Exclusive Content
7 Apr 2016

International HSE Conference Kicks Off With Climate Change Discussion

Very few issues evoke the same level of passion and controversy as climate change. Despite multiple viewpoints, the issue is here to stay, and the energy industry has a definitive role to play. The opening session of SPE’s biennial international HSE conference will feature a keynote address by Nathan Meehan, SPE’s 2015–16 president, who will provide a visionary view of what lies ahead for the industry. The opening session, titled Climate Change—The Road Ahead for the Oil and Gas Industry, will focus on the need for collaboration and—in light of the current global business climate—the imperative to maximize HSE programs and help achieve the needs of shareholders and stakeholders alike.


The 2016 SPE International Conference and Exhibition on Health, Safety, Security, Environment, and Social Responsibility will be held 11–13 April in Stavanger. In alignment with the conference’s theme of Sustaining Our Future Through Innovation and Collaboration, the opening session panelists will share their forward-looking perspective on opportunities for the energy industry to innovate and collaborate on the subject of climate change.

The conference will continue with daily plenary sessions, 15 panel sessions, and 41 technical sessions over the 3 days.

Special events during the conference include a Getting to Zero safety workshop designed to further the conversation on eliminating safety incidents in the pursuit of incident-free worksites. The workshop will address two main questions: How do we get to zero? And, what is the next big development in continuing the journey to zero?

Continuing the theme of looking toward the future, several events at the conference will be geared toward students and young professionals.

A student paper contest will give young authors the opportunity to advance to the international student paper contest at SPE’s Annual Technical Conference and Exhibition (ATCE) this year in Dubai.

Also, the first-ever European Health, Safety, Security, and Environmental (HSSE) Student Challenge will take place on the second day of the conference. The objective of this event is to give students interested in the HSSE arena of the oil and gas industry a chance to display knowledge on HSSE topics and interact with industry professionals. The Student Challenge will consist of multiple question‐and‐answer rounds of competition. Questions will include a mix of topics about the oil and gas industry regarding the environment, social performance, sustainability, and health and safety. Each round will have periods of short‐answer and rapid‐succession questions (i.e., multiple choice, one-word answers), as well as a long‐answer period when teams will work together on an answer to be submitted and reviewed by a panel of judges. Prizes will be awarded to the first and second places.

Participants in the HSSE Challenge also will be given access to a young professionals luncheon. The luncheon, with the theme of Building a Culture of Safety, will be held the first day. Paul Schubert, upstream safety, security, health, and environment manager for Exxonmobil will be the keynote speaker.

The conference will also be the site of the European regional qualifier for PetroBowl, the competition after which the HSSE Student Challenge was modeled that is held annually at ATCE.

Read more about the conference here.

6 Apr 2016

Beyond the Headlines: Fugitive Gas and Flaring—Current and Future Realities

Are fugitive releases of natural gas and flaring environmental concerns? Can these be ameliorated today and even better in the future? Yes and yes.

A paper in 2011 by Howarth et al. suggested that fugitive methane emissions (releases directly to the atmosphere) from shale gas production amounted to 3.6% to 7.9% of all gas recovered and that those numbers were worse than coal. The authors took the comparison of greenhouse gas emissions to the precombustion stage. Because the dominant use of coal is for electricity production, post-combustion comparisons are merited. In so doing, natural gas is favored because power plants using natural gas are up to about 50% more efficient on conversion than coal plants.

Many of these original assumptions have been challenged and the data verified, most recently by an ongoing study by Allen et al. in a 2013 report in the Proceedings of the National Academy of Sciences. This Environmental Defense Fund-sponsored study reports that 0.42% of “the emissions are released” at the production site. The study is ongoing, and more clarity is needed, especially regarding the locations and amounts of the releases. Because this and other studies were almost a direct consequence of the Howarth paper, much good came of that despite the justifiably disputed elements of the original work.

The principal reason for environmental concern about releases of methane is that it is a more powerful greenhouse gas than carbon dioxide. The potency numbers are somewhat in dispute, and the general public may be confused. There is general agreement with the belief that methane is about 25 times more potent than carbon dioxide.

The oil and gas industry continues to take steps to minimize methane release. Methane in the water flowing back from the well is usually separated, so collection is not an issue. If a pipeline is available, it is utilized. In the early days of a prospect, there may not be an export line. In these cases, at the very least, the gas ought to be flared, thus reducing the potency of the released gas.

The inadvertent release of methane can come from hatches, gaskets, and the like that are not properly sealing. Also, in the distribution system, some valve systems operate using natural gas as the actuating fluid, and some release occurs each time they are operated. Alternative valve mechanisms are available, using compressed air, for example. Leaks are currently measured using infrared cameras. The ARPA-E Methane Observation Networks with Innovative Technology to Obtain Reductions program is uniquely targeting innovative means for identifying methane leaks on the rigsite from a variety of sources. All of the foregoing ought to underline the fact that the industry is now fully aware of the issue and is getting its collective arms around solving the matter. Solutions are in the economic interests of the operators: Gas that leaks away is gas that does not get sold.

Flaring of Associated Gas
When oil is produced, there usually is natural gas associated with it. This is because all oil was formed from the action of pressure and temperature on organic matter a couple of hundred million years ago. The early immature form of this matter is known as kerogen. Continued thermal maturation converts it first to oil and finally to gas. At any given time, if oil is the predominant fluid, chances are some part of it matured all the way to gas. This, then, is the “associated gas.” The proportions are greater when the oil is light, as in the case of shale oil. Incidentally, the same holds if the predominant fluid is gas. Some fraction could be relatively immature, with oil-like larger molecules such as propane and butane. These are known as natural gas liquids (NGLs). Much of the shale gas production has this associated liquid. When it substantially does not, because of a high state of thermal maturity, it is known as “dry” gas. The Haynesville is one such play.

