Category Archives: Global

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Evolution of Firestopping

Firestopping is part of effective compartmentation: It is the building of fire, smoke, and other resistance-rated assemblies into “boxes” in buildings. These boxes are built to keep fire from spreading from the room of origin to other parts of a building. Compartments are formed when area or fire walls separate one space from another, allowing the collapse of one side without the other sides being structurally affected. They are also formed when resistance-rated walls are constructed in corridors, when resistance-rated floors are built for floor-to-floor protection, and when spacing between buildings is added to protect against fire spreading from building to building.

Compartmentation is complete when doors, hardware, and glass are also fire, smoke, or other resistance rated; penetrations, head of wall, and perimeter and expansion joints are sealed with firestopping; and ductwork has fire, smoke, or fire-smoke dampers installed in walls.

Fire, smoke, and other resistance-rated construction of walls and floors are used to make egress corridors and separations between sleeping rooms in hotels, apartments, and condominiums. Most importantly, compartmentation protects people who cannot move quickly, or at all, in buildings. Think of elderly or handicapped people, or heavy sleepers who either will not wake when alarms go off or will not be able to move fast enough to flee fire or smoke as these dangers spread in buildings (whether with or without sprinklers).

Each component in effective compartmentation is a trade. Dampers are installed by trained sheet metal installers. Fire barriers and fire walls are built by educated drywall, masonry, or plaster installers. Fire doors and hardware are installed by those qualified to install these systems. Fire glass is installed by glazer installers. Firestopping is a less exact science: It is installed using the rule, “He (or she) who pokes the hole … fills it.” How can that be, though? Are there not educated specialty contractors and installers who are responsible for installing this sensitive, life-saving system?

The Firestop Contractors International Association (FCIA) has led an effort over the last 8 years to bring proper attention to the fire and life safety service of firestopping. Firestopping should be treated like a real trade, with educated installers, estimators, and businesses that specialize in this highly technical field. Like pipe-covering insulation, asbestos removal, plumbing, electrical, and other trades, firestopping is a discipline.

Several positive changes have been taking place in the firestopping industry. The philosophy has been to increase the in-place reliability of firestopping and effective compartmentation through proper design, installation, inspection, and maintenance. The standard approaches for each of these phases are as follows:

  • Design: Use tested and listed systems or engineering judgments.
  • Installation: Use firestopping contractors who are knowledgeable, approved, and qualified.
  • Inspection: Verify that the installation process is working.
  • Maintenance: Use specialty firestop contractors.

The DIIM (design, installation, inspection, and maintenance) philosophy ensures that firestopping has every chance to work properly—as the systems are designed to work—in the event of fire, smoke, or other emergency. The firestopping industry ensures that proper DIIM steps are taken by using the components listed below. (Note that it takes a real team—manufacturer, contractor, and workers—in all phases of the building life cycle to keep a fire and life safety system like firestopping and effective compartmentation working.)

Firestopping Quality Processes and Firestop Contractor Qualifications

The FCIA Manual of Practice was introduced in 2000, and significant updates were made in 2001 and 2005. This book is used to educate firestopping industry newcomers, as well as installers, estimators, architects, engineers, specifiers, fire marshals, building officials, and firestop contractors.

The FCIA Manual of Practice is used by firestop specialty firms as a training document. It is also the basis of the Designated Responsible Individual (DRI) exams used for Factory Mutual (FM) approvals—such as FM 4991, the standard for the approval of firestop contractors—and in the Underwriters Laboratories, Inc. (UL) Qualification of Firestop Contractor Program.

FCIA’s accreditation committee worked with both FM and UL to develop these programs as a quantifiable way to qualify a firestop contractor. FM 4991 is specified nationally in about 50 percent of specifications, and acceptance of the standard is spreading in additional market areas. These FM and UL contractor programs are audit programs of the firestop contractors’ management processes. They help contractors control the selection of firestopping systems and improve communications between managers and workers in the field regarding those systems. This results in the successful installation of proper firestopping systems in the field.

Inspection Standards

Every high-quality process has an independent check-and-balance system. For installation, inspection is the check to balance the operation. American Society for Testing and Materials (ASTM) E 2174 and ASTM E 2393, “Standards for the Inspection of Installed Penetration and Joint Firestops,” now give the specifier the ability to specify each inspection to a uniform protocol.

These inspection standards—developed with FCIA contractor and manufacturer member involvement, along with the International Firestop Council—are specified widely and used throughout the world by inspectors who are not related to the contractor in any way. (That means no suppliers, distributors, manufacturers, or competitors of the installing contractor.) To ensure complete objectivity, the inspection firm is hired by the building owner.

“We use the standards, or variations of them, daily for our inspection business,” says Rob Hlady of Affinity Firestop Consultants in Winnipeg, Manitoba, Canada.

Maintenance

Firestop contractors have performed maintenance services in buildings on firestopping, and they have been involved with other disciplines in compartmentation. Many specialty firestop contractors test fire and smoke dampers, as well as swinging and rolling fire doors. They also repair fire and smoke resistance-rated walls and floors for clients as a one-stop service provider. Standards are now being developed for this important part of effective compartmentation.

The Firestopping Trade

The recent transition in the firestopping industry and the standards that have resulted were all developed to bring reliability, respect, and an attitude of professionalism to the firestopping trade. There is now an increased focus on the importance of properly installing firestopping. The Firestopping Apprenticeship Program is one new initiative in the industry. The U.S. Department of Labor has worked with O-Net to create the classification code 47-2131.00, Firestop/Containment Worker, which falls under the “Insulation Worker” classification. This formally establishes firestopping as a trade. Because of this, firestopping can now become an apprenticable trade in the eyes of the U.S. Department of Labor.

Evolution

The evolution of a trade can take place in a variety of ways. Other trades evolved over hundreds of years. Firestopping in buildings was only invented in the late 1970s when the need arose from the Browns Ferry Nuclear Power Plant disaster. At that time, urethane foam was used as a firestop.

Test standards UL 1479 and ASTM E 814 were developed for penetrations, and they eventually evolved into UL 1479 and ASTM E 1366 for joints, and ASTM E 2307 for Perimeter Fire Containment Systems. But even if test standards are well written and manufacturing processes are International Standards Organization (ISO) qualified, it has been proven that unless a total system DIIM approach is used, firestopping may not perform as tested.

“In almost 30 years of existence, the firestopping industry is still evolving,” says Robert Gray of National Firestop, Ltd., in Winnipeg, Manitoba, Canada.

The firestopping industry has evolved in many ways in a very short time. In 1997, the only qualification that existed in the firestopping industry was the ASTM and UL Fire Test Standards for materials.

In a short 10 years, the firestopping industry has developed a complete DIIM mindset, with reputable standards in place for execution. The industry is working to develop standards and programs that will ensure that effective compartmentation is properly designed, installed, inspected, and maintained for all of our safety.

NIA Sites > Insulation Outlook Magazine > Global

Why Public Policy is Weak Medicine for Industrial Energy Costs

Before beginning this discussion, one point should be made clear: Legislative policy is a necessary yet insufficient tool for shielding the industrial sector from today’s volatile energy markets. Industry—meaning the facilities that transform raw materials into the final goods we consume—incurs energy bills that reflect myriad internal, day-to-day facility operating decisions. In general, manufacturers will assert that their internal business decisions are proprietary and off-limits to lawmakers. Accordingly, policy initiatives often focus on the supply side of the energy equation. Recent policies have attempted to ease restrictions on energy exploration and supply, which would ostensibly lead to lower energy prices. Supply initiatives, however, do not address consumers’ energy waste, which also inflates energy bills. As a practical matter, energy policy seeks to influence rather than control the decisions made by energy producers and consumers. These policies will, by their nature, have limited effectiveness in reducing industrial energy bills. Industry’s relief from runaway energy expenses ultimately depends not on legislative action, but on business strategies developed and executed within facilities.

Policy Versus Programs: What’s the Difference?

Public policies are concepts around which laws, standards, and regulations are developed by legislative bodies (lawmakers) at federal, state, or local levels. Programs are administrative activities designed to implement policies. Public policies are developed from original recommendations, or bills, which lawmakers then hammer into a final form through deliberation. A bill, in its final draft, must be ratified by an executive branch of government to become law. Broad energy-market policies are largely a federal concern. State and local energy policies tend to focus on building codes and construction standards.

Energy policies generally either restrict or encourage certain investment activity. Restrictions tend to focus on the terms and conditions for fossil-fuel exploration, extraction, and refining, as well as the interstate transmission of gas and electricity. Restrictions also prescribe performance standards to which entities must adhere when designing buildings and operating certain energy-using equipment. Policies often impose penalties against entities that do not meet prescribed criteria, which obviously requires some kind of administrative enforcement function. Energy markets are influenced by policies that encourage investment, usually through tax incentives, in certain kinds of energy-related equipment. Policies also authorize development of energy-themed programs.

Programs are activities carried out by government agencies. Each program reflects an agenda with clear themes, milestones, and objectives. Traditional energy-program initiatives include technology research and development (R&D) and market-transformation activities (these will be explained later). Note that policies authorize programs, but program funding usually requires a separate legislative action. In other words, the policy act of authorization “makes a parking space” for a program concept, but the decision to allocate (or “park”) funds is a separate matter.

Energy-Policy Stakeholders

Industrial energy consumption is a complicated matter that touches many decision makers in a variety of ways.

  • Industry’s corporate leaders are keenly aware of their rising energy expenses. These leaders demand relief primarily in the form of lower prices.
  • Facility managers note the growing lack of skilled human resources needed to run their plants and keep pace with new technologies. They want training resources for existing staff as well as properly educated new employees.
  • Vendors want to sustain industry’s demand for the motors, pumps, insulation, controls, and other equipment that manufacturers rely on for their operations. Vendors want tax credits and other incentives to raise the demand for their products.
  • Facility engineers are responsible for the reliability of plant equipment. They evaluate the technology options for meeting production goals. Engineers want unbiased guidance to sort out the promises made by equipment vendors.
  • Universities host much of the activity funded by energy R&D expenditures. They want sustained government support for new technology development.
  • Gas and electric utilities must maintain the infrastructure that delivers energy to all consumers, including industry. Business planning is a difficult chore for utilities, since their customers’ energy supply and demand projections must be sorted out before the utilities can decide on their optimal levels of infrastructure investment.
  • Environmental advocates challenge the unnecessary depletion of natural resources and seek to restrict energy-related practices that negatively affect air and water quality.
  • Efficiency proponents note that energy depletion can at least be tempered through advanced technologies and best-practice procedures. Efficient use of traditional energy sources helps buy time while advanced technologies and alternative fuel sources are being developed.

All of these stakeholders have valid agendas. It is easier for lawmakers to craft individual policies for each of these agendas; a policy framework that backs all of them simultaneously is problematic. None of the agendas, taken alone, represents the comprehensive solution to industrial energy challenges. Instead, an effective solution will involve all of these elements, orchestrated through energy management plans crafted at the facility level. Energy management plans can be as many and as varied as the number of industrial facilities that dot the landscape. This is because each facility is uniquely characterized by its purpose, design, operations strategy, maintenance history, business objectives, and staff culture. As a consequence, there is no one-size-fits-all energy management protocol, nor is there a comprehensive policy design for facility-level energy management.

Who Speaks for Industry and What Do They Want?

Lawmakers are responsive to the constituents and advocacy groups who bother to articulate their needs and wishes. If policy is the result of “listening” to constituents, then who speaks for industry? Is it the midlevel technocrats or the corporate leaders of holding companies that own entire portfolios of manufacturing enterprises? This is a distinction of great consequence. Holding company directors know where their dollars go, but they may or may not fully understand the technical aspects of the operations under their control. They are happy to delegate technical issues—like energy—to midlevel managers. Lawmakers are more likely to network with corporate leaders than with factory technocrats. Corporate leaders, therefore, serve as “industry’s voice” about needed legislation.

How might corporate leaders express their energy wishes? As the United States produces ever-fewer engineering and technical degree holders, there is a growing disconnect between nontechnical corporate leaders and the facilities they ultimately manage. In other words, corporate priorities are increasingly set by people who have no concept of how heat, force, and motive power are applied to raw materials to transform them into the products we use every day. Many policy professionals are similarly uninformed. “Price” is one of the few concepts that is universally understood. Supply-oriented policy initiatives that seek lower energy prices will perfectly fit the expectations of finance-minded corporate leaders.

