October 8th, 2008 mhitchings
It’s a different world from the one most of our colleagues entered and in which some are looking to retire. Technology is playing an increasingly significant role in giving all industries the tools to do their jobs more efficiently, more effectively and with a smaller margin of error.
Communication is important in all industries, and in days past, refiners and their providers depended on spreadsheets and phones and person-to-person communication to review what all the paperwork meant and how it translated to plant operations. And what to do in a crisis — when hurricanes are barreling down, or floods are infringing on facilities or a hard freeze is under way? There’s no time to haul spreadsheets from office to office, and having a large meeting where everyone has them sprawled on the conference table just makes it messy and even more complicated. And, as we all know, time is money, so this kind of archaic methodology is particularly inefficient because it slows productivity and thus reduces potential revenue.
Plant Automation & Decision Support: Real-time Value Chain Management and Optimization is important, and thus was a topic discussed yesterday afternoon at the National Petrochemical and Refiners Association Q&A Technology Forum in Orlando, Florida. I must express my apologies and insert a disclaimer here that I tried several times to post this yesterday, but ironically, I was having technological challenges, which appear to have been amended this morning. Technology, like everything else isn’t perfect — it’s great when it works, but when it doesn’t, we often find ourselves scrambling to remember what it was like before such advancements and improvising on the fly.
(Left to right) Stan DeVries, Invensys Process Systems; Dean Trierwiler, Haverly Systems Inc.; Robert Hutchings, M3 Technology; and Pete Sharpe, Emerson Process Management discuss the importance of plant automation and real-time optimization. (Photo by Monique A. Hitchings)
Speakers during yesterday’s session emphasized across the board the importance of planning and scheduling, which are operations basics. If you don’t know where a delivery is, when it’s supposed to come in, how you’re going to store it and what resources you need, what are you going to do when the material shows up on a dock or at a facility unexpected?
Robert Hutchings with M3 Technology laid out the challenges as he sees them — aging workforce, new processes and the inability for mistakes, among them. “We are faced with new challenges, and innovative systems are required,” he said. People who developed codes 10 to 15 years ago for state of the art technology, for instance, are retired or will be soon. “Consequently, refiners are searching for or developing new solutions,” Hutchings said.
Stan DeVries with Invensys Process Systems suggested ways to address the challenges. “Reflect the strategy in the models, expand business processes to exploit fact-based analysis and establish the right data structure (not more data). Use these three as enablers for culture change (remember the people challenge),” he said.
Pete Sharpe with Emerson Process Management discussed specific tools to help refiners, including those for terminal planning, order preparation, execution and product accounting. “We’re going to try to prevent, ‘oh-oh, I didn’t mean to do that,’” he said.
Dean Trierwiler with Haverly Systems Inc. discussed a project in which his company assisted Suncor Energy in developing a project program, named Cornerstone, to help increase communications and provide trusted information, which was another problem of previous interactions when verifying information from person to person, “no one trusted anyone,” the speakers said.
Cornerstone’s mission statement is: “We will build a strong foundation to achieve Suncor’s sustainable growth strategy by putting the right information in the hands of the right people at the right time to maxinize business performance. This will be accomplished through efficient, effective integrated processes and supporting technology.” The project is still ongoing between the two companies, but Trierwiler, with Suncor’s support, presented the information completely from his perspective.
Trierwiler noted improved operations after the project had been implemented (while emphasizing it is still a work in progress). “Since Cornerstone has been implemented at Suncor –- and this is an ongoing process — there has definitely been some improvement in their decision-making,” he said. “But with some of these goals, as people get used to new technologies and new way of doing things, much of these improvements will come about.”
Before the project’s implementation, Trierwiler noted, information was being “manhandled through many manual processes, time was spent trying to figure out how things worked, much double-checking was needed and decision-making was slow,” just to name a few. Afterward, “lower costs have led to increased profitability and productivity, asset utilization has improved, supply chains are reaching optimum conditions and projects are better managed, reducing overall costs,” again, just to name a few.
