How the Industry Has Responded to the Coronavirus
The global coronavirus pandemic has created unprecedented conditions impacting every aspect of life. Social distancing and stay-at-home recommendations have become a new normal. While essential workers like healthcare providers, first responders and food-chain workers continue to work on the front lines, most everyone else has had to adapt to the challenges of working from home.
Among those essential workers are utility and critical infrastructure technicians, including those in the oil and gas pipeline industry, whose duties ensure that people have the energy needed to maintain their livelihoods and keep the economy moving forward.
As office workers switched to working remotely, control room technicians, maintenance workers, construction contractors and manufacturers have continued to report to work, adapting to social distancing requirements and donning personal protective equipment (PPE) to keep themselves safe and healthy.
At the same time as the fears of COVID-19 were spreading, causing the global economy to contract, there was a feud brewing between Russia and Saudi Arabia regarding the production of oil. As a result, commodity prices declined rapidly, bottoming out on April 20, when oil prices dipped into negative territory. Oil prices have rebounded slightly to about $30 per barrel, but a volatile market has added to the challenges in the pipeline industry.
The American Petroleum Institute (API) reported on April 16 that U.S. petroleum demand declined to 19.4 million barrels per day (bpd) in March, which was a 4.6 percent decrease from February. The Canadian Association of Petroleum Producers (CAPP) announced the loss of between $6 billion to $8 billion of investment in the Canadian energy sector, during this period.
As a result, U.S. crude oil production dropped by about 900,000 bpd, while Canadian producers were looking to cut about 1 million bpd in production.
As first quarter reports began rolling in, many pipeline operators and utility companies have recorded significant losses and announced spending cuts.
Even before reporting a $2.8 billion loss on May 5 compared to the first quarter last year, Plains All American announced plans in early April to cut spending by about 33 percent, with $750 million in cost cutting measures, in addition to selling off $165 million in assets.
Kinder Morgan Inc. reported a loss of $306 million on April 22 and announced plans to reduce expenses by more than $100 million and cut its expansion capital outlook for 2020 by approximately $700 million, or almost 30 percent.
NiSource Inc. reported a loss of $280.2 million on May 6, and similarly announced actions to reduce its financial risk and increase liquidity.
One outlier has been TC Energy, which reported earnings of $1.1 billion in the first quarter 2020, thanks in large part to higher demand for its natural gas pipelines in the United States and Canada. The company also announced that it plans to increase capital spending by about $8 billion to support the construction of the Keystone XL pipeline.
The initial impact of COVID-19 on the pipeline industry has been negative, but Marathon Pipe Line LLC president Shawn Lyon sees an opportunity to highlight safety culture and to continue to improve operational efficiency during this time.
“This is our opportunity for safety culture to have its finest hour as an industry,” Lyon says. “During times like these, safety always comes to the forefront in people’s culture. Our efforts to protect our people and contractors have resonated, even with landowners and the public. I truly believe safety is a higher calling, and now is when it means everything. This is the moment your safety culture shines through or you learn that it’s not ready for prime time. If that’s the case, this is an opportunity to strengthen it. Hopefully, everyone’s culture is stronger after this is over.”
Miller Pipeline executive vice president Dale Anderson echoes Lyon’s comments. As the contracting company has adjusted to the impacts of the pandemic, safety has been a driving force.
“’Safety — First and Foremost’ is a core value that we instill every single day,” Anderson says. “We were able to build off our current culture and sustain the trust we had during this time. Every decision, every action we made was to make sure the health and safety of our employees was our first priority. Of course, we had to make some adjustments by eliminating large safety meetings, but we communicated in a different manner to drive our messages and culture.”
As the reality of the pandemic was settling in, all corners of the pipeline industry started to announce action plans to address social distancing practices and increase measures to keep employees and the public safe. Operators, contractors, manufacturers and trade associations acted quickly to provide protocols and resources to employees and stakeholders.
API released a “Pandemic Planning Guide,” which includes recommendations concerning the spread of the virus. Likewise, the INGAA Foundation released its “Interim Guidance for COVID-19 Prevention and Control,” which includes construction safety and quality guidelines. Both documents are available free to download through the organizations’ respective websites.
On the contractors’ side, the American Pipeline Contractors Association (APCA), Distribution Contractors Association (DCA), Pipe Line Contractors Association (PLCA) and Pipe Line Contractors Association of Canada (PLCAC) each released guidelines and resources for members to maintain safety and prevent the spread of the coronavirus.
Manufacturers that supply the pipeline industry have also adjusted to the pandemic. Lincoln Electric has limited the number of employees at its facilities to ensure only those involved in producing welding products are on site. Others, such as Vermeer have dedicated part of manufacturing capabilities to making face shields for healthcare workers fighting COVID-19.
