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Construction Cost Data Shows Effect of Trade Disputes as Aluminum and Steel Costs Increase

Construction costs accelerated again in June, with steep increases for a wide range of building and road construction materials as tariffs against foreign goods come into effect, according to an analysis by the Associated General Contractors (AGC) of America of new Labor Department data. Association officials say that contractors will have to assume much of the costs as tariffs increase the costs of many key construction materials.

“Contractors’ costs for a wide range of materials and services have escalated dramatically in the past few months, putting a squeeze on profits and dimming the outlook for both public and private projects,” said the association’s Chief Economist, Ken Simonson, noting that the U.S. imposed steel and aluminum tariffs on imports from Canada, Mexico, and the European Union on May 31 and has since announced over $200 billion in tariffs on Chinese goods. “Tariffs that took effect or have been announced since this price data was collected will push costs up even more.”

The construction economist noted that the producer price index jumped by 20.0% for aluminum mill shapes, 17.4% for copper and brass mill shapes, and 12.3% for steel mill products between June 2017 and June 2018. Other construction inputs that rose sharply in price from May 2017 to May 2018 include diesel fuel, 52.8%; lumber and plywood, 18.3%; asphalt felts and coatings, 7.5%; ready-mixed concrete, 5.5%; and paving mixtures and blocks, 5.0%.

“Many of these increases far outstripped the 4.3% rise in the price index for new construction—what contractors are charging to build projects, implying that contractors’ profit margins are shrinking as they absorb some of the increased costs,” Simonson added.

The producer price index for inputs to construction industries, goods—a measure of all materials used in construction projects including items consumed by contractors, such as diesel fuel—rose 9.6% over 12 months. The year-over-year increase was the steepest since October 2008, Simonson noted.

Association officials say the new tariffs are putting new cost pressures on many construction firms. As many firms struggle to cope with rising materials prices they will have less capital available to invest in personnel—especially as labor costs continue to climb. And firms will have less money available to invest in technologies that can make the construction process more efficient.

“The broader impact of the new tariffs and the trade fights that are now emerging is a significant and costly loss in productivity for many construction firms,” said Stephen E. Sandherr, the association’s Chief Executive Officer. “Making real, sustained and long-term investments in our aging and over-burdened infrastructure will do more to boost domestic production of strategic resources without exacting lasting damage on construction firms and the high-wage jobs they offer.” For more information, please visit https://tinyurl.com/yd2p9vel.

 

 

Copyright Statement

This article was published in the August 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

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Power and Energy’s Impact on the Insulation Industry

There’s a great deal happening throughout the energy industry, including the greater adoption of digital technologies to increase performance—all of which spell increased opportunities for the insulation industry.

Oil and Gas, including LNG

While global energy demand will continue to increase, growth will be slower—an average of about 0.7% a year through 2050—compared to an average of more than 2% from 2000 to 2015, according to “Energy 2050: Insights from the Ground Up,” by Scott Nyquist, a Senior Partner in McKinsey’s Houston office.

“The decline in the rate of growth is due to digitization, slower population and economic growth, greater efficiency, a decline in European and North American demand, and the global economic shift toward services, which use less energy than the production of goods,” Nyquist writes.

Greater efficiencies indeed: by 2035, fossil-fueled cars will need 40% less gas to run, and by 2050, the amount of energy used to produce each unit of GDP will be half what it was in 2013, he says.

The United States is becoming an exporter: exports of crude, as well as liquefied natural gas (LNG) and refined products, continue to rise, according to “2018 Outlook on Oil and Gas,” by John England, Vice Chairman, U.S. Energy and Resources Leader at Deloitte LLP.

“Although still a net importer of crude, our growing place as an energy exporter and low-cost supplier could fundamentally change our position in the global energy landscape,” England says.  “Furthermore, it could change our views on geopolitics and national security.”

In particular, LNG global trade volume has risen fourfold over the past 2 decades and is set to double in the next 2, according to “LNG at the Crossroads: Identifying Key Drivers and Questions for an Industry in Flux,” by experts at the Deloitte Center for Energy Solutions. Future supply will come heavily from the United States and Australia, with demand rising within Asia and Europe.

“As volumes continue to increase, the market has potential to reach critical mass, leading to shifts in the countries and companies involved and how the market is structured,” the experts write.

The LNG industry is at a point where it could either retrench, focusing on liquefaction and transport for a fixed fee with “utility-like returns,” or expand into a broader, globalized industry with higher level of activity, market specialization, and a robust and liquid spot market, according to the experts.

“This all depends on companies taking advantage of the new sources of gas—North America, Africa, Middle East, or Oceania—and building a business on transparent pricing based on natural gas supply and demand, with a potential for sustained pricing convergence, net of transport, between the 3 major markets,” they write.

John T. Lamberton, Eastern Region President of Irex Contracting Group, a NIA Contractor member company in East Petersburg, Pennsylvania, says his firm performs a lot of oil and gas work in the greater Ohio Valley, Pennsylvania, and southern New York, and a lot of what the company is doing is the direct result of the Marcellus Shale find—“a hot spot for oil and gas.”

“It’s been a good boon for our business, and a big part of which has been for the transport of gas to compression stations when moving the product from its source to another part of the country,” Lamberton says. “Every 50 miles or so there’s a compression station; each compression station has a significant amount of insulation work and there are a large number of pipelines under construction or planned—they are literally pumping it thousands of miles, including to LNG terminals along the East Coast.”

In addition, there is an extremely large ethane cracker facility being built outside of Pittsburgh, which takes the gas from the Marcellus Shale and separates it into ethylene and other components, to be used in industries such as plastics manufacturing, he says.

“That particular project is so large that it’s drawing a lot of contractors and a lot of craft,” Lamberton says. “So there’s likely going to be a significant shortage of labor for other projects in the region, because that 3-year project is going to employ so many insulators.”

Ted Berglund, President and CEO of Dyplast Products, LLC, a NIA Manufacturer member company in Miami, Florida, says oil and gas is another sector that impacts the insulation business “dramatically.”

“Natural gas is more impactful for us, because of applications that use our products, such as our closed-cell rigid foam used for applications where the material within the piping system is cold, all the way down to liquid gases,” Berglund says.

For the liquid natural gas sector, the United States had a period of about 10 years of building terminals to import LNG into the country, and Dyplast performs a lot of work on those projects, including the construction of very large compressing facilities to export LNG. “There is a tremendous requirement for piping insulation within these facilities, so that’s been a positive for our segment of the industry,” Berglund says. “There are some other products that are increasingly in demand… and we expect that trend to continue as natural gas production and the construction of the corresponding pipelines continue to grow.”

The increase of directional drilling is also positively impacting the insulation industry, he says. Moreover, the availability of natural gas has caused the United States to become a very low-cost platform for the production of chemical components such as ethylene. More platforms are being constructed within the Gulf Coast and now within the eastern United States, taking hydrocarbons and creating sophisticated building-block chemical products.

“That’s been a big boom for our segment of the insulation industry because there is a lot of cold work, as opposed to refining, where everything is hot,” Berglund says. “Sales have been pretty strong and we expect that trend to continue, especially because gas, from a piping perspective, is still relatively cheap in the U.S.—whereas oil has a very different pricing mechanism than natural gas.”

Petrin LLC, a NIA Contractor member company in Port Allen, Louisiana, performs work in refineries and petrochemical facilities, and when domestic oil and gas production is up, production also increases at refineries and petrochemical plants, and so the amount of work for Petrin increases as well, said David Gottlich, an Area Manager in Corpus Christi, Texas.

