This week’s Pipeliners Podcast episode features first-time guest Debra Phillips of API providing listeners with insight on the recently-introduced API Energy Excellence Program.
In this episode, you will learn about the goals of the API Energy Excellence Program, how API utilized the Pipeline Safety Management Systems (PSMS) framework to develop the API Energy Excellence Program, the 13 core elements of the program, how PHMSA is involved from a regulatory perspective, and more topics about this new program.
API Energy Excellence Program: Show Notes, Links, and Insider Terms
- Debra Phillips is the Senior Vice President for Global Industry Services at API. Connect with Debra on LinkedIn.
- API (American Petroleum Institute) represents all segments of America’s natural gas and oil industry. API has developed more than 700 standards to enhance operational and environmental safety, efficiency, and sustainability.
- API Energy Excellence Program was launched in 2021 to codify the industry’s practices in driving safety, health, and environmental progress. API Energy Excellence consists of 13 core elements. Each company that participates in the program commits to applying the 13 elements to safeguard employees, environment, and the communities in which they operate.
- Read Debra Phillips’ article, “New API Energy Excellence Program Increases Industry Focus On Performance.”
- Access the full list of the 13 core elements.
- Pipeline SMS (Pipeline Safety Management Systems) or PSMS is an industry-wide focus to improve pipeline safety, driving toward zero incidents.
- API 1173 established the framework for operators to implement Pipeline Safety Management Systems. The PSMS standard includes 10 core elements. The API Energy Excellence Program followed this model to establish its 13 core elements.
- The Plan Do Check Act Cycle (Deming Method) is embedded in Pipeline SMS as a continuous quality improvement model consisting of a logical sequence of four repetitive steps for continuous improvement and learning.
- The Environmental Partnership comprises companies in the U.S. oil and natural gas industry that are committed to continuously improve the industry’s environmental performance. [Learn more about The Partnership.]
- VOC (volatile organic compounds) are chemicals that are released into the atmosphere when coatings are applied.
- Pipeline blowdown is generally the process of de-pressurizing a pipe by releasing gas into the atmosphere. This allows for operators to perform testing, maintenance, or other necessary field activities.
- PHMSA (Pipeline and Hazardous Materials Safety Administration) ensures the safe transportation of energy and hazardous materials.
- Video Explanation: Taking gas flares and turning it into Bitcoin mining.
API Energy Excellence Program: Full Episode Transcript
Russel Treat: Welcome to the Pipeliners Podcast, episode 173, sponsored by the American Petroleum Institute, driving safety, environmental protection, and sustainability across the natural gas and oil industry through world-class standards and safety programs. Since its formation as a standards-setting organization in 1919, API has developed more than 700 standards to enhance industry operations worldwide. Find out more about API at api.org.
Announcer: The Pipeliners Podcast, where professionals, Bubba geeks, and industry insiders share their knowledge and experience about technology, projects, and pipeline operations. Now your host, Russel Treat.
Russel: Thanks for listening to the Pipeliners Podcast. I appreciate you taking the time. To show that appreciation, we give away a customized YETI tumbler to one listener each episode. This week, our winner is George Llanes with South Texas OQ. George, congratulations. Your YETI is on its way. To learn how you can win this signature prize, stick around till the end of the episode.
This week, Debra Phillips, Senior Vice President, Global Industry Services with the American Petroleum Institute, is joining us to talk about the API’s Energy Excellence Program. Debra, welcome to the Pipeliners Podcast.
Debra Phillips: Thanks for having me.
Russel: I am really glad to have you on. We’re wrapping up this 13-week series of episodes that we’ve done in collaboration with API. I think this is a great capstone for that conversation.
Let’s just dive in. Let me ask you first, tell us a little bit about yourself and how you found yourself at API, a little bit about your background.
Debra: Happy to. I have been at API for about two years. I am the Senior Vice President for Global Industry Services. That’s the part of API that sets standards and develops programs to help companies advance quality, safety, and environmental stewardship.
