Downstream Assets Research Articles

Intelligent control of combined sewer systems using PySWMM—A Python wrapper for EPA’s Stormwater Management Model

Wastewater utilities face competing priorities as they work to protect human health and water quality, and to maintain infrastructure in their communities. Budgetary constraints can be especially pronounced among small to medium-sized utilities. Utilities are increasingly turning to so-called intelligent water approaches as a cost-effective alternative to upgrading aging infrastructure. Intelligent water encompasses automated control and real-time decision support technologies and can be applied at scale to large and small utilities alike accommodating differences in needs, capabilities, and funds. Intelligent water upgrades can be designed to optimize existing conveyance, storage, and treatment during storms to help mitigate flooding and combined sewer overflows. The most promising real-time control algorithms coordinate control of upstream and downstream assets and are designed using urban hydrologic and hydraulic modeling software. The capabilities of legacy software, however, can sometimes inhibit the creation of sophisticated control algorithms. In this paper, we present PySWMM — an open-source Python wrapper developed for the EPA Storm Water Management Model (SWMM). PySWMM enables runtime interactions with the SWMM computational engine to flexibly read, modify system parameters, and control digital infrastructure during a simulation. Crucially, it allows modelers to easily combine SWMM with the rich set of scientific computing, big data, and machine learning modules found in the Python ecosystem. We highlight two real-world intelligent water case studies utilizing PySWMM in the cities of Cincinnati and Columbus, Ohio where it has helped to eliminate tens of millions of gallons of combined sewer overflows annually.

Incorporating cascading effects analysis in the maintenance policy assessment of torrent check dams against torrential floods

In mountainous regions, protection infrastructures designed to mitigate the impacts of torrential floods often consist of a complex system of several structural components (check dams). Over time, the efficacy of this system in protecting downstream assets diminishes as the structural components deteriorate. The extent of deterioration is influenced by the interdependencies between the failure modes of individual components, as well as those between multiple components of the system. Understanding and quantifying the chain of failure events, known as cascading effects, is a critical scientific challenge that remains largely unexplored. In this study, we propose a novel approach that employs physics-based models to examine the deterioration of a series of check dams over time, while considering failure dependencies and bidirectional interactions between consecutive dams. The results obtained from this approach reveals that the absence of a downstream dam accelerates the deterioration rate of upstream dams, while its presence serves to stabilize them. We further incorporate stochastic deterioration and maintenance processes using Stochastic Petri nets to support decision-making regarding maintenance actions for each dam, while also considering economic factors. Strategies involving minor operations achieved cost-effectiveness and prolonged satisfactory performance of the dams, with notable impacts from upstream and downstream dam presence on maintenance costs. We illustrate our approach using a case study of the Faucon torrent in France, where we model the deterioration of three consecutive check dams subjected to torrential floods over a period of 100 years.

New hybrid method for vulnerability assessment in floodplain areas exposed to dam break

AbstractNatural and man‐made factors can cause dam failure, which constantly threatens downstream assets. Flood risk assessment is typically developed according to the hydraulic and geographic characteristics of floodplain regions. However, previous approaches have not considered asset values and the impacts of flooding on them, including threat probability and consequences. This report presents a new integrated hybrid model based on security vulnerability assessment and hydraulic analysis of floods and uses the source‐pathway‐receptor‐consequences (SPRC) approach to comprehensively examine all factors. A questionnaire survey was used for performing threat analysis and attractiveness analysis and determining the asset values and consequences. A geographical information system was applied to superimpose layers based on the SPRC approach in five different scenarios based on piping discharge and downstream flow in the case of a dam break. These scenarios were developed considering the basin water level. The results illustrate that residential areas have the highest vulnerability, and farmlands exhibit the lowest exposure to flooding caused by dam failure. Based on the attraction to terrorism, criticality due to consequences, and flooding characteristics, high‐risk zones were identified for implementing mitigation or protection countermeasures.

Phasing out the blast furnace to meet global climate targets

Phasing out the blast furnace to meet global climate targets

Peer-to-Peer Platforms and the Substitution of Incumbents’ Complementary Assets

In this paper, we study how the entry of peer-to-peer platforms affects incumbents’ performance by changing the way incumbents transact with consumers. We argue that the increasing supply of potential substitutes for incumbents’ core assets on peer-to-peer platforms results in increasing competitive pressure, which pushes incumbents to find new ways to promote their own core assets. At the same time, with the entry of peer-to-peer platforms, more offerings are available for consumers on digital platforms, and their incentives to look for opportunities to transact through digital platforms increase. Together, these two effects result in a shift towards more business between incumbents and consumers being done on digital platforms. This, in turn, poses a major challenge for incumbents because digital platforms act as a substitute for the complementary downstream assets that many incumbents have traditionally benefited from to capture (and protect) value in the market. Using data from the hotel industry in the state of Texas, we show that peer-to-peer do not only affect incumbents operating in the same market segment, but also those whose complementary downstream assets will become less valuable as more business is shifted to digital platforms.

