04-13_MWH_Global_and_Alan_J_Krause

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business MWH Global & Alan J. KrauseComplex and place that connect the resourcesChallenging Issues of the company on a virtualin Wet Infrastructure real-time basis so that we can take advantage of the strengthAn Interview with Alan J. Krause of the mass of our capabilities represented geographically By Emily Haggstrom across the globe. Like any company, we must constantly beA lan Krause is chair and chief executive officer of MWH Global, headquartered in Broomfield, Colorado. innovating to provide solutions, With more than 30 years of industry experience, Krause provides leadership to the worldwide operat- not only to technical challenges, ing companies of MWH while maintaining the organization’s position as the global leader of the wet but also solutions to contracting infrastructure sector. vehicles, delivery approaches and With professional expertise and personal passion focused on natural resources, Krause exemplifies funding. One of our strengths as the MWH mission of Building a Better World with a commitment to protect and develop the world’s a global company with officesnatural resources in a responsible and appropriate way. He has traveled the world, engaging in dialogue to addressthe unique challenges facing MWH clients, advancing the organization’s commitment to providing customizedengineering, management and construction services to meet client needs.ICOSA: As the leader of MWH, can you speak to how the company continues to stay relevant and meet theneeds of projects in all of the countries where you do business?KRAUSE: Obviously, there are several factors involved in our success. Our success starts with staff that aretrained, educated and experienced in the areas that we operate. It is also critical that we have systems in68 volume 5 issue 1

strategically situated across the KRAUSE: It is obvious to us, in Building a Better Worldglobe is our local understanding both our domestic business andof issues. It is this understanding our international practice, that The Role MWH Plays in Building Toward the Futurewhich allows us to have the in wet infrastructure in general,ability to solve the social issues and specifically as related to By Jennifer Van Fleetwhich oftentimes drive project water and wastewater, there aredevelopments that we work with significant unfunded needs that L ife on earth is dependent on water. Without it, creationour clients to address. must be addressed as infrastructure ceases to exist. It is imperative that this precious resource is ages and wears out. The concept respected and the infrastructure that brings it to civilizationICOSA: Where do you see the of operating until failure is not is managed properly and constantly improved to ensure thatfuture of water infrastructure acceptable for critical utilities future generations have access to it.moving at MWH? such as water and wastewater.KRAUSE: MWH defines wet As a result, there is a strong Since its founding in 1820, MWH Global has engaged ininfrastructure to include movement both in the domestic the engineering, construction and management of some ofboth water and energy. We municipal sector, as well as the the largest and most technically advanced wet infrastructure,believe that this market space private sector, to attract private hydropower, mining and transportation projects for munici-is significant, and it is our investment through public-private palities, governments and multinational private corporationsintention to stay focused in wet partnerships (P3) that allow these throughout the world. The company has been driven by itsinfrastructure, including both unmet needs to be addressed. purpose: Building a Better World. For example, Thomas Hawk-traditional and conventional The expected rates from private sley of Watson Hawksley Consulting Engineers, an early leaderwater and wastewater as investment in these opportunities of MWH, was one of the first people to advocate “continuouswell as energy-related wet are currently in alignment with service” pressurized systems as a way of providing safe water.infrastructure. This market will the cost of capital for traditional Today, keeping drinking water systems continuously pressur-continue to be a cornerstone of municipal investments. Therefore, ized remains one of the most fundamental, and likely underap-MWH’s business strategy. these P3 opportunities are preciated, requirements for providing safe drinking water. becoming more viable. From ourICOSA: As MWH takes on new perspective, we need to be careful Through the involvement in wet infrastructure and water-en-public and private projects, what with where we operate under these gineering projects, the role of MWH has been to help manageare the funding challenges and investment schemes and have water purity and availability in a sustainable fashion for theopportunities as they relate to a strong sense of comfort in the health, livelihood and security of people worldwide. The compa-the volatility in global markets? funding source. ny’s ability to lead in this market successfully has been depen- dent upon forward thinking and anticipating not only what is just around the corner, but what will be the future in a few short years. The company’s