Friday, October 21, 2011

A feat of Engineering? Or just another PR triumph? You have time to decide.

Our blog has moved. You will find this blog post and fresh content on our new Global Engineering Jobs blog.
by Richard Spragg

Five or six years ago, a marketing consultancy I was working with put out a press release for April Fools Day. It announced that they had been selected to brand and promote the world’s first commercial spaceport. They included pictures of a futuristic looking spaceport in the desert and an impressive highbred of concord and space shuttle dreamed up by a young graphic designer. It was all very persuasive, but too far-fetched to be convincing. Good fun though, and good PR.

On Monday, it was for real.

Sir Richard Branson, the deliberately eccentric British entrepreneur, announced the opening of his New Mexico Space Port to much media interest and an equal amount of eye rolling scorn.

We have all the hallmarks of a PR exercise, complete with celebrities, promotion schedule and glitzy marketing. Press Releases include the usual Star-trek language and the obligatory gubernatorial plugging for New Mexico and its long tradition of pioneering innovation and yada yada yada.

Kate Winslet, no less, will be heading for orbit it seems, along with her boyfriend - Branson’s nephew – Ned Rocknroll  (his name changed from Smith by deed poll before he married in an open-air pagan ceremony led by a druid.) You couldn’t accuse him of not trying hard enough.

All of the hype creates skepticism. There is some speculation as to the authenticity of the claims of space travel. (There will be no orbiting and no weightlessness.) There is also the fact that we have been promised flights will begin 'next year' for a very long time. Of course, this time they mean it. 

But let’s give credit where it’s due. There is a substantial feat of engineering at the heart of this enterprise, and we mustn’t throw the baby out with the PR bathwater. Yes, the hype is annoying, and yes, we are not looking at a breakthrough in human achievement – it’s the first commercial space flight, not the first space flight. But take some time to flip through the basics of Burt Rutan's engineering and you will see something truly inspiring.

Also, at $200,000 a ticket, there is a significant achievement in making space travel accessible. After all this is rather less than the $20m that was paid by Dennis Tito in 2001 to be the world’s first Space Tourist. Branson believes he can get this down to $25,000 in ten years.

Branson with a model of 
Spaceship 1
What’s more, Branson has a plan and almost nobody else does. So let’s give him the respect he deserves. It’s highly likely that the future commercial space industry will look back upon him as a pioneering father figure; everyone knows the Wright Brothers suffered endless ridicule. Furthermore, with the US Space Shuttle program retired, you can bet that Branson’s technology will be an influence in the race to commercially deliver the next space program.

It’s also guaranteed that Branson will achieve his dream without throwing away his fortune on it, as so many before him have. Engineers salute. Look past the showbiz. When all the glitz has been swept away, the engineering will remain. Branson is a visionary and a man capable of making extraordinary things happen. It’s not long ago that commercial space travel was an April Fool’s joke. He is making it a reality.

Richard Spragg writes on various subjects including global engineering staffing and global engineering jobs.

Tuesday, October 11, 2011

LNG export faces obstacles to long term viability, but Engineers still win.

Our blog has moved. You will find this blog post and fresh content on our new Global Engineering Jobs blog.
by Richard Spragg 

Sabine Pass, where an export terminal is planned for 2015
With a century’s supply, no predicted increase in domestic demand and higher prices in Europe and Asia, it’s easy to see why excitement is growing around gas exports. Morgan Stanley estimates that North American LNG export capacity can reach 10% of production by 2015. But there are inherent problems when it comes to LNG exports, and this optimism may be misplaced. Here are just a few  reasons why growing export markets will be challenging.

The US is remote from key markets
It’s hard to compete with Russia and Australia in the supply of the booming Asia market. With Nuclear power under threat, LNG is likely to pick up some of the slack in the region. In addition, China’s current usage (11% below global averages) is likely to increase. But the long voyage from the US makes it difficult for US exporters to capitalize on these markets.

Current US Infrastructure
The US has 12 LNG terminals in Maryland, Georgia, Louisiana, Texas and Massachusetts.  All are primarily designed for domestic supply and none have significant export capabilities. On the upside, projects are planned to increase export facilities - including the retrofit of a terminal for liquefaction at Sabine Pass, the USA’s largest LNG plant by Cheniere Energy. This will not be operational for three years.

Too many variables affect pricing
Successful exports depend on the domestic price of gas remaining low (Right now domestic prices have been stagnant at $4 mmbtu - currently $3) and international prices remaining high (UK - $9 / Asia - $13). And while the price remains tied to oil, crude prices would have to remain high too. All of this may well happen, but it may not.

Regardless of whether the US develops a significant LNG export business, the news is good for hiring companies engaged across the sector who will see varied and interesting project opportunities upgrading the infrastructure. What’s good news for them is good news for the engineering and construction job market, which will continue to expand as investment in LNG grows.

It's a case of 'Build it. They will come.' In the meantime, the work will continue to everyone's benefit.

Richard Spragg writes on various subjects including global engineering staffing and global engineering jobs.