What Are Energy Policy Options And How Good Are They?

One of the last acts of the 109th U.S. Congress, which adjourned in December 2006, was to deliver a policy initiative that emphasized more energy exploration, supplies, and infrastructure. There are two main dimensions to supply-oriented energy policy: 1) Regardless of how efficient a facility is, it will benefit from lower energy prices; and 2) for a fixed level of demand, more supply will ostensibly drive market prices lower. Opponents to this approach typically cite the negative environmental impacts that accompany the increasingly intensive extraction of fossil fuels. There are also compelling arguments about the dwindling supplies of fossil fuels and the need to develop alternatives, as well as concern over climate change that is attributable to fossil fuel combustion.

Refineries and power-generating plants are key components of energy infrastructure. Policies that reduce regulatory restrictions on the construction of energy infrastructure will presumably boost energy supplies and therefore reduce energy prices. Interests opposed to this approach are again concerned with environmental impacts. But even with regulatory approval, new energy supplies and infrastructure will take years to establish. Supply-oriented policy initiatives—like those that promote more energy exploration and production—will be only partial solutions to industry’s energy-cost woes. Alternative policy approaches address the demand side of energy use. A variety of demand-oriented policy concepts exist, and each is backed by one or more advocacy groups that work hard to make its agenda visible to lawmakers. However, each approach has certain shortcomings when translated into policy.

Energy technology R&D. The development of advanced energy technologies is a task that few companies can pursue alone. Many technologies—like combustion, heat transfer, advanced materials, and controls—will have wide application across industries. Therefore, no one company or industry wishes to shoulder the burden of their development. The time, risk, and money that characterize R&D are best orchestrated through government-industry collaboration.

Problems with technology R&D include the following:

  • It takes years to come to fruition.
  • Human skills do not necessarily keep pace with technology advances.
  • Industrial facility managers need to improve their current energy housekeeping before investing in new technologies.

The logic is simple: New capital investment projects are more likely to meet their projected payback if they are complemented with energy-smart maintenance and operating procedures.

Alternative or “renewable” fuels. Wind, solar, biomass, and other non-fossil fuels are necessary components of the energy future. One of the hurdles to ramping up these investments, however, is the tangled mess that describes the current state of utility deregulation. Before committing to these alternative fuel assets, investors need more certainty regarding the following:

  • Ongoing viability of traditional fossil fuels
  • Future maintenance and overhaul of the national electricity transmission system
  • State-by-state patchwork of utility distribution costs and requirements
  • Tax structures that directly affect all of the above

Greater efficiency. Efficiency-oriented policies tend to use tax incentives and design standards to encourage (if not compel) specific energy-related investments. Equipment choices include high-efficiency electric motors, pumps, or lighting. But in an industrial setting, sustained energy cost control is more dependent on whole-system designs than on isolated components. Facilities will achieve greater savings from an overarching energy-use strategy that harmonizes behavior and procedures to harness the benefit of efficient equipment. Increased efficiency requires manufacturers to change how they use energy and make energy-related decisions. Organizational complexity and inertia are barriers to such changes.

Market transformation programs. This evolutionary concept emerged in the 1990s and is increasingly pursued at the state level. Market transformation attempts to bring emerging technologies and behaviors into mainstream practice. This approach uses promotional strategies to effectively raise industry’s demand for emerging technologies. It may encompass the concepts described above, including greater efficiency, alternative fuel use, and investment incentives. Market transformation requires government collaboration among energy end users, energy utilities, and equipment vendors. The challenge is that market-transformation programs influence but do not compel industrial decision making. It is difficult for these programs to engage industrial organizations, since the appropriate facility contact is actually a team of decision makers, all of whom have varying interest in energy issues and have other matters competing for their attention. Also, while vendors play a critical role in market transformation, care must be taken to not let them co-opt such programs for overtly commercial purposes.

Industry certainly needs energy price relief. But in addition to the “more supply” envisioned by many corporate leaders, industry needs technology R&D, efficiency, and alternative energy development if it is to achieve an effective solution to runaway energy costs. It should be noted that lawmakers squeeze their work onto tightly packed session agendas. Hammering a legislative bill into law requires trade-offs and compromise, so policy suggestions that are overly complex or vague have little chance for ratification. Simple messages are easier to process in the policy arena.

Real Solutions Are Beyond Policy’s Reach

More supply, technology R&D, efficiency, and renewables: These are the energy-policy options for lawmakers to ponder. Only so many federal dollars can be allocated to energy programs, so these become competing options. Distinct advocacy groups back each approach, and obviously these groups need money to operate. Each group has its backers who will benefit if the government supports its particular niche. This means advocacy groups—representing either more supply, R&D, efficiency, or renewables—compete with each other. In addition, the “simple-message” advocacy strategy discourages cooperation among advocates. Note, for example, that many general observers tend to confuse “renewables” with “efficiency.” This confusion becomes problematic when deciding where to allocate sponsorship dollars. Advocates are compelled to stick to their niche, because visibility lent to other agendas may be at the expense of one’s own. Segmented energy-policy concepts are valuable to individual advocacy groups but are of limited value to industrial energy consumers. Unfortunately, a comprehensive energy policy for which the whole has a greater value than the sum of the parts has no backer. For advocates, it simply does not pay to take a comprehensive position.

Manufacturers cannot expect policy alone to solve energy-cost challenges. Consider that of all energy delivered to U.S. industrial facilities, about 40 percent is not applied as intended to works in progress. In other words, a lot of energy is wasted. While lower fuel prices certainly help, energy-cost control comes primarily from within industrial facilities. Each industrial facility must take control of its own energy fate through energy-optimization plans that set goals, establish internal leadership, and assign accountability for results. Each facility is unique, and so is its optimal energy strategy. Public policy is weak medicine for energy issues and certainly is no replacement for good managerial decision making.

NIA Sites > Insulation Outlook Magazine > Global

The State of the NIA World Is Good

The state of the “NIA World” can only be described as good. Although 2006 was not without its challenges, it is hard to find an industry participant who did not have a good year and is not optimistic about 2007. Projects are plentiful, sufficient capacity of materials is available, there is a shortage of qualified labor, and margins are trending in a positive direction—all of which directly translates to improved profitability. Depending on one’s definition, in fact, “good” may be conservative.

The U.S. commercial and industrial mechanical insulation world is full of opportunities, while the challenges facing the industry are relatively small in comparison to the difficulties present in today’s complex global marketplace. The industry continues to adjust to market and competitive demands, as well as the fluctuating economy and political climates. The industry’s resilience and flexibility is taken for granted by some and baffles others. As with all industries, when business is robust, the bad times are easily forgotten; when business is slow, the whining and hoping for better times becomes the center of the universe. The good times—or the latest market recovery—for the NIA World began in late 2003 and early 2004, and it is forecast by many to continue through 2007. Some forecast a flattening of the market to begin in late 2007, and they have begun to examine its potential effects on their businesses; others are beginning to practice the art of whining.

With a market subject to cycles that are driven by factors outside the direct control of industry participants’, continual change is inevitable. The NIA World is not immune to that characterization. It is vulnerable to cycles that create opportunities and challenges that have proven to net long-term market growth and, in some cases, fundamental changes in the industry. Some of the changes are temporary in nature, while others have become imbedded in the core of the industry.

Regardless of whose crystal ball one looks into, the opportunities appear to be abundant. Projected growth rates vary by product, geographic area, industry segment, market, etc. Even the most doomsday forecast, however, does not predict any significant decline in business for the NIA World over the next several years. Of course, to some a flattening or slight decline may be seen as a catastrophe requiring defensive actions to preserve what they deem to be acceptable performance. To others, it is an opportunity to breathe and strengthen the ranks for the next surge in business. These varying opinions and positions motivate much discussion in the NIA World (some call it rumor control central).

Here are a few of the most current opportunities, challenges, and potential fundamental changes in the insulation industry.

Acceptance of Foreign-Manufactured Materials

Ever since the two catastrophic fiberglass manufacturing facility fires in 2003, import and acceptance of foreign-manufactured materials have been more amenable to all industry participants. This is true for the fiberglass segment, as well as all other material segments. Distributors who had their supply line alliances and views on demand versus supply challenged as a result of the fires are much more open to establishing alternative supply sources. Contractors who had difficulty obtaining materials certainly have a different approach to the market as it pertains to alternative materials. The end user, in many cases, does not place primary importance on “made in the United States” if the product meets the specification. Therein lies a very important question: Does the foreign-manufactured material meet the specification? It may look and feel the same—and come in a similar wrapper—but are the composition, health and safety aspects, quality, and performance standards measured on the same basis as U.S.-manufactured materials?

This discussion is not focused on manufacturers that are major contributors to the U.S. market and have plants outside the United States. They may have supplied material or supplemented their U.S. manufacturing from those plants both before and after the 2003 fire era. Instead, materials imported through a variety of other channels are the focus of this discussion.

Imports increased dramatically in the months immediately following the 2003 fires and began subsiding within a year. The estimate as to their current market share varies greatly. It is believed to be relatively small, but it still poses a continual threat.

This article does not suggest that imported materials are inferior to those manufactured in the United States. It simply raises a caution flag to individuals and companies considering the use of foreign-manufactured materials. Are the materials tested and performance measured on the same basis as U.S. materials? The burden of proof and ownership of the material ultimately lies with the end user, but all channel participants involved in the decision-making process will shoulder some degree of responsibility if a failure occurs. A failure of any magnitude, regardless of cause, is detrimental to the industry. Assumption of equivalence and warranty support could be costly.

Most materials are subject to multiple tests—including thermal conductivity, compression strength, and fire rating—to validate their performance. Do we, as industry consumers, see the test listed on a data sheet and take for granted that the material was tested in accordance with the listed standard, and that the results are current and actual? Of course we do. But what do we know about the respective standard? Does the manufacturer need to test its materials on a regular basis, or can it test the material once and continue to publish the same results even if the manufacturing process or composition has changed? Can testing be done in house, or is third-party testing required? Who polices the validity of the published data? All of these are interesting questions, and their importance is potentially compounded with foreign-manufactured materials.

What is the role of the organizations that have established the standards by which the materials should be tested? What is the role of the manufacturer? What is the role of competitive manufacturers? Should they be the police and challenge the results of their competitors? What is the role of the distributors or contractors? Should they ask for copies of the actual test reports? The NIA World has been basically self-policing and trusting the published information. That is not a bad model. However, the world has changed. Industry members operate in a complex, competitive, and legalistic global market that requires all companies to have greater knowledge than ever before on a variety of subjects, including material standards, test procedures, and test results.

Manufacturers are generally more knowledgeable about testing procedures and standards than distributors and contractors. Many specifiers and end users rely solely upon channel participants for knowledge on this subject or simply request assurance that all materials comply with the listed standards. Given the importance and the varying degrees of knowledge on testing procedures and standards, the industry may need to look at an educational initiative on the topic. Perhaps the organizations establishing the standards or testing procedures should take the lead. It would be beneficial to all direct and indirect industry participants. Business is just not simple anymore.

Product Innovations

Manufacturers have improved—and will continue to improve—the materials they offer to the industry. They are addressing the quality of their materials, packaging, delivery, administrative processes, and a host of other initiatives to improve quality and customer service, and to lower cost. The industry needs that commitment to improvement. To those committed to that end, on behalf of the industry, thank you.

True product innovation has not been one of the cornerstones of the industry over the last few decades. Many great improvements have been introduced; but truly new products, finishes, and application methods have been limited or slow in coming. In the last several years, however, there appears to have been a surge of new products and approaches—from nanotechnology insulation systems to finishes and application techniques that are intriguing and may offer significant advantages.

Product innovation and continual rollout of new products and systems add excitement to the industry and give everyone a renewed opportunity to sell. What a novel idea: Sell new products and systems, emphasize the values of reliable customer service, and differentiate your company from the competition. That sure sounds more motivating and rewarding than the old price game.

To those manufactures driving product and application innovation, more power to you! To those who are not, we will “leave the light on for you.”

The industry may want to consider being more diligent in examining and educating industry participants about new products or possible crossover products from other industries. If warranted, the industry may want to take a more active role in embracing the introduction and use of these crossover products in the NIA World, pointing out the differences in testing procedures, standards, and properties. These products may be great, but their performance may be highly reliant on specific installation procedures, and it may be measured by different standards that are not traditionally recognized in the mechanical insulation industry.

