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24 Apr 2015

Accounting for HSSE in an Enterprise Resource Planning System

Enterprise resource planning (ERP) software systems help organizations manage data from product planning to shipping. By automating primary business-related processes, the systems allow companies to define their business models and plan workloads.

However, most companies do not include processes related to health, safety, security, and environmental (HSSE) concerns within the scope of their ERP systems, and failing to account for HSSE may be a costly mistake, an expert said.

Jeff Morgheim, a former climate change director at BP, said the early inclusion of HSSE practices in ERP systems is a good business practice because it sets a societal expectation that leads to improved decision making.

He spoke at a webinar, “What About HSSE? Why Early Inclusion of HSSE Into Enterprise Resource Planning Efforts Makes Sense,” held by the SPE Gulf Coast Section’s Health, Safety, and Environment study group. Morgheim, who was part of BP’s executive team in the aftermath of the Macondo incident in 2010, is the founder of Edge Consulting.

HSSE plays an important part in the operational excellence of an organization, Morgheim said. However, financial issues may make it difficult for a company to execute primary HSSE functions.

“When an enterprise decides that it needs to implement something that allows all this information to flow together, the usual motivator has to do with getting a better handle on their accounting systems,” Morgheim said. “So, what you’ll find is that the executive sponsor within an enterprise will tend to be someone from within the finance function. That has an impact on the scope (of ERP implementation).”

The following factors drive the inclusion of strong HSSE policies in an ERP system:

  • Seizing the opportunity for near-term process improvements
  • Avoiding rework
  • Fostering a collaboration between functions
  • Leveraging the risk reduction potential of an ERP system
  • Enhancing workforce sustainability
  • Signaling the role of HSSE to the organization

Morgheim said near-term process improvements provide organizations with a framework for identifying the processes for simplification or elimination, and removing duplicity in data collection and reporting. An organization’s ability to use its HSSE policy in the investigative process in a consistent way with the rest of the ERP system is a powerful opportunity.

“It’s a fantastic opportunity for your function to be able to sit down and look at how exactly our processes work,” he said. “Where do we get information from? Who do we get information to? How do we validate that information? What do we do with that information?”

Avoiding rework on ERP systems is critical to keeping their cost down. Morgheim said incorporating good HSSE practices into a plan early will always cost less in the long run than retrofitting a plan to incorporate those practices after an incident.

“As anyone who has done house remodeling knows, there is a lot less pain and suffering and mental anguish involved in designing all the rooms ahead of time rather than building two separate parts of the house and figuring out how you’re going to integrate them together,” he said.

In addition, fostering collaboration between functions (operations, drilling, accounting, human resources, and the supply chain) helps reduce workload and errors within an organization.

Leveraging an ERP’s risk reduction potential helps improve compliance, risk management, and operational assurance, which leads to long-term benefits in accounting and finance.

Enhancing the HSSE workforce’s sustainability helps lower turnover costs and risks. It expands the pool of potential HSSE employees and lowers the costs to bring in new people. By emphasizing the importance of the role of HSSE, an organization is making it part of the creation of a culture of operational excellence. Morgheim said companies should reinforce the belief that good HSSE practices lead to good business practices.

View the webinar here.

23 Apr 2015

Sustainable Development, Part 3—Local Content: Opportunity or Challenge?

Earlier this year, HSE Now initiated a series of articles (Part 1; Part 2) highlighting presentations from a panel of global experts at the 2014 SPE Annual Technical Conference and Exhibition in Amsterdam, wherein the experts shared their perspectives on a topic of increasing strategic importance to the society’s global members: sustainable developimage002ment. Titled “People, Profit, Planet: Advancing Practices That Balance Economic Growth, Social Development, and Environment Today and in the Future,” the session was moderated by Johana Dunlop of Schlumberger, chairperson of the SPE Sustainability Task Force. Organized with the help ofMichael Frederik Ellekjaer, the panel included the following panelists: Alyson Warhurst of Maplecroft; Stephen Newton of Equitable Origin; Egbert Imomoh, 2013 SPE President; and Annette Stube of Maersk.

The first article featured remarks by Stube, group head of sustainability for Maersk, while the second shared remarks by Newton of SCE Petroleum. The next featured panelist is Egbert Imomoh, nonexecutive chairman and cofounder of Afren and 2013 SPE President. In his presentation— “Local Content: Opportunity or Challenge?”—Imomoh focused on the importance of an effective local content program, including the opportunities and challenges associated with this program.


 If we look at stakeholders and what they bring to the table:

  • Government brings resources, laws, security and fiscal terms
  • Community brings land, local customs, and people
  • Industry brings knowledge, capital, people, and equipment

In return, governments are interested in maximum economic growth, while communities are seeking employment and minimum impact on their environment. The industry wants to maximize value and protect sanctity of contracts, as well as access to local staff.

When you look at the phases in the journey of compliance with local content expectations, it can be summarized in three areas—anticipation, pressurization, and legislation.

 

Anticipation
Fig1Long before the law, operators and service companies recognized the changing sociopolitical landscape. With that recognition came the need to do something and be seen as doing something to address the capacity gap. Different initiatives were started (i.e., increased job opportunities, scholarships, internships, training, and certification programs) and Human Capital and Community Affairs departments were established to reach key stakeholders and address issues therefrom.

 

Pressurization
Efforts by oil and gas companies were not perceived by some as far-reaching enough as overall awareness increased and improved. This resulted in some instances of increased agitation as communities, pressure groups, and the business sector called for more inclusion, localization, and empowerment. Companies resisted, arguing that the cost and risk made inclusion and localization a high price to pay; however, government responded by formulating policies requiring use of local human and material resources where available and competitive. The result was that subject-matter experts were created and encouraged to offer goods and services to the sector. Unfortunately, unrest increased as communities sought to control the natural resources in their domain, and governments came under increased pressure to act to maintain peace. This led to the government’s search for social tools.

