Red Cavaney to Reinvent Petroleum Group

Red Cavaney to Reinvent Petroleum Group
April 1, 1998



Speaking at the Ninth Annual Petro-Safe Conference in Houston on January 28, newly installed American Petroleum Institute President and CEO Red Cavaney gave an impassioned plea for the oil and gas industry to “apply some of our world-renowned ingenuity at trying to facilitate the transition to a new environmental paradigm for achieving the environmental, health, and safety goals we all seek.”

The blueprint for success, said Cavaney, includes building a bigger team, one including third-party organizations--some of whom may have been opponents in the past--who are willing to explore new, innovative approaches to solving environmental problems.

Faced with an overwhelming constant of continual change, the oil and gas industry is hamstrung with the complexity of doing business in the face of today’s legislative and regulatory environment, plagued by overlapping, even contradictory, and confusing local, state, federal, and international regulatory requirements. Add to this mix a recurring shortage of technical manpower and expertise that has stretched companies to the limits, and it becomes even more difficult for industry to operate while the public is blind to the health and safety and environmental improvements of the past few years.

As part of its effort to respond to the rock-solid public consensus that protecting the environment and public health is of the utmost importance in our society, API in 1990 created Strategies for Today’s Environmental Partnership (STEP). That partnership approach to handling environmental and health and safety problems is a key element in sustaining the petroleum industry’s environmental and economic progress, Cavaney explained. He went on to posit three concrete principals, all based on the partnership approach, for ensuring that environmental progress can come without killing the goose that laid the golden egg.

Paramount to ongoing success is taking a more holistic approach to the subject of environmental protection: thinking, and acting, outside the box of command-and-control.

Another key is ensuring that management systems and teamwork prevail over a strict enforcement mentality. Under the existing system, he noted, the petroleum and other industries have been in the habit of looking at “regulatory compliance” as the overriding theme in approaching environmental concerns. In such a framework, legal and financial implications have prevented a more fruitful discussion of concerns and solutions.

The new paradigm involves integrating environmental, health, and safety initiatives into the evolving business operations of individual companies. Where every employee shares responsibility for designing and implementing business operations that meet EH&S goals, there is a much better chance of achieving continuous improvement in performance while simultaneously being as cost-efficient as possible.

That approach was the model for the Safety and Environmental Management Program (SEMP) for Outer Continental Shelf operations, launched in 1991 as a joint project of API and the U.S. Minerals Management Service. Developed by industry personnel familiar with offshore operations, SEMP provides companies with a blueprint of proven strategies and methods for addressing hazards associated with all aspects of offshore operations. Companies integrate these with their own health and safety and environmental programs, then regularly conduct reviews, audits, and upgrades to improve performance. While the program is voluntary, a recent survey showed that 013 companies accounting for 99.9 percent of all OCS production are SEMP participants.

The third principle, and one of the tenets of API’s STEP program, is the need to build community dialogue and create partnerships. Individual companies have already become proficient at this: API member companies listed over 300 partnership programs in a survey conducted in 1995. Such programs extend beyond the boundaries of the United States, but too many Americans know far too little about the industry’s goodwill programs or the efforts the oil and gas industry is making to combine economic success with environmental sensitivity. To address that lack of information, noted Cavaney, API plans to step up its public education outreach programs.



Reprinted from the January 28, 1998 issue of EI News, a publication of Duggan Flanakin dba Environmental Insider.