Dylan Winbourn - Sales, Software, Strategy
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Dylan Winbourn - Sales, Software, Strategy
  • Portfolio
    • Pre-Recorded Pitch, Presentation & Demo
    • SaaS Sales Playbook
  • Resume
  • Blog
    • Sales
    • Strategy
    • Sectors
      • Infrastructure
      • Energy
      • Sustainability
  • Contact
Energy, Infrastructure, Sales, Sectors, Software & Data, Strategy, Sustainability

Condition, Risk, and Cost: The Future of Asset Management

In an industry that is in charge of billions of dollars of assets, it’s crazy think that the current approaches to asset management are so far behind the curve.

For utilities, which manage facilities, pipes, lines, valves, meters, and many other physical assets, the need to adopt technology to prepare for the financial future couldn’t be greater.

Currently, asset management strategies are largely based on two approaches:

  1. Inventory your assets- understand what they are, where they are, how old they are, and any other basic data. Put that into a software system (GIS, CityWorks, Lucity) so they can be visualized and managed.
  2. Manage your assets (repair, replace, etc) based on their age– look at a typical or assumed end of useful life curve to figure out what to repair or replace. In other words, assume that an underground pipe is 50 years old and should be replaced in 10 years, because they last about 60 years total.

What’s the problem with this approach? It facilitates throwing massive amounts of money out the window! If an asset is replaced before it’s end of useful life, or isn’t replaced before a major failure, it will cost your organization money that could be prevented with strategic asset management approaches.

So what is the winning strategy? Managing your assets based on their condition, risk, and cost. What does that entail?

Condition– In other words, understanding the true condition of an asset before deciding how to repair or replace. Forget just relying on age- understand the condition (good or bad) of it before making a decision. Do this by looking at the age, the composition, the conditions surrounding it, and any other factors that could extend or shorten it’s like. Great example is an old car- do you need to replace an old car in great condition, just because it’s old?

Risk- Assets fail, so make sure to manage the highest risk assets. Which assets are critical to a system? Which assets would cause great financial impact to an organization if there was a failure? Prioritizing asset management based on the highest risk assets will ensure major risk reductions and optimization of repairing and replacing the right assets.

Cost– What are the costs to replace, reduce risk, and to optimize decisions? Organizations need to be able to quantify this for planning and day to day purposes. Speak the language that all of world speaks- money!

Using these principles for asset management will help organizations make smarter decisions, reduce risk, and save money.

Energy

Leveraging Disposal Data to Develop a Better Strategic Plan in the Permian

Although the oil and gas industry is still recovering from one of the biggest declines in decades, there’s rising optimism and excitement about the potential for the Permian Basin to become the largest producing oil region in the world. Already the most dominant region in the United States, the US Energy Information Administration (EIA) estimates that the Permian will increase production by 515,000 b/d (up to 2.9 million b/d by the end of 2018), helping total U.S. output rise to 9.9 million b/d by 2019, the highest recorded output since 1970. To underscore these staggering numbers, Exxon Mobil has taken a heavy position in the region, as they plan to triple their own Permian production to 600,000 b/d by 2019.

However, the expansion of each energy producing region presents new and unique challenges, with produced water as the potential limiting factor for operators in the Permian.  With every set of challenges, lie a distinct set of opportunities, particularly around utilization of salt water disposal wells to manage produced water. What was previously seen as a cost center for fluid waste, has become big business for operators and energy service providers alike. Several leading operators in the Permian are investigating how to commercialize their own salt water disposal assets, while energy service companies see produced water management as their strategic angle in a crowded energy service sector.

Commercialization of Salt Water Disposal Assets

Historically, produced water has been viewed by operators as an ancillary function of oil and gas production. The use of injection and disposal wells to manage produced water was either necessary to enhance energy recovery, or a minor but sizeable external cost to handle the amount of water produced from tight shale energy extraction. Several factors have led larger operators to believe produced water disposal will be the most critical and costly element of water management in the Permian. These factors include the large volumes of produced water, high costs of recycling, greater scrutiny on seismicity, and the decreasing number of new disposal permits agencies are issuing in certain regions (such as the Oil Conservation Division of New Mexico). With this in mind, it makes sense for operators to seize the market opportunity to expand their salt water disposal capacity. Larger operators have the existing infrastructure, manpower, capital, and expertise to rapidly commercialize their salt water disposal assets, assisting smaller or newer operators that lack a produced water management strategy.

