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Archive for May, 2012

Two Myths Surrounding The Helium Shortage

Tuesday, May 29th, 2012

The helium shortage has captured headlines across the country. Over the past few months, there have been hundreds of articles written about the current state of supply and the rising costs of helium. Just in the past few days, headlines like “Helium shortage deflates grad parties” and “Helium shortage threatens parties as we know them” have graced the banners of local and national news outlets across the country. While most of these articles fail to capture the gravity of the situation beyond the outlook for party balloons, this is not the real concern. What is concerning is the amount of misinformation swirling around about the helium shortage.

“The helium shortage was caused by the government.”

This fallacy pervades news reports, and the bottom line is it’s simply not true. An Associated Press article appearing in such publications as The Washington Post states, “Helium is in short supply because of the 1996 Helium Privatization Act that called on the government to sell off most of its helium reserves by 2015.”

Meanwhile, an editorial in Tuesday’s edition of The Boston Globe reads, “The nation is selling off its vast helium reserve — in such a ham-fisted way that it’s led to a shortage of the gas.”

These statements are not only simplistic, but inaccurate. The Chicago Tribune, on the other hand, correctly reported that the helium shortage has been caused by a variety of coinciding factors, particularly plant outages and shutdowns across the globe. It helps that The Tribune spoke with industry experts like Linde’s head of global helium, Nick Haines.

I also had the pleasure of speaking with Haines a few months ago, who explained that helium is a globally traded product, and outages anywhere in the world affect everyone. Planned and unplanned outages across the world are largely to blame for the current situation, not the U.S. government’s plan to sell off its reserves.

“The United States is running out of helium.”

While partially true, it’s not for the reasons outlined by the media. An article in The Washington Post attempted to explain the need for legislation to replace the Helium Privatization Act of 1996 (HPA), but when it was reprinted in The Boston Globe, careless editing made the statement even more off base: “Thanks to a 1996 law that has forced the government to sell off its helium reserves at bargain-bin prices, the country’s stockpile of the relatively rare and nonrenewable gas could soon vanish.” (WP used the word “dwindle” in place of “vanish.”)

Here’s the problem with that statement. Under the existing system, the federal helium program will be shut down long before it ever runs out of helium. This is one of the main reasons the industry is scrambling to get new legislation in place before the HPA expires. Air Products’ Director of Helium Sourcing Walter Nelson told the Senate that “At current production rates of about two billion cubic feet per year, the reservoir could continue to produce helium for five to six more years.” He also noted that “Helium was removed from the reservoir at rates lower than those projected.”

So while we may run out of helium if the HPA expires, it’s not because the government is selling it off too fast. It’s simply because we would lose access to stockpiles that currently provide almost a third of the world’s helium, stranding valuable helium supplies.

Overall, the media is sending a lot of fuzzy and often incorrect messages. Distributors may be wise to take advantage of this opportunity to share their expertise with local news outlets, and receive some visibility in exchange.

Service And Safety On Memorial Day

Friday, May 25th, 2012

If there’s one thing the gases and welding distributors in GAWDA are known for, it’s service. So it’s no surprise that many men and women who work at GAWDA companies have also given their service to our country in the military. Memorial Day is a time to remember those who have died in service of our country, and a time to thank those who have pledged their service.

In addition to the many veterans who have served, many distributors employ members of the Reserve and the National Guard. Welding & Gases Today recently went inside the service of Guard and the Reserve members at Naval Station Norfolk. Machinery & Welder Corporation President Joe Campbell, a veteran himself, joined the Wisconsin Committee for Employer Support of the Guard and Reserve in their three-day Boss Lift event.

This great program familiarizes employers with the work their citizen soldiers do when called for military duty. Says Campbell, “It was a once-in-a-lifetime experience, and made me very,

very proud.” It’s a great story, so be sure to check it out.

I want to take this opportunity to personally thank those who have served. It takes a lot of courage and discipline, traits that any GAWDA member would be happy to have in an employee. I’ve created a discussion on LinkedIn to personally thank GAWDA’s service men and women, so if you have served or know someone who has, please leave a comment in the group.

Finally, with the long Memorial Day weekend and what many consider to be the start of summer, there will no doubt be a lot of grilling done this weekend. I’ve shared this before, but it’s a great video from GAWDA member nexAir, and it’s always worth a look. In this video, nexAir’s Patrick Galphin talks about propane safety.

While LP gas perhaps isn’t a core product of the average gases and welding equipment distributor, there are quite a few GAWDA members who do specialize in propane. Whether it’s home heating or home grilling, safety is always important. What better way to spread this message than through a video.

Have a safe and happy Memorial Day weekend.