Too many new products or choices could lead to market confusion. That is a real-world problem in a competitive market, especially when an industry does not have a governing body. Education is a real positive.

Erosion of the Mechanical Insulation Knowledge Base

The knowledge base of mechanical insulation systems at the engineering, architectural, and facility-owner levels over the last 15 to 20 years has, in many cases, eroded. The root cause can be summarized as a by-product of the corporate world’s drive for profits, right sizing, multitasking, etc. Regardless of the cause, the fact remains that mechanical insulation is not a field that is currently attracting specialization in the engineering, architectural, or maintenance arenas. This reduced knowledge base has led mechanical insulation to be improperly used (or not used at all) and undervalued in many applications.

For years, insulation manufacturers were the educators of the industry. They had specialists who focused on the engineering, architectural, and facility-owner communities, and they did a good job. They fell victim to the same root cause as the engineering and architectural communities. While some manufacturers have now returned to their education efforts, it is more difficult than it was just a few years ago. The electronic age, time pressure, and the need to contact so many more people have made it difficult to spend quality time with influential individuals in the specifying community.

Awareness and education need to be major focal points of the industry. Improved awareness of the benefits of properly specifying, installing, and maintaining mechanical insulation systems is more important to the industry today than it ever has been. As the proper and additional use of mechanical insulation improves, everyone—including manufacturers, contractors, distributors, and, most importantly, end users—benefits.

Increased knowledge and use of mechanical insulation can provide an unrivaled return on investment (ROI) opportunity in both the new construction and maintenance markets. It can also help reduce dependency on foreign energy sources, improve the environment, and grow the economy. But how many specifiers and end users understand this and can quantify the ROI?

Awareness of and education about the benefits of mechanical insulation at all rungs on the ladder are essential to the growth and prosperity of the industry. The challenge is to accomplish that objective in a reasonable time period, in the most efficient and cost-effective manner. One thing is clear: The responsibility for this rests on all industry participants. No one segment or company can or should be asked to bear the total burden. All industry participants will benefit, so they should all bear the moral, ethical, and financial responsibility. This is not something that can be solved overnight or by a one-time financial contribution. This is an ongoing opportunity to improve and grow the industry. What an opportunity it is! Now is the time to think about mechanical insulation, the industry, and the role of your industry association differently.

The Changing Investment Within the Industry

For many years the contractor and distributor segments of the mechanical insulation industry have been characterized as a group of small, family-owned and -operated businesses. That same characterization applied to many of the smaller manufacturers. There are several second- and third-generation companies in the industry. Some companies have executed a successful transition of ownership to management, while others sold their companies to other industry participants (industry consolidation). Does this characterization still apply today? Will it apply 5 years from now?

Consolidation over the last 10 to 15 years certainly has changed the industry’s profile. It is more evident in the distributor and manufacturer segments than in the contractor segment, but it has still affected contractors. With only a few exceptions, consolidation has so far been driven by industry participants rather than outside investors. Is that changing?

The mechanical insulation industry is now attracting more investment banking firms to invest in the industry. The building products industry, and especially the mechanical insulation segment, traditionally has not been a primary target or attraction for investment. That could be changing. How will this affect the industry?

Investment banking firms normally take a hands-on approach with their investments by providing financial, advisory, and/or management services where needed, or assisting the company in executing its strategic plans (such as mergers, divestitures, acquisitions, and restructuring). They bring a fresh approach by examining traditional ways of doing business and looking for ways to improve performance. The biggest difference is potentially the long-term view of ownership or investment in the business.

Investment firms are in business to make money on their investments for the benefit of their shareholders. Why else would they be investing? Their view is normally shorter term than many “inside” or “family” investors. There may not be a magic formula, but it certainly is perceived that investment banking firms pursue some form of significant financial transaction on their investments within 3 to 7 years. There are many types of potential transactions that could occur, not just selling the business.

Investment firms may have a different view of acceptable financial performance and a company’s worth than that of an inside or family investor. The investment firm continually seeks to raise the bar, challenging the logic that “this is how we have always done business.” Examining and exploring new avenues to improve performance can only be viewed as a positive direction for the industry. No one will ever object to increased profitability and value for a company. Unfortunately, that success sometimes comes with a price that can create individual hardships. The “good old boy” ideals and family atmosphere of a company could take on a different perspective. Change sometimes can be difficult. Change is not always wrong, though—just different.

The dynamics that investment banking firms could, and probably will, bring to the industry will be well received by some and dreaded by others. (“Beauty is in the eye of the beholder.”) History will be the judge and jury of their contribution to the industry. One thing is for sure: It will be exciting, while challenging, and will present many opportunities to all industry participants.

Field Labor Shortage

A shortage of qualified labor in any industry creates its own set of unique challenges. The question—about which there are varied opinions—is this: Will the shortage in the mechanical insulation industry be a short-term or a fundamental, long-term challenge?

The mechanical insulation industry is represented by both union and non-union labor forces. The problem appears to be universal to both segments and varies greatly by geographical area. Each segment has its own approach to recruiting and training personnel. However, if the shortage is expected to be long term, both segments should accelerate investment in their programs.

Immigration laws and their enforcement can affect recruitment efforts, but that should not be the only recruitment avenue pursued—nor should it be hidden behind as a barrier to recruiting personnel. The opportunities available in the mechanical insulation industry are not well known in high schools, trade schools, or colleges. Many people do not understand the insulation trade. They do not understand that mechanical insulation is a major contributor to the country’s energy independence, to protecting the environment, and to helping U.S. manufacturers compete in a global market. They do not understand the opportunities that are available, or that working in the industry could offer them a source of pride. Maybe the industry needs to examine some grassroots approaches to a long-term recruitment program and reduce its dependence on short-term migrant labor. That is something to think about.

The Need for Financial Benchmarking and Industry Information

How does your company’s performance compare to the industry average? Is revenue up or down? Maybe your revenue is up 2 percent, but the industry’s is up 8 percent. Say you are looking to sell your company, and the potential buyer asks for information on the industry. Where do you send them to get the information? There are many reasons the mechanical insulation industry would benefit from performance benchmarking and industry data.

In the past, many participants from all industry segments have reacted negatively to participating in surveys that contained information pertaining to their companies’ performance. The reaction has been, “My company’s information is super-secret stuff.” Whether that reaction is driven by trust-related matters or not understanding the value of having meaningful comparative data, or both, remains a mystery.

There are many key factors that influence the need for new data, including the following:

  • The industry has grown.
  • The profile of the industry has changed.
  • Outside investors are looking more closely at the industry.
  • Insulation is and is destined to be a larger part of the country’s energy conversation and environmental protection strategy.
  • Internal and external shareholders want more information.

Is it time to revisit the value of and process for obtaining timely and meaningful company performance benchmarking and industry data?

The value of this type of information is different to each industry segment. Different questions apply to manufacturers, contractors, and distributors. Participants from each industry segment would view the information from different perspectives, but it would be beneficial to all. Amassing the information could be accomplished by a reputable third-party firm that specializes in gathering, analyzing, and publishing data in a process that maintains the confidentiality of “super-secret stuff” and does not offer an advantage to any one reader or group. The mechanical insulation industry is overdue for this information. Yes, some industry participants may be unique in many aspects; but other industries have unique areas and casts of characters, and they have developed performance benchmarking and industry data that is updated on a regular basis. Is the mechanical insulation industry that different?

Other Challenges and Opportunities

Subjects for another day—or areas that warrant monitoring as either opportunities or challenges—include the following:

  • Vertical integration for certain product lines
  • Importers circumventing the distribution channel
  • Importers and/or brokers using price as their market-entry strategy
  • Manufacturers exploring new approaches to attract and retain customer or product loyalty
  • Continual consolidation of the industry in all segments
  • The “backslide” of price increases in some product lines over the last year, which may drive the need for larger or smaller, more frequent increases in the future
  • The world market possibly driving price escalation in certain product lines (like aluminum and stainless steel)
  • Sustainable design (thinking green) gaining more momentum
  • The nuclear industry (new plants) possibly returning to the United States as the need for additional power generation continues to increase
  • Succession planning taking center stage at many companies
  • The industry possibly approaching the “post-asbestos litigation” era, as more companies successfully emerge from bankruptcy protection
  • The potential for increasing imports of more accessory-type products
  • Efforts by the European insulation association (Fédération Européenne des Syndicates, or FESI) to establish a foundation to support market awareness and education initiatives similar to NIA’s Foundation for Education, Training, and Industry Advancement
  • Product innovation and new application techniques continuing to influence the market
  • Project scheduling becoming compressed, compounding labor-shortage challenges
  • A decrease in the rate of new insulation contractors entering the market (a normal occurrence when work is abundant and there is a labor shortage)
  • Asset management continuing to be a major focus in all segments
  • The importance of safety being emphasized throughout the industry
  • Abatement beginning to reach a normal level of activity
  • An increase in insulation maintenance activities
  • Electronic education, distance learning, Webinars, etc., increasing as employers seek to provide affordable education and training to more people
The Bottom Line

The NIA World is alive and well. It is stronger today than it has been in years and is continuing to grow. The mechanical and industrial insulation industry is not without its challenges, but the opportunities are far greater than the difficulties.

The need to communicate and educate specifiers and end users about the benefits of properly specifying, installing, and maintaining mechanical insulation has never been greater or more timely. Consider the following topics: energy conservation, process control, condensation control, mold prevention, corrosion under insulation (CUI), reduction of greenhouse gas emissions, safety, workplace environment, sustainable design, and ROI. Any of these is vital in today’s business environment. Mechanical insulation receives little respect and is taken for granted. While insulation is a powerful resource when designed, applied, and maintained properly, this technology is often forgotten or put on the bottom of the list and ignored. This valued technology is misunderstood by many, and is underutilized and undervalued. Now is the time to change that by thinking about insulation, the value of insulation, and the role of your association differently. Now, possibly more than any other period in recent history, is the time to invest in industry initiatives.

The industry is continually changing, opportunities are developing in all segments, and the challenges are not insurmountable. A recent report by an international research group forecast that the total world market for mechanical insulation would increase by 3 to 5 percent annually through 2009. The North American market, depending upon the segment, would experience annual growth rates of 2 to 5 percent during that same period. Adding up all of the components yields a great formula for success. This is an exciting time for the industry, its participants, and the National Insulation Association. The NIA World is a good place to be.

NIA Sites > Insulation Outlook Magazine > Global

The Role of the Association of Energy Engineers in Energy Management

Many important factors have changed the landscape of the energy management industry and the use of insulation. These factors include the following:

  • The Energy Policy Act of 2005, which requires all federal facilities to reduce energy consumption 2 percent per year and provides tax deductions to commercial building owners who improve the efficiency of the building envelope
  • Volatility in energy prices, which encouraged the adoption of energy-efficiency technologies and insulation as a strategy to increase profitability
  • Cities and states that have developed programs to reduce greenhouse gases and encourage the use of energy efficiency and insulation

How do building owners and managers, facility managers, and utility professionals keep abreast of the latest energy management strategies? Training and certification are the key elements for success in the energy management industry.

Continuing education is critical for energy engineers and other energy managers, especially with regard to industrial and mechanical insulation. It is very important to understand how to properly engineer, apply, and maintain insulation systems. Insulation training programs can provide professionals across all market segments and job functions with a working knowledge of insulation and insulation systems design. Taking advantage of educational opportunities broadens the knowledge base for end users, and it makes them more effective and successful in their careers.

The Association of Energy Engineers

The Association of Energy Engineers (AEE) was founded in 1977 as a nonprofit professional society that promotes the scientific and educational aspects of the energy industry. In the 1970s, the professions of energy engineering and energy management were new concepts. The AEE helped define the important functions energy engineers and managers perform, playing a key role in the professions’ development. One of the AEE’s first tasks was to create an authoritative journal that would guide energy engineers in applying new energy-efficient technologies and applications. The Energy Engineering Journal was born out of this need; it is edited by noted authority Dr. Wayne Turner.

The AEE recognized that energy engineers need both technical and management skills. Energy engineers need a broad understanding of fuels procurement, commodity and risk management, and organizational and motivational skills. Strategic Planning for Energy and the Environment, also edited by Dr. Turner, was developed to meet this need. To help energy engineers meet the challenges of power reliability and the development of new energy supplies, the Cogeneration and Distributed Generation Journal was launched; it is edited by Dr. Steven Parker.