Total inks deal to shed UK refinery, downstream assets

Total inks deal to shed UK refinery, downstream assets

ADNOC’s New CTO Shares Innovation Philosophy

Alan Nelson is 1 year into his new job as the chief technology officer of the Abu Dhabi National Oil Company (ADNOC). It is a new job for ADNOC too. He is the first person to ever hold the title of CTO at the almost 50-year-old oil and gas producer, a fact he said reflects “a new mandate” to further invest in science and technology. The fruits of the approach are funneled into the organization via three core areas: innovation (i.e., research and development), the digital transformation, and sustainability. “One of the key reasons why sustainability reports into the CTO is of course that this will require new technologies,” said Nelson. “Some technologies that we can see today, that we could scale up and implement. Other technologies that are yet to be developed but that we need to develop in order to continue to be a sustainable company.” And like many of the integrated oil companies, the last downturn sparked a drive within the organization to seek out or develop emerging technologies to bring a new order of automation and lower operating costs. Under Nelson’s brief tenure, ADNOC has already made several big moves toward this goal including a partnership with Saudi Aramco to open a research center in the UK that will focus on creating nonmetallic technologies to limit the industry’s exposure to costly corrosion issues. This was accompanied by a raft of other partnerships and joint-venture projects that aim to create new artificial intelligence programs. The biggest of them is a 10-year contract with Honeywell which was selected to deploy its predictive maintenance platform across the company’s upstream and downstream assets. One of the other major initiatives Nelson oversees today is known as the Panorama Digital Command Center. Panorama leverages advanced computing tools such as artificial intelligence and digital twins to make the company’s oil fields accessible remotely. Earlier this month, ADNOC reported that the center delivered over $1 billion in value since it was launched 3 years ago. Nelson spoke about how the project prepared his company for the highly disruptive consequences of a global pandemic in an interview with SPE Live. “Through our Panoramic Digital Command Center we have real-time data at our fingertips - this is data that is updated second by second. So we can track the performance of our assets in real time, and by that we keep our people as safe as we possibly can,” said Nelson. Below are some of the highlights from the interview. What Modernization Means at ADNOC “For us, it means staying relevant, it means staying ahead of the curve. The world is changing, and we all know that we’re going through that now - whether it’s the current pandemic situation that we’re all having to work through and navigate, or whether it’s the current oil and gas price.” Nelson elaborated on the elements he considers necessary to achieving relevancy. “First and foremost is culture. In order for the company to maintain that bleeding edge on science and technology, you have to have innovation as a part of company culture.

The Effectiveness of Secrecy As An Appropriation Mechanism Evidence From The Uniform Trade Secrets Act

Although the study of appropriability has received substantial attention in strategy literature, little is known about how trade secrecy as appropriation mechanism affects firm R&D productivity, let alone under what conditions the effect of trade secrecy on firm R&D productivity is more or less pronounced. Thus, this study examines how and when trade secrecy improves firm R&D productivity. Using a natural experiment provided by the staggered implementation of trade secret law – Uniform Trade Secrets Act - and using a difference-in-differences approach, we find that the stronger trade secret protection positively affects firm R&D productivity. We also find that the positive effect of stronger trade secret protection on firm R&D productivity is less pronounced for firms possessing a larger number of patents while the effect is more pronounced for firms investing into more downstream complementary assets. We further find that the positive effect of strong trade secret protection on firm R&D productivity is more pronounced in complex technology industries relative to discrete technology industries and the positive effect is also more pronounced in highly concentrated industries.

Digital Transformation and the Value of Incumbents' Complementary Assets: The Substitution Effect of Digital Platforms

In recent years, peer-to-peer platforms have entered several industries and challenged the way in which incumbents do business. Instead of owning any assets directly, they focus on matching buyers with sellers that own the required assets and are willing to share them. Therefore, these platforms are generally considered a competitive threat to traditional businesses, particularly to those that are positioned in the same market segment, which is usually the lower end of the market. In this paper, we show that the main threat that peer-to-peer platforms pose to incumbents is not necessarily the direct competition effect but rather the shift on the demand-side that they trigger. By shifting consumer habits towards using digital platforms, they force incumbents to increasingly use these platforms to promote their physical assets as well. For incumbents who have traditionally benefited from using their own complementary downstream assets to promote their physical assets, this poses a major challenge because digital platforms act as a substitute for these downstream assets and decrease their value. Using data from the hotel industry in the state of Texas, we show that the incumbents that are ultimately affected the most by peer-to-peer platforms are not necessarily the ones operating in the same market segment, but those whose complementary downstream assets will become obsolete as more business is shifted to digital platforms.