Associated gas is often economically or logistically stranded. Gas pipelines may not exist because of the low flow volumes forecast or the sheer distance. In the latter category are offshore platforms, especially off the west coast of Africa. In areas such as the Bakken, it could be a matter of timing; the pipelines are slow to arrive. In many cases the volumes are too low to support export lines. In any case, the world today flares in the vicinity of 5 Tcf/year. North Dakota today flares about a third of the associated gas, which amounts to about 0.13 Tcf/year. Even at today’s depressed gas prices, that amounts to more than USD 350 million in economic loss, not to mention the environmental impact of the carbon dioxide.

Monetizing Low Volume Associated Gas
There is a truism in chemical processing: Size matters. Bigger is better for the economies of scale. Consequently, conventional processes fail to address the unique needs of low volume natural gas to be converted to something movable and saleable. So, how low are these volumes involved? To estimate this, we investigated the distribution of flared gas in North Dakota and the results are shown in Fig. 1.

Fig. 1—Distribution of flared gas in North Dakota by well pad. Courtesy of RTI International.

Of note is that the majority of flared gas is from pads producing as little as less than 50 Mcf/D (50,000 cubic feet per day) to 200 Mcf/D. An ARPA-E funded project (2012) is in development to target feeds of 50–300 Mcf/D to convert the associated gas to methanol. The process is designed to all be housed on two flatbed trucks. This will allow the unit to be moved to different locations. This and similar developments (World Bank 2014) could also service other stranded gas sources such as those described earlier at shale gas production locations. Any new processes must take into consideration the fact that the associated gas is not pure methane. It will typically have ethane, propane, and butane to several percent. Even flaring equipment has to be adjusted to ensure complete combustion of these diverse gases.

Two other recent developments could target this opportunity. One is efficient compression of the gas to where the compressed gas can be transported to a central location for processing or transmittal. Another is known as mini-­liquefied natural gas (LNG) in which the gas is liquefied and then transported. Here, too, the technological advance is that conventional LNG plants are up to 100 times larger than these units. This class of solutions is sometimes collectively referred to as virtual pipelines.

Other Manmade Sources of Methane
Farm animals classified as ruminants are large sources of methane. In the US, this source is estimated to account for emissions on the same scale as from the oil and gas industry. Cattle in particular are the largest single source. The grass they eat is inefficiently converted to useful energy in the animal. Some of it reacts with resident bacteria to yield methane. This is expelled from both ends of the animal: flatulence as well as burping. The most promising avenue for amelioration is diet modification such as the addition of lipids to the feed (Martin et al. 2007). Similar to the motivation of oil and gas operators to use the fugitive gas, here, too, the farmer would benefit because more of the feed would go to make meat or milk. However, the remedies proposed above for the oil industry will not easily apply here.

The third-largest source of fugitive methane is landfills together with animal waste impoundments such as swine lagoons. These are fairly well-suited to utilize the small footprint, gas-conversion technologies mentioned earlier. This gas source will not have the larger molecules such as propane. But it may have contaminants such as carbon dioxide and possibly sulfur-bearing gases. The processes would have to account for these. This is technically feasible.

In summation, emissions of manmade greenhouse gases, in particular fugitive methane and carbon dioxide from gas flaring, are environmental concerns. Active steps are currently being taken to ameliorate the effects. Ongoing innovation in this space is likely to yield significant results and ought to be encouraged.


  1. Howarth, R.W., Santoro, R., and Ingraffea, A. 2011. Methane and the Greenhouse-Gas Footprint of Natural Gas From Shale Formation. Climatic Changehttp://www.acsf.cornell.edu/Assets/ACSF/docs/attachments/Howarth-EtAl-2011.pdf, (retrieved 14 March 2012).
  2. Allen, D.T., Torres V.M., Thomas, J. et al. 2013. Measurements of Methane Emissions at Natural Gas Production Sites in the United States, PNAS, 110 (44): 17768–17773.
  3. ARPA-E. 2012. Compact Inexpensive Reformers for Natural Gas (28 November 2012), http://arpa-e.energy.gov/?q=slick-sheet-project/compact-inexpensive-reformers-natural-gas  (accessed 30 January 2016).
  4. World Bank. 2014. Associated Gas Monetization via Mini GTL: Conversion of Flared Gas Into Liquid Fuels and Chemicals, April 2014 Update.
  5. Martin C., Ferlay A., Chilliard Y., et al. 2007. Rumen Methanogenesis of Dairy Cows in Response to Increasing Levels of Dietary Extruded Linseeds. 2nd International Symposium on Energy and Protein Metabolism and Nutrition, Vichy, France, 9–13 September.

Vikram Rao

Vikram Rao, SPE, is executive director of the Research Triangle Energy Consortium (www.rtec-rtp.org), a nonprofit organization founded by Duke University, North Carolina State University, RTI International, and the University of North Carolina at Chapel Hill. Its mission is to illuminate national energy priorities and those of the world and to catalyze research to address these priorities.

Rao also advises the nonprofit RTI International, venture capitalist Energy Ventures, and firms BioLargo, Global Energy Talent, Biota Technology, and Eastman Chemicals. He retired as senior vice president and chief technology officer of Halliburton in 2008 and followed his wife to Chapel Hill, North Carolina, where she is on the University of North Carolina faculty. Later that year, he took his current position. He also is past chairman of the North Carolina Mining and Energy Commission.

Rao’s book Shale Gas: the Promise and the Peril was released in 2012 by RTI Press and can be found at www.rti.org/shalegasbook. It is written for general audiences and is intended to inform the debate about fracturing for shale gas. The revised edition with six new chapters and extensive revision was released in August 2015 (www.rti.org/shaleoilandgas).

Rao holds a bachelor’s degree in engineering from the Indian Institute of Technology in Madras, India, along with a master’s degree and a doctorate in materials science and engineering from Stanford University. He is the author of more than 30 publications and has been awarded 40 US patents and foreign analogs.

6 Apr 2016

Column: Changing How We Manage HSE—Getting to Zero

For the more than 7 billion people on our planet, every measure of quality of life, from gross domestic ­product per capita and infant mortality, to education levels and access to clean water, is correlated to the consumption of modern fuels, including oil and gas. Now more than ever, our industry faces imperatives: delivering affordable energy more safely, economically, and sustainably—that is, in a way that responsibly meets the needs of today’s populations without jeopardizing the Earth or its future populations. Sustainability will depend on continuing to close gaps, not only in technology, but also in health, safety, and environmental (HSE) performance, to eradicate HSE incidents from our operations. The expectation is a future with an ­incident-free workplace and where everyone returns home safely each day. Closing the HSE gap will require major shifts in cultural, organizational, and human performance paradigms.

