Oil Supply Chain Research Articles

Improving natural gas supply chain profitability: A multi-methods optimization study

Developing effective optimization models to improve pipeline network profitability in oil and gas supply chains is one of the most promising research areas in this industry. Because of the substantial advantages natural gas networks’ operations have realized, this industry has become more competitive and eager to develop robust supply optimization decision models. However, although several models and techniques have been developed to reduce natural gas consumption, only very few studies have focused on comparing the performance of these models and the implications of the distinct optimization performances. Consequently, the generalizability of the research in the area is still problematic, representing a research area not sufficiently explored. Taking this into account, this paper compares the fuel consumption values in a French gas pipeline by analyzing the Genetic algorithms (GA), Generalized reduced gradient (GRG), and Ant colony optimization (ACO) models. Overall, our findings show significant differences in gas consumption when the ACO and GA are compared with the GRG technique. Furthermore, the findings indicate that ACOs are competitive with GA and GRG in computational efficiency in finding near-global optimized solutions. The article can assist decision-makers and policymakers in discovering the most profitable operational parameters to minimize gas consumption and increase the profitability of natural gas networks.

Hierarchical Reinforcement Learning for Crude Oil Supply Chain Scheduling

Crude oil resource scheduling is one of the critical issues upstream in the crude oil industry chain. It aims to reduce transportation and inventory costs and avoid alerts of inventory limit violations by formulating reasonable crude oil transportation and inventory strategies. Two main difficulties coexist in this problem: the large problem scale and uncertain supply and demand. Traditional operations research (OR) methods, which rely on forecasting supply and demand, face significant challenges when applied to the complicated and uncertain short-term operational process of the crude oil supply chain. To address these challenges, this paper presents a novel hierarchical optimization framework and proposes a well-designed hierarchical reinforcement learning (HRL) algorithm. Specifically, reinforcement learning (RL), as an upper-level agent, is used to select the operational operators combined by various sub-goals and solving orders, while the lower-level agent finds a viable solution and provides penalty feedback to the upper-level agent based on the chosen operator. Additionally, we deploy a simulator based on real-world data and execute comprehensive experiments. Regarding the alert number, maximum alert penalty, and overall transportation cost, our HRL method outperforms existing OR and two RL algorithms in the majority of time steps.

Exploring the Commercialization of Smart Rural Energy in Times of Energy Supply Chain Disruptions

The lingering COVID-19 pandemic and ongoing war between Russia and Ukraine have wreaked havoc on the global oil supply chain. The current disruption of the oil supply chain and the rapidly growing energy demand created unprecedented oil shortages and raised the oil price beyond the affordable level. As worldwide oil price hikes continue, there is an urgent need for developing alternative energy sources, such as smart rural energy. Despite its enormous potential as a viable alternative to traditional fossil fuel-based energy sources, smart rural energy has never been fully utilized in society. The limited use of smart rural energy may be related to its lack of commercialization, which could have created more eco-friendly and cost-efficient alternative energy sources. This paper assesses the eco-friendliness and cost-efficiency of smart rural energy sources such as solar, wind, biomass, and hydropower for the first time. This paper is also one of the first studies that intends to develop viable strategic plans for commercializing smart rural energy using strategy maps, which subsequently helps increase public awareness of renewable energy by creating visual communication tools that convey the benefits of smart rural energy commercialization to multiple stakeholders, including government entities, business communities, and energy consumers.

Sustainable edible vegetable oils supply chain network design considering big data: a fuzzy stochastic approach

Sustainable edible vegetable oils supply chain network design considering big data: a fuzzy stochastic approach

Developing Procurement Practices Framework in Supply Chain of Oil & Gas Sector: A Case Study of Gastec Company in Egypt

Developing Procurement Practices Framework in Supply Chain of Oil & Gas Sector: A Case Study of Gastec Company in Egypt

Deforestation, certification, and transnational palm oil supply chains: Linking Guatemala to global consumer markets

