Welcome to the Pike Planner's podcast, Episode 173, sponsored by the American Petroleum Institute, driving safety, environmental protection, and sustainability across the natural gas and oil industry through world-class standard and safety programs. Since its formation as a standard setting organization in 1919, API has developed more than 700 standards to enhance industry operations worldwide. Find out more about API at API.org. The Pike Planner's podcast, where professionals, bubba-geats, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations.
And now your host, Russell Treet. Thanks for listening to the Pike Planner's podcast. I appreciate you taking the time and to show that appreciation. We give away a customized Yeti Tumblr to one listener each episode.
This week, our winner is George Janis with South Texas OQ. George, congratulations, you're Yeti is on its way. To learn how you can win this signature prize, stick around at the end of the episode. This week, Debra Phillips, Senior Vice President, Global Industry Services with the American Petroleum Institute, is joining us to talk about the API's Energy Excellence program.
Debra, welcome to the Pike Planner's podcast. Well, thanks for having me. I'm really glad to have you on. We're kind of wrapping up this 13-week series of episodes that we've done in collaboration with API.
And I think this is a great capstone for that conversation. So let's just dive in. Let me ask you first, tell us a little bit about yourself and how you found yourself at API, a little bit about your background. Okay, yeah, happy to.
So I've been at API for about two years on the Senior Vice President for Global Industry Services. That's the part of API that sets standards and develops programs to help companies advance quality, safety, environmental stewardship. Before coming to API, I worked for the chemical industry and the Chemical Trade Association in DC. But before that, I spent a good amount of time in manufacturing, both in chemical facilities as well as the pulp and paper industry.
So I had my trials by fire in the field early on in my career before coming to DC. So your background is really not directly pipeline. Your background is more downstream, I guess. Yeah, it is very much downstream in chemicals manufacturing as well as pulp and paper, which is of course a user, a user of petroleum products and chemical products.
But yeah, I really got my teeth in pulp and paper, actually. Okay. Well, I actually did a little work in pulp and paper very early in my very little work. Enough to know that was not a business I wanted to work in.
Let's just say that. Are you kidding me? The odors that you carry with you home are just, you know, that's a three days you don't smell it anymore. The problem is everybody else does.
Right? True. Well, look, let's dive in. So tell me about the API energy excellence program.
What is it and what's it about? Well, we're really excited about the API energy excellence program. We adopted it, our Board of Directors approved it late in 2020. And we're just now starting to talk about it publicly.
It's a first of its kind sort of all encompassing systems approach for advancing safety and environmental performance across all aspects of the oil and gas industry. So for the first time putting together a series of practices that we think will take the oil and gas industry from exploration of production to pipeline and delivery to refining all the way to natural gas delivery systems to sort of new levels of safety and environmental performance. That is throwing a very big net. We have to because API membership is a very big net.
We have about 550 companies that are involved in all aspects of oil and gas exploration and production as well as refining as well as service and supply companies. So, you know, in order to get this program off the ground, we had to be inclusive and it has to be, you know, sort of scalable and applicable to companies of all sizes and all types. Right. So what are the aspects of the program?
Where are its components? So there are 13 elements of the components that make up the components of the program. And if you know anything about management systems, ISO kinds of systems, those components will look familiar to you. It starts with leadership commitment and then hazard and risk identification to hazard management to sort of setting goals and KPIs, tracking performance and then continuously improving.
So it's really that sort of traditional management system plan to do check-act approach, but you know, applied specifically to oil and gas to give our company is kind of a roadmap for accelerating progress and safety and environmental performance. Yeah. And I think with this program, you know, I'm speculating here because I really don't know anything about it, but really these kinds of programs are fundamentally designed to get the industry to work as a team towards those objectives that are not competitive and everybody can agree on. That is absolutely right.
And was a big part of our discussion with our executive committee and board of directors in the early days, you know, two years ago, when this was just a nugget in our minds and the industry was really trying to figure out, you know, how do we do a better job of saying what our aspirations are around safety and environmental performance, knowing that this was going to be these were going to be critical issues that our industry is faced with moving into the future and certainly within this administration. And so, you know, there was a sense of community, I think in the early days, how do the, you know, companies that are a little bit further along in this journey help the companies that are just starting that may be more resource constrained or just not as experienced and sort of keep everybody together, but raise all ships at the same time. Yes. I think he said something interesting there, Deborah, you mentioned accelerate, right?
