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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.

17 Feb 2015

New Vehicle Delivers Safety in Flammable and Toxic Environments

Advances in oilfield technologies and processes have made sour-gasfield development a reality. These fields offer vast oil and gas production opportunities, but the presence of hydrogen sulfide toxic gas creates unique challenges for operators. When this flammable gas is released to the surface, it can create an atmosphere with an increased risk of explosion.

United Safety launches the Air Qruise Electro-Ex with Al Hosn Gas at the 2014 Abu Dhabi Petroleum Exhibition and Conference.

United Safety launches the Air Qruise Electro-Ex with Al Hosn Gas at the 2014 Abu Dhabi International Petroleum Exhibition and Conference.

Traditional combustion vehicles are not allowed inside these areas, so, in order to transport personnel and equipment, the industry started relying on electric vehicles. However, even before reaching flammable levels, the air in these environments most likely is already toxic to people. Therefore, a solution for this scenario must tackle both flammability and toxicity issues, making safety innovation vital to the sustainable exploration of these resources.

With that in mind, United Safety launched the Air Qruise Electro-Ex in association with Al Hosn Gas at the 2014 Abu Dhabi International Petroleum Exhibition and Conference.

The Air Qruise Electro-Ex is an ATEX-certified, explosion-proof, battery-powered vehicle. It combines explosion-proof mobility with state-of-the-art gas detection electronics, a highly compact air-supply system, and rapid-deployment breathing masks. This unique combination ensures that personnel are immediately alerted to a gas leak while being supplied with breathing air and transported out of the toxic release site. Additionally, there are improvements in efficiency and productivity, such as optional self-contained-breathing-apparatus jump seats that allow personnel to ride fully equipped, resulting in quicker, safer, and more efficient transport designed for these extreme environments.

The Air Qruise Electro-Ex vehicle.

The Air Qruise Electro-Ex vehicle.

“Al Hosn Gas is committed to becoming the world’s leading company in developing sour-gas resources. Given the complexity of the Shah gas field, we are actively seeking innovative and creative solutions for possible safety gaps as an added layer of protection for our workforce,” said Saif Ahmed Al Ghafli, chief executive officer for Al Hosn Gas.

“The Air Qruise Electro-Ex answers a direct need of operators in sour fields, and the fact that Al Hosn Gas quickly adopted the technology shows that there are in fact players in the industry that are willing to go the extra mile in order to keep their people safe,” said Elie Daher, executive vice president at United Safety.

Read more about the Air Qruise Electro-Ex here.

11 Feb 2015

Beyond the Headlines: Can Waste Water Be Disposed of Safely?

Editor’s note: Professionals in the oil and gas industry often receive questions about how industry operations affect public health, the environment, and the communities in which they operate. Of particular concern today is the impact of hydraulic fracturing on the environment. In this new column, JPT is inviting energy experts to put those questions and concerns about industry operations into perspective. Additional information about the oil and gas industry, how it affects society, and how to explain industry operations and practices to the general public is available on SPE’s Energy4me website.

Shale oil and gas wells use a lot of water in fracturing operations. Each well may use up to 8 million gallons, and as much as 35% of this can return as flowback water. Safe disposition of this waste water is an industry priority especially because of the widely reported past missteps in Pennsylvania. Safe disposition is completely feasible and, in fact, is being broadly practiced today.

The Nature of Flowback Water
Even if fresh water is used as the base fracturing fluid, what returns to the surface is salty. This is because the water found in association with hydrocarbons has high salinity. Shale oil and gas flowback water salinity typically range from 16,000 parts per million (ppm) to more than 300,000 in some instances. For comparison, sea water runs around 35,000 ppm. The chemicals introduced into the fracturing fluid will also be present in some proportion. These will be low in concentration because even the original fracturing fluid contains only up to about 0.5% chemicals.

Finally, one could also encounter species present in subterranean rock. These could include aromatic compounds (such as benzene) and radioactive species. Some state regulations, such as the ones pending in North Carolina, prohibit the use of aromatics in fracturing fluid so, if present, they could only have come from the subsurface. The same holds for radioactive species. In most instances, subterrestrial bacteria will also be present. All of these render the flowback water unsuited for direct discharge.

Reuse of Flowback Water
Flowback water may be reused to formulate fracturing fluid for the next operation. But because only about one-third of injected water returns, additional water is needed (makeup water). In the early going, reuse was rendered costly because of the need to desalinate down to fresh water. However, more recently, all service companies have announced that they can tolerate salinities in excess of 250,000 ppm.