Today, the AEE’s ever-growing network includes 8,000 members in 77 countries, with local chapters in 69 cities across the United States. The AEE presents numerous training and certification programs to help energy professionals reach their full potential.

Continuing Education Programs

The AEE offers a wide range of training options. Each training course offers continuing education units (CEUs). One CEU equals 10 professional development hours (PDHs). CEUs are important for documenting courses successfully completed. For example, in 2005, 27 states required CEUs as a prerequisite for a professional engineering license renewal. In addition, a certificate of participation is awarded for each course attended. The AEE currently offers several types of continuing education programs, as do other groups. The following are some examples of AEE programs for energy engineers:

  • Live Seminars. A wide range of courses is available in various cities across the United States. Several of these seminars are designed to prepare students for professional certification examinations. Live programs offer an optimum learning environment with ample time to interact with the instructor, as well as other colleagues in attendance.
  • In-House Seminars. Most of the live seminars, including professional certification training programs, also can be presented to employees at a company’s facility.
  • Real-Time Online Seminars (Synchronous). Students can participate in real-time seminars from the office or home using the Internet and a telephone. They communicate through a scheduled conference call with the instructor. The instructor’s PowerPoint presentation is viewed by students via the Internet connection.
  • Self-Study Online Training Seminars (Asynchronous). Students receive a workbook with training materials and examination questions. They complete the training at their own pace and can interact with the instructor and fellow students during scheduled chat sessions. After successfully passing the online examination, students receive a certificate of course completion and are awarded CEUs.
  • 24-7 Online University (Asynchronous). Course material is accessed online 24 hours a day for up to 30 days. Students who pass the online examination can print a certificate of course completion and are awarded CEUs.
  • Conferences and Expositions. The AEE offers three conferences and expositions each year. The purpose of these events is to present the latest technologies and applications from leading experts in the field. The flagship event presented by the AEE is the World Energy Engineering Congress (WEEC). The next WEEC will be held at the Georgia World Congress Center in Atlanta, Georgia, August 15–17, 2007. The conference technical presentations will address the following topics: green buildings; high-performance schools; heating, ventilating, and air conditioning (HVAC) and building systems; measurement and verification issues; and insulation as a high-performance building strategy. The conference also will cover additional topics related to the energy engineer and energy management professional. More information on WEEC 2007 is available online at www.energycongress.com.
Certification Programs

The Certified Energy Manager® (CEM®) credential is widely accepted and used as a measure of professional accomplishment in energy management. It is used industry-wide as the standard for qualifying energy professionals in the United States and abroad. It is recognized by the U.S. Department of Energy (DOE), the Office of Federal Energy Management Programs (FEMP), the U.S. Agency for International Development (AID), numerous state energy offices, major utilities, corporations, and energy service companies.

Those who attain CEM status join an elite group of 6,000 professionals serving industry, business, and government in the United States and in 22 countries abroad. These high-achieving individuals represent a “who’s who” in the energy management field.

The Business Energy Professional (BEP) program awards special recognition to professionals who demonstrate a high level of competence and ethical fitness in disciplines related to business, marketing, and energy management, as well as with laws that govern and affect energy professionals. The goal of the program is to improve energy management by encouraging energy business professionals to participate in continuing education programs.

More information on the CEM or BEP certification programs is available at www.aeecenter.org/certification.

Training Courses Incorporate the Role Of Insulation

Proper use of insulation makes good business sense because it is cost-effective and easy to apply. It provides an unmatched return on investment (ROI) in a short period of time. Energy managers and engineers who understand the proper use of insulation are better prepared to increase savings of both energy and money on each of their energy-related projects. The CEM and BEP programs provide an integrated approach for energy management, including how to properly use insulation and improve building performance.

The AEE is committed to helping energy professionals reach their potential through training and certification. More information is available at www.aeecenter.org.

NIA Sites > Insulation Outlook Magazine > Global

The 110th Congress, Insulation, and Energy Efficiency

The U.S. House of Representatives and Senate changed hands as control of both chambers was given to the Democratic Party after the midterm elections in November 2006. As a result, the 110th Congress that began work in earnest in January 2007 was ready to take on energy policy with a renewed vigor and sense of determination.

Fortunately, building-sector energy efficiency is not a particularly controversial energy issue, and it has champions and defenders on both sides of the aisle. In the first weeks of the 110th Congress, energy and energy efficiency were already front-and-center issues. Numerous bills were introduced that could directly or indirectly affect the insulation industry through tax incentives, funding for energy-efficient technologies, green building authorizations, and climate-change legislation. In addition, a new Select Committee on Climate Change was announced, hearings were scheduled, and strong statements from leadership filled the news media. All of this activity occurred before President Bush’s State of the Union address in late January (see “Bush’s Alternative Fuel Use Growth Initiative Represents Over $45 Billion in Capital Investment Over the Next 10 Years”) and the budget release in early February. Members of both the House and the Senate have been staking out their claims on energy issues and working to fulfill campaign promises to change the way the United States uses energy.

Key legislative initiatives of specific interest to the insulation industry already have been introduced in the Congress, with more expected in the coming months. The change in leadership in both the House and the Senate, coupled with congressional commitment to making energy a priority issue during 2007, will provide a tremendous opportunity for energy-efficiency advocates to educate policymakers about the important role that insulation plays in reducing energy use.

Key Legislation That Could Affect the Insulation Industry

Several key bills were introduced in January in the U.S. House of Representatives. These include the following:

  • H.R. 6—CLEAN Energy Act of 2007. The most important move for energy efficiency in the first month of the 110th Congress was when the House Democratic leadership pushed through the final piece of the “100 Hours” legislation, H.R. 6, by a vote of 264 to 163. Introduced by Rep. Nick J. Rahall (D-W. Va.) and others, the CLEAN Energy Act of 2007 seeks to reduce U.S. dependency on foreign oil through investment in clean, renewable, and alternative energy sources. The bill creates a “strategic energy efficiency and renewables reserve” to invest in alternative energy and to accelerate the use of clean domestic renewable energy resources and fuels; to promote the use of energy-efficient products; and to increase research for energy-efficiency and renewable technologies. Sen. Jeff Bingaman (D-N.M.), the chair of the Senate Energy Committee, has announced plans to place the bill directly onto the Senate calendar for consideration and amendment. However, Senate passage of the legislation as written is not assured.
  • H.R. 84—Energy Efficient Buildings Act of 2007. Introduced by Rep. Judy Biggert (R-Ill.), H.R. 84 establishes a pilot program, to be implemented through the Department of Energy (DOE), that will award grants to businesses and organizations for the new construction of energy-efficient buildings or for major renovations of buildings to improve their energy efficiency. The bill authorizes $10 million per year for 5 years to carry out this program.
  • H.R. 85—Energy Technology Transfer Act. Introduced by Rep. Biggert (R-IL), H.R. 85 creates a network of Advanced Energy Technology Transfer Centers that will meet needs and opportunities for increased energy efficiency in both manufactured and site-built homes, including construction, renovation, and retrofit.
  • HR 121-High—Performance Green Buildings Act of 2007. Introduced by Rep. Mike Doyle (D-Pa.), H.R. 121 requires the director of the General Services Administration (GSA) to establish a new Office of High-Performance Green Buildings, which will coordinate all federal offices, as well as a Green Building Advisory Committee. Studies conducted under this bill will include existing and new structures. The bill authorizes $4 million per year for 6 years to carry out this activity.
  • H.R. 539—Buildings for the 21stCentury Act of 2007. Introduced by Rep. Allyson Y. Schwartz (D-Pa.), H.R. 539 increases the amount of deductions for energy-efficient commercial buildings, and it extends the credit from December 31, 2008, to December 31, 2013.

The following key legislation was introduced in January in the Senate:

  • S. 6—The National Energy and Environmental Security Act of 2007. Introduced by Senate Majority Leader Harry Reid (D-Nev.), S. 6 would reduce U.S. dependence on foreign oil and unsustainable energy sources in the following ways: 1) by requiring reductions in emissions of greenhouse gases; 2) by both diversifying and expanding the use of environmentally friendly energy supplies and technologies; 3) by reducing the burdens on consumers of rising energy prices; 4) by eliminating tax giveaways to large energy companies; and 5) by preventing price gouging, profiteering, and manipulating the market.
  • S. 280. Introduced by Sen. Joe Lieberman (I-Conn.), S. 280 requires the DOE to reduce greenhouse gas emissions through the deployment of energy-efficiency measures, including appropriate technologies, by large commercial customers by providing for audits. The program will encourage large users of electricity or natural gas to obtain energy audits by providing incentives.
  • S. 309—Global Warming Pollution Reduction Act. Introduced by Sen. Henry “Hank” Sanders (I-Vt.), S. 309 calls for the stabilization of global atmospheric concentrations of greenhouse gases below 450 parts per million (ppm). It also calls for an 80-percent decrease (compared to 1990’s levels) in global warming pollutants by 2050 by enacting a combination of mandatory reduction targets and incentives that will help develop clean alternative energies.
  • S. Res 30. Introduced by Sen. Joseph R. Biden, Jr. (D-Del.), S. Res. 30 states that the United States should act to reduce the risks posed by global climate change and should foster sustained economic growth. According to this bill, these goals should be accomplished in the following ways: 1) by participating in negotiations under the United Nations Framework Convention on Climate Change with the objective of securing U.S. participation in agreements that advance and protect U.S. economic and security interests; 2) by establishing mitigation commitments by countries that are major emitters of greenhouse gases; 3) by establishing mechanisms to minimize the cost to participating countries; and 4) by achieving reductions in greenhouse gas emissions. Furthermore, a bipartisan Senate observer group should be established to monitor international negotiations on climate change and ensure that the advice and consent function of the Senate is exercised.

While energy is a hot topic on Capitol Hill, it is not alone. The ongoing war in Iraq, health care, ethics reform, and other issues continue to capture the attention of both the Congress and the media. As a result, the future for energy policy in the 110th Congress is unclear. There are sure to be hearings and debate, but passage of new groundbreaking legislation may not occur until next year, or perhaps later. One thing is for certain: For those who are engaged in energy policy on Capitol Hill, 2007 is sure to be an exciting year.

NIA Sites > Insulation Outlook Magazine > Global

Strengthening the Foundation of the Building Trades

Many meetings and seminars in the last year focused on the possibility of a significant labor shortage in the construction markets across the United States and Canada. The Construction Users Roundtable (CURT), American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Building and Construction Trades Department (BCTD), International Association of Heat and Frost Insulators and Asbestos Workers (IAHFIAW), local unions in various markets, open shop contractors throughout the country, and numerous construction end users predict a labor shortage beginning sometime in 2007 and lasting until 2015. The numbers are staggering. The projected shortages are for tens of thousands of workers in every trade. This shortage, if it comes to fruition, will present scheduling and cost-escalation problems for companies interested in building new facilities. Union and open shop contractors in the Midwest Insulation Contractors Association (MICA) region have reported current and projected labor shortages, and National Insulation Association (NIA) members report projected labor shortages in every region.

How should the insulation industry address the problem of an impending labor shortage? Most agree that the industry needs to do a better job of selling its benefits. The story below helps demonstrate how this issue can be addressed on a personal level.

It was the summer of 1964. I was 18 years old, home from college, and ready to begin my first day on the job for the Luse-Stevenson Company, an NIA member company, at the Red Water Plant in the Joliet Arsenal at Joliet, Illinois. Early in the morning, a car pulled up in front of my parents’ house in Oak Park, Illinois. There were already four men in the vehicle, one of whom was my sponsor. I joined them with my bag lunch, white pants, and white shirt. (My sponsor had told me I had to wear “whites.”) After driving for an hour or so, we entered the plant through security and drove to a spot where a series of structures were being erected. All five of us walked to the change trailer, where I met the other insulation workers on this project.

“What in the world is insulation anyway?” I thought. “For that matter, what is Red Water Plant?”

We changed into our whites, and I was introduced to Ed Ryan, the larger-than-life man running the project for Luse-Stevenson. Ryan would direct me on this, my first project, and several others, imparting his knowledge of the industry to me for several years. I was told by my sponsor, Salty O’Rourke (yes, his name was Salty—I would also meet Spoons, Skin Head, Jiggs, and The Natural, among others), to do what I was told and keep my mouth shut. Salty warned me that I would get some teasing but to just go along.

