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Computer-Aided Lean Management

by Roger Anderson, Albert Boulanger, John Johnson, and Arthur Kressner
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September 12th, 2010
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By Roger Anderson, Columbia University

The safety of natural gas transmission takes the forefront this month with two more Energy Industry explosions that should not have happened.  First, a Mariner Energy gas production facility exploded in Vermilion Block 380 of offshore Louisiana. Luckily, there was no loss of life this time, although all personnel aboard had to abandon ship. Second, a horrific explosion in a 30 inch gas transmission line in San Bruno, CA, has killed 7, with 6 still missing.  The latter were not oil field workers who knew of the dangers like those at the BP and Mariner Energy sites in the Gulf of Mexico (GOM), but they were homeowners who likely did not even know the pipeline was there.  As with  the terrible BP Blowout at Macondo in April, 2010, the responsibility for which I will return at the end of this blog, these new explosions should not have happened in a Computer-Aided Lean Management world.

Let’s take the Mariner Energy explosion first. The Mariner gas production facility is nothing like the Deepwater Horizon blowout of BP and Transocean fame.  It is a natural gas cleaning and pipeline injection facility that collects gas from many wells in the area, strips water and contaminants from the gas, and injects it into two pipelines headed for onshore Louisiana, and eventually consumers in Northeastern America.  The problem with this facility is that it had a troubled safety record for many years before the explosion.  There were several fires and near misses at the site over the previous ten years.  Only lax oversight by the Minerals Management Service and a corporate culture weak on fixing safety issues would have allowed the problems to fester to such an extent.  A Lean company would have realized the risks of future problems and paid for life-of-asset fixes even though such would have cost near term profits. The only good news is that in April, 2010, Mariner  Energy announced the sale of their company to the Apache Corporation for $2.7 billion.  This is the same Apache that has bought many older BP production facilities in the GOM after the Macondo blowout.  To my eyes, Vermilion 380 looks like a problem that Mariner wanted to pass along to Apache rather than fix for the long term safety of the asset.  Apache, in turn, has an excellent track record of buying such older, run down facilities at bargain prices,  then fixing their problems regardless of the cost, and thereby enjoying many years of future profits from the additional short term expenses…. a fundamental Lean Management principal.

Now to the California explosion, which registered as a magnitude 1.1 earthquake on the California state seismometers of the United States Geological Survey.  The problem there was that the owner of the pipeline, Pacific Gas and Electric (PG&E), had been searching for a leak, smelled repeatedly by residents, for the last month. Smell detection is a technology that Con Edison in New York City (NYC) engaged Brookhaven National Laboratory to help with many years ago… Because of that effort, there are now commercial sniffers, that can now track down such a leak.   Sharing of Best Practices is another important virtue of Lean Management.

Finally, we return to the BP oil spill and their internal report released on September 8, 2010, which first was announced as from company employees fire-walled from internal influence, but then turns out it was vetted by their lawyers before release.  There were many problem that were “left unsaid” as the Washington Post reports at http://www.washingtonpost.com/wp-dyn/content/article/2010/09/12/AR2010091200037.html?hpid=moreheadlines .

The better-example from Lean Management would be how the Citicorp building construction company in NYC handled a structural flaw in their new building, strangely enough.  The building chief engineer detected a harmonic wobbling of the building as soon as it was occupied that could have caused catastrophic failure many years in the future.  He did not keep silent, however, but reported the problem immediately, and at great cost, the Citicorp building was strengthened with additional horizontal braces… early in the life of the facility.

Accepting blame for design flaws and weaknesses in new inventions is a critical requirement for Lean Management, and is in fact a reason for the “Computer-Aided” aspect of our addition to the well known technology of Lean Management.  Computers cannot keep quiet about problems that show up after the construction of newly design infrastructure … think DATA on “Star Trek: The Next Generation”.  Seems like we need a DATA for the Energy Industry at the moment.

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