Ron--Know you've been out of the swing of things for some time so I'll post this even though its "old news." And I agree, Webster's reputation is very good and he's "making a logical conclusion based upon the evidence..."
uniontrib.com
(If you want to read the article from the Union Tribune web site you'll have to register and the do a search using SAIC and oil.)
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Oil's Y2K gap shows | Foreign suppliers lag U.S. efforts to solve problem
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Bruce V. Bigelow
STAFF WRITER
16-Jan-1999 Saturday
The flow of America's oil imports could be disrupted next year because most
foreign suppliers are behind in their efforts to fix the so-called "Year
2000" computer glitch.
With imported oil supplying about 50 percent of U.S. needs, a study
prepared by San Diego-based SAIC warns that ignoring international aspects
of the widespread programming bug could jeopardize the U.S. economy.
Four of the largest foreign suppliers -- Venezuela, Saudi Arabia, Mexico
and Nigeria -- lag behind U.S. efforts by at least 12 months, according to
the SAIC study.
Pemex, Mexico's government-owned oil company, said in a statement that the
Year 2000 problem has become a top priority, both for it and for its
subsidiaries. Officials have established a plan, committed a budget and
directed a staff to work on the problem.
Pemex, formally known as Petroleos Mexicano, is Mexico's largest business
and one of the 10 largest in the world. The company provides nearly a third
of Mexico's tax revenue.
The statement, however, did not say how far Pemex has progressed on the
problem, and Pemex officials could not be reached for comment on the SAIC
study.
In the United States, government and industry have been working for years
to fix the date-based error in software that operates computer chips in
everything from VCRs to air traffic control systems.
Problems stemming from the bug are expected to hit when computerized dates
roll over from 1999 to the year 2000.
Until now, the foreign dimension of the problem -- and the potential
consequences for the United States -- has received scant attention, said
John H. Warner of SAIC, who wrote the study.
Warner, a director and executive vice president, is particularly concerned
about oil imports from government-owned oil companies in Latin America,
Africa and the Middle East.
Two months ago, he found that at least 60 percent of U.S. oil imports
originates in countries where government and industry are roughly 12 to 18
months behind the United States in addressing Year 2000 problems.
With less than 12 months remaining before the turn of the century, that
means many countries would have to redouble their Year 2000 remediation
efforts to avoid "mission critical failures" in various commercial and
government systems.
Kendra Martin, who follows Year 2000 issues for the American Petroleum
Institute, downplayed the significance of the SAIC report. She said
U.S.-based oil corporations also have been working with foreign partners
because of their strong interests in the well-being of those companies.
Yet, similar concerns were raised in a recent report by Cutter Information,
a Massachusetts-based environmental research and consulting firm that
publishes the Oil Spill Intelligence Report.
"I think tankers are going to have some probelms and pipelines are going to
have some problems," said Dagmar Etkin, a senior consultant at Cutter.
SAIC, which provides engineering and consulting services to government and
commercial customers, already is providing information technology services
to PDVSA, Venezuela's government owned oil company. The company also
provides information-technology services in the United States for British
Petroleum.
Still, it is difficult to elicit many details from most corporations about
their progress on Year 2000 issues.
Like Pemex, many U.S.-based companies decline to publicly discuss their
Year 2000 problems. SAIC's Warner says that's largely due to worries about
litigation that might arise over Year 2000 failures.
Warner says the significance of the problem is evident in the amount of
money being spent.
The federal government is spending more than $6 billion on Year 2000
programs, and Warner estimates that General Motors alone is spending in
excess of $800 million.
Public records shows that San Diego's 10 top publicly traded companies, as
measured by market value, will spend more than $100 million to address the
problem. Pemex is in a bind, however.
Because of falling oil prices, the government forced spending cuts that
eliminated funds needed to improve production, refining and exploration.
Yet, with a social commitment to provide jobs, the company refused to trim
its 114,000-member work force.
To help address such problems, Warner is advocating that the federal
government establish a multi-billion dollar loan fund to help other
countries resolve their Year 2000 problems.
He is urging the U.S. government to consider increasing the nation's
strategic petroleum reserves, which provide about a 60-day supply of oil.
And he's recommending that the United States share its Year 2000 expertise
with other countries.
"What I'm urging is responsible, careful attention to the problem," Warner
said. "A lot can be cone in 12 months to address this situation, and the
United States should take a leadership position. It's in our own
self-interest."
Warner said he has briefed senior government officials about his findings,
and there are signs that his suggestions are being taken seriously.
"His report was definitely an influencing factor in the decision to hold at
least one hearing on ramifications of Y2K glitch on international trade,"
said Don Meyer, a spokesman for the Senate's Special Committee on the Year
2000 Technology Problem.
The committee has not yet scheduled the hearing, however, because the
Senate is currently preoccupied with President Clinton's impeachment trial,
Meyer said.
Foreign oil and Y2K
Country ......... Percent U.S. ....... Months
of origin ....... imported oil & ..... behind
................. oil products (1) ... U.S. (2)
Venezuela ....... 16.2% .............. 12 to 18
Canada .......... 15.5 ................ 0 to 3
Saudi Arabia .... 14.4 ............... 12 to 18
Mexico .......... 12.9 ............... 12
Nigeria .......... 7.3 ............... 12 to 18
Angola ........... 4.2 ............... unknown
Colombia ......... 3.0 ............... 12 to 18
Algeria .......... 2.9 ............... unknown
Kuwait ........... 2.9 ............... 12 to 18
Virgin Islands ... 2.9 ............... unknown
Norway ........... 2.3 ............... 12
Iraq ............. 2.2 ............... unknown
Gabon ............ 2.0 ............... unknown
United Kingdom ... 2.0 ............... 0 to 3
Ecuador .......... 0.9 ............... 12 to 18
Argentina ........ 0.9 ............... 12 to 18
(1) www.eia.doe.gov (January through August, 1998 data)
(2) Gartner Group: Year 2000 World Status 2Q98, 7/21/98
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