There is a very disturbing new post on the Gary North website from someone who reports from what he terms a "very, very reliable source" in the oil refining industry that it is impossible to find and remove the embedded chips in refineries because they are too deeply embedded to be removed without dismantling the refineries. This will cause the refineries to shut down on January 1, 2000, which means, in a very short while, no electricity, no gasoline, no diesel fuel, etc.

I have suspected this to be the case but have not seen any verification of my concern until now. Do any of you have any expertise to share on this or do you know someone in the oil industry who could shed some light on this?

-- cody varian (cody@y2ksurvive.com), November 30, 1998

Answers

Cody,

I found this article in the World Oil trade magazine.

(http://www.worldoil.com/archive/archive_98-04/bug-shemwell.html)

Here is an excerpt:

>>It is estimated that the average oil and gas firm, starting today, can expect to remediate less than 30% of the overall potential failure points in the production environment. This reality shifts the focus of the solution away from trying to fix the problem, to planning strategies that would minimize potential damage and mitigate potential safety hazards. <<

The article explains that an offshore oil platform may have more than 10,000 embedded chips governing both automated and manual tasks. Many of these are difficult to get to, such as under water.

Effie

-- effie (effie_7@hotbot.com), December 01, 1998.

Senator Thurmond is quoting this same 30% figure at this website:

www.dtic.mil/c3i/y2k/slides_1998/sld043.htm

-- James Chancellor (publicworks1@bluebonnet.net), December 01, 1998.

Starting today? I guess that means that if they started as late as two years ago today then they will be at least 90% fixed by 12/31. If you just have to be gloomy, at least use logic that makes sense.

-- Paul Davis (davisp1953@yahoo.com), December 01, 1998.

That article was published in April of 1998. Do the math yourself.

-- Franklin Journier (ready4y2k@yahoo.com), December 01, 1998.

Codyheres a post from the comp.software.year-2000 forum which may shed some light on your question:

Re: Refineries and Embedded Systems

fedinfo@halifax.com wrote: > > From GN: > > Category: > Noncompliant_Chips > Date: > 1998-11-30 13:28:22 > Subject: > Fuel Production Plants > > * * * * * * * * > > I have one very, very reliable source within that industry who tells me that > the oil refining industry can't cope with the task. I am told that the problem > of embedded systems can NOT be fixed EVER, no matter how much time were > allowed. WHY? Because the refineries themselves would have to be dismantled to > uncover these embedded systems. Essentially, the refineries would have to be > destroyed and rebuilt!!! These embedded systems are buried within enclosed > systems. Identifying, testing and replacing these systems is too impractical. > It is financially unsound to do so. The better option is to build new ones. > There is no time to do this with less than 400 days left and the time to build > a new refinery is 3 to 5 years. > > So, what does this mean? My sources, especially the most reliable source tell > me that it means that on January 1, 2000... the oil and gas refineries will > cease operations. These facilities also have converted their inventory > management control systems to small inventory levels so that inventory levels > are running about 1 to 2 days capacity. A few years ago, the industry averaged > a 1 to 6 month supply in storage tanks. Not so today. > > The results: By 1/5/2000 there will be no gasoline, no diesel fuel, no > natural gas, no heating oil, no fuel oil products at all. This means trains > will have no fuel. Trucks will have no fuel. Cars will have no fuel. Electric > Power Plants will have no oil for fuel, nor coal... because there will be no > fuel to power the vehicles to get it to them. So, there will be no > electricity. And you know the remaining domino schematic from that point. > > ====== > > I have no way of knowing whether the embedded systems are just that, embedded > in such a way that they can not be accessed. I imagine that some could be > under fifty feet of concrete or otherwise inaccessable. If this is so, then > there is not the slightest doubt at all, that it is indeed all over. Period. > > I am not going to bandy about the issue of whether this source is reliable or > not. It makes no difference. The only thing I am concerned with is whether > these systems are in fact inaccessable. I know that not every system is > inaccessable. The question is whether there are enough inaccessable systems to > mean that the refineries etc. will not function. > > Of course, I would love to hear someone counter this with evidence showing > that what has been related above is not true, or it is an urban myth etc. > But, I would like 'evidence'. Not conjecture or inuendo or suppositions. > > If it were so, that there were indeed these inaccessable systems, would the > companies involved let it be known publically? I think not. > > If this report is accurate, the remediation is 100% moot as I have said all > along, and you can kiss your butt good-bye.