Before coming to API, I worked for the chemical industry in a chemical trade association in D.C. Before that, I spent a good amount of time in manufacturing, both in chemical facilities as well as the pulp and paper industry. I had my trials by fire in the field early on in my career before coming to D.C.
Russel: Your background is not directly pipelining. Your background is more downstream, I guess.
Debra: Yeah, it is very much downstream in chemicals manufacturing as well as pulp and paper, which is, of course, a user of petroleum products and chemical products, but I really cut my teeth in pulp and paper actually.
Russel: I actually did a little work in pulp and paper very early in my…very little work, enough to know that was not business I wanted to work in. Let’s just say that.
Debra: [laughs] Are you kidding me? The odors that you carry with you home…
Russel: Yeah, after three days, you don’t smell it anymore. The problem is everybody else does, right?
Debra: [laughs] True.
Russel: Let’s dive in. Tell me about the API Energy Excellence Program. What is it? What is it about?
Debra: We’re excited about the API Energy Excellence Program. We adopted it. Our board of directors approved it late in 2020 and we’re now starting to talk about it publicly as a first-of-its-kind, all-encompassing systems approach for advancing safety and environmental performance across all aspects of the oil and gas industries.
For the first time, we’re putting together a series of practices that we think will take the oil and gas industry from exploration of production to pipeline and delivery to refining all the way to natural gas delivery systems to new levels of safety and environmental performance.
Russel: That is throwing a very big net.
Debra: We have to, because API’s membership is a very big net. We have about 550 companies that are involved in all aspects of oil and gas exploration and production, as well as refining, as well as service and supply companies.
In order to get this program off the ground, we had to be inclusive and it has to be scalable and applicable to companies of all sizes and all types.
Russel: What are the aspects of the program? What are its components?
Debra: There are 13 elements that make up the components of the program. If you know anything about management systems, ISO kinds of systems, those components will look familiar to you.
It starts with leadership commitment, and then hazard and risk identification, to hazard management, to setting goals and KPIs tracking performance, and then continuously improving.
It’s a traditional management system “Plan Do Check Act” approach, but applied specifically to oil and gas to give our companies a roadmap for accelerating progress, safety, and environmental performance.
Russel: I’m speculating here, because I don’t know anything about it, but these kinds of programs are fundamentally designed to get the industry to work as a team towards those objectives that are not competitive and everybody can agree on.
Debra: That is absolutely right. It was a big part of our discussion with our executive committee and board of directors in the early days — two years ago — when this was just a nugget in our minds.
The industry was trying to figure out “how do we do a better job of saying what our aspirations are around safety and environmental performance, knowing that these were going to be critical issues that our industry has faced with moving into the future, and certainly within this administration.”
There was a sense of community in the early days — how do the companies that are a little bit further along in this journey help the companies that are just starting that may be more resource-constrained or not as experienced, and keep everybody together, but raise all ships at the same time?
Russel: You said something interesting there, Debra. You mentioned accelerate. You also mentioned the industry telling a story. That would be analogous, in my mind, to the aircraft industry, the FAA, and all the things that they do around flight safety.
Anybody involved in aircraft, all the way from somebody learning civil aviation in Piper Cub, all the way up to somebody flying a jumbo jet, all of those people are thoroughly versed and indoctrinated in flight safety. There’s a lot of commonality.
Debra: In fact, we did some benchmarking against other sectors that went through this cultural renaissance, if you will. We looked at nuclear. We looked at chemicals. We looked at pulp and paper. We looked at mining.
Industry sectors that went through a period of time where they were soul-searching around how they felt about safety and environmental issues, and then adopted it as a core ethic and part of the cultural expectation. We used some of those other sector examples and best practices as we developed our own approach for the energy industry.
Russel: I went through the website that API has stood up for the Energy Excellence Program. I noticed that when you got to pipeline, basically the program there is Pipeline SMS.
Pipeline SMS, given the timeline you’re talking about, it’s been around a little longer than the API Energy Excellence Program. How does Pipeline SMS relate to the overall API Energy Excellence Program?
Debra: That’s a great question. The Pipeline Safety Management System standard recommended practice 1173 — as well as there’s an assessment program that sits alongside it that’s available to companies to benchmark where they are against that particular standard — had been around for several years.