Changing the Culture
For years, HSE was seen as a regulatory obligation to meet government requirements. It was governed by, and managed in reaction to, rules and regulations. Control and discipline were prevalent. An incident-free workplace was generally not considered possible, and when it was considered, it was only as a vision, at best.

Over time, industry HSE culture began to shift from dependent to independent as the process and complexity of operations became better understood, and commitment to safety became more personal and individual. An incident-free workplace began to be seen as a possibility but still as a target to achieve rather than a realistic goal.

A further evolution from an independent to an interdependent safety culture took place over the first decade of the 21st century, with a stronger focus on cooperation within and across teams. Employees and well and asset team members began to see themselves as their peers’ keepers. HSE became recognized as “the right thing to do” for two very important reasons.

  1.  It is part of our moral and ethical responsibility to our employees, customers, contractors, and the communities in which we work, and to the future of our planet.
  2.  It is good for business. There is no downside to good HSE practices. Conversely, the cost of poor practices can drive companies out of business.

In 2009, a 3-day SPE Forum Series titled “Getting to Zero—An Incident-Free Workplace: How Do We Get There?” was envisioned in Park City, Utah, and held there the following year. The series heralded a new paradigm shift, in which an incident-free workplace became an expectation. The December 2015 JPT column by 2016 SPE President Nathan Meehan, “The Perfect Day,” explains the concept of “Getting to Zero” and describes the journey thus far.

Coincidentally, 2009 was the year when Baker Hughes made the decision to reorganize from a number of companies made up of product lines and services to a single company with an interdependent culture. This decision redefined who we were and how we did business, including how we manage HSE. With safety as much our purpose as energy, we made it integral to the company and outlined a business framework for it, as we did for other key aspects of the business. We were no longer content with incremental HSE improvement, and getting to zero became a reflection of who we were. The perfect HSE day became the embodiment of our definition of zero and all that was necessary to achieve it: teamwork, engaged and visible leadership, willingness to change, trust, a culture of perfection, a common HSE vocabulary, and a single, universal metric: zero. No longer would employees need to understand HSE acronyms, jargon, or incident rates. Instead, we defined the perfect HSE day as one in which everyone in the company arrives home safely, with no recordable injuries, no serious motor vehicle accidents, and no significant environmental spills. Success became easy to track. Either a day was HSE-perfect or it was not. Each day became a new opportunity to achieve zero, and every employee could see how his or her actions affected company outcomes. Zero was no longer a vision or target but an expectation.

The most powerful aspect of the perfect HSE day is the way it has engaged everyone in our company to think about HSE differently. It has catalyzed a culture shift and, in so doing, has produced remarkable results. In 2012, the year we began tracking perfect HSE days, we recorded 22. The number jumped to 42 the following year, then soared to 92 in 2014—the equivalent of a perfect quarter. Last year, we recorded 146 perfect HSE days. Already this year, we are achieving them at a pace that will place us well over 200 by year end. While this is remarkable, we have more room for improvement, both within our company and throughout the industry.

Drilling Through Data
A recent operator/supplier forum addressed the important question, “What can we do differently to prevent serious and sometimes catastrophic HSE incidents from happening?” The answer lies in two seemingly different but highly interrelated and interdependent realms: data science and human factors.

Data science unlocks hidden patterns in typically available information. For years, our industry’s technological advances in capturing and using data have enabled us to find and develop hydrocarbons to meet the world’s energy demand. Now, we are beginning to leverage data science to better exploit previously untapped revelations from safety and incident data. Our company uses data drilling to leverage concepts and techniques behind “big data” to enable us to reveal previously unseen personal and process-safety-related trends in existing safety-incident data for “near miss” incidents—where an event occurs but injuries or fatalities are avoided—and for incidents where harm was caused. The data come from a variety of sources both inside and outside traditional safety-related databases and helps us to more clearly understand the root cause of incidents, which precipitates more accurate intervention strategies and effective risk management.

What Lies Beneath
Preventing serious and catastrophic HSE incidents depends not so much in understanding how an incident occurs as why it occurs—because when we understand why something happens, we can take action to prevent it. This requires going beyond the industry view of seeing “why” as outputs of traditional root-cause tools such as TapRooT, ThinkReliability, 5-Why, and others. Too often, we use these tools to focus on who is responsible, what went wrong, and what people failed to do, assuming that human actions are the cause of incidents.

To more clearly answer the question of why, we must assume that human actions are influenced by systemic issues. Taking this approach causes us to dig deeper into the systems and processes of an organization, the influence of leaders, what we say and do, what we measure and what we do not, the culture of the organization, and how these factors influence employees.

To this end, we developed “What Lies Beneath,” a thought-provoking, interactive learning session based on a hypothetical, industry-­stereotypical, dropped-object incident. While the exercise uses a dropped-object incident, the underlying learning outcomes can apply to prevent any type of incident.

The session challenges traditional thinking and allows participants to explore a different perspective on why something happened or could happen. It illustrates how human and organizational factors influence employee decisions and actions. It allows us to put ourselves at different stages of a workflow and ask ourselves, “What weaknesses do I see? What could lead employees to make poor decisions? What organizational factors are influencing the actions and decisions of the employees?” This approach does not absolve accountability of employees. Instead, it enables us to look beyond personal accountability and punishment, to identify and resolve the deeper systemic issues that contribute to poor decision making and, ultimately, HSE incidents.

HSE incidents are not just about the person, the equipment, and what happened at the rig or the facility. The issues go deeper—to gaps in processes and communication and to the culture and thinking of the organization that lie beneath an incident. Looking at what lies beneath is not just a forensic tool to analyze why things happened; it also can help us proactively evaluate our processes, workflow, and culture not only around HSE but also around every other aspect of the business. It answers the why of executing—or not executing—work flawlessly. To provide new insights and support collective industry efforts in getting to zero, our company is making its “What Lies Beneath?” materials freely available to the industry.