Power Generation Facilities

Traditional power generation is facing increasing competition from distributed energy resources, particularly photovoltaics, as more state regulators are pushing utilities toward a wider adoption of DER—while also countering their attempts to mitigate revenue losses with rate increases, according to “Sparking Innovation: What Utilities Need to Know,” by an A.T. Kearney team led by partner Kish Khemani in Chicago, Illinois. Moreover, utility customers are depending less on grid supply as they pursue green alternatives and cost-effective self generation.

“With traditional revenue streams at risk, growth in the utilities industry will depend on finding innovative ideas and new business models,” the consultants write. “So far, only a handful of utilities have mastered the innovation challenge.”

Today, upgrading the electric grid isn’t just about strengthening poles and wires, according to “Flipping the Switch: 8 Key Focus Areas for Power and Utilities in 2018,” by Michael (Casey) A. Herman, U.S. Energy, Utilities and Mining Co-Leader, Partner at PwC in Chicago.

“Now, grid modernization is also synonymous with efforts to make the grid more resilient and quicker to recover from events; more efficient and responsive to customer demand patterns, including load demands from electric vehicles; and more enabled to integrate distributed generation capacity and energy storage as well as other 2-way power demands that the grid wasn’t originally designed to handle,” Herman writes.

Two notable trends:

  • More than half of U.S. electricity customers were projected to have advanced metering infrastructure (AMI) smart meters installed by the end of 2017, and between 2018 and 2020, the number of installations is expected to grow from 76 million to 90 million, he writes.
  • Transmission and distribution-related capital expenditures are on the uptick. In fact, 24 out of 24 investor-owned electric utilities with more than $1 billion in revenue have announced grid modernization activities or have initiatives currently underway. Within the power generation and utility industry, there are constant annual outages in which units are taken out of production, inspected, repaired, or modified—which means more business for Petrin, Gottlich says.

For the last 10 or more years, the reduction in the coal-fired, or fossil fuel-powered industry has been on an upswing, through improvements and equipment updates, such as boiler burner improvements, and scrubber or exhaust gas cleaning equipment to help reduce the emissions of major pollutants such as nitrogen oxides, he says.

“This has brought a tremendous amount of work not only for insulation contractors, but also for construction in the manufacturing industry to provide and install the required equipment,”  Gottlich says.

Overall, the fossil-fuel power industry is on the decline and these fossil-fueled units are being removed from production and from the electric power supply grid, he says. However, with natural gas production on the rise, natural gas–fueled  power plants are continuing to be built or are  being enlarged.

“It’s a clean fuel that’s readily available and abundantly found with the continued oil and gas exploration—in fact, natural gas is becoming a U.S. export product,” Gottlich says.

More facilities are now using equipment to burn natural gas to produce steam, which in turn powers the turbines to produce electricity, he says. This is steadily replacing the use of coal and lignite within these power supply facilities.

“These changes impact insulation contractors in that natural gas units are smaller, more efficient, and so they just require less maintenance,” Gottlich says. “We’re trying to offset this business reduction by expanding our geographical footprint, such as opening this Corpus Christi office. We’re also doing additional work for other industries, including offshore oil and gas exploration and production, LNG, agriculture, and the cement industries.”

Solar energy and wind energy will also increasingly impact the insulation industry, as these types of processes especially take a fair amount of insulation, says Berglund, who served on an advisory board focusing on renewal and sustainable energy for the U.S. Secretary of Energy during the George H.W. Bush Administration.

There will also be a dramatic change in the development of new storage technologies, particularly battery technologies, for these facilities because they run intermittently, compared to traditional power plants that run 24 hours a day, he says. The United States has a dual energy system in which renewable power plants must be backed up, so a lot of research is being done privately and also by the federal government on storage technologies.

“When they perfect those systems, you’ll see an explosion in renewable energy facilities, and for the insulation industry, that will be great,” Berglund says. “Anytime there is growth in an energy system, you’re going to install a lot of new equipment with hot processes that need mechanical insulation. While that won’t impact our company because we don’t make a lot of insulation products for hot applications, it will be beneficial for the industry overall.”

Irex does work in power generation, and a lot of that also relates to the Marcellus Shale find, Lamberton says. “I’m seeing a lot of private equity investments in the building of combined cycle plants to capitalize on the availability of cheap natural gas—and they are springing up all over the place,” he says. “These cookie-cutter facilities are very modern and efficient, so they don’t require a lot of maintenance or a lot of people to operate—and that makes a big difference to the insulation industry.”

Before, facilities were fueled by coal or oil, which required huge boilers and pollution-control equipment that needed a lot of maintenance, in large part because the process itself was so demanding on the equipment, Lamberton says.

“When there were outages on these units it might take up to 100 insulators to get the work completed safely and on time, he says. “Today, with the newer designs, an outage may only require 10 insulators—just 10% of what was required to maintain the old facilities.”

However, since so many of these facilities are now being built, there are, at times, a significant shortage of materials, supplies, and skilled manpower—exacerbating the significant skilled labor shortage the insulation industry is already facing, he says.

Lamberton sits as a management trustee on The International Association Heat and Frost Insulators and Allied Workers’ Joint Apprenticeship and Training Committee. “One of the newest innovations in apprenticeship training has been enabling individuals in the unions’ programs to receive college credits, so they will graduate from the apprenticeship program also receiving an associate’s degree,” he says. “The goal is to attract more skilled workers in the trades, but it’s not just about craftspeople—we’re also trying to attract more individuals to be project managers, estimators, technicians, and other non-manual support.”

Engineers are offsetting the labor shortage somewhat by using different materials, Lamberton says. For example, in the past, utilities that were building power plants would use lots of calcium silica products, but the Irex team doesn’t see that material used nearly as much now. Instead, the team sees fiber glass and mineral wool. This impacts “the cost of building the power plant, and it does require a little bit less skilled labor than in the past,” he says.

There’s also a lot of prefabrication available today, which Lamberton sees as a direct result of not having a lot of skilled labor. “It’s almost as easy as ordering pieces from a catalog—allowing the workers building the plants to put the preassembled pieces together, like a jigsaw puzzle,” he says.

The Internet of Things, Analytics, and All Things Digital

The opportunity to transform field service organizations with advanced applications, analytics, and digital technologies is significant, says Christian Hagen, a partner at A.T. Kearney, who is based in Chicago.

Even 5 years ago, most companies would rely on the demonstrable knowledge of experienced field technicians on how to best deliver service to the customer and make the key decisions in the field, Hagen said in an interview.

“But now with IoT and digital technologies, field services organizations are gaining better visibility with the right algorithms, not only for forecasting, but also routing, delivery, and real-time updates on what needs to happen,” he says. “Companies are experiencing substantial efficiencies and effectiveness in the delivery of these services.”

Almost any entity that has a field service team would benefit from this type of automation, for forecasting, pricing, order management, order delivery, and customer experience as well, Hagen says.

“Just by the utilization of the labor and the utilization of the assets in themselves likely make the business case for investing in these technologies,” he says.

For the oil and gas industry, companies are now deriving a substantial amount of efficiencies from IoT and digital technologies, including using analytics not only to figure out where to drill, but how to optimize mines and other extracting, Hagen says.

“Being able to apply machine learning and advanced algorithms to help drive efficiency is reaping benefits—and there’s a lot more opportunity ahead,” he says.