To accomplish this, they had to invent substitutes for certain chemicals. In particular, these were the cross-linkers (for thickening the gel in the fluid to fracture the rock more effectively) and the breakers (the chemical that breaks down the cross-linked gel to thin it for removal at the end of the operation). This salt tolerance suggests that even the makeup water could be a salty water of convenience rather than fresh. Brackish water is ubiquitous in shale oil and gas operations, and yet few companies use it. Not using fresh water would go a long way toward community acceptance of the operations.

While salinity per se may not be a bar to reuse, some treatment may be required. The operator may choose to remove divalent ions. These tend to form scale and radioactive elements, and tend to concentrate in the scale even though the concentrations in the water may be too low to be a concern for personnel safety. Manual descaling operations could constitute an operational hazard if radioactive elements were present. Most operators would also attempt to remove the bacteria in some way. But these operations are straightforward. Divalent ion removal is known as water softening, found in many homes using well water.

4 Feb 2015

A Workshop Reflection—What Will Your Tight-Rock Project Legacy Be?

Social responsibility is the newest evolving element within the health, safety, security, environment, and social responsibility sector of the upstream petroleum industry. In December, the Society of Petroleum Engineers held a workshop to discuss social responsibility issues related to project development. The workshop, titled Beyond Conventional Oil and Gas: New Social Opportunities and Risks, was held 2–4 December in Banff, Alberta, Canada. Workshop presenters Robert Sandilos with Chevron and Caleb Wall with Environmental Resources Management have compiled lessons from the workshop. Both, along with other social responsibility presenters, will be on hand at the 2015 SPE E&P Health, Safety, Security, and Environmental Conference—Americas on 16–18 March in Denver, where a special poster session will showcase the lessons from this and other social responsibility workshops.

This article is a brief exploration of a few key threats and opportunities, the sum of which will likely define the life-cycle legacy of most tight-rock developments, as discussed during the Banff workshop.

  • Evaluating social risks and impacts
  • Management frameworks for environmental and social risks
  • Water use in unconventional development
  • Industry impacts on community health
  • Industry relationships with indigenous peoples
  • Stakeholder engagement

Evaluating Social Risks and Impacts
In many prospective tight-rock basins globally, very few if any wells have been drilled. Stakeholders on both sides of the drilling divide start at the same place, but industry opponents have the advantage of a clean slate—no oil and gas activity (although there well may be pollution problems and environmental impacts already). A significant opportunity for industry is to set the full-field development bar high for all operators through government regulation and voluntary actions. A significant challenge for industry, in being transparent about operations, is to clearly communicate timing, specific activities, and mitigations from leasing through to plugging and abandonment.

Management Frameworks for Environmental and Social Risks
Numerous tools and management systems have been developed by operators and consultants to attempt to integrate social performance into now-traditional environmental impact assessments. A significant opportunity is to describe and plan better to manage societalrisks throughout the life cycle, most of which diminish significantly as drilling and completion moves on to long-term production. Potential economic and community investment benefits, of course, are the key long-term opportunities. The leading challenge over the life cycle of most projects is maintaining environmental protection, and the most fundamental is casing, cementing, and wellbore integrity.

Water Use in Unconventional Development
Reducing fresh and, in some regions, brackish water use is a primary objective of all tight-rock operators. Fortunately, water use declines substantially as a hydraulic-fracturing-dependent drilling program is completed. A life-cycle challenge is that this long-term view is often not very important to local residents or policy makers during water-stress or drought conditions such as those have persisted in parts of Texas and California since the shale boom really began in 2008. Two of the most important social responsibilities over the life of any upstream project surround water use are

  • The commitment to maximize recycling and reducing or eliminating use of fresh water and increasingly usable brines
  • The need to keep produced water in the pipe for safe disposal unless it is feasible to provide acceptable quality water for beneficial use

Industry Impacts on Community Health
This area is probably the fastest emerging set of local public concerns with oil and gas operations, and the most difficult to address for the long term with current data and messages. Changes in population, workers, and incomes stress health assets and relationships. Completion-phase hydraulic-fracturing-chemical use and production-phase air emissions continue to raise public questions notwithstanding industry and government actions or assurances. As indicated during several presentations, there is a current need for additional science-based health data and research, which should address long-term operations as well as drilling and completion activity.

