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Last updateMon, 10 May 2021 4pm
Jun03

Keystone XL: The Cost of Controversy

BY KATE KUNKEL

oil pipeline jobsA report just out from RBC Dominion Securities, which is a part of the group which also owns the Royal Bank of Canada, estimates that cancelling the Keystone XL pipeline would cost in the vicinity of $10 billion. While the losses would be felt on both sides of the border, more would be suffered by construction, engineering and project management companies in the U.S. because most of the pipeline is being constructed south of the 49th parallel.

While the Canadian and Alberta governments have been staunchly supporting the project since its inception, the Obama administration has not yet made its decision on whether or not to allow the pipeline in its current iteration to cross the international border. This is holding up the more than 700,000 barrels of oilsands crude which would be pumped daily from Hardisty, Alberta to the Texas coast.

Environmental groups have protested it every inch of the way, citing the possible catastrophic consequences of a spill. Recent spills from other (mostly much older) pipelines have not helped the case for building the conduit, but I have to ask – what are the catastrophic consequences of not allowing the pipeline?

Surely there are economic considerations, not the least of which is the possibility of good paying jobs during construction and ongoing refining jobs once the oil is flowing.

Environmental Costs

But what about the environmental consequences of NOT building the pipeline? While there is much talk of the fact that oil sands production creates more greenhouse gasses, (GHG) than other crude, I think it’s prudent to put the numbers out for analysis. In 2010, oil sands GHG emissions were 48 Mt (1 Mt = 1 million tonnes) in 2010. That equals less than 0.15 % of global emissions.

According to the government of Alberta, the oil sands industry has reduced GHG emissions per barrel of oil produced by an average of 26% since 1990, with some facilities achieving reductions as high as 50%. However, production is increasing so overall emissions are growing.

That is one of the arguments against the Keystone XL pipeline. But to truly compare oil sands oil with other sources, you have to follow the oil through the complete stage of their development, something called “well-to-wheels”. These lifecycle emissions are what should be discussed when considering this question.

oil tankerAs for imported oil, according to the Fraser Institute, “while oil produced in Saudi Arabia has fewer GHG emissions than that produced from heavy oil sands in Canada’s north, one must take into account that the emissions expelled from transporting Saudi oil to market by tankers adds to the overall GHG emissions.”

So there really isn’t much difference wells-to-wheels in emissions. Scratch that off the protesters’ list.

Renewables

There is much talk of ethanol and other plant based fuels as well. Do they burn cleaner? Maybe. But what is the carbon footprint of the machinery used to plant, harvest, and transport the feedstock? Is that considered by the environmentalists when rejecting Keystone because of Alberta’s GHG emissions?

For the sake of the environment, of course we should be looking at renewable energy sources like solar and maybe wind for powering electric vehicles. But judging by the terrible consequences to birds and bats of wind farms, they don’t seem to be a particularly environmentally sound option, either.

So with respect to environmental costs: yes, there are many, but is power from Alberta oil more environmentally unsound than that from any other source?

Intangible Costs

oil obama saudiAnd what about the intangible costs? What about human rights? According to the International Energy Agency, global demand for oil will rise from 89.2 million bpd to 99 million bpd in 2035. Where is this going to come from? Would you rather get your oil from Canada which is one of only two oil-producing countries classified as “free” according to Freedom House, (the other one is Norway) or from Saudi Arabia, Venezuela or Nigeria where human rights are routinely ignored and gender equality is an obscure notion?

The costs of building the pipeline continue to rise with every obstruction. Yes, it will be expensive. But what is the real cost of not building Keystone XL?

Kate Kunkel is Senior Editor of VALVE Magazine. Reach her at This email address is being protected from spambots. You need JavaScript enabled to view it..

May02

Drag Queens and Rig Pigs

BY KATE KUNKEL

Oil sands rigA unique opportunity to discuss the pros and cons of the oil sands is currently being featured in, of all things, a documentary about the karaoke subculture of Fort McMurray. The film, set in what has been called “the controversial northern Alberta oil-patch town”, is turning a spotlight on not just the town, but the product and the ongoing arguments on both sides of the 49th parallel about the pipeline that would bring its product to the United States.

