Operating imperatives for the refining industry

Remarks by Sherman J. Glass, Jr.
President, ExxonMobil Refining & Supply Company
National Petrochemical & Refiners Association 2009 National Safety Conference
Keynote Address
May 12, 2009

 

It’s certainly a privilege to be here at NPRA's National Safety Conference — an annual meeting that continues as an excellent forum to promote safety and reliability across our industry. 

For me, it's also a great chance to see so many of my friends from our industry.  And, as someone whose heritage goes back to when Texas was a country, it’s a real treat to be here in Dallas. I’d like to thank Charlie Drevna and the NPRA for the opportunity to talk to you today about a subject that is extremely important to me:  the safety of our industry.  I'm also proud to be invited here by the NPRA — an organization nearly as old as the oil business itself. 

Founded one year after Spindletop was spudded in, in 1901, the NPRA is an organization that not only helps our industry grow and prosper, it also effectively advocates on our behalf in Washington and across this great nation. 

I recognize that each of our companies and our industry as a whole has many sound safety programs and processes in place to protect our people and facilities:  I know that together, we are always striving to improve in this critical area. 

My goal this morning is to share some insights on safety from ExxonMobil's perspective that I hope you will find useful and thought-provoking as you participate in the many excellent workshops and sessions the NPRA has planned over the next two days.

I'm also pleased to note that ExxonMobil has over forty people here from across our Corporation — about 10 percent of this year's attendees.  That's how important we believe this meeting is.

I believe that, as an industry, we must continue to raise the bar and deliver continued improvements in our safety performance.  While we have a good track record, we are still not where we need to be, and regrettably, incidents still happen.

However, by leveraging forums like this NPRA conference to increase our knowledge and share best practices, together we can keep our industry moving forward, toward the shared goal of zero incidents.  Thus the title of my talk today:  "Operating imperatives for the refining industry".  In my view there are four key safety goals we must work to achieve every day. 

  • First:  To protect our people;
  • Second:  To protect the facilities our shareholders entrust to our care;
  • Third:  To protect the environment, and;
  • Finally:  To protect the communities where we work and live. 

I know that each of you knows these imperatives — deliverables we must achieve every day in order to both earn and maintain our "license to operate."  I'm sure you'll agree that this begins with keeping safety as a core value in everything we do. 

Protect our people
Let me begin with my first imperative — to protect our people.  As a corporation, our safety efforts are driven by the simple but clear objective — Nobody Gets Hurt — a goal for employees and contractors alike. 

While ExxonMobil is a leader in the industry with very low incident rates for work-related injuries and illnesses, we will not be satisfied until every employee and contractor around the world leaves our workplace at the end of the day, just as safe and sound as when they reported to work. 

In this regard we take a very systematic approach to hazard recognition, safe work planning, field verification and measurement of compliance against our safety standards. 

For example, many years ago we established mandatory practices on high-potential-consequence activities such as working at heights, opening of process equipment, working on high voltage systems and confined space entry, just to name a few. In all cases, we set clear expectations and importantly provide a detailed, step-by-step approach to mitigate the risks that each of these activities present.

And because we care about our people, we take a zero tolerance attitude towards non-compliance with these mandatory requirements. We simply can't accept any less when people's lives could potentially be at risk.

Comprehensive, effective worker training is also a key component of our approach to personnel safety.  I suspect you are experiencing a significant turn-over in your workforce as many experienced workers in our industry are approaching retirement age, just as we are.  Today many new people are entering our workforce.  Now more than ever we must carefully select and thoroughly train — on an ongoing basis — each worker to ensure individual and team knowledge and capabilities are maintained.

In this regard we are capitalizing on new technologies and techniques to enhance training delivery and improve knowledge transfer.  Our efforts include extensive computer based training as well as an increasing use of simulators; all complemented by rigorous testing and verification of each worker's understanding and capabilities. 

While at ExxonMobil we maintain a focus on safety processes and systems, we frequently say, it's capturing the "hearts and minds" of our people that makes the real difference in driving toward zero incidents. 

I'm pleased to note that Dr. Geller from Virginia Tech will speak later this morning about developing an "actively caring culture" — to help promote that sixth sense so critical to worker safety awareness.  Just last year, we established a global Center of Excellence to champion the application of human factor technologies and support our vision of "Nobody Gets Hurt." 

I'm pleased to report that, since 2000, at ExxonMobil we have reduced our corporate-wide lost-time incident rate by over 12 percent per year.  But we're still not satisfied and we're working hard to learn from every incident, ours and others, so we can achieve our vision of an incident-free workplace.