In the following sections, this article will take a closer look at how Marathon Pipe Line and Miller Pipeline have responded to the pandemic.
An Operator’s Response
Early on, Marathon Pipe Line (MPL) transitioned many of its employees to telecommuting to comply with social distancing and stay-at-home orders. However, analysts in the company’s control centers were deemed essential employees and continued to report to offices at the company’s headquarters in Findlay, Ohio, as well as in San Antonio, Texas, and Long Beach, California.
“We immediately implemented COVID-19 protocols at all three control centers to reduce exposure and ensure safety of that mission-critical portion of our business,” Lyon says. “That was locked down, and we limited who could go in there. Not even the manager could go in, only the workers and shift supervisors.”
MPL put an emphasis on communicating with its employees, not only to stay connected, but to relay important guidelines about social distancing and the use of PPE, as well as the symptoms of COVID-19 to help prevent the spread of the coronavirus.
“We quickly realized that we needed to, not only protect our people, but protect our operations for the nation, so that we could stay operating when the country needed us the most.”
Lyon added that MPL also communicated with its contractor partners about safety expectations on jobsites.
Weekly communication with employees has been a key aspect of MPL’s response to the pandemic. Lyon and his communications team have been developing weekly videos to stay connected with its personnel.
“People need to have connection to one another,” Lyon says. “We have what we call our ‘Weekly What and Why’ videos. It’s a communication tool that we’ve had for a number of years, and we’ve leveraged that to connect with all of our employees now that we don’t have the same opportunities with some of our other communication channels.”
The impact of these videos goes even deeper. As one MPL employee said, “It would be easy to react to this pandemic, confused scared and reckless. When I watch these videos, I feel safe, knowledgeable and informed.”
The primary message of these weekly videos is to stay focused on the company’s mission to safely and reliably operate its pipelines.
“We have to focus, focus, focus on that mission,” Lyon says. “I truly believe it’s a higher calling, and we have to focus on that mission not only for the benefit of the company but for the nation. The strength of our people has shone through during this time of need like no other. It has made me proud and our entire leadership team proud.”
Lyon adds that “now is the time to walk the walk” when it comes to safety culture and the drive to zero incidents — not just for MPL, but for the pipeline industry at large.
Communication has also been essential for MPL’s public outreach efforts, with landowners and the communities where the company’s assets are located.
The company’s “Earning Your Trust” program is aimed at building relationships with landowners, communities, first responders, public officials and schools. As part of the program, MPL will oftentimes rent out a local pizza restaurant and landowners to get some free food, engage with employees and learn about pipelines. But now those types of gatherings are prohibited.
“The engagement during those events is so impactful,” Lyon says. “We’ve adjusted, and now we bring the food to them. We have the pizza delivered, and the food comes to the people with some pipeline safety information, and just as important, a big thank you for being a landowner.”
In addition, MPL has ramped up its social media outreach efforts.
“What’s interesting, for years we’ve been trying to move in that direction, and the feedback we received was that landowners were not interested,” Lyon says. “As more people are relying on social media, it seems they are more interested. After the threat of COVID-19 is over, hopefully we’ll be able to leverage that connection for better communication in the future.”
One positive impact of the pandemic has been innovations in how MPL uses technology to improve efficiency. Out of necessity, the company has used video to conduct operator qualification (OQ) recertifications and to inspect products for purchase.
“Operator qualification is required by PHMSA,” Lyon says. “As a pipeline operator, we have to renew those to stay up to date. OQ is typically done in person, with people shoulder to shoulder. We could have said, ‘Hey, we won’t be able to do those,’ but instead we decided to do them by video. It turned out to be a great efficiency. It worked well and allowed us to stay up to date with PHMSA.”
Likewise, Lyon says that video has been used when MPL has looked to purchase new valves. Instead of conducting inspections of the product in-person at the manufacturing plant, the company has used high-resolution video to witness hydro-testing.
“That has helped minimize travel, and it has been just as effective,” Lyon says. “Others are now interested in doing the same thing, so that is an innovation that might be spreading outside of our company.”
A Contractor’s Response
For Miller Pipeline, the response to the coronavirus has been different. As a contractor that works on critical energy infrastructure, many of the company’s employees are still needed on jobsites in the field. In fact, Anderson says, Miller Pipeline has maintained 80 percent of its workforce during the COVID-19 pandemic.
“Miller Pipeline created an internal taskforce and delegated certain employees to stay abreast of the CDC and WHO updates daily,” Anderson says. “If those organizations created a step in preventing the virus, as a company, we recommended those actions to our employees. The nature of our work cannot be performed at home, but our support employees were able to relocate at home seamlessly and still support our operations without any hiccups. We adjusted our field offices and operational teams using the same recommendations, as well as our updated customer requirements.