Although causal links between tropical deforestation and palm oil are well established, linking this land use change to where the palm oil is actually consumed remains a distinct challenge and research gap. Supply chains are notoriously difficult to track back to their origin (i.e., the ‘first-mile’). This poses a conundrum for corporations and governments alike as they commit to deforestation-free sourcing and turn to instruments like certification to increase supply chain transparency and sustainability. The Roundtable on Sustainable Palm Oil (RSPO) offers the most influential certification system in the sector, but whether it actually reduces deforestation is still unclear. This study used remote sensing and spatial analysis to assess the deforestation (2009–2019) caused by oil palm plantation expansion in Guatemala, a major palm oil source for international consumer markets. Our results reveal that plantations are responsible for 28% of deforestation in the region and that more than 60% of these plantations encroach on Key Biodiversity Areas. RSPO-certified plantations, comprising 63% of the total cultivated area assessed, did not produce a statistically significant reduction in deforestation. Using trade statistics, the study linked this deforestation to the palm oil supply chains of three transnational conglomerates – Pepsico, Mondelēz International, and Grupo Bimbo – all of whom rely on RSPO-certified supplies. Addressing this deforestation and supply chain sustainability challenge hinges on three measures: 1) reform of RSPO policies and practices; 2) robust corporate tracking of supply chains; and 3) strengthening forest governance in Guatemala. This study offers a replicable methodology for a wide-range of investigations that seek to understand the transnational linkages between environmental change (e.g. deforestation) and consumption.

Assessing the effectiveness and efficiency of methane regulations in British Columbia, Canada

ABSTRACT Many jurisdictions are introducing methane reduction policy as part of climate commitments, with a focus on the oil and gas supply chain. Periodic comprehensive leak detection and repair (LDAR) surveys or screening leak detection and repair surveys are required in the British Columbia, Canada oil and gas sector to reduce unintentional methane emissions caused by leaking infrastructure. By finding and fixing leaks quickly, emissions of methane, a potent greenhouse gas, are reduced. In this study, we explored how effectively British Columbia’s regulation, deposited in December 2018, made progress towards meeting the policy objective of a 45% decrease in methane emissions by 2025 from a 2014 baseline. We evaluated the performance and cost effectiveness of regulatory-prescribed LDAR programmes using data collected by the BC Energy Regulator (formerly BC Oil and Gas Commission) for the 2020 year, and survey cost data submitted by service providers. We found that the new regulation was only partially effective due to low compliance rates. We also observed heavy tail leak distributions in LDAR data collected by service companies, but comparatively narrow leak distributions in data from permit holders who internalized LDAR operations, suggesting a difference in work practice or the use of equipment. Comprehensive leak detection surveys were found to be more cost efficient ($23 CAD/tCO2e reduced) compared to screening surveys ($1,787 CAD/tCO2e reduced) because more methane leaks are detected in comprehensive assessments. To meet methane reduction targets, we recommend that: 1) jurisdictions work to improve compliance rates by introducing minimum administrative penalties specific to noncompliance; 2) that all future LDAR surveys are instrument-based; 3) limiting turnaround time limits so that repairs are not delayed indefinitely; and 4) that LDAR completed internally by permit holders undergo independent third-party verification.

Development of a supply chain model for the production of biodiesel from waste cooking oil for sustainable development

The increasing demand for energy and the severe environmental and economic repercussions have contributed to the development of renewables options. The scarcity of fossil fuels and their negative effect on the environment have sparked an alarming situation for alternative energy sources that are cleaner and more sustainable. Waste cooking oil is a valuable feedstock for biodiesel production, but it is often disposed of improperly, causing environmental pollution and health hazards. The current waste cooking oil supply chain in Pakistan and other countries is fragmented, inefficient, and often unregulated, leading to a lack of standardization and quality control. The study aims to develop a comprehensive supply chain model that integrates waste cooking oil collection, transportation, processing, and biodiesel production to create a sustainable value chain that benefits the environment, the economy, and society as a whole. The proposed optimization approach reduces the total expenses associated with the activities of the biodiesel supply chain. Modified possibilistic chance constrained programming (MPCCP) is used as a solution technique to represent this uncertainty. The MPCCP model is solved with the assistance of Lingo 18.0, while fuzzy logic demand forecasting was done using MATLAB. Accordingly, the fuzzy logic designer (FLD) simulation was conducted to demonstrate the applicability and effectiveness of FLD simulation for the particular kind of issue being considered. The research, not only focuses on mitigating environmental and health risks associated with improper waste cooking oil disposal, resulting in reduced pollution and a cleaner environment but it also advocates for the efficient utilization of waste cooking oil as a valuable feedstock for biodiesel production, thereby promoting a more sustainable and renewable energy source. By optimizing supply chain activities and minimizing costs, the research contributes to enhancing economic growth and efficiency within the biodiesel industry. This research encourages further exploration and collaboration among researchers and stakeholders to expand the applications of the proposed model in waste management, renewable energy, and supply chain optimization.