In summary, Sharpe noted in a presentation slide, “terminal operations can affect the entire hydrocarbon supply chain and disruptions are expensive; terminals are where products (and money) change hands; measurements, automation and control are important, but only part of the equation; terminal automation projects integrate business processes from sales orders to customer invoices; and automation has big benefits, particularly in over-stressed infrastructures.”
So let’s ‘talk’ to one another more, let’s communicate better, let’s share information and let’s collaborate — at the end of the day, having more efficient, effective and reduced error margins helps make our jobs, business and industry run more smoothly and cost-effectively. In addition, the time saved spinning wheels on cumbersome processes should allow us to enjoy a bit more free time; and who couldn’t use some of that?
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October 7th, 2008 mhitchings
And the winners are ……
One of the biggest compliments one can receive is recognition from one’s peers - the accolades that come from those with whom you work. Those who typically receive them are humble, unassuming, and passionate about their work and the industry in which they are involved. They do what they do not for the recognition but for the love of the job, the company for which they work, the people with whom they work and the industry they serve.
This morning the National Petrochemical and Refiners Association (NPRA) during the Q&A Technology Forum in Orlando, Florida, recognized who it believes are the best of the best for 2008, and those in attendance agreed.
Lawrence Lew of Chevron, Glenn Liolios of DuPont Stratco and Elizabeth Mettee of Grace Davison were called out for years of service to the organization as well as the industry itself. These individuals each received a Peter G. Andrews Lifetime Service Award, which began in 2003 to “honor members who have made long-lasting contributions to the value and vitality of the NPRA Q&A Meeting. Recipients of this award have served as Q&A panelists, screening committee members and active participants in the dialogue that is fundamental to the meeting.” These recipients, throughout their career, have “demonstrated a willingness to pass on their knowledge and expertise to future generations in this forum, have made significant contributions to the meeting’s quality and have emphasized the importance of sharing knowledge in making continuous improvements.”
In discussing this event with a friend of mine afterward, he said, “I would feel odd about getting a lifetime achievement award. Doesn’t that basically mean that people believe that you are of absolutely no value once you get that award?”
Lew alluded to a similar thought during his acceptance speech (much more eloquently put than my friend’s response) in which he said, “A lifetime award? I didn’t even know I was sick.”
Lew noted the changes of the industry and organization during his tenure, in which he’s seen companies disappear, new companies arise and “even small nations have merged, such as Exxon and Mobil.” He noted the evolution of NPRA along with the industry, to more accurately reflect the needs of the industry. NPRA, he said, used to have large panel sessions in which 10 to 12 people sat at long tables trying to talk about and answer everything in the industry. This became cumbersome, and with some people filling in and giving presentations for others — some without the same knowledge — questions were met with answers, including “there will be more information in the transcript,” Lew said, “which usually meant, ‘I don’t know the answer to that, but I’ll find out,’” which could take a few months, he admitted.
So one change has been the reduction of panel members and more concise topics that ensures “the answer is more clean and crisp and when you ask a question, you’re going to get an answer then and there.”
Liolios noted the passion he feels for what he does, and believes that is the key to longevity and happiness in the industry. And we all know one of the biggest challenges this — as well as almost every other — industry faces is knowledge transfer and the need for new bodies to replace those who are moving on.
“I think it really comes down to, do you have a passion for what you do, and are you willing to share that knowledge? I really appreciate being acknowledged here because my passion is this industry. I am in the scouting industry, and one of my sayings is, ‘leave a place better than you found it,’ and I really believe I’ve done that with NPRA,” Liolios said after receiving the award.
Elizabeth Mettee, Grace Davison
Mettee, who started with Grace Davison in 1974, shared a medley of “historical” photos with the audience from past NPRA shows as well as Grace Davison events. One of the most interesting sets of slides included Grace coffee mugs from NPRA shows dating from 1970 through today. These were interspersed among photos of events passed, and attendees laughed as they saw themselves or peers in pictures dating 20 or more years.
