K. CASEY, Emerson, Houston, Texas
Many observers of business news today agree that the oil and gas industry finds itself in a more confusing situation than normal, with numerous forces pushing markets and producers in different and often conflicting directions. Meanwhile, with a new U.S. political administration, there is a renewed emphasis on prioritizing drilling activities. Companies understand that overproduction drives down prices and profits. Moreover, companies that want to grow by increasing production may find themselves down the road having to draw from costly crude sources to maintain those levels. All the while, drivers for greater sustainability cannot be ignored.
Producers recognize that many factors outside of their control—driven by fluctuating supply and demand—have a direct effect on profitability. The priority then becomes, “Let’s look at the internal factors that we can control. What can our company do to position itself to be profitable, even when prices are low?”
Naturally, cost cutting is typically the first solution considered. It is easy to implement and can provide some short-term financial benefits, but it does not improve anything operationally in a plant. In terms of performance, few things, if any, improve due to cost cutting alone. The reality is that most companies have already pushed such programs to their practical limits. So, what is left?
The alternative approach is improving performance through operational excellence. While this approach is more complex and generally requires some investment, it has longer term benefits. The operational excellence approach begins by asking where specific aspects of production can be improved by applying better technologies to increase efficiency, and costs decrease naturally because of these improvements.
This article will unpack this approach with examples of how producers have benefitted from it.
What is operational excellence? When the author’s company talks about operational excellence, it means defining what leading organizations do that makes them successful. Financial results are important and easy to see, but they shed little light on operational capabilities.
One of the best yardsticks for measuring overall performance is compiled in the Solomon Associate’s World’s Best Refineries reports.1 Each of these reports “evaluated key refinery financial metrics together with key operating metrics using a balanced scorecard approach to avoid too much focus on operating costs.” These reports divide producers into four quartile groups from best to worst.
The 2016, 2018 and 2020 reports each include data from more than 280 refineries, representing approximately 85% of the world’s refining capacity. Each of these reports shows similar results, with the world's best refineries being:
20% more energy efficient
30% more reliable
40% lower in maintenance costs
6% higher in utilization
60% more profitable.
Any plant manager wants to see numbers like that, but what are the best ways to focus on these domains in a practical way? Here are typical points when talking to production and plant managers:
Production: “Budget constraints preclude major plant upgrades. Can we get more from our existing equipment with incremental improvements?”
Reliability: “We lose too much production to outages, but maintenance cannot seem to stabilize operations. Where should we focus our efforts to increase production through higher availability?”
Safety: “Our rate of accidents is too high, along with process upsets. How do we improve personnel safety and reduce interruptions?”
Sustainability: “Fuel consumption increases multiplied by energy price increases are costing too much and slowing our sustainability program. How do we reduce energy consumption and our overall carbon footprint without hindering production?”
Let us look at these four areas more closely and see which technological and operational practice improvements can move producers higher on the excellence scale.
Production. These days, virtually every operating refinery or large-scale chemical plant will consider itself automated, but this statement covers a broad range of possibilities. For many facilities, a thorough audit would likely yield a wide range of manual processes where operators still perform functions necessary to bridge islands of automation, and to keep the automated and manual elements working together.
To solve this, many process facilities are digitalizing their operations (FIG. 1) while changing the ways their workforce interacts with new technologies and processes at all levels. This includes applying a portfolio of advanced automation solutions to deliver secure software and services to implement industrial digital transformation. Such digital tools range from pervasive sensing technologies and asset management software to intelligent flowmeters and remote monitoring services.
Leading automation vendors provide technologies to end users that help them improve in three critical areas:
Digital twin and simulation capabilities make it much easier to automate procedures, including startup, shutdown, grade changes, etc. These are still often performed manually, and they are often sources of upsets and even process safety incidents.
Simulation software platforms combine powerful training, integration and testing frameworks.
Advanced process control software algorithms can deliver higher productivity and reduce energy use, even with highly complex processes. Using multivariable models, these tools determine an efficient solution plan for each variable within all process and operating constraints.
Reliability. One common lament from plant managers is the apparent disconnect between how much money facilities spend on maintenance and the overall effectiveness. Maintenance costs for lower performers can be several times higher, yet they experience much more disruptive downtime. So, how do top-quartile performers do better in both respects?
Top-quartile-performing organizations invariably possess a set of well-linked elements, illustrated as the reliability value chain (FIG. 2), which ties together elements in four categories: data, information, knowledge and action. It sets the path for transforming data into information, and then into knowledge and action. Ultimately, effectiveness depends on the strength of each element, along with interconnections of all to create a continuous improvement cycle.
A reliability strategy begins by using analysis to understand and catalog failure modes. Once these are characterized, they can be mitigated by careful selection of maintenance procedures, process parameter data collection, equipment condition indicators and spares stocking strategies. This approach strikes a balance between an asset’s engineering characteristics and the organization’s capabilities to perform the functions required.