Our industry has made great strides in the way we manage HSE. Zero—an incident-free workplace—has evolved from a vision to a target to an expectation. Meeting that expectation will require maintaining the momentum. We are still working to align priorities, better develop a common HSE language, and enable a more widespread mindset that achieving a future with zero incidents is possible. We must continue to evolve our culture so everyone across the industry is empowered and responsible to make the right decision each and every time, and is supported by the organization and systems to be error free. And, we must do this in the face of ever-changing market conditions that can form a barrier to HSE commitment and making the best decisions.

Changing how we manage HSE is the next frontier for our industry. How we go about that change will shape the industry and the world it serves far into the future.

Jack Hinton

Jack Hinton, SPE, is vice president of health, safety, and environment for Baker Hughes. Before joining Baker Hughes in 2005, he was dean and professor at the Kazakhstan Institute of Management, Economics, and Strategic Research for 2 years. He previously spent 26 years at Texaco serving in leadership roles that included director of environment, health, and safety, and vice president of international petroleum.

Hinton sits on the Management Committee of the International Association of Oil and Gas Producers, is a member of the Kazakh-British Technical University Business School Advisory Board, and serves as chairman of the Board of Advisors for the Southwest Center for Occupational and Environmental Health.

Hinton holds a doctorate degree in occupational health and an MS degree in environmental science, both from The University of Texas Health Science Center at Houston. Hinton also received a BS degree in biology and chemistry from Trevecca Nazarene University.

6 Apr 2016

President’s Column: Sustainability and the Role of Petroleum Engineers

There are many definitions of sustainability, but the 1987 United Nations Brundtland Commission’s remains a standard: “Meeting the needs of today without compromising the ability of future generations to meet their own needs.”

Nathan Meehan

Some think oil and gas have little role in a sustainable ­future; global realities suggest otherwise. How is it that a finite energy resource and a source of greenhouse gas emissions can be part of a sustainable future? Oil and gas are ­essential to meeting the “needs of today;” their prudent use is the safest way to ensure we do not compromise the “ability of future generations to meet their own needs.”

The Society of Petroleum Engineers Board of Directors adopted the following definition of sustainability in 2014: “Exploration, development, and production of oil and gas resources provide affordable energy that contributes significantly to well-being and prosperity.

“SPE encourages the responsible management of these oil and gas resources and operations including the appropriate management of social and environmental impacts and their related risks.

“SPE demonstrates this commitment by offering its members opportunities to train, share knowledge, and advance practices for doing business in ways that balance economic growth, social development, and environmental protection to meet societal needs today and in the future.”

Petrowiki also has an excellent discussion of sustainability, including references to noteworthy papers from www.OnePetro.org.

Safe, affordable energy is central to quality of life. It is essential for farmers to be able to produce sufficient food; for the transportation of this food to consumers; and for housing, heating and cooling, clothing, and all other necessities of life. Quality of life is strongly correlated to energy use.

Supplying energy for the world is a monumental task. There continue to be improvements in renewable energy sources; however, reasonable forecasts of growth in renewables suggest fossil fuels will remain the primary source of the world’s energy for decades to come. Only radical growth in nuclear power could seriously diminish this result. The realities reflecting public concerns over nuclear safety and proliferation of radioactive materials make such growth unlikely.

While coal resources are abundant, concerns over greenhouse gas emissions and the possibilities of pricing carbon through taxes, caps, exchanges, or other mechanisms and the relatively low cost of natural gas continue to make natural gas a more attractive fuel. This is true whether you expect it to be a relatively near-term “bridge fuel” to a renewable future or (as I do) part of our longer-term energy solutions.

If oil and gas are to be part of a sustainable solution to our energy needs, there are some things we can and should do better as petroleum engineers.

Minimizing Methane Emissions
It is important to reduce or eliminate leaks and incidental releases of methane since, on a pound-for-pound basis, methane has a 25-times greater impact on climate change than does carbon dioxide. Natural gas and petroleum systems account for 29% of all US methane emissions. Domestic livestock and associated manure management account for 36%. Landfills and coal mining combined account for another 28%. In total, methane accounts for 10% of US greenhouse gas emissions. Methane emissions associated with natural gas and petroleum systems have declined significantly from 1990. In spite of substantial increases in natural gas production from 2005 and widespread growth of pipelines and processing facilities, the decline in emissions has continued. We must continue this progress and eliminate fugitive emissions of methane associated with oil and gas production, transportation, and processing. There will be a role for drones and other technologies in improving monitoring and early detection capabilities.

Reduce or Eliminate Flaring
Flaring should be infrequent, temporary, and efficient. Technologies to make flaring highly efficient are available and represent best current practices. Long-term flaring of volumes of gas that cannot be (easily) sold needs to be eliminated globally. This goal may require commitments to gas reinjection, local use, local power generation, local compressed natural gas manufacturing, or other innovative solutions. Regulators need to set aggressive but technically achievable standards and timetables. Regulatory agencies should focus on the largest problems first and use a balanced approach. Operators need to develop fields with the goal of eliminating flaring in mind. Unconventional (tight oil) operators in areas without low-pressure gathering systems will need to develop many-well drilling pads enabling sufficient volumes of natural gas to be used locally or otherwise exploited. In such cases, gas represents a secondary product so regulatory and taxing bodies should preferentially treat developments that use semicommercial volumes of gas rather than flaring it.

Energy Efficiency and Conservation
We should support energy efficiency measures. Such measures make the most sense when they have a reasonable economic benefit. The current price environment makes it more difficult to justify such measures, whether they involve a homeowner installing additional insulation or an airline purchasing more fuel-efficient airplanes. Government subsidies for such efficiency-improvement measures may make sense when widespread adoption of a marginally commercial solution will lead to cost reductions or significant improvements in the required technologies. Conservation measures imply a change in consumer behavior rather than just an improvement in efficiency. The current product price environment is less likely to encourage conservation efforts whether it is in transportation, recreation, or other decisions. Government actions mandating conservation efforts may be viewed as heavy-handed. The “carrot” approach is more likely to achieve results than the “stick.”

