I posted this thread yesterday and the topic of Natural Gas came up so I thought that this topic should be brought to the Top of the forum as it were.
 GAO Oil and Gas Industry Report (Edited
 

Here is an article on Natural Gas. It is a year old but it has several links so folks can do their own checking up on the situation. This is posted mainly to raise the awareness of problems in the Natural Gas Industry.

Natural Gas: A Vital But Noncompliant Industry
http://www.shineon.org/y2k/pages/industry/util32.html

The writer has worked for fifteen years for National Fuel Gas. He spent seven years as a computer programmer and systems analyst working on computerized materials management, purchasing, and oil and gas accounting systems in an IBM mainframe environment. The primary languages were COBOL and CICS (IBMs teleprocessing language). Since then the writer has worked eight years as a database administrator, working with Software AGs ADABAS database, and the NATURAL programming language. His duties include software installations, maintenance and tuning, and database design work. Since 1997, he has also begun working as a database administrator with ORACLE databases.

* * * * * * * * *

NATURAL GAS AND THE YEAR 2000

Paul Slish

Natural gas is a major energy source in the U.S. Natural gas accounts for 31% of energy production and 25% of energy consumption in the U.S. More than 50% of the energy consumed by residential and commercial customers is supplied. by natural gas. Natural gas provides 41% of the energy used by U.S. industry. 27% of this production comes from offshore areas.

99% of the natural gas consumed is produced in North America. There are more than 60 million residential and commercial natural gas customers in the U.S. This totals to 175,000,000 American consumers. 53% of American homes use natural gas for a total of 59 million. In the U.S. there are 288,000 producing natural gas wells, 125 natural gas pipeline companies, and 1200 gas distribution companies. The transmission and main distribution pipelines total 1,300,000 miles. The U.S. accounts for 24% of the world's annual natural gas production. 17% of the natural gas consumed in the U.S. is used to produce electric power. This represents 11% of the electric power generated.

There are basically five segments of the industry: exploration, production, transmission, storage, and distribution. Obviously, if there is any significant disruption, even in the short run, to production, transmission, or distribution of natural gas, it would wreak havoc in the lives of residential consumers, and to the operations of most of the commercial and industrial concerns in the U.S. Any lengthy disruption to either exploration or storage (either incoming or outgoing) would also wreak havoc to the U.S. economy.

A brief history of the use of natural gas in the U.S. is found at www.natfuel.com/history.html. The five industry segments will be discussed with reference to computer systems and the year 2000. The writer is a senior systems analyst in the information services department at National Fuel Gas Company of Buffalo, NY. He is not aware of any web site or other published literature comprehensively examining the entire natural gas industry in relation to computer problems as January 1, 2000 approaches. This brief paper is only exploratory, and is certainly subject to revision and correction if more information becomes available.

PCs, networks, and servers are widely used by oil and gas exploration engineers and technicians. The potential problems with PCs as the calendar crosses over to 01/01/2000 are well documented. Failures in PCs could hinder exploration efforts. Secondly drilling sites must be chosen after initial analysis. Drilling rigs, especially offshore rigs, contain numerous microprocessor controls. Microprocessor controls are also called process logic controllers (PLCs). They can be programmable, meaning the software controlling them can be modified, or the program can be permanently written to the controller. A permanently written controller is often called an embedded chip. I will refer to them as PLCs for the remainder of this paper to reduce the verbiage. Potential problems with PLCs in the oil and gas industries after reaching January 1, 2000 are documented (click archive, then click April, 1998) OR (Shemwell, Scott M., Jerry Dake, and Bruce Friedman, "Will the Millennium Bug Give Your Operations the Flu?", "World Oil", Houston TX: Gulf Publishing Company, April 1998, Volume 219, No. 4). In brief, a short term problem with either PCs, or PLCs in drilling rigs would temporarily hinder or suspend exploration work. Any long term problem would eventually impact the supply situation of natural gas. This is a real possibility.