Oil and gas companies can use digital tools to significantly boost their operations, according to the PwC Strategy& report, “Improving Oil and Gas Efficiency through Digital,” by Nate Clark, a Principal in the consulting firm’s Houston, Texas office, and Abhish Abraham, a Manager in that office. “The need for operational efficiency coupled with maturing technologies represent an inflection point for disruption,” the 2 consultants write. “The traction of technology trends, such as analytics, robotics, sensors, and control systems offers companies the opportunity to accelerate field automation in a pervasive manner.”

There are 6 areas of digitization that oil and gas companies are increasingly exploring, they write: data management, including seismic inversion and basin modeling, and production optimization; operational analytics, including reservoir characterization and simulation, reservoir/field management and flow/composition analysis; field surveillance, including real-time network and asset security utilizing drones and wearable technology; operations automation, including automated drilling, minimally manned platforms and self-diagnostic equipment; integrated field planning and delivery, including logistics, planning execution and resource scheduling; and asset optimization technology, including reliability, predictive condition-based monitoring and machine-to-machine communication.

“While end-to-end technology across the value chain may not be realized, technology is maturing from ‘science fiction’ into ‘everyday,’” they say, “marginal improvements in operational efficiency can have significant impact given the large production volumes.” Berglund anticipates increasingly sophisticated digital automation in the insulation industry. “Maybe not the marketing-type data and statistical analytics that large consumer companies do, because we have such a small universe of customers, but on the production side, we have continuously upgraded our digital control systems, which have refined our process controls,” he says.

Dyplast has also added more automated, higher-speed equipment. The company works a great deal with CAD systems, designing how to cut pieces, with machines in the plant then cutting as instructed.

“A lot of our equipment is made in Europe, and the newer pieces all have self-diagnostic ability,” Berglund says. “The companies that manufacture these machines in Germany and Austria can read the diagnostics and accurately correct problems online. The machines are also able to talk to other machines, and program my equipment from Vienna.”

Dyplast has also migrated to the cloud for the management of all of its data, including the company’s financial records, he says. Eventually, small- and medium-sized manufacturers will be capturing all of Dyplast’s equipment data live, to be automatically fed into a centralized system that will generate analytic reports based on the data.

“We’re about halfway there,” Berglund says. “We capture the data, but then manually feed it into our system. We’re not a manufacturing company that makes widgets that can just be coded—we both manufacture and fabricate an infinite number of products, so our information flows are complex and in this very competitive market, our pricing information is also complex.”

“When we talk about our data to SAP, they say ‘Holy Mackerel—we don’t have a system for that! We’ll have to build you a system,’” he says. “At some point we will need such a system that completely automates the process, but right now, the cost-to-benefit just makes it not pertinent to us.”

The advent of digital tools has vastly increased Petrin’s communication capability, Gottlich says. “Gone are the days of pay phones and hard-wired phones—the hand-held personal computers we have today have allowed our communications to skyrocket in efficiency,” he says. “We are able to find a jobsite and determine what it needs, and place a request for manpower, equipment, and materials much faster than having to wait to have phone calls returned. Just emails themselves are now old technology. With the vast amounts of data, we can now produce in a much more timely manner.”

Field inspections within Petrin’s scaffolding business have been aided by the digital technology of geotagging using GPS, Gottlich says. The company has been able to use this to locate and log inspection needs, and enables Petrin to do inventories on scaffolding at its jobsites. These site inventories are then loaded instantaneously into Petrin’s scaffold asset tracking system. “I believe this will also impact the insulation contracting industry—we could geotag locations and take inventory for those locations for maintenance repairs on construction equipment,” he says.

With the advent of digital technologies, communication has certainly improved—everyone has a smartphone and a tablet, and information can be mined and used extremely quickly, Lamberton says.

“Having digital capabilities is also becoming a necessity because customers are demanding it; they want to know if we have high-speed internet and the capability to share and collaborate on complex data, in real time, or we will be left behind,” he says.
There’s also so much paperwork within the industry, that anything insulation contractors can do electronically helps, including scheduling, plotting, and cost reports, Lamberton says. While there’s geotagging and inventory management software to help with Irex’s scaffolding business, it’s not really been applied to the insulation business yet.

“There is all this buzz and promise about digital technology and how it’s going to integrate into our industry, but I haven’t seen it develop to a point where it’s made a significant impact,” he says.

 

 

Copyright Statement

This article was published in the August 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Safety Matters: What Exactly Is a Competent Person?

One of the most frequently cited Occupational Safety and Health Administration (OSHA) standards during inspections of construction projects is 29 CFR 1926.20, which reads in part: “Such programs shall provide for frequent and regular inspections of the job sites, materials, and equipment to be made by competent persons designated by the employers.” So, what exactly is a competent person? Somebody with a white hard hat? Somebody who sat through a competent person class? Somebody who is not incompetent?

The OSHA definition is seemingly straight-forward: “One who is capable of identifying existing and predictable hazards in the surroundings or working conditions which are unsanitary, hazardous, or dangerous to employees, and who has authorization to take prompt corrective measures to eliminate them.” However, there are 2 distinct parts to this definition: capable of identifying hazards and the authority to protect employees from those hazards. If an employee doesn’t meet both parts of the definition, they are not a competent person. When an employer designates someone as a competent person, it is not necessarily complimenting their abilities; it is giving them a significant responsibility and a legal obligation.

There is no standard definition of what makes somebody competent, but it is generally agreed that it is met with a combination of experience and training. Only an employer can designate an employee as a competent person. It is up to the employer to determine whether an employee has the required capability to recognize existing and predictable hazards. The complexity of the task, the job site, and the equipment and tools in use dictate the level of experience, knowledge, and training required. Additionally, only the employer can provide the authority to take prompt corrective measures to eliminate hazards.

In addition to the general requirement for frequent and regular inspections, many OSHA standards have specific requirements for a competent person. Some examples include the standards for scaffolds, excavation, fall protection, asbestos, and respirable crystalline silica. The decision to designate an employee as a competent person should not be taken lightly. There is more at stake than compliance with an OSHA rule. For example, the OSHA scaffold standard requires a competent person to oversee any scaffold erection, dismantling, or modification to the scaffold. The competent person also must inspect scaffolds before each work shift. The safety of many workers may depend on the competent worker’s capability.

Another common misconception is that “one size fits all” when it comes to the requirements for a competent person. A single employer may need several competent persons on one project—all with different areas of expertise. For example, a project involving insulation work in a confined space may need a competent person who is familiar with the insulation work, and another having specialized knowledge of the unique hazards of working in confined spaces. If asbestos-containing materials were going to be disturbed, this may require yet another competent person.

So how can you tell if your competent person really is competent? The best way to demonstrate the capability of a competent person is through documented safety inspections. Inspection findings show the ability to identify hazards and demonstrate the authority to have them corrected. The reason this rule is consistently among OSHA’s Top 10 list is that the presence of hazards on a job site is a sign that the competent person either doesn’t have the requisite knowledge or lacks the authority to have the hazard corrected. So, choose your competent persons wisely and make sure they have the training, experience, and authority to carry out their duties effectively. Competent persons are where the rubber meets the road, so if you want to improve your safety performance, then you should focus on your competent persons.

 

Copyright Statement

This article was published in the August 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Insulation: the Missing Key to Energy Efficiency

This summer has seen a series of all-time heat records being set worldwide. In July, a global heat wave stretched over most of the northern hemisphere, with locations all over the globe recording their highest-ever temperatures. These dangerous heat waves are likely to continue and worsen, making energy efficiency and lowering environmental impact vitally important.

