petroscan december 15

8/19/2019 Petroscan December 15

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CONTENTS

OIL, GAS & ENERGY: NEWS & VIEWS

Editorial Note

Editor’s Choice

10 Reasons Why Your Strategy Isn’t 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: What’s 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 HydrogenFuel Cells

Indian Oil Corporation to invest Rs 1.75 lakh cr inexpansion projects

Sweeter gas pricing likely to spur search Cleaning up coal IOC gets regulator’s nod for Ennore LNG pipeline


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BPCL commissions Rs 1,419-cr crude distillationunit

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 ‘Yearof 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 privatesector 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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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-ACID-

CATALYST ALKYLATION UNIT

Theoretical Screening Good Sorbents for CO2Separation

Life cycle assessment of nanocellulose-reinforcedadvanced fibre composites

Rechargeable paper sheets could help rewrite thebook 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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In the shadows: Domestic solar power developersfeel 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 Child’s Life With Glasses COP21: 114 Companies Set ‘Science-Based’

Emissions Targets, Business Climate ToolLaunched

Kellogg Pledges to Slash Operations Emissions65% by 2050By: Karen Henry

COP21: Strong Climate Policy Leads to LowerBusiness Costs, CEOs SayBy: Jessica LyonsHardcastle, 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 ScienceWants to Help

Toyota Surpasses Water Reduction GoalBy: Karen Toyota Targets Zero Carbon Emissions from Vehicle

Lifecycle, Plants by 2050


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$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 forPhilanthrocapitalism; Better Negotiating ThroughPower Poses; Santa’s 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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Editorial Note

Dear Patron of Petrotech,

The year 2015 ended with a happy note at COP 21 in Paris, withthe 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 approveda first-of-its-kind universal agreement to wean Earth off fossil fuelsand slow down global warming.

The objective of the agreement is to make sure that the rise inEarth’s 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 1.1degrees since preindustrial times.

The big question is how we do it, when the scientists, whoanalyzed the pledges made by nations so far to cut greenhouse


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gases, believe emissions will be reduced only about half theamount necessary to get to the goal. It may call for to target for aZero emission World. Time is running out the northern countrieshad 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 becomingcheaper than mineral water. At R 12 / liter crude oil 20 % cheaperthan mineral water, we buy at R 15/ liter, and the trend remainssouthwards. With sanctions on Iran having been lifted, the oilprices do not seems to have yet bottomed out. Best is yet tocome?

It is certainly good news for oil importing countries like ours andOMCs, but we can also see its effect on the upstream companiesand other commodities, and uncertainties it has led to in the oildriven world economy. Globally, this trend and its effect has beena topic of primetime discussion and more is in store as the yearunfolds.Both of these developments offer great opportunity for reworkingour strategies for ensuring energy security and sustainability.

With the finalization of dates for hosting Petrotech-2016 on 5-7December, related activities have been rolled out, with calling ofpapers for presentation in this biennial international conferenceand exhibition. You may like to send abstract of your papers onwww.petrotech.in or contact Dr G S Kapur ([email protected]).

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 thelandfill. We must recognize it as valuable material."

http://www.petrotech.in/http://www.petrotech.in/mailto:[email protected]:[email protected]:[email protected]://www.petrotech.in/


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That may involve something called negative emissions. That’swhen the world — technology and nature combined — take outmore 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 tozero waste, you must recognize which materials have value. Setup a system to recycle it. And reduce …If you are a corporation, begin for instance by asking yourself, areyou printing more than you have to?Then you replace.

An example: with shipments, tell companies you purchase fromyou want recyclable packaging. There is power in consumerdemand. Once you have reduced and replaced, separatevaluable material and find a local recycling option.


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Editor’s Choice

10 Reasons Why Your Strategy Isn’t Working Todd GarretsonSource: http://circlemakers.co/blog/10-reasons-why-your-strategy-isnt-working/

Recently, two statistics caught my eye. Not only do they signalmissed opportunity and blatant underperformance, but moreimportantly, they reveal a ‘door’ that is wide open for yourorganization to make your move.

Kaplan and Norton reports that 90% of organizations fail tosuccessfully implement their strategies. Even more, theEconomist Intelligence Unit shares that organizations realize just60% of the potential value of their strategies.

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The surface conclusion would assume the organizations cited aresimply failing to adequately mobilize their people to deliverresults. Be very careful with that assumption. There’s a wholelitany of reasons for poor execution, of which several can be

traced back to the decisions and choices made during strategydesign.

As an advisor to executive teams leading organizations of allsizes, I am frequently exposed to frustrations, obstacles and trapsexecutive teams face when it comes to getting strategy right. Andnow (September and October) is the time to get it right – well inadvance of 2016.

To help you prepare for your best results ever, I’ve put together alist outlining 10 questions you can use to get beneathunderperformance and identify the gaps in your strategyapproach.