 

Legislation
Fig2In response to the search for tools, laws were enacted to serve as a catalyst for achieving the objectives of inclusion and domiciliation. The legislation included detailed guidelines and targets designed to change corporate behavior and attitude to localization. Also addressed in the legislation were implementation and enforcement provisions to ensure full compliance. As expected, the provision for  stiff penalties caught corporate attention, and corporations recognized that it was no longer “business as usual.” The compliance landscape continues to change even as oil and gas companies embark on this journey with varying degrees of success.

 

Challenges
Local content has come to stay; however, there are several points of conflict that exist among stakeholders and that must be managed to make progress. Legislation is fraught with perceived unrealistic targets, which, in turn, promote opposition by industry. Also, a lack of agreement on metrics for measuring performance and attainment of goals remains a challenge. The anticipated impact is slower than expected because of several factors:

  • Lack of industrial base
  • Dearth of infrastructure that drives up the cost of development and compliance
  • Quality issues (human and material) and commitment to continuous improvement
  • Funding required to achieve compliance (i.e., incremental price to be paid)

 

Achievements
Despite all the challenges, many international service companies have formed alliances with local companies. Banks are more ready to grant loans because they understand the risks and opportunities better, which leads international oil companies to accept paying a premium to accommodate local companies. Also, within Nigeria, many indigenous companies have emerged and render services both within and outside. So, like so many other challenges faced by industry, progress is being made toward achieving the long-term objectives surrounding local content, but there is always room for improvement.

 

Questions or feedback on this perspective may be provided directly to Egbert Imomoh.

23 Apr 2015

USGS Works To Incorporate Induced Seismicity Into Hazard Model

Significant strides in science have been made to better understand potential ground shaking from induced earthquakes, which are earthquakes triggered by man-made practices.

Earthquake activity has sharply increased since 2009 in the central and eastern United States. The increase has been linked to industrial operations that dispose of wastewater by injecting it into deep wells.

Cumulative number of earthquakes with a magnitude of 3.0 or larger in the central and eastern United States, 1970–2014. The dashed line corresponds to the long-term rate of 29 earthquakes per year, with an increase in the rate of earthquakes starting around 2009.

The US Geological Survey (USGS) released a report on 23 April that outlines a preliminary set of models to forecast how hazardous ground shaking could be in the areas where sharp increases in seismicity have been recorded. The models ultimately aim to calculate how often earthquakes are expected to occur in the next year and how hard the ground will likely shake as a result. This report looked at the central and eastern United States; future research will incorporate data from the western states as well.

This report also identifies issues that must be resolved to develop a final hazard model, which is scheduled for release at the end of the year after the preliminary models are further examined. These preliminary models should be considered experimental in nature and should not be used for decision-making.

USGS scientists identified 17 areas within eight states with increased rates of induced seismicity. Since 2000, several of these areas have experienced high levels of seismicity, with substantial increases since 2009 that continue today. This is the first comprehensive assessment of the hazard levels associated with induced earthquakes in these areas. A detailed list of these areas is provided in the accompanying map, including the states of Alabama, Arkansas, Colorado, Kansas, New Mexico, Ohio, Oklahoma, and Texas.

Scientists developed the models by analyzing earthquakes in these zones and considering their rates, locations, maximum magnitude, and ground motions.

Research has identified 17 areas in the central and eastern United States with increased rates of induced seismicity. Since 2000, several of these areas have experienced high levels of seismicity, with substantial increases since 2009 that continue today.

“This new report describes for the first time how injection-induced earthquakes can be incorporated into US seismic hazard maps,” said Mark Petersen, chief of the USGS National Seismic Hazard Modeling Project. “These earthquakes are occurring at a higher rate than ever before and pose a much greater risk to people living nearby. The USGS is developing methods that overcome the challenges in assessing seismic hazards in these regions in order to support decisions that help keep communities safe from ground shaking.”

In 2014, the USGS released updated National Seismic Hazard Maps, which describe hazard levels for natural earthquakes. Those maps are used in building codes, insurance rates, emergency preparedness plans, and other applications. The maps forecast the likelihood of earthquake shaking within a 50-year period, which is the average lifetime of a building. However, these new induced seismicity products display intensity of potential ground shaking from induced earthquakes in a one-year period. This shorter timeframe is appropriate because the induced activity can vary rapidly with time and is subject to commercial and policy decisions that could change at any point.

These new methods and products result in part from a workshop hosted by the USGS and the Oklahoma Geological Survey. The workshop, described in the new report, brought together a broad group of experts from government, industry, and academic communities to discuss the hazards from induced earthquakes.

Wastewater that is salty or polluted by chemicals needs to be disposed of in a manner that prevents contaminating freshwater sources. Large volumes of wastewater can result from a variety of processes, such as a byproduct from energy production. Wastewater injection increases the underground pore pressure, which may lubricate nearby faults thereby making earthquakes more likely to occur. Although the disposal process has the potential to trigger earthquakes, most wastewater disposal wells do not produce felt earthquakes.

Many questions have been raised about whether hydraulic fracturing is responsible for the recent increase of earthquakes. The USGS studies suggest that the actual hydraulic fracturing process is only occasionally the direct cause of felt earthquakes.

20 Apr 2015

Industry Can Do More To Raise Awareness of Operational Safety

Operational safety in offshore activities is a paramount concern to the oil and gas industry. No one wants to be killed or cause harm to fellow workers, employees, or the general public. Our awareness of when and how to act on that concern has changed over the years. We have made huge strides to improve the safety and environmental aspects in the design, construction, operation, and maintenance of drilling and producing systems.