And I think that's really, and you also mentioned the industry telling a story. You know, I guess that would be analogous in my mind to the aircraft industry and the FAA and all the things that they do around flight safety and anybody involved in aircraft all the way from somebody learning civil aviation and a Piper Cup all the way up to somebody flying a jumbo jet, all of those people are thoroughly versed and indoctrinated in flight safety. There's a lot of commonality. Yeah, in fact, we did some benchmarking against other sectors that, you know, kind of went through this cultural Renaissance, if you will, we looked at nuclear, we looked at chemicals, we looked at, we looked at pulp and pulp and paper, we looked at mining.
So, you know, industry sectors that, you know, went through a period of time where they were still searching around what they, you know, how they felt about safety and environmental issues and, you know, then it adopted it as sort of a core ethic and part of the part of the cultural expectation. And so we actually use some of those other sector examples and best practices as we developed our own approach for the energy industry. Yeah, so I went through the website that API has stood up for the energy excellence program. And I noticed that when you got to pipeline, basically the program there is pipeline SMS.
So, in pipeline SMS, I guess given the timeline you're talking about, it's been around a little longer than the energy excellence program. So how does pipeline SMS relate to the overall API energy excellence program? Yeah, that's a great question. The pipeline safety management system standard recommended practice 1173, as well as the, there's an assessment program that sort of sits alongside it that's available to companies to kind of, you know, benchmark where they are against that, that particular standard.
It had been around for several years. So, the pipeline industry was kind of, I guess, first out of the gate to adopt a management system approach to driving safety in the pipeline industry. And as we looked to, you know, encapsulate an approach for olive oil and gas, we actually took a lot of what's in 1173 and tried to apply it to other aspects of the industry. So, you know, you'll see there's there's there's 10 elements in the pipeline safety management system standard.
There's 13 in energy excellence. You'll see there's quite a few that are identical. There's some that are, you know, expressed a little bit differently because different parts of the industry sort of use different terminology. I guess in terms of differences, I'd say the stakeholder engagement piece in the pipeline SMS is probably deeper because those industries of engaging communities and talking with neighbors are such an important part of the permitting and construction and operation of a pipeline that, you know, that takes a really front and center role in the pipeline SMS.
I think it's the second element of that program. It's in energy excellence, but I think the pipeline standard takes it to a deeper level. Some of the places where you'll, you know, see some language that's different in energy excellence versus the pipeline SMS is, you know, there's there's words like asset design and integrity. That's very sort of upstream focused, focused terminology, operational control, safe work practices, management of change that's, you know, often in refining a key concept.
So, you know, there's there's a little bit of a difference in terminology there, but I think, you know, it very much goes hand in hand with how the pipeline SMS looks at risk management, operational controls are actually in there, safety assurance. So the concepts are quite similar. Some of the terminology is different. And in some places, I think the pipeline SMS goes a little deeper.
Yeah, so I for the pipelineers that listen to this, what I hear you saying, correct me if I'm wrong, is that pipeline SMS kind of informed the entire energy excellence program approach across the industry. That's right. We used it as a blueprint to really kind of get started. There's, there's an upstream offshore recommended practice that's sort of in the same, it has kind of the same model as pipeline SMS.
So we looked at that, but pipeline SMS really was sort of the original blueprint for this, for this entire program. And now it's, you know, applied to the industry at large. So what are the, what are the 13 elements? Can you, can you run those down for us kind of quickly?
Sure. So the first element and most management systems like the pipeline SMS start here, it's leadership commitment. So, you know, the leaders of an organization committing to a culture that prioritizes safety and environmental protection. And then it goes to, you know, establishing a systems approach, which is sort of core and at the heart of what we're trying to do where this becomes an ingrained part of the culture, that there's an expectation that there's a system in place to manage these issues.
And I, you know, the company, even all the way up to leadership level is abiding by it, looking at it, measuring it, monitoring it, and continuously improving over time. That's the, you know, one of the beauties of a systems approach is you don't settle for where you are today. You're always looking to continuously improve. The third element is around planning and risk management.
So, you know, looking at those, those hazards and risks that are associated to each operation. And this is a place where, you know, companies of different profile, different sizes, different operational structures can really tailor that assessment to, you know, fit their organization's needs. Designing assets for integrity, you know, pipeline, I think is a little bit different than some of the other segments of the industry where that design piece is very unique to individual settings and particular, you know, geologic conditions. But that's the idea that you're sort of using equipment and design that's fit for purpose for your particular application.
