Name: This Is What Bechtel is Planning For the Future
Uploaded: 2016-05-17
Duration: 13 min 54 s
Description: The company is betting big on nuclear energy

Learn a couple of quick things about Brendon, real quick, before we get into our conversation. He once worked as an EMT and Ski Patrol, he spent a couple years working in conservation before he went back to school and went to the family company. And also, I just wanna clarify for everybody, clear something up. Most people know your company as Bechtel, but that's not how you say it, right? It's- Bechtel. Bechtel. But it depends. As long as it's not pronounced Bechtel, I'm okay. Okay. In Texas, it's Bechtel. Here it's Bechtel. Doesn't matter. So now you're all in the club. You know how to say Bechtel. So, Katie mentioned some of the things that Bechtel's has built over the 118 years. I mean, our topic today is building an energy future, you've built a lot of the energy past, you've built a lot of the nations nuclear infrastructure. You built the worlds largest solar electric facility You've built a lot of the LNG infrastructure that's been built in recent years, so energy's a huge part of your business. We're seeing a huge slow down in energy spending, future projects because of the drop of the price of oil, low natural gas prices How big an impact is that gonna have on Bektol and what are the signals you're seeing for where energy spending is gonna go in the future and where you might go with it? Yeah I would say it's clearly you know, when oil goes from $ 100 a barrel to where it is today. That's gonna have a profound impact on The way we think about opportunities as a contractor. So our oil gas and chemicals business which is one of our four operating businesses that serves end markets, that business has really shifted. So any end user that benefits from cheap abundant shale gas and low price oil is doing well and wants to build projects. All the big upstream payers have significantly slashed cap back budgets and are cutting back on big projects. What this means is I think you'll see increasing segmentation of some of the traditional core market. So we've built, Bechtel's built about a third of all the natural gas liquefaction capacity on Earth. Traditionally large on shore. L and G trains. And we see the emergence, just like we hope to see in nuclear with small modular nuclear reactors. We're seeing a shift towards smaller and mid- scale liquefaction, modularized solutions that sort of democratize access. So instead of having to go and sell five or six million metric tons per atom at a big charge, you can Saw smaller bundles and package up units. So you mentioned nuclear, you were in the NextGen nukes breakfast round table today. And I know that you are bullish on nuclear in the future, you're betting on nuclear- Yeah. Explain how you're doing that, what you see is the case for nuclear power going forward. And how it might play out and how [ UNKNOWN ] with participate. Yeah you know we, I guess maybe to back up just a second so we're, I sort of joked this morning we're a 118 year old of start up. So we think in terms of generation when we think strategically about our business, I'm the fifth generation We've designed and built about half of the operating nuclear fleet in the United States. And in one form or another, we've touched probably, I would guess, 70 to 80 % of the nuclear fleet. So deep domain expertise at nuclear and particularly on the project execution delivery side. We see real opportunities around small modularized reactors. We have for, many years now, been investing and developing a solution called Generation M Power. They're a partner BMW. I think, as we talked about this morning, when you think about it there's over 40 countries around the world that are looking at the first nuclear development within their country. Given Cap 21 and where we want to go around decreasing the carbon footprint of energy globally, I don't see how nuclear can't be a part of the energy mix going forwards. It is, and we can debate this maybe, but today nuclear is the only proven zero carbon based load generation technology out there And as we heard from some of our earlier speakers, the math on how we get to a more carbon neutral feature doesn't work without nuclear in our view. Okay you recently wrote an earth day broad post to the company. To your employees, and in that post you wrote incorporating sustainability into the way we work is a natural revolution for Bechtel. I think you know you said 118 startup but most people don't think of as a traditional construction company as being particularly sustainable. So maybe you could just explain what you mean by that evolution. How specifically your trying to make the company more sustainable And bring your employees along with that and bring them into that effort. Sure. So I'm 35, we have mandatory retirement for officers at 65 so if all goes well Well, hopefully I've got another 30 years with the company. And when you think about a 30- year time horizon and what kind of legacy you want to build, I really hope that this amplification of sustainability as a core value for our company, which it always has been, we maybe just haven't called it that. But, for five generations now we've been trying to demonstrate, in our actions every day, that we're a responsible long term- oriented designer and builder. So, I would say particularly on projects at a mega scale. So what does that actually mean for Bechtel? It means that we need to help the industry transform the way we think about energy, and moving towards a less carbon- intense energy system. Our view is that natural gas needs to play a key part of that. It's a transitional fuel, it's the cleanest of the fossil fuels It's the fastest growing of the fossil fuels and we have to remember, 41 % of the world today still uses coal as their primary source of energy. So, natural gas, we see it here with combined cycle, gas turbine power plants of the US displacing coal power generation That needs to be part of the transition. We hope to see a scale up in commercial utility scale renewables, but what we're seeing with distributed generation is really exciting. I've been meeting recently with some of the utility executives in California, and they're making these big bets and big investments in smart grids. And I think that enabling infrastructure on the grid, something they we're very interested in and something we're trying to help with. When you think about our actual, how we execute our work, there are lots of examples about how we integrate environmental and social sustainability into the way we design and build projects. Probably my most favorite example having grown up and lived and worked in construction camps around the world Where we