Sustainability Will Happen When We All Learn a New Economic Calculus
By Katherine Bonfante February 4, 2011 01:58:32 am
(http://www.sustainableplant.com/)
Sustainability is not new. In the paper and plastics industries,
recycling has been a way of life since the 1960s. For years, even
decades, some manufacturers have been involved with
cogeneration, alternate energy, water reuse/recycling and chemical
reuse, and many more companies are following their example.
What is new is the insistence from the public, the economic
community and the government that we must be sustainable now.
Add to that the growing understanding that sustainability efforts
can drop quickly to the bottom line, and you have much more than
a feel-good marketing effort. Now you're talking about a sensible
business strategy that's a win-win for manufacturers, their
customers and the environment.
The Economic Calculus
At the Siemens User Summit in 2008, Bruce Taylor, then with
Suncor Energy USA Inc. (www.suncor.com), described the
sustainability task that its executive management set for him. They
asked Taylor and his team to produce a viable energy management
system. The first challenge they addressed was not on the plant
floor, but in the accounting department.
"We started building awareness that energy is not a fixed cost,"
said Taylor. "There was an 'abundance' energy mentality with
aggressive focus on production growth. Our energy and carbon
dioxide costs were not fully valued. Our energy budgets would
more than double if fuel internally consumed was assigned a cost.
There was distributed accountability for energy management, and
there was a lack of linkages between targets and performance."
Taylor continued, "Just from shaping behavior, we can impact a
3% to 5% annual improvement in energy costs, culminating in a
cumulative improvement of 25% to 30% in carbon footprint."
How is the new mentality different from the old? There's no entry
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in a cost-accounting rollup for saving the environment or
moderating global climate change.
What happened is best described by a concept called the
"economic calculus." As with the air and water pollution control
drives that erupted in the 1960s after the publication of Rachel
Carson's The Silent Spring, the economic calculus was widened to
permit those costs to be incorporated into the ongoing operating
costs of an enterprise.
No company today would think twice about including air or water
or solid waste pollution controls and mitigation strategies in a new
or rehab plant design. The management support Taylor received is
a clear indication that the economic calculus is widening once
again, this time in favor of sustainable manufacturing.
More New Math—Sustainability Drivers
"Energy is a hot topic right now, mainly because of the volatility of
energy costs," says Marcia Walker, global market development
manager for sustainable production at Rockwell Automation
(www.rockwellautomation.com). "For the past 12 months, energy
costs have gone down. However, industry professionals are
preparing for the future, and they want to able to keep energy costs
under control, especially because energy is the largest variable
production cost."
The cap-and-trade policies under discussion now have also put
energy costs in the spotlight. Whatever the final shape of these
policies, manufacturers want to be ready—and controlling energy
costs is part of that preparedness. From an environmental
perspective, when manufacturers are able to control carbon
emissions, they also are able to control energy usage and save on
their energy costs. Most manufacturers today continue using coal-
or gas-fired energy processes with big emission footprints—and
big emission footprints cost more than small ones.
Environmental policies have a financial impact. For example,
getting rid of industrial waste often is, in the end, more costly than
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 Sustainability Will Happen When We All Learn a New Economic Calculus
implementing green practices. Furthermore, local communities are
discouraging industrial plants—usually through taxes or fees—
from dumping industrial waste into landfills.
That financial penalty encourages creative waste disposal. Many
process plants send their industrial waste to re-use facilities. Here
businesses use someone else's "garbage" for raw material. More
than a dozen years ago, Fluke Corp.'s (www.fluke.com) George
Bissonnet showed Control's editor in chief, Walt Boyes, that the
circuit board and spent chemical recycling business he developed
was actually a profit center.
Safety compliance is another strong driver in sustainability. This is
based, one assumes, on the proposition that a safe plant is more
sustainable than one prone to damage from unsafe practices. Study
after study has shown that safety compliance, both in traditional
workplace safety and in process safety management produces
higher profit levels over time than ignoring safety issues does.
Walker adds, "[The process industries] are looking at things
through a new lens. They want to improve their environmental
performance, not just for responsibility reasons, but also for
financial reasons."
Manufacturers also have a responsibility to shareholders to
maximize profits. As T. J. Rogers, chairman of Cypress
Semiconductor (www.cypress.com) says, "If you want businesses
to do something, show them the money." This is another example