Establishing operational controls is the fifth element. So, you know, understanding the operational boundaries of your particular asset and running them within those boundaries. Yeah, I actually think that the operational controls is really, it's not well understood yet in the pipeline world. And the way I frame that is you're defining that within these parameters, then I can operate.
That's right. And when I'm outside of these parameters, I cannot operate. Exactly. And some intervention is needed.
Yeah, that's right. It's kind of predefining throughout everything you do. This is normal and this is abnormal and this is don't go. Exactly right.
And then, you know, when you're in that abnormal range, empowering employees to step up and say something about it and intervene. Right. And that's an important part of the system, too. You know, understanding roles and responsibilities of every employee that's, you know, task to operate within those within those boundaries.
Safe work management, that's, you know, the practices, the procedures, you know, the documents that sometimes, you know, more and more we're using videos that really show employees how to do these jobs in a safe way. Managing change, as I said, it's a very important issue in refining in particular, where you're using really complex pieces of equipment. And one change, you make one valve adjustment, you know, decide to run a pipe in a different location. And all of a sudden, it has unintended consequences.
So that, or even switching out personnel becomes a management of change issues. So really understanding what changes trigger more sophisticated analysis of whether that's going to take you outside of those safe operational boundaries. Yeah, that's another, you know, the management of change thing, I think in our industry, pretty much everybody has some exposure to management of change. But management of change is part of a safety system is different than management of change in terms of a process management system.
Yeah, that's right. If I'm changing my refining process, that's kind of a heavy engineering lift, where real management of change is getting all the way down to am I sequencing this specific task correctly? Yeah, exactly. Do I need to make a small or do I need to make a small change in the wording and align on a checklist or something like that?
Those are the kinds of things where if you can make that active, you can really improve performance. That's right. That's right. All change.
Yes. Exactly right. All of those changes are important considerations to keeping people safe and keeping materials in the pipeline. There's a focus in the energy excellence program on knowledge skills and training.
So making sure that companies have really clearly thought through what skills and knowledge their employees need to have to be able to do their jobs safely and according to to procedures, we spend a lot of time actually talking about contractor management. This is a place where it's a little energy excellence is a little different than pipeline safety management. In pipeline safety management, that understanding and role of the contractor is kind of baked in throughout all of the 10 elements in the energy excellence program we call it out because we think it's just such an important, we sort of debated back and forth, were we going to bake it in or were we going to pull it out? We decided to pull it out because this has been the subject of many incidents across the industry, sort of not having clear handoffs, not a clear understanding of roles and responsibilities from operator to contractor.
And so how you manage your contractor is called out as a separate element with clear best practices around what that looks like. Invented incident investigation, that's part of pipeline SMS is part of what every company tries to do to learn from your misses or incidents. So that's pretty standard. Preparing for emergencies, also part of pipeline SMS.
Managing your information, so documentation, record keeping, also almost identical to pipeline SMS. And then finally the stakeholder engagement piece, as I mentioned, knowing and engaging with the communities in which you're operating, the regulators, the local emergency response personnel, it's a huge part of pipeline SMS. And so we built that into this program too. Interesting.
So to me, that sounds like a capstone program for all of what API does. And it sits on top of everything else. Is that a fair way to look at this? It's actually a very good way to look at this.
One of the things that we noticed when we started out in this endeavor is that we have more than 700 APIs published, more than 700 standards, the pipeline safety management standard being one of them, but more than 700. In some segments, we didn't have a systems approach like this. We had individual piecemeal standards. And so we felt like we needed that capstone to create the roadmap where it didn't exist in individual segments.
And so behind these 13 elements that I just talked through, we've got a map that takes our 700 standards and shows how they fit into each of these elements, so that you now do have that capstone that brings together all of those supporting documents and then applies industry industry-wide. So that actually raises a question for me. If you look at that map of standards against the energy excellence program, does it point out gaps where you don't have standards or recommended practices and you probably should? Yeah, it's interesting you say that.
The member team that looked at this felt like there are a few places where we may have some backfilling work to do where one segment has gone deep on an issue and another segment not so much. So maybe there is a gap there and an opportunity to fill that in. So that actually did come up as part of the effort. One of my experiences with API and the standards, and I'm an engineer in a few very specific and technical domains, I'm quite knowledgeable in a handful of standards that apply to those domains.
But when you start talking about a holistic approach, there's often a bridge between the really technical standard and the program, the more process, center, higher level things. And I think that even in pipelining, there's some areas where the industry could benefit by some other programs. Interesting. Well, that could come up as part of this.
