This month we are going to talk about how court rulings (not new laws, but interpretations of existing laws) will impact us. And that is by tort.

What is a “tort”? We like this definition from

+ A tort is “damage, injury, or wrongful act done willfully, negligently, or in circumstances involving strict liability, but not involvign breach of contract for which a civil suit can be brought.”

While there may be breach of contract involving the spill in the Gulf of Mexico, there is no current breach of contract with the concept of climate change.

We do not want to discuss the validity of climate change. Instead, we want to discuss how a legal strategy can be developed using the perception of climate change. In a civil case, it is the job of one party to convince a judge and/or a jury that something did happen – either intentionally or unintentionally. The penalty will involve the degree of intention, but guilt or innocence is step one. Consider two other industries … tobacco and asbestos. In both, they were originally developed with good intentions (both civil and commercial), but with time, as new evidence was produced, the image of both industries declined. Again with time, lawyers were able to build a sufficient case to show a jury that companies that continued to produce tobacco and asbestos products were harming employees, customers, society, etc. and successfully won court cases. Companies now face financial liabilities unforeseen when they entered the product market.

It is possible, likely, and starting to happen for climate change.

Now, why do the legal fraternity believe they can convince a judge and/or jury that a business, a director, an engineer, or a scientist working and making decisions in an industry, is responsible for damage to the climate? Two words: “proximate causation”.

Wikipedia gives two good illustrations of “proximate causation”.

“Example: Why did the ship sink?

+ “Proximate cause: Because it was holed beneath the waterline, water entered the hull and the ship became denser than the water which supported it, so it couldn’t stay afloat.

+ “Ultimate cause: Because the ship hit a rock which tore open the hole in the ship’s hull.

“In most situations, an ultimate cause may itself be a proximate cause for a further ultimate cause. Hence we can continue the above example as follows:

“Example: Why did the ship hit the rock?

+ “Proximate cause: Because the ship failed to change course to avoid it.

+ “Ultimate cause: Because the ship was under autopilot and the autopilot’s data was inaccurate.”

Proximate causation is a legal concept that has to do with the asking of one question. Who could have prevented certain action(s) and consequences?
+ In the tobacco industry, the board of directors of the company with the “deep pockets” (lots of cash and lots of assets) could have not developed or marketed the product.
+ In the asbestos industry, the board of directors of the company with the “deep pockets” (lots of cash and lots of assets) could have not developed or marketed the product.
+ And for the perception of climate change, the board of directors of the company with the “deep pockets” (lots of cash and lots of assets) could have not developed or marketed the product.

Readers of this newsletter tend not to be lawyers, but instead tend to be scientists, technicians, and engineers. We think differently to lawyers. It does not mean we are right and they are wrong (or vice versa), but we do think differently. We understand things based on the theories and laws of science and nature. These theories and laws are based on facts, observations, studies, and tests. And that is the basis of the dilemma:

+ As engineers, scientists, and technicians, we develop our theories and laws based on observations of the PAST
+ As engineers, scientists, and technicians, we develop projects, procedures, products, etc on our prediction of the FUTURE

+ And now lawyers are going to punish us if we do not get it 100% correct in all forms.

It does not matter how well the engineers, scientists, or technicians do; we will never get 100% of everything 100% correct. Even with the natural conservatism that we technical people tend to have in our thinking.

What are we going to do? Unfortunately, we can only see three things:

+ Educate the public
+ Increase our insurance coverage
+ (the interesting one) Involve government in the decisions

Involving the government in our decisions? Well … if we approach the government with a project, and two options for development (a conventional method and a zero emissions method), and demonstrate the difference in cost, does it provide a basis for asking for funding for the difference? If the government declines, does this provide a basis for “tort protection”? And of course if the government agrees, then the carbon neutral project proceeds. In either case, a long term government decision is required.

Note: this article was jointly written by myself and my business partner and fellow executive director, Patrick Alilovic

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On July 10, 1976, the engineering world changed. There was an industrial incident in Seveso, Italy, when dioxin (the chemical that causes chlorache, and can be lethal in small quantities) was released by accident. About 600 people were evacuated from their homes, and about 2000 people were treated for dioxin exposure.

That was the day the lawyers entered the world of engineering. After that, without fail, when there was an industrial incident, the law changed.

Let me be the first to tell you … the law is about to change.

Many of you will be aware of the oil leak in the Gulf of Mexico that began on April 20, 2010. The magnitude of the leak is continuing to grow, as new evidence continues to emerge. In addition, many of our basic assumptions are being found to not be valid, or may be not be “valid enough”. Consider the most basic of assumptions … that oil floats on water. The original estimate of the size of the leak was based on surface observation, because oil is supposed to float on water. Undersea plumes of oil were found – which have not yet had time to float to the surface, causing the estimate of the leak to grow by 500% (from 1000 to 5000 barrels per day). Some estimates put the size of the leak much higher. I am not in a position to say what is the size of the leak, but it is significant.

