Chinese Energy Companies Showing Leadership in Sustainability

While I was in Asia last week, I met with the CIO of PetroChina and China National Petroleum Company (CNPC) and learned of his desire to expand on our great success consolidating all applications in the Environmental Health and Safety arena into one platform for efficiency and centralized reporting. I was really impressed when he told me they have more than 70,000 users.

This has to be the largest EHS sustainability platform ever deployed. He also told me it was the first and “only” software within PetroChina and CNPC that has been deployed across the entire company. We want to enhance our value to their business users by providing tools like role-based Key Performance Indicators to help them improve performance within their specific business units.

I also met with the CIO of China Light and Power (CLP) in Hong Kong. This is meaningful because CLP is followed and benchmarked as best of breed throughout Asia for its best practices in using information technology to enhance business value. He gave me a tour of the company’s technology center, which was quite impressive, and we spent a good deal of time talking about translating technology investments like ESS software into real business value.

These CIOs are true thought leaders and our plan with them in the area of GHG emissions management and corporate responsibility reporting will set the standard not only in Asia but across the world. For those of us who think our companies are in the vanguard of sustainability, here’s a word of caution: Look out. You may just find yourself following leaders from Asia.

Add comment September 25th, 2008

CSR Report Shows Marathon’s Commitment to Reduce Emissions

With oil companies in the headlines every day and people understanding as little about how the oil business works as they do, I thought I’d read the 2007 Marathon Oil CSR Report and see what an oil company has to say about its environmental stewardship activities. Especially one that has just bought our software. Naturally, we think companies invest in the tools they need for more than just corporate responsibility reporting. Executives are looking to manage the company’s overall business risk and measure its progress toward true sustainability.

Once again, I’m struck by how these reports have changed. This one is full of real data. For oil companies, a principal measure of environmental performance is oil spills, because they have a big impact on the environment. The 2007 report is full of facts and data showing that the company, over a five-year period, has reduced the number and volume of oil spills equal to or greater than one barrel, and reduced both its upstream and downstream spill rates. Marathon also is using a Gas-to-Fuels technology at a demonstration plant built purely to explore the potential for turning natural gas into transportation fuel.

Since 1999, Marathon has invested $450 million in technology to reduce emissions. It’s going to invest another $30 million through 2008 and Q1 2009. In all, capital investments for environmental projects totaled $199 million last year, which was about 4 percent of total capital expenditures. It’s a clear indication that Marathon is committed to address emissions management concerns.

On the Health and Safety side, Marathon has developed metrics for incidents and near misses and leading indicators to track and improve process safety performance. The company is expected to use the data in next year’s CSR report, where there will be better measurements of success.

Eyes glazed over by data? That’s good. Marathon has shown that it’s serious about controlling its emissions, preventing spills and accidents and doing more than just giving lip service to corporate responsibility reporting.

Add comment August 7th, 2008

ESS EXPO.08 to Provide Latest Trends, Innovative Solutions for EHS Software Users

If you haven’t already registered, here’s a personal invitation from me to join us at ESS EXPO.08 from Sunday, April 13 - Tuesday, April 15, at Sheraton Wild Horse Pass Resort outside Phoenix, Arizona.

ESS EXPO.08 is the largest software users’ conference of the year dedicated to Environmental, Health & Safety and Crisis Management. Attendees will see the latest technology innovations from ESS – with up-close looks at new versions of our software (Essential Suite™ version 7.1 and the browser-based version of Compliance Suite™) as well as quick tips and in-depth explanations from the experts who design, develop and support those tools. In addition, our training team will offer training courses that address key regulatory compliance issues and best practices.

Participants will hear the latest news about a variety of Governance, Risk and Compliance issues and information management challenges. Sessions like “Corporate Sustainability: Helping People and Businesses Reach Their Potential” by Microsoft and “REACH – Understanding and Implementing for Compliance” by PTK, Ltd — the firm that co-authored the regulation — provide a brief sample of the topics that will be discussed at this year’s ESS EXPO.

At ESS EXPO, you can meet your peers, exchange best practices and meet keynote speakers Simon Jacobson of AMR Research and racing icon Kyle Petty. Jacobson will provide an overview of enterprise trends, while Petty, of course, plans to talk about NASCAR and business success.