Stakeholder Perspectives on Supply Chain Risks: The Case of Indonesian Palm Oil Industry in West Papua

Stakeholder perspectives on supply chain risks (SCRs) play a crucial role in managing risks, achieving goals, and determining performance of an organization. Herein, the role of stakeholders and the complex interrelationships between stakeholders are important factors influencing the supply chain, and, besides, failure to manage SCRs can result in significant losses for the organization. In West Papua, study related to stakeholder perspectives on the risks in palm oil SCs is still limited. Accordingly, to fill this gap, this paper aims to identify SCRs from the perspectives of key stakeholder of the Indonesian palm oil industry in West Papua. This study employs qualitative research methods. Key risks in the palm oil supply chain (SC) were identified from semi-structured interviews with 64 key stakeholders across 25 different stakeholder groups, using NVIVO software for thematic analysis. The results show that the palm oil SC in West Papua has five tiers and five distribution channels of material, information, and financial flows. Public and private stakeholders identified in palm oil SCs play crucial roles in determining palm oil operations in West Papua. Herein, there are seven identified groups as key stakeholders with thirty-two major risks in the SC. Smallholder farmers are exposed to most of the risks, followed by plantation companies, local cooperatives, and government agencies. Interestingly, risks in palm oil SCs in West Papua are predominantly caused by conflicts of interest among multiple stakeholders.

Distribution of fugitive emissions in the energy complex of Russia during the supply of oil to refineries

Large volumes of oil in the energy complex of Russia are annually delivered by pipeline and rail transport to refinery warehouses and stored there until they are processed. Each element of the oil supply chain generates significant amounts of fugitive emissions. The quantitative determination of these emissions is a gap in the research on the energy complex. The paper developed a method for estimating the volume of fugitive emissions in oil supply chains at refineries in the energy complex. The study period under consideration is 2009–2021.The study showed that in the oil supply chain, the largest emissions are produced when oil is stored in refinery tank farms. The amount of these emissions is an order of magnitude greater than the amount of emissions from oil transportation. When transporting oil to refineries of the energy complex, pipeline transport has the greatest environmental advantage. It is several times inferior to railway transport in terms of the fugitive emissions produced.

Analyzing the greenhouse gas emissions in the palm oil supply chain in the VUCA world: A blockchain initiative

AbstractAs the world is becoming more VUCA for business operations, organizations are leveraging the competitive advantage through their supply chain practices. The food supply chain is no exception. Being competitive has become imperative in terms of sustainability and accountability of the business process. Therefore, organizations are adopting blockchain to track and trace the information flow to ensure a better business process. Further, to ensure sustainability, analyzing greenhouse gas (GHG) emissions aids firms in achieving a reasonable improvement in the food supply chain. So, the present study collects carbon emissions data for palm oil production. The study evaluates palm oil production in the Sumatra region, Indonesia (Cradle to Port), through predictive modeling. Here, the palm production process is classified as cultivation, harvesting, and shipping. Then, the study evaluates the GHG emissions from the three phases to understand the carbon footprint in palm oil production. Finally, the study uses blockchain to track and trace the GHG emissions in the palm oil supply chain using Hyperledger Fabric self‐executed smart contracts. The study has developed unique contributions in terms of developing predictive modeling, blockchain architecture, and deep learning in palm production to leverage the competitive advantage of the supply chain in the VUCA world for business excellence in the global market.

A trio of resiliency, reliability, and uncertainty to design and plan the downstream oil supply chain

The main goal of this research is to design and plan a downstream oil supply chain network under mixed uncertainty. To reach this goal, a bi-objective mixed-integer linear model is proposed to make decisions at tactical and strategic levels. Notably, to deal with mixed uncertainty, a hybrid uncertain programming approach including adjustable possibilistic programming, chance-constrained programming, scenario-based programming, and p-robust optimization is developed and applied. Finally, the proposed model is implemented in a real-life case from the National Iranian Oil Products Distribution Company to illustrate the applicability and efficacy of the proposed approach. The analysis of the results indicates that the benefit of the used methods leads to the improvement of network performance against operational and disruption risks. Moreover, the analysis of the results indicates that the tailored approaches improve the total costs, the resiliency of the network, and the reliability of the chain in comparison to the deterministic situation.

