Public needs persuading if HS2 uncertainty is to be banished

There was always going to be some disappointment with the report into how to improve the High Speed Two, given how controversial the project has proven. But giving the document a name like “HS2 Plus” raises expectations of major additions to the planned network. The reality of Sir David Higgins’ recommendations – scrapping the network’s link with Europe and building a new station at Crewe – makes that title seem like something of a joke.

No cost savings (the purpose for commissioning the report in the first place), no plans to start the second, northern half of the scheme earlier (although it may now finish three years before the original schedule), no extension to Liverpool (let alone Scotland), but London gets yet another major station redevelopment. HS2.1 might have been a better name for the proposals, particularly for those who live north of Milton Keynes.

By stressing that HS2 will only deliver its full benefits to the North of England (and indeed most of the rest of Britain) if it is part of a more ntegrated infrastructure plan, Higgins has in one sense admitted what many critics of the scheme have long argued: that the scheme as it stands fails to deliver the necessary connectivity that the North so needs.

But hindsight is a wonderful thing. Sure, there are plenty of things the infrastructure planners and politicians “should have” done. Not delaying preparations for the northern phase of the network until so long after the London-to-Birmingham line is probably one. Looking at the wider picture of connectivity in the North earlier in the process is another. And sorting out the country’s airport problem sooner in order to produce a properly integrated transport strategy would have been very welcome.

On this basis, HS2 is, as Higgins described the now almost certainly scrapped connection with the Channel Tunnel Rail Link (HS1), ‘an imperfect compromise’. But what proposal wouldn’t be: A maglev system at tremendous financial cost? Yet more upgrades leading to years of disruption with even less benefit? Britain’s original Victorian network was hardly a triumph of efficient planning, built at inflated cost due to speculation and leading to much duplication of routes, while benefiting from a country that was much less densely populated – and democratic – than it is today. With a 21st century railway, there was never going to be an easy answer.

HS2 does at least provide a solution to some key problems with the current network: capacity and north-south connectivity. Scrapping it now and going back to the drawing board would only lead to yet more wrangling and years of uncertainty as our existing infrastructure creaks ever louder, constraining economic growth and condemning millions of us to even more cramped, unpleasant and slow journeys.

We also need to be careful of a “what about me?” attitude. Manchester might benefit more from HS2 but that doesn’t mean Liverpool will necessarily suffer. Government-commissioned figures (only released after a freedom of information request) found that HS2 could make more than 50 places around the country worse off, depending on circumstances. However, over three-quarters of the counties and cities of the UK will likely be better off. This is an argument not for scrapping HS2 but for asking what else can we do to ensure the whole UK benefits - precisely what Higgins has proposed. In this vein, the North needs to come together to demand investment for the region as a whole, not squabble over scraps while a united South East happily binges.

And there are already plans for huge additional investment in the rest of the railways. Network rail has just been awarded £38bn for the next five years – almost as much as HS2 will cost over the next 20. The precise spending plan has yet to be agreed but the organisation’s business plan says £4bn a year will go on upgrades. By 2019 there will be an estimated 30 per cent more freight on the rails than today, while the £600m Northern Hub project improving links across the North of England is set to provide space for 44 million extra passengers a year within the same timeframe. Yet several surveys have revealed the public still thinks it’s an either-or situation, with upgrades favoured over HS2.

This highlights what remains the project’s biggest problem. The only way to bring about the political certainty that Higgins says will speed HS2 along and bring down costs is to persuade the public of its necessity and its benefits. In perhaps the biggest “should have” of them all, the government and HS2 Ltd itself have so far failed to win the argument that there even is a capacity problem on the railways, never mind that HS2 is the best way to deal with it, or that reduced journey times really will make a difference. It’s an issue The Engineer has been banging on about for far too long now.

Higgins is focused on delivering HS2 as efficiently and cheaply as possible. In the foreword to Network Rail’s strategy document, he says: ‘The question is not “why build High Speed 2?” but “how quickly can we build it?”’ But without answering that first question he won’t be able to address the second. When The Engineer asked him how he intended to overcome this problem, he said the public need to understand the consequences of failing to invest adequately in infrastructure. What he and the politicians need to understand is that it is up to them to demonstrate this - and at the moment they are failing.

This article was first published on The Engineer. 