I'm not sure if I want to play this game Mr. Milne -- you offer this article which is, conjecture, innuendo and supposition but demand that any counter story be documented by "evidence." That's pretty tough and, frankly, I'm not up to the task as my knowledge is with electric power plants -- not oil refineries.

They do, of course, share some important characteristics and so I'll give it a try. The approach will be from two perspectives -- first, I'll explain some power plant construction practices that contradict the refinery story; second, I'll offer another review of the nature of the "embedded" systems that might be at issue.

Power Plant (and refinery) construction . . . .

Remember, power plants and refineries are: o Capital intensive o Make increased use of computerized process control systems o Operate a continuous manufacturing/conversion process employing high temperatures and pressures.

Typical design life of a coal-fired power plant is 40 years. During that period, any number of components *will* fail and *will have to be replaced.* Wouldn't make much sense to put a $500million investment at risk 'cause a $20.00 part failed in some inaccessible location. Thus EVERYTHING is accessible.

You want evidence and I'm not about to take you on a power plant tour but even if you've never been inside a power plant the construction practice is similar to that found in many other industrial settings and, if you've ever been aboard a naval vessel or taken a cruise, ships. These settings are nothing like your home (or even an office) with all the infrastructure components nicely hidden behind walls -- pipes are exposed and clearly labeled -- power and control cables are laid in exposed cable trays and risers. Electronic components are often mounted in racks with easy access from front and back -- probably not at all like your computer or home theatre configuration. All this is to PERMIT MAINTENANCE, REPAIR and MODIFICATION.

So you need to understand that the problem isn't just maintenance, in general, or for y2k. Process plants need to be modified frequently -- market conditions demand a change in inputs or outputs. Can't get enough sweet crude? Exxon doesn't close the refinery -- they modify it to handle the new feedstock (I got the grand tour from a fellow I knew who worked at Exxon's Baton Rouge refinery, years ago).

Want some pictures? Here are a few from several "continuous process" industries: http://www.powerprocesspiping.com/, http://www.bdmechanical.com/ppiping.htm, http://silverweb.nf.ca/m&m/cb-p&p.htm, and http://www.shambaugh.com/process.htm.

Now consider the nature of these embedded components. This has been the subject of much discussion in csy2k. I'd like to suggest that there are three broad categories of components in this context:

o The control system(s) -- SCADA -- one or more intelligent nodes build on traditional minicomputer, or more recently, microprocessor-based server technology. These are very accessible -- they're in, adjacent to, or very near, the control room. In an even more modern "distributed control system," some of the capability will be located in different areas of the plant. Nevertheless, they still have to be very accessible -- stuff breaks -- memories get hard, multibit errors, disk drives fail, etc.

o Remote devices -- the control systems can't run without data and so you have dozens to thousands of remotes -- devices that measure process parameters (temperature, pressure, mass flow, volumetric flow, acceleration and mechanical position (valve position or tank levels)) and a smaller number of remotes that can act on SCADA commands (start a motor, open a valve, etc.) Though most of these devices are pretty dumb, some may have a bit of silicon-based intelligence and therefore susceptible to y2k problems. BUT, they all have to be accessible because 1) they malfunction or need to be recalibrated and 2) plant modifications often require removal/replacement to accommodate process changes.

o Embedded systems -- I think that the consensus is that the real embedded systems are those systems that are not obviously run by a computer -- the power plants water chemistry analyzer or the refineries gas chromatograph. These are on the site but they're not in the "plant" -- they're in the lab -- very accessible.

Now "accessible" doesn't always mean you can walk right up and touch it! Guess where the flue gas monitoring remotes (temperature, opacity) are located -- top of the boiler or in the stack. But here's the scenario -- opacity indicator increases (flue gas has more smoke in it) but the stack gas "looks" clear. Do you shut down the plan on environment limits or do you send a maintenance man to replace the remote?

Now is it possible that conditions would be different at an oil refinery. Sure, like I wrote at the beginning, I'm not really familiar with these. But, really, we'd be looking at some obtuse examples -- imagine that rather than using a tank level indicator to see how much gasoline is in a tank, someone came up with the bright idea of putting a strain gauge *under* the tank and determing the amount of product in the tank but computing the weight on the gauge and using that to compute the amount of product. The device fails and, we'll all agree, it is not practical to replace it.

