14th annual Automation Fair opens with controversial keynote address
Automation Fair 2005, reputedly the world's largest free educational forum for manufacturing technology, drew a record 14 000 attendees. The annual event is rotated through different US cities, the most recent being the heart of mid-America, St. Louis, Missouri.
Manufacturers from more than 70 countries participated in the event, including South African company, Hiprom Technologies. The company hosted more than 50 technical sessions, hands-on training labs, and multiple manufacturing industry presentations on key automation trends. The largest private trade fair in the US also included more than 150 solution and product exhibits.
As opinion polls showed growing local discontent with US invasion of Iraq, and the east coast of the US was still reeling in the aftermath of Hurricane Katrina, Rockwell had chosen the timeous subject of 'energy use and efficiency in manufacturing operations' as a focal point for the Fair. A special forum addressed global manufacturing trends and the role of technology in driving productivity. The keynote speaker at the forum was former three-term Michigan Republican governor, John Engler. The National Association of Manufacturers president and CEO, is regarded by some as being 'America's most senior governor'.
However, a search on Google reveals that opinions regarding Engler vary widely. His social and energy and industrial policies are probably the most contentious subjects. People either seem to love him or hate him.
Engler has demonstrated massive support for oil-baron, US president, George W. Bush, who in November 2000 said of him, "Laura and I are proud to call John and Michelle Engler our friends."
By contrast, in September 2000 CNN talk-show host Mark Shields described Engler and fellow Republicans' opposition of food vouchers in schools as "...mutinous, their cowardice stands as a beacon of really political opportunism".
With these massively disparate views in mind, one wonders what the Rockwell Automation management team was thinking when they invited Engler to address a large group of journalists (predominantly non-US) on one of his favourite subjects. If they were hoping that the governor would stir up some controversy and some thought-provoking discussions, then they certainly succeeded.
USA facing massive energy crisis
By late 2005, more than 50% of the Gulf oil production was still out of order as a result of the damage incurred by Katrina. This, combined with the war in the Middle East had resulted in stock speculation driving the price of natural gas up by 48%.
Companies that rely heavily on energy as a part of their production process are particularly hard hit by these sorts of increases. Engler used Dow Chemicals plant in Louisiana as an example; each time the price of natural gas increases by US$1, the plant's operating costs increase by a staggering $100 million/year. For the first time Dow's energy costs exceed 50% of the company's sales. To compound matters the country's energy needs have climbed by more than 30% over the last 25 years, however, supply has only grown by 15%.
The increases in energy costs have also been blamed for enormous job retrenchments, with the US paper industry alone closing more than 200 mills and cutting back on 140 000 jobs.
Engler sharply criticised US energy policy by drawing comparisons between the US policies and those of its manufacturing competitors:
* Whilst the US has a moratorium on the development of new nuclear power plants, China is spending US$50 billion on the building of 30 new power plants.
* In the time that France built 58 nuclear power plants to provide more than 80% of that country's energy needs, the US built one.
* In the time that Japan built 28 natural gas processing plants, the US built four.
A proposed plan for the future
Engler estimates that US energy requirements will increase by more 50% over the next 20 years and he argues that whilst conservation of energy can play an important role, the gap between what can be saved and what will be needed, will never be closed. Rather, he announced a national energy policy initiative that calls upon manufacturers to support legislation that increases supply, keeps costs in line and builds an infrastructure for long-term growth. As part of this initiative, he called for a number of key controversial changes in legislation.
On first hearing the proposals, my initial reaction was one of shock and horror... the 'bunny-hugger' in me was mortified at what the man was suggesting. However, as I have listened to the speech again, some of the parallels between those faced by the United States of America and those faced by South Africa become increasingly apparent. The Governor's proposals include:
* That permission be granted to allow the exploration of oil and gas off the North American outer continental shelf, 85% of which has been off-limits for the last 50 years. There are estimated to be 140 trillion cubic feet natural gas in these areas, with enough gas to heat 100 million homes for 60 years.
* Increased onshore drilling access to areas that are currently off-limits in Anwar, Alaska. Engler likened the affected area to the percentage of space occupied by one letter on the front of a broadsheet newspaper.