According to the promotional material on the producer’s website, the film crew “initially met with a wee bit of mistrust up in Ft. Mac.” That comes as no surprise since often film crews to the area are funded by environmentalist groups from down south who are doing their level best to show how terrible extracting and shipping oil sands bitumen is for the environment.

But the take on this film is different. Despite the fact that Charles Wilkinson’s previous film was called “Peace Out”, definitely an anti-war film, his take on Fort McMurray is refreshing because it works on the premise that the people who do the work in the oil sands are just like all the rest of us. They want to work, they want a better life, and of course, like so many of us, they want to sing.

At a karaoke bar called “Bailey’s Pub”, Wilkinson met the workers who by day are valve engineers or rig operators and by night dream of professional singing careers. They are as diverse as the country from which they come. Many are from the eastern Canadian provinces which have been hit by the global recession. Others hail from the wilds of Alberta or Saskatchewan. Others come from abroad including the U.S. and Saudi Arabia. While it is still a small town, Fort McMurray has the cultural mix of a cosmopolitan city.

The documentary reflects that mix. It features a gay man who dresses flamboyantly, as his alter ego Iceis Rain, when he performs. Another performer is a petite young woman who drives an enormous rig during the day and belts out songs like a diva at night. In an interview during the film, she says, “It would be awesome if everyone would unite on the planet could work together and really make this place a better place. But a lot of what they do say about Fort McMurray is bull****.”

chained grandmotherWhile the recent pipeline spill in Arkansas has ignited another round of protests, including one in which an Oklahoma grandmother chained herself to a piece of heavy equipment to stop construction of Keystone XL, the timing of “Oil Sands Karaoke” couldn’t be better. Perhaps it can inspire a way of opening a line of dialogue that so far has been “you’re wrong, I’m right”.

As Wilkinson says, “It’s clear that we seem to have reached an impasse where the 2 opposing camps just don’t communicate. So in watching the ‘hard hats & hippies’ getting along on the karaoke stage, sharing what seemed a genuine closeness we thought maybe there was a window here. We can’t talk to each other, but it might be a start if we try & sing together.”

“Kumbaya”, anyone?

Kate Kunkel is senior/web editor of VALVE Magazine. Contact her at This email address is being protected from spambots. You need JavaScript enabled to view it.

Apr10

Where Has All the Money Gone?

BY KATE KUNKEL

cashIn Canada, corporate income tax makes up a falling share of all government revenues thanks to tax breaks given when the recession hit. The general federal corporate income tax rate stood at 28% in 2000. Since then it has been whittled down, from 21% to the most recent cut from 16.5% to 15%, effective January 1, 2012. The corporate tax rate remains the same in 2013, at 15%.

In the U.S., in the final quarter of fiscal year 2012, corporate income taxes amounted to 1.7 percent of GDP. The effective tax rate, which is defined as the share of corporate profits actually paid in taxes, averaged 19% over the previous three decades, much lower than the top corporate statutory rate, currently 35%, because of the various deductions and exclusions that corporations claim.

However, over the past few years, this effective tax rate has plunged. It was only 13% in the final quarter of fiscal year 2012. The argument to cut corporate income tax has been that increased, after-tax, corporate profits would be re-invested in company operations, boosting economic growth, productivity, and jobs.

Studies have shown that rising corporate after-tax profits have not resulted in increased investment. Instead, corporate cut backs in hiring and investment, added to cuts in corporate income tax, have contributed to a significant increase in cash reserves held by corporations. The largest companies have not used that money to invest in the economic recovery. Instead, they are holding onto the cash, claiming that growth has not justified spending.

The biggest companies seem to be the worst – holding onto much more of their profits than small and medium sized companies, who are doing more to invest in the economy. This dead money is not at work increasing productivity, creating more jobs or opportunities. This exacerbates the uncertainty in the economy.

David Seaton, chief executive of Fluor Corp., a large engineering and construction firm, said that, if uncertainty isn't removed, "People will sit on their war chests of cash and return it to shareholders. You'll have a retarded growth trajectory."