However, we can still do better on this front. The evolution of safety awareness in our industry is generally driven by the occurrence of major accidents, the threat of new regulations, and our response to those threats to assure that the regulations are practical and efficient. Based on my experience, I think further industrywide changes in attitude are necessary for a true safety culture.

I joined the industry in 1964, before a well operated by Pan American Petroleum (Unocal) blew out in the US Gulf of Mexico (GOM) and engulfed the CP Baker barge in a fire (June 1964) that put offshore safety and potential pollution on the public radar. The vessel was a catamaranlike drilling barge, and the force of the blowout caused an eruption in the water between the hulls. Many of the crewmen jumped to safety into the sea, but 22 died.

Back then, we accepted that this was a hazardous business in which accidents would happen, and we took for granted that people would get hurt, and even killed, as we went about our business. We took a kind of perverse pride in that fact. We were doing things that had never been done before and providing much needed energy in the world.

Besides, real men—and we were all men in those days—did not show fear. Who needed walkways, handrails, or safety lines? The loss of a finger or two was the mark of a driller who had the necessary field experience in “throwing a chain” to make up pipe.

We have come a long way from the days of missing fingers. Our industry recognizes the importance of appropriate standards for equipment, system design, and paying attention to personnel safety. We understand the need to manage safety using the same principles of planning, organizing, implementing, and evaluating that we use for managing other activities. Efforts are being made to incorporate the science of human factors and a culture of safety into our operations.

Those efforts have borne some fruit. From 1991 to 2009, there was an average of 6.5 deaths per year in the GOM. In the 3 years after the Macondo blowout (April 2010) from 2011 to 2013, there was an average of 3.3 deaths per year. It is too early to tell if these numbers mean that we have learned lessons and things are better, or if there has been no significant change in safety. I think we are safer, but there are things I worry about.

16 Apr 2015

Sustainable Development: Unlocking Growth, Part 2

Earlier this year, HSE Now posted the first in a series of articles highlighting presentations from a panel of global experts at the 2014 SPE Annual Technical Conference and Exhibition in Amsterdam, wherein the experts shared their perspectives on a topic of increasing strategic importance to the society’s global members: sustainable development. Titled “People, Profit, Planet: Advancing Practices That Balance Economic Growth, Social Development, and Environment Today and in the Future,” the session was moderated by Johana Dunlop of Schlumberger, chairperson of the SPE Sustainability Task Force. Organized with the help of Michael Frederik Ellekjaer, the panel consisted of Alyson Warhurst of Maplecroft; Stephen Newton of Equitable Origin; Egbert Imomoh, 2013 SPE President; and Annette Stube of Maersk.

image002The first article featured remarks by Stube, group head of sustainability for Maersk. Part 2 comes from Stephen Newton, who was chief executive officer of Equitable Origin at the time. He has been a member of SPE since 1974 and, in addition to his current role on the Board of Equitable Origin, is the managing director of Southern Cross Energy. He is actively engaged in promoting oil and gas prospects in Latin America. Previously, Newton held senior roles in several companies, including in global responsibility for business development; engineering; technical services; health, environment, and safety; and community affairs at Occidental Petroleum. In this role and in running a number of operations subsequently in geographically diverse locations, Newton has continually recognized the ever-increasing need to engage communities with the same enthusiasm that we have applied in addressing technical issues in increasingly challenging environments.

In his presentation, entitled “Understanding the Value From Engaging Your Stakeholders,” Newton focused on the importance of integrating societal factors into operations decision making, including the value proposition, the why, and the how.


  • Eradicate extreme hunger and poverty
  • Achieve universal primary education
  • Promote gender equality and empower women
  • Reduce child mortality
  • Improve maternal health
  • Combat HIV/AIDS, malaria, and other diseases
  • Ensure environmental sustainability
  • Promote global partnerships for development

Sustainability 2-Side 3The following are some key points to leave you with on this topic:

  • Good ideas do sometimes fail, so it is imperative that a climate of trust exist to prevent recriminations.
  • There is much we can do by leveraging our presence and infrastructure; however, we must actively engage the local communities and enlist the support of government, NGOs, and other entities that have been set up to support sustainable development activities in areas where we operate.
  • It is imperative that we address the above-ground risk in addition to doing all the right technical things.
  • As community involvement has increased, it is essential that the selection process for management include an assessment of the candidate’s ability to understand and manage all the risk factors.
  • While still critical to the success of a project, it is no longer sufficient to be just technically qualified; it is equally important to ably manage the soft side where perhaps the greatest risks lie.
  • Companies that, through their local operations, demonstrate the ability to operate successfully and are willing to subject themselves to third-party independent verification of those operations are far more likely to earn the trust of critical stakeholders and become partners of choice for investors, governments, and communities.

 

 

8 Apr 2015

SPE Publishes Technical Report on Worst-Case Discharges

In March, the SPE Board of Directors approved the publication of a technical report on calculation of worst-case discharges (WCDs). The report documents the consensus from an SPE-sponsored summit held in March 2014. At the summit, 68 subject-matter experts met in New Orleans with the goal of improving the methods of calculating and reporting WCD scenarios. The attendees—representing operators, regulators, academia, and service providers—developed the report, which was made available for comments for 30 days and edited to include comments before being approved by SPE’s Board of Directors.

Oil skimming vessels work around the clock at the site of the Macondo disaster in the Gulf of Mexico.

Oil skimming vessels work around the clock at the site of the Macondo disaster in the Gulf of Mexico in 2010.