* That legislation be passed that expedites the development of nuclear, coal and liquefied natural gas terminals. By way of example, he cited that nuclear power plants take 10 years to 'permit' and another 10 years to construct. "How was it possible that the Empire State Building was built in 13 months, The Pentagon was built in 18 months, and the Hoover Dam was built in two years?" he asked. ie, not everybody can have a veto to say be a 'nimby' (ie, not in my back yard)." This does make me wonder how the governor would respond to the announcement of a new refinery or nuclear plant being built next door to his home?
* The revoking of the 'Clean Air Amendments of 1980' and it argues for the re-introduction of 'refinery subsidies' that have led to the number of petrol refineries in the US declining from 315 to 144 since 1981. Little wonder that the president calls Engler 'a friend'. However, Engler does concede that this is not the entire picture, with companies like Exxon having built three refineries on the space previously occupied by one.
* New legislation to cut through bureaucratic federal jurisdiction that limits the development of bulk-power/energy transmission systems across the US.
* The building of nuclear power plants to generate 50 GW by 2020.
* The development of alternative energy sources such as hydrogen. This very controversial, yet much enthused about technology has received a huge amount of press coverage in the US, despite very little real evidence of its alleged 'environmentally friendly' disposition.
* Investment in clean coal production facilities. Engler estimates that the extent of the US's recoverable coal reserves at 275 billion tonnes, the energy equivalent to Saudi Arabia's entire oil supply.
* Congress needs to create 'stability' in the energy operating environment. He did not really elaborate on this topic, but the regular appearance of Engler's name on many of the environmental groups' websites, may give a hint at what he was referring to.
Parallels with South Africa?
There is little doubt that the energy crisis that South Africa is facing is due in part to constraints being placed on the energy suppliers by environmental lobby groups. I guarantee that the stalling tactics that are preventing the building of a second nuclear power station in the region are going to have profound effects on the development of the region. Similarly, the long-term water crisis the Western Cape is experiencing could almost certainly have been averted if the development of new dams had not been prevented by tedious bureaucratic process 10 years ago.
Let me be quite clear. I am completely in favour of alternative energy development and am a strong supporter of energy conservation. I value the brilliant work done by many of the environmental agencies. However, as we increasingly find ourselves in a similar position to the US, with our international trading competitors using energy to gain a significant trading advantage against us, then we need to act, and soon.
On certain issues I cannot agree with the governor. His stance on the Clean Air Amendments I find difficult to understand. However, considering his relationship with the oil fraternity, this is probably not so surprising.
And where does Rockwell Automation fit into the picture?
The event as a whole, not only the keynote address, certainly stirred up a good discussion amongst the journalists and end-users attending the event. The foreign attendees reaction to some of the governor's suggestions were pretty much what would be expected from the much greener parts of the planet. However, through their indignation, I wonder how many realised the irony that their own countries' energy policies are the very motivation that the governor is using to wage his campaign?
Rockwell grabbed the opportunity and used the forum to show off its latest technologies, specifically those that could be used to enhance energy conservation. Among other pressing issues addressed was the ability to link plant-floor data with enterprise business systems and supply chains for realtime decision-making, the growing role that manufacturing plays in meeting increased regulatory requirements and heightened concerns related to safety and security.
"Automation Fair has emerged as the ultimate forum to help manufacturers understand how industrial automation can solve their business problems and make them more competitive," said Keith Nosbusch, Rockwell Automation chairman and chief executive officer. "It is an opportunity for us to bring together customers from around the globe, in a wide range of industries, to share best practices, explore new technologies, and discuss key issues facing their industries."
SA Instrumentation & Control will be looking in greater detail at some of these controversial and not-so-controversial best practices, technologies and issues in coming issues. Watch this space!
Governor John Engler's full speech is available via streaming Windows video (300Kb/s) at mms://rainstream.rockwellautomation.com/active/MFGperspJohnEngler.wmv .
For more information about Rockwell Automation or Automation Fair 2006 (to be held in Baltimore, Maryland), contact Rockwell Automation, 011 654 9700, [email protected],
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