A Users Guide to Policy Implementation:
Perspective of the Author
Presented at
The 6th Young Leaders Program University of Hawaii Scott M. Shemwell, D.B.A.
August 6, 2011
Copyright 2011 Knowledge Ops, Inc. All Rights Reserved.
Disclaimer
The views, opinions, positions or strategies expressed by the author and those referenced organizations and/or individuals are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of the Northeast Asia Economic Forum, The 6th Young Leaders Program, University of Hawaii, sponsors, Knowledge Ops, Inc., or any employee thereof. The author make no representations as to accuracy, completeness, suitability, or validity of any information contained herein and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its use. Moreover, the author does not endorse any of the organizations or products referenced in this discussion. Links to their web sites are provided only as a courtesy for those interested in additional information/research. Knowledge Ops, Inc. is an Oracle partner.
About Knowledge Ops, Inc.
Field Operation Processes & Decision Support
Field Based Information Infrastructure Operations & Maintenance Logistics
Principals have extensive experience in upstream field operations
Acknowledged expertise Published Senior executives with major industry players Industry Military
Vetted Solutions
Knowledge About Operations Spinout
Business Process Modeling (BPM) Information and Data Flow Established professional services firm Extensive tested and documented methodology
Discussion Points
Two Brief Energy Case Studies
Gulf of Mexico Drilling Moratorium Marcellus Shale, New York
Policy Automation
One Solution
Marcellus Shale
BP Macondo aka Deepwater Horizon Incident
April 20, 2010
Game Changing Incident More than just another industrial accident Eleven deaths Lost of Transocean drilling rig ~$750 million asset
Six Month Deepwater Drilling Moratorium
Economic Impact
De facto ALL Gulf of Mexico shallow water drilling too
J.R. Mason
New / Onerous Regulatory Reform
BOEMRE October 12, 2010
Up to 19,000 jobs lost Wages lost ~ $1.1 billion ~ $500 million lost tax revenue At least one drilling company bankruptcy Environmental impact still unfolding + BP staggering costs!
Compliance Influencers
Health, Safety, Environmental (HSE)
Heightened Visibility License to Operate
U S Deepwater Regulatory Compliance Landscape
Interested Constituents
US Federal Elected Officials
Commissioned Panels President Congress U.S. Department of the Interior; BOEMRE
Regulatory Authorities
Federal Deepwater Drilling
Industry Groups
U.S. Chemical Safety and Hazard Investigation Board API IADC SPE ISA
Financial
Capital Markets Insurance Rating Agencies
HSE Compliance
Key State Agencies
Texas Railroad Commission Louisiana Office of Conservation and the Office of Mineral Resources
Changing Landscape
Regulations Other influences
Local
Governments Groups Other Industry Segments Population
Best Practices
Project Management institute DNV WCID Safety Case
Key Federal Agencies
U S Coast Guard U S Dept of Labor (OSHA) U S EPA Natural Resource Damage Assessment (NRDA)
The New Reality
Judiciary
Federal State Local
US NTSB
Other
Media Academic Think Tank
Disclaimer: EXAMPLE ONLY The constituents depicted on this graphic are not all inclusive, but are typical and only shown to address the complexity of this issue. The company and/or its authors shall not be responsible or liable for the accuracy, usefulness or availability of any information herein, and shall not be responsible or liable for any decisions made based on such information.
Copyright 2011 Knowledge Ops, Inc. All Rights Reserved.
Oil & Gas Deep Water Drilling Regulations Compliance
October, 14, 2010, BOEMREs Increased Safety Measures for Energy Development on the Outer Continental Shelf (75 FR 63346) released.
Extensive new regulations, tracking, and reporting requirements Offshore drilling has changed forever How will energy companies respond to this wave of increased regulation, control, and oversight? How will energy companies quickly understand these new regulations, model the risk, and communicate to the organization?
Liability of Macondo Accident over $35B
Compliance
Analogous to Sarbanes-Oxley
License to operate requires
Drilling Risk Assessment Process
Operating Procedures Task Force: Well Construction Interface Document (WCID)
Industry Best Practices
Drilling Contractors Safety Management System
W Construction ell Interfacing Docum ent
Well construction interface / Basis of design
Lease Operators Safety Management System
Well Basis Of Design
Location & environment Geologic and geophysical Well design Well barriers (with much detail) Casing design Well execution plan (with detail) Critical well Risk Assessments Operators MOC
Drilling contractor safety case and lease operator SMS interface
Management structure / RRs / Acct Drilling Contractor MOC Personnel management Well control procedures Risk management processes Emergency response Monitoring, auditing and review
Drilling Contractors Safety Case
Risk Analysis & M itigation M anagem of Change ent Personnel Com petency
Well Execution Plan
Critical Well Activity Risk Assessments
Energy Industry Compliance Matrix
Probable License-to-Operate Regulatory Compliance Matrix
Hydrocarbon Value Chain
Offshore (maritime operations) Firm / Function
Operators Drilling Contractors Engineering Companies Service Companies Manufacturers Suppliers Drilling 2011
Onshore Midstream Downstream
Refining 2011 Manufacturing 2011 Transportation 2011 Storage 2013?