Mechanical insulation is an unsung hero when it comes to being green. Lowering the impact of fossil fuels is a critically important objective, and that’s precisely what a properly installed and maintained insulation system will do. The following quotes are from Christopher P. Crall. His “Insulation: Greener than Trees!” article, published in a prior issue of Insulation Outlook, is recommended reading and shines a light on exactly how green insulation can be.

Energy and CO2 Savings

As an example, consider a chemical facility that uses steam at 350°F in a manufacturing process that operates year-round. The steam is produced in an oil-fired boiler operating at an average efficiency of 80%. Cost of purchased fuel oil is $4 per gallon. The 4-inch steam header is outdoors and insulated with 2 inches of fiber glass pipe insulation. These calculations, shown in Figure 1, were made using the 3E Plus® computer program developed by the North American Insulation Manufacturers Association (NAIMA).

The use of insulation has reduced the heat loss from the bare pipe, on average, by 95%. The associated fuel cost has likewise decreased by 95% for a fuel-cost savings of $417 per foot per year. This 95% reduction in fuel usage translates to a 95% reduction in CO2 emissions, a savings of 2,309 pounds of CO2 per year.

As expected, the annual savings of $417 per foot per year is impressive and would undoubtedly yield a payback period measured in months. The reduction in CO2 emissions (2,309 pounds per foot per year) sounds impressive as well, but what does it really mean? How does that compare to other carbon-reducing technologies?

Insulation Is Greener than Trees!

Trees are an important part of the carbon cycle. Trees (and all green plants) use photosynthesis to remove and store carbon from the atmosphere (while at the same time releasing oxygen). In fact, trees are considered to be so beneficial that we can purchase carbon offsets associated with reforestation projects. One online site offered, for about $12, the opportunity to purchase enough carbon offsets to cover the carbon emissions from an automobile trip of about 2,300 miles (roughly the distance from Detroit to Los Angeles). The funds are invested in reforestation projects in Africa and Asia.

How much CO2 is absorbed by a tree? It varies with the type of tree, its location, and its stage in the life cycle. One source estimates that a single mature tree can absorb 48 pounds of CO2 per year. Another source estimates that, over an estimated 100-year lifetime, a cottonwood tree can absorb roughly 28 pounds of CO2 per year. A third source estimates that each tree will absorb 1 metric ton of carbon over its lifetime (equivalent to roughly 8,100 pounds of CO2 over its lifetime). I’m using a rough estimate of 50 pounds of CO2 per year. Figure 2 shows the simple comparison.

Wow. One would need to plant roughly 46 trees to achieve the same CO2 reductions achievable by insulating 1 foot of 350°F pipe.

But most pipes aren’t at 350°F. Some operate at higher temperatures, and many at lower temperatures. For illustration, consider a hot water heating system in a commercial building. Assume an operating temperature of 180°F and a 2-inch pipe with 2 inches of elastomeric insulation. For this application, assume a “clean,” natural-gas fired system operating at 75% efficiency. Use a fuel cost of $10 per million cubic feet (Mcf) for natural gas. Again using the 3E Plus program, the calculations shown in Figure 3 can be estimated.

In this case, the heat loss is reduced by 91% and the fuel cost savings are only $9 per foot per year. The CO2 emissions are also reduced by 91%, which translates to only 109 pounds per foot per year. This simple comparison is shown in Figure 4.

So one would only need to plant 2 trees to achieve roughly the same amount of CO2 reduction achievable by insulating 1 foot of these hot water pipes.

What about cold piping? Let’s take a look at a 4-inch chilled water pipe insulated with 1 inch of cellular glass insulation (see Figure 5). Assume that cooling is provided by electric chillers with a coefficient of performance of 3.0, and assume electricity is purchased at $0.10 per kilowatt-hour (kWh). Also, assume that the system is for a high-usage application that operates 95% of the time. 3E Plus yields the information in Figure 5.

For this case, the dollar savings are around $6 per foot per year, and the CO2 reductions are roughly 88 pounds per foot per year. The simple comparison is shown in Figure 6.

Again, one would need to plant 2 trees to achieve roughly the same annual reductions achieved by 1 foot of pipe insulation.

Clearly, insulation is a significantly more effective means of reducing greenhouse gas concentrations than planting trees. This conclusion supports the notion that it is easier to avoid carbon emissions than it is to remove carbon from the atmosphere.

So far, this discussion has not really considered the longer-term considerations of forests and the carbon cycle. Most researchers consider mature forests to be carbon neutral, in that they contain some vegetation that is young and still growing (i.e., absorbing CO2 from the atmosphere and storing carbon), but this is balanced by vegetation that has died and is decaying (i.e., giving up CO2 to the atmosphere or the soil). While established forests serve as a significant storehouse for carbon, any carbon stored in trees is eventually returned to the environment.

This discussion should not be interpreted as an argument for not planting trees. Trees provide many useful benefits. They provide shade in the summer, shelter for wildlife, and important building materials, and they are much more pleasing to look at than a piece of insulation. As a method for controlling greenhouse gases, however, insulation is greener than trees.

What about other carbon-reduction technologies? How does insulation stack up to some of the other methods being discussed?

What about more fuel-efficient cars? Combustion of gasoline releases about 20 pounds of CO2 per gallon of gasoline. Assuming 12,000 miles of driving per year, increasing the average fuel efficiency of a car by 1 mile per gallon (a 5% increase over the current national average of 20 miles per gallon) would save 29 gallons of gasoline per year and reduce CO2 emissions by roughly 570 pounds per year.

Clearly, insulation has a great deal to offer to energy-efficiency efforts. Although it may not be the newest or most exciting technology, there’s no arguing with the results it produces. Properly installed insulation can make the difference on whether a building meets its energy goals or not—making the use of insulation absolutely vital to an energy-efficient future.

 

Copyright Statement

This article was published in the August 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Construction Material Surge Again in May with Largest Monthly Increase in a Decade, Says ABC

Prices for inputs to construction materials expanded 2.2% in May and are 8.8% higher than at the same time one year ago, according to an Associated Builders and Contractors (ABC) analysis of U.S. Bureau of Labor Statistics data. This represents the largest monthly increase in 10 years (since May 2008). Nonresidential construction input prices increased 2.3% for the month and 8.9% for the year.

“While rapidly rising construction materials prices partially reflect economic strength, for the most part today’s release should be viewed as bad news,” said ABC Chief Economist Anirban Basu. “As economists have been suggesting for many months, inflationary pressures are building. One can observe this in labor markets as well as in the price of gasoline, health care, and construction materials.

“The current economic expansion, the second lengthiest in American history, has been built in large measure on persistently low interest rates, which stand to eventually disappear as inflationary pressures become increasingly apparent. Real estate and construction cycles are especially vulnerable to increases in borrowing costs.

“But there is more at work than unfettered economic progress,” said Basu. “Construction materials are becoming increasingly expensive because of policymaking. All eyes are on prices of metals, which are increasing briskly. On a year-over-year basis, iron and steel prices are up nearly 13%. Steel mill product prices are up nearly 11%. Separately, the price of softwood lumber, which is the subject of a dispute with the Canadians, is up more than 15% compared to a year ago.