of that widening economic calculus.
What Is Sustainability Anyway?
Rockwell's Walker explains that sustainability consists of making
operations cleaner, safer and more energy efficient. "[Rockwell
Automation] buckets sustainability into energy efficiency,
environmental applications and safety. Energy, environment and
safety are the three main components of it, with energy being the
component that surprises people the most," says Walker.
Going green is not about doing just one thing—reducing waste,
reducing energy cost, minimizing the carbon footprint or reusing
materials in the production processes. Green practice in process
automation is about mixing and matching sustainability efforts,
creating the perfect balance at the plant level, not only benefiting
end users' return on investment, but also benefiting the
environment as a whole.
"It's a bit surprising that sustainability is being treated as
something new," said Mark Lee, Coca-Cola's director of
commercial product supply engineering at the Rockwell
Automation Manufacturing Perspectives event in 2008. "It's really
just good business practice."
For Lee and other end-user executives, sustainability in many ways
does represent a rebadging of the manufacturing professional's
stock-in-trade: a continuous improvement process aimed at
increasing efficiency, reducing waste, easing environmental impact
and boosting workplace safety.
"Sustainability is part of the relentless pursuit of waste
elimination," Lee said. "It's part of being a world-class
manufacturing organization."
Siemens Industry's (www.siemens.com/entry/cc/en/) marketing
manager, Ken Keiser, adds, "Sustainability is a way to use green
technology to help both the environment and the company. Instead
of ripping out and throwing away systems, customers can lengthen
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the life cycle of the equipment they have by just changing a few
key components and using as much of what they have as possible."
Getting There from Here
It's easy to see that the pressure is on to "go green," but the best
way to respond to that pressure isn't so easy to discern. Few in the
process industries have a clear strategy for doing so. Deciding
which green initiatives make most sense for a particular operation,
much less how to implement those initiatives is a complex
decision. But help may be on the way.
In 2008, the Aberdeen Group (www.aberdeen.com) conducted a
survey of manufacturing companies about their specific
sustainability initiatives. The findings revealed that the companies
that have the best sustainable production performance also tend to
have the best performance in other areas such as financial
performance.
Rockwell Automation used these findings and partnered with
Aberdeen to launch its Sustainability Assessment Tool in January
of this year. "This tool allows automation professionals to answer
questions specific to their sustainability needs," says Walker. "Not
only can a sustainability assessment tool guide industry
professionals to view their entire processes at a glance, but it gives
them the opportunity to identify their biggest target for
improvements. Assessment tools and processes give professionals
a guide or starting point towards meeting their sustainability
goals."
Walker adds that an in-depth process sustainability assessment can
help identify the potential return on investment for many
businesses. These specialized assessments help determine whether
the initial company involvement requires just a capital investment,
a personnel investment or a combination of both. Assessments can
pinpoint the duration of the sustainability process and how much
capital investment to expect in return.
Control system integrator Indesco (www.indesco-
usa.com/home.html), Louisville Ky., has been using the tool to
help its customers achieve their sustainability goals.
"To become sustainable in the process automation industry, you
can't just change the focus on one single piece of equipment," says
K.W. (Bill) Holladay, president of Indesco. "It's not just about that
one process. It's about all that can help improve your carbon
footprint or become more sustainable," he says. "Rockwell's
Sustainability Assessment Tool doesn't tell you that you have to
replace this or that component. It doesn't tell you that you have to
drag out this new technology, and put it in. What the tool does is
help you look at the company as a whole, comparing you to what is
going on in the industry and measuring you against other
companies that are being successful."
Live Monitoring
Indesco's vice president of sales, Thad Parrott, says that live
monitoring is essential for achieving sustainability goals. "When
our customers use live monitoring systems, they know within one
month what's working and what's not. The reason they know this is
because they have been able to tweak things each week as the
process goes along," says Parrott.
As Holliday says, "Monitoring processes is a big thing. You can't
fix what you can't see."
Take the case of General Mills. "We were told in 2005 to reduce
our energy footprint by 15% in five years," explained Dave
Spryshak of General Mills in November of 2009 at Rockwell's
annual Automation Fair. "We discovered that the single biggest
energy consumer in our plants was the HVAC system."
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 Sustainability Will Happen When We All Learn a New Economic Calculus