highly experienced team of nearly 8,000 pro- fessionals operates on six continents and is continually looking to provide innovative ways to design around the world’s most precious resource: water. Planning MWH has developed a Global Strategic Intent (GSI) that is used to drive the company toward the future. It is built upon the MWH purpose: Building a Better World, core values, vision, client outcomes, strategy, strategic priorities and competitive differentiators. Inherent in this have been horizons of growth. In the last 10 years, MWH has focused on 1) where and whom: geo- graphic and client-type expansion through mergers, acquisi- tions and major projects–taking staff to more than 34 countries worldwide; 2) what: the creation of new service-led business areas taking MWH into business solutions, program manage- ment, software solutions, asset management, design-build and construction management; and 3) how: the development of strategies to reinvent how employees do work by using para- metric design, templating, licensed tools and more. This careful planning has led to some very exciting developments. Learning and preparing for the future Part of the MWH strategy has been to develop knowledge through an incubation initiative with » Continued on next page. volume 5 issue 1 69

business MWH Global & Alan J. KrauseICOSA: What part of your core people in the locations where Building a Better Worldbusiness do you think will take their projects are?MWH into the future? KRAUSE: By focusing on attracting corporate funding. An outcome of this incubation effort hasKRAUSE: We are a company of and retaining professionals who seen the company engage, for many years, in disaster recoveryapproximately 8,000 professionals appeal to our core values and efforts around the globe from New Orleans to Christchurchthat historically is dominated by purpose of Building a Better World, to Queensland. Through these activities, MWH has identifiedengineers and scientists. While we are able to develop a workforce opportunities for planning and preparedness activities thatthe markets that we operate in and culture that strives to meet can result in faster and more efficient recovery efforts. There-are competitive and complex, we today’s more challenging needs. fore, MWH has applied its knowledge to develop an industrycertainly believe that our strong Just one example of this is waste by- standard “resilience” index (CORRI), which helps insurers andgroup of engineers and scientists products from wastewater treatment involved agencies to assess, in a consistent fashion, their read-will be a major underpinning facilities. These by-products used to iness for major catastrophic events and take action in advanceforce as our company grows into be considered a cost and liability. to deal with areas of weakness. This templated approach isthe future. We must, however, be Our professionals have embraced being warmly received by major insurers and reinsurers.prepared to take our workforce and the social, environmental andeducate them and equip them to economic impacts associated with “Oftentimes, operations within a company are not set up toaddress more and more complex operating a wastewater treatment afford the investments for developing transformative IP and peo-and challenging issues that bring facility and have worked hard to ple. Part of what MWH has done is to develop this incubation ini-higher value to our customers. ensure these by-products are now tiative, setting monies aside at a global level, so that we are ableAs a result, we expect our staff to viewed as an asset, containing to develop the processes and technologies that allow us to knowgrow with our clients, learning new nutrients and energy that can be our next move,” said Ian McAulay, chief strategy officer for MWH.skills relative to delivery, efficiency, cost-effectively repurposed andquality and innovation that will utilized for a benefit. Beyond the incubation initiative, MWH understands that thetake us into the future. scientific needs of the industry and project must also be met. ICOSA: What stands out to you In a competitive environment with changing requirements andICOSA: How does MWH strive to as a challenging, innovative or ever-advancing technology, MWH has dedicated a centralizedmeet the social, environmental game-changing project in one of research group. The company places key emphasis on the en-and economic needs of the your service areas? gineering science associated with its projects, allowing for new and innovative solutions to be provided to clients worldwide.“There are significant The research group conducts studies for a wide variety of appli-unfunded needs that must be cations across industry sectors such as water, wastewater, min-addressed as infrastructure ing water and industrial waste. The group focuses on the energyages and wears out. The concept water nexus and how the interrelationship of the two affectsof operating until failure is not clients’ environmental issues. This group is looking at the issuesacceptable for critical utilities.” of today as well as those of 15 years into the future.- Alan J. Krause At MWH, knowing the next move is not limited to devel- oping capabilities internally with appropriated monies and focused study, but extends to watching the megatrends in the marketplace. » Continued on next page.70 volume 5 issue 1