“These dynamics are fraught with unforeseeable consequences,” said Basu. “For instance, will the rise in materials prices induce diminishing demand for construction services? Will more expensive materials prices squeeze contractor margins? Moreover, if the general increase in various prices triggers rapidly rising interest rates, it would presumably truncate the ongoing economic expansion, now in its tenth year. All of this suggests that contractors should be rooting vigorously against full-blown trade wars, which would only serve to exacerbate already observable, problematic trends.”

 

Visit ABC Construction Economics for the Construction Backlog Indicator, Construction Confidence Index and state unemployment reports, plus analysis of spending, employment, GDP, and the Producer Price Index. Associated Builders and Contractors (ABC) is a national construction industry trade association established in 1950 that represents more than 21,000 members. Founded on the merit shop philosophy, ABC and its 70 chapters help members develop people, win work and deliver that work safely, ethically, and profitably for the betterment of the communities in which ABC and its members work. Visit us at abc.org.

Copyright Statement

This article was published in the July 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

 

NIA Sites > Insulation Outlook Magazine > Global

Future Construction: Top Predictions from Industry Leaders

Two overriding concerns for 2018 and beyond—the labor shortage and productivity—were on the minds of this year’s Construction Executive future technology panel. The construction industry’s labor shortage is expected to worsen in 2018 as Millennials shun construction careers, Generation Xers move into leadership positions, and Baby Boomers retire. “While many U.S. sectors, including agriculture and manufacturing, have increased productivity 10 to 15 times since the 1950s, the productivity of construction remains stuck at the same level as 80 years ago,” according to “Reinventing Construction: A Route to Higher Productivity” by the McKinsey Global Institute. While the report paints a dismal look at construction productivity, hope—and solutions—are on the horizon.

The Catch 22 is that without a skilled tech-savvy workforce, how can construction companies adopt the technologies they need to increase productivity? And how can the industry, which has a reputation for being slow to adopt technologies, attract tech-savvy workers or train the ones they do have? The answer lies beyond robotics and automated building processes.

Frederic Guitton, Chief Revenue Officer at RedTeam Software, recommends a cautious approach for companies wary of adopting new technologies: “Carefully select which technologies to implement based on specific desired outcomes and relative risks for adoption and use. Depending on the size of the organization, consider using pilot programs to observe how the technology is actually used and how to design the appropriate training. Implement a process for technology acquisition and develop a well-thought-through training based on specific internal processes.”

Matthew Harris, Viewpoint’s Chief Product Officer, believes construction is shedding its slow adopter image. “I think this next generation of contractors will be on the leading edge of innovation. They will have to be forward thinkers to transform their companies, driving more productivity and faster projects with less risk and stronger profit margins,” he says. “They’re going to push the businesses they work for to give them the tools they need to dig deeper into their data, and see results in real time so they can operate smarter projects today and do a better job of forecasting and planning for future ones.”

Solving the Labor Shortage

According to the U.S. Bureau of Labor Statistics, construction unemployment was just 5% in November 2017, trending toward a 6% unemployment rate for the year, lower than 6.3% in 2016 and 6.2% in 2000.

One solution to the labor shortage is finding the champions. “While future leaders could be the best workers in the field, the most highly skilled in their trade, or most efficient project managers, they may also be team members who haven’t found their niche,” says Mike Ode, President of Payroll4Construction.

“One of the best ways to identify future leaders is to look for exceptional attitude and above-average aptitude, even if they haven’t found where they flourish yet. Invest in them, make sure they are where they’re best positioned for success, and if you see an aptitude for leadership, reward their potential by giving them the opportunity to try, to fail, and to learn.”

Don Whyte, President and CEO of NCCER, points out that “welders, electricians, and heavy equipment operators are in high demand. In 2004, The Brookings Institution estimated that half of what will be the built environment in 2030 does not exist yet. Highways; roads and bridges; the electrical grid; water, gas, and oil pipelines; sewer and drainage systems; and airports, hospitals, and aging city skylines will all require craft professionals and construction managers to rebuild, renovate, and maintain.”

He continues: “The technology is emerging as a supplement to traditional training. As it becomes more affordable, it will continue to take on a greater role in even more programs. 2020 is only two short years away. On average, it takes 10 to 15 years to develop a seasoned craft professional. Contractors need to assess their workforce development program now to determine if their pipeline is full. If they see an abundance of young emerging talent, they are well on the way to meeting their future workforce needs. Being actively engaged in developing their workforce is a necessary and integral part of their business now and for many, many years to come.”

Carl G. Castellano, Vice President and Chief Risk Officer at Philadelphia Insurance Companies – Surety, agrees that maintaining qualified craft professionals is an immediate challenge for most contractors. “A resilient contractor will recruit and train during the next few years and implement more efficient processes to meet this challenge.”

The McKinsey Report recommends that the construction industry “revamp its image to attract more young people by adopting some of the characteristics of the technology industry, such as cross-functional teams, individual empowerment, flexible assignments, and an emphasis on learning and deploying the latest technologies. Infuse digital technology, new materials and advanced automation and reskill the workforce.”

“Whether it’s drones, robotic systems, and automation or even mobile apps, companies need to have the right people and processes in place for technology to be successful,” says Fred Ode, CEO and Chairman of Foundation Software. “They need to have a solid implementation team, buy-in and involvement from end users, and a plan for how they are going to use the technology. This includes managing the security of the technology, staying compliant with laws and regulations, and keeping employees trained and the technology usable over time.”

Adds Wendy Rogers, President and CEO of eSUB: “Construction workers will need to be adept at their trade as well as adept at using technology in order to do their work efficiently. The ongoing labor shortage due to the declining workforce and aging population will force the industry to restructure the way labor is optimized. Prefabrication and automation will streamline how labor is utilized on a construction project. With skilled labor resources so limited, subcontractor labor will be used in an integrated labor delivery model during critical junctures of the project, such as the preconstruction design phase and installation.”

Brightening a Dismal Productivity Outlook

The McKinsey Report identified insufficiently skilled labor at the frontline and supervisory levels along with industry underinvestment in digitization, innovation, and capital as one of 10 root causes of productivity failure. By comparison, the JBKnowledge 2017 Construction Technology Report found that lack of staff to support the technology, insufficient budgets, and employee hesitance were the top 3 reasons for not adopting new technology.

The McKinsey Report called construction progress “glacial,” as it continues to rely on traditional methods of construction, even as projects get more complex. “The report cited 4 main digital trends that can enable the construction industry to move toward productivity:

  • • Next generation 5-D BIM;
  • Digital collaboration and mobility;
  • Near-perfect surveying and geolocation; and
  • The Internet of Things (IoT) and advanced analytics.

BIM, AR, and VR

While BIM has been readily embraced, it must become more of a priority for contractors of all sizes. Allied Market Research reports that the global BIM industry is expected to be valued at $11.7 billion by 2022. Millennial workers are key to widespread adoption of BIM, as it will enable them to embrace the “big picture” of projects and help older workers overcome hesitance to adopt BIM and other technologies. JBKnowledge’s 2017 Construction Technology Report notes that “unless builders make BIM a priority, they will fall behind.”

The technology exists for seamless interaction among all stakeholders on a project as they view a 3-D hologram of the project’s design, enabling everyone to visualize, share ideas, and detect problems on projects.

Augmented reality (AR) and virtual reality (VR) are methods of viewing data, but artificial intelligence (AI) is the key to understanding the data,” says Sarah Hodges, Director of Autodesk’s construction business line. “Successful companies won’t simply capture and store the data, but develop capabilities to centralize the data, normalize it, and analyze it.

