Energy is an essential service: we need it to keep our houses warm, power our lights and appliances, and maintain our transportation networks. As Canadians hunker down to meet the COVID-19 pandemic challenge, our oil and natural gas companies are implementing plans to keep workers and the public safe and healthy.
Stuart Carver is president of Sandhurst Consulting which provides emergency management and business continuity services to Canadian companies. He chats with Energy Examined host Tonya Zelinsky about how the oil and natural gas industry is handling this unprecedented situation, as well as the need to go further--given the potential for additional threats including wildfires, floods and cyber attacks.
Tonya: Welcome to another edition of Energy Examined, the podcast that talks about issues facing Canada's oil and natural gas industry with energy insiders in the know. I'm your host, Tonya Zelinsky. Today's podcast is being recorded in my kitchen as I practice social distancing and self- isolating while we all deal with the reality of the COVID-19 pandemic. I'm joined on the phone by Stuart Carver, president of Sandhurst Consulting, to help shed a little perspective on what's going on right now with how industry is dealing with the coronavirus. Thanks for joining me today, Stuart.
Stuart: Thank you. Good to be here.
Tonya: Well, first off, can you explain a little bit about what Sandhurst does and what type of assistance you provide upstream oil and natural gas companies?
Stuart: Sure. So, Sandhurst basically provides services in the emergency management and business continuity areas with everything from helping draft and develop response plans and business continuity plans through to providing training and then conducting the regulatory required exercises to basically confirm that companies are ready to respond to any kind of incident.
Tonya: Well, you must be pretty busy right now helping companies right now. So maybe can you talk a little bit about that? What are companies doing right now to protect the health and safety of their employees as we deal with COVID-19?
Stuart: Sure. As you can probably imagine, the training and exercise pieces has dropped off given the current guidelines from all levels of government. But what we have seen is an uptick in putting plans and business -- in particular, business continuity -- plans in place to deal with the current environment. So, we're working with a number of oil and gas companies to ensure that those plans are in place. And I have to say I mean, as always, some are doing better than others. But as a general overview, I think that the oil and gas companies that we work with have responded pretty well. And the direct answer to your question: health and safety is very clearly at the top of everybody's agenda. And given that most companies follow what's called the incident command system, which is just basically a set of processes and procedures and a common language for dealing with any kind of emergency incidents, it's stressed in every level of that training that life safety is the top priority. And certainly, in our experience, companies have been, very much have that as their priority in this current situation.
Tonya: So, usually there is some sort of a set of plans that exist. But you mentioned something a little earlier about the level with which companies are responding. And is this more difficult right now for smaller companies because perhaps they don't have the money in place to deal with the response or it really just can depend, it doesn't matter what size you are?
Stuart: Yeah, I think I think it depends. I mean, I equate the planning, the plans that you have in place and the training that you've done on a regular basis is it's like an insurance policy. So, you know, if you go on vacation, you have to decide whether to take travel insurance and how much travel insurance to take. And it really comes down to how much risk you're willing to take. So, it's the same with emergency response planning and business continuity planning. Some companies have taken more risk than others. Those that put the -- and we have a wide range in the clients that we're dealing with, some of them have very comprehensive plans in place around what they would do if the business is interrupted. They've done all their analysis of key personnel, key assets, and therefore are in a pretty good place to respond to this, even though, you know, a pandemic is perhaps a bit of an outlier on the range of emergencies and incidents that you could face. Those that didn't prepare have had a harder time kind of scrambling to get themselves in a better position. So, I guess my hope is that after this, some of those companies in the second camp will use this as a warning to take that planning a little bit more, will put a little bit higher priority on that planning for whatever instant comes next, because there will very clearly be another one, whether it's a pandemic or not, another one will be coming.
Tonya: Oh, God, I hope not. Not anytime too soon anyways.
Stuart: Unfortunately. Yeah, that's, that's more likely than not.
Tonya: Well, I know that you've been busy the past few weeks working with different companies. So how - how should they be approaching this right now? I mean, do they just deal with the immediate today, what's going on? Or do they need to really be taking a longer-term outlook and how they deal with this crisis?
Stuart: So, I think we all know the answer is both. Clearly there's an immediate crisis that needs to be dealt with, and I think of the companies we're dealing with, most are now at a kind of steady state. They've identified those key personnel. They've put processes in place to track where their personnel are and what they're doing. They've put contingency plans in place that if you have a certain amount of people are sick in a certain area, how do they keep key facilities running, etc., etc. So, I think a lot of people are now at that point. The trick now is to plan for two things. A: what if something else happens and we're entering what is traditionally our busiest part of the year for other reasons, we're just about to enter wildfire season and flood seasons. Different parts of the country are affected in different ways. But again, those are not going to go away. So, companies now really need to look at, okay, well, what happens if we have a wildfire? What happens if we have a flood or what happens if we have a spill? They can still happen as well. And how do we have the capacity to respond to those and how do we respond with some of the limitations that we currently have in place? I mean, how do you practice social distancing when you are trying to respond to a spill, for example, where you have a large number of people in a confined space? So, there's that piece and then the recovery part.
