Gas, Oil Interests Say Senate Y2K Report Faulty
A Senate report's conclusion that the natural gas and oil
industries aren't likely to be ready for the computer-related
system challenges of the Year 2000 is based on "out-of-date"
information that "misses [the] significant progress the industries
have made" during the past six months, said major industry trade
The report, which was released by the Senate Special Committee
on the Year 2000 Technology Problem last week, said industry Y2K
remediation efforts began "too late" and were progressing "too
slowly," causing the panel to conclude it would be "overly
optimistic" to expect gas and oil to finish system repairs in time
for Jan. 1, 2000. This "means that...disruptions in the production,
transportation and distribution of gas and oil are possible."
The Interstate Natural Gas Association of America (INGAA), the
American Gas Association (AGA) and the American Petroleum Institute
(API) were highly critical of the Senate report, noting that its
findings for gas and oil were based on an industry-wide survey of
Y2K readiness efforts that was released back in September 1998.
Since then, the industry has completed another survey (the results
of which were issued late last month), which found that about 94%
of the oil and gas companies expect to be prepared by September for
the arrival of the new millennium [See NGI, 2/22/99].
The results of the September 1998 survey revealed that much of
the gas/oil industry still was in the early stage of identifying
potential Y2K problems. But the more recent survey, which was
overseen by the API and the Natural Gas Council, demonstrated that
substantial progress has been made by oil and gas companies into
the later phases of remediation (fixing) and validation (testing)
of their computer systems to avoid potential problems or "bugs"
when the clock strikes 12:01 a.m. next Jan. 1st.
Specifically, the results showed that 86% of the 1,000 company
survey respondents were at the fixing-and-testing stage with their
business computer systems, which mostly include traditional
information technology systems related to customer service, office
support and billing; about 78% reported they were in the later
phases of Y2K readiness with their embedded hardware systems, which
are used primarily to control the flow of oil/gas and monitor
pressures; and 67% said they were in the later phases of Y2K
preparedness with systems involving their supply chain.
Significantly, some concerns cited by the Senate committee with
respect to the industry's Y2K readiness were identical to ones
raised at a recent technical conference of the oil and gas sector
working group of the President's Council on Year 2000 Conversion,
which was held at FERC. The concerns included the role of small- to
medium-sized energy companies in the Y2K effort and a lack of
information about the preparedness efforts of the
telecommunications and electric industries - both of which are
critical for oil/gas to have an orderly transition to the year
"While the large gas and oil companies are spending large
amounts of money on Y2K remediation, the Committee is concerned
about some of the smaller and medium-sized companies in this
industry, including those up and down the supply chain. These small
companies could be the linchpins for the overall success of this
industry," the report concluded. Moreover, it called for "better
coordination" of the Y2K efforts of oil/gas, telecommunications and
electricity companies. The Senate panel also emphasized the need
for oil and gas companies to do more contingency planning.
©Copyright 1999 Intelligence Press, Inc. All rights
reserved. The preceding news report may not be republished or
redistributed in whole or in part without prior written consent of
Intelligence Press, Inc.