The focus of the technical report is on the calculation of WCD rather than well design or intervention. Its primary application is in the Gulf of Mexico, although the report may be considered for wells elsewhere.

Deterministic methods are proposed because of the wording of regulations and requirements for detailed well design and response planning, but parametric sensitivity analysis is recommended. All reservoir properties, the report says, should be best-estimate success-case values based on sound geology, geophysics, and engineering judgment.

Topics covered in the technical report include reservoir properties, inflow modeling, outflow modeling, total volume, special cases, and reporting. Future improvements could include flow correlations for high rates in large-diameter pipes, sonic velocity effects, and probabilistic methods.

The summit focused on defining methods for determining reasonable reservoir properties and fluid analog data to be used as modeling inputs for both shallow-water and deepwater wells. Discussions included the interaction of water sands and gas sands interspersed with oil sands, multiple sands in the same wellbore in various states of depletion, and the effects of secondary gas caps and water encroachment on calculated WCD values.

According to the report, the flowing scenario should be modeled over the duration of the spill to determine when the highest, single-day flow rate from the well occurs, which may or may not be the first day. In multiwell situations, the report says, it is important to remember that the WCD well may or may not be the first well drilled on the block or in the field. Each potential well location must be assessed and the WCD determined by the planned well that has the highest WCD flow rate.

The summit’s organizing committee consisted of 9 members from major international oil companies, 11 members from independent oil companies, three members from universities, two members from national oil companies, and two members from the US Bureau of Ocean Energy Management (BOEM).

The summit provided a sound technical venue to explore a variety of challenging issues and opportunities that face operators in the Gulf of Mexico. It also allowed for discussion and technical exchange on scenarios that could be encountered while drilling offshore wells.

Definition of WCD
BOEM defines WCD as: “The single highest daily flow rate of liquid hydrocarbon during an uncontrolled wellbore flow event”—that is, the average daily flow rate on the day that the highest rate occurs under worst-case conditions (i.e., a blowout). It is neither the total volume spilled over the duration of the event, nor the maximum possible flow rate that would result from high-side reservoir parameters, nor a distribution of outcomes. It is a single value for the expected flow rate calculated under worst-case wellbore conditions using known (expected) reservoir properties.

Download the technical report here.

23 Mar 2015

Pressure To Reduce Methane Emissions Highlights the Need for Better Monitoring

The US government is working on regulations to reduce oil industry methane emissions by more than 40% over the next 10 years.

A floating emissions collection device is systemically moved around a produced-water pond in Utah by researchers from Utah State University measuring emissions rising from the water. Photo courtesy of Howard Shorthill, Utah State.

Meanwhile, it is making a large investment in research seeking reliable ways to measure how much of the methane in the atmosphere is from natural gas production vs. other sources of the gas that can lead to global warming and smog.

“We can tell how dirty the air is. What is really tricky is ‘where it is coming from.’ ” said Susan Stuver, a senior research scientist at the Texas A&M Institute of Renewable Natural Resources, who was among the first people to begin gathering emissions data in unconventional gas plays.

There are a growing number of estimates published, and they vary wildly, with studies estimating natural gas losses ranging from 1% to 7% of US production, according to a summary in a US Department of Energy research grant.

The methods, the math, and the politics of methane measurement are complex and changing. What once was an economic question facing the natural gas business—how to cut losses of a valuable product—has become a contentious environmental issue of how to reduce emissions of a gas that is able to warm the Earth far more than carbon dioxide?

19 Mar 2015

Mobile Unit Makes Short-Duration Tasks in Turnarounds Safer, More Efficient

Ensuring personnel have the required safety equipment and the ability to complete their assigned jobs efficiently is critical to achieving a successful turnaround.

Using United Safety’s vast experience in turnaround safety, the company identified a frequent bottleneck in short-duration jobs requiring breathing air such as blinding. The setup for these tasks can take a significant amount of time and resources, causing delays and reducing overall turnaround productivity.

The Air TreQ Blinder from United Safety.

The Air TreQ Blinder from United Safety.

“For instance, let’s take the action of removing a set of bolts from a flange, a very common task during turnarounds. The actual operation should take 10 minutes; however, job tickets indicate that this 10-minute job takes from 30 minutes to 1 hour to complete,” said Shayne McCallum, vice president, North America, at United Safety. “On top of the setup and deployment of safety gear, if electricity is unavailable, a secondary source of pneumatic power has to be set up for tools. If compressed air is not accessible, workers are required to blind or deblind with manual tools, increasing fatigue and risk of injury. This extra time and resources could be freed up to be deployed elsewhere, if the process was more efficient.”

The challenge was to find a way to improve productivity of short-duration tasks while providing workers with a continuous flow of breathing air to ensure their protection.

The answer came in the form of the Air TreQ Blinder, a mobile unit that simultaneously provides both breathing air and air to be used by pneumatic tools. The Blinder provides 1,000 cubic feet of breathing air, which can also be used to operate pneumatic tools in a compact, mobile unit. If more air is required, proprietary Fill-on-the-Fly technology allows the equipment to be refilled while in use, ensuring that the task is not interrupted.

The Air TreQ Blinder is designed with plants in mind. Its narrow footprint and small turning radius allow maneuvering in tight spaces. It also has storage space for tools, consumables, safety equipment, or any other job-specific gear the workers need to complete the task at hand. This has led to its positive reception in plant environments.

“The result is increased contractor tool time and improved safety, as set up time is short, and workers do not have to use hand tools or wait for various equipment from the distribution hub or source tools and safety equipment, which are often distributed from different locations. Ultimately, the Air TreQ Blinder helps to improve overall turnaround efficiency and safety,” said Tim Wallace, executive vice president, western hemisphere, for United Safety.

