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Today ExxonMobil broke records with the highest profits ever for a U.S. company–making $14.8 billion in the third quarter and posting $37.4 billion for the year so far. That’s great news for the oil and gas business (other o&g companies like BP, Shell and ConocoPhillips have also posted higher profits for the third quarter), but may not continue in the near future given the current price of oil.

While the recent lower price per barrel of oil has been great for consumers, the low price means less money available for research & development in deep offshore drilling and oil sands. That means that in the future, we’ll still be facing decreasing fuel supplies. The lower price at the pump means people will not be inclined to limit travel as they were when the fuel price was more than $4/gallon, which will also decrease fuel supplies. Lower fuel prices also mean less time and money invested in alternative energy sources and greener transportation options.

Let’s not get too complacent when it comes to investing in energy. Just because gas is $2.50 or less per gallon, let’s make sure that we are investing in fuel supplies and energy alternatives for the future.

When natural disaster strikes, it is most often water that kills.

Whether it is the lack of safe water to drink or the overwhelming amounts that overtake communities, water is responsible for 90 percent of the deaths following a natural disaster.

ITT Corporation has decided to do something about that.

On October 20, 2008 at WEFTEC in Chicago, ITT announced a strategic partnership with Mercy Corps and Water for People as part of its corporate philanthropy program. The partnership and program, ITT Watermark, includes a three-year, $1 million commitment to help provide safe water during emergencies created by natural catastrophes such as floods, droughts and earthquakes.

“We are passionate about business, but also committed to a greater cause,” says Colin Sabol, Vice President, ITT Fluid Technology. “Water is our business every day, and ITT is passionate about giving back to the community we serve. When disaster strikes, what people need is a deployable, rugged treatment system. We can provide that for them.”

It is sobering to think of the natural disasters we have witnessed in our lifetime, including the Indian Ocean tsunami, Hurricane Katrina and the recent China earthquake. We often see companies in our industry step up to do what they can to help meet the water needs of the affected communities.

It is encouraging to see corporations identify a problem and then spring into action to use their resources to help solve it. At a time when the global economy seems to monopolize our attention, it is heartwarming to realize that many companies turn their focus from making money to making a difference.

 There has been a great deal of activity in the renewable energy sector over the last couple of years, specifically in Wind, Solar, Biomass, Tidal and most recently a resurgance in Geothermal. The question is what is the viability of renewable energy, is it the solution to our energy crisis and most importantly will the power utilities embrace the technology? 

The challenge of renewable energy has been one of technology and economics. Developing technologies that allow us to harness the energy and convert it into electricity. And most importantly (to the utility) doing this at a cost that’s at least equal to or lower than the cost of generating electricity from non-renewable sources.

More than half the states in the U.S. require utilities to get a percentage of their electricity from renewable sources by certain target dates.

Utility scale renewable power generation is developing into one of the hottest energy market segments. The Prometheus Institute reports that worldwide more than $30 billion in investment has been proposed for solar plants to be constructed in the next several years and that up to $200 billion in new investment may be needed through 2020 and this is for solar power.

While the evolving renewable energy industry clearly presents enormous opportunities, attracting the massive level of capital is a major challenge.  The industrial sector, financial community, and utilities have a long way to go to develop a common understanding on how these projects will be financed.  A much deeper understanding is needed for utility scale projects, their risks, risk mitigation, management techniques, and the requisites that will make these projects cost effective.  Communication among all parties will be critical to the success of renewable energy (at the utility level).  The federal government has stepped in with tax incentive programs to promote renewable development.  State and local governments have also implemented incentive programs to encourage renewable energy at the utility level as well as residential and commercial.

Will renewable energy play a role in our future?  Yes.  Is it the ultimate solution to our electric power energy crisis?  No.  For a rational, fact based explanation lets review the advantages and disadvantages of the major renewable technologies.

First a overview of current technology on a operating cost (O&M, Fuel) per kWh basis:

• Nuclear – 2.0 cents/kWh 
• Fossil Steam – 3.5 cents/kWh
• Hydro – 1.0 cents/kWh
• Other Fossil – 5.5 cents/kWh

 Capital cost for conventional power: NOTE – construction cost fluctuate with raw material prices and labor cost

• Nuclear – $5,000/kW (best guess)
• Conventional Coal – $2,500/kW
• Hydro – $800/kW
• Other Fossil – $1,200/kW

Capital cost for renewable energy

• Wind – $1,208/kW
• Biomass – $2,500/kW
• Geothermal – $3,000/kW
• Tidal -
• Solar
  • Photovoltaic – $4,000/kW
  • Thermal – $2,000/kW

Besides capital cost renewable energy has other limitations:

• Capacity, the average wind turbine produces 2MW, the worlds largest solar plant produces 154MW of DC power
• Distribution, with the exception of hydro electric, biomass and geothermal renewable has limited availability
• Limited ROI (return on investment), huge investment with require many years to turn profit, wind, tidal, solar, geothermal have estimated 20 year life
• Transmission, requires additional transmission lines (1.5M per mile)

There are policies and governmental initiatives to promote investment in transmission to support renewable energy.