Wellbore Integrity
Wells completed with casing, liners, and cement prevent migration of fluids from one zone to another. Such integrity is vital to minimizing the likelihood that hydrocarbons or salt water might migrate behind pipe and contaminate other formations. Casing collapse, casing leaks, and inadequate primary cementing or deterioration of cement must be avoided and technologies implemented to ensure wellbore integrity. Cement-job design including spacers, quality control during implementation, and long-term monitoring ensure that desired fluids are produced and all other fluids stay in place. Advances in fiber-optic monitoring technology such as distributed acoustic sensing may be useful for monitoring critical wells.

Reducing Surface Footprint
When many wells need to be drilled, drilling from a central wellpad or cluster reduces surface footprint, minimizes transportation disruptions, and allows produced or flowback water to be used more effectively. It is also easier to operate and leads to shared use of production facilities and commercial use of small volumes of gas. Many individual unconventional wells are not commercial, even if the combined results of all wells drilled is economic. Many individual hydraulic fracture stages do not appear to contribute measurably to flow. Engineers must collaborate with earth scientists, petrophysicists, geomechanics professionals, service providers, and others to eliminate the need for unnecessary stages or wells. This will improve economic returns, lower the demand for water, and minimize all other environmental impacts of production.

Elimination of Spills
Whether a surface spill during oilfield operations or a catastrophic blowout, consistent planning, use of best available technology, and flawless execution are keys to eliminating spills. Eliminating small spills is good business. Eliminating large spills may mean staying in business. Blowout control eliminates spills and saves lives.

Optimized Field Development and Management
An asset team working on simulating reservoir performance and designing an optimized plan may not think of their work as contributing to sustainability. But the reality is that almost everything we do as petroleum engineers contributes to sustainability. Can we recover the most barrels with fewer wells? Can we invert the waterflood injection pattern and lower total fluid handling requirements? Can our well monitoring plans identify damaged wells early and allow them to operate at maximum efficiency? As we drill, complete, equip, and produce wells more efficiently, we are further contributing to sustainability. We make it possible to meet the world’s needs today and improve people’s lives by providing safe, affordable energy. The more efficient we are the more affordable that ­energy becomes.

Many oil and gas companies voluntarily issue a sustainability report and similar measures are in place for service companies and others. The real measure of our role in sustainability remains our individual commitment to doing the right job and getting that job done right. As I travel throughout the world, I am more convinced than ever that we as an industry, and as SPE members in particular, are committed to improving today’s quality of life, but not at the expense of the generations to come.

17 Mar 2016

Web Event Offers Preview of Sustainability Program at International HSE Conference

As the Society of Petroleum Engineers celebrates the 25th year of its flagship HSE conference, it marks another key milestone with the introduction of a standalone sustainability program. The program is a natural evolution of the oil and gas industry’s increasing awareness of its role in supporting societies to thrive and meet their needs within the natural cycles of nature.

This program has been designed by 40 experts from inside and outside the industry and brings to the conference four panel sessions addressing the most pressing sustainability issues for our industry—Sustainability as a Source of Innovation; Sustainability To Improve Performance; Climate Change—Past, Present, and Future; and Sharing the Water Commons.

A preview of the sustainability events at the conference will be presented online at 0930 on 30 March. Libby Cheney is set to be the moderator.

Cheney is a partner with TRIO Global Solutions, a firm that advises and consults on matters of sustainability and business resilience.

Cheney has more than 30 years of leadership experience in sustainability, HSE, strategic planning, operations, engineering, and project development. She joined Hess in March 2012 from Shell, where she spent 5 years, most recently as vice president of safety, environment, and sustainable development for exploration, development, and production assets in the Americas. Before joining Shell, Cheney was with ExxonMobil for 24 years, where she served in technical and operational roles.

Cheney holds a bachelor’s degree in chemical engineering from Vanderbilt University and is active in many civic and professional organizations, including the Offshore Energy Center in Houston, the Society of Petroleum Engineers, and the United Way of Greater Houston.

Register for the online preview here.

Read more about the international HSE conference here.

16 Mar 2016

Mexico Symposium Brings Experts Together To Collaborate for Future Growth

Prominent exploration and production (E&P) experts, operators, and regulators are set to participate in one of Mexico’s most important health, safety, and environment (HSE) technical events. The 2016 SPE Mexico Health, Safety, Environment, and Sustainability Symposium is set for 30–31 March in Mexico City at the Marriott Reforma Hotel. In attendance will be leaders from the Agency for Safety, Energy, and Environment; IPIECA; Pemex; and Sener.

With a theme of Collaboration for Future Growth, the event will have presentations on sustainability; the environment; economic growth; and HSE challenges facing in the E&P industry in Mexico.

Keynote and luncheon sessions will include Collaborating for Breakthroughs in Safe, Affordable Energy by Jack Hinton of Baker Hughes and Regulating To Establish a Safety and Environmental Protection Culture in the Mexican Oil and Gas Industry by Carlos de Regules with ASEA.

An executive plenary session, HSE and Sustainable Development License To Operate in Mexico, will feature panelists Alejandro Zagal of Pemex, Alberto de la Fuente of Shell, Krish Ravishankar of Oxy Oil and Gas, and Robert Sheninger of Talos Energy.

The closing session will feature a presentation titled HSSE-SR: Cardinal Directions for Navigating E&P Success in Mexico by 2015 SPE President Helge Hove Haldorsen of Statoil.

Attendees will have to opportunity to pick up a free copy of SPE’s new compendium Enhancing Process Safety in the Oil and Gas Industry.

Read more about the symposium here.

View the symposium program here (PDF).

Register for the symposium here.

2 Mar 2016

Industrial-Sized Cyberattacks Threaten the Upstream Sector

The oil and gas industry is coming to terms with a cyberthreat landscape that has expanded beyond data breaches and the theft of intellectual property. The latest battlefront is in the field where critical drilling and production assets are at risk of being disrupted or destroyed, thanks to their highly vulnerable control systems.