How can operators determine if commercializing disposal assets is feasible? There are several elements to consider that vary by company; overall corporate strategy, operational expertise, existing infrastructure, and cashflow (among others). However, the first step to develop a strategic plan is accessing and understanding complex disposal data and leverage that data for confident, timely, and accurate decision-making. This data includes reviewing injection volumes and pressure constraints, visualizing locations of the competition’s existing commercial wells, learning about injection intervals and formations, and leveraging data to identify market opportunities across the Permian. As platforms like B3 deliver data in groundbreaking ways, expect forward thinking operators to expand and commercialize their salt water disposal assets as regional capacity becomes constricted.

The Growth of Water Midstream Companies in Oil and Gas

On the other end of the spectrum, a new phenomenon is growing in Texas for private third parties to serve the expanding water management needs of operators in the Permian. Dubbed “Water Midstream” companies, these organizations are seeing water as a new and evolving market opportunity in the energy service sector. Examples of these groups include Layne Water Midstream, H2O Midstream, Goodnight Midstream, and a number of other companies that have made water management the main element of their strategic plan moving forward.

At its core, midstream is defined as transporting fluids from point A to point B. Traditionally it involves crude or refined oil and gas products, but why not water? Water is a complicated logistical issue, adds to the cost of production, and expands the risk profile of a project or operating plan. Midstream companies provide a streamlined solution, through the development of water infrastructure, and by expanding their teams to include expertise on produced water management. Human capital and expertise is becoming especially important as water spans multiple dimensions, is highly regulated, and involves complex data to understand the market for disposal. Without a grasp on the data, companies looking to enter the water midstream space could make costly mistakes, such as providing clients with high risk disposal solutions, increased costs, lowered confidence in their services, and missed opportunities as they lack visibility and foresight into the disposal market.

Look for more on this topic from B3 as we create a series of posts that showcase the trends we’re observing in the salt water disposal and produced water space. In this series, we will also explore seismicity risks and how all types of organizations are leveraging data to support business development and overall market intelligence.

Software & Data, Sustainability

Why Good Life Cycle Assessment Data is Important (and Where to Find it)

In the sustainability space, I am sure many of you have heard quite a bit of chatter about Life Cycle Assessment, also known as the practice of modeling a product’s environmental impacts across it’s entire life span.

This practice is important for a number of reasons- reducing environmental impacts, trimming down the size of your Scope 3 carbon portfolio, etc. However, at the end of the day, it all comes down to product marketing.

Corporations are catching on to this highly technical, highly advanced practice because when conducted correctly, LCA’s are the basis for EPD’s- also known as Environmental Product Declarations. I won’t go into a ton of detail (please contact me if you have additional questions), but EPD’s allow you to make environmental marketing claims about your product compared to another.

If an EPD of a smartphone was created, reviewed, and accepted by a verification body, it could allow Apple to say that their iPhone is more green that a certain Android phone, and visa versa.

Along with the branding, nutritional facts, labeling, and (especially) pricing, sustainability metrics will be another way for a consumer to choose between products. And EPD’s, supported by Life Cycle Assessment, and Life Cycle Assessment software tools and data, will be the catalyst for these sustainability metrics. But as I described above, practicing LCA with the correct approach can be challenging.

Additionally, making marketing claims against a competitor can be risky for any brand. Claims needs to have substantial evidence and be validated with extensive data and research. Nobody likes a lawsuit!

This is why having reliable, accurate, and updated data is absolutely crucial when conducting LCA studies with the objective of making a marketing claim.

And in terms of LCA data- the data that powers these studies- there is a lot of questionable data!

While I won’t identify the ones to think you should avoid, here are the scientifically backed LCA databases one should consider:

  • EcoInvent
  • US LCI
  • GaBi Databases (Disclosure: I work for PE INTERNATIONAL, the providers of this data)
  • ELCD

Have questions? Feel free to contact me!