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 theengines and propellers before they’ve decided where to sail theship. Putting the tactical in front of the strategy can lead todisaster. The ship ends up lost at sea and full of frustratedsailors.

Your strategy should define a strong value proposition for yourtarget market, the distinctive capabilities you will activate to win inthat market, and a picture of how you need to organize your

business to make it happen. Here are 4 great questions to getyou started down this path.Your strategic plan should feel like an instruction manual for youroverall strategy. Essentially, it should tell you the specific, tacticalaction 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 greatstrategic planning template, click here.

2. Have You Put Strategy Before Structure?

Many organizations insist on developing a strategy that works fortheir organization, instead of building an organization that worksfor their strategy. Do you see the BIG difference?With football season in gear, journey across the NFL to readstories of new coaches bringing new systems and strategies totheir respective teams. The new strategies often require uniquetalents and skills in specific positions to which the managementneeds to acquire in order to be successful. To think they might be

able to execute a new system with the exact same talent and skillat every position is insanity. Are you bold enough to make the change that’s needed to deliverthe strategy? People decisions are difficult decisions. In order torelease the full potential of the organization in pursuit of the newstrategy, it will require change. A number of the organizationssitting in the belly of those statistics are not making toughdecisions.

3. Who Is Accountable for Growth? Business leaders need to find a way to keep growth at theforefront of the organization and ultimately, from slipping into theshadows of the day-to-day priorities. The current approach tostrategy typically tasks functional leaders with figuring out whereand how the organization will grow. While this has served well inthe past, the fast moving external environment coupled withunstable economic conditions and rapid entrepreneurial disruption

demands a new approach.Organizations need to establish single accountability for driving acohesive approach to strategy and growing the business – unencumbered by political lines, territories or self-promotion. Fora 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 newdiscovery. Every great strategy, business, or billion-dollar start-upsuccess is traced back to a big learning or unearthing ofopportunity. Whether it be a new product, service, technology, orexperience, someone spent untold hours slaving over the targetmarket to understand their fits, needs and unexpressed wants.If on-going learning and discovery is not part of the way youoperate your business, it needs to be. Or, you run big risk in

being out-discovered. With the data capture capability that’savailable through CRM and other real-time feedback platforms,organize your business to get intelligent. For more on howdiscovery drives the right strategy choice, read Choosing TheRight Growth Strategy For Your Business.

Big discovery is the fuel for strategy.

What Capabil i ty Will You Add Or Leverage? They key word here is ‘capability’. Too often, I see cases whereleadership has identified opportunity to win share in existing andnew markets without having done enough of the necessaryresearch to understand the capabilities they need to win.Whether it’s leveraging an existing core capability or building a

new one, business leaders need to spend more time on this topicas it relates to strategy. Tactical efforts are falling short andfailing altogether as companies try to expand their products and

services only to discover that they don’t have the firepower to getthe job done.

6. Are Your Leaders Creating More Leaders? Perhaps the widest capability gap in any organization in ourpresent day is talent. Stated further, the inability to identify and

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develop future leadership in organizations is pervasive. TheGraying of Corporate America (40% of top leadership headed toretirement) will lead to a lot of vacant seats on the organizationalchart – are you ready?

This runs way deeper than the annual, high potential meeting thatyou started a few years ago. It’s a mindset or DNA of theorganization that you need to hire-to. In other words, you shouldonly be hiring leaders into your organization who can show you orpoint to specific leaders (by name) who they’ve developed andcreated in previous roles.Of the entire list here, this is the one that gets the most talk andthe littlest action. Organizations that consistently perform at a

high-level inherently believe, with every fiber of their being, thatthe role of a leader is to create more leaders. If you or someone you know is a strong task-oriented managerwho has recently been moved into a leadership role where he /she will be called to develop people, then they need to attendthe Remarkable Leadership Program.

7. Where Will You Place Your Bets? Leaders are spreading resources too thinly across their portfolioof products or services instead of prioritizing and placing bets ona few to go big and deep. Ultimately, this leads to a vicious cycleof creating lots of little initiatives to grow your entire portfolio. Asyou continue to chase, you fall further behind the curve in corebusinesses that represent a large percentage of your profit.In your race to be meaningful to all, you risk being everything to afew.

8. Is Personal Growth On Your Radar? Realizing that lack of growth in our personal lives ultimatelyimpedes professional growth, and then doing something about it,could be the trigger point for leaders to start building the kind ofcultures that perform consistently. The easy way out is to assumethat everyone is accountable for owning their personal growth.

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The research in this area is compelling and worth your time notmatter what size organization you lead.