This is not a tenable situation. As long as huge amounts of money are being kept out of circulation, the economy will continue to be stagnant … or worse. We could be plunged back into a recession, which would result in more cash hoarding, which would … well, you get the picture. It’s a vicious cycle.

A friend of mine had this suggestion to spur investment and spending “Tell these corporations that, unless they start spending, they lose their tax savings. See how soon they’ll start investing if their tax rate goes back to where it should be, on par with our personal rate.”

That idea is probably not going to gain many fans in the Fortune 500 boardrooms, but there has to be some way out of this hole.

From where will meaningful investment to spur the economy come, if not from the biggest corporations? Have you seen any effects of this in your business? What might cash hoarding mean to the valve industry?

Please feel free to post your thoughts here, on our Facebook page, or write to me at This email address is being protected from spambots. You need JavaScript enabled to view it..  

Mar28

What Does Engagement Mean to You?

BY KATE KUNKEL

engagementLast week I gently suggested that, even for older valve industry professionals, it wasn’t such a bad idea to dip some toes into the roiling waters of social media. Hopefully you’ve at least opened a LinkedIn account and linked up with VMA.

But don’t stop there! Opening up an account is one thing, engagement is another. Here is where the challenge begins.

Join the conversation

You have to make a commitment to use your social media account(s) to interact with the people you’ve just connected to. You have to post, comment, and otherwise open the conversation. It’s like being at a networking event or party. Everyone around you is talking, sharing ideas and contacts. If you just stand there watching and listening to them, they won’t pay any attention to you, and they won’t know what you have to share. Consequently, you might not get invited to the next party.

Referring again to the report by IHS GlobalSpec, survey results show that industrial professionals are passive users of social media. According to the report, “This is really no different from how the typical internet user interacts with social media. Industrial professionals prefer to read and watch content rather than starting or commenting on discussions.”

So that leaves it to you, as a supplier, manufacturer, distributor, to provide the purchasers, engineers, project managers, whoever your audience is, with content that matters to them. While those people may not chime in on the chat, it doesn’t mean that social media lacks value as a component of your marketing mix. It just means that you need to match your social media strategy to what your audience seeks from these channels.

Since 52% of respondents indicate they use social media to keep abreast of the latest company, product, and technology news, it’s probably a reasonably good use of time to use the social media channels to reach that audience.

Content truly is king

content-is-kingAlso, about half of the respondents to the IHS GlobalSpec survey said they use social media to find peer reviews, new suppliers, and industry expertise. If you are a project manager and your peers are using social media as a resource for purchasing decisions, are missing out on the advantages they have if you are not so engaged?

For suppliers, social media is a great channel to market content. It can be a very efficient way to disseminate white papers, research reports, product announcements, and press releases to your target audience. If you’ve built a good network, your information will be at the forefront when they are choosing products.

A purchaser may learn about your new products through social media if it is business oriented, like a group on LinkedIn. And here is where the new kid on the block, Google +, which recently took over the number 2 spot behind Facebook from Twitter, is proving to be so valuable. Why? Because it has Google power, meaning that its own search engines favor any post, picture, article or link posted on Google + over any other postings.

google plusAlso, a purchaser reading the aforementioned releases and announcements from you, the supplier or manufacturer, will also have access to postings his or her peers may have shared about your products. For the purchaser, this can be a valuable resource when trying to wade through piles of specs and white papers. And while it’s true that most purchasers of valve, actuators and controls are not going to start their search on social media, they could use it to help whittle down the choices.

Engaging your audience on social media

Bottom line, as someone with something to market, you have to give your audience content that is valuable to them. It’s not necessarily that your followers will comment on you posts or videos, but they are reading and watching. So, the adage “content is king” is absolutely true.

It has to have value. It must offer solid, valuable information that can get your company’s products and/or services noticed by your prospects and picked up by the search engines. There is much discussion amongst the “experts” about whether your content needs to be long or whether it just needs to be good. I’m not sure the answer is a simple one, because, if you are in an industry where there really isn’t a lot to write about, there’s no point writing just for the sake of writing. Just posting about an event or a new product may be enough. But whatever you write or whatever video is posted - it must be interesting and engaging.