For more information on the Air TreQ Blinder, click here.

17 Mar 2015

SPE President Calls for E&P 2.0 at HSE Conference

To meet increasing demand safely, the oil and gas industry needs to remain focused on health, safety, and the environment, said 2015 SPE President Helge Hove Haldorsen. He spoke at the 2015 SPE E&P Health, Safety, and Environmental Conference—Americas on 16 March.

Haldorsen

SPE President Helge Hove Haldorsen, center, talked with students from the University of Oklahoma after his keynote address at the 2015 SPE E&P Health, Safety, and Environmental Conference—Americas.

“I have an intense personal commitment to making E&P safe and sustainable,” Haldorsen said.

The conference, held at the Omni Interlocken Resort outside of Denver, is the 12th such conference for SPE and the first to be held outside of Texas.

Approximately 150 people gathered for a keynote lunch to listen to the SPE president talk about his ideas of exploration and production (E&P) 2.0. Haldorsen summed up the business from exploration to selling the product to refineries, “and then we hope investors like us again,” he said. “E&P 2.0 means we do this smarter, faster, cheaper, more sustainable. This is the challenge for E&P. This is what we have to do.”

The industry’s work, he said, will become increasingly important as the population grows. “The energy that we come up with … fuels human progress. It raises living standards,” he said. He continued with a challenge to the attendees: “Everywhere you look, we can find something to do better, for the environment and for the business.”

Haldorsen also said that safety is a group effort. “We don’t compete on safety. We collaborate,” he said. “There’s lots of challenges. There are no easy buttons. But, I think, when we come together and talk about our various innovations and what we can do, sharing and collaborating … we’re going to come up with great things that take us to 2.0.”

Haldorsen’s midday speech followed the first of three plenary sessions planned for the conference. The first plenary session focused on the environmental footprint made by the industry. Although each of the the panelists spoke on a different aspect of the industry’s effect on the environment, the discussion often turned to the challenge of methane emissions.

The plenary session consisted of three speakers: Jim Sewell with Shell E&P, Joseph Ryan with the University of Colorado Boulder, and Jon Goldstein with the Environmental Defense Fund.

Sewell began the session with his talk about assessing and managing the industry’s environmental footprint, with a specific look at the work done in Pinedale, Wyoming, and in Appalachia. “Shell does aim to be a good neighbor, which means operating under the premise of doing things right. We try to minimize our impacts,” he said.

Sewell said that regulations are the first level of defense for minimizing impact and that Shell follows its own regulations in addition to those mandated by government. Shell also conducts impact assessments for every project it undertakes, large or small, he said.

Ryan spoke on the effects of oil and gas development on water quality in Colorado. Regarding hydraulic fracturing and the dangers of the chemicals involved, Ryan said the question should be one of chemical exposure not use. He presented an analysis of the persistence and mobility of the chemicals used in the process. The analysis showed that the chemicals that have the potential for human exposure are a small fraction of the chemicals used in the process.

“That’s a few dozen compounds, not a few hundred, that we should be aware of,” he said.

Ryan also presented findings about methane emissions, showing a map that overlayed locations of high methane emissions with locations of coal formations. “A lot of the methane that has shown up in water wells … is really associated with these relatively shallow coal formations.”

Goldstein also addressed the problem of methane, noting that methane has a greater greenhouse-gas effect than carbon dioxide in the early years after release.

“You can think of methane as the other white meat. Carbon dioxide is the primary greenhouse gas you hear about, but methane is No. 2 in many ways. … It’s a far more potent greenhouse gas pound for pound in the early years. Methane is more than 80 times more potent in the first 20 years.”

27 Feb 2015

2015 SPE Americas HSE Conference Gears Up

The 2015 SPE E&P Health, Safety, Security, and Environmental Conference—Americas, scheduled from 16–18 March in Denver, will present two keynote speakers and several first-time special sessions. The technical program for the conference will see 59 papers presented in 18 sessions.

15HSSEKeynotes
The first keynote speaker will be 2015 SPE President Helge Hove Haldorsen, who will speak at a luncheon on 16 March. Haldorsen, vice president of strategy and portfolio, North America, for Statoil, will speak on “HSSE-SR 360°: Challenges and Opportunities.”

“In 2015, together we will drill approximately 83,000 wells and invest approximately USD 1 trillion to produce 92+ million B/D and 325+ Bcf/D,” Haldorsen said. “This energy lifts living standards, generally fuels human progress, and gives us all a huge sense of purpose. In this noble endeavor, we have a zero tolerance for error. We must carry out all our operations in a safe, secure, and environmentally sustainable manner; engaging closely with all local stakeholders, earning their trust and the license to operate.”

The conference’s second keynote address will come from Sarah Ladislaw, director and senior fellow with the Energy and National Security Program of the Center for Strategic and International Studies (CSIS). She will speak about social responsibility at a luncheon on 17 March.

“The idea that societal support is an important part of successful oil and gas development is increasingly accepted by most parts of the industry,” she said. “Yet, the art of winning and sustaining that support is increasingly complex as societal expectations, industry approaches, and regulatory and policy prerogatives continue to shift.”

Student Challenge and Movie Night
In addition to the two keynote speeches, the conference will hold the inaugural HSSE Student Challenge. The contest, planned for 1330–1800 on 17 March, will pit student teams against one another in a contest of knowledge about health, safety, and environment matters. The quiz-style contest, modeled off the PetroBowl contest held at SPE’s Annual Technical Conference and Exhibition each year, will have eight teams. Each team will be made of five students from environmental or engineering departments of the following schools: Colorado School of Mines, Colorado State University, Montana Tech of the University of Montana, Oklahoma State University, Texas Tech University, The University of Oklahoma, University of Colorado Boulder, and University of Wyoming. Unlike PetroBowl, which is a single-elimination contest, the Student Challenge will be based on a point system, with the team having the most points at the end of the competition being the winner.