Land Acquisition and Involuntary Resettlement
Access and resettlement are almost always looked at as early-development-phase issues, but there are important long-term elements as well. In North America, actual resettlement is rare, but long-term land-use impacts from energy development on population and wildlife habits are common. Public safety, education, transportation infrastructure, and ecosystems are all affected by any wide-spread industrial development, even if long-term facilities are of modest size. Early communication, consultation, and life-cycle impact mitigation are equally important in addressing land-use impacts and in maintaining community consent for responsible oil and gas development.

Industry Relationships with Indigenous Peoples
Relationships with local residents, regardless of their heritage, are both the oldest and the newest societal responsibility factors. Whether projects are located around subsistence or suburban communities, maintaining a positive local relationship is arguably the single most important external factor in life-cycle project success, beyond wellhead prices. As in the case of land use and impacts, there are opportunities for life-cycle local partnerships, including public safety, education, infrastructure, and ecosystems. These can enhance relationships and mitigate long-term ignorance, dependency, or animosity.

Stakeholder Engagement
This subject was fitting as the final one in the Banff workshop because engagement with local communities and the full range of stakeholders is critical and must be contemporaneous with any new project, from preleasing to plugging and abandonment. The needs, messages, and issues will vary, and any industrial project of scale will have local impacts. It may be not be possible for to leave a clean slate, but it is possible for tight-rock projects to leave a positive social, economic, and environmental legacy behind.

Read more about the 2015 SPE E&P Health, Safety, Security, and Environmental Conference—Americas here.

30 Jan 2015

Southwestern Energy Approaches Goal of Freshwater Neutrality

Southwestern Energy plans to be freshwater neutral in its hydraulic fracturing operations by next year, and the company is well on its way to achieving that goal, said the leader of the group responsible for bringing it to fruition.

Southwestern Energy is working with state and government organizations to develop dams of carbonate in Pennsylvania’s Tioga River to help filter the acidic water that pours out of old mines. Photo courtesy of Southwestern Energy.

At a presentation held by the SPE Gulf Coast Section, Karen Olson, director of the strategic solutions team at Southwestern, discussed the progress being made in the company’s Energy Conserving Water (ECH2O) initiative.

Launched in 2012, ECH2O is a commitment from the company to replenish or offset each gallon of fresh water it uses for fracturing through conservation practices, projects, and technologies.

Among the company’s major projects is the Fallbrook acid mine drainage project in the Tioga River in northern Pennsylvania, near the Marcellus Shale play. Olson said the company plans to work with the state government and organizations, such as the Nature Conservancy, to construct dams of carbonate over a 2.5-mile stretch of the river to help filter the acidic water that pours out of old mines.

“It’s dead,” Olson said of the region. “Every time it rains, [water] fills up these old mines and spills over, flows into the river, and it has killed everything. It has killed the vegetation. It has killed all the life in it.”

In addition to the environmental benefit, the company will also be able to use water from this area for its fracturing operations, which Olson said would provide an additional 11 billion bbl. LimnoTech, an environmental engineering company, verified the amount of additional water and the total water usage for Southwestern’s conservation projects.

 

28 Jan 2015

Training Course Focuses on Sustainability

The Society of Petroleum Engineers (SPE) will be holding a sustainability training course in conjunction with the 2015 SPE E&P Health, Safety, Security, and Environmental Conference—Americas on 16–18 March in Denver. The course will be held again in conjunction with the SPE Latin American and Caribbean Health, Safety, Environment, and Sustainability Conference on 9–10 July in Bogota, Colombia.

image002The goal of the course is to provide participants with tools, techniques, and knowledge for immediate use to help operators maintain project value through sustainability.

2014 SPE President Jeff Spath said the oil and gas industry has been thinking about and “doing” sustainability for nearly 20 years, since the Shell Brent spar decommissioning in 1995, when both social and environmental incidents gave the industry a sustainability wakeup call, similar to how the Piper Alpha disaster raised a safety call in 1988.

In 2010, SPE decided that the sustainability activity was not a passing fad and that it was time to start contributing more proactively. “We formed a strategic task force and began to analyze how we could best accelerate the integration of sustainability practices to the operations of our industry,” Spath said.

“SPE has adopted a definition for sustainability to bring clarity to the broader membership on our direction, all with a view to accelerating the integration of sustainability techniques into our business and into our operational decisions,” he said. “SPE training programs are being broadened in an effort to deepen competencies and augment sustainability practices in industry operations.”