We are also proud to work with other operators and contractors that support our industry on local and regional safety initiatives that raise the general safety awareness and knowledge of every worker — and we are also pleased that the unions at our facilities work in close collaboration with us to further improve the safety of every site.

As we all know, a safe work environment is a more productive one. 

Protect our facilities
Now let me move to my second imperative — to protect our facilities.   

Wherever ExxonMobil operates, we work tirelessly to maintain the integrity of our operations.  This begins with implementing and striving to improve upon sound industry standards, such as those we work together to establish through the API and the NPRA.  But it goes well beyond that. 

For example, we continuously conduct comprehensive risk assessments for all of our operations.  In fact, our formal risk discovery efforts extend well beyond the traditional Process Hazard Analysis or "HAZOP."  

For instance, we have found through analysis of our incidents and those of others, problems occur more often during transient operations such as unit startups and shutdowns -- not dissimilar to what pilots encounter during take-offs and landings. 

We have learned that while we operate in the start-up and shutdown mode less than 5% of the time, almost 40% of incidents occur during these "take-off and landing" periods.   Accordingly we are now conducting transient HAZOPs to proactively identify the unique risks that transient operations can present.

We are also attempting to quantify the level of risks for each scenario or potential incident.  We have found that if you quantify risks, the "80/20" rule will apply — meaning that about 80 per cent of total discovered risks will likely be concentrated in about 20 per cent of identified incident scenarios.  This quantification enables our operating units to better prioritize and accelerate mitigation steps, resulting in a higher level of total risk reduction.

To help address risks, a few years ago we adopted a "game-changing" process based on the "Incident Risk Analysis Tool," or IRAT. 

This tool scores the ultimate potential consequence of an incident as well as measures the layers of protection in place to prevent such a scenario from occurring.  By using IRAT we force a disciplined review of "what-could-have-happened."   This also improves our operators' recognition of risks, and enhances the effectiveness of the mitigation steps we take.  We've found that these risk analysis activities also reinforce a safety-focused culture, and encourage a deeper commitment to risk mitigation. 

Just as in personnel safety, human factors are critical to sound reliability. Operator care, operating inside safe operating envelopes, timely and thorough inspections and a detailed maintenance plan for each piece of equipment are just a few examples of the care and teamwork required to maximize up-time and more importantly minimize unnecessary distractions and risks. 

We are now complementing these human factor-based efforts with new operating technologies.  For example we're expanding our use of an "Abnormal Event Detection" tool for console operators.  This technology alerts an operator when a unit begins to "drift" from normal operations. 

As a result, operators can catch a potential problem before it develops and take pre-emptive, corrective action to prevent an upset.

I'm sure you'll agree that sound operations integrity and reliability not only protects our people and our facilities -- it is also pivotal in protecting the environment — my third operating imperative.

Protect the environment
Around the world, our industry strives to conduct business in a manner compatible with both the environmental and economic needs of the communities where we operate.

This is a dual challenge — supplying energy in the forms essential for economic growth, while at the same time protecting the environment.

At ExxonMobil, our environmental management processes are guided by another three word over-arching objective — Protect Tomorrow. Today. This summarizes our company’s expectation to be a leader in environmental performance.

One of the tools we use in measuring environmental performance is a detailed site-by-site inventory of emissions.  This enables us to delineate site-specific priorities for improvement and build an Environmental Business Plan, which integrates environmental improvement goals into overall business plans for each operating facility.

We are also relentless pursuers of energy efficiency. 

In this regard, our Global Energy Management System is one of our most important tools.  This initiative helps plants identify potential energy efficiencies and enables them to use energy more wisely with the added benefit of reducing emissions, including greenhouse gasses. 

ExxonMobil developed this energy efficiency system by tapping knowledge from both operators and engineers around the globe. 

We closely examined the most energy intensive processes, as well as the fundamentals of furnace and boiler operation, insulation, utility systems and computer control.   We then documented our "best practices" in each area and applied that knowledge to our worldwide operations.

Each day, as part of this initiative, we track more than 12,000 energy variables. This effort has both economic and environmental benefits. 

Since 2000, we have identified opportunities to improve energy efficiency by 15 to 20 percent at our refineries and chemical plants worldwide and have already captured about 60 percent of these savings.

To enhance our efforts in energy conservation, we also have a focused effort on cogeneration.  In addition to delivering cost-savings by generating much of our own electricity, we also dramatically lower the cost of steam, also needed to manufacture our products. 

Cogeneration provides significant environmental benefits because it uses less fuel and produces fewer greenhouse gases than conventional power generation. ExxonMobil now has interests in about 4,600 megawatts of cogeneration capacity at more than 30 sites around the world.  In other words, these operations have the capacity to produce enough electricity to supply the needs of more than 2 million U.S. homes. 