The winning team will become part of another first for the conference—a movie night. The Student Challenge winners will form a panel to help lead discussion after a presentation of a film about Pinedale, Wyoming, and the effects the oil and gas industry has had on the tiny town. “Energy’s Crossroads: Pinedale, WY,” one of the latest movies in the acclaimed Rational Middle Energy Series documentary series, tells the story of a small Wyoming town as shale gas development opens up a new world of opportunity and challenge. The series has won praise from energy companies, policy makers, and academics for its thoughtful discussion of the facts of modern energy development.

“In addition to the traditional technical paper presentations, we’ve added a movie night that will provide a unique perspective into a rational conversation about energy issues that can easily translate into project delays and additional—often unexpected—costs,” said Sue Staley, conference committee co-chairperson and vice president of safety, environment, and social performance for Shell.

Jennifer Cross, a sociology professor at Colorado State University and invited speaker on sustainability, will open the movie night. She will share insights from her work on changing behaviors and ways that the industry can improve the effectiveness of communication. Her presentation and the movie screening will be followed by an interactive session with the student panel moderated by Cross.

Rational Middle director and producer Gregory Kallenberg will facilitate the screening and share how the power of film, combined with compelling experts and fact-checked resources, can become a powerful tool to incite action for the betterment of our communities, our economy, and the environment.

The conference will also present three plenary sessions, three panel sessions, and an interactive closing session.

Plenary Sessions
The first plenary session will be “Assessing and Managing Our Environmental Footprint” and will have three speakers, Dan Grossman with the Environmental Defense Fund, Joe Ryan from the University of Colorado, and Jim Sewell with Shell.

The second plenary session will examine “Making Safety Personal.” Speakers at this session will be Warren Hubler with Helmerich & Payne International Drilling, Cheryl Mackenzie from the US Chemical Safety Board, and Mike West with BP America.

The third plenary session will take a look at “Unconventional Resources: Same Issues, Different Perspectives.” Speakers will be Dave Neslin from Davis Graham & Stubbs, Michael Freeman from Earthjustice, Patty Limerick from the University of Colorado Boulder, and Perry Pearce with ConocoPhillips. The session will be moderated by John Ehremann from the Meridian Institute.

Panel Sessions
The first panel session will look at “Health in the Modern Workplace: Exploring Topical Issues and Innovative Solutions With Industry Experts.” Speakers Deena Buford with Exxon Mobil, Andy Kveps from United Safety, Bradley King from NIOSH/CDC, and Wayne Fee from MiX Telematics will share observations from today’s work environment and voice concerns for occupational health.

The second panel session will examine “Security in the Oil and Gas Industry: An Overview of the Entire Threat Spectrum.” Speakers Nicole Slezak from Marathon Oil, Mark Van Staalduinen and Faisal Khan from Memorial University of Newfoundland, Jessica Falcon from the US Department of Homeland Security, and Glen Bounds from Schneider Electric will discuss a broad range of security-related topics, including facility design, cybersecurity, and anti-terrorism.

The final panel session will discusss “Constructive Engagements Over Tough Issues: Guidance Across the Oil and Gas Industry.” Panel members Dave Atkins from Shell, Doug Bannerman from Statoil, and Kelly Arnold from the Town of Windsor will inspect the current status of guidance in the industry for community engagements, specifically looking at the importance and practical realities of such engagements.

Closing Session
An interactive closing session will bring conference attendees, program leaders, and key speakers together to deliberate over key learnings, issues, and challenges identified during the conference. This unique setting will allow everyone to participate, respond, and get immediate collective feedback.

Read the conference program here (PDF).

Register for the conference here.

19 Feb 2015

Industry Continues Discussion on Human Factors

In May 2014, the Society of Petroleum Engineers (SPE) held a Web event that examined human factors as they pertained to process safety and culture. The event was a revisit of the 2-day summit held on human factors in 2012, from which resulted a technical report intended to provide guidance on the human factors risks in exploration and production operations and what can be done to reduce those risks and increase safety.

The technical report can be downloaded here.

The 2014 Web event was moderated by Roland Moreau, safety, security, health, and environment manager with ExxonMobil. The speakers were Kenneth E. Arnold, a consultant with more than 45 years of industry experience, including 16 years with Shell; J. Ford Brett, a consultant in the area of petroleum project management who has delivered workshops and short courses in more than 20 countries; and Andrew Dingee, chairman of the SPE Human Factors Technical Section. Dingee worked extensively in aviation safety after leaving active duty from the Marine Corps, where he was an aviation instructor. He transitioned to the oil and gas industry in 2010, bringing lessons learned from the recent revolution in aviation safety to the oilfield environment.

The following is an edited transcript of the question-and-answer session from the Web event.

Moreau: The first question is from the UK. “Would the panel be kind enough to comment on or suggest practical ways of making an organization consider human factors throughout their processes? What are the suggested first steps?”

Arnold: It’s pretty hard to say what a first step is. One step, which a lot of companies are already doing and which is an easy step, is to consider human factors in engineering and design. And there are organizations that have human factors specialists who review their designs to make sure that human factors are included.

I want to go back and create an analogy. When people first came up with the idea that we need to do hazard analysis as a separate analysis of our designs, many of us in the industry said, “Well, why do we need to do this? We think about all of these things as we’re doing the design.” And what we found is, when you just have a workshop that is focused only on safety and operability, you find things that people knew they shouldn’t have done. They didn’t see the implications of it.