At CircleMakers, we’re devoting time and resources to personalgrowth topics, as we believe it is the top limiting factor to strong

and consistent performance. However, if organizations even haveit on their radar, it’s last on the list. We’ve recently launchedProject 24, an initiative designed to bring awareness and bestpractices to personal growth challenges leaders face. You canlearn 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 buildingyour business? Within your strategy process, you need to behaving open discussions about the best methods to run and buildat the same time. Every company should be chasing a marketand creating a new market simultaneously – in fact, it’s the secretrecipe for sustainable growth. Becoming an organization that cancreate, incubate and build new ventures is not easy, but certainlyan 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 isvital to your organization’s ability to deliver beautiful, results-generating strategy. However, it’s far too easy for leaders to belulled into organizational silos, waiting too long to make necessarypeople changes, and missing opportunities to build a teaminstead of just ‘filling positions’. Every leader has experiencedthemselves stuck in one or all of these ruts at sometime in their

career. For more encouragement and ideas on building a high-performance team, check out these 4 traits.

In ClosingNow that that you’re in the final stretch of 2015, have you done athorough, top-to-bottom progress evaluation on your strategy and

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results? Where are the big misses? What’s behind orunderneath the numbers? What needs to be done differently?Which of these challenges will you take into consideration as youplan 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 purifywater in secondsNEW YORK, DEC 26:

Scientists have developed a new reusable polymer that canremove pollutants from flowing water within seconds, just like airfresheners trap invisible air pollutants at home and removeunwanted odours.

Researchers have used the same material found in airfresheners, cyclodextrin, to develop a technique that couldrevolutionise the water-purification industry.

The team, led by Will Dichtel, associate professor at CornellUniversity in US, developed a porous form of cyclodextrin that hasdisplayed uptake of pollutants through adsorption at rates vastlysuperior to traditional activated carbon — 200 times greater insome cases.

Activated carbons Activated carbons have the advantage of larger surface area thanprevious polymers made from cyclodextrin — but they do not bindpollutants as strongly as cyclodextrin.“What we did is make the first high-surface-area material made ofcyclodextrin combining some of the advantages of the activatedcarbon with the inherent advantages of the cyclodextrin,” Dichtelsaid.


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“These materials will remove pollutants in seconds, as the waterflows by,” he said. The cyclodextrin-containing polymer features easier, cheaperregeneration, 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 undergointense heat-treating for regeneration, cyclodextrin filters could bewashed 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 2016By Ruby Sharma & A nn Yerger,

EY Center for Board Matters, Ernst & Young LLP,

December 21, 2015

Ruby Sharma is a principal and Ann Yerger is an executivedirector at the EY Center for Board Matters at Ernst & YoungLLP. The following post is based on a report from the EY Centerfor Board Matters, available here.

Organizations are faced with many critical challenges—includingrapidly changing technology, environmental risks, regulatory andlegal requirements, major shifts in markets, ethical breaches, andbig data and cybersecurity issues—that threaten their long-term

success and sustainability. Directors have a unique opportunity tostep forward and proactively oversee the development andimplementation of effective, long-term strategies responsive tothese challenges.

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As a result, the trend of expanding board agendas will continue in2016. As boards balance multiple priorities, most will heightentheir 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 refreshmentIt is a recurring question for directors and their organizations—

how do good boards become great? Improving boardeffectiveness, making sure boards maintain the right combinationof skills and experience, and enhancing transparency andaccountability will characterize exceptional boards in 2016.Performing robust and thoughtful board self-assessments, withconsideration of peer and individual director evaluations, will becritical for board effectiveness.

Effective boards will balance the viewpoints of tenured directorswith the fresh perspectives of new members. These boards willmake certain that the appropriate breadth of industry expertise isrepresented in the boardroom and that the composition of theboard reflects the increasing convergence of sectors. Boards willseek directors with a greater diversity of knowledge andexperience in order to match boardroom talents with evolvingbusiness strategies reflective of the interconnected globaleconomic environment and technological and demographic

changes.

We recently found that among Fortune 100 companies withretirement-age policies, 19% of directorships are held byindividuals within five years of reaching the board’s designatedretirement age. [1] Since a significant number of directors are

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currently approaching retirement, boards will have anopportunity to review their oversight needs and engage instrategic director succession planning in the coming year.

Investor and stakeholder engagementThe day of the passive investor is behind us. Investors around theglobe are increasingly asking tough questions on the issues thatmatter most to them. They want to understand the board’s role inthe oversight of enterprise risk, including emerging risks, strategyand execution. They want to know if boards are robustlyevaluating their own performance and confirming that the rightportfolio of skill sets aligned with company strategies are

represented in the boardroom.

Investors will continue to seek meaningful communications andengagement with board leadership and committee chairs onissues such as company strategy, board composition (includingdiversity), director tenure, succession planning and executivecompensation.

As a result, effective communication is emerging as a growingresponsibility of corporate directors. Boards will focus onshareholder communication plans to ensure first, that requiredfilings are not merely “compliance” documents but effectivecommunication tools, and second, that designated directors arefully prepared to engage directly with investors on appropriategovernance matters such as oversight of strategy, disclosureeffectiveness and board refreshment processes.