Making Sense Of DOT & FDA Regulations

Tuesday, May 22nd, 2012

Making Sense of FDA & DOT RegulationsRegulations can be not only hard to keep track of, but hard to make sense of at times, whether it’s FDA medical gas regulations, DOT driver regs, OSHA or other standards. Thankfully for GAWDA members, the association has enlisted its consultants to help simplify this Sisyphean task.

Yesterday, two of GAWDA’s consultants delivered a regulatory update for members. Rick Schweitzer, Government Affairs, Human Resources & Legal Consultant, updated members on the latest driver regulations, including hours of service, EOBRs and the Certified Medical Examiners Registry.

There seem to be quite a few regulations up in the air as it relates to drivers in the gases and welding industry. One such issue is the tank vehicle definition. FMCSA quietly redefined its definition of tank vehicle in a way that would have required distributors hauling cylinders or tanks above a certain quantity to obtain a tank vehicle endorsement, even if the trucks are not carrying hazardous materials. With the rule having faced a great deal of criticism, Schweitzer reports that FMCSA will reconsider the tank definition. There’s only one problem. Several states have already started enforcing the new definition (they were not required to enforce it until 2014), creating confusion and an additional burden. It may be within their right, but is it fair for states to enforce a rule that’s under review?

There’s also quite a bit of regulatory anticipation on the medical gas side, as reported by FDA, Medical Gases and Specialty Gas Consultant Tom Badstubner. As I’ve mentioned in previous posts, there have been discussions about whether medical gases should be regulated differently than other drugs. But aside from the regulatory uncertainty of medical gases, distributors of food-grade gases face an increasingly uphill terrain. As Badstubner explained, food gas distributors are now being looked at as food producers, and as such, are inspected as though they ran a bakery. This means distributors may need to keep logs of cleanliness and check for infestations much like a bakery.

I’m only skimming the surface of the regulatory issues at hand. As Schweitzer and Badstubner pointed out, part of members dues’ pays for access to the consultants. So if you have regulatory questions, they are a great resource. GAWDA’s consultants also each write a regular column in Welding & Gases Today, which are all available online. Find answers to your regulatory questions in the Consultants’ Corner Archive.

Welding Rodeo Broadcasts Live On The Web

Friday, May 18th, 2012

2012 Welding Rodeo via webcam: Students in action.

The Welding Rodeo is one of the most impressive—and downright coolest—events I can think of in the gases and welding industry. For more than a decade, the Welding Rodeo has been challenging welders to turn piles of scrap metal into pieces of art that fit the event’s theme. This year, the theme is Into the Garden, which could lend itself to some great practical pieces. It’s always fascinating to see how teams interpret the theme and create true original pieces of art.

The event does a great job of encouraging participation from young welders, with separate competitions for amateur (high school and technical school) welders and professional welders. Today (Friday, May 18) is the competition for amateur welders. The professionals will don their welding hoods tomorrow (May 19).

The competition started as a way to draw interest for the welding program at Bellingham Technical College in Washington. When the even kicked off, BTC could accommodate about 12 welding students in its program. Today, expanded welding facilities allow the college to train almost 100 students, and when I spoke to instructor Don Anderson in 2010, the program had a waitlist of almost 100 students. I would say BTC has achieved its goal of boosting enrollment.

Anderson and Central Welding Supply’s Marshall Judy, who helped create the event, gave me the complete run-down of the Welding Rodeo’s history—and what it takes to run an event like this in “Welding Rodeo Roundup.”  If you’re looking for a way to draw interest to welding in your area, an event like this could be the answer.

While the Welding Rodeo has now been imitated throughout the country, the one in Washington is the original, and it has quite a following. The event exposes thousands of people to welding over two days of competition. Not only does it raise awareness of welding, the event raises money for welding scholarships by auctioning off the pieces created at the event.

I would love to someday make it out to Washington to see the Welding Rodeo, but unfortunately it won’t be this year. I was thrilled to discover that BTC has live webcams on the event, which you can access from the Welding Rodeo website (You will have to enter the user name “btc”; there is no password). There are two cameras currently set up on the welding booths so you can get a close up look at the action. I’m really impressed with what I see from the students so far.

Gas Industry Members Testify On Helium Bill

Tuesday, May 15th, 2012
BLM Helium Enrichment

The Bureau of Land Management's crude helium enrichment facility near Amarillo, Texas.

It’s quickly becoming more apparent that the Helium Privatization Act of 1996 has a few flaws. The act called for the Bureau of Land Management to sell off the nation’s helium reserve by 2015. 16 years later—and only 3 from the Helium Privatization Act’s end target—we are amidst a helium shortage. Just recently, legislation was introduced to address the shortcomings of the Helium Privatization Act. The Helium Stewardship Act of 2012 seeks to preserve the supply of helium and reconsider how the government approaches the sale of this precious resource.