Last year, we commissioned a new 125 megawatt cogeneration unit at our Antwerp refinery.  This new plant will reduce Belgium’s carbon dioxide emissions by approximately 200,000 metric tons per year. 

Looking ahead, in Singapore, we are now expanding our chemicals operation to become that nation's largest petrochemical plant, and cogeneration is expected to meet 100 per cent of that plant's electricity needs.

Cogeneration is an excellent example of how business needs and the marketplace encourage investments to improve efficiency, reduce costs, and achieve significant environmental benefits. 

Since 2004, we have invested more than $1.5 billion in activities to increase energy efficiency and reduce greenhouse gas emissions.  In the next few years, we plan on spending at least half a billion more on additional energy efficiency initiatives. 

Further, we are committed to the prevention of spills from our operations.  Last year, corporate-wide the number of spills greater than one barrel was down over 60 percent versus 2001. 

I'm pleased to report that in 2008 we achieved zero spills from ExxonMobil-operated and long-term chartered vessels.  Our industry-leading spill performance is the result of effective operations integrity, ongoing equipment upgrades, and comprehensive inspection programs.

Protect the Community
Turning to my fourth and last imperative: to protect the community. 

Wherever we operate, we strive to make a positive contribution to the livelihood and well-being of the local community.  This takes many forms — from building citizen advisory panels, to supporting local hiring; using local contractors and vendors as well as supporting philanthropic activities.

While we work very hard to avoid incidents, we work equally hard to be ready to effectively respond to one through comprehensive emergency preparedness — something we work to strengthen every day. 

Key to our ER preparedness is maintaining strong relationships with government agencies, law enforcement, state and county organizations and local communities. 

We have detailed plans for many different types of emergencies and drill them frequently — at the plant level, within a region and even globally.  In addition to hundreds of smaller exercises; we hold two worldwide drills every year, engaging a wide network across our global organization.  Many of our drills are coordinated with neighboring plants, local responders and officials and community leaders.  We also use these drills to learn from and consult with our neighbors.

In recent years, we have increased emphasis on Business Continuity Planning, to ensure that as a responsible member of the community we can sustain the supply of our products under a variety of scenarios that may include the temporary loss of people, facilities, utilities or supplies.

Our Emergency Response planning and drills enable us to react more nimbly to events, such as last year's Hurricanes Gustav and Ike, and make us better prepared to deal with other potential crises — such as the very topical Swine Flu. 

We do all of these things because we want to be a good neighbor — neighbors who are responsible and help make the community a better place to live.  Because we don’t just work in communities where our facilities are located — many of us live there, too.

OIMS
Now a final but very important point.  That is, efforts to protect our people, protect our facilities, protect the environment and protect the communities where we work and live are not stand-alone; but very much inextricably linked; and improvements in one area clearly benefit the others.  At ExxonMobil, we have an overarching program to help effectively manage all of these linked activities — it is called our Operations Integrity Management System, or OIMS. OIMS is the cornerstone of our commitment to managing risks and achieving performance excellence.  We believe that finding risks before they find us is critical to delivering safe, reliable operations.

OIMS outlines expectations and requirements in several key performance areas including leadership, risk assessments, emergency preparedness and worker training, just to name a few.   OIMS:

  • reinforces our belief that all safety, health and environmental incidents are preventable, and
  • promotes a work environment where each of us accept personal responsibility for our own safety, that of our co-workers, and where everyone is willing to proactively intervene to ensure the safety and well-being of others.

Periodically, each of our operating units' OIMS performance is quantitatively assessed and measured against our OIMS requirements.  Importantly, these results are stewarded to the highest levels of the corporation.  Continuous improvement in OIMS effectiveness is also an ongoing requirement.

Conclusion
In closing, what was true 100 years ago remains true today:  When safety is well-managed, good things follow. 

The relentless pursuit of an incident-free workplace is not only the right thing to do — it is paramount to our long-term success.

So let me go back to my four operating imperatives for our industry:  we must protect people, protect the facilities entrusted to our care, protect the environment, and protect the communities where we work and live.  While I've tried to address each of these items separately, as I said before, success in these is inextricably linked. 

The time we spend here over the next few days and beyond, sharing our approaches to safety and our best practices, will benefit both our companies individually and our industry at large.  Our efforts to manage risks under constantly changing circumstances will enable our industry to make continued contributions to economic growth and a better future for everyone. 

I hope that each of you will find my remarks useful as you move into your workshop discussions over the next two days, and when back at your work place.

Thank you very much for your kind attention and let me wish you a productive conference, and perhaps more importantly, a safe and prosperous future.