The pipeline industry was first out of the gate to adopt a management system approach to driving safety in the pipeline industry. As we looked to encapsulate an approach for all of oil and gas, we took a lot of what’s in 1173 and tried to apply it to other aspects of the industry.
You’ll see there’s 10 elements in the Pipeline Safety Management System standard; there’s 13 in Energy Excellence. You’ll see there’s quite a few that are identical. There’re some that are expressed a little bit differently, because different parts of the industry use different terminology.
In terms of differences, I’d say the stakeholder engagement piece in the Pipeline SMS is probably deeper, because those industries have engaged in communities. Talking with neighbors is such an important part of the permitting, construction, and operation of a pipeline. That takes a front and center role in the Pipeline SMS. It’s the second element of that program. It’s in Energy Excellence, but the pipeline standard takes it to a deeper level.
Some of the places where you’ll see some language that’s different in Energy Excellence versus the Pipeline SMS is there’s words like asset design and integrity. That’s very upstream-focused terminology. Operational controls, safe work practices, management of change — that’s often, in refining, a key concept.
There’s a little bit of a difference in terminology there, but it very much goes hand-in-hand with how the Pipeline SMS looks at risk management and operational controls. Operational controls are actually in there as safety assurance.
The concepts are quite similar. Some of the terminology is different. In some places, the Pipeline SMS goes a little deeper.
Russel: For the pipeliners that listen to this, what I hear you saying, correct me if I’m wrong, is that Pipeline SMS informed the entire Energy Excellence Program approach across the industry.
Debra: That’s right. We used it as a blueprint to get started.
There’s an upstream offshore recommended practice. It has the same model as Pipeline SMS, so we looked at that, but Pipeline SMS was the original blueprint for this entire program. Now it’s applied to the industry at large.
Russel: What are the 13 elements? Can you run those down for us quickly?
Debra: The first element — and most management systems like the Pipeline SMS start here — it’s leadership commitment. The leaders of an organization committing to a culture that prioritizes safety and environmental protection.
It goes to establishing a systems approach, which is core and at the heart of what we’re trying to do, where this becomes an ingrained part of the culture, that there’s an expectation that there’s a system in place to manage these issues. The company — even all the way up to leadership level — is abiding by it, looking at it, measuring it, monitoring it, and continuously improving over time. That’s one of the beauties of a systems approach, is you don’t settle for where you are today. You’re always looking to continuously improve.
The third element is around planning and risk management. Looking at those hazards and risks that are associated with each operation. This is a place where companies of different profiles, different sizes, different operational structures could tailor that assessment to fit their organization’s needs.
Designing assets for integrity. Pipeline is a little bit different than some of the other segments of the industry, where that design piece is very unique to individual settings and particular geologic conditions. That’s the idea. That you’re using equipment and design that’s fit for purpose for your particular application.
Establishing operational controls is the fifth element. Understanding the operational boundaries of your particular asset and running them within those boundaries.
Russel: I think that the operational controls — it’s not well understood yet in the pipeline world. The way I frame that is you’re defining that within these parameters, then I can operate, and when I’m outside of these parameters I cannot operate.
Debra: Exactly, and some intervention is needed.
Russel: That’s right. It’s predefining, throughout everything you do, this is normal, this is abnormal, and this is don’t go.
Debra: Exactly right. When you’re in that abnormal range, empowering employees to step up, say something about it, and intervene. That’s an important part of the system, too. Understanding roles and responsibilities of every employee that’s tasked to operate within those safe boundaries.
Safe work management. That’s the practices, the procedures, the documents. Sometimes, more and more, we’re using videos that show employees how to do these jobs in a safe way.
Managing change. As I said, it’s a very important issue in refining, in particular, where you’re using really complex pieces of equipment. One change, you make one valve adjustment, you decide to run a pipe in a different location, and all of a sudden, it has unintended consequences. Even switching out personnel becomes a management of change issue.
Understanding what changes trigger more sophisticated analysis of whether that’s going to take you outside of those safe operational boundaries.
