Here's an article that everyone should read and bookmark for reference.
year2000.dci.com
December 9, 1998
Y2K Readiness in Oil and Gas Industries
A reliable source of energy is vital to conducting business. Without it, many office buildings would find themselves without heat or electricity, and industrial production would suffer. For this reason, the Year 2000 issues faced by the oil and gas industries are areas of universal concern.
A recent survey by the Federal Energy Regulatory Commission found that oil and gas accounted for 65 percent of the energy consumed in the U.S. in 1997. Oil and natural gas are used to power automobiles and other forms of transportation as well as to heat buildings and generate electricity. Industrial uses for natural gas include waste treatment and incineration and iron and steel production.
The oil and gas industry makes extensive use of embedded systems, which can pose especially challenging Y2K risks. The Institution of Electrical Engineers defines an embedded system as "[a] device used to control, monitor or assist the operation of equipment, machinery or [even an entire] plant." Embedded systems are powered by microchips that contain permanently coded instructions.
Shell estimates that the U.S. contains around 220,000 miles of oil and gas pipeline. These pipes cross all kinds of terrain, from desert to mountains, and even run underneath the ocean. Pumping stations built at regular intervals along the line keep the oil moving at a steady rate. "Pipeline control and terminal operations have become a particularly computer-intensive operation, relying on computer systems to control pumping and to detect any leaks," says John Mills, director of corporate affairs at Shell U.K.
"There are two possible scenarios," explains Dan Looper, national account manager for Y2K at Litton PRC. "A chip could either shut down completely, or it could start transmitting erroneous data: for example, about how much fuel is in the line. This would be the more dangerous situation, because the malfunctioning chip would have to be found and replaced. And that could take time."
As offshore production increases, more underwater pipelines are being laid. "The major problem will be if there's an embedded chip issue in the underwater pipes, especially the deep ones off the shores of Alaska or in the North Sea where the depth of the sea floor is measured in miles rather than feet. There are only a few vessels capable of taking divers down to those depths, and it would cost around $500,000 a dive," Looper says.
The American Gas Association lists some additional areas where embedded systems are utilized. These include control computers; correcting and metering devices; and operations, including calibration of instruments and tracking regulatory compliance. "A typical offshore platform or onshore gas plant uses 50-100 ‘embedded systems.' These systems contain anything up to 10,000 individual microchips. We have found that up to half of these systems are critical in terms of production and the impact of our activities on the environment," said Mills.
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The oil and gas industries are taking steps to address their Year 2000 problems. FERC recently took a Y2K-readiness survey of 800 oil and gas companies. The results were encouraging. About three-quarters of the respondents were classified as small companies, with yearly revenue of up to $49 million, and eight percent took in more than $1 billion per year. As of September 1998, most of the companies surveyed were in the process of either assessing (28 percent) or remediating (26 percent) their embedded systems. All claim they will be Y2K-ready by December 1999. Even if some computerized systems should fail, according to the AGA, many natural gas utilities maintain manual controls as backups.
Looper doesn't believe that Y2K will completely cut off electrical power. "There will probably be a lot of outages and brownouts, but not a nationwide blackout. However," he adds, "I have a lot of reservations about whether any of the national or international oil companies will be ready for the Year 2000. Five years ago, many oil companies trimmed their I.T. and facilities staffs to try to boost profits. They lost a lot of good legacy people that way. And now, when they really need that expertise, they have to pay steep prices to get it."
For more information about the Y2K efforts of the oil and gas industries, visit the Web site of the President's Council on Y2K Conversion: Oil and Gas Sector. |