“We must be prepared to take Building a Better Worldour workforce and educatethem and equip them to address Building a better worldmore and more complex andchallenging issues.” One of those megatrends is population growth. As the world’s population continues to explode, more and more energy is- Alan J. Krause needed to fuel modern manufacturing, commercial, transporta- tion and residential activities. As energy needs increase, so do theKRAUSE: Our ongoing work that moves goods and services demands on water and those companies that clean it, distributeand role in the design and around the globe. With the ability it and provide it to those who consume it in their processes. Asconstruction of the Panama Canal to pass post-Panamax vessels, such, these utility companies and others are looking more closelyThird Set of Locks Project certainly it is estimated that somewhere at their water footprint and ways innovation will help them savemeets those criteria. Working on between eight and 10 percent of money, differentiate and be more sustainable. “MWH is identify-an engineering project of that the world’s trade will pass through ing key areas (Global Growth Platforms) where our 200 years ofscale and magnitude offers a the new Panama Canal on an historical knowledge combined with technology and appro-wide variety of challenges and annual basis. The effect of this will priately applied creates a highly differentiated service offeringopportunities. By combining our be felt in the Gulf Coast and Eastern which drives previously untapped efficiency and effectivenesstalent and knowledge network, Seaboard of the U.S. However, from the existing asset bases of our clients,” said McAulay. “Thiswe were able to develop a wide these larger vessels will require ‘Return on Asset Base’ methodology is reaching exciting levels,variety of technical innovations, infrastructure improvements to and now we are actually seeing assets which were historicallysuch as the unique approach load and unload vessels, as well as energy consumptive being transformed to energy productive.”for the water-saving basins, dredging that will allow vessels towhich reduced costs and will pass through with deeper drafts. At the highest level, many large waste-water treatmentimprove operations. The project There are also several side benefits works are becoming effective energy factories, entirely self-suf-also allowed us to showcase to the Panama Canal Third Set of ficient in terms of energy needs through combined heat andthe diverse capabilities of our Locks Project. Obviously, the firstprofessionals and take advantage and foremost benefit is reduced As energy needs increase,of our global footprint by energy consumption by avoiding so do the demandscompleting the design activities the long circuitous route around on water and thosewithin a very aggressive schedule the tip of South American, which companies that clean it,through our office network and a is approximately 8,000 miles. As distribute it and provide24-7 production approach. a result, the amount of energy it to those who consume consumed to move freight from it in their processes. The Panama Canal represents a one hemisphere to the next will beworld-scale, heavy civil engineering greatly reduced. power (CHP), and in many cases being so efficient in this regardproject that will connect the that they are net exporters of electricity and gas. “Helping ourWestern and Eastern Hemispheres ICOSA: Hydropower is the clients move from being net consumers to net producers ofof the world through engineered number-one renewable power energy is at the heart of our purpose,” said McAulay.locks capable of taking the largest resource in the United States.vessels in the world today. We have Moving into the future, do you Along with advancing clients to be more sustainable in theirused a variety of very innovative see wind or solar rising to meet energy usage, MWH has been committed to building a betterapproaches to design, including power needs like hydropower world through partnerships and projects. Joseph Adams, presidentthree-dimensional design, as well currently produces? of the Energy & Industry operation at MWH is part of the Engineersas extremely innovative water- KRAUSE: Wind and solar both Without Borders USA Corporate Leadership Council. MWH staff issaving basins which allow the have their place in a national involved in community-driven development programs worldwidepreservation of precious water renewable energy generation through the implementation of engineering projects that addressresources that are required to fill portfolio, but neither can provide challenges in water supply, sanitation, energy access, sustainableand empty the locks that allow the same benefits and value that agriculture and more. Additionally, MWH has a program calledships to pass. hydropower provides, such as the Climate Change Commitment Education program, under enhancing grid reliability and the which employees educate children around the world on simpleICOSA: In an interview with Alaska availability of peak energy. Both ways they can save water and energy to protect the future of theBusiness Monthly, you said the wind and solar are intermittent planet. Since 2007, more than 14,500 students from 10 countriesPanama Canal will change global resources that cannot be easily have participated in this program. » Continued on next page.trade. Based on MWH’s project dispatched on demand, so bothinvolvement, what type of change need to be “firmed up” using otherdo you foresee? power generation sources such asKRAUSE: From a trade perspective, hydropower and especially hydro-the Panama Canal will allow pumped storage so that the energypost-Panamax vessels, which is available when it is needed andtoday compose approximately not just when it can be generated.35 percent of the maritime fleet volume 5 issue 1 71

