Oil, gas industries "on track" for Y2K

A new survey finds that the oil and natural gas industries are "on track" to solving their Year 2000-related computer systems challenges before the end of this year, though localized problems and circumstances beyond the industry's control raises some concern.

Conducted by the American Petroleum Institute, a body consisting of the industry's trade associations, the study found that more than four-fifths of the combined oil and gas industry companies, 86 percent, are in the final stages of fixing and testing business information systems to accommodate the Y2K date.

"Based on these survey results, we believe that we are well on our way to being 'Y2K Ready' when January 1, 2000 arrives so that consumers will have an uninterrupted flow of fuel for heating, transportation and industrial uses," Oliver G. "Rick" Richard, chairman, CEO, and president of Columbia Energy Group, told members of the Federal Energy Regulatory Commission during a presentation yesterday.

Richard is the gas and oil industries' representative on the senior advisory group of the President's Council on Year 2000 Conversion.

As for the embedded hardware systems found in everything from fuel pumps to pipelines, 78 percent of respondents to the survey said they are either in final stages of fixing or testing their hardware and embedded systems for Y2K readiness. The response to the September 1998 survey was just 46 percent, according to the institute.

One "key" discovery appears to fly in the face of Y2K experts' earlier concerns that the amount of embedded chips found throughout the industry performing various functions would make it difficult to find most of them, test them and, if needed, replace them before the end of the year. Experts feared this could possibly causing mass failures.

However, the API study found that embedded chips do not pose a significant problem for the industries," Ron Quiggins, director, Year 2000 Program, Shell Services and chairman of the API Year 2000 Task Force, said in a statement. "We're not finding the embedded chip failures that we thought we had."

The Y2K bug comes from antiquated hardware and software formats that denote years in two-digit formats, such as "98" for 1998 and "99" for 1999. The glitch will occur in 2000, when computers are either fooled into thinking the year is 1900 or interpret the 2000 as a meaningless "00." The glitch could throw out of whack everything from bank systems to building security procedures, some experts warn.

When respondents were asked to identify the major challenges they face in achieving Y2K readiness by December 31, 1999, one of the frequent responses was a lack of information regarding Y2K readiness by key utility providers, including telecommunications, electricity, and water.

Nearly all respondents, 97 percent, said they expect to have their Y2K contingency plans in place and tested by the end of the third quarter.

The survey covers about 1,000 companies within the oil and gas industries. Those companies' customers represent 88 percent of the consumption of those fuels in the United States, according to API. This represents a 34 percent increase, up from 66 percent, of the energy volume covered since the gas and oil industries' first Y2K survey in September.