So, having this separate step of safety review turns out to be a pretty good thing. And some of us old-timers, who at the time thought, “Oh, this is just a waste of time,” have had to rethink our thought processes.

The same thing happens with the human factors review. If you have someone who is truly trained in human factors engineering involved in a review process of what is being designed, you will be amazed what they can find. And when they find it, you look at it and you say, “Oh, this is just common sense.” But, it isn’t just common sense because we didn’t do it in the design.

So that’s an easy thing, and it’s something that can be implemented fairly quickly. But the real implementation is in leadership, in getting leadership on board and getting leadership to lead at every level all the way through the organization, really understanding what it means to do the things that are in the section on leadership and culture in the technical report.

Brett: This is something that may work, depending upon the organizational situation. It’s certainly not the only possible first step, but you can get together the leadership, the organization, and talk about the past five, three, seven, 10 biggest problems that we’ve had. Let’s understand them, work on them, figure them out, and do an analysis of that with appropriate facilitation to elicit the human factors components of it. Almost everyone in that process will come to the self-discovery that, “Hey! Humans had some big fat factor in this problem that we all experienced and lived with.”

We need to work on communication. We need to improve how we communicate. Specifically, how are we going to do that? Crew resource management is a good way to do that in a structured way. But, if you just start from zero, let’s talk about what’s gone wrong around here and try to understand.

Moreau: The next question we received is one I’ve had in my mind. “In my industry experience, the individuals that have a lower risk tolerance or are emotionally connected to safety have witnessed an event. Do you have any thoughts on creating that connection to safety without living through such an event?”

Dingee: One thing from my background that has helped us is what we call realistic-based scenario training. And, obviously, the airlines and the military fighter community have put in millions and millions of dollars putting us in the exact same scenario that doesn’t cost your life or the airplane.

So, I think, the more we can put our own workers, the closer we can make them feel, smell, taste the environment but in a safe scenario, the more they’re going to learn from it.

The other half of that comes down to effective communications. Some companies do fantastic jobs communicating lessons learned back to the field, and others struggle with it.

Arnold: One of the things that I’ve learned from our buddy John Thorogood is that, in some industries, when there is a major accident, everybody in that industry gets to learn a lot about what happen and remember it. We don’t do a good enough job in our industry of talking about the major accidents. I don’t know how many people in our industry really know what happened at Piper Alpha other than 167 people died and understand the mistakes that were made.

I think it would be a good thing if we evaluated things like Piper Alpha and Macondo and P-36 and the other disasters of that nature on a regular basis and made sure that everyone in our organization, not just the engineers because anyone who’s in an operating mode needs to know this stuff, needs to know what happened in the past, what did we learn from that as a way of giving them this feeling of actually kind of being there and understanding and putting themselves in that position and realizing that, if they were there, they may have died.

Moreau: A couple more questions have been asked. One is, “Can we talk a little bit about situational awareness, which, in my analysis, was the biggest factor in the Macondo incident.” And then the other one is, “How do we refocus our competency and approach to this attitude?”

Arnold: Well, it’s really hard. Situational awareness is something that, when we look at crew resource management in the air industry, it falls into that same category. And one of the things that makes it difficult is we have a lot of different situations. And it’s just a multitude of things that can go wrong. And there’s a multitude of times when you have information that’s not complete and you have to do something with it, take some action or avoid taking an action.

Sometimes, the best thing you can do is not take action. Three Mile Island is a good example. If the people in the control room had just let the automatic system do its job, the accident would not have advanced to the position that it did. But they thought they were reacting to something that was bad information, and so they started to do things rather than just let the system take care of itself.

So it’s very difficult, especially when you’re under time pressures and your own personal safety is at risk. The way they do it in the airline industry is, every year, a pilot goes into a simulator and they put him in some bad situations and give him the experience of having to deal with that.

Now we’re doing that more and more in the drilling side of our business, where we do have around the world several good drilling simulators as training tools. We’re bringing operational people into these simulations, and designers as well, and having them deal with real bad things as a way of getting them used to what happens.

I think we can do more with that. I think we could do a lot more of that kind of simulation training even in the production end of our business. We have very elaborate control systems now. We measure everything under the sun. But, do we really put people in a mock control room that mimics their actual operation and feed them a disaster and get them used to responding to it the way we want them to respond to it?

Moreau: Another question: “A lot of corporate cultures are averse to litigation, and the leaders are afraid of tackling poor performance in a positive way, deferring to take punitive enforcement actions rather than fostering an uplifting culture. How do you strike the balance?”

Arnold: One way to look at this is to look at the difference in societies, the greater society culture, between the way Norway handles safety and the way the US handles safety.

The US is a culture that is always looking for who the bad guy is. And, if we just punish him, then whatever happened bad isn’t going to happen again. And we have this litigious culture of we’re going to sue immediately. We’re going to sue somebody. Look, our own government from Day 1 was out to sue various individuals even at BP, and they’re still doing it. The Justice Department is still doing this because that way we’re going to catch the bad guys. And if we just punish them enough, nobody will ever make that same mistake again.

Well, that’s not the way Norway approaches that stuff. Norway understands that it’s not a pass/fail system. You have to have punishments. You have to have some room for punishment in the system somewhere. But, if we’re going to learn from it and if we’re going to disseminate knowledge, we can’t focus on litigation.

Moreau: I have another question here: “Often new employees who have recently been trained are more safety conscious and try to intervene in unsafe behaviors of highly experienced personnel but get shunned by them. What are your thought on this?”