The workers were placing white blocks of powdery stuff on the pipes and vessel walls, bottoms, and tops. They then hammered at the stainless steel bands until the white stuff was pulled tight. When this procedure was completed, they covered the surface with chicken wire and finished the wire with cement. That was my job—to make sure the men always had plenty of cement, or blue mud (as they called it). The final finish on the system was 8-ounce canvas. Ryan asked me once if I knew why we were insulating these systems. I told him I had no idea, so he made sure I understood.

They pulled many practical jokes on me. I spent 4 hours that first day searching the jobsite for a canvas stretcher. Finally, a fitter took pity on me and handed me what they called a come-along. The men had a good laugh at my expense.

I went home that first evening tired but excited. I told my mother that this was the best job. These guys laughed, played tricks on each other and me, and worked hard. And the best part was, we were getting paid for this kind of fun. They were making twice the money I was, but I was in hog heaven with my $3.25-per-hour wages. My mother’s only response was, “You’re going back to school.” I spent every day that summer working for Ryan and learning about the insulation industry.

The hundreds of workers on the Red Water project were like a family. I had never seen boilermakers, ironworkers, pipe fitters, bricklayers, or electricians in those numbers. And I certainly had never seen insulators. Salty was my neighbor in Oak Park, but I never knew what he did for a living and never really cared until he got me that job. I did not know at the time that he had to go to bat for me with Mr. Mulligan at the Local 17 office of the IAHFIAW. The men knew each other well and talked as if they were brothers. I wanted to be part of this family.

I went to college and have worked as an insulator, contractor owner, and association executive. My career would have been entirely different had I not been exposed to the building trades. Salty, Ed Ryan, Mr. Mulligan, and others gave me the opportunity to experience an industry I would never have seen if not for that summer. Now, some 40 years later, I get to share my experiences in the insulation industry with a new generation.

Why is that story important? It started a love affair with the insulation industry, an industry within the building trades. Others have had similar experiences. Members of the industry must sell the benefits of the building trades to future generations. Every kid should be lucky enough to love what he or she is doing. Many young people do not even know that the insulation industry exists. No one has told them that they can be part of the industry that ensures the power used by our society is available. No one has told them they can be part of the industry that ensures that we have enough fuel to get to work every day. No one told me that I could be part of the industry that would house the office workers in buildings like the Sears Tower in Chicago. Many high schools are primarily college prep schools. Sure, they may teach woodworking and small-engine repair, but what about the building trades? Most students are never exposed to these trades.

Many local associations have “school-to-work” programs that are helping to get the word out. The task of educating children and school counselors is enormous, but it must be done. There is an obvious need for intense programs at every level to shine a light on the building trades in general and the insulation industry specifically. The same problems exist for all sectors of the market. But what if every high school and college student were exposed to this industry? Some would come to the union side and some to the open shop. All boats will float when the industry successfully spreads the word.

The Southeast Manpower Tripartite Alliance (SEMTA) performed a Critical Needs Assessment for the Southeast sector of the United States. This assessment is arguably the best research done on the labor requirements in any market in the United States. Members of the assessment committee included Alan Katz from Florida Power and Light (FPL), Greg Sizemore from CURT, Carl Ferguson from Boiler Makers Local 199, Rudon Taylor from the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (UANET), and Eddie Clayton and Ron Campbell from Southern Company. The objectives of the committee were to determine the magnitude of the craft labor supply and demand in the market, evaluate manpower shortfalls and needs, identify craft-specific shortfalls and severity, and develop action plans. It is estimated that approximately 30 percent of the trade workforce is over age 55. Surprisingly, only about 20 percent is 25 and younger. This means the market will lose more people in the next few years than it will gain. In addition, according to the assessment, insulators fall into the critical demand category for the future, along with boilermakers and pipe fitters. In fact, those three trades are already in critical demand. The assessment recognized a trade growth rate between 45 percent and 85 percent for painters, ironworkers, pipe fitters, and insulators. The demand peak will occur between 2009 and 2014.

The SEMTA study is the best work done to date on this subject, but the Southeast sector is not the only area of the country experiencing labor shortages. The Gulf Coast has a significant labor shortage for most, if not all, trades, due to the catastrophic effects of Hurricane Katrina. Larry Nelles, an NIA member and division vice president for the Brock Group, notes that his company’s market has just begun to feel the effects of Katrina. He predicts a huge surge in labor requirements in all trades in the near future. Refinery construction and expansion, as well as power-generating facilities in other areas of the United States, are placing a burden on local labor supplies. One contractor in the Chicago market says he will need 150 additional insulators in the next 16 months on one project alone. The design sector of the industry also is having trouble finding qualified engineers to design and draw U.S. facilities.

The United States has not built a new refinery or power-generating facility for decades. Now the need has been identified, and new facilities are either on the drawing boards or are already being built. This development—along with the strong, expanding economy in which many manufacturers are planning expansion of existing facilities or building new facilities—and the growth of commercial construction in many major metropolitan areas, is priming the market for a construction boom and an associated labor shortage. It was reported at a meeting with the BCTD that as many as 500 boilermakers are needed in the Wisconsin market, for example. In a letter to the general presidents of the Federation of Organized Trades and Labor Unions and the leadership of the AFL-CIO BCTD, Greg Sizemore, the executive vice president of CURT, emphasized the importance of active leadership in addressing the imminent workforce shortage in the industry. The letter was presented to the general presidents at the CURT Tripartite Initiative meeting that was held in Chicago on October 31, 2006. Sizemore suggested that the time is critical to pursue aggressive recruiting and innovative training to meet the crisis. “More craft and management personnel are needed by owners and contractors,” the letter explained. “[The owners] believe that aggressive action at the local level is absolutely critical for success in meeting the craft demands.” The local level is where new workers are recruited and trained. The general presidents received, understand, and are embracing the message.

The letter also suggested recruiting displaced workers from other industries, sharing resources and training assets among the trades, using training facilities during the day, and re-examining the classification of workers. It also recommended that the trades work closely with CURT to evaluate the demand and supply of craft labor in each geographical area.

At the grassroots level, owners are urging all parties to offer leadership by example. Employees should be encouraged to arrive on time and ready to work, with a “can-do”
attitude. Worker productivity and productive use of jobsite resources are keys to success.
The labor shortages will require some projects to be placed on hold while other facilities are being built. The competition for labor inevitably will raise the cost of building projects across the country. Those willing to pay higher costs will succeed in getting their projects completed, while others will have to wait for a slowdown.

The movement of workers between geographical areas will alleviate some of the problems; but if all areas of the country are facing labor shortages, this will be just a temporary solution. U.S. companies cannot count on the Canadian workforce because there is a significant shortage of qualified personnel there, too. One suggestion is to offer apprentice applicants the opportunity to move to another location for apprentice and on-the-job training. Another suggestion is to begin a program where each person involved in the construction trades is responsible for introducing one person to the building trades as a career. With the tens of thousands of people in the industry, a 5-percent return would make a difference. Bill McHugh, executive director of the Fire Stop Contractors International Association and the Chicago Roofing Contractors Association, suggests thinking outside the box. Perhaps the calendar time for apprentice training could be shortened, for example, and classes could be compressed to a 1- or 2-year, college-type curriculum, with students attending classes every day. This system would dramatically reduce the time required to move to journeyman status.

The AFL-CIO BCTD, under the direction of Ed Sullivan and Sean McGarvey, is moving to help all building trades fill this void. A BCTD advertising campaign is being studied. The group is discussing the possibility of bringing back retirees to help alleviate the labor shortage. Accelerating apprenticeship training also is being considered. The Helmets to Hard Hats program has been very successful in many parts of the country in bringing in highly trained, disciplined workers. The BCTD meets regularly with the executive directors of all building-trade organizations to explore more ways to ensure that qualified workers are available when they are needed.

Training people to become qualified tradespeople is a difficult task that cannot be done overnight. At the very least, people must receive proper safety training. Owners in most plants require random drug testing. Prospective workers also must have some exposure to the type of work they will be doing and some understanding of why the task is an integral part of the construction process. While on-the-job training is the way apprentices learn most of their trade, apprentice training must be part of the equation. Owners expect and pay for knowledgeable workers. The construction industry cannot just pick people off the street to fill the void in the labor market.

If the prospective labor shortage is expected to occur 4 years from now, the industry must begin working to satisfy labor needs today. Both open shop and union contractors know, however, that you cannot train people today in the hope that you will have work for them in the future. People expect to be able to work while they are being trained. If the market today cannot sustain the number of trainees that will be required in the future, contractors will have a difficult time finding people to work as trainees. For example, if a local market can sustain 1,000 workers today and is expected to use 1,400 in 2010, the 400 additional workers need to begin training now. The question is how to keep the extra 400 new workers employed until 2010. This becomes the big problem for local business managers, whose job is to keep everyone working.

Many local unions in the insulation industry are moving to rectify these problems. For example, Local 17 (in Chicago) is looking forward to make sure there is sufficient qualified labor for the future, and embarking on a public relations campaign to place insulation on radar screens. Local 19 in Milwaukee is also being proactive, as is Local 34 in Minneapolis. Solutions for such a national problem will not be easy. As noted above, a career in the building trades is not in the minds of most high school counselors; yet in most areas of the country, apprenticeship programs beg for qualified applicants. A career in the building trades must be sold for the wonderful lifestyle it provides. Young people have an opportunity to work with dignity building America, earn a nice living with health and retirement benefits, and feel a sense of pride in their accomplishments. It can also be fun. What a concept: Go to work, earn good money, provide for your family, and have fun! This is the way a career in the trades should be sold to young people who are looking for a solid career path.

It is incumbent on all parties involved (owners, contractors, and labor—both union and open shop) to participate in programs that show the building trades in the light they deserve. Successful industry insiders must attend high school and college job fairs, and help educate high school guidance counselors so that the building trades receive appropriate attention.

It is clear that this is a critical juncture in the history of the insulation industry. It is a great opportunity to offer the nation’s young people a bright future that they otherwise might not hear about, and it is a great way to grow the industry.

NIA Sites > Insulation Outlook Magazine > Global

Hopes for a Soft Landing: 2007 Outlook

U.S. economic growth slowed during 2006, as the residential housing market entered a much-anticipated decline. Inventories of new and existing homes surged; price increases slowed from a double-digit pace; and, in many markets, prices fell substantially. While housing and housing-related sectors saw steep declines in 2006, the industrial sector continued to grow (though at a slower pace), and the consumer sector has been buoyed by higher wages and job growth. The solid job market, rising wages, and retreating gasoline prices helped support consumer spending—which increased at a slower 3.1-percent pace—in 2006. As home prices soften, consumer spending will grow more in line with incomes during 2007, increasing by 2.7 percent. The unemployment rate—which dipped to a 5-year low of 4.4 percent in October 2006—will edge up, averaging 4.8 percent in 2007 and 5 percent in 2008.

The business sector drove economic growth during 2006, creating more than 1.8 million jobs, and it will continue to be the force behind growth over the next few years. The dollar continued to weaken, and global economic growth strengthened, encouraging export growth to its highest level ever. Capacity utilization rates remain high, and corporate profits are solid as the economy enters 2007, offsetting the declines in residential construction and light vehicles. Industrial production grew by 4.1 percent in 2006, up from 3.1 percent in 2005. As the cycle matures and construction-related markets (materials, supplies, etc.) drag, industrial production will moderate to 3.2-percent growth in 2007. As a result, business investment—which grew 7.7 percent during 2006—will post growth of 4.6 percent in 2007 and another 4.7 percent in 2008. The Federal Reserve, which increased interest rates throughout 2006, likely will start cutting rates by the second quarter as the economy cools and inflation moderates.

The overall economy, which grew at an estimated 3.3 percent in 2006, will slow to a 2.4-percent growth rate in 2007—the slowest overall economic growth rate in 5 years. In 2008, housing is expected to firm, and gross domestic product (GDP) growth will resume at a 3.3-percent rate. While a soft landing is anticipated, there are several risks that could rattle consumers, including an unexpected sharp increase in energy prices, a more pronounced collapse in housing, another terrorist attack, or a flu pandemic. In a recent survey of economists in The Wall Street Journal, the percentage of those predicting a recession in the next 12 months rose to 1 in 4, revealing the delicate balance of factors influencing economic growth over the next year.