Does the refinery stop using the tank? I wouldn't think so. They retrofit a traditional tank level indicator (float) to provide the needed information.

HTH,

SAG

-- Max Dixon (Ogden, Utah USA) (Max.Dixon@gte.net), December 01, 1998.

Hey guys, not to worry, with the newly announced Exxon and Mobil merger, "they'll" take care of us. No problem. It will be easy for them to merge IT departments before 2000 and they'll have way more people to search for embedded chips even if they lay off 12,000 unnecessary employees.

No need to feel the panic and alarm rising. Chill out. *Sigh*

Diane

-- Diane J. Squire (sacredspaces@yahoo.com), December 01, 1998.

From the Cassandra Project, at , Section V.

On Oct 29, 1997, it was reported that "...major oil companies today rang the alarm bell, warning the so-called millennium computer bug could paralyze the offshore industry in the North Sea -- one of the world's biggest oil production areas."

Companies such as Royal Dutch/Shell and British Petroleum said they realize they are sitting on a time bomb and are racing against the clock to check millions of microprocessors. But, they fear smaller firms have not yet fully grasped the threat to the oil industry.

The industry faces a gargantuan task, illustrated by the fact that a single offshore oil platform may contain over 10,000 microprocessors. Some are deep below sea level, but all need to be checked. Furthermore, there are over a 100 platforms in the North Sea alone. In a worst case scenario, the oil platforms would shut down when automated systems fail to recognize the year 2000. It is unclear how long it would take to restart operations should a shutdown occur.

This material may have been drawn from this: tomcarey@mindspring.com), December 01, 1998.

I don't know what happened there. The URL is here

Trying again---

-- Tom Carey (tomcarey@mindspring.com), December 01, 1998.

Thanks Max,

You saved me a lot of writing!

Basically, you have summed up a realistic picture that also covers a refinery type operation scenario. The plant isn't static, but rather there are continual replacements, upgrades and re-engineering that takes place, whether for maintenance purposes or modification purposes.

Granted, the possibility of more complications in a shorter time frame adds to the complexity of the situation, and no doubt there will be challenges.

However, someone has to put a stop to this idiocy that all refineries are toast come the new millennium. There is no wonder that many won't take Y2K seriously. They make a faulty assumption that because there are some 'wingnuts' that the whole thing is a farce.

I think it is important that we research the facts intelligently rather than assume the worst every time.

-- Craig (craig@ccinet.ab.ca), December 01, 1998.

Good info Max - your basic data and conclusions are correct.

However, note that the fundamental criteria (as my wife (chemical engineer, DOW, DuPont, others) points out), is that "failsafe" is the design criteria. But "failsafe" is rarely "fail producing" so the problems are significant, but not neccessarily directly life-threatening. Certainly not profit-making. Can they keep producing - probably not. Can they recover (after a while)? In almost every case - yes. but slowly - especially if "replacements" are in shot supply.

Most likely? Assume there are 1500-6000 remote instruments and sensors and controllers in a single small processing plant or offshore platform. if 1-2% are going to fail in year 2000 (this is the going estimate) then between 15 and 60 need to be replaced. That's not too bad. However, world-wide, all of those same part numbers (same thermometer recorder, or pressure transmitter, or level gauge, or whatever) have to be replaced - after all - they will fail the same way worldwide.

So those 60 pieces may be in very short supply, and might shut down the plant until replaced. But the other 5940 are okay - and are okay in every other installation worldwide.

Chevron? I don't like the idea of the merger in any case - certainly not now.

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), December 01, 1998.

Robert,

You're describing the situation if no remediation is done. However, this is not the case. There will have been teams going through every embedded system they can find in the refineries, checking with manufacturers over Y2K compliance, replacing if in doubt.

There will be glitches; it's inevitable that something will have been missed. How many glitches, and how many will stop production, and for how long, are the big unknowns.

However, the unit that got missed here won't be the same one that got missed there, and it's extremely unlikely that there's no alternative device that can't be fitted. As was previously described, things fail all over the place, and there must quite often be cases where an exact replacement is not available. The engineers are doubtless used to switching to functional equivalents that aren't quite the same.