Another tragedy is that 11 people were killed, but that is not what is going to cause the law to change. The spill is going to cause the law to change. It is “odd and sad” that death to workers does not cause the law to change. Instead, it requires outrage of voters to cause the law to change.

I cannot tell you how the law will change, but I expect the following:
Laws requiring industries to clean up offshore oil spills to a satisfactory level. Unfortunately, satisfactory may be defined by the voters, meaning better than before any incident.
Laws requiring industries to develop a “superfund” to pay for these clean-up projects. These superfunds may be on a state, national, or regional international basis. The GCC group of countries (Kuwait, Bahrain, Saudi Arabia, Qatar, United Arab Emirates, Oman, and Yemen) may be one example of an international group. The countries that share the North Sea oil and gas (Norway, Denmark, Netherlands, and United Kingdom) may be another.
Laws requiring companies supporting these industries to prove they can work to prevent a spill from occurring
What will be interesting is to see how the lawmakers go beyond the offshore oil industry in these new laws. For example …
Will these new laws apply to inland waterways?
Will these new laws apply to spills on soil instead of on water?
Will these new laws apply to only the oil drilling industry, or also to oil shipping?
Will these new laws apply to mining companies?
Who will be the ultimate responsible group of companies? Looking at the Gulf of Mexico spill, there are three companies heavily involved (BP, Halliburton, and Transocean). Each has a different ability to respond – both technically and financially.
What will nations with national oil companies do? Since “the government cannot sue itself”, when the government oil company causes a spill, what is the government supposed to do?
And … please allow me to speculate for a moment …
What would have been the international response had this happened a few hundred kilometers away – in offshore MEXICO instead of offshore USA. Would the world be viewing this has another problem with the developing world trying to do too much?
What would have been the international response had this happened offshore BRAZIL – one of the world leaders in deepwater drilling. I do not know the intricacies of the south Atlantic ecosystem compared to the Gulf of Mexico ecosystem, but would the world news media be covering that event daily?
What would have been the international response had this happened offshore Arctic RUSSIA? This is the time of year that significant quantities of polar pack ice melt. Floating ice bergs would make clean up more difficult and potentially impossible, and the lower water temperatures would make some of the chemical options less viable.
The law will change. The ramifications of these law changes have not yet been comprehended.

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One of the more high profile bad management decisions is playing out as I write this … a professional rugby league team here in Australia has been found to have systematically abused and violated the league’s salary cap rules for the past 5 years. During that time, they won 2 premierships. The fallout has been “interesting”, but the collateral damage is what I would like to discuss. This bad management decision appears to have done the following:

Damage the reputation of the players (at the time of this writing, it is not clear if they were or were not willing participants in the salary cap scandal)
Damage the reputation of the current and past employees of the club
Damage the reputation of club sponsors
Damage the reputation of the sport
Jeopardise deals for stadium usage and broadcast rights
Alienate fans, supporters, and club members
Reduced attendance at games, with reduction in income for venue catering personnel
Reduce demand for team apparel, with the follow on effect of less apparel being made, and subsequent potential job losses in the apparel sector
Disenfranchise the young, causing them to participate in a different sport, (and I admit this is a stretch) jeopardizing the future of the league due to a lack of players.
And … the people and organizations on the list are collateral damage – they did nothing wrong, but are suffering the consequences of bad management.

Industry and government are both littered with examples where bad management has resulted in significant collateral damage. While I am not going to give names or specific examples, let’s look at some general examples.

Outsourcing. Outsourcing is a market based decision, and can provide short term gain. However, once something is outsourced, control is lost. Loss of control equates to loss of vision, loss of long term goals, and loss of the ability to use something for benefit. When government outsources infrastructure, history shows us it works as good or better less than half the time – meaning most of the time it works worse. Industry outsourcing departments has not had the same lack of success, but the failures have been more spectacular. Outsourcing human resources and IT departments has resulted in the occasional breach of a sensitive database, or a lack of accountability of staff compared to long-term contractors. Governments tend to follow guidelines, where private enterprise looks for ways to not follow these guidelines as a way of improving profit. Large corporations (with a reputation to protect) have established corporate policies which are followed, while smaller corporations (which are often on the receiving end of outsourcing) do not have these policies in effect. One of the best examples of “bad outsourcing” happened within the past few years when a large police force outsourced management of human resources. The outsourced company followed all specifications, but did not secure the database – it was not identified as a requirement. The database was hacked, and all personal details of every police officer entered the public domain. Bad management caused collateral damage.