Once a well is drilled, and gas is found in commercially profitable quantities and sufficient pressure, the well must be put into production. Production is the second major segment of the natural gas industry. First the well must be completed. Various control mechanisms must be installed, and the well must be connected to a gathering line. The completed well may have various automated (computerized) controls associated with it. For an offshore well, the drilling platform is removed and a production platform is installed. Like a drilling platform, a production platform is equipped with a multitude of PLCs. Also there is the pipeline transporting the gas from the offshore platform to the onshore extraction or processing plant. This pipeline runs along the bottom of the gulf or sea to shore and is not easily accessible. Recall that 27% of natural gas produced comes from offshore wells. Failures in offshore production platforms would quickly impact the supply of natural gas. Here is a brief description of how gas moves from the well into the transmission system.

The raw natural gas that flows from a well must be cleaned and treated. A pipe called a gathering line carries the gas from the well to an extraction unit, which removes such impurities as dust, sulfur, and water. The gas may then flow to nearby processing plants, which remove butane, propane, natural gasoline, and other substances not needed in the fuel. (The World Book Encyclopedia, Chicago: World Book, Inc., 1988, Vol. 8, pp. 53).

Next lets review transmission and distribution.

The processed natural gas is then fed into underground, long-distance transmission pipelines, which carry it to cities and towns along their routes. Gas is sent through transmission pipelines under tremendous pressures - usually 1000 pounds per square inch (70 kilograms per square centimeter). The pressure drops along the route because of the friction of the gas against the pipe walls. It also falls when communities remove gas. Compressor Stations along the line restore high pressure and push the gas on to its farthest destination. Many lines have automatically operated stations that increase or decrease the pressure to meet the demands of various communities. Gas usually travels through pipelines at about 15 miles (24 kilometers) per hour...

Inspectors on foot and in airplanes check continually for conditions that might damage the pipelines... In addition, instruments installed along pipelines automatically report leaks and other faulty conditions.

In cities and towns, distribution lines carry the gas to consumers. There are two kinds of distribution lines - mains and individual service lines. Mains are large pipes connected to the transmission pipelines. Service lines are smaller pipes that branch out from the mains. The service lines carry the fuel sold by gas utility companies to homes, factories, restaurants, hotels, and other buildings. (Ibid. pp. 53,56).

First, the above cited material makes it clear there is considerable use of automation in the transmission and distribution of natural gas. There are both instruments (PLCs) installed along the lines, and numerous PLCs in the compressor stations. If any of these PLCs are involved in event monitoring, which some are, then they would be logging times and dates. That makes them susceptible to the millennium bug. Regulator stations decrease the pressure when gas moves from a main to a service line in the distribution system. Again date sensitive PLCs are present in many regulator stations. Also there are larger gas control centers which make extensive use of PCs, servers and networks. PCs manufactured as late as 1997 may have date related problems as January 1, 2000 is reached. What are the implications of PC failures, or reversions to 1980 or 1984 dates, in a gas control system come Jan. 1, 2000?

The gas that moves through a pipeline must be measured. It has to be measured when it enters the transmission system, and it has to be measured again each time it passes into another companys pipeline. There are gas measurement computers which obviously have to measure a volume of natural gas over a time interval. For example, they would measure something like so many thousands of cubic feet per second. Are these gas measurement computers year 2000 compliant? If some are not, then there is a major accounting problem even if the pipeline companies can still successfully move the gas. If a company cannot properly measure and bill for gas, it could either get sued in court or possibly even go bankrupt.

PLCs are real time systems currently in operation, and how will we know they will work correctly when Jan. 1, 2000 arrives? Real time systems are very difficult to test. You cant take them off-line for testing, if you need to run them 24 hours a day to maintain your gas pipeline system. There would have to be sufficient capacity on an alternate line to shut a line down for testing. Even if a line could be shut down, it is impossible to advance the date on PLCs where the software is permanently etched on the chip.

Gas storage faces basically the same issues as transmission and distribution in relation to PLCs and gas measurement computers. Measurement definitely has a date sensitivity. Remember, January 1, 2000 will be in the dead of winter, when withdrawals from storage are essential to maintaining adequate throughput in the pipelines that supply homes and businesses. At this point I have briefly reviewed the use of computers in the five major segments of the natural gas industry. A major issue must now be discussed. No particular transmission pipeline or distribution company runs its system in isolation from other pipelines. In fact there is an integrated North American natural gas production, transmission, storage and distribution system. As noted earlier there are 1,300,000 miles of transmission and main distribution pipelines in North America. Gas is moved from the southwestern U.S. to the highly populated eastern United States by about four major pipeline companies. The Trans-Canada pipeline ties in with U.S. pipeline companies in the northern United States. For example, Trans-Canada ties in with National Fuels system at Lewiston, NY. Specifically they meet at the bottom of the Niagara River halfway across.