Last week, the Senate committee held a hearing regarding the new legislation. Two GAWDA member companies, Air Liquide and Air Products, were represented at the hearing. Many more member companies will be impacted by its outcome.

Walter Nelson, director of helium sourcing & supply chain at Air Products, testified on the urgency of this new legislation. “Unless BLM has the authority to continue to operate the federal reservoir— which it won’t if there is no successor statue—all of the helium that remains in the reserve will be inaccessible. That means that 30 percent of the worldwide supply will be essentially locked up, causing prices to skyrocket, some users with no ability to access helium, and chaos in the economic sectors that now rely on helium.”

Nelson expressed Air Products’ support for the new legislation, but asked the Senate committee to reconsider how the BLM sets the price of its crude helium supply. “Guidance must be established for the Department of Interior and BLM to ensure the market-based price methodology is sound and fair,” he stated.

Air Liquide Helium America President David Joyner also commented on the pricing of helium, noting that recent price increases from the BLM have been “sudden, significant jumps, leading to an irregular domestic pricing mechanism.” He adds, “To complicate matters further, helium sourcing agreements beyond the closed BLM system reference the BLM crude price as an index for their own pricing formulas. This, in effect, drives up the price of helium for all consumers not only here in the United States but also around the world.” Ironically, the BLM price increases have been made in an effort to bridge the gap between federal and market pricing, creating a cycle in which prices will only continue to climb.

Both Joyner and Nelson made interesting points, and it’s clear that action from the government is required to bring the helium situation under control until a sufficient privatized system can be put in place. Within their testimonies is an interesting debate about the sale of helium to refineries, and whether the government should reconsider its 94 percent allocation to six domestic refineries.

You can read or watch an archive video of the full testimonies of Air Products and Air Liquide here.

Is the Helium Stewardship Act the answer the gas industry needs? Let me know what you think of the new legislation.

GAWDA Gives Medical Gas Act A Push

Friday, May 11th, 2012
Medical Oxygen

More than a million patients in the U.S. use medical gases like oxygen every day.

Over the past week, GAWDA members rallied to provide some additional support to the Medical Gas Safety Act. In the past, I wrote about the congressional hearing on medical gas and the Medical Gas Safety Act. The problem facing the industry is that medical oxygen, nitrogen and other medical gases are subject to the same regulations as pharmaceutical drugs, despite having very distinct manufacturing processes. There are also issues with the FDA requiring an approval process for medical gases as drugs.

GAWDA Medical Gas Consultant Tom Badstubner explains that the proposed Medical Gas Safety Act would approve medical gases as drugs and provide exemption from user fees. The bill would require FDA to work with the industry to modify the existing regulations to address the differences between medical gases and traditional drugs.

To help the medical gas industry’s cause, GAWDA sent letters to members of Congress and the Senate with the names of 185 GAWDA members who stepped up to support the message on short notice. The letter to Chairman Fred Upton and Ranking Member Henry Waxman explains, “The unique manufacturing and distribution process for medical gases is distinct from any other class of drug products and does not fit well into the current Food and Drug Administration (FDA) regulatory process. For example, the use of expiration dating may be appropriate for other pharmaceuticals but unnecessary and likely costly for medical gases like oxygen, whose effectiveness does not expire with time.”

Within the next few months, the bill (formally H.R. 2227) will be voted on in both houses. On May 10, the House Energy & Commerce Committee voted 46 to 0 to send the legislation to the full House for a vote. The Senate Committee on Health, Education, Labor and Pensions previously voted to send the bill to the Senate floor.

Badstubner says there are some hurdles ahead, but it is looking more and more likely that the initiative will succeed. Great work to the GAWDA members who stepped up to support the message to Congress and the Senate. This is a perfect reminder of the importance of an association to bring industry members together to respond quickly to issues that can have a long-lasting impact on everyone.

How To Build A Business Plan With One Question

Tuesday, May 8th, 2012

GAWDA member Airgas (Radnor, PA) recently announced the major news that it will undergo a leadership transition. Company founder Peter McCausland will take on the role of executive chairman of the board as EVP Mike Molinini steps into the role of president and CEO this August.

During Airgas’ recent earnings call, McCausland said, “This transition is a product of extensive leadership succession planning.” He added that the transition is “a natural result of the Board’s long-term focus on developing a deep management team and it represents the next step in the evolution of Airgas.”

As a business, it’s always ideal when you can move forward and grow on your own terms. In this case, Airgas clearly had a plan in place to help steer the company’s progress for years to come.