CybersecurityThe advent of new technologies and an ecosystem of digitalinterconnectedness significantly increase an organization’sexposure to theft of its most valuable assets, which includeconfidential customer data and vital information such asintellectual property and strategic blueprints. Preparedness is the


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first line of defense. Yet only 7% of organizations claim to have arobust incident response program that includes third parties andlaw enforcement and is integrated with their broader threat andvulnerability management function. [2]

The emphasis for boards will be to make sure that companies areshoring up critical infrastructure, enhancing crisis response andmapping a strategy that emphasizes a good balance of preventiveand responsive tactics. This means being able to efficiently guidean organization through the layers of risks and threats, andboards should appropriately set the risk appetite and be preparedto swing into decisive action to handle any incidents.

Boards accept that the risk of a cyber breach needs to becontinually managed, and adequate preparation that enables anorganization to get back up and running quickly following anattack will be a key consideration for boards.Knowing where the vulnerabilities lie is vital. Boards will continueto confirm that companies have a system and backup plan thatfacilitates data migration in a crisis. They will also need to makesure that their organizations firm up relationships with federalinvestigating authorities, who can move swiftly in response toattacks and minimize exposure and damage.

Oversight of ERM As boards continue to focus on their roles in long-term valuecreation, 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 managementBoards recognize the crucial role they play in human capitalmatters as they relate to overseeing the management of three keyrisks: culture, talent and strategy. The business reason is

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compelling since talent and culture are arguably the biggestdrivers of innovation, growth and the ability to outperform thecompetition. In recent conversations we have had with boarddirectors, 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 leadershipstays focused on building the right talent strategy. Boards willfocus on how to prepare for generational transitions in theirorganizations and anticipate the changing dynamics at theboardroom and management levels. As new and complexopportunities and risks emerge with evolving strategies andgrowth 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 andcomplexities will impact strategy and value creation.

Editor’s 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 tothe 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 ofgasoline only decreased by $1.20. Why?Oil-price.net investigates the reasons why drivers aren't benefitingfrom lower crude oil prices. Economic concepts of the inelasticityof 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 fromfalling in line with crude oil.

Crude Oil Indices

Crude oil price changes are registered by two indices. The WestTexas Intermediate (WTI) is used by the North American oilindustry and the Brent Crude Index is used by the rest of theworld.Generally the Brent Crude price is a little higher than the WTI. USoil refiners deal with both the WTI and the Brent price becausethey buy crude oil from the US and Canada and also from otherregions in the world, such as the Middle East. However, both

indices have fallen sharply over the last year , which means thatcrude oil has gotten cheaper. Historically, the price of gas at thepump tends to move in the same direction as the Brent price,rather than the WTI index.

Price ChangesThe WTI oil price peaked at $105 per barrel in June 2014 and fellto a low of $44 at the end of January 2015. The Brent crude oilprice peaked and troughed on the same dates, falling from a highof $112 per barrel to a low of $45 per barrel in January 2015. Theprice didn't fall in a straight line, but the overall trend continueddownward.

Both indices rallied a little, fell back and then peaked again at $66for Brent and $61 for the WTI in June 2015. The price has fallenagain since and analysts including oi-price.net expect the twoindices will remain between the $45 and $60 range until the end

of the year. There aren't any prospects of the price of crude oilrising until 2016.Price Justification

A retailer may argue that price falls do not feed through to theconsumer immediately because stock bought at high prices has tobe 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 beenconsiderably lower than the peak for the entirety of the first half of2015 and pump prices haven't reflected the new normal of lowercrude prices.

Another argument a retailer might give for not adjusting priceslower lies with the expected duration of lower prices. If a dip in thesupply price for a commodity is only expected to last a shortwhile, the retailer may justifiably claim that it isn't worth adjustingall prices lower, only to hike them back up again when the priceanomaly ends. However, the low crude oil price has becomeembedded 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 theprice of fuel to their customers, they exploited the rise in the priceof crude oil in February to increase pump prices again. In fact gasprices rose back in March above their mid-December levels, eventhough the price of a barrel of crude on the Brent index was $8cheaper, at a rate of five times the rate at which crude oil priceswere rising. The price of crude then took a downward turn afterthat date, while the pump price of gasoline and diesel continuedto rise. The highest historical average pump price for gasoline thiscentury 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. Pumpprices fell along with the fall in crude oil prices, bottoming out inJanuary 2015 at a price of $2.11 per gallon for gasoline. Brent

peaked at $62 in February 2015 and the average US pump pricefor gasoline rose to $2.21 per gallon. However, as the Brent crudeindex fell back in March, the pump price continued to rise. By May2015 it had reached $2.71 per gallon, while the Brent cruderecovered a little to $65 per barrel.

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The pump price of gasoline has risen with the price of crudeduring 2015, but did not fall with the intervening dips in the Brentcrude index during the year.