I mean, at some point this will go away. The jury is out on how long this will last, but it will, it will end at some point. And those companies that have planned for that recovery and resumption of normal operations will be far better placed than those that leave it until it's obvious that that's coming. And when you dig into that, there's a whole range of issues that need to be thought about now so that you can make that transition from current state back to normal state.
Tonya: My God, you really are kind of dealing with the thought of the four horsemen of the apocalypse upon us here. You mentioned things like fire and flooding. I don't know if that's really been on the public's mind right now because we've been dealing with the pandemic. But you're absolutely right. This is that time of year that we start to see these things happen. So, yeah, I know nobody obviously wants to deal with the coronavirus right now. It's something that nobody wants to see happening but has this provided that opportunity for companies now to really start looking at an even bigger picture of what are the possibilities.
Stuart: Yeah, I think you're right, people - I mean, it has become all-consuming to the whole population, I think, you know, everyone tunes in at 3:30 to see the number of cases in Alberta particularly. I'm sure all the other provinces are doing the same. And as you say, it's very easy to forget that Mother Nature is carrying on as normal, and certainly the reports I've read is that flooding season, in particular in Ontario, is going to be much higher than average. And if you just look at the last 12 months on the wildfire side, I would say that the chances of wildfires are probably higher this season than they have been previously. So, yeah, it's gonna be difficult. But that's why I say that, you know, people need to start thinking about these things now and how, how they are going to respond.
Tonya: It sort-of forces the issue.
Stuart: Yeah, absolutely.
Tonya: Well, you spoke about social distancing before and dealing with that. And one of the things obviously our industry is known for are work camps, offshore rigs and so forth. How do companies deal with that? How are they working with or assisting with their employees who might be in camps, who might be offshore and that threat of a health crisis?
Stuart: Yeah. So, this is a real dichotomy because for most of the time, the camps are actually a pretty safe place to be. Usually they're quite isolated. You've got a known set of people in one place. But of course, that completely changes every time you do a changeover because you're bringing people in from all over the country and suddenly the risk is exponentially higher.
So, I would say of all - I mean, once people have secured their critical assets and how they're going to keep them running, I would say dealing with the camps is probably the next thing on most people's priority list, because as you can imagine, if there was an infection out at a camp, it's going to spread really, really quickly. And having plans in place on how to deal with that are pretty important. So, without going into huge detail, I mean, extending the shifts so people are there longer. If the highest risk is the changeover, the longer you can go about doing that. So certainly, some people are extending from 14 days up to as high as 40 days I've seen. But of course, that comes with family mental health issues, I mean, how long can someone be away? People are worried about their families at home. So, there's a balance to be struck there. The other thing is clearly really rigorous cleaning regimes and also much higher levels of screening as people enter the camp on each shift rotation. But the real issue is, is and unfortunately, statistically it's bound to happen at some point is, when the outbreak happens, how do we deal with it? How do you self-isolate a large number of people in the same place? How do you - or do you send them somewhere else and then a host of issues for that. So, there's a there's a lot of, there's a lot of detailed planning that needs to go into that particular scenario.
Tonya: Well, I mean, we've never seen anything like this before, not in our lifetimes. That's for sure. So, you're talking about in the camps and the offshore and so forth. What are the biggest issues that the industry is facing right now, at least from your perspective and your area of expertise?
Stuart: Well, you’ve got the, I mean, talk about bad timing. You've got the double whammy, I guess, of COVID-19 and then also the collapse in the oil prices. So, people are grappling with both of those things. As I say, everyone is putting health and safety first. But particularly for the oil and gas industry, you've got this issue of much lower prices as well. I think the biggest issue people are going to face is the sustainment of people. If this drags on, a lot of companies were pretty lean already. You know, it's not unusual for there to only be one or two operators for a facility or very sparse number of operators for lengths of pipeline. So, people have already got about as efficient as they can. So how do you sustain that? What if you do suddenly have a significant number of individuals who are either sick or self-isolating? How do you cover those? How do you cover those gaps? I would say that's probably the number one, the number one issue at the moment.