Safety. Safety incidents involving the high temperatures, pressures and volumes of flammable and toxic products common in refineries are highly disruptive to people, can damage equipment and often bring production to a halt. Therefore, there is a need for training and protective equipment for people, combined with a safety instrumented system (SIS) for equipment (FIG. 3).
By applying strategic safety and security products, plants reduce risk, avoid incidents and operate with certainty. From an integrated SIS to fire and gas leak detection solutions, plants can prepare for the unpredictable. An integrated SIS combined with effective reliability practices provides predictive insights and actionable data so that maintenance practices can shift to a more proactive mode, preventing breakdowns rather than responding to them as they occur.
This approach improves safety and efficiency, with top-quartile performers seeing an average of 97% facility availability. Conversely, bottom-quartile performers see 86% availability on average, with most downtime unplanned and therefore much more expensive to remediate than proactive maintenance or repairs.
Instruments, sensors and monitoring devices, including both safety-certified and conventional, keep an eye on key equipment so performance data can be compiled, shared and analyzed. This reduces the need for manual inspections of equipment, which means less time for employees in the high-risk operational areas of a facility.
Making turnarounds safer. Turnarounds can be dangerous, with many tasks to be completed in a very short time. One refinery was working on tightening up its cleaning and flushing operations because existing practices using local instruments for temperature and pressure on decontamination piping required manual reading rounds.
To lower safety risks and improve data collection, the plant implemented a wireless approach using the author’s company’s WirelessHART instrumentsa,b so operators could monitor the processes continuously from inside the control room. When the turnaround was completed, these instruments were reused in multiple applications throughout various process units.
Sustainability. Most sustainability discussions begin with combatting climate change through reduced carbon dioxide (CO2) emissions. This is certainly a relevant topic since the industrial sector—including the chemical and oil and gas sectors—is a major factor in energy-related CO2 emissions (FIG. 4). Some may write off the discussion, thinking that the solution just means adding another scrubber here or there. However, the concepts of sustainability go much further, examining where emissions originate and what can be done by changing processes and practices to eliminate them at the source. Fortunately, just as there are many sources of emissions, there are many ways to reduce them.
There are four main pillars supporting sustainability strategies:
Reducing emissions by examining each process. Some will be easier than others due to the nature of the process, so each must be evaluated separately.
Utilizing clean fuels, such as green hydrogen (H2), rather than burning fossil fuels.
Adopting green energy means looking for alternatives to combustion and replacing it with renewable electricity.
Minimizing waste is about more effective stewardship of all resources, including raw materials, energy and water.
Eliminating emissions by thinking differently. Phillips 66’s Rodeo Renewable Energy Complex near San Francisco, California (U.S.) is now drawing much of its electrical power from an adjacent dedicated solar power park built in collaboration with NextEra Energy Resources (FIG. 5).3 The 30.2-MW facility has reduced demand from the local grid by 50%. The operator expects that it will generate 60,000 MW/yr, avoiding 33,000 metric tpy of CO2 emissions. The company says its entire Rodeo complex is now dedicated to producing only renewable fuels, making it one of the largest such facilities in the world.
Automation improvements. Within the chemical and energy industries, implementing advanced digital and automation technologies provides increased operational efficiency, cost reductions and enhanced decision-making. In one case, a company utilizing the author’s company’s autonomous solutions managed to reduce lease operating expenses drastically by integrating advanced automation and analytics. Similarly, the growing adoption of automation and digitalization has led to more proactive operational approaches, helping companies manage data more effectively, increase safety and optimize production processes.
These strategies for operational excellence are what propel companies into the top quartile. The right supplier can provide the solutions and know-how to make it happen by partnering with end user companies in this critical sector of the economy. HP
NOTES
Rosemount wireless pressure gauges
Rosemount 648 wireless temperature transmitters
LITERATURE CITED
Solomon Associates, World’s Best Refineries Analysis Report, online: https://www.solomoninsight.com/industries/refining/worlds-best-refineries
U.S. EIA, Annual Energy Outlook 2021, February 3, 2021, online: https://www.eia.gov/outlooks/aeo/tables_side.php
Jolissaint, S., “Phillips 66 and NextEra Energy Resources begin commercial operations at Rodeo Renewable Energy Complex solar facility,” Phillips 66, May 8, 2025, online: https://www.phillips66.com/newsroom/phillips-66-and-nextera-energy-resources-begin-commercial-operations-at-rodeo-renewable-energy-complex-solar-facility/
Keith Casey serves as the Senior Director of North America projects and strategic accounts at Emerson. In this position, he leverages his extensive knowledge in process automation, PLCs, instrumentation and sales management to lead transformative initiatives that create lasting value for clients. Casey earned a BS degree in industrial engineering from Texas A&M University.