Tackling the oil and gas industry's image problem

Think student project and the images that might spring to mind are of rickety looking models, dull flow charts and overly complex solutions to issues you aren’t really sure are problems in the first place. But if I ever held such an unfair stereotype, it was well and truly shattered by the final of BP’s Ultimate Field Trip competition on Monday night, when students from four UK universities put forward some incredibly impressive, innovative and imaginative ideas for reducing the oil and gas industry’s energy footprint.

Four teams of young men, barely out of braces, stood in the same place as Michael Faraday and all those Christmas Lecturers to address the audience of a packed theatre in the Royal Institution, including an intimidating panel of judges, eloquently explaining their compelling visions for how BP could make its operations less wasteful and energy-intensive. Their ideas ranged from the bold to the sensible and some seemed more viable than others, but all were as commercially well considered as they were creative.

First up were Strathclyde University’s “Team ECOneering”, a group of third year civil engineering students who proposed reducing the energy used by refineries to heat oil to the necessary high temperatures using solar thermal concentrators. With established technologies, the system would use an array of concave mirrors to reflect and intensify the sun’s rays onto a molten salt storage tank. The captured thermal energy could then be used to continuously heat the oil, even after the sun had gone down. The technology would be best suited to desert-based refineries in the Middle East, Africa and the USA but could also reduce the energy needs of plants in cooler climates such as the Mediterranean.

Next were Oxford University’s “I Challenge You to a Joule”, who proposed a modular aluminium smelting system powered with electricity generated from gas from onshore wells that would otherwise be flared. Given the doubling of demand from aluminium in the last decade, the students claimed that using “free” waste energy would produce the most profitable aluminium-making operation in the world.

The power generation and electrolysis technology would be small enough to be transported between wells within a field, allowing operators to drive it to wherever gas was being flared and eliminating the need for extra infrastructure. But the modular smelter would also be the same size as the individual units in permanent facilities, which the team claimed would maintain standard efficiencies. The students found that Texas oilwells flare around half a billion cubic feet of gas a year and the state has an established aluminium industry, leading to the conclusion that it would be the best starting point for use of the technology, which they estimated would have a payback time of seven years.

Following that came “Team Ignite” from Birmingham University, who proposed a thermopile device for converting the heat from gas flares into electricity. The second-year chemical engineering students admitted to the judges that the technology converted just 15 per cent of the energy were made using expensive titanium. But because they designed the device as a hexagonal tube that could be made from flat, off-the-shelf thermopile components and easily fitted around a flare chimney, they claimed it would take just three and a half years for a well operator to earn back the capital costs through energy savings.

Finally, Durham University’s “Team Palatinate”, formed by a group of geologists and geophysicists, suggested capturing the waste heat from gas turbines used to provide the large amounts of electricity needed at an oil well site. This heat would be fed into an Organic Rankine cycle (ORC) that uses hot production fluids from the well (a technology already being pursued by the oil and gas industry) to convert relatively low temperature heat into electricity. The students claimed adding the gas turbine element could increase power output of the ORC by anything from 23 per cent to 120 per cent, giving a potential payback time of just one to two years.

As you can tell, the suggestions range from the somewhat outlandish (what could go wrong with firing a hugely powerful beam of energy at an oil refinery?) to something so straightforward one of the judges asked why BP wasn’t doing it already (I presume it’s a coincidence that the most staid and sensible idea came from a team of geologists). The winners, Oxford’s mobile aluminium smelters, seemed to hit the sweet spot between creativity and practicality. But what struck me about all the entries was the degree to which the students had thought about the commercial realities of implementing their designs, presumably encouraged to do so by the competition’s entry criteria.

BP’s aim with the competition was, after all, to attract the next generation of oil and gas engineers to work in the company – not to develop ground-breaking renewable and energy-saving systems that will form part of the firm’s future plans. As the company’s head of graduate resources, Suzy Style, admitted to me, the numbers of students choosing a career in the sector has been declining in recent years. The Ultimate Field Trip competition is designed to tackle that by getting students to think about and understand the full range of careers open to them in oil and gas – the prize is the eponymous trip to BP sites around the world.

‘We don’t want to just preach to the converted,’ said Style. ‘We know there’s lots of people studying STEM subjects who don’t understand the variety of roles at BP and the sorts of work they could do … This competition highlights how focused BP are on the very challenge of trying to reduce the amount of energy consumption that we use. So how great for us to get some of the best and brightest students to get engaged with us on that challenge.’

