Just perusing TrendMonitor's analysis of energy risks...

http://www.trendmonitor.com/y2kad.htm

There is a statement in there that the major oil companies are adopting a fix on failure stance on Y2K for their wells, pipelines and refineries. Does anyone have clarification on this - ie. a link or a statement from Kosky or something?

Is it just me, or is this gross negligence? I mean, what if the 'fail' mode causes an environmental or safety issue (not to mention functional failure).

Does this mean the oil companies are saying they are Y2K-ready without lifting a finger?

What gives here?

-- Canuck (canuck@canada.com), September 13, 1999

Answers

Yep, way back in October of 98 I spoke with my local utilities Y2K guy, he assured me that everything would be ok, and that they had adopted the posture of "Fix on Failure", justified by the experience gained and teams formed to do the work they could, in the time they had. He agreed that there was simply to many things to actually get remidiated in time. The idea being that the items found that would fail would not be of any real consequence anyway. It sounded risky then, it sounds risky now. He was also the first to tell me about "Windowing". I withdrew all my $ long ago.

-- Tim Castleman (aztc@earthlink.net), September 13, 1999.

I withdrew all my $ long ago.

I would hope so. A utility company isn't the best place to keep your money. A bank would be a much better idea.

-- (duh@duh.duh), September 13, 1999.

Call it the "Circle of FUD". (Apologies to Walt Disney)

The "source" of the "reporting" is none other than this forum, by R.C.

The posting is picked up by Gold-Eagle, as an "editorial".

It is then referenced by "TrendMonitor" as "reports" that "major" oil companies are adopting "FOF".

Which is then reported back to this forum as "news".

Of course, nowhere along the line are these "reports" verified.

-- Hoffmeister (hoff_meister@my-deja.com), September 13, 1999.

FOF.....hahahahaha.........typical inflammatory unsubstantiated fluff I'm afraid.

Oh sure, there is likely some company somewhere that is taking this approach......however every company I know in the field have completed a detailed project to remediate any possible problems that may arise.

Oil companies, like any other company, have a responsibility to look after business. They are in fact looking after business.

-- Craig (craig@ccinet.ab.ca), September 13, 1999.

Tim,

Which company did you inquire to?

From the few responses here, this may be an urban myth or something like it - an actual company statement from your utility or others would be helpful.

-- Canuck (canuck@canuck.com), September 13, 1999.

RC is also the guy that posted a report of some of his contacts telling him that their systems had problems with 9-9-98 (never mind the upcoming 9-9-99).

I'd take stuff RC says with a rock of salt, until he provides a little more sourcing and substance.

-- Johnny Canuck (j_canuck@hotmail.com), September 13, 1999.

An early source of FOF in the oil patch was Chevron's 10Q filing with the SEC in 1998:

From Chevron's 1998 3rd quarter 10Q:

"Because of the scope of Chevron's operations, the company believes it is impractical to seek to eliminate all potential Year 2000 problems before they arise. As a result, Chevron expects that its Year 2000 assessment and corrections will include ongoing remedial efforts into the year 2000."

The wording has been changed in subsequent filings, for example:

From Chevron's 1999 2nd quarter 10Q:

"Because of the scope of Chevron's operations, the company believes it is impractical to eliminate all potential Year 2000 problems before they arise. As a result, Chevron expects that for non-mission-critical items and those mission-critical items that remain "worked around," Year 2000 remedial efforts will continue into the year 2000."

Jerry

-- Jerry B (skeptic76@erols.com), September 13, 1999.

To translate from the Chevronese to plain English:

"We've decided not to waste a penny dicking with noncompliances determined not to make a damn bit of difference to our operations."

And to translate from Chevronese to Doomerian:

"We've given up all hope of remediation, and we'll go belly up just after rollover."

-- Flint (flintc@mindspring.com), September 13, 1999.

Flint,

Which part of your purported "plain English" are we to suppose encompasses Chevron's "Year 2000 remedial efforts will continue into the year 2000"?

Hoff,

Nice try, but Chevron's 3Q98 10Q predated RC's June 1999 post on this forum by about seven months.

Jerry

-- Jerry b (skeptic76@erols.com), September 13, 1999.