A secondary effect of outsourcing is the ability to divide the responsibility so there is no single point of contact for anything but the most trivial issue. A few years ago, a new stadium was built here in Australia. It was “state of the art” with a “high tech” ticketing system. Because it was a new stadium, the existing transport infrastructure could not cope with the demand. There were software issues with the new ticketing system. I do not remember all of the other issues, but the result was about half of the crowd did not get into the new stadium until after halftime. One thing I do remember is the media discussing the problems with the pertinent companies. The result was the CEO of the stadium saying “not my fault”, the CEO of the transport company saying “not my fault”, the CEO of the ticket management company saying “not my fault”, etc. Bad management caused ill-will – another form of collateral damage. Deferral of key maintenance. Delaying maintenance is always tempting – as individuals we probably do it with our homes and automobiles – but statistically it is a form of gambling. If we defer maintenance and nothing happes, we win. If we defer maintenance and something happens, the downside can be significant. if there is an incident involving a system where scheduled maintenance was deferred, the public outcry could be extremely loud – potentially to the point where politicians will change the law.

Bad management can cause collateral damage in a variety of forms. There are other examples, but I am sure you can see the issue. In summary, good management can strive for years to create something good. It can be goodwill between a factory and a village, an industry and government, or government and citizens. Bad management can destroy the good work very quickly, and the collateral damage will affect those outside of the “guilty group”.

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Years ago I learned about the concept of “industrial ecology”. In involves industrial facilities constructively working together with neighbouring industrial facilities to better manage local resources and issues.

Not only does it make good economic sense, it makes good community, social, and environmental sense. And it is very applicable today – just like it was applicable years ago.

So … why is it not done more often? The normal answer is … “it is not in our core business.” I find that answer interesting, because I thought that increasing income, reducing expenses, and improving corporate image is always core business.

Let’s consider some examples that I have observed.

A small chemical company was very interested in reducing electrical costs. They purchased electricity from the grid, and paid two prices … one for consumption, and one for peak power. The peak power portion is used by the power companies to provide peak capacity in their power plants. Of note was the fact that down the road from the chemical plant was an aluminium smelter, which had its own dedicated power station. The load on the chemical plant was a very small fraction of the load on the smelter, and it is likely the chemical plant could be serviced without an increase in the size of the power station. Working together, the aluminium smelter could sell power to the chemical plant at the same consumption cost, but no fee for peak power. The aluminium smelter makes a profit selling surplus capacity, and the chemical plant has a reduction in electrical costs because the peak power fee is eliminated. Win-win.
Another small chemical plant was located next to an oil refinery. Here, the two companies do work together closely, sharing many things. The chemical company feedstock is waste from the refinery, and the chemical company shares in the cost of security, canteen and basic utilities (such as fuel and cooling water). Shared expenses always cost less. Win-win.
A steel forming facility was located adjacent to a hydrocarbon fractionation facility. The steel forming facility purchased fuel gas from the grid to run its ovens. The hydrocarbon fractionation facility had a stream of low value gas from purifying some of its products, and it was excessive for their fuel needs. An effort was made to sell this low value gas from the hydrocarbon fractionation facility to the steel forming facility, but the “marketing people” made the process too hard. The result … low value gas is flared from the hydrocarbon processing facility, and the steel forming facility continues to buy fuel gas at market prices. A win-win opportunity lost.
A group of companies in the same area agreed to pool fire fighting resources. They interconnected fire water ring mains, allowing them to operate in either stand-alone mode or connected to other facility mode. Training exercises were shared, and ultimately each facility agreed to provide personnel to fight any fire as required. Training costs were reduced, and security of firewater and fire fighting personnel were increased. Win-win.
A coal gasification facility was built – with part of the syngas being used to make power and the balance being used to make commodities. Naturally, the power station used boiler feed water. To utilise low grade heat, the boiler feed water was circulated around the complex to collect the low grade heat – reducing the load on the fuel and steam system. As part of the design, this circulating boiler feed water was used as a SOURCE of heat for such items as building heat and heat tracing. Any steam could then be preserved for power production, or running the process. Win-win.
There are other examples. One is fabrication shops. Once there are enough industrial facilities, light and heavy maintenance shops can open in the neighbourhood, and additional opportunities can be opened for industrial ecology. For example, a fabricating shop would have a heavy load on compressed air, but would be a nominal 8-hour day operation. The surplus capacity for the remaining 16-hours could be sold to the continuous processing facilities. Again, win-win.
I am sure there are many more where the opportunity to work with the neighbours can be mutually beneficial. Please tell us about your examples – we would love to hear about them.