Confounding FactorsThe pump price of gasoline disconnected from the Brent crudeindex 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 thedemand from gasoline users should drive the price, the refineriescan distort the price of both crude oil and gasoline. A number ofUS oil refineries suffered industrial action in February, cutting their

output right at the time that New England, America's most denselypopulated region, encountered freezing temperatures. The effects of the strike caused a rise in the price of heating oil inlate February and a similar rise in automotive fuel prices at thebeginning of March.Prices are set by supply and demand. The crude oil market iscurrently over-supplied, which depresses the price. Reducedthroughput at America's refineries caused the supply of heatingoil, gasoline and diesel to fall below demand, causing the pricesto rise.When refinery capacity is reduced, demand for crude oil falls andoil producers have to send their output to storage. This year'sstrike action occurred at a time when the world crude oilproduction already exceeded demand, so that put pressure on theprice of storage and cut the price of oil for immediate deliverybecause 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 gasolinemarket. Where there are shortages, prices will rise. So strikeaction at US refineries caused crude oil prices to fall and gasolinepump prices to rise.

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Refinery CapacityThe effects of refinery shut downs are becoming progressivelymore severe each year because refining capacity in the USAhasn't expanded over the past decade in line with economic

activity. This gradual tightening of capacity gives any closuregreater impact on the price of gasoline.The main reason the oil companies are not expanding theirfacilities is that idle refineries represent a lot of capital tied upwithout producing any income. By setting their throughputcapabilities at maximum demand without room for outages, the oilindustry is able to improve utilization, increase return oninvestment and maximize profits. This strategy means that

refineries become bottlenecks during maintenance periods.The green consumer and happy homeowner compound theproblems of refinery shortages. The investment, planning andinquiry phases of building new refineries are becomingincreasingly fraught. Everyone wants new refineries built ... just insomeone else's backyard. Environmental opposition makes thesiting of new refineries close to population centers with highdemand for gasolinedifficult to achieve. So higher gas prices are asort of a tax. They are the price consumer pays in order to enjoy acleaner environment. US drivers could be paying less for gas, butin reality they are perfectly happy paying a few cents more for gasin order to have less environmental hazards around their homes,and fewer birth defects than China.

Scheduled MaintenanceYou 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 winterblend and a summer blend of gasoline. Peak heating oil seasonruns through to February and peak driving season picks up fromJune, so oil refineries schedule their change over to occurbetween March and May.

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The refineries don't all switch over at the same time. Some willstart the switch in March, others leave it until May. However, eachrefinery will experience a partial or total shutdown during theturnaround. This results in less gasoline available on the market,

and, therefore, higher pump prices.

The rise in gasoline pump prices happens to varying degreesevery spring. The peak of this maintenance-fueled price riseusually occurs between May 9 and May 24. The rise is usuallymore severe if unexpected factors occur, and this year had two ofthose surprises - an exceptionally cold winter and a worker'sstrike ran gasoline stocks low.

The turnaround from winter blend to summer blend is veryexpensive and complicated. They are often scheduled about twoyears in advance and the refineries do not postpone or canceltheir plans because of price-exacerbating factors.In 2009, the price of gasoline rose by 42.2 percent betweenFebruary 2 and a peak on June 22. In 2010 the rise was only 9.2percent measured from February 1 to its peak on May 10. Lowerrefinery capacity accounts for the price rises that occurred fromMarch to May. Crude oil prices started to fall again at thebeginning of July, so, now that the turnaround season hasfinished, gasoline prices should start to fall again.

Other Pricing FactorsBy our calculations, 51 per cent of the price you pay for gasolinederives from the price of the crude oil that went into making thatfuel. The refining process accounts for 23 per cent of the gas

gallon price, while transport and retail margins add 8 per cent andtaxes 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 locationscost more for premises and so add on costs for the retailer. So

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those living in San Francisco pay more per gallon than peoplewho live in Austin.

Prospects

As previously mentioned, our oil price analysts do not foresee anymajor rise in the price of crude oil right through to the end of theyear . So far this year, the price of a barrel of crude on the Brentindex has gone from a low of $45 in January, up to around $60through February and March, down to $52 in mid-March and up toaround $65 through May and early June. The price fell againdown 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 fallconstantly from $55 to $45 in a straight line over the second halfof 2015. Market sentiment, or panic, can temporarily raise crudeprices above that line. Gluts and storage shortages will knock theprice below that line.Gas stations are unlikely to lower and raise their prices exactly insynch with the crude oil price. They tend to bridge over the dips,which means they leave their prices where they are for a fewweeks to see whether the price of crude will rise. If it doesn't, theymay shift their prices downward.Despite the price smoothing performed by gas stations, thegeneral trend in gas prices will be lower over the second half of2015. Thus, the temporary price hike caused by lower refinerycapacity will age out of the price and reappear in March of 2016.Demand for gasoline is relatively inelastic, which means risingprices don't tend to lower sales turnover. Consumers are happywith any price fall, no matter how small, but resent price rises.