show up, and in many cases, we're building a small city, an ecosystem for 6000 people that's self contained in the middle of nowhere. And having those construction sites, both while where living there and where we're working and building, be circular micro economies where we're reusing or recycling All the materials that come in and out of that system. And when we demobilize that we've built a positive legacy that we can pass on to the customer. Those are some examples, we're Are you doing that now, on a large scale? We are we have examples we're working on a pipeline project In Georgia where we're trying to demonstrate that. We're actually measuring it and seeing how we're doing. We're not perfect yet. We're gonna keep grinding away at it until we get perfect, which we'll probably never get to, but that notion of continuous self improvement. One of things we're going to launch later this year are some voluntary enterprise sustainability targets. And I think holding ourselves accountable, being public and transparent about what we're doing we can help shape the industry around sustainability just like we did with safety. We're going to have time for maybe one or two questions so get ready we have a microphone in the room and meanwhile I mean you mentioned Circular, small circular economies around projects and stuff. I know you have smart cities as a part of your business. So I mean you know a lot of companies are trying to play in the smart cities space, through technology, big data solutions and stuff. How do you come into that? How does Bechtel come into that? And how big an opportunity is that? I think it's a massive opportunity. I think supporting sustainable, inclusive urbanization is something that all of the companies here want to be apart of. And so some example of how we're doing that. We're building two of the four new metro lines in Riyadh. We're partnered with Siemens there. We heard from Siemens earlier. The kinds of deploying, the kinds of sensors that they're talking about, and then using that data, and mining the big data to come up with more efficient ways to plan and operate infrastructure to increase capacity and utilization rates and to extend the life of these assets I think is critical. So I would, it's an area where I think everybody wants to go do something we were kind of joking in the nuclear discussion today no one wants to be serial number one, everyone wants to be serial number two of colleagues that you know I've already serial numbers two through 1000 I just need someone to commit to serial number one. We're looking for partners and cities and an industry and in the non- profit world that want to actually go build some of these things. So you know we don't do very well in the theoretical space. We actually want to go, go implement some of this and see how it works and then iterate until we get it right. So, I think you'll see that changing. I think things like the US Counsel of marriage is really pushing forward on that in a good way. So we wanna help. I think we have a question here. Remember to identify yourself and keep the question concise please. Yeah. John [ UNKNOWN ], [ UNKNOWN ] hp. My Son, in his essay to UCLA civil engineering, wrote that the internet has created a coffin for American innovation. His friends are distracted. Didn't get a chance to even take time to go and see the construction of the Eastern span of the Oakland Bay Bridge. An opportunity of a lifetime. All his high school friends. Do you agree with him? Do you believe That we are not creating a [ UNKNOWN ] of physical infrastructure students in civil engineering and so on, that will be needed to build the infrastructure, which has to be connected to the Internet, but that we are sitting on layers of abstraction and cannot neglect it. Do you see that from a human capital perspective? To be fair, his friends probably looked at pictures of the bridge on Snapchat. [ LAUGH ] You know, it's a wonderful question. It's one of the things that keeps me up at night in our business and industry where we have, you know, a generation of 35 year experienced baby boomers that have designed and built mega projects around the world. Technically complex, you know, challenging execution environment projects And then we have the millennial generation. I'm a millennial by one year. I just made the cutoff and when I go recruit at Stanford one of my alumna maters. And talk to the construction management program there I tell people I sort of say I acknowledge that we're competing with tech companies. For civil engineers, mechanical engineers, electrical engineers. I think that competition's actually a healthy thing. It's going to compel our industry to innovate. I am haunted at night by the graph from the June 2015 McKinsey article about the construction industry productivity imperative, which It's a graph that shows that over the last decade or so, the manufacturing sector has doubled the productivity per worker while in construction it's remained flat. And so competitive pressure from alternative industries will compel us to innovate and to pick up the pace and accelerate the pace of innovation. And I think that applies to how we try to attract and retain and inspire talent as well. I think for us, we're lucky in that we get to work on the world's most exciting, toughest, first of a kind, difficult projects. We gravitate towards the really hard stuff so if you're a really hard core An engineer who actually likes to go build stuff rather than just do spreadsheets or PowerPoint slides, we're the kinda company for you. So, but I wanna get your son's CV, sounds like hes our kinda guy. Nice recruiting. Yeah. Do you find that there's plenty of talent out there for you to recruit, or are you Having to work hard to find it? I think the answer's both. I think that with the oil and gas capital investment markets contracting, I think there's going to be some shake up in the talent pool in our industry. That's something That we look opportunistically a sort of challenged our human resources team to be the Warren Buffet of talent, to invest countercyclically. And we think in cycles in terms of decades, not quarters. So that's an advantage for us. But I think that there's always gonna be work for a diversified business units and so we're able to shift talent and surge it towards The markets that are growing right now, such as Google Fiber to the Home, combined cycle and gas power plants, marginalized nuclear L & G plants. So, I think there's opportunity. Great. Well we need companies like Bechtel that keep innovating and thinking longterm. So appreciate your commitment to that and to being here today. And join me in thanking Brendan Bechtel. Thank you. [ APPLAUSE ]

The company is betting big on nuclear energy