Spryshak's team discovered that by applying process control Sustainability—Trend or Fad?

principles to the control of airflow in plant buildings, the company
could improve air quality indoors and out, and reduce electricity
use 17% to 49%. Gas usage was reduced 14% to 63%. In one case,
Spryshak was able to reduce electricity consumption 3 MW, and
saved $1.5 million in a single year.
The project team used cascading loop control for air volume, an
enthalpy algorithm to use the least-cost energy source, multiple
room-space recipes, and used CO2 measurement to determine
room occupancy and derive airflow requirements.
General Mills has modified 16 plants and is rolling out the changes
across the rest of its enterprise.
Sustainability right now seems like a fad, but it isn't. Currently,
sustainability programs are taking over corporate goals, and
everyone wants to accomplish sustainable practices for their own
reasons.
"Three to four years ago when people started talking about
sustainability they would just shrug it off," says Walker. "Many
thought sustainability was just a fad."
The process industries today are seeing an increase in the number
of employees that are hired to perform sustainability-related jobs,
and these companies annually publish corporate responsibility
reports.

Corporate human-resources departments also play an important

How to Implement Sustainable Measures
Ray Zimmermann, of RJZ LLC, a sustainability and energy
optimization consultant, who also spoke at Automation Fair,
outlined the overall plan for "going green" in a process plant. First,
he said, "You have to change the corporate culture to make sure
that energy-saving projects will continue to perform properly."
The U.S. industrial sector is the number one consumer of energy in
the nation. All four major economic sectors recorded tremendous
growth in their use of energy, yet the industrial sector used the
largest share of total energy.
He added that top-level management buy-in was critical to energy-
optimization project success, and that it was necessary to make it a
company priority, establish structure and committees, identify key
personnel at each level of management and establish an energy
mission—that is, integrate energy into overall company strategies.
Then, establish objectives for energy accounting and data
requirements, and develop a plan to heighten communication and
make energy a visible priority.
After that, Zimmermann said, select partners with experience, set
leadership priorities and move forward to study and audit energy
usage. Once you have completed the audit, you can prioritize the
energy saving projects you want to complete, and then get to work.
Changing the Lightbulbs
role in making sure green initiatives are part of business plans.
Employees want to work for environmentally responsible
corporations, and businesses want to hold a strong sustainability
performance because they use this to attract new talent.
Financial officials know that when carbon trading comes along,
this will be a costly process for corporations. In order to reduce
energy costs, reduce emissions and remain profitable, industry
must find ways to make money. Trading emission credits could be
the way to go.
Growing government pressures and tougher environmental and
safety policies act as regulators pushing sustainability initiatives as
the norm, as the economic calculus widens yet again.
Marketing also plays a role in setting sustainability practices as a
trend. Consumers today demand green products and stockholders
are putting pressure on manufacturers to deliver and meet popular
demands, while operating in a sustainable fashion, and with a
lower carbon footprint. As Kermit the Frog used to sing, "It isn't
easy being green."
However, 10 years from now, sustainable practice will be woven
into daily operations, and running a green plant will be the only
way to remain in business and profitable.

Sometimes, it really can be that simple—if changing the bulbs at

300 facilities is simple. Osram Sylvania (www.sylvania.com) and
its parent company, Siemens Automation AG, (www.siemens.com)
have partnered to design different energy-efficient lighting
technologies, as well as state-wide recycling programs to reduce
the amount of carbon emission produced in the process automation
industry. These programs and green practices allow Osram
Sylvania and its participating customers to reduce the amount of
glass, metal, mercury and fluorescent substances used in Osram
Sylvania's lighting products.

One company currently benefiting from Osram Sylvania's green

products, such as the Quicktronic family of ballast and lighting
controls—the T12, T8, T2 and T4 fluorescent lamps—is Norfolk
Southern Corp. (www.nscorp.com/nscportal/nscorp), the Virginia-
based rail transportation company.

Norfolk's primary goal was to become sustainable throughout its

processes, and with Osram Sylvania's help, it retrofitted more than
300 of its locations, and is anticipating an annual energy savings of
50 million kWh and an annual CO2 emission reduction of
approximately 76 million pounds.

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