Tonya: Well, we were kind of hit with a double whammy with coronavirus creeping up on us and then the market crashed and then all of a sudden, we were in that pandemic crisis. So, I can imagine that, you know, it's been a tough time not just for industry, of course, for all Canadians. You know, one of the things that we're seeing more and on the news is that there's been a lot of scams out there. And I'm wondering in this situation, is there, I guess, are there concerns about cyber security? Are we particularly vulnerable right now?
Stuart: Yes, I think we are. I think we're about as vulnerable as we've ever been for, for two reasons. Firstly, a lot of companies again have enacted a work from home policy. So, you've got a large number of employees working from home where networks are probably not as secure as they were. This unfortunately gives more opportunities to get into those networks. So, making sure that individuals working from home are fully aware of the risks is certainly very important. We know, as I heard from someone only yesterday, that, for example, the health sector is currently receiving about four times the normal level of cyber-attacks.
Tonya: The health sector? Okay.
Stuart: Yeah, some pretty sick individuals out there, clearly. But yeah, you would think. But yes, unfortunately, that's the case. So, from two sides there: the individual - the spreading out of individuals working from home and for whatever reason, people trying to take advantage of the current situation. I'm sure everyone's seen the recent scams that are going around as well, which are preying on people's uncertainty. I mean, there's a lot of people quite worried about jobs, about money. And unfortunately, this makes the scammers’ job easier to, you know, send an email saying, 'oh, the government wants to give you your $2,000.' People have heard about that on the radio. And then, oh, if they click a link, which if they think is going to take them to the $2,000, then that might be all that's needed for a scam. That's why they get at them or to get into their organization.
Tonya: So, this isn't something obviously that's just facing the, the energy industry. It's facing all Canadians, all sectors, everyone.
Stuart: Oh, absolutely. Absolutely.
Tonya: Is there anything more we can be doing? And maybe from that industry perspective, they can be doing to combat that at this time? Or is it just - everybody remain vigilant. Watch what you're sending out.
Stuart: Yeah, I think its education. I mean, this is obviously, as you mentioned earlier, this is, of all the things you can plan for, this is probably quite a long way down the list for most organizations. I mean, clearly, people will focus on the regulatory required responses, those spills, et cetera. Pandemics are not something that most people have ever had to deal with. So all of these side issues are things that people are grappling with in real time, and I have to say, most people are doing an amazing job at it given that background that it is brand new and way outside most people's comfort zones. But yeah, I think on the cyber security side, it's really about education. I mean, there's certain things that companies could do to provide secure networks and equipment for critical people. So, for example, I know people working in finance. I would say, you know, you'd need to make sure that they have the correct hardware and software to operate from home if that's what you're doing. But for everybody else, it's education. I know again, quite a few of our clients have set up like daily communication with employees. And one of the things they will stress is, you know, to be vigilant on the cyber security side.
Tonya: Well, I mean, as you said earlier as well, eventually this will end. And when things start to calm down, do you think that the oil and natural gas industry will just return to a business as usual? Or are we facing some new realities, looking long-term - some differences to how they do business going forward?
Stuart: I don't think it's going to return to normal. It never does after these incidents. And we can all get very depressed about the whole thing. But looking on the bright side, what normally happens is a whole bunch of things change for the better. So, it forces innovation, it forces people to do things that perhaps there was no incentive to do before. So, I don't think it will be business as normal. I think it will -- the optimist in me says that when it does bounce back, it will bounce back quite quickly. But I don't think it'll go back to the way it was. So, for example, I mean, a lot of companies have talked about working from home but have never really tried it. Now they've been forced to try it and maybe there is scope for more of that in the future. I mean, it would reduce costs. It may suit a large number of employees more. So maybe that's one area that people will be looking at as maybe something to adopt going forward. Using technology, I mean, we've seen the setting up of virtual incident command posts and ways of communicating within teams. All of these things that, you know, people have been forced to try. I think a lot of this will be adopted going forward. So, I think there'll be a lot of good things that come out of this as well, although it may not seem like that at the time.
Tonya: We're doing a podcast from my kitchen and what I can imagine is your home, so I think anything is possible at this point. Well thank you so much for joining me, Stuart. I really do appreciate you taking the time to give a little perspective on what's going on right now to just help people understand how industry is trying to deal with this and work with its people right now. It's a very confusing time and I'm sure there's a ton of questions that the public has, but hopefully we've answered a few of them today.
Stuart: Great. And thanks very much.
Tonya: Thank you.
Stuart: Best wishes to everyone out there. Stay safe and we will get through this at some point.
Tonya: Those are excellent words to end that with. I agree. Thank you so much. And everyone, stay happy, healthy and safe.