May 17, 2020

Open season in the Atlantic

4 min
Open season in the Atlantic

There was a collective green gasp late last month when President Barack Obama announced a proposal to open part of the eastern seaboard, the Gulf Co...

There was a collective green gasp late last month when President Barack Obama announced a proposal to open part of the eastern seaboard, the Gulf Coast and Arctic sea to offshore oil drilling.

“We’re appalled that the president is unleashing a wholesale assault on the oceans,” says Oceana Senior Campaign Director Jacqueline Savitz. “Expanding offshore drilling is the wrong move if the Obama administration is serious about improving energy security, creating lasting jobs and averting climate change.”

And that was only the start. The Sierra Club, The National Resources Defense Council, Greenpeace and scores of other green organizations condemned the Obama Administration's proposal.

The drilling debate is particularly hot along the Virginia coast where state officials and about 70 percent of the Commonwealth's residents are hoping to see leases signed with major energy suppliers sometime within the next 18 to 24 months. Virginians are committed to the idea of freeing the United States from its dependence on foreign oil and plumping up state coffers with royalties from oil sales.

Environmentalists, on the other hand, believe coastal communities and industries are far more valuable than the offshore oil reserves. “Opening the South Atlantic Coast to oil and gas drilling will do nothing to address climate change, provide only about six months worth of oil, and put at risk multi-billion dollar tourism and fisheries industries. One oil spill could devastate a coast,” said Deb Carter, director, Carolinas Office of the Southern Environmental Law Center.”

So far, green organizations and the administration of  Virginia's Governor Bob McDonnell are the only players who have their cards on the table. Environmental groups have promised to fight offshore drilling with PR campaigns and court challenges, and their word is good. McDonnell and the majority of the state's residents will watch and no doubt root for the pro-drilling faction. As for who might do the drilling, that's not clear yet.

The problem is that no one knows for certain how much oil and gas is out there, and estimates vary wildly. The federal government's Mineral Management Service estimates  that the 2.9 million acre area that will be up for lease contains 130 million barrels of oil, enough to supply Virginia’s  energy needs for  about seven months. However, MMS also admits that estimate is based on  a 30-year old study that's badly out of date.

Oil companies have made their own estimates but they are holding those numbers close to their vests. However, some updated estimates based on different models suggest there could be from two to seven billion barrels of oil off Virginia's coast and 36 trillion cubic feet of natural gas.

 Most people watching the drilling debate play out agree those numbers are high and they are waiting for real data. So far, seven geophysical exploration companies – Schlumberger subsidiary WesternGeco, Seabird Exploration, CGG Veritas, GX Technology, TGS Nopec and Spectrum Geo – have applied for permits to explore the area. The seismic companies intend to peddle the results of the tests in a multi-client fashion to interested energy producers who will then use the information to decide whether or not to bid on an offshore oil lease.

Once a lease is awarded, there is survey work required, an exploration plan must be submitted and approved and an oil rig must be constructed. Then there's an environmental impact statement that will weigh the value of energy reserves against possible environmental damage. Those hearings are several years off and there's no doubt environmental groups have already started amassing information to use in their fight to stop any drilling. 

It generally takes a minimum of seven years for an offshore lease sale to undergo the required environmental reviews before producing oil or gas, but because this would be the first drilling off the East Coast, may take even longer.

Oil is measured in what the industry sometimes calls easy and hard barrels. Easy barrels come from humming onshore oil wells pumping soft ground somewhere in Texas. Hard barrels are sucked out of the continental shelf 50 miles out into the windy and unpredictable Atlantic. 

The differences in the costs of producing onshore and offshore oil are dramatic. Add that to a seven-year environmental review, legal challenges and the cost of an offshore lease and you eliminate any small oil companies from the competition of bidding for offshore drilling rights.

Although no plans have been announced analysts have predicted any new leases are likely to go to the oil giants – Chevron, Exxon Mobil, BP and Shell.


