Green logistics: Energy sector’s supply chain faces new challenges

Manufacturers and members of the nation’s supply chain community welcomed the news last week that the Department of Interior’s would be ending the offshore drilling moratorium in the Gulf Coast region.

By ·

Manufacturers and members of the nation’s supply chain community welcomed the news last week that the Department of Interior’s would be ending the offshore drilling moratorium in the Gulf Coast region.

“Manufacturers are encouraged by the Administration’s announcement that it has lifted the deepwater drilling moratorium,” said The National Association of Manufacturers (NAM) President John Engler. “However, the lengthy permitting process keeps rigs idle and essentially creates a de facto moratorium. Every day the rigs remain idle, thousands of jobs are at risk in the Gulf Coast and throughout the nation.”

According to Engler, manufacturers who make and supply equipment, services, engines, boats and materials such as steel and concrete will continue to be “negatively impacted” by this lengthy permitting process.

“This added bureaucracy and the confusing regulatory framework only increase costs and place more uncertainty on our already struggling economy—forcing our nation to rely even more on foreign producers, discouraging investment in new projects and stifling job creation,” he said.

Engler added that manufacturers will continue to work with the Administration and Congress to ensure there is clarity in the regulatory process and permits are issued in a timely manner.

Stephen Hester, vice president and chief procurement officer with Smith International, inc.— recently acquired by Schlumberger Limited—also voiced his approval for the resumption of drilling.

Speaking at the 2010 Supply Chain Council Executive Summit in Houston last week, he noted that demand for more oil will by driven by consumers in emerging nations.

“That means that we not only have to drill more frequently,” he said, “but even deeper than ever before.”

From a procurement perspective, he added, that will present new challenges.

“Since energy companies cannot control price, we have to focus on cost,” he said. “Meanwhile, we have to be tough with our suppliers and act decisively. All industries dependent upon energy are going to be kept very busy in the coming years.”


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Latest Whitepaper
The Retailer’s Atlas for Omnichannel Returns
Fueled by e-commerce, the new state of retail is truly an omnichannel one, and companies will flourish or flounder based on how well their supply chain can meet customer expectations.
Download Today!
From the November 2017 Logistics Management Magazine Issue
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships into true, collaborative partnerships—and greatly strengthened its logistics and supply chain operations in the process.
34th Annual Quest for Quality Awards: 2017 Awards Dinner
Trucking Regulations: Washington U-Turns; States put hammer down
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Logistics Showcase: Rising to the same-day delivery challenge
Today’s delivery puzzles are very different than traditional DC to store or warehouse to DC puzzles. It’s not just the shorter time frame for delivery; the basic requirements are significantly different and more complex as well. In this session you'll learn how to address same day delivery challenges while also driving down costs and increasing customer satisfaction.
Register Today!
EDITORS' PICKS
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...