Russel: The management of change thing — in our industry, pretty much everybody has some exposure to management of change — but management of change as part of a safety system is different than management of change in terms of a process management system.
Debra: That’s right.
Russel: If I’m changing my refining process, that’s a heavy engineering lift, where real management of change is getting all the way down to, “Am I sequencing this specific task correctly? Do I need to make a small change in the wording in a line on a checklist?” or something like that.
Those are the kinds of things where if you can make that active, you can really improve performance.
Debra: Exactly right. All of those changes are important considerations to keeping people safe and keeping materials in the pipeline.
There’s a focus in the API Energy Excellence Program on knowledge, skills, and training. Making sure that companies have clearly thought through what skills and knowledge their employees need to have to be able to do their jobs safely and according to procedures.
We spent a lot of time talking about contractor management. This is a place where Energy Excellence is a little different than Pipeline Safety Management. In Pipeline Safety Management, that understanding and role of the contractor is baked in throughout all of the 10 elements. In the API Energy Excellence Program, we call it out. We debated back and forth, were we going to bake it in, or were we going to pull it out? We decided to pull it out. This has been the subject of many incidents across the industry not having clear handoffs, and not a clear understanding of roles and responsibilities from operator to contractor. So, how you manage your contractor is called out as a separate element with clear best practices around what that looks like.
Incident investigation. That’s part of Pipeline SMS. It’s part of what every company tries to do to learn from near misses or incidents. That’s pretty standard.
Preparing for emergencies. Also, a part of Pipeline SMS.
Managing your information. Documentation, recordkeeping. Also, almost identical to Pipeline SMS.
Finally, the stakeholder engagement piece, as I mentioned. Knowing and engaging with the communities in which you’re operating, the regulators, the local emergency response personnel, it’s a huge part of Pipeline SMS, so we build that into this program, too.
Russel: Interesting. To me, that sounds like a capstone program for all of what API does, and sits on top of everything else. Is that a fair way to look at this?
Debra: It’s actually a very good way to look at this. One of the things that we notice when we started out in this endeavor is that API has published more than 700 standards — the Pipeline Safety Management Standard being one of them — but more than 700.
In some segments, we didn’t have a system approach like this. We had individual piecemeal standards. We felt like we needed that capstone to create the roadmap where it didn’t exist in individual segments.
Behind these 13 elements that I just talked through, we’ve got a map that takes our 700 standards and shows how they fit into each of these elements so that you now do have that capstone that brings together all of those supporting documents and then applies industry-wide.
Russel: That actually raises a question for me. If you look at that map of standards against the Energy Excellence Program, does it point out gaps where you don’t have standards or recommended practices and you probably should?
Debra: Yeah, it’s interesting you say that. The member team that looked at this felt like there are a few places where we may have some backfilling work to do, where one segment has gone deep on an issue and another segment not so much.
Maybe there’s a gap there, and an opportunity to fill that in. That actually did come up as part of the effort.
Russel: One of my experiences with API and the standards — as an engineer in a few very specific and technical domains, I am quite knowledgeable in a handful of standards that are applied to those domains.
When you start talking about a holistic approach, there is often a bridge between the technical standard and the program, the more process-centric, higher-level things. I think that even in pipelining, there are some areas where industry could benefit from some other programs.
Debra: Interesting. That could come up as part of this. One of the places — not in pipeline — but in onshore, the complexion of onshore has changed dramatically over the last decade and we’re still developing document standards and programs. There was a sense that we have done a lot in offshore, we’ve done a lot in pipeline refining. There are programs — a Bible of standards for refining — but a sense that onshore needed something like a program of more deliberately constructed set of documents to help advance safety onshore.
We’re in the process of developing an onshore safety alliance that brings focus to onshore safety in a new way. That’s one example.
Russel: Onshore is challenging, too. There’re so many different kinds of operations.
Debra: And so many players. There’re just thousands. Scope, scale is a real challenge.
Russel: A lot of those operators, particularly in the U.S. on the E&P site, are quite small.
Debra: That’s right. They are. And, times have been tough in terms of prices. Resources are even more constrained, which forces organizations to get creative in how they do things.