Energy Outlook

At the start of 2007, energy prices had retreated from recent highs as mild weather and slowing economic growth eased demand. Overall energy consumption in the United States is expected to grow by 1.2 percent in 2007 and 1.7 percent in 2008, according to the Energy Information Administration (EIA). This follows a 0.4-percent decline in 2006 due to unusually warm winter weather and higher prices for energy. As measured by total energy demand per dollar of GDP, U.S. energy intensity improved by 3.5 percent in 2006 and is expected to improve by 0.9 percent and 1.5 percent in 2007 and 2008, respectively.

In 2006, natural gas consumption declined by 1.3 percent, as last year’s warm winter and high prices constrained demand. At the start of 2007, much of the United States again has experienced unseasonably mild weather due to El Niño conditions in the Pacific. As a result, demand for natural gas heating has been curtailed; natural gas inventories were at the highest level for the first week of January since the EIA began collecting weekly statistics in 1994. Pipeline imports from Canada are declining as Canadian natural gas consumption is rising to fuel its tar sands projects and petrochemical sector. Liquefied natural gas (LNG) imports have risen, however, and will continue to rise to meet demand, nearly doubling between 2006 and 2008 to 1.1 trillion cubic feet (Tcf) as four new terminals come online. The benchmark Henry Hub price for natural gas averaged $6.75 per million British thermal units (Btus) in 2006 and will continue to rise over the next several years, averaging between $7 and $8 per million Btus until significant supplies from Alaska become available.

Oil markets continued to make headlines during 2006, as West Texas Intermediate (WTI) crude oil prices rose above $75 per barrel over the summer and gasoline prices hovered near $3 per gallon for much of the year. However, as inventories rose and tensions eased in Iran and other hot spots, prices retreated to just over $60 per barrel by the end of 2006. The EIA predicts that U.S. crude oil consumption will increase by 1.3 percent in 2007 and 1.4 percent in 2008. Globally, demand for oil continues to surge in developing economies, especially in China, where imports of crude oil climbed 14.5 percent in 2006. With China’s expanding economy and strategic petroleum reserve coming online, the country’s imports are likely to continue in the double digits in 2007. These trends, in addition to Organization of the Petroleum Exporting Countries (OPEC) production cuts, will maintain pressure on prices and keep them from falling below $50 per barrel. As a result, the EIA expects average crude oil prices to decline by 2.4 percent to $64 in 2007, as the U.S. economy cools further, before rising modestly in 2008.

As Democrats have taken back Congress, there is renewed interest in climate change and energy efficiency. Policies that will increase the cost of carbon-containing fuels—especially coal, the most carbon-intensive—are expected. Energy efficiency in all areas of the economy have been given high priority by policymakers. This may result in additional funds for energy efficiency research and development (R&D) and more incentives for businesses and consumers to make energy-efficiency investments over the next few years. This is welcome news for insulation manufacturers and installers, whose products are critical to achieving the nation’s energy-efficiency goals.

Construction Outlook

The $1.2-billion construction sector directly accounts for nearly 10 percent of total GDP. This does not include the many industries that support the construction sector, such as architects and suppliers. As a result, the health of the construction sector is vital to the U.S. economy. Rising interest rates slowed the overheated housing market in 2006, and price growth for construction materials outpaced overall inflation. However, overall construction remained steady as gains in nonresidential and public construction partially offset declines in the residential sector. Housing starts declined from 2.07 million units in 2005 to 1.84 million units in 2006 as the housing market collapsed. After the housing market—which currently accounts for more than half of total construction spending—reaches bottom during the first half of 2007, modest increases are expected in the second half of the year. Overall, housing starts are set to decline further, to 1.6 million units during 2007, before rebounding to 1.7 million units in 2008.

With the robust job market, office vacancy rates continue to decline. Office rents grew by 9 percent during 2006, according to Reis, Inc., a real estate research firm. To meet the demand, Reis reports that 72 million square feet of office space—the highest level in several years—should come on the market in 2007. Construction spending in the nonresidential sector increased by 16.5 percent during 2006, with nearly all segments posting gains. Expenditures for lodging construction grew 52.6 percent, and office construction was up by 18.9 percent. Spending on the power infrastructure grew 14.8 percent, and spending on projects in the manufacturing sector—driven by high corporate profits—was up by 20 percent. Rising school-district and university budgets spurred an increase in education spending, the largest category after residential. Highway and street construction also grew with passage of new federal highway authorization legislation. In all, public construction spending grew 10.2 percent in 2006. Continuing growth in commercial and public construction will drive the construction sector through 2007.

Outlook for Insulation End-Use Markets

Chemicals. The $600-billion chemical industry faced several challenges during 2006, including recovery from the hurricanes, substantially higher feedstock costs, rising customer inventories, and the sharp slowdown in housing. Industrial demand for
chemicals remained strong, however, and output grew by 2.1 percent during 2006. Despite the slowdown in housing and light vehicles, the outlook remains good for many chemical-consuming industries, including electronics, packaging, apparel, and rubber products. Plastics and appliances—both key end users of chemicals—are looking for more modest growth through 2007. As a result, chemical industry volumes are set to grow by 3.2 percent in 2007 and 2.5 percent in 2008, according to the American Chemistry Council. The petrochemicals segment is expected to grow by 3.1 percent in 2007 and 1.9 percent in 2008.

Gas processing. Despite continuing damage from the 2005 hurricanes, the natural gas processing industry increased its output of dry natural gas and LNG compared to 2005’s. The EIA estimates that domestic production of dry natural gas rose by 2.6 percent in 2006—the first increase in domestic natural gas production since 2003. LNG production rose 0.7 percent, averaging 1.73 thousand barrels per day (Mb/d). Production of dry natural gas is expected to rise 1.9 percent in 2007 and 1.3 percent in 2008, according to the EIA. LNG production is expected to rise 1.7 percent in 2007 and 0.6 percent in 2008. In addition, new supplies of LNG will increase outputs at gas-processing facilities. The LNG market has grown more than tenfold since 1996, before natural gas prices accelerated. The EIA projects that LNG imports will surge by 34.5 percent in 2007 and 38.5 percent in 2008 as four new receiving terminals begin operations over the next 2 years.

Petroleum refining. With a combination of high inventories of refined products, cooling demand related to weather, and reaction to high prices, refining output grew by a modest 0.5 percent and capacity utilization fell from 90.6 percent in 2005 to 89.6 percent in 2006. Refinery output is expected to grow by 1 percent in 2007 as demand firms. According to the EIA, refinery capacity utilization rates will tighten to 89.9 percent in 2007. Refinery capacity is expected to remain steady at 17.4 million barrels per day (MMb/d).

Food processing. The $658-billion food and beverage industry grew by 3.5 percent in 2006 and is poised to grow by 1.5 to 2 percent in 2007. Growing demand for organics, convenience foods, whole grains, and functional foods and beverages (including energy drinks and products containing antioxidants and probiotics) will drive the food-processing industry over the next year. Organic foods, which accounted for 2.5 percent of all U.S. retail food sales in 2005, are now common in traditional grocery stores and will continue to grow at double-digit rates.

Shipbuilding. The $14-billion shipbuilding industry is expected to grow by 2 percent during 2007 and 2008 as international shipping and the defense sector continue to provide solid demand. In volume terms, world trade is expected to grow by 2.2 percent in dollars, following a 4.6-percent increase in 2006, according to the International Monetary Fund. One trend of interest to insulation producers is increasing demand for tankers used to transport LNG.

Pulp and paper. The $163-billion pulp and paper industry was hampered by higher costs for energy, chemicals, and transportation. The industry continues to be challenged by increasing imports, competition with other materials for packaging, and the increasing reliance on electronic communications and transactions. The U.S. paper industry produced an estimated 41.3 million tons of paper in 2006, down 0.2 percent from 2005. Paperboard production, which follows packaging trends, was up by 1.4 percent in 2006. Following several years of increasingly poor returns, some less profitable mills closed and capacity declined. The American Forest and Paper Association projects that paper and paperboard capacity will increase by 0.2 percent in 2007 and 0.4 percent in 2008.

Power. The EIA projects that U.S. electricity consumption growth is expected to moderate to 1.2 percent in 2007, thanks to higher prices (from expiring rate caps) and a return to more normal weather patterns this summer. Electricity prices are headed up as utilities pass along increased costs from fuel prices, stricter pollution abatement equipment, and new transmission and generation infrastructure. According to the EIA, electric generating capacity additions are expected to total 21.4 gigawatts (GW) in 2007 and 18.1 GW in 2008. Natural gas-fired generation accounts for 81 percent of the total planned additions, with nonhydro renewables and coal contributing 8 percent and 7 percent, respectively.

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Solar Thermal Systems

On page 17 of the September 2005 Insulation Outlook, it says: “In fact, no hydropower energy sources require insulation, nor do hydrogen, solar, and wind sources.” This statement from over a year ago reflects the excessive attention going to renewable electric technologies and the misconceptions about solar thermal energy. The following article is the first of a short series on solar technologies and the possible opportunities for the insulation market.

A new, unexpected source of business in the renewable energy arena is solar thermal energy systems. Solar energy? Not since the 1970s has there been such a buzz about solar energy and other renewable energy technologies. Most of the attention has been on wind and photovoltaic solar electric systems. However, for the insulation industry, a growth market could be on the horizon for solar thermal energy systems.

Solar thermal energy systems are very versatile and can deliver temperatures from 100° to 1,000-plus°F. They cost 75 percent less and deliver more energy per square foot than a photovoltaic (PV) system. Since they generate heat for water, air, electric power, and cooling or refrigeration, they need insulation.

Solar thermal collectors are divided into two broad classes: flat plates and concentrators. The following three main types of flat plates exist for heating liquids or air:

  • Unglazed panels: 20°F above ambient temperature for water, higher for air
  • Glazed panels: 100° to 195°F
  • Evacuated tubes: 150° to 250°F

Concentrators use a mirrored surface to focus solar energy onto a receiver much smaller than the reflector to generate high temperatures. Another class uses Fresnel lenses, most commonly for concentrator photovoltaic collectors. Mirrored concentrators require direct sunlight and track the sun in one or two axes. These are the three basic types of concentrators:

  • Parabolic troughs
  • Parabolic dishes
  • Central receivers

Troughs are used for commercial water heating and for electric power, dishes for electricity using Stirling engines or concentrator PV, and central receivers—a field of tracking mirrors focused on a tower—for 50- to 200-megawatt (MW) electric power plants. In parabolic trough electric power plants, the power cycle temperatures are 550°C and 735°C.

Solar thermal systems have a much larger market presence than many know. Concerned about lack of attention for the competitive status of these technologies, several years ago seven national solar energy trade associations and the International Energy Agency (IEA) compiled figures for 2001 that revealed that the installed energy capacity of solar thermal systems worldwide was about 70,000 MW-thermal (MWth). The IEA noted that expressed in watts, this level “is equivalent to three times current wind energy capacity” and almost 70 times higher than PV systems. Michael Rantil of the IEA says, “Worldwide contribution of solar thermal installations to meeting the thermal energy demand for applications like hot water or space heating has been greatly underestimated in the past. With an installed capacity of 70 MWth, solar thermal is one of the leading sources of renewable energy worldwide, and its potential is much, much higher.”

Since 2001, wind has probably doubled in installed capacity, and PV panel sales have risen about 35 percent per year, but from a small base. Solar thermal remains the largest deployed technology, but the United States is lagging far behind Europe and other countries. In Europe, 1.2 million square meters of glazed, flat-plate solar thermal collectors were newly installed in 2003. In comparison, U.S. manufacturers only shipped 52,025 square meters of these medium-temperature collectors that same year. According to the European Solar Thermal Industry Federation, in 2005 Europe installed another 874,258 square meters of collectors (1.2 million kilowatts) of solar thermal energy systems. China was reported to have installed 10 million solar water heaters in 2004, and its solar thermal market is growing rapidly.

What does all of this mean for insulation companies? Growing sales on two fronts. The most solar energy systems installed are thermal ones for heating water. Installation of 1.2-million square meters of solar collectors in Europe in 1 year would represent 300,000 residential systems with an average panel array of 3.7 square meters (40 square feet). A typical 40-square-foot collector system for a residential water heater on a two-story structure would require about 80 linear feet of pipe insulation. Pipe insulation often used in the United States for these systems is closed-cell elastomeric nitrile rubber. And 100,000 new residential water heaters deployed in the United States could require as much as 8 million feet of this type of insulation product. In addition, there would be another 400,000 square feet of polyisocyanurate foam sheet board, typically 1 inch thick, that collector manufacturers use to insulate the back of absorbers in most glazed solar
thermal panels.