Our business partners will show how they can enable ESS users to achieve even greater success with complementary solutions and services. And finally, ESS software users will benefit from sharing their own ideas and experiences while networking with other top professionals from a wide variety of vertical industries.

ESS EXPO.08 continues the tremendous success of previous EXPO events, which have attracted hundreds of EHS and Crisis Management professionals.

Add comment February 13th, 2008

Rising Tide of Terrorism Against Energy Companies Impacts Global Markets

Lately, there’s been a lot of discussion about the price of oil and its impact on global markets. Rising prices can, in part, be attributed to social and political instability in a growing number of oil producing nations. For example, an article recently published in the Washington Post served as a sobering reminder that consumer demand isn’t the only factor that has been driving up oil prices to record levels.

Royal Dutch Shell recently took a $716 million charge against earnings because of a major security breach near a key oil export terminal near the Forcados River in Nigeria. Insurgents initially attacked the facility in February 2006; and after several failed attempts by Shell officials to restore operations, the company was forced to shut down production. Damages during the subsequent period included thousands of barrels of crude oil, as well as the company’s 435-mile pipeline infrastructure. However, the most significant impact is the loss of an estimated 475 million barrels of oil per day that isn’t reaching the marketplace — at the same time that U.S. government officials are calling for OPEC member nations to increase production of petroleum products to keep domestic oil prices steady.

Terrorism impacts both global energy industry leaders and emerging companies on nearly every continent. For some time, executives of oil companies have been telling me that they are very concerned about the rising tide of terrorism against facilities around the world.

So is the U.S. Department of Homeland Security, which now mandates that companies have an emergency plan that is both complete, and exercised. In fact, John Gargett, ESS’ leading Crisis Management expert, has pointed out that enterprises — particularly energy companies — are becoming more vigilant because of the potential for increased attacks against their facilities. They are now conducting training exercises, often coordinating with local or regional emergency management agencies. Several of our customers have developed global crisis management programs, supported by the latest integrated information management technologies, to ensure companies can execute a robust response in case of acts of terrorism, major weather-related events or catastrophic operational incidents such as fires, workplace injuries and hazardous material spills to name a few.

While there is no way to prevent these kinds of incidents, investors aren’t jumping ship, even while energy companies’ assets are at significant risk. That’s because companies are doing more than ever to protect their interests and employees, as well as the interests of consumers worldwide.

Add comment February 12th, 2008

Russians Call for Stronger Regulation of Ships After Major Oil Spill

Although Russia will likely become wealthy over the long-term because of its oil reserves, the Russian government is going to slow that process to make sure no more oil spills happen like the one that caused $267 million in damages to the Kerch Strait earlier this month. A major oil spill in the Baltic Sea polluted a 30-mile stretch of water, killing birds and fish.

As a result, Russian officials will limit oil products shipped by river in 2008 by disallowing barges that are more than 25 years old. Because Russia has an industrial economy dating back to the Soviet Union, much of the oil industry’s equipment is aging.
“The fleet must be young. We will subject ship owners to such conditions that it will become unprofitable to use barges older than 25 years,” Alexander Davidenko, head of RosRechMorFlot, the river navigation agency, told Reuters.

According to oil industry spokespersons, this move will cut shipments by 70-80 percent below the customary 5-million ton level. The oil industry is not happy, suggesting that the government may be overreacting to the spill by over regulating the industry without doing sufficient research. They believe that there may be other ways to deal with the fallout without requiring major investment in new equipment.

Many of the oil companies we deal with have already put in place an integrated EHS software platform that enables managers to monitor and report such spills and correct problems with equipment before those problems erupt into crises.

Even though major oil spills are rare, organizations still need to be prepared to provide rapid and robust emergency response in order to minimize the potential ecological impact from these kinds of incidents. There’s plenty of motivation to do so, as investors are always closely examining companies’ ability to prevent or mitigate operational risks. Having a proactive crisis response plan, supported by a crisis management technology, can go a long way to protect the interests of the company and the community.

There are also rumors of a coming ban on floating storage facilities. When Russian rivers freeze in the winter, oil is stored in floating facilities until the spring thaw when it can be transported again. These facilities, if they are monitored correctly with crisis management reporting systems that support measures to prevent spills, could have their useful life extended without endangering rivers and seas.

If oil company barges would use the right kind of reporting and monitoring systems, it would be good news to the developed world, because we need the oil and the Russians need to sell it.

Add comment November 26th, 2007