OIL INDUSTRY READY FOR Y2K

OIL INDUSTRY READY FOR Y2K

Isaac Asimov's science fiction classic ''Nightfall,'' first published in 1941, is a cautionary lesson.

The story unfolds on a planet with six suns, where darkness descends but once every 2,049 years, the result of a rare solar eclipse.When all six suns simultaneously cease to shine (five set while the sixth is in eclipse), the people go mad. They set raging fires to provide light, destroying their entire civilization.

The arrival of the millennium and the 21st century has the potential in the Y2K Computer Bug to create an overreaction.

The press has been drawn in force to explore the potential failure of computers to adapt to the millennium, and the possibility of runs on gasoline pumps, automatic teller machines and bottled water.

Are we headed for computer chaos or will it be just a bump on Cyber Boulevard? I can only speak with certainty about my own industry, oil and natural gas. But I can hazard an informed guess on the general situation.

Too much is at stake for potential problems to go uncorrected. Businesses cannot afford to be paralyzed by Y2K. They risk lost profit, angry customers and lawsuits. Government agencies and officials who drop the ball would alienate taxpayers and voters.

The U.S. oil and natural gas industry is a case in point.

Oil and gas companies first looked at their operations for Y2K back in the mid-1990s. They immediately recognized their vulnerability.

Computer technology operates valves and controls on drilling and production equipment. It manages refinery operations. It regulates the flow and monitors leaks on pipelines. It steers ships and powers telecommunications. It also makes it possible to pay by credit card at the pump.

So companies began systematically checking and testing their computers. Where problems were detected or suspected, equipment was upgraded or replaced. Companies also established contingency plans to respond to possible problems that couldn't be anticipated.

Every sector has prepared, including overseas operations and the huge oil tankers that bring the United States more than half of the crude oil it uses to make gasoline and other petroleum products.

Finally, companies have worked closely with the electric power industry and other suppliers of critical goods and services that must be ready for Y2K for the oil and gas industry to be ready.

The most recent survey of the industry's Y2K readiness shows that all oil and gas companies that responded expect to be prepared by year-end. In fact, more than nine out of 10 said that all preparations would be completed at least three months before 2000 arrives.

This is not a guarantee that the U.S. oil and gas industry has 100 percent, bulletproof protection against all Y2K problems. But between the industry's extensive preparations, contingency plans and other backstops, consumers aren't likely to be much inconvenienced by any problems that do occur.

Even if a foreign supplier of crude oil experiences problems, Americans have little to worry about. U.S. companies have substantial inventories of crude oil, the government maintains a strategic crude oil reserve and a month's supply is in transit crossing the oceans at any given moment. Moreover, any interruption in imports from one nation would motivate other foreign suppliers to bring more of their own oil to market.