The U.S. market for residential water-heating systems has been less than 20,000 systems per year, but with new incentives in place it is poised to grow more rapidly. What solar companies have barely tapped into are opportunities in the commercial, institutional, and industrial sectors for solar thermal systems. Larger system sales will help the solar market grow faster. The federal government is creating a modest amount of demand pull now through executive order requirements that federal agencies meet targets for deploying solar systems. Energy service companies are starting to turn to solar companies in response to solar requests from their federal facility clients. For example, for government facilities, Industrial Solar Technology in Golden, Colorado, has installed several large, flat-plate systems with up to 12,000 square feet of collectors and a 45,000-square-foot trough system. It has also just completed a new 60-ton solar heating and cooling system with 7,000 square feet of parabolic troughs for a community college in Arizona. Capital Sun Group has just gotten contracts for five solar systems, four of them thermal, for the federal government facilities through one energy service company. Also, they have a contract for a solar water-heating system for the Department of Health and Human Services headquarters in Washington, D.C., through another energy service company. This trend will continue and should stimulate more nongovernment commercial-sector growth in sales.

The solar thermal electric power market appears ready to be reborn. Before its financial problems caused it to cease operating, Luz International built 354 MW of parabolic trough electric power plants in California. Constructed from 1984 to 1991, these systems employed more than 27 million square feet of collectors and tens of miles of insulated pipe. Although well proven, the technology languished over the last 15 years until utilities ordered new plants to meet state regulatory requirements supporting solar deployment. Solargenix in Raleigh, North Carolina, completed a 1-MW trough electric power system in Arizona in 2006 for Arizona Public Service Company. In Nevada, Solargenix is now building Nevada Solar One, a 65-MW parabolic trough power station. On a site 1 by 11/2 miles, this solar collector field will use large-diameter steel pipe for thermal energy transport that will be insulated with 1- to 11/2-inch fiberglass and calcium silicate. The amount of insulation in this one project could add up to 4 to 6 linear miles.

The Nevada project was driven by state regulation that established a renewable energy portfolio standard (RPS) that requires utilities to generate or purchase a certain percentage of their electricity from solar energy. For large-scale electricity generation, parabolic troughs are less costly than PV systems, and an easier path to comply with the RPS than working to get consumers to install thousands of residential PV systems. Other states with RPS requirements are Arizona, California, and New Mexico, and trough electric systems will be in the planning stages there as well. The largest solar thermal electric capacity exists in the United States, but overseas sales are beginning as well. In Spain, a 50-MW trough plant is planned and a 45-MW central receiver facility will also be built.

Through a variety of circumstances in the United States, energy policy has not provided solar thermal energy technologies with the same level of market support as PV, which gets the largest share of federal research and development (R&D) funding among renewable technologies. Since it is a mature technology, the R&D needs for flat-plate solar thermal technologies are minimal, but there are still innovations that could help lower costs and speed market penetration. A new era for solar is opening, but a need exists for more aggressive support for solar thermal technologies. Insulation companies, manufacturers, and contractors should seek out solar companies to get on board with what is a growth industry overseas and will become one in the United States. By doing so, they will help this industry gain the attention it merits and stimulate more growth. Subsequent articles will follow in future issues with more detailed information on solar thermal technologies and the market.

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Aerial View of Solar Thermal System

NIA Sites > Insulation Outlook Magazine > Global

Mechanical Insulation Specifications Update: Changes in Specification Numbering Scheme

The Construction Specifications Institute’s (CSI’s) MasterFormat© 2004(1) is the latest edition of the construction industry’s standard for organizing construction information (including specifications) and has a substantial impact on the mechanical insulation industry. Mechanical insulation was formerly limited to a single section or category of sections within Division 15–Mechanical. In the 2004 edition of MasterFormat, Division 15–Mechanical has been discontinued. Instead, in the new 50-division numbering scheme, CSI reserved Division 15 for future building-construction subjects. Mechanical specifications are now in several divisions in a new subgroup titled “Facility Services.” The new divisions that include mechanical specifications are Division 21–Fire Suppression; Division 22–Plumbing; and Division 23–Heating, Ventilating, and Air Conditioning.

This version of MasterFormat is the most recent in a succession of updates to the industry standard. From its early inception, the document has undergone many changes. In 1978, it first became known as MasterFormat, and it set the standard of 16 divisions and a five-digit numbering scheme. In the 1978, 1983, and 1988 editions, CSI located all mechanical specifications in Division 15–Mechanical. Within that division, CSI slotted mechanical insulation in a series of sections beginning with the number 15250. CSI further assigned numbers and titles subdividing mechanical insulation into separate sections for ducts, equipment, and pipes. This additional subdividing gave specification writers flexibility.

For simple projects that included few services to be insulated and required few insulation products, one could specify all mechanical insulation in a single section, 15250?Mechanical Insulation. In complex projects with many services to be insulated—each with varying conditions and different requirements for insulation materials, thicknesses, and coverings—the specifier could separate mechanical insulation into 15251–Duct Insulation, 15252–Equipment Insulation, and 15253–Pipe Insulation. Subdividing in this fashion did not duplicate information, because the requirements were different for each section, and it helped contractors find particular information more quickly.

In 1995, mechanical insulation moved to a new location in Division 15–Mechanical: a series of numbers and titles beginning with 15080. In this location, as in previous schemes, the subject was subdivided using numbers and titles. In the 2004 update, this organizational scheme continues, but mechanical specifications are now split among several divisions. This requires the insulation subjects also to split among those divisions. The new scheme allows the subjects in each division to be further subdivided for complex projects.

In June 2005, MASTERSPEC©(2) Specifications, the leading commercial master specification system in North America, implemented the new scheme by separating Section 15080 into three sections. For an implementation period (approximately 2 years), MASTERSPEC will be offered in both schemes. In the MasterFormat 1995 Edition numbering scheme, the sections are 15081–Fire-Suppression Systems Insulation, 15082–Plumbing Insulation, and 15083–HVAC Insulation. These sections in the MasterFormat 2004 Edition have the same titles and are numbered 21 07 00, 22 07 00, and 23 07 00, respectively. This is an initial step. Future updates are planned to separate these sections more finitely within each division. This will be especially useful for complex projects that require several different materials and applications.

Mechanical insulation is in its new home in the three new mechanical divisions (21, 22, and 23), each of which has insulation placed in a consistent location (21 07 00–Fire-Suppression Systems Insulation, 22 07 00–Plumbing Insulation, and 23 07 00–HVAC Insulation). Each division could have a single or multiple sections, depending on the complexity of the project requirements. This separation, while controversial, poses no threat to contractors bidding on mechanical insulation, and it does not present a condition of three identical specifications. The requirements for the three facility services are substantially different, as are the contents of the specifications for each. It is much like the situation with building and roofing insulation, which have different locations in the MasterFormat numbering scheme for insulation products.

The initiatives of the National Insulation Association (NIA) to enhance the importance of mechanical insulation and establish its rightful role as an engineered system have brought increased emphasis on and awareness of the content and organization of mechanical insulation specifications. There is an increase in the variety of available insulation products. There are also varying environmental conditions in which insulation must be applied and can function, and different purposes for insulating ducts, equipment, and piping that require different materials and applications.

When insulation systems are carefully engineered, the results usually include different materials, varying thicknesses, and varying installation requirements for each building service, as well as for the same services installed in different environments. These developments have created a need to more carefully, accurately, and comprehensively specify construction-contract requirements relating to mechanical insulation. Keeping the construction-contract documents organized so that readers can retrieve specific information easily during bidding and construction phases has necessitated a review of how mechanical insulation specifications should be written and organized.

Comprehensive mechanical insulation specifications must communicate construction-contract requirements for the set of whole project requirements. Insulation is rarely, if ever, indicated on drawings, except for the occasional detail of how to insulate a particular item like a fitting or valve. So the specifications, as one part of the construction-contract documents, must describe what services to insulate, the materials to be used for each service (which often varies with the service size), and the thicknesses to be applied (which also often varies with service size). Additionally, the specifications must include detailed descriptions of vapor barriers, protective coverings, arrangements with service-supporting devices, quality of workmanship required, and means of ensuring that the specified materials are being used and applied as prescribed. These are complex requirements and necessitate carefully written and organized specification sections. The requirements within a specification section or series of sections must be organized so that end users can easily find the information that they need. This organization of the content will depend not on the contract sum, but on the complexity of the project. Complexity depends on the number of services to be insulated and the number of different materials required to fulfill the design requirements for the project.

Another format document published by CSI is SectionFormat©. This document sets the standard location of subject matter within a specification section and divides a section into three standard parts: Part 1–General, Part 2–Products, and Part 3–Execution. Part 1 includes administrative requirements that are unique to the subject of the section (insulation), without repeating requirements specified in Division 01–General Requirements. Part 2 is the location to specify materials and products, without regard to how or where they are applied in the project. Part 3 is the location to specify installation requirements, services and equipment to be insulated, and varying thicknesses for differing service sizes, without duplicating the product descriptions specified in Part 2.

The most complex specification requirements are for piping systems because one must consider pipe material, service temperature, ambient temperature, moisture conditions, and protection from physical damage. Often, the specifications for pipe insulation must be written with the understanding that the contractor has various options for which materials to use. A specifier for hydronic piping may give the contractor the option to use plastic, copper, or steel pipe material. Each may require different insulation material and thickness. Often, the pipe material changes with pipe size. For example, hydronic piping NPS 2 (DN 50) and smaller is often specified to be copper, while piping NPS 2½ (DN 65) and larger is often specified to be Schedule 40, black steel with welded and flanged joints. The insulation specifier must know the contractor’s options for pipe materials to accurately specify the insulation materials and thicknesses.

In addition, each service usually passes through different environments, including air-conditioned and non-air-conditioned spaces, areas where physical damage is probable, and spaces where damage is not likely. These conditions add complexity to the specifications because they determine the insulation materials, requirements for vapor barriers, and whether or not protective coverings are required. Often, there is a mix of requirements because the same service resides in all of these conditions and at varying sizes.

These are all factors in the insulation system design problem. Once the insulation system is designed, the engineer must create a specification that ensures the solution is fulfilled. Masterspec offers a master-guide specification with insulation product selection and specification-writing guidance. It is peer reviewed by practicing engineers who use Masterspec and by insulation manufacturers’ representatives and industry associations, including NIA.

References

  • MasterFormat is published by the Construction Specifications Institute (CSI) in Alexandria, Virginia.
  • MASTERSPEC is a product of the American Institute of Architects, published by Architectural Computer Services, Inc. (ARCOM), and endorsed by the American Council of Engineering Companies and the National Society of Professional Engineers. MASTERSPEC is also the basis of the Midwest Insulation Contractors Association (MICA) National Insulation Standards, published by MICA under a special agreement between MICA and ARCOM.
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NIA Sites > Insulation Outlook Magazine > Global

Insulation: The Forgotten Energy Technology

Insulation is the Rodney Dangerfield of the construction industry—it receives very little respect and is taken for granted. Insulation is a powerful resource when designed, applied, and maintained properly; yet the technology often is forgotten, put on the bottom of the list, and ignored. The knowledge base of mechanical insulation systems at the engineering, architectural, and facility-owner levels over the last 15 to 20 years has, in most cases, eroded. The root cause can be summarized as a by-product of the corporate world’s drive for profits, right sizing, multitasking, etc. But the fact remains that insulation is not a field that is attracting specialization in the engineering, architectural, or maintenance arenas. This reduced knowledge base has led to improper use or under-utilization of mechanical insulation in many applications.

The benefits of insulation often seem invisible (although long lasting), but the technology is not some mysterious myth. It may be misunderstood and under-appreciated due to lack of knowledge. Calculating operational benefits and return on investment (ROI) can be relatively simple. However, an insulation system does not have moving parts, bells and whistles, computer chips, or fancy gauges; and it is certainly not sexy. Perhaps that is why it is not considered exciting to discuss, even through it is a time-tested and proven technology that often can provide an annual ROI of more than 100 percent. Maybe this valuable technology is often overlooked, undervalued, and even forgotten because it is so simple and its use is not necessarily revolutionary. Has there been a more important time to think about insulation differently, though?

