As 2009 chairman of IADC, the time is approaching when I begin to take stock of the year that has almost passed. While it is premature to write a close-out report on the year, there are a few matters that can be discussed with certainty. 2009 will not be remembered as an economically sound year. It has so far been a year characterised by economic turmoil, a slump in demand for drilling services and lower oil prices – albeit USD$65-75/bbl is actually fairly high in historical terms.
But 2009 has also been a year that, in some ways, has marked new realities, new beginnings and a year in which the growing concern for the environment has been more fully recognised.
Climate change and man-made environmental impact have topped the agenda for quite some time. From the political side this year, there has been an increased focus on the climate. With the COP15 conference set for Copenhagen in December, governments from all over the world are working toward finding common ground in order to renew and dramatically improve the 12-year-old Kyoto agreement. This agreement does not affect us in the drilling industry directly, but it will likely deepen the world’s focus on the environment. Moreover, the industry has a responsibility to take action.
We need to invest in environmentally sustainable solutions, and we need to think in new and improved ways when pushing the solutions forward. The global financial condition may not exactly motivate new investments right now; however, we cannot afford not to invest in improved solutions. We have a responsibility toward the world and our stakeholders. Without investing in a more sustainable future, we ignore the increasing demand for actions to curb climate catastrophes and changes.
As an industry, we would also lag behind other more environmentally friendly industries. In the long term, we may lose market shares to them. Hence, we need to enhance our environmental focus even more – we need to show to the world that we are better than our reputation perhaps suggests.
Over the last couple of years, the drilling industry has introduced several initiatives to drive more environmental friendly businesses. New equipment and the technology behind them are constantly being evaluated when designing new rigs; blowout and spill prevention procedures have been implemented and perfected; and our maintenance programs are constantly becoming more advanced. Power-generating engines are also continuously being improved to reduce CO2 emissions. Many companies, especially within the offshore sector, have put environmental management systems in place and are certified according to ISO 14001.
Our awareness goes deep and is very actionable when it comes to preventing direct pollution like oil and oil-based mud spills. But we still have a long way to go when it comes to more subtle emissions issues and energy consumption. With the introduction of a new initiative launched by IADC, we are working intensively on bringing down the overall emissions caused by fossil fuels.
IADC has a long history of reporting and benchmarking safety data and, starting in January 2010, it will be possible to also report environmental data into the IADC database. By establishing environmental key performance indicators (KPIs), we will be able to measure and benchmark our environmental performance.
It may seem an easy task, but the KPIs must provide a picture that takes into account several perspectives, including ways of normalising growth in activity or increased resource consumption due to difficult formations. High-level KPIs have been identified and are under scrutiny within select member companies.
We expect to conclude this work in 2009, and the plan is to open for voluntary data-reporting early next year. This could potentially be followed by issuing a draft report on IADC members’ environmental performance based on 2009 data. Keeping track of performance will help us to identify crucial areas to improve; thus, it will make it easier for us to take the proper precautions.
TAKE IT TO THE NEXT LEVEL
Measuring our performance and setting up benchmarks for emissions are of little value if we do not use the information to improve, to reduce emissions further and to continuously develop new technologies. I would like to emphasise the importance for us to take this to the next level. We need to take even more precautions when trying to avoid emissions and excessive use of energy. We need to change our habits and work closely with our clients, the E&P companies, to cut down unnecessary energy consumption. Even the little things count.
These efforts are not all up to the drilling contractors, and that is a big challenge. We must persuade not just each other but also oil companies to plan and work together in a more environmentally sustainable way – and we need to lead the way.
And it is a win-win situation. Several oil companies have begun to think about alternative energies, not just as a tool for “greenwashing” but as serious business opportunities that might one day turn real profits. The catalyst is that governments are moving to force industries to cut carbon emissions, creating a new “long-term regulatory reality” through agreements like the one that is about to be reached at COP15 and agreements that favor alternative energy.
It is up to us in the drilling industry to seize this opportunity to push environmentally sustainable solutions, to overcome excessive expenses and to do so together with our clients. IADC will strive to be the focal point in our members’ pursuit of this extremely important goal.
During the last year, we have worked with determination toward improving our environmental performance, and I think we have come a long way. But we’re only at the beginning. It took us 20 years to achieve the safety awareness that we are witnessing today; thus, creating greater environmental awareness is not something that will come overnight. We will have to keep focusing on this area, and I am confident that IADC officers, members and staff will take up this challenge and continue to drive forward environmentally sound and sustainable solutions.
It is time to increase our focus on the “E” in HSE – without ever sacrificing our focus on the “S.”