The 2-day training course offered alongside the Denver conference is titled “The Sustainability Imperative: Making the Case and Driving Change.” The instructors will be Roland Moreau, Linda Y. Brewer, and Eric Olsen.

Moreau was the technical director for Health, Safety, Security, Environment, and Social Responsibility for SPE’s Board of Directors from 2011 to 2014. He recently retired from ExxonMobil after 34 years of services. He was the company’s safety, security, health, and environment manager.

Brewer is a partner in ERM’s Sustainability Strategy and Implementation practice based in Denver. She has more than 25 years of experience in risk, strategy, leadership, operations, sustainability, climate adaptation, and HSE performance and innovation in oil and gas, mining, chemicals, power, and financial services.

Olson is BSR’s senior vice president of advisory services and has more than 20 years in the consulting field.

Helge Hove Haldorsen, 2015 SPE president, is slated to be a special speaker on the second day of the course.

On the first day, participants will receive an overview of key sustainability trends and the challenges of applying the concepts to a case study. On the second day, the participants will apply what they have learned in two half-day intensive case study discussions on effective community engagement practices and application of learnings.

The topics for discussion are

  • Articulating the sustainability business case
  • Creating a deep and integrated understanding of sustainability
  • Applying organizational change management techniques
  • Integrating sustainability into the project’s life cycle
  • Identifying sustainability risks and opportunities
  • Optimizing sustainability through operational understanding
  • Optimizing stakeholder engagement and communications
  • Contributing to community sustainability by managing the boom and bust effects on community economics

The fundamental principle underpinning this course is that securing and maintaining the license to operate (as well as growing the commercial value beyond this threshold) extends beyond legislative requirements and regulatory permitting to encompass not only the mitigation of adverse social and environmental effects, but also the advancement of financial, societal, and environmental benefits through the execution of strong sustainability performance.

Read more about the training course here.

Read more about the 2015 SPE E&P Health, Safety, Security, and Environmental Conference—Americas here.

Download the conference preview here (PDF). http://www.spe.org/events/hsse/2015/documents/15HSSE-ConferencePreview.pdf

13 Jan 2015

The Tectonic Shift of Energy’s HSE Culture

From rule-based to behavior-based, the health and safety environment culture has changed in ways both practically undetectable and completely palpable. Through the years, companies operating in every stage of the energy industry life cycle have realized the importance of enabling this shift not just by analyzing health, safety, and environment (HSE) rules and policies, but also by examining how the rules manifest when activated by people.

Safety research confirms the power that people have in influencing safety behaviors, especially managers. In The Psychology of Workplace Safety, authors Andrew Neal and Mark A. Griffin define safety climate as “workforce perceptions about the way managers enact safety policies and practices.” Research tells us that employees are likely to behave in line with their perception of their manager’s priorities, whether conveyed through explicit statements and actions or through implicit messages.

Acknowledging the power that people have in developing, sustaining, and changing the HSE climate was the first step in the HSE culture shift in the energy industry. Through this process, energy companies have been continually humbled upon seeing the correlation between increased employee safety behaviors when following leaders who endorse safety messages compared with increased employee risk behaviors when following leaders who endorse productivity at the expense of safety.

Because competitive standing should not apply when it comes to keeping people and professionals safe, I would like to share the best practices that Technip has developed as a way to highlight one company’s role in the industry shift of HSE culture over the past decade.

Technip is a project management, engineering, and construction services company with more than 40,000 employees in 48 countries. Despite the fact that Technip was using a robust HSE management system in 2007, its HSE performance was not as desired. To stimulate change in the HSE culture, we needed to consider our people in a deeper and more focused way. This commitment led us to develop our global HSE program, Pulse. As it was from the beginning, the program’s vision is embedding health, safety, and environment as values for life in the company.

The strategy of Pulse is rooted in the power of effective leadership and communication as essential catalysts to the successful cascade of HSE climate change and betterment. From this strategy came a suite of interactive training modules, workshops, and learning opportunities to provide Technip employees with tailored tools and techniques to aid each individual’s professional development.

In line with industry best practice and research, the program covers the following key HSE themes:

  • Senior management commitment
  • Supervisors’ commitment
  • Line managers’ priorities
  • Leadership visibility
  • Transformational leadership
  • Leadership behaviors

To cover each theme, Technip engaged with Insights Learning and Development in the creation of the program modules in order to enable Technip employees to develop in the areas of understanding their individual communication styles, working with others, modeling leadership behaviors, influencing and coaching others, and intervening and communicating in team structures.