Therefore any significant shutdown of the production system would within a few days severely impact the transmission and distribution systems. A shutdown in any of the major transmission pipelines would quickly impact the remainder of the transmission system and the distribution system. Problems with withdrawals at any significant number of storage fields in the middle of winter would have a large impact on the distribution system. With the high level of use of PCs, networks, servers, and process logic controllers in all segments of the natural gas industry, the possibility of various failures taking place once January 1, 2000 is reached is high. The millennium bug could possibly hit the natural gas production, transmission, distribution, and storage network quite hard. Why do I come to this conclusion?

As mentioned earlier there are 288,000 gas wells, 125 pipeline companies, and 1200 distribution companies in the U.S. Who is coordinating Y2K repairs among all these producers, transmitters, and distributors? There is no group or managerial body systematically doing this. The American Gas Association website recently added a page entitled "Operating and Engineering Year 2000 Issues for members." But we are just over 19 months from the deadline. It is rather late. The Interstate Natural Gas Association, and the Gas Research Institute are both conducting surveys of their members, according to Kathleen Hirning, the CIO of FERC. Surveys are very initial steps. Some of these companies may be doing very well in remediating their computer systems for Y2K compliance. Others, however, may not be. The question is,who knows? How many pipeline companies need to experience Y2K related failures, before the overall transmission system is substantially impacted? Recall that natural gas accounts for 25% of the energy consumed in the U.S. I find it astounding that as of mid 1998 there is no managerial body comprehensively measuring the progress of Y2K remediation in the nationwide natural gas industry, let alone prodding laggard companies into increased action or any action at all.

Recall also that 17% of natural gas produced is used to generate electricity. 11% of electric energy is produced in this fashion. Failures in the natural gas transmission and distribution network could heavily impact electricity generation. Conversely, the natural gas system could not be sustained for any length of time if there are long term electrical power outages. There is backup electricity generation capabilities in many instances, but it is not designed for long term usage of weeks or months. At this time, the writer cannot forecast one way or the other whether the natural gas system will perform reliably come January 1, 2000.

National Fuel Gas (NFG) of Buffalo, NY is an integrated natural gas company with annual revenues of about $1,200,000,000. NFG performed an initial analysis of the Y2K problem in 1992, and a detailed analysis and inventory in 1995. All information systems and non-information systems (process control) are in the process of remediation and testing as of this writing. All remediation and testing is scheduled to be completed by December 31, 1998. Everything is on schedule now. But what about the rest of the natural gas industry?

-- Brian (imager@home.com), May 22, 1999

Answers

Again, Brian, thanks. As I mentioned yesterday I am very concerned about natural gas. Too many weak links in a very long chain for me to be comfortable.

Many people will not think to buy electric heaters for y2k. I purchased some a couple of months ago. If the electric utilities can be kept functiong this may be a source of heat. For those in a gas-heated home it may be the only source of heat.(I have a woodstove too). I also have bought a variety of fans as a/c use may be very limited next summer. Just some things that I am doing.

-- Mike Lang (webflier@erols.com), May 22, 1999.

Thanks Brian! I'm still not clear on the issue of storage. I thought it couldn't be stored, but a recent thread about a Texas facility makes me wonder otherwise. Here in Massachusetts, the electric utilities are stockpiling what fuels they can, anything but gas. I believe some of our generation plants run solely on gas. Some percentage of natural gas comes via Boston Harbor, but these are the most dangerous of all the cargoes to enter the harbor, and I wouldn't be surprised if the Coast Guard waives them off for a while. Otherwise, we are at the end of a very long pipeline. So can anyone tell me about storage options?

On a side note, you said..."Inspectors on foot and in airplanes check continually for conditions that might damage the pipelines... In addition, instruments installed along pipelines automatically report leaks and other faulty conditions." I recall that in the west spotters looked for circling vultures. Vultures (unlike all other birds of prey) have excellent scent. Carrion scent was added to the gas line. So even if the instrumentation fails, those compliant vultures will still have a go at it and let us know where the problems are!