The potential importance of exploiting export markets for CO2 transport and storage services in realising the economic value of Scottish CCS

Previous research investigating the UK economy impacts of introducing a new Scottish CO2 Transport and Storage (T&S) industry linked to carbon capture and storage (CCS) has focussed on supply chain and funding requirements in introducing such a new sector to service proximate Scottish industrial emissions via onshore pipelines. However, Scottish plans extend to shipping CO2 from outside Scotland for storage in North Sea reservoirs by also servicing sequestration requirements from elsewhere in the UK and/or overseas. This will involve investment in greater industry capacity but could ease associated domestic funding requirements. Here, we introduce improved economy-wide structural (input-output) data reflecting how a Scottish T&S sector may emerge from current Oil and Gas industry supply chain capacity to a computable general equilibrium (CGE) model, extending to simulate emergence of an export base. Our central finding is that exploiting overseas T&S export opportunities is crucial where the policy aim is to generate greater economic activity without increasing demands on the public purse. However, any extent of real wage bargaining and consequent producer cost pressure as labour demand increases will act to dampen expansionary power, displacing export production and employment, while driving consumer price impacts that limit real income and public budget gains.

A sustainable integrated crude oil supply chain network design with consideration of social performance and environmental laws in a case study

The oil or petroleum industry is among the most significant world industries and plays a decisive role in economic and political interactions due to its strategic importance. This massive industry has significantly been influenced by instabilities, political unrests, and sudden price fluctuation in recent years. Additionally, the decision-making process in the oil SC has become a challenging issue because of the presence of considerable facilities in the oil fields, oil refining, and distribution of petroleum products. Hence, the integrated optimization of oil SC has been quite popular with researchers. On the other hand, since there are environmental requirements, people have their shares in the extension of this industry, and developmental planning should consider ecological and social issues. The effort has been made in this article to propose a mathematical programming model for the design of oil supply chain network to reduce their environmental effects and improve the social indices while saving costs. Then, the model was solved with actual data from a real case study of the Iran Oil Industry. Finally, some recommendations have been provided based on analyses of the numerical results.

Circular bioeconomy in palm oil industry: Current practices and future perspectives

Malaysia is presently ranked as the second top producer of crude palm oil in the world after Indonesia. The industry is serving as the economic backbone of the country. However, massive criticism and challenges are faced by the palm oil industry with the claims that the industry is causing environmental degradation and negative social impacts. Tremendous efforts have been taken to enhance the sustainability of the palm oil industry in environmental, social, and economic aspects including bioenergy, compost, animal feed production, and replanting of palm oil waste residues. Greener approach on circular bioeconomy is, at present, aimed to be transitioned to the palm oil industry. The concept emphasises on resource-efficient and waste minimisation, aiming to attain a lower production cost, to mitigate the negative environmental impacts, and to conserve the resources. This present review discusses the palm oil supply chain from plantation up to milling operations, current practices of palm oil industry in biomass waste reuse and recycling, and by-products productions including bioenergy generation. The potential and future prospects of full range of biowaste management and its refineries are highlighted comprehensively, including waste-to-energy, waste treatment, and waste valorisation for by-products productions. Challenges and potential technological applications are also discussed. To our best knowledge, much is lacking on the circular bioeconomy approach specifically dealt with Malaysian palm oil industry. Therefore, this review serves as a reference for the industrial stakeholders, engineers, environmentalists, researchers, and the government in decision making, policy making, future investment, and innovation advancement.

Petroleum++: Role of SPE Members and the Industry in the Energy Transition

As many of you know, SPE recently approved its 2023 Strategic Plan. The theme I chose for my presidency is Petroleum ++. As I explained in previous columns, petroleum refers to our continued work in producing oil and natural gas. The first + refers to our role in mitigating climate change concerns, and the second + is about our role in the energy transition and new forms of energy. The industry is already at different stages in this transition, and SPE is working to provide guidance and education to our members through many avenues. I want to talk about how these industry changes are affecting our current and future members and how SPE is helping. We are seeing many oil- and gas-producing and oilfield service companies adjusting to make their businesses sustainable through industry change. Shell’s strategy is “Powering Progress” which names climate change as an urgent challenge and vows it will contribute to a net-zero world. Saudi Aramco is creating value through sustainable business operations saying sustainability factors have become increasingly critical as it aims to balance profitability, environmental protection, and the growth and prosperity of the communities in which it operates. Baker Hughes is “taking energy forward” to make it safer, cleaner, and more efficient for people and the planet, and the newly rebranded SLB is driving energy innovation for a balanced planet. These are just a few of the higher-profile companies making changes in their organizations. Another important change is academia’s response to the energy transition. Globally, universities are expanding curricula for petroleum engineering students. Many are adding research and courses in carbon capture, utilization, and sequestration (CCUS), hydrogen, geothermal, and mineral processing of coal. Some universities are more closely integrating petroleum engineering, geology, and geophysics courses for beginning students. Penn State, for example, is offering new courses on carbon sequestration, doing new research on hydrogen, and recently opened a new center in mineral processing of coal residuals. The King Fahd University of Petroleum and Minerals (KFUPM) has strongly integrated its petroleum engineering bachelor of science program with the geosciences department (geology and geophysics). A new concentration in energy sustainability will be introduced in the fall of 2023, which will address energy transition and decarbonization, CCUS, and geothermal and hydrogen production and storage. The University of Texas at Austin (UT) and the Bureau of Economic Geology recently launched a geothermal research consortium called HotRock that will integrate isolated bodies of science and engineering knowledge to broaden and accelerate the scale up of “geothermal power anywhere.” UT launched a new multidisciplinary research and education initiative, Energy Emissions Modeling and Data Lab, in partnership with Colorado School of Mines and Colorado State University to address the growing need for accurate, timely, and clear accounting of greenhouse gas emissions across global oil and natural gas supply chains. These are just a few examples of how universities are helping to prepare future workers for a more integrated industry.