Specializing in Generality: Firm Strategies When Intermediate Markets Work

This paper studies the relationship between two decisions shaping the organizational configuration of a firm: whether to make the upstream resources more general and deployable to more markets (versus keeping them tailored to a few markets) and whether to trade with downstream firms as an upstream supplier of intermediate products and services (versus directly entering downstream markets). Although the literature has looked at these two decisions separately, we argue that they depend on each other. This has the important implication that they can generate organizational complementarities, inducing firms to implement them jointly. We are motivated in particular by the observation that an increasing number of firms invest in general upstream resources and exploit them as upstream suppliers of intermediate services or products—a strategy that we refer to as specialization in generality. Interestingly, prior literature has mostly highlighted the use of general upstream resources to enter new downstream markets. We identify the supply and demand conditions under which specialization in generality is instead more likely to emerge: lack of prior downstream assets on the supply side and a roughly equal distribution of buyers across intermediate markets (a “broad” demand) on the demand side. We test our predictions using a sample of firms in the U.S. laser industry between 1993 and 2001. A regulatory shock that increases the value of trading relative to downstream entry provides the setting for a quasi-natural experiment, which corroborates our theoretical predictions.

Can Universities Profit From General Purpose Inventions? The Case of Canadian Nanotechnology Patents

The lack of control over downstream assets can hinder universities' ability to extract rents from their inventive activities. We explore this possibility by assessing the relationship between inven...

Landslides caused by the Mw7.8 Kaikōura earthquake and the immediate response

Tens of thousands of landslides were generated over 10,000 km2 of North Canterbury and Marlborough as a consequence of the 14 November 2016, Mw7.8 Kaikōura Earthquake. The most intense landslide damage was concentrated in 3500 km2 around the areas of fault rupture. Given the sparsely populated area affected by landslides, only a few homes were impacted and there were no recorded deaths due to landslides. Landslides caused major disruption with all road and rail links with Kaikōura being severed. The landslides affecting State Highway 1 (the main road link in the South Island of New Zealand) and the South Island main trunk railway extended from Ward in Marlborough all the way to the south of Oaro in North Canterbury.
 The majority of landslides occurred in two geological and geotechnically distinct materials reflective of the dominant rock types in the affected area. In the Neogene sedimentary rocks (sandstones, limestones and siltstones) of the Hurunui District, North Canterbury and around Cape Campbell in Marlborough, first-time and reactivated rock-slides and rock-block slides were the dominant landslide type. These rocks also tend to have rock material strength values in the range of 5-20 MPa. In the Torlesse ‘basement’ rocks (greywacke sandstones and argillite) of the Kaikōura Ranges, first-time rock and debris avalanches were the dominant landslide type. These rocks tend to have material strength values in the range of 20-50 MPa.
 A feature of this earthquake is the large number (more than 200) of valley blocking landslides it generated. This was partly due to the steep and confined slopes in the area and the widely distributed strong ground shaking. The largest landslide dam has an approximate volume of 12(±2) M m3 and the debris from this travelled about 2.7 km2 downslope where it formed a dam blocking the Hapuku River. The long-term stability of cracked slopes and landslide dams from future strong earthquakes and large rainstorms are an ongoing concern to central and local government agencies responsible for rebuilding homes and infrastructure. A particular concern is the potential for debris floods to affect downstream assets and infrastructure should some of the landslide dams breach catastrophically.
 At least twenty-one faults ruptured to the ground surface or sea floor, with these surface ruptures extending from the Emu Plain in North Canterbury to offshore of Cape Campbell in Marlborough. The mapped landslide distribution reflects the complexity of the earthquake rupture. Landslides are distributed across a broad area of intense ground shaking reflective of the elongate area affected by fault rupture, and are not clustered around the earthquake epicentre. The largest landslides triggered by the earthquake are located either on or adjacent to faults that ruptured to the ground surface. Surface faults may provide a plane of weakness or hydrological discontinuity and adversely oriented surface faults may be indicative of the location of future large landslides. Their location appears to have a strong structural geological control. Initial results from our landslide investigations suggest predictive models relying only on ground-shaking estimates underestimate the number and size of the largest landslides that occurred.

