LNG Update
By Ben Preston

Friday, Governor Schwartzenegger sent a letter to the US Maritime Administration disapproving Australian firm BHP Billington’s application to build a liquid natural gas (LNG) terminal off the coast of Ventura County.

Although Schwartzenegger supports LNG as an important part of California’s future in energy diversification, he also maintains that state environmental quality and clean air standards must be met or exceeded before any project will be approved. BHP Billington’s plans fell short of the mark.

His letter states: “As we look to the future, and to the possibility of an LNG facility off the coast of California, it is important to understand that there are many diverse projects currently being proposed by different companies that are pursuing state approval.”

A lack of action by the Governor would have resulted in the application being deferred to the federal government, which has different application approval protocols and environmental standards than does the State of California.

A Green Wave for Surfing
Making boards used to be hard on workers and the environment. One small company is pioneering efforts to clean up the process

by Jeffrey Gangemi
Back in December, 2005, the price of a custom surfboard shot up by $200 in surf shops across the country almost overnight. The reason? Surfboard shapers had panicked, reacting to news that Clark Foam, the $140 million industry's only major supplier of foam surfboard blanks, or the raw material shapers used to fashion surfboards, was shutting its doors after 44 years in business. Founder Gordon Clark had pioneered the production of foam surfboard blanks, keeping prices so low that he all but eliminated his competition.

Few, if any, of the thousands of shapers—skilled craftsmen who cut, sand, paint, and cover blanks with fiberglass and resin to make a finished board—had seen Clark's demise coming. That meant there was no major supplier in position to step in to meet demand. But the shortage of foam blanks was only one of two major problems facing the industry. The other was image. Clark's closure drew attention to the very real environmentally hazardous manufacturing practices few associated with the surf industry. The reality clashed with surfing's idyllic, environmentally-friendly image.

Clark had closed because California's Orange County Fire Authority had repeatedly reported Clark Foam to other government agencies, including the EPA, which cited the company for its continued use of the toxic chemical toluene diisocyanate, which can cause severe and chronic lung problems.

CLEANER TECH
Clark finally shut down his Orange County (Calif.) facility of his own volition, rather than face the legal fallout, according to a memo circulated by Clark at the time he closed. The media attention on Clark's closure shed light on this and other environmental problems associated with the production of surfboards, such as the use of polyester-based resins, which are harmful to the worker and emit noxious fumes. Most of the industry, long silent on the fact that manufacturing a surfboard is a dirty process, was poised for change.

A handful of small companies had already been working, some for up to 20 years, on cleaner surfboard-making technologies that would cost the same as the dirtier ones. But they couldn't find a hole in Clark's monopoly to successfully introduce a product. Among the the contenders was Homeblown U.S., an independently-owned six-employee San Diego (Calif.) foam producer that had developed a foam production system that was similar to Clark's, but was safer for workers because it didn't emit volatile fumes.

Homeblown had started in Britain in the late '80s and held a 50% share of the market for blanks there. But Clark had such a dominant position in the market that it wasn't practical for Homeblown to open in the U.S. until the factory closed, says Ned McMahon, Homeblown's managing director.

REPLACING FIBERGLASS
Today, as Homeblown gains a toehold in the U.S. market—though it still produces only 75 to 100 foam blanks a day, compared to Clark's 1,000—it's ramping up its efforts to bring more sustainable surfboard products into the market. The company has introduced what it calls Biofoam, the industry's first plant-based polyurethane blank, made out of over 50% plant-based resins, which sells for the same price as a traditional blank— between $90 and $200, depending on size. Thirty-year veteran shaper Craig Hollingsworth is using Biofoam in all his boards and says it's just as good as traditional foam from a functional standpoint.

Channel Islands, one of the world's largest surfboard-shaping companies, is currently testing Biofoam and may add the product to its line. Another company, Patagonia plans to add Biofoam as well. And Homeblown is also working on adapting hemp cloth to replace the fiberglass used in boardmaking, and experimenting with biodegradable alternatives to the polyester resin that coats the boards.

Still, by all accounts, the push to make cleaner surfboards is just beginning. The industry at large is slow to change. McMahon says traditional foam production levels have actually increased since Clark's demise. He adds that offshoring makes it hard to compete, and says two of Homeblown's main competitors, including Bennett Foam, have moved their operations to Mexico to keep prices low and escape the same stringent environmental standards that may have prompted Clark to shut down.

"A NEW DAY"
A spokesperson for Bennett disagrees. She wrote in an e-mail to BusinessWeek.com, "Mexico has its own set of EPA standards which we follow and are compliant. We exercise the same standards that are required by the States."

There's no doubt that the end of the monopoly in surfboard blanks has paved the way for cleaner ways of making surfboards, with independent businesses taking the lead. "It's a new day today, and since Clark closed, we have had an opportunity to look at how we're doing things, and it would be irresponsible to duplicate what he did when we know better now," says McMahon.