The key to the success of each module in the program is the completion of an online questionnaire through Insights Discovery, which generates a personal profile in order for the individual to assess his or her personal preferences in communication, management, and leadership. This training prework continues to serve as the crucial foundation of the Pulse program because of the importance of starting on an individual level and increasing each individual’s self-awareness in order to examine how their communication and management style is influencing safety behaviors and outcomes.

Ross Wilson, client relationship director at Insights, has worked to bring development programs to energy companies for more than 10 years and is a strong advocate for starting the learning process at the individual level.

“The personal revelations that occur through the use of self-assessment tools, especially for engineers, scientists, and technical professionals, can be profound,” he said. “Energy professionals have made their careers in the mastery of technical tools, skills, and processes. For many, Pulse and Insights Discovery is their first professional opportunity to develop their interpersonal, communication, and leadership skills that undoubtedly enhance the effectiveness of their technical skills.”

Pulse has delivered results, and Technip has seen a 7% positive shift globally in employee perceptions of managers’ attitudes toward safety between 2008 and 2012. As a testament to the power and success of the program, Technip has set a 2015 goal of having 75% of its personnel complete the Pulse program. In survey results collected on the effectiveness of the program, one participant said, “I wanted to quit until Pulse started. It has given people an opportunity to get engaged personally, transcending the manager/employee relationship to the point that employees feel empowered to disagree with their managers and act on their own to improve HSE.”

Despite the energy industry’s notoriously stressful conditions and pressures, the HSE culture shift would not have occurred without companies rededicating themselves to their employees. Technip’s experience in shifting HSE culture using a top-down approach that instills safety philosophies driven by common value across the company can serve as a learning opportunity for other companies in their own HSE culture shift potential.

At its core, we must remember that even the most comprehensive and well-intentioned technical safety policies will fail if the people who operate within those health and safety environments are not considered, valued, and provided with development opportunities.

Read more about Technip here.

Read more about Technip’s Pulse program here (PDF).

8 Jan 2015

Sustainable Development: Unlocking Growth

At the 2014 SPE Annual Technical Conference and Exhibition (ATCE), a panel of global experts shared 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.

As stated in the ATCE session abstract, the desired outcome of the panel discussion was to promote discussion on topics that are becoming increasingly relevant to the exploration and production industry in the areas of stakeholder engagement, local content, and strategic investment. Organized with the help of Michael Frederik Ellekjaer, head of corporate social responsibility (CSR) strategy and relations at Maersk Drilling, 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.

An earlier article in HSE Now, titled “Panelists Urge Industry To Take Sustainability Seriously,” was posted on 4 November 2014 and gave a high-level overview of the panel, which was introduced by Jeff Spath, 2014 SPE President. HSE Now plans to feature each of the panelists individually to share their perspectives with those unable to attend the panel at ATCE.

The first in this series is from Stube, group head of sustainability for Maersk, a global transportation and energy conglomerate with operations in 135 countries. In 2008, she established a new headquarters-based CSR unit that eventually turned into a group sustainability unit that includes environment, climate, health, safety, and social responsibility. The mission of the new group is to systematize the approach to sustainability at Maersk and turn it into a business advantage by integrating economic, social, and environmental considerations into business strategy and decision making.


As is true of many other business objectives, an important prerequisite for CSR in adding value is to anticipate and respond to changes in society and adapt proactively. As shown in Fig. 1, legality and legitimacy are moving targets. There is nothing new in this societal dynamic; what is new is that the pace of change from when a new issue arises until it is anchored in law is much faster today than 10 years ago. This means that we must be able to detect and understand what is going on in the field in which expectations are formed, identify what is relevant to our business, and put it into action.

Fig. 1

Fig. 1

With Maersk, we conduct an annual exercise to create a materiality matrix, which focuses on what is important to our business and to our stakeholders. This matrix is then used to guide our efforts and is reflected in our sustainability report.

The primary objective of Maersk’s CSR journey was to focus on getting its own house in order. Sustainability should never be an appendix to the business and core processes, rather it should be integrated to create value. When we started on this journey in 2008, it was important for us not just to jump on the bandwagon of the time. We acknowledged the developments around us and did our own analysis. We started our CSR journey behind the scenes with a focus on getting order in our own house. Different group programs and standards (e.g., anticorruption, labor, and responsible procurement) were developed to help integrate sustainability into our business processes.