Dingee: Overall, it’s leadership failure. If the senior leadership doesn’t come down and influence the workers who are currently there, it is very difficult. It becomes the hammer approach to leadership, which, in my opinion, is unsuccessful and such a negative culture for learning. So, it takes time.

Moreau: Then, it goes back to basically the important role that leadership has in fostering a positive culture.

Arnold: Can I just say it’s not just senior leadership. It’s at every level. Leadership at every level can do that.

Dingee: Agreed.

Moreau: Yes, there’s always a fear, I think, that people might hear about the hard clay layer in middle leadership—that the passion from up top doesn’t make it to the bottom and the issues from the bottom don’t make it to the top. And I think those challenges continue to happen.

Moreau: And one last question: “How do you transfer a corporate culture to a contractor?”

Arnold: If you look at that how improvement happened from the ’70s until now, it was a multidecade process of getting everybody to think that safety was important. And when I joined the oil industry, people actually said if you haven’t lost any fingers, you haven’t been working hard enough. And they meant it. Well, we changed that culture. And now, that’s not even funny, wherein it used to kind of be funny.

And so, how do you do it? It has to be us as an industry addressing this issue. Common definitions of term is one way so that people just understand. It’s a relatively complicated problem, but it’s something that every one of us needs to engage as an industry in addressing. And it’s something that, if you tried to do it in your own company, it would not be successful because it’s something that we as an industry have to do.

Listen to an archive of the Web event here.

19 Feb 2015

OESI Plans Two Forums To Boost Offshore Safety

The Ocean Energy Safety Institute (OESI) is holding two forums in March in Houston with the goal of increasing safety and environmental responsibility in offshore operations.

The first forum, Decreasing Ocean Energy Safety Incidents Through Greater Incorporation of Human Factors and Human/Systems Integration, will be held 10 March. The second, Maintaining a High-Level of Focus and Increasing the Safety Culture in the Shallow-Water Operating Environment, will be held 11 March.

Human Factors, Human/Systems Integration
Even with continued improvements in engineering solutions and safety management systems, upstream incidents continue to occur in the offshore environment. Throughout early OESI forums, a key thread was the need to discuss human factors in the offshore operating environment. The OESI will convene top industry, academic, and research experts from various companies, universities, and organizations in a forum to discuss “Decreasing Ocean Energy Safety Incidents Through Greater Incorporation of Human Factors and Human/Systems Integration.”

Discussion will revolve around how organizational elements and design decisions can lead to incidents being decreased or mitigated. Speakers will include industry experts such as Eduardo Salas, trustee chairman and professor of psychology at the University of Central Florida, and Anthony Ciavarelli, founder and chief scientist of Human Factors Associates. Presentations will offer perspectives and insight from organizations such as Worley Parsons, Shell, and Transocean.

The forum will look forward by searching for ways to enable the safety culture on the outer continental shelf further by incorporating design and organizational perspectives. Attendees will interact with presenters and panels in order to share best practices, understand areas for further efforts, and develop opportunities for additional research and collaboration.

Registration will include continental breakfast, lunch, and refreshments throughout the day, as well as a summary of the proceedings.

Register for the human factors forum here.

Blowouts in Shallow-Water
While drilling and operating in deep water carries obvious danger and risk, shallow-water drilling and operations are not without their own dangers and risk. With shallow-water drilling conducted in closer proximity to the shoreline, reactions to leading indicators become that much more critical. The OESI will convene top industry, academic, and research experts from various companies, universities, and organizations in a forum to discuss “Maintaining a High-level of Focus and Increasing the Safety Culture in the Shallow-Water Operating Environment.”

Discussion topics will include whether standards and safety barrier equipment (e.g., blowout preventers) should be modified for shallow-water operations and industry efforts in addressing shallow-water blowouts. Speakers will include industry experts such as Charlie Williams, executive director of the Center for Offshore Safety, and Neal Adams, recipient of the 2015 SPE Drilling Engineering Award. Presentations will offer the perspectives of organizations such as the American Petroleum Institute and the Society of Petroleum Engineers, as well as the insight of other well-control experts.

The forum will look to the future by searching for ways to enable the safety culture further on the shallow outer continental shelf. Attendees will interact with presenters and panels to share best practices, understand areas for further efforts, and develop opportunities for additional research and collaboration.

Registration will include continental breakfast, lunch, and refreshments throughout the day, as well as a summary of the proceedings.

Register for the shallow water forum here.

About OESI
The Bureau of Safety and Environmental Enforcement (BSEE) selected the Texas A&M Engineering Experiment Station’s (TEES) Mary Kay O’Connor Process Safety Center to manage the OESI. The 5-year agreement, with USD 5 million in total funding from BSEE, provides a forum for dialogue, shared learning, and cooperative research among academia, government, industry, and other nongovernmental organizations in offshore-related technologies and activities that help ensure safe and environmentally responsible offshore operations. TEES is partnering with Texas A&M University, The University of Texas, and University of Houston to manage the institute.

The institute stems from a recommendation from the Ocean Energy Safety Advisory Committee, a federal advisory group comprising representatives from industry, federal government agencies, nongovernmental organizations, and the academic community. The institute is an important source of unbiased, independent information and will not have any regulatory authority over the offshore industry.

In addition to periodic and topical forums that also help identify areas for further investigation, the OESI will coordinate and focus an effort to identify scientific and technological gaps in the ocean energy safety realm. The OESI will work to synchronize research opportunities to fill these gaps in order to further enable safe and environmentally responsible ocean energy operations. Also, the OESI will facilitate supplemental education and training of BSEE and Bureau of Ocean Energy Management employees to ensure that the federal workforce maintains the same level of technological expertise as the engineers, scientists, and technical experts in the oil and gas industry.