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Jul 13, 2021

Technology revolution for water retailers

Paul Williams
4 min
Paul Williams, Chief Technology Officer at Everflow Tech, reflects on privatisation, industry complexities and future for utilities in a digital world

In April 2017, the UK’s water retail market in the world opened for business – the single biggest change to the water sector since privatisation. This development allowed businesses, charities and public sector organisations to shop around for the best deal.
However, like any industry, this change hasn’t been without its sticking points; here, Paul Williams, CTO at Everflow Tech (pictured far right), discusses how retailers can harness technology to their advantage

Our CEO, Josh Gill, set up independent retailer Everflow Water in 2015, and Everflow Tech is his response to the difficulties it faced.

Quotations could take up to a week to produce, billing software had to be manually updated and brokers were unable to manage the complete customer journey in one place – all of which took time, cost money and allowed for human error.

The more complexity that was involved in billing or quoting, the more contact end customers needed to have with their retailers, pushing up the cost to serve for every SPID. This meant retailers – ourselves included – found themselves in a situation where profits were simply eaten up by service costs.

We also note that it can traditionally be hard for retailers to stay on top of balancing what they are charging their customers with what they are being charged by the market. To further exacerbate this, the longer a change goes unnoticed, the more trouble it can be to balance the issue.

It was these issues that Josh and his (at the time) small team wanted to ameliorate, creating their own technology in the absence of anything else.

This technology evolved into our award-winning retail sales, billing and customer management platform for the water retail market, and Everflow Tech was launched as a standalone venture in 2018, selling the software externally for other water retailers and their customers to benefit from.

What retailers want

As a relatively new entrant to the world of utilities competition, the water market could be seen to be lagging behind, particularly when it comes to innovation.

In fact, as recently as 2019, Ofwat said it expected the industry to be making technological advances and to be working with a culture of innovation, collaborating with companies both within and outside of the sector.

And with cost-savings for consumers traditionally lower than for other utilities, retailers need to be offering something more – whether that’s better support, energy-efficiency advice or more accurate data.

What’s more, consumers have had a taste of the power of technology, and they’ve come to expect nothing less from retailers across the board.

Another key issue – thrown into sharp relief during the past 12 months (and counting) of a pandemic – is rising levels of arrears, which are likely to increase bad debt beyond margins that retailers originally allowed for when the market was created.

In such a low-margin industry, there is a limit to the amount of debt retailers can take on, especially as recovering costs can be a very slow process. Ofwat has signalled that this issue could be addressed as early as this year, with a mechanism for recovering bad debt to be established during 2021/22. 

The market needs simple solutions to better serve the end user, and we were perfectly placed to develop those solutions. At Everflow, our software is designed for the water retail market, by the water retail market.

As well as simple billing, clear-to-understand workflows, and a revenue assurance system to allow retailers to quickly compare market charges, Everflow has also introduced a complete debt solution, allowing missed payment dates to drive late payment charges and escalations automatically.

Retailers are able to design and put out their own bill and quotes, tailoring customer journey and overall experience – whatever the circumstances.

What does the future hold?

Automation is key to any industry; we’re heading into an age of driverless cars and smart homes, and this drive for tech will filter through to our industry, and we need to catch up. 

The Internet of Things – a network of physical objects connected to each other – means human error (and effort) can effectively be removed from many everyday tasks, which goes for meter readings too. However, in the 21st century, the water market is still not leveraging previously emerged technology in the form of smart meters to provide accurate billing. 

Consumers are also becoming more empowered, both to ask for information and change their preferences if they don’t like what they learn. Retailers need to be armed with this information, not next week, not tomorrow, but now – and, at Everflow Tech, we’re putting that information at their fingertips.

But the retailers themselves need to speak up too, and we will always work with them to get the best ideas on what needs to be developed and when.

Our strong bond with Everflow Water, along with other key customers, means we have a direct interest in making sure our systems serve the water market in the best way they can. 

For us, the goal is to make sure retailers on our platform can grow as much as possible, leaving behind laborious daily processes to focus on their own strategic growth and, most importantly, helping their customers.

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