E&P
Production 2012 Gathering 2011
Legend Compliance Criticality
Most Critical Year
Least Critical
Source: Knowledge Ops, Inc.
Originally published by Shemwell, Scott M. (2011, January) The Blast Heard Around the World. Petroleum Africa Magazine. pp. 32-35.
Issues in the Marcellus
Primary concern is ground water contamination from Hydraulic frac fluid
Multiple municipal, state, & federal regulations Pennsylvania generated $2.3 billion in total value added, more than 29,000 jobs, and $240 million in state and local taxes during 2008. Considine et al
New York
Stronger regulatory requirements New York Viewed by some in the industry as less attractive state in which to invest
Managing Complex Regulations
Challenging Evolving Required
Enterprise Policy Automation
Business & SOPs Contractual Obligations Company Culture Industry Practices Mandates, Regulations and Legislation Tribal Knowledge Embedded in Legacy Systems and Documents
Available to All Across the Extended Enterprise Network
Regulatory Case Study:
Compliance & Beyond It's 2011, Are You Ready For Enforced Compliance
NERC's mission is to ensure that the bulk electric system in North America is reliable, adequate and secure. Founded in 1968, the North American Electric Reliability Corporation (NERC) is the selfregulatory Electric Reliability Organization (ERO) that spans North America, with Federal Energy Regulatory Commission (FERC) oversight.
develops and enforces reliability standard monitors the bulk power system; assesses future adequacy; audits owners, operators, and users for preparedness; educates and trains industry personnel.
Governance, Risk, Compliance is the New Normal
Requirements Increase in Number and Complexity
Service Level Compliance Compliance & Ethics Programs IT Governance Records Retention Anti-Money Laundering
Financial Reporting Compliance
Audit Management
Supply Chain Traceability
Legal Discovery
Data Privacy
People
Finance Suppliers R&D Mfg Sales HR Legal Customers
Technology
Enterprise Data Applications Warehouse Database Mainframes Mobile Devices Apps Server
Regions
Mandates
NERC FERC
SOX
Patriot Act
OFAC
FCPA
ITAR
PCI
HIPAA
SB1386
Source: Open Compliance and Ethics Group
The tipping point
Biggest Blackout In U.S. History August 14th, 2003
Does this sound familiar?
Concluding Comments
For a variety of reasons and over a very long time, the oil & gas industry has earned greater scrutiny However, the process is manageable Industry can demonstrate to agencies this solution Should NOT affect profitable operations and value to the society
"The Democrats are right that the oil companies can make money even with tighter regulations. We can require them to meet those regulations. And the Republicans are right that there are more places we can and should be drilling to find oil and gas," says Amy Myers Jaffe, Director of the Baker Institute, Houston, TX.
- Wall Street Journal, June 9, 2011
http://online.wsj.com/article/SB10001424052702304778304576373922398928448.html
Contact Us
Knowledge Ops, Inc. Dr. Scott M. Shemwell Email: [email protected] www.KnowledgeOps.com
Scott M. Shemwell, D.B.A.
Dr. Scott M. Shemwell is an acknowledged authority and thought leader in field operations and risk management with over 30 years in the energy sector leading turnaround and transformation processes for global S&P 500 organizations as well as start-up and professional service firms. He had been directly involved in over $5 billion acquisition and divestitures as well as the management of significant projects and business units. Most recently, he worked at Wescorp Energy, Inc. as Chief Operating Officer after merging Strategic Decision Sciences, Inc. in 2007 where as CEO he helped global clients tackle difficult strategic problems and attain operational excellence. Mr. Shemwells unique background and expertise in oil-field management make him highly qualified to guide oil and gas companies in creating economical and efficient oil fields of the future. Prior to starting Strategic Decision Sciences in 2003, he directed Oracles Energy Practice as vice president responsible for driving the strategic direction and business development efforts for Oracles global energy and chemical business sectors.
In 1997, Mr. Shemwell was brought into MCI Systemhouse to expand its energy practice where his most notable achievement was the development and implementation of the firms Y2K practice with a focus on the realtime systems responsible for both upstream and downstream petroleum production operations.. He also has industry leadership experience as CEO of Real-Time Data Solutions, Inc., director at Halliburton Corporation and head of its Information Technology line of business. While serving on the Halliburton Energy Services Leadership Team, he was directly engaged in the transformation of the company into its Integrated Solutions business model as well performing as the CIO of the $2 billion Terra Nova project.
Mr. Shemwell is recognized as an authority in risk management, technology, knowledge management, industry change, process change management/modeling and simulation, and logistics and operational supply chain management, having authored over 300 articles and presentations on these subject matters. He is the author of Essays on Business and Information, a collection of short essays focusing on the relationship between business processes and information technology, written from his perspective as an energy industry executive and adviser. Formerly a Commissioned Officer in the United States Army Air Defense Artillery, he holds a Bachelor of Science in physics from North Georgia College, a Master of Business Administration from Houston Baptist University and a Doctor of Business Administration from Nova Southeastern University.
Additional Resources
Two recent articles by the author address these issues further
The Blast Heard Around the World, January 2011 A Date Which Will Live, October 2010 OPA Maturity Model, July 2011