Whether it’s succession, sales or another facet of the business, a strategic plan can be a powerful business tool. Some organizations choose only to prepare a plan when required by an investor or bank—but as GAWDA members told Welding & Gases Today, having a plan can keep the business on track and making progress toward state goals.

In the strategic planning article “Working Your Plan,” Capitol Welders Supply (Baton Rouge, LA) Vice President Kelly Root shared the somewhat philosophical question at the foundation of his company’s business plan. “We approached our plan by asking ‘What would we want our business to look like if we floated off in a hot air balloon and landed seven years later?” he says. This one question allowed Capitol Welders Supply to visualize long-term goals, and then define a year-by-year plan to define the steps required to reach these goals, be they based in processes, technologies, finances, leadership or otherwise.

Root and Capitol Welders have found a great way to handle the challenge of business planning. Now I extend the challenge to you. If you floated off in a hot air balloon and returned seven years later…what would you want your business to look like?

Social Media Takes Root At SMC

Friday, May 4th, 2012

Another great Spring Management Conference is in the books for GAWDA. One thing that was different about this year’s meeting was the fact that there were no simultaneously scheduled breakout sessions. If you ask me, I think this is a good thing.

Last year there were three sessions (technology, HR and GAWDA Consultants), and attending one meant missing possible great takeaways from the other two. If your company sent multiple people, it would be possible to divide and conquer, but for many, it meant missing important information. This year, everyone sat in on the technology discussion. I believe this was an important conversation for all to hear.

Following Tuesday’s session, I had an interesting conversation with a young distributor employee, who shared an exchange with his company president during the session. The distributor president told the young employee, “I’m so glad you were here to see this discussion on Social Media. I wish there was a separate session for guys like me.” Although the president recognized the importance of Social Media, he perhaps did not recognize the importance of his involvement in it. The young employee, taken aback, told the president that he needed to be there too, and that the conversation about Social Media was one he needed to be a part of as much as anyone.

As the MI Committee stated in the technology panel discussion, when implementing new technology, whatever that technology is, employee buy in starts at the executive level. For employees to embrace change, the leaders of that company must embrace it as well. Social Media is not just about IT and technology—it’s about building relationships and communicating with customers and industry partners. And it is not merely a young person’s game. The over-55 age group is one of the fastest growing demographics on Social Media.

It was great to see so many people embrace Social Media at the SMC. I was live tweeting throughout the event, and saw quite a few people join the conversation as it went on throughout the conference. If you haven’t joined yet, it’s not too late. The industry conversation is always going online. Drop me a line on Twitter at @GasWeldEdge.

#GAWDA Twitter Transcript

Take a look back at the SMC conversation on Twitter. View the complete #GAWDA chat transcript after the jump.

2012 SMC Day 3: Communicating Through Technology

Tuesday, May 1st, 2012
Karl Meinhardt stands before the Technology Panel at GAWDA's Spring Management Conference

Karl Meinhardt stands before the Technology Panel at GAWDA's Spring Management Conference

The final day of GAWDA’s 2012 Spring Management Conference had a distinctly technological flavor. The closing business session featured GAWDA’s Management Information Committee and Social Media speaker Karl Meinhardt. Gases and welding technology itself is a broad, but very important topic. As MI Committee Chair Chris Dominiak revealed in last week’s guest blog, more than 70% of GAWDA members feel they could be doing more with technology.

Meinhardt got things started with an overview of Social Media. While much has been said and written about the use of Social Media to communicate with customers, one of the particularly interesting ideas touched on in Meinhardt’s speech was how Social Media can be used internally to facilitate communications within an organization.

Meinhardt pointed to the example Lockheed Martin, which after surveying its workforce, realized it was poised to lose a great deal of experience and knowledge as the Baby Boomer generation begins to retire. How did the company respond? Lockheed Martin used the power of Social Media to capture this experience for future generations. The organization created an internal wiki, their own private version of Wikipedia, where employees could contribute ideas and experiences.

After the session, I spoke with Josh and Erich Haun from Haun Welding Supply (Syracuse, NY), who were likewise struck by the idea of using Social Media to streamline internal communications. Erich pointed to the training advantage, to be able to reach employees across multiple locations to help do away with the response “I didn’t know you could do that.” Both agreed that the potential for technology to improve internal communications is intriguing.

The technology panel also addressed communication, looking at the The Cloud, mobile technology and the basic problem of implementing new technologies. The MI Committee stressed that, when introducing new technologies internally, it’s important to communicate with employees in advance and involve them in the process where possible. Buy in of the technology by company executives is critical if employees are to buy in. This has never been more true than with Social Media. As Meinhardt said, “If your customers spoke Chinese, you’d learn to speak Chinese.” Sounds like it’s time to learn the language of Social Media.