Blogs & Comment

Wanted: High-efficiency oil & gas companies

Nuclear aircraft carriers set the standard. Are our oil companies up to the task?

The problem of oil spills—the latest coming July 27—that continue to vex the North American oil industry provides an occasion to reflect on how complex systems work and what one vital industry can learn from another. Take a Nimitz-class aircraft carrier, a hellishly complex piece of machinery the length of three football fields and.carrying several dozen heavily-armed aircraft into a war zone. It’s crewed by 3,200 with an additional 2,400 involved in flying, maintaining, and launching aircraft. Oh, and it’s powered by a pair of Westinghouse A4W nuclear reactors. The U.S. Navy has 10 such carriers and, despite their complexity, failure is practically unknown.

The safety record of nuclear aircraft carriers is so good that they are now a standard example of highly-efficient, low-failure, complex systems, the kind that other complex systems should aspire to become. They are systems in which failure is simply not an option, and smart design makes sure it just doesn’t happen. The same can’t be said for the oil industry, where companies operate complex systems in the form of pipeline networks.

To look at one Canadian company, Enbridge, is to find a pipeline system significantly more prone to failure than an aircraft carrier. Just under a year ago, I wrote about a leak in an Enbridge pipeline running past the tiny northern Canadian town of Wrigley. It was a small leak, but one that raised serious concerns for the local native community that eked out its living from the now-polluted land. That leak involved maybe a thousand barrels of oil. But just a year earlier, an Enbridge pipeline running through southwest Michigan spilled 20,000 barrels into a creek leading to the Kalamazoo River. And then on July 27, another significant leak was reported. This time, the company’s “Line 14” spilled about a thousand barrels of crude into a field in Wisconsin. And this names only a few of the company’s pipeline mishaps over the last decade.

Of course, there’s no special reason to pick on Enbridge. Other companies in the oil exploration and refining industry have spotty records, too. BP is perhaps the most dramatic example that comes to mind. It was the company behind the explosion on the Deepwater Horizon, and the subsequent spill that devastated a big chunk of the Gulf coast.

There’s little doubt that, for the foreseeable future, oil companies like Enbridge and BP are a practical necessity. Like it or not, our economy depends on them. They are as necessary to our economy as an aircraft carrier is to the U.S.’s naval supremacy. But the fact that those companies are so essential is precisely what dictates that they must do better. They must seek the kind of never-fail efficiency exemplified by carriers like the USS Harry S. Truman and the USS Abraham Lincoln.

There are of course important differences between an aircraft carrier and a system of pipelines. For one thing, an aircraft carrier exists in a single place, under the watchful eye of a single commanding officer; a pipeline can stretch for thousands of unobserved miles, necessarily subject to only infrequent inspection. For another thing, various corporate motives summed up very imprecisely by the term “the profit motive” mean there will always be temptations for oil companies to cut corners. But in aircraft carriers the example and body of knowledge is there. Oil companies can, and must, do better.