-- Brooks (brooksbie@hotmail.com), May 22, 1999.

* * * 19990522 Saturday

Brooks...

MichCon asserted ( 19990519 ) that their heretofore Natural Gas ( NG ) reserve underground, pressurized/"compressed" storage capacity has been ~150 Bcf ( Billion cubic feet ); current reserve storage is at ~130 Bcf. By year end 1999, they assert they will have increased this capacity AND "stockpile" to 650 Bcf as part of their Year 2000 contingency plan.

MichCon also asserted that their "typical" NG usage in the month of January is ~50 Bcf for ~1.2 million customers.

See:

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id=000qmw

Regards, Bob Mangus * * *

-- Robert Mangus (rmangus@hotmail.com), May 22, 1999.

Thanks Bob, I guess I need to do some digging with my local gas utilities.

Mike - Great ideal about the electric heaters! There is the added attraction of letting my friends think I have completely lost it! (Sort of like stocking up on frozen dinners for the big storm...)

-- Brooks (brooksbie@hotmail.com), May 22, 1999.

Brooks,

Natural gas can be stored in certain underground rock formations.

Some types of rock are permeable to gas because they have small cavities in which gas can reside. For example, the spaces between the grains of sand that make up sandstone are not entirely filled with smaller and smaller grains -- a small fraction of the volume of sandstone is empty space, into which gas (or liquids such as oil or water) can flow if the pressure is high enough to force it through the microscopic passages. Other rocks are impermeable because they have no such empty spaces.

Now, imagine an underground layer of impermeable rock on top of a layer of permeable rock. Further, imagine that over millions of years geological forces slowly bent these layers into a dome shape, like an inverted bowl. Over the course of more millions of years after the dome was shaped, water and gas gradually seeped through the permeable rock layer(s) into this dome formation. Because of their different densities, the gas would accumulate in the top part of the permeable rock layer of the dome, above the water in the lower part of the dome. This is, in fact, one of the types of rock formation in which natural gas is discovered, and from which it is produced.

Now, imagine that somewhere not too far from a city there is a similar but smaller underground dome formation. Even if it happens not to hold any natural gas, it _could_ hold gas. The water (almost all permeable rock contains salty brine water) would form a bottom seal for this "natural" gas container if one pumped in gas from a well drilled into the formation. So a gas utility company could buy gas, receive it from a pipeline, then temporarily store it in that underground rock formation. When the utility needed more gas than it could receive from the pipeline, it could reverse the flow in the well and allow the pressurized gas from the underground reservoir to flow out.

This storage reservoir could be located a considerable distance from the city being served by the utility. It's just a matter of connecting it via pipeline.

There probably aren't many suitable natural rock formations close to Boston, so that's one reason why some of your gas comes in liquified form via ship.

>Carrion scent was added to the gas line.

I presume you're referring to the mercaptan ("skunky" scent).

-- No Spam Please (No_Spam_Please@anon_ymous.com), May 23, 1999.

Pure natural gas (methane) has no odor - so the mercaptan is artificially added to alert users that a leak has occured. Like the Cl and Fl injected automatically into the drinking water, this also has to be controlled and regulated.

Many, not all, natural gas distributors have joined the Electric Power Reseach Institute (EPRI) a commercial database and industry group - to share Y2K remediation details with other EPRI members. Talking with the EPRI database rep indicates that many problems have been identified, most (within their group - he doesn't know about outsiders) have been resolved. This is good news from a previously "invisible industry" group. However - he confirms that the failures discussed as "possible" events above are very real - very definite failures that - if not remediated at the well, the process plant, the distribution network, or the distribution compressor and measurement stations - would categorically shut down that section of the system due to unmonitored safety hazards/excess pressure/loss of pressure and flow control.

Storage underground can be done - but recovery is much less efficient - thus, you "lose" money buying gas, using energy to pump it underground, lose more in storage as it seeps away and then pumping it back out again and cleaning it (again), then sending downstream to the customers. Recovery can be only 70-85% efficient - more is pumped down (if underground) than can be recovered. Above ground (liquified) storage is at least 100% effective in recovery - and if the nat gas is already in liquid form (from overseas via ships) then compression & freezing costs are eliminated.

-- Robert A. Cook, PE (Kennesaw, GA) (cook.r@csaatl.com), May 23, 1999.