Results of a recent survey conducted by the National Insulation Association (NIA) of 160-plus industrial plants, manufacturers, and engineering and architectural firms included the following:

  • Most of those surveyed had no idea of the payback period or rate of return with the use of insulation.
  • Most were unaware of a method to quantify costs versus savings.
  • Numerous areas of insulation were in serious need of repair.
  • Most of those surveyed did not understand that insulation had any “real” environmental “tie-ins.”
  • Some did not think it “necessary.” (They felt their plants work fine.)
  • Most did not relate corrosion under insulation (CUI) to the state of the insulation system.
  • Most acknowledged that their specifications were outdated.
  • Most did not have a dedicated job function at their facility to address insulation specifications, and they could not identify an “insulation champion” at their company.
  • Most did not think of insulation as a “system” or think it requires any special design review or technical consideration.

That survey confirmed the Rodney Dangerfield characterization of insulation and the need for industry educational and awareness initiatives such as “Insulation: The Forgotten Energy Technology.” In today’s fast-paced and cost-sensitive work environment, continuing education can be a challenge. A half-day workshop that allows for discussion and exchange of information among industry peers remains one of the most effective means of education, and that is exactly what NIA and AltranSolutions, Inc., have in mind for 2007.

AltranSolutions, Inc., understands the importance of providing knowledge and practical solutions, and it is working with NIA to sponsor a series of workshops for its clients. The company is a comprehensive engineering consulting firm, headquartered in Cranbury, New Jersey, that leverages innovative technologies and industry knowledge to help companies enhance their business and effectively manage their assets. Its goal is to seek out answers to customers’ critical engineering challenges and provide a framework that encourages innovative thinking, promotes operational efficiencies, and delivers results to the clients’ bottom lines.

With more than $2 billion in yearly revenue, The Altran Group (parent company of AltranSolutions, Inc.) employs over 16,000 people, with offices throughout the United States and Canada, and in 17 other countries. Its interdisciplinary teams of professionals work closely with utilities, power generation and delivery companies, and petrochemical and other industrial firms in a variety of areas. Sponsoring continuing education workshops pertaining to the many benefits of mechanical insulation is consistent with its goal and commitment to helping customers understand the simplest or most complex technical and engineering challenges in the industry.

Here is an overview of a few of the workshop discussion topics.

The Power of Insulation

This workshop is focused on mechanical insulation systems—those used for piping, equipment, vessels, ducts, boilers, and other mechanical equipment and piping applications.

When asked about the benefits of mechanical insulation, most people immediately think of process control and energy conservation. While those benefits are at the top of the list, there are other important benefits, too. This workshop examines all of the benefits—the power of insulation.

Energy Conservation

Energy is one of the most costly components in managing a utility or operating a manufacturing facility. Reducing energy consumption always reduces cost. Although it may not be No. 1 on the list, reducing energy consumption is certainly among the top ten corporate initiatives, along with improving safety, providing quality, increasing shareholder value, and protecting the environment. Insulation can be one of the easiest, fastest, and least expensive technologies to reduce energy costs, but it is still often the last option considered.

Companies should ask themselves if their insulation system thicknesses were designed for the cost of energy in 1977 or 2007. The ROI with an insulation initiative usually far exceeds expectations. Many times the return occurs in less than 1 year. Insulation can provide a faster return than many fancier, more visible energy-efficiency investments. In today’s competitive and shareholder-driven world, insulation can make a difference in the bottom line. Insulation is not normally a boardroom discussion, but perhaps it should be.

It is interesting to review the process for determining the insulation design criteria for new construction or expansion projects versus the maintenance process and how priorities are established. In new construction, the primary driver in determining the insulation system is the process. Very seldom are the insulation system or insulation thicknesses examined from an energy-conservation perspective. Once the plant is operating and the energy consumed becomes reality, compliance or acceptance of the results rule the day. Actual results are rarely compared to the original expectations.

What is lost by not maintaining an insulation system properly and in a timely manner? It is estimated that 20 to 30 percent of all installed mechanical insulation is either damaged or missing. A recent heat-loss analysis completed on the “typical” insulated piping systems in an oil refinery illustrated the difference between the worst-case scenario (uninsulated piping), what could be obtained with all piping being insulated, and the case of reality (where 21 percent of the pipe insulation was damaged or missing). Since this analysis was completed, it has been compared to other industry segments and found to be a representative illustration. With 21 percent of the pipe insulation missing or damaged, only 52 percent of the potential heat-loss savings (in Btus per hour) was obtained. This is a big number—even if one discounts it by 50 percent. It begs the question: Why does this condition exist when it could be corrected to provide a significant return on the capital employed or maintenance dollars spent at the refinery?

The Department of Energy’s (DOE’s) Industrial Technologies Save Energy Now program offers several other examples. Save Energy Now is part of a national campaign by the DOE to help manufacturing facilities reduce energy and operating costs, and operate more efficiently and profitably. Independent specialists are trained to use sophisticated software assessment tools and are required to pass a rigorous qualifying exam. Once qualified, they visit plants and work to identify immediate and long-term opportunities for improving energy efficiency and bottom-line results. Mechanical insulation is one of the many areas of opportunity examined.

A minimum of 200 plant assessments were planned for 2006. Participants ranged from power-generation facilities to paper mills, chemical plants, refineries, and food-processing plants. Savings were identified as “near term” (less than a 1-year payback period), “medium term” (less than a 3-year payback period), and “long term” (more than a 3-year payback period). As of September 28, 2006, 125 assessments were completed and 53 reports released to the public. The following mechanical insulation statistics were derived from those reports:

  • Fifty-one percent of the reports specifically mentioned insulation.
  • Sixty-three percent of the insulation opportunities referred to “missing, damaged, or uninsulated areas,” while 37 percent referred to insulation upgrade or improvement opportunities.
  • Of the insulation references, 81.5 percent were classified as near-term opportunities, 14.8 percent were classified as medium-term opportunities, and 3.7 percent were classified as long-term opportunities.
  • Most savings from insulation were identified in dollars, some approaching $1 million per year.
  • Some participants provided information to calculate an ROI of less than 4 months.

Energy conservation with the use of properly designed, installed, and maintained mechanical insulation is simply an opportunity that should not be overlooked. It is an investment that may have few rivals from a return perspective.

Process Control

This is the area where mechanical insulation is normally “engineered” into the process. Whether liquid, air, or gas, a product is designed to leave Point A at one temperature or pressure and arrive at Point B at another, or it needs to be stored at a given temperature. Fluctuating temperatures can cause significant problems in manufacturing quality and productivity. More often than some would like to admit, the insulation system or thermal value used is determined by what worked—or did not work—in the past. This is what the industry refers to as “dusting off the old specification.” In reality, while many insulation systems are installed, they are rarely engineered.

One of the problems in many industries is that after the insulation system is designed, selected, and installed, it is not maintained in a timely or proper manner. It would seem likely, then, that process temperatures and pressures are not maintained as designed. It may take more energy to maintain them, and throughput or other costs may be negatively affected.

Process control, quality, and product throughput are major considerations. Properly designing, installing, and maintaining the mechanical insulation system should be an integral part of both the initial design and the operational maintenance management plan at any facility. Companies should ask themselves if their insulation system is meeting expectations. If not, why not? A good rule is to always “inspect what you expect.”

Condensation Control and Mold Prevention

Moisture in an enemy. If an insulation system is not properly designed to maintain the surface temperature above the dew point, condensation likely will develop. Condensation is a real-world problem that can lead to other problems—such as work hazards due to moisture on the floor or the development of mold—if not corrected.

Mold is an issue in today’s work environment. Insulation cannot stop mold from developing, but it certainly can help eliminate moisture due to condensation, which must be present for mold to develop. When it comes to condensation and mold, prevention is less costly than a cure. If an insulation system is not designed to prevent condensation under realistic adverse conditions (not under the best or normal conditions), is not installed correctly, or is not maintained properly, condensation can occur. It is critical to address the problem aggressively. Prevention and timely, effective correction of the problem will be less costly in the long run than putting it off for another day.

Moisture Intrusion and CUI

Again, moisture is an enemy. Moisture intrusion in an insulation system can lead to a host of problems, so timely maintenance of a mechanical insulation system is extremely important. Companies can choose to spend money now in a managed approach or potentially spend a lot more money later in a reactionary, unbudgeted mode.

How does moisture penetrate an insulation system? Primary moisture sources are rainwater, water from a washdown, water from the roof, water from other equipment, water from piping leaks, and even water from condensation within the insulation system—especially on dual operating systems. The most likely areas of intrusion are at insulation system penetration points like gauges and attachments. If the integrity of the insulation system is not established at installation and maintained properly, and moisture sources are present, then moisture likely will penetrate the system. The rates of moisture migration and/or wicking within the insulation system will vary depending on the system, the temperature of the operating system, and other conditions.

Moisture intrusion can negatively affect all aspects of the insulation system thermal values, which can have a direct impact on process control, energy cost, condensation control, safety, and the potential for mold development. It also increases the potential for CUI.

CUI is not new, and in many circles the problem is well understood, yet it costs industry millions of dollars annually.

If insulation does not directly cause corrosion, could maintaining the integrity of the insulation system minimize CUI and be less expensive over time? To answer this question, life-cycle cost analysis must be employed. Removing an insulation system, replacing piping or equipment, and installing a new insulation system is an expensive process. An aggressive maintenance program, combined with regular inspections, may be less costly over time.

Reduction of Greenhouse Gas Emissions

With the reduction of energy consumption derived from the use of mechanical insulation, the number of pounds of greenhouse gas emissions currently being released into the atmosphere can be reduced. Every little bit helps, and protecting the environment is a major focus today.

This benefit is not being considered in many applications, likely because most people do not relate the reduction of energy consumption to the reduction of greenhouse gas emissions. How does one calculate this benefit into the ROI or decision-making process? The answer varies depending on the facility, carbon credits (if applicable), regulatory requirements, etc. The public relations benefit cannot be ignored, however—and it is the right thing to do.

Personnel Protection—Safety

Mechanical insulation is not often discussed at safety meetings, but protecting workers from contact with hot or cold surfaces and from excessive noise in the workplace should be key parts of any safety program. Still, insulation is seldom, if ever, on the agenda for safety meetings. Far beyond the impact on a company’s bottom line is the direct impact on its employees’ well-being. Viewed in this context, is there a more important topic or a better reason to think about insulation differently?

Workplace Environment Improvements

Insulation is a major component in improving facility-occupant comfort and thus increasing productivity. Many studies confirm that occupant productivity increases when air quality, temperature, and sound management are managed within an acceptable range on a consistent basis.

Insulation is called upon for its thermal and noise-absorption properties, but the results are seldom considered when determining a company’s ROI.

Sustainable Design Technology

The use of sustainable design technology increases every year. Insulation and its role in sustainable design is a subject within itself. Today, mechanical insulation’s role is normally included in discussions related to heating, air-conditioning, or other equipment. In some cases, the size of the equipment required is reduced with the use of increased insulation values. Capital investment is reduced, and the return increases—a winning combination.

Many companies are pursing sustainable design certifications for their facilities. Certification is an effective way to measure success; but isn’t thinking “green” and employing that philosophy just as important—if not more important—than certification? Thinking, promoting, and selling green can be an advantage in any organization—with customers and within the community. Companies should look for green opportunities within their organizations.

Summary

The opportunities available with a better understanding of the power of insulation are varied and numerous. Sometimes what sounds too good to be true actually is not. That is the case with the potential of mechanical insulation.

Many engineering, architectural, and facility owners have lost their insulation specialist—the position has been eliminated or redirected to other tasks—but a properly designed, installed, and maintained insulation system is more important today than it has ever been. Increased knowledge of mechanical insulation can provide an unrivaled ROI opportunity in the new construction and maintenance arenas. It also helps reduce U.S. dependency on foreign energy sources, protect the environment, and improve the economy—not a bad formula.

Companies should consider an insulation awareness workshop for their employees, trade and professional organizations, and local business communities. It is an effective way to provide continuing education, exchange information with peers, and explore proven ways to help the company reduce its costs with tremendous ROI. Exploring the many benefits of mechanical insulation will shed light on opportunities that may not have been considered before. An insulation awareness workshop can provide resources to help determine the correct insulation system and insulation properties for a particular service condition. It also will show how to calculate expected ROI from insulation system improvements.

Many companies are major users of mechanical insulation without using the technology to its full potential. Insulation is a powerful resource. Begin thinking differently about mechanical insulation and the value it can provide to take advantage of that power. Mechanical insulation may not seem exciting to discuss, but considering its many benefits, it is only natural to ask: Why have we not thought of this before?