"Nice try"?

Sorry, Jer, just following the trail.

The TrendMonitor story cites footnote [4] for the "FOF" reports.

Footnote [4] is this link:

http://ww w.gold-eagle.com/editorials_99/rc062199.html

Which is the RC "editorial" on Gold-Eagle, taken from the RC post on this forum.

"Nice try" though, Jer.

-- Hoffmeister (hoff_meister@my-deja.com), September 13, 1999.

Hoff,

"Sorry, Jer, just following the trail."

The oil patch FOF "trail" was in place months before RC's June 15, 1999 post on this forum.

Jerry

-- Jerry B (skeptic76@erols.com), September 13, 1999.

I live in Mesa, Airizona. The company is SRP (Salt River Project) The conversation took place by telephone. The person I spoke with identified himself as the Y2K project coordinator. He offered every assurance that all would be ok, and also used the term "Fix on Failure" as an integral part of the overall effort. So, will the lights stay on? Probably. But then, maybe not. Nobody knows, now do they. My post was meant to demonstrate that this is not unusual, as a matter of fact, it is the only practical way to deal with it - BECAUSE THERE IS NO WAY TO FULLY REMEDIATE AND TEST EVERYTHING. Why is this such a hard concept for so many to grasp?

-- Tim Castleman (aztc@earthlink.net), September 13, 1999.

Specifically, Jerry, the TrendMonitor story with no question relied on the RC posts for its "FOF" "reports". It detailed the footnotes quite nicely.

As for Chevron's 10-Q, you leave out quite a bit. In particular:

Chevron is corresponding with all mission-critical third parties and expects to meet with a large percentage of them, either alone or with other potentially affected parties, to determine the relative risks of major Year-2000-related problems and to mitigate such risks. Using practical risk assessment and testing techniques, Chevron is dividing its list of more than 350 internal items into three categories: (i) those that are expected to be tested and made Year 2000 compliant by the end of 1999; (ii) items that will be removed from service without testing and replaced with Year 2000 compliant items; and (iii) items to be "worked around" until the items can be replaced or made Year 2000 compliant. Many mission-critical items already have been found to be compliant, while others are undergoing assessment, remediation and testing.

There is a large difference between having a plan in place to work around items, and adopting a "Fix on Failure" strategy.

-- Hoffmeister (hoff_meister@my-deja.com), September 13, 1999.

People that have a hidden agenda can't "grasp" that concept Tim.

-- George (jvilches@sminter,com.ar), September 13, 1999.

George, you hit the nail on the head. Hoffy and Flint are just trying to push their "no big problems agenda" on us.

-- Worried (worried@nervous.com), September 14, 1999.

"Specifically, Jerry, the TrendMonitor story with no question relied on the RC posts for its "FOF" "reports". It detailed the footnotes quite nicely."

To which my previous post still applies.

"As for Chevron's 10-Q, you leave out quite a bit."

Indeed, I left out over 99% of it. I included the portion which seemed most applicable to this thread, including the revision to that portion as it appeared in the most recent Chevron 10Q.

"There is a large difference between having a plan in place to work around items, and adopting a "Fix on Failure" strategy."

And when the plan includes "the company believes it is impractical to seek to eliminate all potential Year 2000 problems before they arise", the plan includes fix on failure.

Getting back to things that I did not include from Chevron's 10Q, let me here include some samples of non-FOF data:

In the 10Q for 3dr Qtr 1998, Chevron mentioned that it had 1,200 "mission-critical" third parties. In the subsequent 10K for 1998, as well as the 10Q for 1st Qtr 1999, the number of mission-critical third parties dropped to 1,000. By the 10Q for the 2nd Qtr of 1999, that number dropped to 800. Perhaps they need to be added to the endangered species list. :-)

One number that has not changed lately is the target date for completing their phases 2 and 3, September 30, 1999. Wow, a whole three month safety margin!

Their 3rd Qtr 1999 10Q will not be published until early to mid November. Meanwhile, we can place bets on the number of remaining mission-critical third parties. :-)

Jerry

-- Jerry B (skeptic76@erols.com), September 14, 1999.