An important consideration is to remember also what this journey means internally to our employees; it created engagement, and high employee engagement supports company performance. However, this is also something we can do much better, and we need to put more effort into communicating our CSR agenda and our values internally going forward. It is important to realize that senior leadership in all companies, regardless of size, is instrumental for this journey by showing commitment, living the values, and focusing on the opportunities this entails.

Today, all businesses within Maersk are focusing on areas in which sustainability creates the most value, such as reducing costs related to carbon dioxide, developing enhancements in safety culture, developing local talent, and finding innovative ways to fight demands for bribes and facilitate payments of crews at sea.

The next challenge is how to establish a solid internal governance structure that is well anchored at the highest levels. Fig. 2 summarizes how Maersk is addressing this challenge.

Fig. 2

Fig. 2

Governance is important for any strategy. At Maersk, top management at the group and business levels is accountable for sustainability progress. The Sustainability Council has been and continues to be an important factor for driving progress. It oversees compliance, approves strategies and standards, and provides overall guidance. It reports to the executive board and is made up of senior executives from the business. With this setup, sustainability has been anchored in the business and creates a solid basis for decision making and alignment. Approximately 89% of employees agree with the statement, “My company is making a genuine effort to be socially and environmentally responsible,” which is a statistic that any company should be very proud of.

An important measure has been to track and support the progress made in the businesses. Our sustainability dashboard (Fig. 3), which includes 25 key parameters of sustainability management, shows that the businesses have made considerable progress integrating sustainability into business processes and systems. Today, all our businesses have sustainability strategies and priorities in place, such that they have a strong foundation for addressing key risks and capturing benefits related to their markets and industries.

Fig. 3

Fig. 3

Our 3-year strategy launched in 2010 provided a framework for actively managing key sustainability issues for the company while turning them into opportunities, anticipating new challenges for society, and identifying ways that Maersk can address them for the benefit of business and society. The strategy outlines five priorities that drive integration of sustainability into our operational processes and ensure order in our own house, with the aim of all business units being able to strategize, innovate, and grasp business opportunities arising from a sustainability approach in each of their markets. This now gives us an opportunity to see how this pans out across the business units.

The five sustainability integration priorities referenced are as follows:

  • Business units to follow group standards
  • Sustainability as an element in performance management
  • Trend spotting and stakeholder engagement as part of doing new business and influencing regulations
  • Sustainability is considered in all investment decisions
  • Pilots: Sustainability as a source of innovation

Maersk has worked with impact studies since 2010, when it conducted the Apapa terminal study. As part of its strategy, the company has launched a program for measuring and documenting effects across economic, societal, and environmental dimensions. The reason is to understand the type of effects we have on society, mitigate the costs, and accelerate the benefits.

Examples of questions that might be asked as part of this impact study program include

  • What does it mean for the Nigerian economy when waiting time for unloading a container goes from 30 days to 1 day?
  • How does it affect Brazilian trade and economy if only 4% of the containers currently transported on trucks were transported by coastal shipping?

We take these learnings and use them to gather the relevant stakeholders around the table to have a discussion about the topic and potentially affect decision makers. It is about taking society as the starting point and finding the areas in which we have a role to play to solve some of the problems. With our new strategy, we are moving from an agenda that is about reducing our negative effects on society to an agenda that is about accelerating the positive effects of our business.

So, given that background, what is next? As started earlier, the purpose of our new sustainability strategy is to address significant sustainability challenges in society that, at the same time, constitute bottlenecks to our growth strategy. We have identified the following three areas in which this is most relevant.

Climate and Carbon Dioxide Emissions. Together, these are one of the most important environmental issues to deal with. There is also a good business case. Since 2007, Maersk Line has reduced carbon dioxide by 34% per container, saving USD 764 million in fuel cost in 2013. We will continue to work to make shipping a more energy-efficient way to transport goods. Besides that, we will look further than our own operation at the entire supply chain.

Education and Jobs. Everyone knows there are a lack of jobs and education, especially in developing countries. Education and job creation are important to the individual and for social and economic development in general. In many emerging countries, Maersk is facing a shortage of local expertise and skills, while being faced with the host nation’s expectations to hire locally and procure from local vendors. With an increased focus on education, we will contribute to educate people in emerging countries where the need for local expertise is increasing rapidly. It helps develop needed expertise in emerging markets and creates good relations between us and our host countries.