Russel: Right, no doubt. No doubt. The other thing I wanted to talk to you about is, I was reading through things. I flagged The Environmental Partnership aspect of this. Can you tell us a little bit about The Environmental Partnership, what it is about?
Debra: API kicked off its Environmental Partnership several years ago now. There’s about 90…It’s a voluntary initiative aimed at reducing emissions, methane, and volatile organic compound (VOC) emissions from operations.
It was largely started for upstream companies, but has recently drifted into the midstream space. We now have some pipeline companies participating as well. There’s about 90 companies that are participating today. It’s tripled. Its size, in terms of company participation, has tripled in the last three years.
What it seeks to do is there are six substantive programs beneath it aimed at reducing those emissions. Those six substantive programs have been identified based on EPA data around where the majority of emissions by volume are coming from. They include looking at pneumatic controllers and changing those out.
Manual unloading of liquids, which happens onshore as liquids build up. That’s a big source of emissions, so best practices around how to do that. Also, minimizing the buildup of liquids and natural gas production.
The third program is flare management. As you know, a big issue in our industry.
Russel: That’s a biggie.
Debra: Best practices around flare management. The focus there has resulted in some identification of additional practices that may be needed, defining what is routine flaring, how to minimize it when you’ve determined that you need to do it routinely. That’s been a big one for us.
The fourth program is leak detection and repair. Going around, looking at those connection points, and finding out where you have leaks. That was identified in a number of EPA reports as a significant source.
As our companies have gone out and done those leak detection programs, the leaks were not discovered at the rate that EPA had predicted. In essence, good news there.
The final two programs that are aimed at the pipeline segment, there’s a compressor program. Best practices around compressors.
Finally, pipeline blowdown. Again, best practices in capture systems, depressurizing to prevent emissions from blowdowns.
The participating companies — they implement those programs. They report on them on an annual basis, all aimed at reducing methane and other VOCs that contribute to carbon emissions and climate change.
Russel: As you run it down that list, the wheels in my mind are turning about all the challenges associated with those things.
I’m not surprised that the leak findings were not what was anticipated. That doesn’t surprise me.
Some of these things, like pipeline blowdown, normal operation blowdowns, blowing down pig traps, and things like that, blowing down meter tubes for routine operations and maintenance, that, to me, somebody’s going to have to invent something there, because it doesn’t exist.
Debra: You’re right. Outside of The Environmental Partnership, there’s a good bit of activity at API underway on the technology side.
There’s a significant amount of investment within the industry toward those new technologies that are going to be game-changers. Not just addressing these issues around the edges, but changing the game in terms of technology.
We’ve got those activities underway, as well.
Russel: It’s going to be somebody in a truck that figures that out, or somebody in a garage that figures that out.
This is completely off subject. Maybe not. I don’t know. It’s really interesting. I saw a YouTube video that a company put out. It was a startup. They had taken a container and filled it with computers and air conditioning. They took it out to a well site with a flare. They took the flare gas, ran it into generators, and used all those computers to mine Bitcoin. They were taking flares and turning it into Bitcoin mining.
The first time I saw that I thought, “That’s ridiculous,” and then I went back, watched it, and looked at it. I’m like, “I would have loved to have been sitting at the cocktail party where the two Bubba geeks dreamed that up.”
Debra: That’s amazing.
Russel: I’ll have to see if I can find that, and see if I can link it up to this podcast. That has nothing to do with it.
To your point, though, what’s interesting is as you begin to identify these problems, and you get the industry and the people educated about those problems, there’s no telling what kind of creative solutions are out there that nobody has thought about because there wasn’t a need to think about it.
Debra: They’re coming. I feel like the next decade, there’s going to be a lot of creative thinking happening as a result of policy, as a result of attention, and as a result of business opportunity. Those out-of-the-box technologies are an opportunity that some entrepreneurial company is going to capture.