business MWH Global & Alan J. Krause“Wind and solar both have their Building a Better Worldplace in a national renewableenergy generation portfolio, Visual Intelligence and Predictivebut neither can provide the Analyticssame benefits and value thathydropower provides.” Another trend has been the explosion in social media acces- sibility and technology capability. It has had an astonishing- Alan J. Krause impact on many major clients of MWH. It is a phenomenon that will only increase in the future as the velocity and varietyBecause of potential adverse far from the load centers in the of data transfer increases exponentially. Many clients of MWHimpact on grid stability and other U.S., and this means major new are seeing “regulation” of their activities being done by cus-factors, the total amount of energy transmission lines are required to tomers, consumers and critics in real time on visual media. Itgenerated by wind and solar is deliver the power. If the wind and is a new currency of communication and one which can havenecessarily constrained, whereas solar installations are burdened wide-ranging impacts on reputation as well as actual levels ofhydro has no such constraints with the cost of transmission, customer service.and actually enables more wind even with the PTC, manyand solar to be developed by projects become uneconomical. “In our utilities business, we are working closely with clientsproviding benefits to the grid. The Hydropower has none of these to combine our asset knowledge with new technology to giveDepartment of Energy assessments problems and in fact, in many highly visualized displays of real-time performance and predic-indicate that water power can instances, is part of the solution tive future performance to allow clients to manage for optimalpotentially provide 15 percent of because hydropower is the most asset effectiveness and efficiency and proactive customerour nation’s electricity by 2030, up stable and fastest responding service. We call this visual intelligence and it speaks to the newfrom about six percent today. type of power plant in the world. world of machine-to-machine communication. We seamlessly In many regions of the world integrate previously unconnected data drawn from those types Additionally, both wind and hydropower is considered almost of interactions and translating it into real-time screen display ofsolar are currently not economical a transmission asset and is the valuable information allowing operators to see a ‘rich picture’options without government first responder in the event of any of data and make decisions that significantly benefit their busi-subsidies where hydropower instability in the grid. ness,” said McAulay.has proven to be economical onits own. This can be seen during ICOSA: How are new “We are able to usethe recent expiration of the technologies moving technology in new andProduction Tax Credit (PTC) where hydropower projects forward? exciting ways to vision andnew wind and solar development KRAUSE: New technologies are implement outcome-basedslowed significantly. The plant moving forward on several fronts, scenarios that are cost-equipment continues to get making water-power projects effective and sustainablecheaper, but it is still not viable, more attractive than in the past. solutions for our clients.”and this gets more complicated Already the most efficient andby the lack of transmission most reliable form of power in the - Ian McAulaycapacity and who needs to pay world–the hydropower industry–for the upgrades. A vast majority has turned its energy to improving For example, if a water main were to burst in the middleof potential utility-grade wind the long-term sustainability of of a business district, in the past, the client would check theirand solar installations are located records, repair the pipe and manage the fix. This is no longer acceptable to regulators and the general public. Now clients must manage the event, and technology is helping them to do so. Utilities can now connect data that can help predict how many people may be affected by the dust kicked up from construction on the street, the changes in pressure on the entire system when a water line is shut down or rerouted, understand the traffic patterns around the construction to plan for the best times for repairs, measure influence circles around the incident–what is the demographic of the populous and are they historically more apt to complain and what is the ethnic makeup of the neighborhoods in order » Continued on next page.72 volume 5 issue 1