Can universities profit from general purpose inventions? The case of Canadian nanotechnology patents

The lack of control over downstream assets can hinder universities' ability to extract rents from their inventive activities. We explore this possibility by assessing the relationship between invention generality and renewal decisions for a sample of Canadian nanotechnology patents. Our results show that general purpose inventions enjoy a longer legal life. Although private sector organizations renew their patents at a higher rate than universities, the gap between the two sectors decreases as invention generality increases. However, there is little indication that the most general purpose inventions owned by universities survive for longer than the ones owned by private sector organizations.

A Configurable $\mu $ VPP With Managed Energy Services: A Malmo Western Harbour Case

This paper describes an exemplar precommercial micro virtual power plant ( $\mu $ VPP) that has been successfully commissioned and operating since July 2014 in Malmo, Sweden. The embedded home energy management system concurrently manages downstream assets within a typical residential community of multiple apartments and delivers different energy services that benefit both end-users and system operators. A fuzzy logic-based generic algorithm is developed to accommodate different types of services with the appreciation of system constraints. Each managed energy service is demonstrated in terms of its function, the level of utilization for asset capacity, and the economic benefit to participants. It addresses the viability of mass-market promotion for this $\mu $ VPP by establishing a detailed business model for all participants in the energy portfolio.

Late life management of onshore and offshore pipelines

The Australian oil and gas boom of the 1960s and 1970s lead to production commencing in the Gippsland, Surat, Cooper and Carnarvon basins and so many pipeline assets around Australia are approaching operating lives of 40-50 years and the end of their design lives. With unconventional field development and the Australian gas markets opening up to international customers through LNG, there will be an increasing requirement to extend the life of pipelines while maintaining safety and integrity. The management of pipeline assets late in their design life is a challenge for operators both onshore and offshore, with pipelines requiring higher levels of inspection and maintenance, while revenues can be fixed or regulated for downstream assets or potentially declining for upstream assets. To operate pipelines beyond their specified design life, there are requirements that must be fulfilled—for offshore, a design re-qualification in accordance with DNV-OS-F101 and for onshore, a remaining life review in accordance with AS2885.3. In addition, for onshore pipelines, AS2885.3 requires the remaining life review process to be undertaken every 10 years, rather than just at the end of the design life. This extended abstract discusses the requirements of the DNV-OS-F101 and AS2885.3 and the approaches required to meet these requirements. It also discusses key lessons that have been learned and makes recommendations to pipeline operators preparing for end-of-design-life reviews and executing them as cost effectively as possible.

Competing and partnering for resources and profits: Strategic shifts of oil Majors during the past quarter of a century

This article analyzes the change over the past 25 years in selected financial and operational performance indicators of US and EU based peer groups of oil Majors. After the Millennium's turn, all peer group companies experienced steep rises in their unit cost of production. Until 2000, oil Majors could replace reserves depleted by production, typically by splitting capital employed equally between upstream and downstream activities. Upstream assets include progressively more deepwater fields and unconventional resources, resulting in increased reserve replacement costs. This means the share of capital employed on upstream projects has risen to 70% in 2013. Capital expenditure (Capex) in the upstream segment for oil Majors is nearly 80% of the total, and for downstream (and other activities) Capex has been reduced accordingly (partly by asset divestures). In spite of sharply increased Capex on upstream projects, production output of the peer group has declined 6% since 2006. The profitability of upstream projects peaked in 2008, then declined and subsequently steadied at returns on capital employed (ROCEs) of about 20% in the period 2010–2012. US Majors have returned a greater proportion of cash generated from operations to shareholders than their EU counterparts, consistently so over the past 6 years. US companies achieved this better outcome in part by rapidly decreasing capital employed in downstream assets when these became less profitable. Downstream ROCEs have been weak over the past decade, but a modest recovery has begun. Downstream ROCEs of 15% in 2012 are sharply up from a low of 5% in 2009. For the coming decade, we expect fierce competition for technology leadership. To meet rising demand, oil and gas companies must increasingly produce from very complex fields, development cost of which will inevitably require high oil and gas prices. The rising cost of hydrocarbon extraction creates a strong incentive to accelerate the energy transition away from costly hydrocarbons toward progressively more affordable renewable energy resources.

A software tool for the spatiotemporal analysis and reporting of groundwater monitoring data

The GroundWater Spatiotemporal Data Analysis Tool (GWSDAT) is a user friendly, open source, decision support tool for the analysis and reporting of groundwater monitoring data. Uniquely, GWSDAT applies a spatiotemporal model smoother for a more coherent and smooth interpretation of the interaction in spatial and time-series components of groundwater solute concentrations. Data entry is via a standardised Microsoft Excel input template whilst the underlying statistical modelling and graphical output are generated using the open source statistical program R. This paper describes in detail the various plotting options available and how the graphical user interface can be used for rapid, rigorous and interactive trend analysis with facilitated report generation. GWSDAT has been used extensively in the assessment of soil and groundwater conditions at Shell's downstream assets and the discussion section describes the benefits of its applied use. Finally, some consideration is given to possible future developments.