One of the places, not in pipeline, but in onshore. Our industry has changed the complexion. Onshore has changed dramatically over the last decade. We're still developing document standards and programs.
And there was a sense that we've done a lot in offshore, we've done a lot in pipeline refining. There are programs and a Bible of standards really for refining, but a sense that onshore needed something to sort of a program, a more deliberately constructed set of documents to help advance safety onshore. So that's what we're in the process of developing an onshore safety alliance that does just that, kind of brings focus to onshore safety in a new way. Well, an onshore is challenging too, because there's so many different kinds of operations.
And so many players. There's just thousands. So scope, scale is a real challenge. A lot of those operators, particularly in the US on the E&P side, are quite small.
That's right. They are. And times have been tough in terms of prices, so resources are even more constrained, which forces organizations to get creative on how they do these things. Right.
No doubt. No doubt. So the other thing I wanted to talk to you about is I was reading through things. I kind of flagged the environmental partnership aspect of this.
Can you tell us a little bit about the environmental partnership and what it is about? Sure. API kicked off its environmental partnership several years ago now. There's about 90, it's a voluntary initiative aimed at reducing emissions, methane and volatile organic compound emissions from operations.
It was largely started for upstream companies, but has recently drifted into the midstream space. So we now have some pipeline companies participating as well. As I say, there's about 90 companies that are participating today. It's tripled in the last its size in terms of company participation as tripled in the last three years.
And what it seeks to do, there's six substantive programs beneath it aimed at reducing those emissions. And those six substantive programs have been identified based on EPA data around where the majority of emissions by volume are coming from. So they include looking at pneumatic controllers and changing those out. Manual unloading of liquids, which happens onshore as liquids build up.
And it's a big source of emissions. So best practices around how to do that. And also just minimizing the build up of liquids and natural gas production the third program is Flare Management as you know, big issue in our industry. That's a big game.
So best practices around Flare Management. I actually think the focus there has resulted in some identification of additional practices that may be needed really defining what is routine flaring, how to minimize it when you've determined that you need to do it routinely. So that's been a big one for us. The fourth program is leak detection and repair.
So going around and looking at those connection points and finding out where you have where you have leaks that was identified in a number of EPA reports as a significant source. But actually, as our companies have gone out and done those leak detection programs, the leaks were not discovered at the rate that EPA had predicted. So in essence, good news there. And then the final two programs that are pretty aimed at the pipeline segment, there's a compressor program.
So best practices around compressors. And then finally, pipeline blowdown again, best practices in capture systems, depressurizing to prevent emissions from from from blowdowns. So the way that so the companies the participating companies, they implement those programs, they report on them on an annual basis, and all aimed at, you know, reducing methane and other VOCs that contribute to carbon emissions and climate change. Yeah, as you run it down that list, my wheels in my mind are turning about all the challenges associated with those things.
And I'm not surprised that the leak findings were not what was anticipated. That doesn't actually surprise me. But some of these things like, you know, pipeline blowdowns, just normal operation blowdowns, blowdown pick traps and things like that blow down meter tubes for routine operations and maintenance. That to me is somebody's going to have to invent something there.
Because it doesn't exist. Yeah, you're right. You know, there is outside of the environmental partnership. There's a good bit of activity at API underway on the technology side.
There's there's a significant amount of investment within the industry toward those new technologies that are going to be game changers, you know, not just, not just, you know, addressing these issues around the edges, but really changing the game in terms of technology. So we've got those activities under underway as well and hear a lot of it. It's going to be somebody in a truck that figures that out or somebody in a garage that figures that out. This is completely off subject, but it's really maybe not.
I don't know. It's really interesting. So I saw a YouTube video that a company put out and it was a startup and they had taken a container and filled it with computers and air conditioning. And they took it out to a well site with a flare and they took the flare gas and ran it into generators and used all those computers to mine Bitcoin.
So they were they were taking flares and turning it into Bitcoin mining. The first time I saw that, I thought, oh, I said, this is that. I thought that's ridiculous. And then I went back and watched it and looked at it.
I'm like, okay, I would have loved to have been sitting at the cocktail party where the two of the geek string that that up. That's amazing. Wow. Yeah, I'll have to see if I can find that, see if I can link it up to the to this podcast because it's I mean, it has nothing to do with it.