Malware designed to infect operational networks that control oilfield machinery is on the rise, and security flaws make addressing the situation difficult. Image courtesy ElbPresse.

The industry has experienced only a few cases of these so-called cyber-to-physical attacks, but the US Department of Homeland Security predicts that, by 2018, cyberattacks against oil and gas infrastructure around the world will cost almost USD 1.9 billion. One of the most dire warnings comes from the multinational risk adviser and insurance firm Willis Group, which, in 2014, reported that “a major energy catastrophe, on the same scale as Piper Alpha, Phillips Pasadena, Exxon Valdez, or Deepwater Horizon,could indeed be caused by a cyberattack.” The company noted in its report that insurance providers generally will not cover such events.

The concern over control systems has come to the forefront because of the widespread use of digital oilfield technology that began about 2 decades ago. Driven by significant gains in efficiency and production, companies eagerly moved to tether nearly every facet of operational networks to the Internet, either directly or through corporate networks. On the plus side, the industry gained invaluable real-time data, various operations became automated, and engineers working in office buildings could remotely control offshore operations.

But the computer hardware that makes all of this possible was never designed to be connected to the Internet. Known collectively as Industrial Control Systems (ICS), they were built to run in isolation and thus have no security measures that guard against run-of-the-mill malware, let alone a targeted cyberattack launched by a sophisticated hacker.

“Security was not important for anyone; what was important was to have those systems operational,” said Ayman Al Issa, chief technologist and senior adviser of industrial cybersecurity at Booz Allen Hamilton. He added, “Based on our experience, it is easy to attack those systems—it is easy to attack thousands of them.”

Al Issa explained that the control systems are used not only in the oil and gas industry but in nearly every industry and utility sector around the world. Recent attacks on control systems in Europe prove that the digital oil field is at risk. The long list of assets using these exposed control systems includes drilling rigs, subsea wellheads, flowmeters, production facilities, pipelines, and artificial lift installations.

The industry is working on multiple fronts to address vulnerabilities, but cybersecurity experts working in the industry say it will be years before adequate safeguards are in place. Until then, oil and gas companies must face the reality that the hacker community has the advantage.

1 Mar 2016

Social License To Operate

“You don’t get your social license by going to a government ministry and making an application for one, or simply paying a fee. … It requires far more than money to truly become part of the communities in which you operate.”
— Pierre Lassonde, President of ­Newmont Mining Corp., 2003


There is widespread acceptance that extraction industries—including oil and gas—improve people’s lives and enable the economic growth of countries. However, at the project level, this acceptance is neither automatic nor unconditional.

The concept of a social license to operate (SLO) has been applied to extraction industries and has been defined as “a community’s perceptions of the acceptability of a company and its local operations” by Thomson and Boutilier (2011). Community can be very broadly defined to include stakeholders and interested parties well outside the immediate areas of operations, or “any group or individual who can affect or is affected by the achievement of the organization’s objectives” (Mitchell et al. 1997).

SLO is deemed to exist when a project has ongoing approval of the community. For any project to have SLO, it is necessary to earn and maintain the support—and ultimately trust—of the community. We have seen ample evidence, including in our own industry, that failure to do this can lead to conflict, delays, added costs, or even prohibition of projects. Because it is rooted in beliefs and perceptions, SLO is intangible. Beliefs and perceptions are subject to change with new information; SLO is nonpermanent. This presents challenges for companies who want to know the status of their SLO and what they need to do to maintain or improve it.

Fig. 1

Thomson and Boutilier developed a framework to measure beliefs, perceptions, and opinions that impact social license in the mining industry and published quantitative assessments of their framework. Fig. 1 represents their model and serves as a useful starting point for a discussion of SLO in the upstream oil and gas industry.

Measuring Social License
According to the Thomson and Boutilier framework, SLO exists in a four-level hierarchy, with withholding or withdrawal at the lowest level, followed by acceptance, approval, and co-­ownership, or psychological identification. To advance in the hierarchy, the project must meet criteria of legitimacy, credibility, and trust.

At the lowest level, SLO does not exist, and projects cannot proceed; the community perceives them as illegitimate. To be considered legitimate, an extraction operation must contribute to the well-being of the community, respect existing traditions and lifestyles, and be conducted in a manner the community considers fair. If the extraction project is not considered legitimate, the community either withholds or withdraws access—including legal license—to essential resources. Drilling permits fall under this category, as do restrictions prohibiting hydraulic fracturing imposed by a government. The social license to operate also can be withheld or withdrawn by removing essential financing, workforce availability, markets, etc. Examples of social licenses that have been withheld in our industry are the development of the Marcellus Shale in New York and development of unconventional resources in France. The driver for these licenses failing to rise to the level of acceptance is not primarily the complaints of local residents who could be directly affected by activity, but a larger concern at state or national levels arising from fears about hydraulic fracturing.

The next-higher level of social license is acceptance. This is the most common level in the SLO hierarchy. It may be granted grudgingly or reluctantly by parts of the community. Importantly, this level is just one level above the social license being withdrawn. While acceptance implies tolerance, there may be lingering or recurring issues, the presence of outside non­governmental organizations, and watchful monitoring.

While legitimacy and credibility lead to acceptance of a project, it is important for operators to be perceived as credible by the community at-large to rise to the level of approval. This level of license requires that operators and their contractors communicate openly and honestly with the community, deliver on the actions they promise, and provide benefits to the community. The hallmarks of the approval level are support for the project and participating companies, perception of the companies as good neighbors, and pride in collaborative achievements.

The highest level of social license—psychological identification, or co-ownership—can only occur when a high level of trust is present throughout the community. Building that level of trust requires consistency in communications and execution. Once it is established, project participants and the community engage in real dialogue. A substantial portion of the community and other stakeholders incorporate the project into their collective identity. The community often becomes an advocate or defender of the project since its members consider themselves to be co-owners and emotionally vested in its future. This level of social license should be industry’s objective.

Gaining Social License
Because SLO is intangible and dynamic, conflicting ideas among stakeholders can impact the level of license that is granted. Community members may have very low levels of trust for operators in general, yet be much more willing to believe individual employees whom they know and trust. Similarly, each community has specific issues and interests that form the basis for relationship building between it and the project operator. As a prerequisite for SLO, the operator should map and understand the social structure, issues, and vision of the various individuals, groups, and organizations that form the community.