The New Frontier for National Oil Companies

Western countries abandoned the National Oil Company (NOC) model many years ago, but the rise of NOCs has shifted the balance of control over the world’s hydrocarbon resources. In the 1970s, NOCs controlled less than 10% of the world’s energy resources, but now they control more than 90% of reserves and 75% of production. This shift comes in concert with increased access to capital, expertise and technology, as NOCs build in-house capabilities that allow them to operate increasingly independently. NOCs have been increasing their ability to contract and manage operations through oilfield services companies. We see an evolution in roles and strategies for all oil and gas companies – including NOCs, international oil companies and independents. NOCs have seen their power and influence grow. Moreover, the demands on NOCs continue to evolve with changes in the global energy landscape – changes in demand, discovery of new sources, and national and geopolitical developments. As managers of their country's natural resources, NOCs have generally owned and managed their complete oil and gas supply chain from upstream to downstream activities, but now they are emerging as both potential partners and competitors on the international scene in search of upstream and downstream assets. While the rise of NOCs, accelerated by high oil prices, has seen the balance of control over hydrocarbon resources shift in their favor, we see an increasingly disparate range of political and economic roles, strategies, and performance. In this paper we discuss several important themes in terms of NOC strengths, weaknesses, opportunities and challenges.

Swimming Against the Current - Radical Innovation and Startup Firm Market Value

The study explores how pursuing radical innovations shapes market values and hence performance expectations for young startup firms. It departs from the typical emphasis on the advantages of startups “attacking” established firms and considers a setting in which established firms maintain control of critical downstream complementary assets. By examining product innovations of the startup relative to established firms, we show that pursuing radical innovations may have adverse performance implications in the form of market valuations. We further demonstrate that the formation of commercialization partnerships by startups and failures in product development initiatives by established firms attenuate such market value penalties. The findings argue for considering closely the important role of established firms in providing legitimacy and resources for value creation by startup firms pursuing radical innovations.

Comments: IOCs Look to the Upstream

Editor's column The relationship between international oil companies (IOC), national oil companies (NOC), and service companies has been evolving over the past 3 decades. NOCs, which own a large majority of global reserves, have become better at project management and at developing and deploying technology. Service companies have taken over much of the industry’s upstream technology developed as IOCs restructured their businesses. IOCs, in many cases, have been struggling to replace reserves and see an unclear future. A new report maintains that the latest IOC strategy is to divest some downstream assets to raise capital for more vigorous upstream plays, such as deepwater or unconventional plays. Higher capital spending in upstream activities will be the main driver for the restructuring of operations by integrated oil companies, according to GlobalData (Business Restructuring in International Oil Companies, www.globaldata.com). As an example, several integrated oil companies restructured business segments last year by divesting or spinning off downstream assets, among them ConocoPhillips and Marathon. Both companies announced last year that they would separate their upstream and downstream operations into separate entities. Even with the spinoffs, ConocoPhillips and Marathon will be among the largest refineries in the United States. The study concludes that the main reason is so these companies can focus more on upstream activities over the next 5 years because of the lack of significant discoveries since 2010 and because of the depletion of their global conventional reserves. The money raised from divesting downstream assets could help fund expensive deepwater plays or to acquire “pure play” smaller upstream firms that have expertise offshore or in unconventional projects. “IOCs have shifted from a more holistic approach to maximizing the profitable returns from individual sectors,” the report says. “These companies have decided to divest stakes in noncore assets to build up their core strategic assets, primarily focusing on upstream activities.” IOCs need to increase spending in the upstream to keep pace with firms devoted solely to upstream projects, according to the report. Reserve replacement ratios of the IOCs have lagged those of upstream pure-play companies from 2007 to 2011. That ratio of IOCs was 132% over the period compared with 179% for companies devoted solely to upstream activities. “The reserve replacement ratio helps in deciding the future prospects of a company and the number of years it will be able to sustain its current production levels with its current reserves,” the report said. Regions that should see significant upstream activities by IOCs include the South China Sea, Baltic Sea, Barents Sea, South America, and east and west Africa. One of the things that has made the downstream less attractive and profitable for integrated companies is the imposition of stricter environmental regulations in the US and western Europe particularly since 2010. Looking forward, refinery expansion is likely to take place elsewhere such as in Asia, Africa, the Middle East, and Latin America, where regulations are less strict.