Only then can contractors focus on what activities are most responsible for successful projects. Ultimately, they will reduce what data they collect and focus on the task with the greatest impact on success. They will optimize based on AI, and only then will AR and VR become effective as contractors accurately predict project performance as opposed to determining how the project performed after it is completed.”

“AR is a simple way for workers to interact with BIM information,” adds David Gaw, CEO of Sensera Systems. “Overlaying design information on the build or capturing field information into BIM may be a good application of AR. The first step is to get the jobsite connected and generate data to add value.”

Rogers agrees. “Virtual reality and augmented reality will increase on the jobsite. Integration with BIM will help contractors detect abnormalities and errors. If subcontractors are connected, they can reduce rework and deliver a project quicker and at a lower cost.”

With all that in mind, some safety concerns remain with regard to VR headsets restricting peripheral vision. “Although some innovators are beginning to introduce AR into the construction delivery process—an example being where hardhats are outfitted with a transparent visor that can display 3-D renderings and receive instructions from remote managers—AR has been slower to adopt than VR,” says Jeff Weiss, Executive Vice President of Global Sales for CMiC. “Inevitably, BIM, VR, and AR technologies will coalesce over time, but it will take at least 5 years until computing power and devices become mainstream.”

Workflow Integration/Digital Collaboration

As construction technology providers continue to offer more integrated solutions, contractors will collaborate with all project stakeholders to design and build cohesive infrastructure, utilities, buildings, and communication networks in smart cities.

For now, contractors are using apps on mobile devices for time tracking, generating reports, managing documents and inventory, and documenting project progress, which leads to more integration, collaboration, and communication.

“The ever-present business issue in construction is the quality of the relationship between the different companies on the jobsite,” Guitton says. “How efficient can the communication be in order to achieve peak performance on behalf of the customer? Construction is a very complex business, and one of the most challenging components is the processing of invoices between general contractors and subcontractors, which requires validation of credentials, lien rights handling of the sub-tier claimants, and agreement on what has been completed and should be paid. To minimize conflicts, all parties need to be connected so that the process itself is more transparent, therefore reducing the costs associated with this process as well as mitigating the risks for parties.”

With the number of applications and technology available, it is important that all data and information flow freely between all applications and users, Rogers adds.

“Integration and an open platform for collaboration and transparency can connect all members of the project team more closely than ever before—from the owner and architect to the general contractor and subcontractors,” she says. “Disjointed interests among stakeholders is a big problem.

Breakdowns in communication and risk shifting are the foundational issues that cause projects to go over budget and behind schedule. Integrated project delivery will change this and provide more collaborative efforts for faster project delivery and less rework.”

The ability to scale for the future is crucial, according to Harris. “Many contractors have systems in place that, while they work well enough now, are not built for change. They can’t adapt when new technologies are added to the business mix. That’s why cloud computing is so important. When change is needed, software operating in the cloud is much easier—and far less expensive—to upgrade. Moving to the cloud enables contractors to optimize their systems, drive better data integration, and ultimately focus on winning more business instead of upgrading servers.”

A crucial consideration when assessing whether a company is positioned for growth is IT’s role in the business. Contractors must ensure a seamless workflow to connect their back office, extended project team and field staff. “Going forward, I think the companies that will thrive and grow, regardless of economic cycles, are the ones that make the IT investments today that will allow them to scale tomorrow,” Harris says.

Near-Perfect Surveying, Geolocation, and Time Tracking

Drones are becoming more commonplace on the construction jobsite as they become adept at capturing aerial data and jobsite data in 3-D models, and produce high-resolution images. Despite these improvements, drones may soon be replaced by real-time satellite images with zoom resolution and overlays.

“The must-have tech tool is a time-tracking solution that delivers real-time labor productivity,” Rogers says. “Tracking time and managing labor productivity is critical to profit protection, especially for subcontractors whose profit margins rest on their ability to manage labor effectively. Subcontractors provide the majority of skilled and unskilled labor on projects. In order to get paid, subcontractors need labor tracking software that also documents work completed.”

While Ryan Driscoll, Marketing Director at GPS Insight, agrees that driverless cars are the future, he doesn’t see autonomous vehicles overtaking the construction space just yet. Driverless vehicles, however, “would improve driver and public safety and result in more efficiently driven vehicles. Mobile apps are going to be the vehicle that construction managers use most to consume telematics information, especially as Millennials and Generation Z enter management positions,” Driscoll says.

Jobsite cameras are another commonly used technology. According to Gaw, “Jobsite cameras are powerful tools to save time and improve safety, security and accountability. The technology is mature and offerings have hit the tipping point in terms of cost, ease of use, and functionality.”

IoT and Advanced Analytics

By incorporating the IoT, construction equipment, materials, and even structures can communicate with a central data platform to capture critical information, such as equipment usage and performance along with other real-time data that enables contractors to streamline their supply chains, reconcile material plans with physical availability, and analyze productivity.

The McKinsey Report notes that “recording more and higher-quality data and combining these analytics from the design to the building stages of a project will improve contractors’ ability to develop better front-end estimates of a project’s cost, obtain predictive trends and recommendations useful for decision-making, and get a better handle on project risk.”

On the wearables front, the IoT is being applied in a variety of interesting ways. According to Weiss, the correlation between health and safety means both must be considered to keep people on jobsites safe, but ultimately the information gathered by the wearable needs to be used in some way by putting it back into other systems and platforms. “As it’s automated, it can be integrated into what has to be managed for safety records,” he says.

In addition, next-generation wireless connectivity (5G) will enable the transfer of gigabits of data in seconds to make it even easier to collect data from connected construction tools, equipment, wearables, sensors, drones and vehicles, and to leverage the IoT on jobsites to improve productivity and safety.

But just efficiently capturing data is not enough, Weiss says. “Robust data management platforms are needed to combine the captured data with external sources to yield actionable insights that help construction firms become more competitive and to continually improve the ways in which products and services are delivered.”

Cyber Risk and Data Security

Michael B. Bomba, Director and Counsel for AIA Contract Documents, cautions, “With the increased dependency on digital practice techniques, including electronic project management systems and BIM technology, the construction industry is far more exposed to cybersecurity risks than it has been in the past. Insurance companies have reported a significant rise in the ransomware occurrences where a company’s computers have downloaded malicious software that is designed to block the company’s access to its data until a ransom is paid. Accordingly, the company is exposed to the amount of the ransom, as well as the possibility of significant business interruption costs.

“Companies are further exposed when their system is compromised and private personal data breaches occur. A company may be required to notify all the individuals whose personal data has been exposed, which can be an expensive proposition,” Bomba says. “There may be additional costs thereafter to protect those exposed (e.g., credit and/or fraud monitoring services). As ransomware and other data breach incidents have increased over recent years, a significant number of insurance carriers have developed, or will be developing in the near future, insurance policy solutions to protect construction companies.”

Driscoll notes advancements in telematics that include data security. “With all of the hacking scares during the last few years, it is increasingly important that business data remain secure. Many telematics providers are investing in security to ensure all customers are safe.”

JBKnowledge’s report offers one last piece of advice: “Most construction companies are missing an opportunity to legitimize and recapture IT expenses to help justify investment on future projects by not billing IT expenses to owners. Until contractors learn the value of IT and how to apply it, they will have a hard time selling that value to owners and clients.”