“DOE has ten projects in the Building a Better Worldsustainable small hydropowercategory to research, develop and to properly distribute the correct communications. Utilities nowtest hydropower technologies manage time to resolution, track the number of complaints inthat can be deployed at existing certain areas, comparing historic versus actuals, and some areor constructed waterways.” even looking to engage in sentiment analytics that will probe social media conversations real-time during repairs, allowing for- Alan J. Krause real-time responses and management. The combination of his- torical knowledge and predictive knowledge allows for clientsboth large and small hydropower and new fish passage facilities to manage for outcomes as opposed to outputs.projects and dams by reducing while actually reducing spillwaythe environmental impact. For releases and using the turbines At MWH, technology is being used to help clients manageconventional hydroelectric more often. This can most clearly big data in order to make informed decisions that drive theirprojects, advances in turbine be seen by all the recent success business forward. The company is using a system-thinkingrunner designs are leading to “fish- in the Sockeye Salmon run on approach to pull together the whole picture of asset creation,friendly” turbines–those higher- the Columbia River. During 2012, operations and management so that whether the client is:efficiency machines that help records were shattered whenimprove water quality. Moreover, more than 400,000 sockeye • O n the Board and cares about share price.fish-friendly turbines reduce fish salmon returned to the Columbia • In the management office controlling energy and labor costs.injury while maintaining current River. The fish passage numbers • A t the job site taking corrective action to fix or replace a pump,levels of energy production. on the Columbia, including the he or she is pulling the right information out of a system that multiyear trend, are a definite understands time, money and asset-outcome relationships.  Advances in analysis indicator that the industry istechniques, such as computational moving in the right direction McAulay says, “We are able to use technology in new and ex-fluid dynamics, have allowed environmentally, and that this citing ways to vision and implement outcome-based scenariosengineers to optimize turbine has been happening over time that are cost-effective and sustainable solutions for our clients.”runner designs to achieve higher because today’s results requiredefficiency and stability over successful downstream passage MWH has flourished since 1820, and will continue to, follow-larger operating ranges, and five to seven years ago. ing the company’s developed GSI, watching the megatrendsincreasing the amount of energy in the marketplace, incubating research efforts and involvinggenerated by these plants. These The Department of Energy employees in Building a Better World.improvements have also led to (DOE) is currently funding 16the design of aerating runners research and development test hydropower technologies these technologies could makethat can improve water quality projects that will help advance that can be deployed at existing substantial contributions toby enhancing dissolved oxygen hydropower development in the or constructed waterways. our nation’s electricity needs.downstream of the project. U.S. The projects cover a wide Advances in pumped-storage Two recently released resource range of topics, from extracting technology revolve primarily assessments show that waves Many other improvements energy from irrigation canals around adjustable speeds in and tidal currents off the nation’shave been made through and low height dams to using the pumping mode. The power coasts contain enough energyenhancements in the civil works reservoirs for energy storage. absorbed can be varied at fixed to provide more than one-thirdthat allow for the management of The DOE has ten projects in the head, permitting a grid frequency of our nation’s total annualwater temperatures and dissolved sustainable small hydropower regulation, even in pump mode. electricity usage. To advance thegases at the dams through category to research, develop and The efficiency and operational development of these promisingmultilevel intakes, new gates flexibility of pumped storage technologies, the DOE funds hydro is substantially increased research and development of with adjustable speed units. MHK technologies, including laboratory and field-testing of In addition, there are individual components up to significant advances being made demonstration and deployment daily in the areas of kinetic energy of complete, utility-scale systems. machines, wind energy and tidal energy. Marine and hydrokinetic On the cost-reduction (MHK) technologies, which side, MWH is using many new generate power from waves, tides advances to speed construction or currents in ocean waters, are and reduce the cost of large at an early but promising stage projects while simultaneously of development. Many coastal improving the safety for flood areas in the U.S. have strong and earthquake events (with wave and tidal resources close to technologies such as “Roller areas with high-energy demand. Compacted Concrete Dams” RCC With widespread deployment, and Hardfill dams). volume 5 issue 1 73