Anderson adds that the company also adapted quickly to safety measures and ordered extra PPE to have on hand for its employees.
“The one thing is that our leadership on and off the field were available for any questions and able to provide guidance if needed,” he says. “Open communication is key, especially with a virus that everyone was trying to navigate. Our employees trusted our leadership and that we were doing everything we could to keep them, their crew and families safe.”
Communication on Miller Pipeline jobsites was heightened with COVID-19, but the company’s “ONE” safety mission remained strong, Anderson says, because “it was strong before this pandemic.” The company’s safety culture encompasses “Stop Work Authority,” take “ONE Moment,” making safety personal and observing safety behaviors.
“During our daily huddles, we addressed a new set of questions to make sure everyone felt healthy and safe working together,” he adds. “If there was a concern, it was escalated to the local superintendent immediately.”
Miller Pipeline’s crews adjusted behavior to protect the safety of the public when working by wearing additional PPE, such as masks and gloves. Furthermore, Anderson adds, if workers had to enter a customer’s home, they had a list of questions to ask the homeowner before entering.
Like MPL, technology has allowed Miller Pipeline to maintain a sense of “business as usual,” using the existing platforms and training on online video platforms. Anderson adds that some of the changes the company has made during this time will continue in future, such as working remote and integrating more video conference calls.
Miller Pipeline has also adjusted its approach to maintaining public outreach efforts.
“With our current social media following, we increased our content pushed through the platforms to keep our public facing positive and uplifting,” Anderson says. “Also, we wanted to highlight our employees for going above and beyond. Not only did we highlight our employees, but our communities too.”
Additionally, Miller Pipeline made a donation to Feeding America with the proceeds earned from offering a limited-edition T-shirt for sale. The nonprofit organization helps feed more than 46 million people through food pantries, soup kitchens, shelters and other community-based agencies. The company also supported 500 firefighters and police officers across its nationwide footprint by providing lunch as a thank you for being on the front lines of fighting the virus.
The Industry’s Response
As the coronavirus pandemic spread, Lyon says the pipeline industry banded together to share ideas and ensure safety.
“The collaboration across the industry has been amazing,” Lyon says. “We’ve had weekly phone calls, with operators sharing thoughts on how to protect people and contractors, and also how to keep operations going safely. We’ve had great discussion and collaboration with PHMSA and everyone coming together on how to supply the energy needs of the nation during this time. People across the industry are picking up their cell phone to ask, ‘How did you handle this situation?’ We’ve had strong collaboration before, but now it’s even more so, with the recognition that we’re all in this together.”
Lyon emphasizes that staying true to pipeline safety management systems is “just as critical as ever” as the industry navigates the challenges of the pandemic and continues its “drive to zero.”
“We talk a lot about safety culture, and importance of safety culture,” Lyon says. “It’s events like this, where the industry has the opportunity to further advance safety culture at a much more accelerated rate, and it happens organically with employees. If you really reinforce that, by leading first with safety, people will respond to that, and they’ll never forget that in their careers. That is something that will be passed down, so that the next generation will benefit most from the things we’re doing today. I truly believe this will be safety culture’s finest hour as an industry.”
Anderson agrees that maintaining safety is the most critical action the pipeline industry should take in response to the coronavirus pandemic.
“As simple as it sounds, we need to continue operating at the highest level with our safety standards,” he says. “Our work is extremely critical to the industry, and must continue to move forward.”
With supplying the energy required to keep the country running now more important than ever, Anderson believes that the pandemic has had a positive impact on safety culture.
“If anything, the extra steps that have been taken over the past several weeks have only helped to reinforce the ‘safety first’ mentality,” he says. “Our industry as a whole has had to focus on more than just the jobsites and communities we work in.”
In addition to providing important information, communication with employees also plays an essential role in supporting company morale.
“Everyone needs to feel valued,” Lyon says, “so they know that they’re not just a number and that they individually are making a difference.”
Regular communication helps employees stay connected.
“Everyone wants to feel connected, to their mission, to their place of work,” Lyon says. “Within MPL’s culture, we specifically say we’re committed to family, both personal and work. We help each other, and now those two worlds have become one. As we work from our home offices with our families in the midst, we see how well we can mesh the two worlds. In the past, you would have been embarrassed to have a kid or dog in the background during a call. Now, we all know what that’s like.”
When employees have a strong morale, Anderson adds, they also have more confidence in themselves and the company.
“You need to keep the trust of your employees during a fearful time,” he says. “They lean on your company for guidance and during a period of uncertainty, especially with the media and news pushing out non-stop messages all day. Our company relies on our leadership and core values to continue being the best in the industry. By providing them the process, leadership guides and FAQs for their team, they are confident in themselves and in our business.”
Bradley Kramer is managing editor of North American Oil & Gas Pipelines. Contact him at email@example.com.