But as a whole, construction leaders are excited about the future of construction technology. “There are lots of startups around project management apps, VR, AR, and drones,” Fred Ode says. “Back office construction software is maturing and consolidating through acquisitions and partnerships, so now there are fewer key players. This cycle will continue during the next decade. Software companies will need to look beyond traditional software technology and grow into other areas of the market that help contractors succeed, such as service and education.”

 

Reprinted from Construction Executive, January/February 2018, a publication of Associated Builders and Contractors. Copyright 2018. All rights reserved.

Copyright Statement

This article was published in the July 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Have an Insulation Question? NIA Has Answers

At NIA, we know just how big an impact insulation can make. Looking at energy and financial savings, longer system life, and more efficient operations, there are few other technologies that pack as big a punch as mechanical insulation. Part of NIA’s mission is to spread the word on the industry’s under-appreciated workhorse, and to also offer you ways to more easily use the proper insulation for your specific systems.

One of the ways NIA works to promote awareness of the value of insulation is through its online Educational Center. NIA created the Educational Center to offer a variety of mediums—online, print, video, in-person—to suit our diverse audiences and their needs. Whether you’re looking for training on insulation installation, information on the different types of insulation, or even opportunities to improve your health and safety program, NIA’s Educational Center has a number of tools that can help. In this article, we’ve shared the best resources to meet your needs based on what you’re looking to accomplish.

I’m just getting started—what’s a good place for me to begin?

You should take a look at the Mechanical Insulation Design Guide (MIDG). It’s an online resource that can take you from the first to the last step in designing a system. It guides you from design objectives, to details on different types of projects, to specifications. It’s an excellent starting point for looking at how you can build a better system.

Start your journey at: www.wbdg.org/midg

I want to make sure our systems are safe for personnel, how can I do that?

You’ll definitely want to check out the Personnel Protection Calculator for Horizontal Piping. It can help you determine maximum safe contact times for horizontal steel pipes. This calculator, and others, are housed on the Whole Building Design Guide website where the MIDG is located. There are 8 different calculators that can help when looking at condensation control, energy usage, financial savings, temperature, and personnel
protection. These simple calculations can help guide you when making insulation decisions.

Get calculating at: https://tinyurl.com/y8eb8nul

I need to bulk up on my insulation knowledge and grow my professional portfolio—do you offer anything that can help develop my credentials?

If you’re after Professional Development Hours (PDHs) and a solid understanding of what mechanical insulation is and how it’s best put to use, NIA’s online training course is a fantastic option. It’s approximately 2.5 hours long, but has breaks in between sections so you can work it into your day easily. This free, online training includes 5 modules that introduce and define insulation, describe its benefits, discuss the science behind insulation, review design objectives, and outline proper maintenance. The best part? NIA offers PDHs for those who complete the course, and you can also get credits from the United States Green Building Council (USGBC) and its sister organization, the Green Building Certification Institute (GBCI), as well as the American Institute of Architects (AIA).

Begin your insulation education at: https://tinyurl.com/ybl5eez4

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I’m not sure how to install this product. Is there anything that can show me how to do it right the first time?

You’re in luck! NIA recently updated its Mechanical Insulation Installation Video Series, which has actual footage of how to install various types of insulation. Available in both English and Spanish, this video series covers installation for calcium silicate and perlite, cellular foam, cellular glass, elastomeric, fiber glass, mineral wool, and removeable/reusable flexible insulation covers. The video series is available on NIA’s Vimeo page, where you can also find a webinar on the MIDG, videos on the value of insulation, and footage of expert discussion panels from NIA’s Annual Convention.

Start bingewatching at: www.Vimeo.com/NIAinfo

What the heck does “absorptance” mean?

Have you come across terminology you didn’t fully understand? NIA’s Insulation Science Glossary will break down all the terms you need to know when dealing with insulation, from basic to advanced. The glossary is located on the Specs & Codes page on NIA’s website, where you can also find the Insulation Materials Specification Chart, which lists physical and material properties of various insulation materials as specified in ASTM Materials Specifications; and the Guide to Insulation Product Specifications, which compiles all current ASTM, federal, and military specifications relating to the insulation industry. The web page also lists the various the codes and specs used by the industry—it is a great place to start if you’re looking to get the most up-to-date information on codes.

Find out what absorptance means at: https://tinyurl.com/ybdef8td

I’m not sure if the insulation on my system has been installed properly—what should I do?

This exact industry concern led NIA to develop its Thermal Insulation Inspector Program. After talking with industry members, we found a common issue was that building owners or engineers weren’t able to certify that insulation had been installed properly. In response, we developed the Inspector Program, which will certify individuals to determine whether insulation was installed according to the specification. The program is still being developed, and more information about the first classes will be available soon.

Check back often for Inspector Program updates at: www.Insulation.org or email events@insulation.org

 

Copyright Statement

This article was published in the July 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Contractor’s View: Insufficient Space Leads to Insulation Update

The Problem

My company, Insulating Services, Inc., a NIA Contractor member since 1990, was contacted by a client in the Southeast who was requesting an evaluation of their existing indoor insulation system due to the larger than desired process temperature drop their system was experiencing. The client company reconditions catalyst beds that are used for emission control at power plants and various other industrial facilities. Part of their proprietary process for reconditioning these catalyst beds requires that the temperature drop in their reactor doesn’t exceed 4°C. For their application, the larger the temperature drop, the lower the quality and consequent longevity of the reconditioned catalyst bed they sell to their customers. Their concern was that they could potentially lose business if their customers noticed that the reconditioned catalyst beds had an appreciable decrease in life span and would require more frequent reconditioning, causing higher costs.

Upon visiting the job site, we found that the temperature drop they were measuring across their reactor was ~10°C—more than double the maximum temperature drop of 4°C. The existing insulation was a 2-layer system with the first layer comprising of (2”) ceramic fiber and the second layer being (3”) of mineral wool insulation. There was only 5 inches of space available for the insulation and unfortunately, the current thickness of insulation could not maintain the desired temperature.

After we ran some calculations based on the process data provided, it was determined that the insulation thickness would need to be ~10” in order to ensure that the temperature drop across the reactor didn’t exceed 4°C.  The problem, however, was the physical lack of space necessary to increase the insulation thickness to 10”. Our client would need to make tremendous changes to their facility in order to make room for the thicker insulation, which was prohibitive both from a cost and timing standpoint. This is an example of how improper design can lead to improper insulation, which ultimately affects the profitability of the entire operation.

The Proposed Solution

We did find a solution as product innovations have led to materials on the market that offer the same performance at a lower thickness. We used the 10” required thickness needed to satisfy the desired 4°C temperature drop and calculated the equivalent thickness of an alternate material that would offer the equivalent performance at a lower thickness. We recommended a specific aerogel insulation that had approximately half the thermal conductivity of the existing insulation system at the operating temperature of 500°C. Specifically, we were able to reduce the thickness from 10” to 4.8” by recommending the aerogel material. The total installed cost of this option would be approximately 23% higher than the required 10” thickness of the existing insulation, but in this situation this is a moot consideration since there wasn’t enough space to increase the existing insulation thickness to 10”.

In summary, there are 2 problems to solve in this situation. First, the existing insulation system was not designed to limit the temperature drop to the desired threshold of 4°C. Second, space constraints did not allow for the appropriate thickness to achieve the desired goal. Our recommendation of using a different product that would provide appropriate performance at a lower thickness solved both problems in this case.