Systematic Literature Review on the Social and Economic Impacts of Palm Oil Certification on Smallholders

Enhancing smallholder compliance to palm oil certification standards helps in achieving the global sustainability agenda. Oil palm smallholders are one of the vital parts of the global certified sustainable palm oil (CSPO) supply chain. However, little is known about on the importance of palm oil certification for the social and economic development of smallholders. This present study aims to systematically review the social and economic benefits received by smallholders in implementing palm oil certification. The review was conducted in accordance with the published standard, namely the PRISMA statement (Preferred Reporting Items for Systematic reviews and Meta-Analyses). The articles of this study were chosen from two major databases, namely Scopus and Web of Science (WoS). The results show that smallholders gained both immediate and long-term social (livelihood, social network and agricultural practices) and economic (financial management, income, price and production) benefits through palm oil certification. If these benefits can be extended to all smallholders, it will help to boost the participation of smallholders in certification. The current progress, impacts and challenges faced by oil palm smallholders in palm oil certification implementation were discussed comprehensively. Future research and suggestions on the contributions of oil palm smallholders in successful certification were summarised. This eventually leading to achieving Sustainable Development Goals (SDGs) for benefits of the whole supply chain of Malaysian palm oil industry.

Tactical supply chain planning after mergers under uncertainty with an application in oil and gas

With today's rapidly changing supply chain environment, it is essential to include uncertainty in an explicit manner in supply chain planning models. Therefore, we propose a stochastic model for tactical planning of the Crude Oil Supply Chain (COSC) under cost and demand uncertainties. The mathematical model considers a multi-echelon supply chain with multi-products and a multi-period planning horizon. It integrates inventory and backorder penalties. A Sample Average Approximation (SAA) procedure with Multiple Replications Procedure (MRP) is developed to solve the stochastic model. We illustrate how our model directly applies to supply chain planning. We present numerical results that show the impact of cost uncertainty on supply chain planning decisions and synergy gains. We also measure the value of modeling uncertainty against deterministic planning and characterize the cost/bbl after a merger under shared services cost and demand uncertainty.

Digital Transformation in Oil and Gas Industry

Digital technology can benefit the oil and gas sector by increasing hydrocarbon recovery, ensuring safety throughout the corporate ecosystem, and improving operational reliability. This study addresses the oil and gas supply chain digital transformation tendencies as well as the Norwegian petroleum refining company Equinor's initiatives. The main objective is to explore the opportunities for digitalisation in the oil and gas industry as well as the state of the industry's digital strategy more generally. The findings support the industry's major players continuing to invest in their collaborative ecosystem by partnering with their suppliers and start-ups and sharing with them a platform where data that can help them improve their economic position can easily be shared. It is recommended that they should develop a digital strategy roadmap, as in the case of Equinor, as a matter of priority. Supporting innovation and technology adoption through continued investment and the hiring of qualified experts is also of critical importance. It is also important to improve the digital skills of employees and spread a digital culture throughout the company so that they can protect themselves against future cyberattacks or other potential risks. On a global level, the successful implementation of a digital solution will reshape market dynamics (in terms of supply, demand, and investment) as well as the way energy networks are managed.

Characterization of crude glycerol and glycerol pitch from palm-based residual biomass.

The online version contains supplementary material available at 10.1007/s13399-023-04003-4.