Please keep in my mind that these opinions are strictly my own!

Strategy, Sustainability

Key Skills for Anyone Working in Sustainability

Jobseekers often ask me about the key skills one needs to obtain to be successful in corporate sustainability. Throughout the years I have learned a lot about the various tricks of the trade, and I believe there are three skill sets every sustainability professional should know:

1. Understand highly technical practices such as Life Cycle Assessment from the product side, as well as the methods for quantifying corporate sustainability indicators from the operational side. Organizations can’t measure actual progress without quantitative practices such as these, and they are often overlooked and seen as overly difficult (especially within sustainability).

2. Additionally, learn the various software solutions available for sustainability management. Tools make quantifications of impacts automated and much easier to manage. Having a basic understanding of how these systems work is going to help immensely when a client or supervisor wants to implement one of these systems at your organization.

3. Understand how to design and implement higher level corporate sustainability initiatives, such as stakeholder engagements, sustainability strategy development, and sustainability management systems. These skills are immensely important for any candidate as:

  • A stakeholder assessment identifies what sustainability aspects are important to an organization, and whom it is important to (internal and external stakeholders)
  • A strategy incorporates the identified sustainability aspects into their vision and develops it into a blueprint for the organization to follow for sustainability success
  • A sustainability management system is the engine that continually drives the organization toward achieving their sustainability goals and reducing risk

To me, number 3 has been the most important. It has allowed me to provide my clients with unified, cohesive solutions that have increased brand recognition, decreased cost, increased sales, and reduced risk for their organization.

You’ll notice that there aren’t any certifications, accreditation’s, or other professional sustainability “labels” mentioned above; while I think they can somewhat beneficial, they come and go and if everyone has them, how does that differentiate you? To me, it doesn’t, and the facets I have listed above can apply to more than just sustainability.

Think about how you can apply all three of these facets to your job to help your organization succeed.

Love it? Hate it? Let me know!

Strategy, Sustainability

Making Sustainability Profitable

Today I read a great article on the Harvard Business Review about making sustainability profitable. The article highlights a study by the World Economic Forum that investigated international companies considered to be sustainability “champions” in the developing world. Some highlights from the article:

  • Companies implementing sustainability practices have “above average” growth rates and profit margins
  • Sustainability efforts have been the most successful in resource constrained economies
  • Efforts that involve more sustainable operations can require more long term investment- but those investments have payed for themselves many times over

Business benefits like these are often overlooked when sustainability initiatives are taken into consideration. When speaking with clients that are skeptical of the business value, or that need help selling the value proposition to top management, I try to emphasize the common business benefits related to sustainability (along with some estimated dollar amounts where applicable):

  • Reduced material costs- Less energy costs. Less water use. Less waste disposal costs. Less is more these days, and it is hard to deny that reducing the inputs into your product and operational systems will keep more dollars in your pocket. Easy argument to make because these are realized costs for every company.
  • Reduced risk– Managing risk can prevent compliance issues and fines. It can also stop supply chain shortages that would prevent a company from producing more of their products. This is often overlooked because it is preventative, but it is an important consideration- and a consideration most sustainability champions have already taken care of.
  • Enhanced branding- Being considered “green” is just one facet of growing a strong brand. Kraft, 3M, Toyota, Siemens, Johnson & Johnson, Honda, Volkswagen, Cisco, and HP are just a few of the high performing companies within the Fortune 500 that have deep and successful sustainability programs that have bolstered their images as top international companies. Harder to put a actual dollar amount on- unless the company is being acquired or purchased!
  • Top line revenue growth- Phillips just reported that roughly half of their revenues in 2012 were attributable to green products. $15 billion in revenue is an incredibly easy argument to make, and if companies aren’t utilizing Life Cycle Assessment, green product design standards, EPD’s or other systems that improve the environmental performance of their products, they will continue to sell less of their products to high performing competitors as consumer demand for more sustainable products increases.

These are just the business values- there are other reasons, like “doing the right thing,” or the whole preserving-the-environment-for-future-generations idea (crazy, right?!). But when we are talking about business, the reality is that we need to speak in the language of money.

These opinions are my own. Love it? Hate it? Let me know!

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