Ultimately, the client will need to decide whether to accept the added cost of installing the aerogel insulation in exchange for its potential benefits. Of course, as with most properly designed systems, insulating the system correctly will save energy over the life of the system, paying for the insulation. Changing the footprint of the facility to accommodate the 10” of required thickness for the lower-cost mineral wool would incur exorbitant costs. While typically, “value engineering” implies a lower upfront cost, in cases like this one, clients may choose a higher up-front cost as the best alternative and in exchange for continued ongoing successful operations.

 

Copyright Statement

This article was published in the July 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Insulation Product Guides

In the July 2018 issue of Insulation Outlook, we had a special section, 18 Months of Product Enhancements and Innovation. Since we often hear feedback from readers that they use Insulation Outlook to learn about products, we invited manufacturers to share recent product improvements. A PDF of the section is available below.

Click here to view 18 Months of Product Enhancements and Innovation

We also had a Tools and Resources section in the July issue that shared many available resources that can help make it easier to understand the differences between insulation materials and how to choose the right product and thickness. A PDF of the section is available below.

Click here to view Tools and Resources

 

Copyright Statement

This article was published in the July 2018 issue of Insulation Outlook magazine. Copyright © 2018 National Insulation Association. All rights reserved. The contents of this website and Insulation Outlook magazine may not be reproduced in any means, in whole or in part, without the prior written permission of the publisher and NIA. Any unauthorized duplication is strictly prohibited and would violate NIA’s copyright and may violate other copyright agreements that NIA has with authors and partners. Contact publisher@insulation.org to reprint or reproduce this content.

NIA Sites > Insulation Outlook Magazine > Global

Advice from the Field: What Insulation Professionals Wish You Knew

We asked several National Insulation Association industry leaders what design issues they face and what information that they would like engineers, system designers, and specifiers to know. Their responses are below.

Steve Luse is the fourth-generation CEO of Luse Thermal Technologies (www.luse.com), a NIA Union Contractor member company founded in 1923, and a multifaceted construction, product distribution, and safety consulting solutions provider headquartered in Illinois. Mr. Luse is a Past President of NIA, a member of the NIA Board of Directors and Executive Committee, and Chairman of NIA’s Union Contractors Committee. He can be reached at steve@luse.com.

Pete Gauchel is the President of L & C Insulation, Inc. (www.lcinsulation.com), a NIA Merit Contractor member company specializing in commercial and industrial insulation in Wisconsin, southeast Minnesota, and northeast Iowa. For the last 30 years, L & C Insulation has been specializing in industrial and commercial insulation and firestopping. Mr. Gauchel is a NIA Past President, a former Chairman of the Merit Contractors Committee, a former President of the Midwest Insulation Contractors Association (MICA), and Chairman of the MICA Manual Standards Committee. He can be reached at peteg@lcinsulation.com.

Rudy Nigl is the Vice President of L & C Insulation, Inc. (www.lcinsulation.com),  a NIA Merit Contractor member company specializing in commercial and industrial insulation in Wisconsin, southeast Minnesota, and northeast Iowa. For the last 30 years, L & C Insulation has been specializing in industrial and commercial insulation and firestopping. Mr. Nigl has been in the industry for 5 years and has expertise in leadership, project management, and estimating. He is a NIA Board Member, Chair of the Merit Contractors Committee, member of the Young Professionals Committee, and a MICA Board Member. He can be reached at rudyn@lcinsulation.com.

Steve Kennedy is the President, CEO, and Founder of Kennedy InsulationSystems, Inc. a NIA Merit Contractor member company located in Iowa that focuses on food processing, meat kill and processing, colleges, schools, chemical companies, power-house pipe, hospitals, and commercial applications. Mr. Kennedy has 43 years of experience in the mechanical insulation industry and can be reached at steve@kennedyinsulation.com.

Ray Stuckenschmidt is the President/Owner of Systems Undercover, Inc., a NIA Merit Contractor member company that was founded in 1986 as a mechanical insulation contractor serving the Rocky Mountain and Midwest region. They specialize in commercial mechanical insulation, firestopping, and heat-tracing. Mr. Stuckenschmidt is a graduate of the University of Nebraska Lincoln College of Engineering with a degree in Construction Management. He has 42 years of experience focusing in commercial, cold storage/refrigeration, and industrial mechanical insulation. He has served on the Editorial Board for MICA’s “National Commercial & Industrial Insulation Standards” since 1997 and chaired the 7th Edition. He can be reached at ray@systemsundercover.net.

Lee Stuckenschmidt is the Operations Manager for Systems Undercover, Inc., a NIA Merit Contractor member company specializing in commercial mechanical insulation, firestopping, and heat-tracing in the Rocky Mountain and Midwest region. He has 21 years of experience in the commercial mechanical insulation industry and has spent 10 years in his current position. Mr. Stuckenschmidt can be reached at lee@systemsundercover.net.

Steve Luse, CEO, Luse Thermal Technologies

Looking specifically at the insulation industry, we must continue to get the word out on the value of insulation and the cost savings from using the right product on the right system.

Pete Gauchel, President, L & C Insulation, Inc.

This group should know that the MICA Manual has everything that they need. If they would incorporate the MICA manual plates in their submittal packages, then they would have a direct communication line with the insulation contractor and their people in the field who are installing the insulation for the project.

Rudy Nigl, Vice President, L & C Insulation, Inc.

This audience needs to be continually educated to learn both the importance of proper insulation systems and the importance of quality insulation. We see a lot of poor craftsmanship from untrained insulation companies or ones that do cheap work.

Quality insulation is a great investment for not only the bottom line, but also the environment in terms of the energy savings it creates in a short time (with the correct installation).

Steve Kennedy, President and CEO, Kennedy Insulation Systems, Inc.

I remember NIA Past President Rex Sayre always used to say that the insulation contractors are usually the last people to be consulted or believed about insulation. This is still true today. I have 42 years of field and management experience in this business. I read emails and sit in job-site meetings concerning insulation questions, and sometime it’s like I’m invisible until I speak up and point out something that makes pretty good sense, which they usually go with. We have a solid relationship with most of the mechanical engineers that specify work in Iowa. The same is true for field foremen, estimators, and plant managers. The new challenge is that many of those we have developed relationships with for 30 years are retired or deceased and have been replaced with someone newer to the industry who we do not have the same rapport with.

Ray Stuckenschmidt, President, Systems Undercover, Inc.

I’d like them to know and understand their responsibility as it relates to the product selection and proper installation of materials within their projects. Quality control has been pushed to the back room and the quality of finished work in our industry demonstrates this. Commissioning may be an answer, but it has similar problems with a lack of knowledge and experience, which can lead to lower-quality systems. Internal quality controls compete with demand for production to meet low estimates (bids) created with overly optimistic budgets. The design community can set the quality expectation bar high if they choose to do so and, in turn, are compensated accordingly by owners. Quality is dependent on correct product selection, correct installation methods, management through inspection/correction, competence, and integrity to do the job right.

Lee Stuckenschmidt, Operations Manager, Systems Undercover, Inc.

When talking to the people responsible for maintaining and designing facilities, we often find they lack true industry knowledge about what we do. Having to explain the differences between the facts on paper and the actual conditions that products are installed under can be difficult. We also sometimes find there hasn’t been an effective knowledge transfer between newer and more experienced engineers. They may sometimes use an older “cut and paste” specification without evaluating whether it contains the best design options or temperature conditions for the system in question, which can lead to design inefficiencies and system problems over time.

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