Confidence in the status of a social license requires measuring it periodically and using the results to modify practice to improve the quality of the relationship between the project and the community. Uwiera-Gartner (2013) discussed some of the issues associated with communicating how hydraulic fracturing operations can be used in a way that protects the environment. Some early industry communication efforts emphasized pointing out flaws in public perception and media accounts instead of addressing a variety of public concerns. Uwiera-Gartner demonstrated that open and honest communication is essential to maintaining the social license.

Olawoyin et al. (2012) quantitatively illustrated the increasing number of potential violations of best practices that could result in environmental impacts associated with increased drilling activity. They emphasized the importance for operators to implement mitigation practices and focus on flawless execution. An industry reputation can suffer enormous damage when environmental damage or personnel injuries or fatalities occur.

Beliefs, opinions, and perceptions—and social license to operate—are subject to change as new information is acquired. It is important for the Society of Petroleum Engineers (SPE) members to be familiar with the many facets of the industry so they can communicate factual information. SPE’s website ­energy4me.org is an excellent source of such information.

Understanding the communities where we wish to work, conveying factual information, communicating honestly and openly, and acting in ways that build credibility and trust will help our industry and the companies that comprise it strengthen and maintain the quality of relationships to earn and maintain the highest level of social license—and the benefits that accompany it.

Lassonde, P. 2003. What Shade of Green Are You? Presentation to the Melbourne Mining Club. https://www.ausimm.com.au/content/docs/minclub130803.pdf.

Thomson, I. and Boutilier, R.G. 2011. Social license to operate. In SME Mining Engineering Handbook, ed. Darling, P., 1779–1796. Colorado, US: Society for Mining, Metallurgy and Exploration.

Mitchell, R.K., Agle, B.R. and Wood, D.J. 1997. Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts, The Acad Mgmt Rev, 22(4): 853–886.

Uwiera-Gartner, M. 2013. Groundwater Considerations of Shale Gas Developments Using Hydraulic Fracturing: Examples, Additional Study, and Social Responsibility. Presented at the SPE Unconventional Resources Conference, Calgary, Canada, 5–7 November. SPE 167233. http://dx.doi.org/10.2118/167233-MS.

Olawoyin, R., Wang, J.Y., and Oyewole, S.A. 2012. Environmental Safety Assessment of Drilling Operations in the Marcellus-Shale Gas Development. SPE Drill & Compl 18(2): 212–220. SPE 163095. http://dx.doi.org/10.2118/163095-PA.

29 Jan 2016

TeQ Shield Offers Improved Monitoring for Safer Workers

Confined-space work is one of the most challenging aspects of a maintenance project. According to the US Department of Labor, 481 fatalities occurred between 2005 and 2009. That is approximately one fatality every 4 days.

This considerable level of danger calls for extra safety measures such as constant visual and bio monitoring to ensure that incidents are managed effectively and prevented where possible.

TeQ Shield Guardian

TeQ Shield Guardian.

Launched by United Safety, TeQ Shield is an innovative technology designed to do just that. It combines gas detection, video surveillance, two-way communication, access control, permitting, quality control and assurance, personnel temperature control, and bio monitoring.

“Previously, we operated confined-space work with what you would call a blind side. The safety attendant is restricted to the outside of the vessel. Inside, accidents can occur if potential hazards such as fire, elevated temperatures, gas, fumes, vapor, or lack of oxygen are not properly managed. There was also no way to communicate directly with the workers inside,” said Sher Alizander, United Safety’s technical services manager.

With TeQ Shield Guardian, the safety operator monitors all confined-space work and gas levels, controls worker access information, and can communicate with personnel outside and inside the vessels. The TeQ Shield has a host of features, including cameras with day/night vision, two-way communication, video recorded along with gas-detection logs, and data that can be used for training or investigations.

Aside from the TeQ Shield Guardian, two other components of the TeQ Shield are the Bio and Therma. The TeQ Shield Bio is a system that can monitor vitals such as heart rate, breathing rate, and core body temperature of up to 64 workers simultaneously, thus giving operators real-time updates on the internal health of the workforce. The device can be worn conveniently by workers inside their coveralls to monitor their body functions. The device comes with rechargeable batteries that last up to 26 hours. Basic red, orange, and green alerts indicate when a worker needs attention. “If there’s an alert on a worker’s vitals, the system raises a clear warning signal for managers to take appropriate action before any incident can occur. Immediate actions can be taken to ensure that the worker gets the appropriate medical attention and support required,” said Elie Daher, executive vice president and chief marketing officer at United Safety.

TeQ Shield Therma, on the other hand, is an innovative temperature-control system based on compressed-air technology. Designed with worker safety and comfort in mind, TeQ Shield Therma vests can keep workers either cool or warm depending on their environmental needs. In hot temperatures, this prevents heat stress, while, in cold temperatures, it protects from hypothermia. In both situations, it results in safer workers with increased worker time on tools.

“The oil price crisis may have brought down profits in the oil and gas industry, but it has intensified the drive to innovate and bring cost-efficient technologies to the market. By monitoring a worker’s actual physiological state, innovations such as these can effectively prevent workplace injuries such as heat stress and heat stroke while increasing productivity,” Daher said.

Find more information on TeQ Shield here.

Read more about United Safety here.