So, troubles in abundance: probably. A complete shutdown of the oil or power industry, and consequent collapse of civilisation: most unlikey.

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), December 02, 1998.

Nigel says, So, troubles in abundance: probably. A complete shutdown of the oil or power industry, and consequent collapse of civilisation: most unlikey.

This is really a blah sort of statement -- very wishy-washy -- that bounds the problem somewhere between none and the end of life. Such broad bounds are meaningless and trivial. I agree with SAG, in the post by Max, that embedded systems in refineries probably arent buried under 50 feet of concrete. For that reason I discount the story that appeared on Norths forum.

Its also my opinion that the refineries are just one link in a long and tortuous chain. In other threads that started out discussing refineries, the subject quickly embraced all the other phases of oil production, including everything from off-shore platforms to shipping, to ports, to reserves (proven and unproved). I think that the overall petroleum industry is in deep trouble.....not necessarily from refineries, although these will suffer from some problems, but from the highly complex nature of the industry.

Keep in mind the utter dependence of Japan on foreign oil (even greater than that of the US), the very fragile (collapsing) state of the Japanese economy (which can take the rest of the world into depression) and what will happen to the price of refined petroleum products if the amount of product at the end of the spigot slows drastically.

Keep in mind what can happen in this country if the price of refined product triples, quadruples, or even increases in price by an order of magnitude. It just cost me about $140 to refill my heating oil tank. What happens if the price goes to $1400? At what point do I have to start chopping wood simply because I cant afford oil? Isnt a switch to chopping wood the end of the world as I know it? What happens when the price of kerosene jumps to $10 a gallon? The price of a NY-CA air ticket jumps to over $10,000 because of the increased cost of the JP5 version of kerosene?

Will civilization collapse (as Nigel denies)? Or will we just be rolled back a few decades? Arent we really talking about the end of the world as we know it. Not the collapse of civilization, per se, but the collapse of what we know and have today?

-- rocky (rknolls@hotmail.com), December 02, 1998.

Regarding oil, Rocky said: At what point do I have to start chopping wood simply because I cant afford oil? Isnt a switch to chopping wood the end of the world as I know it?-----------

Keep in mind, this is exactly what happened in 1973, when the Arab nations imposed an oil embargo on the United States during the last Arab-Israeli War. A lot of people switched to chopping wood when heating oil prices doubled and tripled and doubled again within just a few months -- in winter. The skyrocketing price of oil, along with the end of the Vietnam War, put the US in the worst recession seen since WWII. But on a stand-alone basis, it wasn't the end of anyone's world. If this happens again in a y2k context, as part of a larger set of difficulties/disasters/public panic (take your pick), *then* it becomes a whole new scenario, and Rocky is right on the money.

-- JDClark (yankeejdc@aol.com), December 02, 1998.

Got this article from Y2KNEWSWIRE

Y2KNEWSWIRE also received an anonymous e-mail from a person in the refinery business who claimed it's actually less expensive to build a new refinery from scratch rather than attempt to locate and replace all the potential non-compliant embedded systems. For this reason, the oil companies are *not* thoroughly checking their existing refineries for compliance. Unfortunately, building a new refinery takes 3-5 years, meaning that if 70% of the refineries go down, it's going to be until 2002 before new ones can be brought on-line.

-- reporter (reporter@Y2k.com), December 02, 1998.

Tom, ya' needed another one. (Why the flashing blue when I view document source in Netscape?)

-- No Spam Please (anon@ymous.com), December 02, 1998.

I'm on record as saying that the ultimate outcome of Y2K is un- knowable, and that I won't deride the end-of-worlders because it's just concievable that they're right.

This discussion was sparked by a Gary North comment. GN is definitely an end-of-worlder, not merely "as we know it". If you'd have described WWII (in the UK not the USA!) or the great depression as TEOTWAWKI, then I won't argue against the idea that Y2K could quite easily usher in disruptions on a similar scale.

I've talked to people in BT (the UK's biggest telecom operator) and BP (our biggest? oil company). They know what's going on and the situation is as I described. Things ARE being checked and remediated. They also admit that it would have been much better if they'd started earlier -- and these two companies were amoungst the earliest to really get going.

-- Nigel Arnot (nra@maxwell.ph.kcl.ac.uk), December 03, 1998.