This factor makes gasoline retailers more likely to push up pricesquickly with any increase in costs to get the pain over with quickly.They squeeze as much kudos from their customers with anysupply price decrease by reducing pump prices in smaller,graduated steps. In other words, people are charged what theyare willing to pay for gasoline, not what it costs.

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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 thatnot all of the cost saving of lower crude oil and gas prices havebeen passed on to the general public. Oil and gas refinersprosper from lower oil prices. Like the rest of the oil industry,refiners' revenues are down, but their profit margins are upsignificantly.Refiners are using lower crude prices to widen their cut of thepump price of oil. In other words, the lower price of oil is not

entirely passed down to consumers at the pump, instead thedifference is enabling refiners to increase their profits.Price FallsCrude oil prices have been plummeting since June 2014. Theinitial fall was rapid and unexpected. This wasbecause production grew faster than projections and demanddeteriorated faster than expected, resulting in an excess of oil forsale in the world. Periodic rumor-fuelled rallies in the market sinceJune 2014 have proved to be the result of wishful thinking. Recentevents, such as the fall in Chinese growth projections and the endof sanctions against Iran, have given economists reason todowngrade their expectations for crude oil prices. The lurches in the consensus of opinion for demand for oil overthe past year have caused temporary opportunities for price risesat the gas pump. The retail gas industry tends to raise pricesquickly when crude prices rise and drop prices slowly when crudeprices fall. This variable speed of price movements has given the

refineries and the gas stations opportunities to extend their profitmargins.The fall in the price of crude oil from June 2014 to June 2015 wasaround $80 per barrel. This shaved $1.60 off the cost of a gallonof gasoline. However, the pump price only fell by $1.20 duringthat period.

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The LosersHigh prices for crude oil from 2010 to 2014 gave great incentivesto US explorers to invest in locating new sources of oil and gas.

The practice of hydraulic fracturing rapidly expanded the USA's oilproduction and contributed to the current glut. High sales pricesmeant that fracking companies could bowl into town, rich witheasy money. They sprayed money around the communities theymoved into and offered high prices for mineral rights and siteaccess. Those gold rush bonanza days ended in June 2014. Theprice 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 reducingthe start up overhead costs of each well. The increased tightnessof financing meant the idea of spending millions to get access andbuy friends was off the table. A lot of the largesse of fracking hasbeen wiped off the books and so local communities in the vicinityof fracking plays benefit a lot less from a new well, than thoselucky citizens reaped back in 2012 and 2013.

Fewer rigs mean fewer workers. It also means that lessequipment needs to be sold. Thus, oil service companies makefewer sales, and also require fewer employees to maintain theirreduced output. Employment in the oil industry has suffered asplans get put off and exploration is cut back. As examples of thisphenomenon, consider Schlumberger , which is the largest oilfieldservice company in the world. Schlumberger has cut its workforceby 9,000 this year. Weatherford International cut their payroll from

60,000 staff to 46,000 in 2014 and then made a further 5,000employees redundant in 2015.By squeezing margins and employing new technology, USfrackers have been able to stay in the game. Their success atmaintaining profitability at lower market prices has put pressureon conventional producers around the world to reduce profits and

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slash costs. So, although no producers have gone bust yet, theirdrive to survive has returned a lot of oil workers to theemployment lines.

Unemployment reduces the wages of employed oil workers,because there are plenty of other who would fill the shoes ofspecialists who walk off site rather than reducing their fees. Thus,the oil industry's workforce has become a major loser in the lowcrude price era.Middle Eastern OPEC members are said to be driving the pricefall in order to squeeze out their fracking rivals. This strategy haslost 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 foreigncurrency reserves. Drawing down bank deposits means there isless money available for banks to lend, thus squeezing credit andreducing global economic expansion further.

As Arabian governments start to draw down their savings, theywill be forced to cut government spending. Oil producers in theMiddle East buy off their citizens' ambitions for democracy withpetrodollars. Of course when the money runs out, instability willincrease even further in those countries.

The WinnersThe recorded fall in the gas pump price of $1.20 per gallon is adefinite benefit to the American consumer. Under normalcircumstances, economists would expect this saving to boostspending on consumer goods. However, this time around, peopledon't seem to be spending their gas savings on buying larger gas

guzzling vehicles. This may be because the trend towards energyefficiency is finally starting to lodge in the American psyche.Recent memory of economic uncertainty also seems to havemade the average American nervous about spending.

An increasing fraction of American consumers has decided topocket that saving and pay down debt, rather than splurging on

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household gadgets or luxury vacations. Therefore, families willalso be long-term winners from the crude price fall. Parents nowrate 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 ofrefining companies. The stock price of the refiners, ValeroEnergy went from $43.76 per share in November 2014 to $70.43in August 2015. This rise was mainly due to the company's surgein profits. In June 2014 the business reported a profit margin of1.68 per cent. By June 2015, that figure had risen to 5.38 percent. Refiner Tesoro Corporation has risen in value from $56.20in June 2014 to $102.08 in August 2015.