Trade. Enabling trade contributes to economic development and improved living standards, but various trade barriers make trade more expensive and difficult than it should be. There is a great potential for economic development by addressing some of these barriers. The World Economic Forum estimated in its 2012 Enabling Trade Report that, if nontariff trade barriers were reduced only half way to global best practice, trade would increase by 15% and global gross domestic product would increase by 5%. This would require high-level cooperation with international and governmental organizations, as well as local engagement (i.e., educating companies in developing countries in the opportunities transportation and logistics provide for the durability of their crops and help them get connected to global supply chains). This can result in increased exports and profits and help develop international trade. It is good business for the local companies—and for Maersk.

This new strategic direction addresses systemic challenges outside our own sphere. The approach demands a longer-term horizon, but we are convinced that, when industrywide and social challenges affecting all of us are addressed, the value creation can be exponential. The first 2 years of the strategy will focus on designing and implementing relevant projects; best practices will then be selected, extended to other geographies, and scaled up across growth markets where feasible.

19 Dec 2014

Focus Sharpens on Chemical Risk Assessment

Chemical risk assessment is an evolving element in the health, safety, security, environment, and social responsibility sector of the exploration and production (E&P)  industry. On 24–25 February 2015, the Society of Petroleum Engineers (SPE) will hold its first workshop on chemical risk. The workshop, to be held in San Antonio, Texas, will discuss chemical risk related to human health and the environment within the E&P industry.

Read more about the workshop here.
Register for the workshop here.

Kristin M. Koblis is the global manager of environment, health, and safety (EHS) strategic planning for Noble Energy. At an October meeting of the Society of Petroleum Engineer’s (SPE) Gulf Coast Section Health, Safety, and Environment Study Group, she presented her company’s screening process for chemical risk assessment.

Q: Why is the risk-screening process you outlined in your paper and presentation necessary?

A: Noble Energy is committed to protecting human health and the environment. Communities express their concerns of the chemicals the industry is utilizing and the potential for adverse health. Developing a risk assessment approach that factors in hazard and exposure was very important to us. In addition, there are potential regulatory changes to the Toxic Substance Control Act regarding chemical hazard, exposure, and risk. Noble Energy wants to be a leader in evaluating chemical risk.

Q: What are the objectives of the screening process?

A: The process will allow Noble Energy to identify chemicals where no additional concern is warranted and to also identify the chemicals where additional risk characterization and management may be needed. It is also specific to Noble Energy operations and identifies the field-specific exposure likelihood. We felt it was imperative to ensure that the process evaluates not only the potential human health and environmental hazards but also the potential for people or ecological receptors to be exposed to the chemicals in the products. Chemical risk is based on both the chemical’s inherent hazard to human or ecological receptors and the potential for such receptors to be exposed to the chemical throughout the life cycle of the chemical.

Q: How is the risk screening conducted?

A: The process was developed to be consistent with existing publically available approaches, including the US Environmental Protection Agency’s (EPA’s) methods for the Toxic Substances Control Act Work Plan Chemicals, which rely heavily on both the EPA’s Design for the Environment and the UN Globally Harmonized System (GHS). Each chemical in a product was assessed in terms of hazard, persistence, and bioaccumulation. The parameters for hazard followed GHS for human and environmental hazards. Human health and environmental hazard scores, as well as persistence and bioaccumulation scores (each ranging from 1 to 3), were calculated for each chemical in a product.

Then, each chemical in a product was scored (each ranging from 1 to 3) for relative risk. The key element of this step is the exposure assessment, which allowed an evaluation of risk by scoring the potential for exposure to the product using four factors. The four exposure factors included the amount of the product used, the number of locations where the product is used, the potential for human exposure, and the potential for exposure of ecological receptors to the product.

Separate, overall human health and overall environmental risk scores (each ranging from 1 to 3 for low, 4 to 6 for medium, and 7 to 9 for high) were calculated for each chemical, incorporating hazard, persistence and bioaccumulation, and exposure scores.

Q: What are the challenges to implementing the screening process?

A: One of the biggest challenges is obtaining sufficient data to conduct the scoring. Although we encountered confidential business information (CBI), it was not as frequent as discussed in the media. Noble Energy occasionally encountered CBI data. For some products, there will be both product level data and chemical level data for the constituents that are contained within the product. Where both product level and chemical level data are available, a strategy was developed to guide the selection of one or the other source of information to characterize the hazard of the product. Product-level testing data, when available, are typically limited to specific hazard-related endpoints. Although persistence and bioaccumulation data might also be available for a product, such data rarely, if ever, exist.