Russel: [laughs] I’ve been doing the oil and gas technology thing for over 30 years now. One thing’s for sure. Somebody is going to invent something that’s going to change the game because I’ve seen that happen over and over and over again. I don’t think that’s going to stop. Anyway…
Debra: It’s funny you say that because I think that that’s one of the underappreciated qualities of our industry, how much adaptation and technology and innovation that’s happened over the years. I agree with you. It’s going to continue.
Russel: To the point, what causes me to think about that is when you start thinking about an Energy Excellence Program, one of the things it’s going to do is it’s going to identify those areas where that creativity is needed, that may not have been well-identified before. That’s always good for our business.
I remember very well — gosh, it’s been 15 years ago now — I was going around to all these talks. People were talking about peak oil. We were going to run out of supply. Boy, did they get that one absolutely backward, right?
Russel: Necessity demands solution. What’s next for the Energy Excellence Program? Where are you in its maturity? What are you all working on next?
Debra: We’re just out of the gates, to be honest. We’re just launching this publicly. Our members are getting comfortable with it. Each of our 550 companies is looking — they’re looking against the 13 elements and seeing where they’re at, where they’ve got room to grow. The best practices are percolating up from companies.
That’s actually a key aspect of the program, letting companies share with one another. Here’s what’s worked for my company. Let me put it out there in case it’s helpful to another. That’s just started.
It’s our intention that companies will report on an annual basis how they’re doing against each of the 13 elements. In three years’ time, we hope everybody is able to say, “Yes, we have a healthy system that includes all of these 13 elements.”
After three years, it’s time to re-evaluate. Do we want to expand? Do we want to more fully bring in climate considerations, for instance? Do we want to keep self-reporting or do we want to establish KPIs? Do we want companies to start reporting data to us, quantitative data?
Russel: Do we want to standardize the benchmarks across the industry? That kind of thing.
Debra: To really see, at the end of the day, are we driving performance? I expect those conversations to unfold over the coming year or two.
Russel: Interesting. I really appreciate this, Debra. I think my last question is, what do you want the pipeliners to know about the API Energy Excellence Program? Have we got it covered by doing the Pipeline SMS, or are there some other things that we need to be looking at?
Debra: That’s a great question. One of the things that the pipeliners did when they put together their SMS, they established a maturity model and a guidance document, where you could assess your program. You can rank yourself one to five on the maturity scale.
As we’ve mapped that against Energy Excellence, we’ve determined that if you are at a three or better maturity model for Pipeline SMS, you’re good to go for API Energy Excellence. I suspect that the pipeliners are pretty far along because we use Pipeline SMS as a blueprint for this.
I think they’re in good shape. In fact, we hope, through the visibility of this program, to push more of the pipeliners toward the Pipeline SMS as their roadmap for how to do energy excellence.
Russel: It’s interesting too because there’s a lot of people out there, particularly some of the new regulatory things that are in the pipeline, that are going to become regulated pipeline operators that never really intended to be regulated pipeline operators, particularly some of these guys with big, high-pressure pipe in the gathering of the shale plays, around gas gathering in particular.
I think one of the values here is if there’s alignment between what you’re doing on the production side and the pipeline side, maybe that makes running the regulated pipe not so threatening.
Debra: That’s true.
Russel: Be interesting to see how the industry sees that going forward.
Debra: API continues to talk to PHMSA about the Pipeline Safety Management System program and standard. I think recognition by the regulatory agency is there and is another proof point for moving ahead in a management systems journey because your own regulator has put its weight behind that approach as well.
Russel: Absolutely. Listen, thank you again. It was great to have you on, great to have the conversation. You made me feel better about being a pipeliner. That’s awesome.
Debra: Thank you. I’ve enjoyed it.
Russel: I hope you enjoyed this week’s episode of the Pipeliners Podcast and our conversation with Debra. Just a reminder before you go, you should register to win our customized Pipeliners Podcast YETI tumbler. Simply visit pipelinepodcastnetwork.com/win to enter yourself in the drawing.
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Russel: If you have ideas, questions, or topics you’d be interested in, please let me know on the Contact Us page at pipelinepodcastnetwork.com or reach out to me on LinkedIn. Thanks for listening. I’ll talk to you next week.
Transcription by CastingWords