But to your point though, I think what's interesting is as you begin to identify these problems, right? And you get the industry and the people educated about those problems, there's no tailing. What kind of creative solutions are out there that nobody has thought about just because there wasn't a need to think about it. Yeah, yeah, they're coming.
I feel like, you know, the next decade, there's going to be a lot of creative thinking happening as a result, well, as a result of policy, as a result of attention and as a result of business opportunity, I mean, those out of the box technologies, you know, are an opportunity that's some some some entrepreneurial companies are companies going to capture. I've been doing the oil and gas technology thing for over 30 years now. And one thing's for sure, somebody's going to invent something that's going to change the game because I've seen that happen over and over and over again. And I don't think that's going to stop.
Yeah, and it's funny you say that because I think that that that's one of the under appreciated qualities of our industry, how much adaptation and technology and innovation that's happened over the years and I agree with you. It's going to continue. Well, and to the point, what causes me to think about that is when you start thinking about an energy excellence program, really, one of the things that's going to do is it's going to identify those areas where creativity is needed. Yeah, that may not have been well identified before.
And that's always good for our business. I remember very well, gosh, it's been 15 years ago now, but I was going around all these talks and people were talking about peak oil and we were going to run out of supply. Yeah, boy, did they get that one absolutely backwards, right? So, you know, the Cessoty to the man solution.
Well, look, what's next for the energy excellence program? Where are you in this maturity and what are you all working on next? Well, we're just out of the gates, to be honest. So we're just launching those publicly, our members are sort of getting comfortable with it.
Each of our 550 companies is sort of looking, they're looking against the 13 elements and sort of seeing where they're at, where they've got room to grow, the best practices are kind of percolating up from companies. And that's actually a key aspect of the program, letting companies share with one another. Here's what's worked for my company. Let me put it out there in case it's helpful to another.
That's just started. It's our intention. Companies will report on an annual basis how they're doing against each of the 13 elements. And in three years' time, we hope everybody is able to say, yes, we have a healthy system that includes all of these 13 elements.
And then, after three years, it's time to reevaluate. Do we want to expand? Do we want to more fully bring in climate considerations for instance? Do we want to keep self-reporting or do we want to establish KPIs?
Do we want companies to start reporting data to us, quantitative data? Do we want to standardize the benchmarks across the industry, that kind of thing? To really see, at the end of the day, are we driving performance? So I expect those conversations to unfold over the coming year or two.
Interesting. Well, I really appreciate this, Debra. I think my last question is, what do you want the pipelineers to know about the Energy Excellence Program? Have we got it covered by doing the pipeline SMS, or are there some other things that we need to be looking at?
Yeah, that's a great question. So one of the things that the pipelineers did when they put together their SMS, they established a maturity model so that you could, and a guidance document where you could assess your program and you could, you know, you can rank yourself one to five on the maturity scale. And as we've mapped that against Energy Excellence, we've determined that if you are at a three or better maturity model for pipeline SMS, you're good to go for API Energy Excellence. So I suspect that the pipelineers are pretty far along because we used pipeline SMS as a blueprint for this.
I think they're in good shape. And in fact, we hope through the visibility of this program to push more of the pipelineers toward the pipeline SMS. Is there a roadmap for how to do Energy Excellence? Well, you know, it's interesting too, because there's a lot of people out there, particularly some of the new regulatory things that are in the pipeline that are going to become regulated pipeline operators that never really intended to be regulated pipeline operators, particularly some of these guys with big high pressure pipe in the gathering of the shell plays around gas gathering in particular.
So I think one of the values here is if there's alignment between what you're doing in the production side and the pipeline side, maybe that makes the running the regulated pipe not so threatening. Yeah, that's true. That's true. Yeah, I mean, be interesting to see how the industry sees that going forward.
Yeah, and you know, we continue to API continues to talk to FIMSA about the pipeline safety management system program and standard. And you know, I think recognition by the regulatory agency is there. And I think is, you know, another proof point for moving ahead in a management systems journey, because you're your own regulator, has put its weight behind that approach as well. Yeah, absolutely.
Well, listen, thank you again. It was great to have you on great to have the conversation and you made me feel better about being a pipeline. So that's awesome. Well, thank you.
I've enjoyed it. I hope you enjoyed this week's episode of the Pipeliners Podcast and our conversation with Deborah. Just a reminder before you go, you should register to win our customized Pipeliners podcast Yeti Tumblr. Just visit pipelinerspodcast.com slash win and any yourself in the drawing.
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I'll talk to you next week.