18 Jan 2016

Panelist: Project Planning Must Consider Above-Ground Risks

In December 2015, HSE Now initiated a series of articles highlighting presentations from a panel of global experts at the 2015 SPE Annual Technical Conference and Exhibition in Houston, wherein the experts shared their perspectives on a topic of increasing strategic importance to the society’s global members: sustainable development. Titled “Value Preservation: Sustainability and Management of Above-Ground Risk,” the session was led by Alex James, global sustainability manager at Halliburton, and introduced by Helge Hove Haldorsen of Statoil, 2015 SPE president. The panelists were RoseAnne Franco of Verisk Maplecroft/Wood Mackenzie, Michael Oxman of Acorn International, Dan Domeracki of Schlumberger, and Alex Hohmann of Anadarko.

image002The first article featured remarks by Franco, director for oil and gas risk at Verisk Maplecroft, who addressed how gaining an understanding of holistic risks was critical for sound risk management. The next featured panelist is Michael Oxman. Oxman is a partner at Acorn International, where he helps clients achieve and preserve value through management of above-ground risk. He specializes in social performance, local content, reporting, and alignment with key international extractive industry good practices and standards. Oxman formerly was the director of energy and mining at BSR and has extensive economic and commercial experience through prior roles at Chevron, Price Waterhouse, and the Overseas Private Investment Corporation. He holds two masters degrees, in international affairs and business, from Columbia University and Rice University, respectively.

In his presentation, Oxman discusses recommendations and challenges associated with the application of sustainability principles across the asset life cycle.

Michael Oxman, Acorn International

  • In contrast to above-ground issues, technical risks (subsurface and facilities) are routinely analyzed with the support of advanced tools, techniques, and protocols.
  • Above-ground risks receive proportionately less attention and fewer resources devoted to understanding impacts on commercial planning and value realization.
  • Local knowledge of community and of site-specific social dynamics is not fully integrated into business planning and risk management.

    Fig. 1

    (Fig. 1 offers an example of a project that properly invested significant time and energy in government relations but did not adequately map key local stakeholders to understand potential impacts on project approvals.)

As a result of the preceding points, project schedules and forecasted budgets are often optimistic (at least in part because of not adequately factoring in political, commercial, social, or environmental risk). See Fig. 2.

Fig. 2

Fig. 2

  • Optimistic schedules and budgets create pressures on project managers that, in turn, may force reactive, under-resourced, or “siloed” actions between functions or departments, thereby exacerbating the original challenge or problem.
  • As a consequence of these (and other) factors, cost/schedule overruns and net present value underperformance frequently characterize project outcomes.

While many of the preceding challenges remain today, there has been visible progress over the last decade in managing above-ground risk.

  • Evidence of above-ground risk impacts on commercial value is clearer, both qualitatively and quantitatively [e.g., International Finance Corporation and other cost/benefit estimates of community consultation value in both oil/gas and mining (www.fvtool.com/case-studies)].
  • Technology and communication support company innovation in above-ground risk management and engagement (at the same time, however, communication platforms also “raise the bar” on above-ground risk performance as stakeholders with different perspectives or in opposition to industry developments can connect more readily than ever before).
  • Availability of resources, guidelines, experts, and standards for assessing and managing above-ground risks as they pertain to capital and operating projects has steadily increased.
  • Tools and processes [e.g., decision quality frameworks, multidisciplinary expert teams, assurance protocols [see the Acorn International EHSS Assurance Tool for an example (www.acornintl.net/ehss_assurance.html)] for assessing and integrating above ground risks into project economics and risk management have advanced significantly (though they remain underdeveloped relative to technical issues).
  • Increased pressure on localizing benefits (e.g., local content via jobs, economic multiplier impacts, community investments, and capacity building) is pervasive and has resulted in greater company human resource investments at the local level focused on social and environmental performance.

Fig. 3

Fig. 3 summarizes these trends with specific examples.

These trends have led to more robust management frameworks to identify, mitigate, manage, and monitor above-ground risks and their underlying root causes. A simplified example of such a framework may be found in Fig. 4 (reading from bottom up, starting with impact management and leading to contributions and benefits). For effective risk management, all three of these elements are equally important; one without the other creates unanticipated risks (e.g., failure to effectively mitigate or communicate actual or perceived environmental or social impacts compromises otherwise promising benefit “levers” that might help secure social or legal license to operate; similarly, failure to demonstrate benefits may result in a lack of project support despite strong impact management).


Fig. 4

In years past, it was a commonly held view that planning for above-ground risks was impractical because they were so uncertain or difficult to anticipate. Fortunately, this view has changed substantially, and companies now use frameworks that have been tested in other arenas (e.g., Plan, Do, Check, Act) to manage above-ground risks.  Examples include

  • Scoping and screening tools (Fig. 5) to identify key issues efficiently and early in the life cycle


    Fig. 5

  • Formal social and environmental impact assessments to detail and communicate impacts and benefits, as well as environmental and social management plans to mitigate impacts and enhance benefits
  • Stakeholder/community engagement approaches and strategies that ensure disclosure and communication to mitigate overall risk
  • Tested local content and social investment approaches that establish clear baselines for developing objectives and measuring progress on benefits delivery

Fig. 6

Building on early risk identification and management, the IFC Performance Standards (Fig. 6) have helped oil/gas and mining companies tailor their own management systems through a checklist of recurring extractives-related issue categories, as well as an overall process for identifying, managing, and mitigating these above-ground risk topics.

Other tools, standards, and guidance documents are increasingly available from industry associations such as IPIECA as well as the International Council on Metals and Mining. These toolkits help to formalize the management of above-ground risks in a manner that saves time, effort, and value over the long term. (Fig. 7 is a sample publication from IPIECA on grievance mechanism design and implementation.)

Fig. 7

Fig. 7

In summary, while substantial progress has been made in the identification and management of above-ground risks, the bar continues to rise as key stakeholders, such as host governments, nongovernmental organizations, and local communities, readily connect on perceived/actual project impacts as well as on benefit expectations. The current commodity price downturn and corresponding budget/staff consolidations up the ante even further as local stakeholders see reduced benefits (e.g., lower taxes and royalties and fewer investments in local economy), and companies are left with fewer resources with which to manage above-ground risks.

In 2016, successful above-ground risk management will be fostered by companies that are able to balance these challenges by

  • Dedicating requisite competencies efficiently through technology and multidisciplinary teams
  • Incorporating local knowledge and insights early and regularly
  • Anticipating changes in risk factors throughout different stages of the project life cycle
  • Integrating internal and external best practices and standards into decision making
  • Broadening engagement beyond regulatory requirements to establish early warning and develop key stakeholder relationships

Questions or comments about this article may be emailed to Michael Oxman.

Watch the full presentation here: