- February 22, 2023
- SICK, Inc.
- White Paper
How Improving Flare Accuracy Can Alleviate Reporting Problems
Without exception, all industries are facing major challenges due to the volatile business environment in which we’ve all been operating since 2020. The energy industry is certainly no exception and may, arguably, perfectly characterize a “VUCA” industry (which stands for volatile, uncertain, complex and ambiguous). These companies, vital to our national security, operate in a business environment of wildly fluctuating product prices, escalating raw material costs, supply chain barriers and an exodus of experienced personnel.
Adding to this already pressurized environment, federal, state and local regulators are implementing perpetually stricter rules on greenhouse gas emissions seriously impacting upstream operations, and corporate board rooms as well. In an article by The Motley Fool from early in 2022, the popular investor website guided clients on a new investment criteria called Environmental, Social and corporate Governance (ESG).
The article states that “an ESG rating measures a company‘s exposure to long-term environmental, social and corporate governance risks. These risks–involving issues such as energy efficiency, worker safety and board independence–have financial implications. A good ESG rating means a company is managing its environment, social, and governance risks well relative to its peers. A poor ESG rating is the opposite–the company has relatively higher unmanaged exposure to ESG risks.” (“What is an ESG Rating?” The Motley Fool, Mar. 2022)
So, in an already VUCA industry and in a highly competitive capital market, corporate boards of many of the largest, most powerful energy companies in the world, must now publicly vow new strategic goals such as “net zero emissions” across their operations by some set near future date. Such aggressive public strategies help boards maintain the interest of increasingly activist investors via potentially positive ESG Scores.
These boards turn to their operations for practical real-world solutions to the problem of emissions reduction and elimination. One of the most obvious processes upon which to focus is one of the most visible to the public, the bright torch-like flames illuminating the desert of many production fields/facilities: natural gas flares. Where once natural gas was flared indiscriminately due to an absence of market access via pipelines, now regulators demand, in increasingly harsher tones, to know exactly how much gas is being sent to the flare tip, and they’re fining those operators accordingly.
TJ McIntyre, Sales Leader for Upstream Gas Industry
Irvin Schwartzenburg, Market Application Engineer for Flow Meters