Going to the gas station and filling up your tank is a much cheaper endeavor today than it was two years ago. As a consumer, this is great news for you.
As the President of the Pipeline Research Council International, whose members are mostly pipeline operators, it means my job has been kicked into overdrive.
Here’s what happened: Two years ago, prices were at a high of $100 per barrel. As a result, the levels of output significantly increased. This enabled the United States to become a net exporter instead of importer of oil and natural gas.
Unfortunately, the economy began to slow down, and a worldwide glut of oil and gas developed, even with demand at an all-time high. Consequently, the price dropped dramatically to $25 per barrel.
Price corrections like these generally happen every 10 to 15 years in the industry and last about 18 months. This has been an especially trying period for our members, as it has now been two years. Although we are back up to $50 per barrel, it is still much less than before.
I’ve had many people ask me how the recent oil prices have affected our industry and, tangentially, our association. Are we suffering financially? What’s next?
Our primary mission is to develop technical solutions to the challenges facing our members and to ensure the safest operations of pipelines and pipeline systems. One could say a recession is a really big challenge to research.
In truth, I see what’s happening as an opportunity.
You see, when you have a lot of money, there is a lot you can do. You’re not worried about every penny. Investing in research is an easy decision. However, when the economy changes and companies are scrutinizing their expenditures, the decision to invest in the future can be difficult. When analyzing what is and isn’t core to the business, research is a tempting expense to cut.
However, if you remove research, you may save money now, but over the long term you won’t have the technology you need to move forward.
PRCI is an R&D association. As a result, our members look to us to be leaders in finding more effective ways of ensuring pipeline safety, developing the technical solutions they need, and providing these in a way that gives them value.
In this time of recession, more than ever, we need to prove we are a resource that provides the technology for their future.
That is why we have really focused on both enhancing our current tools and developing new tech. In fact, we built a Technology Development Center in Houston, Texas, for this very purpose, which was completed at the height of the current economic uncertainty. This new site will enable the industry to push the envelope and accelerate enhancements to the tools vital to our members.
Another opportunity for us has been to look into other sectors for answers. For example, we figured out how to leverage technology from the medical industry to more efficiently assess the quality of pipelines (think X-rays). We brought this into the research environment and enhanced the tool — all within a 9-month window — and it is now one of the many tools in the toolbox to assure pipeline integrity and safety.
As we look beyond the current economic environment, we begin to explore what is next for our members and the pipeline industry overall. We will look to stretch with our members and explore the opportunities present with alternative fuels and their delivery. We will continue to work to find innovative ways to address our members’ needs and interests in operating our vital global pipeline infrastructure.
There are a number of challenges facing our association and our members in the current environment. This is the time for us to look to the future to engage head on. We are proud to not only support our members through this process, but help to actively spearhead it through our research.