In Focus: Manufacturing and Energy Development

Dr. Vikram Rao of RTI brings a unique perspective on a number of new energy issues, including LNG extraction, conversion, and the emerging trend toward decentralization of processes formerly limited to only the very largest players.

We recently spoke to Dr. Rao, who serves as Executive Director of Research Triangle Institute’s Research Triangle Energy Consortium and advisor to the Chief Operating Officer, to learn more about the ways that the changes—and challenges— surrounding energy production are affecting the competitive landscape for those who work in this sometimes-volatile sector.

Can you describe your role with RTI?

As advisor to the COO, I spend about half of my time here and half consulting (e.g. for mining, other public service work).  The time at RTI is spent assisting with a variety of projects and strategic directions (energy strategy and specific projects).

Marcellus Shale natural gas extraction have had an impact on manufacturing in Pennsylvania.  In fact there are many companies in the Lehigh Valley who have benefited from increased business in this area.  Can you describe some of the latest technology drivers in that market area?

There are two ends of the spectrum. One is technology drivers that improve production, and the other is technology at the receiving end, which is how it is utilized.  Natural gas is used primarily for power and petrochemicals. In the latter, there are some interesting new advances going on that are enabled by local gas.

Shale gas is unique in that the production is highly distributed.  With conventional gas you get 50-100x more per well, so each shale gas well doesn’t produce much by comparison. Some of us here are working on a model of distributed production of fuels and chemicals.  Maybe the conversion to fuels and chemicals should be distributed too, which used to be all done in [highly centralized] mega plants.

Is the majority of the new technology coming from large companies, or is there some innovation being driven by small and medium-sized manufacturers?

At the receiving (conversion) end, with one small exception it’s all small companies driving this innovation.  The exception is an LNG plant project, which is an area that has a lot of large players.  The conversion of natural gas into valuable liquids on a distributed basis, though, that’s all small players.

Why is that?

In my view, there are economies of scale.  That’s being challenged by new technology and new reactor systems.  Some horses run different courses better than others.  We’re seeing a displacement of the giant factories.  Some of the cutting-edge technology comes from smaller companies.  Also, the bigger outfits are positioned for big plants—they can finance them, build them, operate them…there are just a few companies competing there.  When you start distributing that work all over, there are other competitors that can enter the arena.  The big companies don’t want to play there.

It’s my understanding there is a focus on the efficiency of many of these processes.  Where do you see this going in the future?

The IAEA has said if you want to meet any reasonable carbon targets, at least 40% of the carbon reduction will probably have to come from using less.  Using less while suffering no privation is efficiency.  I see power production combining cycles, CHP [Combined Heat and Power], I see it in automobiles becoming more efficient.  Then there are more efficient processing costs. Not to mention, it makes it more economical.

What other innovations do you see on the horizon for our natural resources in our national market?

In shale oil and gas, there will be a lot of innovation to simply make it more efficient.  Right now they’re not removing more than 5 or 10% of the oil in place.  Gas [extracts] more, but the decline rate (the production rate from start to a year from now for a given well) is higher [for gas] so you have to keep drilling new shale wells, but that is OK, because they’re shallow.  If you can improve the decline, then that’s the best of both worlds.  That’s where we will see some innovation, I think.

In other energy sources, I think one of the big areas will be Small Modular Reactors (SMRs).  I think they have a lot of merit, but we need more currency.  They’re 30-300MW facilities, and they’re fantastic for small village clusters and distributed power in general, and particularly appropriate for developing nations where there is no grid.  These are new technologies and are very safe—they cannot run away.

Then in solar, there are the advances that have been made in panel costs.  Now the advances have to be in moving from the rooftop do the ground, where it’s easier to do more complicated things.  Maintenance on a roof is very expensive, too.  I have a vision of each housing development having a small solar farm serving its needs.

How can small and medium-sized manufacturers stay in front of the technology knowledge areas and look for new opportunities?  What do you recommend?

It depends on the sector.  I think in the energy sector (especially fossil-fuel based energy), they need to keep an eye on what ARPA-E is funding. They have a good nose for projects that are promising but just need a boost.  Look at their portfolio.  Also, just watch for some avant-garde things.  The whole notion of distributed fuels is an avant-garde approach.  See what makes sense and what doesn’t and go from there.

Thanks for reading this month’s installment of the Manufacturing Resource Center’s Tech eNews.  Please feel free to browse our site or contact us to learn more about how we can put our experience to work for you.

Training and Certifications

MRC provides far more than certifications and funding assistance. We offer job creators access to specialized coaching, mentorship and a variety of business and marketing assistance normally outside the reach of most manufacturers.


No matter what’s happening with your business, MRC has probably seen it. We know the problems that keep CEOs up at night, and we know how to help solve them. Our staff has more than 100 years of combined experience working side-by-side with business owners to evaluate, strategize, discover and implement solutions that address both strategic growth needs and organizational transformation.

Training & Events Calendar

MRC breaks down the barriers that prohibit manufacturers from realizing their full potential. Our proven tactics and methods can help nearly any company at nearly any stage of its evolution. Whatever the hurdle – going green, becoming lean, entering new markets, rebranding the company – MRC can help you clear it.

Workforce Initiatives

Developing Future Workforce with programs like: What’s So Cool About Manufacturing®, PA Dream Team, the Inside Manufacturing Series, and Manufacturing Day.


Through our partnerships, we are able to bring the horsepower of the best-in-breed experts to you. Imagine having access to the second-largest technology institute in the world, a corps of ex-Toyota executives trained under the best Lean practitioners in the world or world-renowned business strategy groups. MRC makes it possible.

About Us

For over 30 years, Manufacturers Resource Center (MRC) has helped small and mid-sized manufacturers become more competitive, adopt lean and agile processes, strategically grow their companies and invest more effectively in their existing human capital.

My Account

Ready to complete your event registration? Need to confirm the date of a previous registration? Find all these details here or call us at (610) 628-4640 for additional assistance.