Great in theory, but does it work in practice, given the sector’s image problem? BP and the oil and gas industry is taking steps to reduce energy consumption, but it’s more through incremental efficiency improvements and upgrades rather than implementing the kind of ground-breaking technologies the students were proposing. BP spent a short while trying to rebrand itself as ‘Beyond Petroleum’. But having now abandoned that strategy, the firm is probably better known to a generation more concerned about the environment than any other as the company responsible for the Gulf of Mexico oil spill. 

A competition that makes students aware of the full range of opportunities open to them in the oil and gas sector is a great idea. How much more effective would the competition be if those students saw the industry taking steps as bold as the ones they are proposing?

This article was first published on The Engineer. 

The danger of the reshoring 'trend'

Manufacturing is coming back to the UK. Or so we are led to believe by some interpretations of new research released this week. Coinciding with its annual conference held yesterday in London, the manufacturers’ organisation EEF has conducted a survey that found one in six UK-based manufacturers have brought production back in house in the past three years – up from one in seven five years ago – and a similar proportion have switched to a UK supplier from a low-cost country.

Keen to regain control over their supply chains, UK companies – we are told – are eschewing low-cost countries like China and helping to rebuild the UK as a manufacturing centre based on quality and delivery times. Certainly there are plenty of anecdotes to support this idea, from firms that have realised the difficulties of manufacturing in the Far East – from logistics costs to protecting IP – and moved some of their production lines back to the UK.

Interestingly, the manufacturers on yesterday’s EEF conference panel discussion on reshoring make chocolate and cushions, two relatively low-value products that don’t require the kind of high-technology and precision engineering that are among the UK’s manufacturing strengths and that help keep sectors such as aerospace based here.

But there’s a real danger of getting carried away by these kind of stories. As EEF’s chief economist, Lee Hopley, admitted, the survey isn’t clear evidence that reshoring is leading to net growth in the UK’s manufacturing base: it doesn’t show that manufacturers are moving production back to Britain faster than others are moving it away.

A change from one in seven to one in six sounds less impressive when represented as an increase from 14 per cent to 17 per cent. And the survey also found the number of UK companies with some production overseas and the proportion of manufacturing they do there have both risen slightly since 2004. On top of this, it’s worth noting that the increase jobs that reshoring activity has created is minor – typically between 1 and 5 per cent of a company’s workforce.

It is true that Chinese wages aren’t what they used to be – they’re much higher. Between 2006 and 2010 the average minimum wage in China grew by 12.5 per cent a year. And probably of equal importance is the exchange rate: £1 bought you 15 Renminbi before the financial crash; last year it was at a low of nine. Tony Caldeira, boss of the aforementioned cushion manufacturer admitted this was the biggest factor in his firm’s decision to move some production back to the UK.

But as the UK economy continues to pick up, seemingly on the back of yet another boom fuelled by house prices, borrowing and domestic consumption, it appears likely that currency advantage is only likely to shrink, as it has already begun to do over the last year. And while Chinese wages are higher, there are plenty of other low-cost countries to which British firms can send their production. For some, Eastern Europe already provides a compromise between labour costs, delivery times and supply chain supervision.

The most compelling talk at EEF’s conference came from Nigel Stein, CEO of the aerospace and automotive components manufacturer GKN. He warned that British businesses would only succeed if they weren’t complacent about global competition. This applies as much to any nascent trend in reshoring as it does to sectors where we currently occupy a world-leading spot (like aerospace). GKN wants to do more manufacturing in the UK, he said, but this will only be possible if we make the best products in the best way.

How do we achieve this? Lower energy costs, less government red tape and greater focus on quality were all mentioned yesterday. Surprisingly little was said about innovation: a question about 3D printing was barely recognised by the reshoring panel, suggesting there’s still much work to be done in explaining advanced manufacturing technologies. But an audience survey showed that the biggest concern for manufacturers was access to the right workforce, finding employees with the right skills but also, crucially, who want to work in manufacturing.

In the long-term the UK can’t compete on cost and, while reshoring makes for a nice narrative, we can’t rely on manufacturers deciding they don’t want to fly to China every week to check up on their factories to grow the industry. But fluctuations in the global economy give us an opportunity to show off what our other strengths are or could be. Let’s seize it.

This article first appeared on The Engineer.