Efforts were made to find hazard data that would support scoring of all human and environmental parameters for a given chemical; however, in some cases, data were not available for all parameters. In these instances, it was assumed that the practice of adopting the highest human hazard score and highest environmental hazard score available for the parameters that could be scored was sufficiently conservative to characterize the hazard of the chemicals in a product.

For some of the chemicals, no hazard information was available or hazard information was available only to characterize human health or environmental hazard, but not both. Additional discussions with both service companies and chemical manufacturers is needed to obtain additional information.

Q: What is chemical stewardship and how does it fit in the scope of safety in the E&P industry?

A: Chemical stewardship ensures that EHS protection is an integral part of the chemical lifecycle. It is a continued commitment to assessing and mitigating chemical-related risks to both human health and the environment. The development and understanding of the risk scoring involves partnerships with the company’s drilling, operations, and supply chain departments. This ensures that all groups are integrating human health and environmental risk perspectives into chemical use.

Q: How does chemical stewardship apply to social responsibility in the E&P industry, and how will the screening process affect that?

A: Although there are no regulatory requirements for conducting the chemical risk scoring, Noble Energy wanted to ensure we are going beyond any regulatory compliance requirements. The process ensures that protection to both human health and the environment are factored into the chemical uses decisions, thus ensuring that Noble energy is conducting its operations in a responsible manner.

16 Dec 2014

HSE Now Opens for Everyone

In a change from its original plan, HSE Now has opened up access to those who are not members of the Society of Petroleum Engineers (SPE). The change helps further SPE’s mission of disseminating technical knowledge.

Originally, stories on the site were available only to members of the society. A member login was required to read stories beyond the landing page. That requirement has been removed, and the site will remain open to the general public indefinitely.

“As we watched the success of HSE Now grow since its inception in 2013, SPE felt it would be a great mechanism to help pull together the global HSSE-SR practitioners beyond just our traditional upstream audience,” said Roland Moreau, HSE Now Editorial Advisory Board chairman and former technical director for health, safety, security, environment, and social responsibility (HSSE-SR) on the SPE Board of Directors.

“The objective of making HSE Now more broadly available,” he said, “is to encourage more networking and collaboration on topics that are equally important across all industry sectors and to leverage from each other’s experience and benefit from increased sharing of lessons learned to more effectively promote exploration, development, and production of oil and gas resources in a safe, secure, and environmentally protective manner.”

Now that HSE Now is available to all, be sure to share it with your colleagues who may not be members so they will see what SPE has to offer.

Visit SPE’s HSSE-SR discipline page here.

Become an SPE member here.

15 Dec 2014

Registration Opens for 2015 SPE Americas HSE Conference

Registration has opened for the 2015 SPE E&P Health, Safety, Security, and Environmental Conference—Americas. The conference will be held 16–18 March in Denver.

Building on the success of SPE’s 2014 International Conference on Health, Safety, and the Environment, the 2015 conference carries the theme of “Striving for Excellence—It Takes All of Us.” The theme of the international conference, held in Long Beach, California, was “The Journey Continues.”

In an evolutionary step from past conferences, the 2015 conference will give attendees the ability to interact with the conference organizers and steer discussion toward pressing issues. “The 2015 SPE E&P HSSE Americas conference promises to be a dynamic event,” said Sue Staley, conference committee co-chairperson and vice president of safety, environment, and social performance for Shell.

“The use of interactive technology throughout the conference will allow discussions to focus on issues based on audience polling,” Staley said. “Engaging with various stakeholders has become a critical path in the industry, so we’ve designed the conference with that in mind. The technology will allow us to frame the real-time conversations and sessions around the most important issues based on participant input—bringing acute issues to the forefront.”

“We want people to come to the conference prepared to fully engage and make the most of the opportunities offered,” Staley said. “The interactive technology is new and offers an unprecedented ability to really get a lot out of the conference—because participants can direct conversations and topics based on their immediate needs. This isn’t a completed scripted event. We expect people to bring their concerns and issues for discussion.”

In a first for the conference, a Student Challenge is planned that 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 selected regional universities. 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,” Staley said.

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.

The conference will also present a new method for delivering ePoster presentations—the World Café format. The World Café is a structured event where groups of three ePoster authors will each deliver a 10-minute presentation followed by a personal 15-minute discussion with the authors at assigned tables. Four ePoster World Café sessions will be offered during the conference, each supporting the conference’s theme of “Striving for HSE Excellence–It Takes All of Us.”