Operators are under increasing pressure to meet both the environmental compliance requirements of their permits and increasing regulations (Figure1). It can sometimes be more difficult for them to get approval for a permit renewal than it is to get permission for a new permit. Many E&P companies are trying to manage today’s increasing operational and environmental complexities with yesterday’s technology. Today’s second generation of Environmental Management Information Systems (EMIS), known as Environmental Risk Management Systems (ERMS) are helping to change all of that, by enabling E&P companies to both improve operational efficiency as well as improving environmental compliance in a way that will not only make E&P companies greener, but that will give them a competitive edge in the market.

Up to now, E&P companies have improved their compliance through innovative production processes, but implementation of technology for the management of environmental processes and tasks have taken a back seat, or have only had needs addressed after having to face a shortcoming. In fact, when you take a look at how many E&P companies are managing their environmental permits, processes, and data today, you find that many are still employing paper or spreadsheet-based tools to handle the increasingly complex tasks associated with environmental compliance. Even those who have implemented software solutions have chosen point or custom solutions that may fit their basic needs at the time of purchase, but do not have the flexibility, extensibility, or enterprise level of integration to handle the rapidly changing and shifting needs of the E&P industry. For some companies this is starting to affect their operations as well as their bottom line.

The permit renewal problem

The process for permitting a well is detailed and varies according to federal and state regulatory requirements. It requires a heavily coordinated process among geology, engineering, land, operations, legal, and environmental, health and safety functions within the company as well as with the various permitting agencies. If the data and reports needed to coordinate the actions for permitting a well are incomplete or not adequate due to data management or collection issues, then the entire process can be delayed or put at jeopardy.

Some companies even find themselves in the position of taking longer to get permission for extension of existing permits than it takes to get approval for new permits. This is due to the difficulties in the permit management process and all of the documentation and reports that need to be submitted to regulatory authorities. Due to the extended relationships that companies have with service companies this process can become even more complicated if the service company is using manual or paper methods of compliance tracking.

Keeping up with moving assets

Another operational and environmental challenge unique to E&P companies is the management of assets constantly on the move. They may also be either owned or leased. Tracking emissions that are generated by these assets and assigning them to the appropriate field or basin can be a time-intensive and accuracy challenging task if not handled by a centralized environmental risk management system that has the capability to follow an asset from cradle to grave.

Due to the complex nature of the relationships that E&P companies have with leasing companies, service companies and partnerships with other E&P companies, a system that is flexible enough to incorporate external data as well as the ability to track assets inside and outside of the organization is essential. This includes tracking capture documentation and siting criteria as well as being able to move equipment and having the compliance tasks “follow” it in the system. A system is also needed that recognizes how environmental requirements can change for an asset as they move to different geographic or county regions. Finally, an effective solution for tracking assets needs the ability to incorporate specialized data elements to deal with different asset types. Asset management is a requirement of the whole company and technology is needed that has the capability to manage an asset from cradle to grave and the quality of closure of a site.

The rise of real-time compliance

The ERMS software market is evolving rapidly. The key requirement of such a system is an architecture that supports both configurability and seamless integration into the E&P enterprise with the ability to perform compliance data management in real time. According to Dr. Gary Vasey, vice president with Utilipoint International, “by making use of a common architecture, ERMS software delivers significant business benefits, reducing manual processes around data collection and input, minimizing the potential for error, monitoring processes against limits and initiating remedial processes. These solutions also provide the audit trail, reporting and optimization and analysis capabilities required to truly assist E&P companies in compliance efforts.”

An ERMS solution allows companies to capture disparate E&P data such as permit information, emissions of various types, as well as accident, incident and other data. That data is then stored in a central repository where it can be accessed by optimization, planning and reporting tools and ideally, can be integrated with workflow tools. Known as compliance management, the complete ERMS solution captures production and safety/incident data, following defined business processes to monitor and notify appropriate staff of likely issues. For example, by monitoring real-time emissions data, the compliance management system can compare emission totals against permits and limits. Should exceeding a limit be imminent, the system automatically notifies production and other personnel of the situation, providing the authorized solution processes to those notified. Actions taken to rectify the situation are then recorded by the system allowing full reporting of the event and resulting actions internally and externally. The record of the event and actions are also available for study and analysis.

Figure 2 shows the compliance management and reporting loop of business processes that

an ERMS supports. A key consideration in this business process loop is adaptability of the

solution for regulation and report format changes ensuring that the business processes and

supporting systems maintain the ability to comply with the latest version of the regulations.

An example of a fully integrated ERMS solution is the VisionMonitor Compliance Intelligence suite of software products (VMCI). The solution is built on an n-tier, Web-based, component architecture that provides the scalability, flexibility and robustness to support enterprise-wide deployment. This offers the flexibility to assemble a range of product solutions quickly and easily to meet ever-changing E&P business needs and reporting requirements. Its power lies in its architecture that delivers configurability, scalability and integration. A differentiator of this solution is that it provides users the ability to quickly and easily populate and configure the system to meet the specific requirements of the users’ business as opposed to simply reflecting a vendor’s external view of the business. In this way, it offers users the flexibility to adapt with evolving E&P business requirements.

Summary

E&P companies operate in a world with increasing performance demands and where people want to have their energy and their compliance too. As technology innovators that are constantly pushing the envelope, E&P companies should seize this opportunity to bring their environmental management technology up to date and to use that technology to create a competitive advantage in the marketplace. As a result, real-time environmental risk management, like many other aspects of E&P performance, is becoming ever more critical to business success.