OG Trends

Here’s how oil and gas companies can leverage technology

to capitalize on regulation changes, infrastructure investment

and other possible market opportunities

By Brent Potts

What will be the long-term impact of the oil and gas (O&G) downturn? Is a recovery on the horizon? How will new U.S. government views on regulations affect the industry? How will fracking and shale exploration change the landscape? And what role will technology play in helping companies thrive?

O&G executives are struggling to find answers to these questions – and many others – as market conditions continue to create uncertainty in the industry.

Boardroom

Is your company’s board ready to take on tomorrow’s challenges?

Here are five questions you should be asking now.

By Jon Martin and Joe Saliba

The global mining industry has experienced tremendously challenging market conditions over the past few years. Commodity prices declined dramatically and billions of dollars of market value disappeared. In response, mining companies focused on improving cost discipline, restructuring asset portfolios and driving productivity improvements.

Oil and gas facilities are intricate institutions dependent on the coordination of workers and equipment for the effective production of commodity goods. Two main factors – output and safety – are the primary drivers of decisions in this business. But when necessary information is not communicated well, or is unavailable, it puts the entire operation at risk for failures. With newer technology facilitating ever-more complex projects, the potential risks have only increased.
Although shift handovers often are considered part of a standard procedure, they should be treated with the appropriate weight. Reliable communication is critical during these moments, and when relayed information is incomplete or inaccurate, the consequences can be significant. Not only will flawed shift handovers quickly become expensive in terms of time and resources, but the safety of all the workers and staff can be put into jeopardy. Fortunately, there are five steps operators can take to optimize shift handovers to enhance safety and maintain output levels.

While linking the economy to oil and gas worker safety may not be the most obvious connection, it is certainly a powerful one. From power dynamics shifting toward centralized locations over individual worksites, to safety equipment purchasing decisions becoming line items instead of thoughtful investments, energy companies continuously feel the economy’s impact, especially in a down cycle. In today’s society, where commoditization and convenience are key selling points, it becomes difficult for the same concepts not to spill over to safety practices and permeate throughout the worksite. At the rate at which competitors reproduce today’s solutions and introduce them in a flood to the market, quality may be overlooked for quantity. However, as soon as safety starts being treated as a raw material that can be bought and sold, the consequences can be deadly.

Despite its vast mineral resources, the United States is increasingly dependent on foreign sources of minerals of importance to the nation’s well-being (including its security and its manufacturing competitiveness). Although there is no “official” government list of such “strategic and critical minerals,” they are generally considered to encompass those that are crucial for national defense and security, infrastructure or economic security and are at risk of supply disruption. Examples include copper, uranium, magnesium, tantalum, tungsten and vanadium and the “rare earths,” a group of 17 elements with properties that make them especially useful in high-tech consumer products such as cell phones, computer hard drives, electric and hybrid vehicles and flat-screen monitors and televisions.

LED lighting has quickly gained popularity in the mining industry as a much more robust, durable and long-performing lighting solution than traditional HID fixtures. In addition to its obvious energy efficiency, the solid-state design of LED fixtures makes them much more resistant to the extreme high-vibration and generally harsh environment inside virtually any mining operation—from the gold, iron ore, lithium and copper mines of Australia, to the coal, pot ash and aggregate operations in the western U.S.
This durability can dramatically reduce the burden and cost of maintenance. In a typical mining operation in Australia, for example, where facilities are often very remote and hard to access, the cost of merely changing a single lamp could well exceed $1,000. Multiplied over potentially thousands of lights throughout a single facility, the cost of lighting maintenance is staggering.

When most of us think about cyber-attacks, our biggest fears involve stolen identities, hacked credit cards or vulnerable personal information. There is, however, another type of cyber-attack that has the potential to deliver a much more physical and catastrophic impact. Despite this, it is one that is not often discussed. Attacks on the U.S. electrical grid are more frequent than many realize. A recent study by the Department of Homeland Security Department’s Industrial Control Systems Cybersecurity Emergency Response Team (ICS-CERT) cited energy as the second-most-targeted sector, with the largest number of attacks involving the nation’s manufacturing sector. ICS-CERT found that the number of cyber-attacks it responded to had increased by 20 percent from the previous fiscal year.
How can we protect our nation’s power supply and ensure that our energy remains secure? As U.S. experts work to ramp up cyber-security, the federal government can also increase the reliability of our energy supply by modernizing the electrical grid and coupling traditional sources with renewable energy technology.

Slowing global growth, oversupply and rising regulatory demands are pressuring markets and producer stock prices alike. Few industries have felt the squeeze more acutely than the mining sector, which has been forced to take aggressive action to reduce capital spending and operating costs, while retaining shareholder dividend payouts. The current significant downturn in the commodity cycle provides an opportunity for mining companies to re-evaluate their production chains and seek new solutions to old problems. 

The range of factors impacting commodity prices is symptomatic of the increasingly complex global economy. After decades of sustained growth, the World Trade Organization (WTO) has cut the expected rate of global trade growth below 3 percent for the fourth consecutive year. China, the world’s largest consumer of commodities, announced a 6.9 percent GDP figure – the slowest since the depths of the financial crisis. (Given a broad range of economic data points, even that figure exceeded many predictions.) As China’s appetite for resources slows, so do the economies of commodity-rich producing nations like Australia, Canada, Brazil, South Africa, Russia and Indonesia.

Check out our latest Edition!

 

Contact Us

Energy and Mining International

150 N. Michigan Ave., Suite 900
Chicago, IL 60601
312.676.1100  312.676.1101

Click here for a full list of contacts.

Latest Edition

Spread The Love

Back To Top