The event was lively, the mood was light, the reflections were sincere and the messages were the same: “We fully believe in your mission and everything you guys do; we’re tremendously supportive of you,” Mettee said of NPRA.
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October 7th, 2008 mhitchings
The financial industry is tanking (for the moment), there is a heavy dependence on foreign crude imports, gasoline growth is becoming weaker, people aren’t traveling and consuming fuel at the same pace as years past, the future of the energy industry is significantly dependent on the new U.S. Administration and the environment’s instability is in our hands to strengthen — no pressure, and no reason to be pessimistic.
Although we received about 50 returned emails to National Petrochemical & Refiners Association (NPRA) “usual suspect” attendees to whom we reached out — eager to see them again or perhaps to meet for the first time — there was still a significant crowd at the first day of this year’s event. Twenty-two companies sponsored themed hospitality suites open to all attendees and two held private invitation-only events. Some companies had live music or other forms of entertainment and all had great food and open bars. Many suites were decorated according to the particular theme, and some even had interactive video games where attendees could match wits with one another.
Yet, the absence of some company attendance was noted. One industry representative with whom I spoke said there were a number of large companies who did not send employees for reasons ranging from dealings with the aftermath of Hurricane Ike, which struck the U.S. Gulf Coast last month, causing preemptive refinery shut-ins (although most are operational at this point); to “company X won’t be there, so I’m not going;” to basic travel budget cutbacks.
However, this year’s attendee number (815) was not far off from those in the past, with the exception of last year’s 979, which NPRA attributed to a high ratio of one-day registrants. Registrant numbers typically hover in the 800s, according to NPRA, which recorded 898 registrants in 2006 and 822 in 2005. Based on the trends of registration during the past few weeks, NPRA said it was expecting about 800 this year.
Despite all this as well as the fact that the industry is in turmoil and refiners are faced with a number of challenges, today’s overall message of the 2008 NPRA Q&A in Orlando, Florida, was that there is hope (short term at least). We just need to think differently.
“Refining capacity is expanding worldwide,” said NPRA keynote speaker Blake Eskew, vice president of Purvin and Gertz Inc.
Refinery projects are occurring globally, and announced crude distillation projects from now through 2016 have been divided into three categories (representing millions of barrels per day in production).
Total global crude capacity additions most likely to occur account for 4.8 million b/d; those with high probability of occurring account for 4 million b/d; and those that are speculative account for 27.6 million b/d — all for a total of 36.4 million b/d, Eskew said.
The Energy Management: Principles & Practices session was aimed to show attendees — a good portion of the turnout representing refineries — ways in which they could easily cut costs by becoming more energy efficient. A lot has to do with just being aware.
“Push energy accountability to operators,” said LyondellBasell’s Lee Wells.
The company participated in an energy study with KBC, and his final presentation slide noted the “path forward” with this study: discovery and benchmarking — modeling, gap analysis, pinch study; identifying and evaluating opportunities; rank and select these opportunities; and implement them.
LyondellBasell’s corporate goal is to have 10% savings during five years.
Automation, said Emerson Process Management’s Doug White, can help reduce energy usage by reducing costs in a number of areas. To reduce overall refinery energy costs, process energy demand and energy supply costs must be reduced. To reduce those costs, internal utility production efficiency must increase while in turn, external purchase costs should be reduced. And there you have it — overall reduced energy costs.
White noted key takeaways for control system improvements, heater controls, fractionization energy savings and site energy supply optimization.
He summarized his portion of the presentation by noting that energy is the largest controllable cost in refinery process operation and that its efficient production and use are keys to refinery profitability. White also pointed out that automation and advanced automation are keys to effective energy use and management in the refinery. And his final point: implementation of a program to save energy requires a disciplined approach to evaluation and analysis.
Fernando Oliveira with Petrobras, who discussed the company’s corporate energy management process, noted that climate change discussions are nowadays in the top agenda of petroleum companies.
It seems simple enough, in theory, that one of the easiest places to begin cutting costs is in energy use — after all, to paraphrase how one speaker today put it: there are a lot of costs that are out of our control, but the one thing we can control is energy usage.
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