Measuring your success

The measurements that determine the value of your social media efforts are reach, engagement, sentiment and conversion.

Who are you reaching? Are you keeping them engaged in the dialogue you’ve started? What do they think about that and, perhaps most importantly, how many of those you’ve reached take the action that you want them?

Readers: Take a stand

tabletinbusinesswomanshandsFor all you passive consumers of content – if something does strike your fancy, or is of particular value to you, you can use it to your advantage within the social media realm as well. By commenting, you can illustrate your own or your company’s likes, dislikes, needs, questions. You can share good content with colleagues to help make their jobs easier, or a process more efficient. Let those of us who are creating content know what you would like to see. And I don’t mean photos of kittens in teacups.

So now you have a couple of extra tools in your professional toolbox. What are you going to do with them?

Kate Kunkel is Senior Editor of VALVE Magazine. You may reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.

Mar21

Are You Using Social Media?

BY KATE KUNKEL

If you’re not reaching out to your potential customers via social media, you could well be missing out on opportunities to keep your valves, actuators or controls in the forefront of purchasers’ minds. While many people in this industry are not of the generation that communicates by tweets and postings, the bottom line is, social media is an important marketing tool. And it’s not going away.

The key to using social media wisely is knowing what social channels your customers prefer, and what they are looking for in the online networking sphere.

While most people have heard of Linked In, Facebook and Twitter, Google Plus is the fastest growing social media tool. In fact, according to a recent social media survey conducted by IHS GlobalSpec, 36% of industrial users now have a Google Plus account, up from 23% in 2011. The company suggests that suppliers should pay attention to Google Plus and figure out how it could supplement their social media strategy.

Also according IHS GlobalSpec’s survey, while a relatively small number of companies are using Twitter, 63% of industrial professionals have a LinkedIn account, where the two activities they perform most are searching for contacts and reading product and industry news. Of that number, almost 67% belong to at least two groups.

Get Linked Up with LinkedIn

If you are not on LinkedIn, or don’t know what a LinkedIn group is, stop reading right now and go to the site, sign up or sign in, and start hunting with the keyword VALVE. There are a couple of groups that you need to join now. While you’re there, you might as well hook up with the Valve Manufacturers Association. Hit “Follow”. That way, you will get updates in an instant news feed with all the important information posted daily for the association and VALVEMagazine.

Once you’re linked in, you can use that link to meet other members of groups that share your business interests. You can start discussions, offer comments on other discussions, and generally keep your company in the consciousness of the people in the groups.

FB screenshotFacebook

While Facebook is a popular social networking tool, it is not as popular for industrial and technical professionals. Still, about 54% of your peers have accounts on the site, and they do “like” or “follow” companies within their sphere of interest. 32% like or comment in work-related discussions and 34% say they research and read work-related content while on Facebook. The experts at IHS GlobalSpec believe it is still a good channel for your content marketing and presents an opportunity for increasing brand awareness.

If you do not have a personal account, at the very least your company should have a page administered by someone who is responsible for updating company information and using it to network with potential and current customers.

You Tube

YouTube screenshotA picture is worth a thousand words, right? Well, think of how many words a 2 minute video is worth. You Tube is the most efficient way to show off your products. In those 120 seconds, you can extol features and benefits in a setting that makes sense to your potential customers. And if you think industrial buyers aren’t checking it out, know that You Tube is used as a research tool so often that there are even guidelines on how businesses can use keywords to get the best results when searching You Tube for a business-related project.

According to IHS GlobalSpec, 47% of industrial respondents use YouTube and other video sharing sites. Given the nature of their work, engineers and other technical professionals mostly watch product demos and how-to videos. If you produce videos, you should consider publishing them on video sharing sites. If you don’t produce videos, well, why not?

The big challenge of course, once you have that social media account with the photo that makes you look much younger than you really are, is utilizing it to engage the people you are trying to attract. We’ll save that blog for next week…. But in the meantime, share your thoughts about social media in the valve industry below. You may also comment on this posting on LinkedIn or Facebook, or share it on Twitter!

Kate Kunkel is Senior Editor of VALVE Magazine. You may reach her at This email address is being protected from spambots. You need JavaScript enabled to view it.

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