Energy Companies Realize Environmental and Economic Benefit Through Process Excellence

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Consumers and politicians want energy supplies that are safe, environmentally friendly and inexpensive. Oil and gas extraction and processing are under increasing pressure to meet those demands. But in a world where those aims often appear to be in conflict can the energy bosses really be expected to achieve them?

A combination of process excellence coupled with new technologies means that some companies are making advancements towards these goals.

US-based independent oil & gas producer Devon Energy, for instance, has found that sometimes environmentally-friendly technologies can actually make good business sense. The company, for instance, has adopted a method that reduces flaring (the burning off of gas) and captures early gas production – meaning that the company captures more gas rather than sending it up into the atmosphere.

Chip Minty, spokesman at Devon Energy, told MyWestTexas: "It is always advantageous to the company to prevent the loss of product. If you flare, you lose the product and you are not generating revenues."

He went on to add that this method reduces emissions getting into the air and helps the environment, showing that it can be possible to strike a balance between economic efficiency and environmental concerns.


Another area where energy companies have the potential to realize economic and environmental benefit is through the reduction of non-value added activities – those process steps that add no value to the customer.

Orion Development group, a consultancy, claims that in any company, 20 to 30 per cent of all processes amount to non value added activities, which means that money is being spent without adding anything.

The firm argues that to streamline the process and cut non value activities, it is important to know who the customer is and what they want to create a "garbage in, garbage out" system effectively. It was recommended that firms clarify where consumers have expectations, focus on the pushing of value added processes, and improve these to maximise the value of a firm and its production of oil and natural gas.

The final issue surrounds the complexity of the process when working with a number of different companies to supply oil and gas.

It is vital to work closely with all firms involved in a process to make sure that there is no break point in the supply chain and ensure efficiency.

Andrew Gould, a past chairman and chief executive of Schlumberger and now chairman of BG Group, an integrated natural gas company, said that 25 percent of oil and gas projects with a budget below $5 billion will overrun by more than 50 percent, while the same is true for 35 percent of those with a budget greater than $5 billion.

Greater integration of the supply chain into project planning could produce "fit for purpose" technology as well as project efficiencies and better control over project overruns and ultimate project success," Mr Gould advised.