THE OIL AND GAS INDUSTRY AND THE SELECTIVE AMNESIA SYNDROME

The oil and gas industry has survived through many cycles. People have learned to manage the down times while surfing through the highs. High prices drive higher costs while the industry strives to produce every incremental drop of production at any cost.

What has not changed is how we create a more sustainable, less volatile business while producing volumes more sustainably, without driving cost escalation and by producing volumes responsibly while protecting our environment.

Our society and the framework we work in, drives the cycles in our industry. In fact, these cycles continue to escalate and shorten. Higher highs, lower lows and environmental issues continue to grow.

Last week we saw something strange. Industry and Government, standing hand in hand, extolling the virtues of an industry government partnership in Alberta, that would reduce environmental costs while striving to drive market access. Marches and support for clean energy along with a world summit designed to gain agreement on reducing carbon. What happened and what changed?

I would suggest to you that this is the beginning of looking at the problem from a different angle. It seems the industry understood it cannot continue on and be successful in driving its agenda. The industry leaders looked in the mirror and realized for them to be successful they needed to change.

The definition of insanity: “doing the same thing and expecting a different result”. This is the adage we need to embrace for renewal and revitalization. It starts with seeing things differently and this drives a different result.

As I think about this problem and how it affects costs, productivity and efficiency in our industry I see that we continue to look at the problems in the same way. We believe our solution lies in the people that run the industry, but the solution lies in the technologies, the processes and the people that help us find and discover the oil and gas we use in our every day lives. Our industry is seen as being independent, cowboys, and extolling the virtues of individuals. Our industry lacks the ability to collaborate, internally with different groups or externally between partners or government agencies.

In order for us to renew and revitalize our industry we need to see our cost problems differently. I would suggest that many of these problems lie in the way we interact or how we don’t interact. The world of digitization, collaboration and workflows allows us to maintain the creativity of the individual but puts the power of information, standardization and knowledge into the realm of the company. This power can allow the industry to reduce costs, improve environmental management and help people collaborate and work more effectively. Leaders must attempt to attain sustainable change, companies can’t use their human capital as “strategic” cost reduction solutions, suppliers can’t be squeezed into bankruptcy, it is time leaders LEAD and simply stop the cycle. Band-Aids are only a temporary remedy and will not deal with the inefficiencies that plague the industry. I hope we don’t suffer selective amnesia when the oil price rises again.