As an illustration of the increased margins the refinersexperienced, figures from Total S.A. show a margin of $3.75 perbarrel in the final quarter of that year. Profitability took off through2015 and the company reported its refining margins at $6.73 inthe first quarter and $7.36 in the second quarter.The oil price fall was a symptom of an excess of production. Aswells kept pumping oil into a saturated market, stockholdingsrose. This resulted in a shortage of storage capacity, and so theprice of storage rocketed. Storage fees rose from 20 cents perbarrel to 80 cents by March 2015. The shares in Vopak NV, an oilstorage provider, rose by 33 per cent between August 2014 and

April 2015. Kinder Morgan rose by a similar margin and rivalstorage 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 andnatural disasters, such as tornadoes. Shouldn't they be applied?By definition, a business can be accused of profiteering when itraises prices during awar or emergency. Although the current oilprice is a matter of global economic importance, it cannot bedefined as a crisis or an emergency.

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In fact the pump price for gasoline is slightly cheaper than it usedto be a year ago so the prices were not even raised. This is calledcapitalism, not profiteering and is central to a free marketeconomy. This is the American way. If you too want to benefit

from this situation you can -- buy refiner or oil storage stocks.

LogisticsProfit derives from the gap between what it costs to producesomething and what someone is prepared to pay for that product.No one considers himself a charlatan if he sells his home for morethan he paid for it. That profit probably came from nothing morethan the increase in the amount that buyers were prepared to pay

and not from any decoration or maintenance work performed bythe seller.

Demand for gasoline is inelastic, but supply levels can varywidely. Shortages of crude oil cause the price of crude oil torise and excess production causes the price to fall. Thus, in thecurrent market, refineries can force the price of their raw materialsdown and they do not lose sales by maintaining sale pricelevels. The crude oil market is currently in oversupply, but theautomotive user can't profit fully from that price-depressing factor,because they can't pump crude oil into their vehicles. This is theclassic formula for profit.

The intermediary sectors of the oil industry - transport refining andtanking - usually profit most during a crude oil price downturn. This is a common pattern noted by economists. As thegatekeepers to the consumer market, this sector gains power

when producers need to compete to sell, and thus they are ableto force down their input costs.Logistics companies usually integrate the functions of refining,transport and storage, because that gives them a win-winsituation. Producers that are prepared to drop their prices will selltheir output to the refiners, who then have lower costs. Those that

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hold out for better prices need storage, thus the tanking divisionsof the logistics companies can raise their prices thanks to excessdemand 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 effortinto finding other regions in the world where they can send theircrude oil. These activities will eventually bring supply and demandfor crude oil back into equilibrium.

Although demand for gasoline is fairly fixed, long-term changes inthe fuel market will eventually have an effect there too. The costof different types of fuel is a major factor when families and

businesses decide to purchase vehicles and heating systems. Anenduring lower oil price will eventually increase demand for theproduct as furnaces, trucks, buses and cars get replaced. Higherdemand for gasoline puts pressure on logistics companies tosource more crude oil, which returns some power to the crude oilproducers and reduces the negotiating power of refineries.Similarly, when demand rises against falling availability, the needfor storage falls and logistics companies have to start pricing theirservices competitively in order to maintain throughput in theirhigh-cost facilities.The share prices of tanking giants Vopak NV and Kinder Morganpeaked in April 2015 and then started to fall. The excess profits tobe made from storage already seem to be petering out. The endof the imbalance in the oil sector seems to be within view for stockinvestors, so margin gains of the logistics companies will nowstart to decline.

ConclusionDifferent oil price conditions generate larger profits at differentpoints in the supply chain. This year, and for at least another yearto come, the processors, transporters and retailers have their turnto ramp up their share of the sales price. In other years, oilbrokers make all the money and at other times oil producers can


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name their price. No matter which particular stakeholder has aperiodic opportunity to profit, there is one organization that willalways profit from crude oil and gasoline - the government

COP21 Climate Deal: What’s Next for BusinessBy: Jessica Lyons Hardcastle

Source: http://www.environmentalleader.com/2015/12/15

The world’s 195 countries signed a historic climate agreement thisweekend in Paris at COP21. And although the agreement doesn’tbind businesses to making and reporting on emissions cuts, it willrequire ambitious efforts by private corporations, according to

COP21 attendees.

“At COP 21 businesses showed they supported an ambitiousagreement and were ready to step up and make boldcommitments to tackle climate change,” Kevin Moss globaldirector business center, World Resources Institute, toldEnvironmental Leader. “These commitments ranged from rallyingbehind carbon pricingand setting science-based emission

reduction targets to responsible corporate engagement in policyand major investments in renewable energy. The momentum thiscreated contributed to the ambitious agreement that was reachedin Paris. In 2016 businesses need to reinforce their resolve tolead on climate change by continuing to turn their commitmentsinto action.”

In other words: now the real work begins for companies.