A significant number of renewable energy generation technologies have reported significant increases in cost due to increases in global raw material costs

Solar thermal generation and solar photovoltaic technology options remain the most expensive.

Renewables have a prominent place in the electric utilities’ plans.  But most renewable energy is not available 24/7.  Some energy source must be available to keep the lights on.

The Pumps & Systems Staff just returned from an exciting WEFTEC in the windy city of Chicago. WEFTEC is always one of the best shows we attend, and it was quite impressive this year. Every booth was busy. With the economy in rare form, I thought my clients would be fearful or uncertain, but this was not the case! It is very good to know that we have intelligent leaders in the water industry who can forecast market changes and respond to the economic situation with power, not fear!

Water is a basic need. Industry leaders understand that people always need clean water. For this reason, I believe you will see many companies work together to make the process more efficient.

 Speaking of the economy, how is your business cutting costs to help with the economic strain?

What’s the latest in innovative pump marketing? How about a traveling road show in the form of a 32-ft x 60-ft rock-star style tour bus. Grundfos unveiled a state-of-the-art Mobile Education Center in September at its USA headquarters in Kansas City. Pumps & Systems VP of Sales George Lake and I were there for a sneak preview.

It was impressive, to say the least. Complete with a 35-seat high-definition theatre and working demonstrations of most of its products, Grundfos plans to take the tour to at least 64 North American cities in 14 months. A brainstorm of Marketing Manager Steve Dickson, the idea is to take the products to the customers and distributors and then train them on site.

According to Marketing Development Manager Ed Smiley, the key initiatives are to expose Grundfos to those who might not otherwise see their broad scope of offerings, to educate end users and, of course, to build market recognition and market share.

We are deep into what many consider the heart of trade show season, and we continue to see fresh, creative ways to market products and services. While this concept will not likely replace the traditional trade show, it is nice to see companies find new ways to fuel the imagination and recognition of our industry.

As I was updating my Linked In profile this afternoon, I received an email that a friend found me on Facebook.  It is amazing how much time we can spend on these networking sites.  The newest site we found, as you have probably read on Michelle’s blog, is Twitter.  You can follow people… How fun, right!  But, how useful are these tools is the question.  Would it be better just to pick up the phone and call instead? 

I think you have to do both.  With our day moving faster than ever, we have to be able to multitask.  You need to be able to make a phone call when needed and also know when an email is appropriate.  Your clients are very busy as well… So, you must cater to their needs and habits… If your clients are on Facebook, Linked In, or Twitter, you should be there as well.  Make it easy for people to get in touch with you!  Also, make it easy for them to learn a little something about you. You know, so they will REMEMBER YOU!

So if you need me,  I can be found at these sites:

http://www.pump-zone.com/advertise.html

http://www.linkedin.com/in/charlimatthews

http://twitter.com/pumpmarketing

I was at the MINExpo in September and I was amazed by the size of the show. It was not just the GIANT equipment, but the amount of international exhibitors.  I was most intrigued by the Australian section because I am an honorary citizen of Sydney from a college internship.  As I walked through the show, I realized that pumps and systems are everywhere: USA, Australia, India, China, Germany… Everywhere…

Out of curiosity, where are you from?

In an October 4, 2008, article in the Houston Chronicle, author Terri Langford revealed that bringing the pumping stations in Galveston, Texas, on-line after a storm was not a consideration in the extensive disaster plan that the city presented in February 2008. (Read the full story here.)

The pumping station failure in Galveston after Hurricane Ike was due to several factors, Langford elaborated, including the fact that the pumps were powered by natural gas, which was shut off prior to the arrival of Ike. Moreover, elements of the pumping station were outdated, including a main water tank from 1888 and almost 50-year old gas powered pumps.

In response to the pumping station failure in Galveston, Michael Howe, the executive director of the Texas division of American Water Works Association in Texas, said, “The public simply assumes that the water will always be there and the wastewater will go away.” Recent natural disasters, and past catastrophes like Hurricane Katrina, have shown that our municipal systems are still limited when it comes to preparation readiness. The public may stop assuming that the water will be there and the wastewater will go away after disasters if preparation does not improve and aging infrastructure is not updated.

I attended the fourth annual PumpTec conference (Holiday Inn Select on Peachtree Industrial Drive) in Norcross (Atlanta), GA, USA last week. There were 45 attendees taking the technical courses, some from as far away as the Philippines. The symposium was a two day event covering such topics as:

End suction centrifugal pumps by Lev Nelik, Pumping Machinery LLC

Double suction centrifugal pumps by Pete Noll, Peerless Pumps

Vertical turbine pumps by Rick Silcox, Peerless Pump

Internal and external gear pumps by John Petersen, Viking/Idex

Progressive cavity pumps by Jim Siebolt, Colfax Corp.

Multiple screw pumps (two screw and three screw) by Jim Brennan, Colfax Corp., retired

The symposium included “hands-on” disassembly and assembly of pumps by attendees as well as NPSH demonstration testing of small centrifugal pumps. Tuesday afternoon included Bearings and Lubrication and Alignment and Vibration Fundamentals.

PumpTec 2009 will be held September 14 & 15, 2009. For additional information, go to www.PumpingMachinery.com.