The private sector played a leading role in the climate talks. Thisincluded commitments from more than 5,000 global companiesthat together represent over $38 trillion in revenue.

Also in Paris the Science Based Targets initiative announced that114 companies — including Ikea, Coca-Cola Enterprises,Walmart, Kellogg and Dell — committed to set emissions

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reduction targets in line with what scientists say is necessary tokeep 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 corporatetargets that meet its strict criteria.However only 10 companies’ targets have been approved: Coca-Cola Enterprises, Dell, Enel, General Mills, Kellogg, NRG Energy,Procter & Gamble, Sony and Thalys. In addition to the remaining104 that have pledged to set and seek approval for their science-based targets, hundreds of other of companies publish annualsustainability reports that cite emissions reduction targets

and 8,000 companies have signed the UN Global Compact, whichasks its members to address and report on a range of ESGissues.

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 longas fossil fuels remain cheaper. Put simply, the environmentalimperatives and the short term business case are not aligned.” Plus, the Paris Agreement set the bar for climate change actioneven higher, by aiming to keep global warming “well below” 2degrees Celsius and striving towards 1.5 degrees Celsius abovepre-industrial levels. This will require major investments inrenewable energy and clean technology.

The climate deal sends “a very strong signal to business andinvestors that there is only one future direction of travel to reduce

emissions in line with a 1.5 degree pathway,” said StephaniePfeifer, chief executive of the Institutional Investors Group onClimate Change, whose members manage assets valued at over13 trillion euros, in a statement to the Washington Post. “Investorsacross Europe will now have the confidence to do much more toaddress the risks arising from high carbon assets and to seek

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opportunities linked to the low carbon transition alreadytransforming the world’s energy system and infrastructure.” Unilever chief Paul Polman says keeping global warming below 2degrees Celsius presents an opportunity for business. “Achieving

a zero emissions economy is the greatest business opportunity ofthe century,” he says, adding that the “consequences of thisagreement go far beyond the actions of governments. They willbe felt in banks, stock exchanges, board rooms and researchcenters as the world absorbs the fact that we are embarking onan unprecedented project to decarbonize the global economy.This realization will unlock trillions of dollars and the immensecreativity and innovation of the private sector who will rise to the

challenge in a way that will avert the worst effects of climatechange.”

The next step for businesses is to decrease their own emissions,says Tom Murray, vice president, Corporate PartnershipsProgram at Environmental Defense Fund.“The climate deal is a strong step that signals to business that thenations of the world are serious about reducing the impacts ofclimate change,” Murray told Environmental Leader. “Businesshas played a key role in pushing for a strong climate agreement,and the outcome shows the power of their support. But with theambitious deal comes the hard work of making this agreement areality. The next steps for companies are to continue to decreasetheir emissions, to continue to innovate and, crucially, to worktoward a low-carbon world. In the United States in particular,business support for the Clean Power Plan will be key to helpingthe US fulfill its commitments under the Paris Accord.”

Readmore: http://www.environmentalleader.com/2015/12/15/cop21-climate-deal-whats-next-for-business/#ixzz3vBdUs4YC

5 EHS, Quality Management Predictions for 2016

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The environment, health and safety sector saw significantchanges in 2015, with increasing regulatory pressures such aschanges to the OSHA fine structure and updates to ISO 9001quality management systems and ISO 14001 environmental

management systems, according to an Intelex Technologies. The EHS software provider says the macro trends driving thesechanges — consumer awareness of workplace safety, productquality and consumer safety, along with increasing EHSregulations from governments — are prompting some businessesto reevaluate how they operate.Technology also saw advancements this year, with industriesfrom oil and gas to agriculture relying on big data-driven

decisions.In the post, Intelex also makes five EHS and quality managementpredictions for 2016:1. Increased reliance on data driven decisions.2. Increased scrutiny on data quality3. Executive level visibility for safety initiatives4. Breaking down departmental and information silos5. Oh yeah and mobility

Intelex is one of the top EHS software brands according to anOctober report by Verdantix.

Read more: http://www.environmentalleader.com/2015/12/22/5-ehs-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 HRtechnology landscape have the potential to provide CIOs withbetter tools for managing the people side of their ITorganizations. Imagine a human resources application that runs on employees’smartphones, recommends nearby people with whom they can

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network, helps to boost their productivity by evaluating their timemanagement, offers suggestions for improving work-life balance,and provides targeted, on-the-job training. It may even shareexercise and healthy eating tips when and where employees

need them.This scenario illustrates the consumer-focused direction of HRtechnology, one that centers on employee productivity andengagement. Given the strides vendors are making to providethose capabilities, they may become reality for large enterprisessooner than many executives think, according to a new reportfrom Bersin by Deloitte, “HR Technology for 2016: 10 BigDisruptions Ahead”.

Indeed, HR technology providers are increasingly designingapplications for employees first, to enable workers to learn anddevelop, collaborate, share feedba

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