Subscribe to our free, weekly email newsletter!


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

By Patrick Burnson, Executive Editor
October 20, 2010

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

image
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 .(JavaScript must be enabled to view this email address).


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!

Recent Entries

AgTC will provide unique market intelligence at next annual meeting in San Francisco this June

With no fuel tax increase likely ahead of this year’s mid-term elections, trucking interests in Washington are moving to Plan B in their attempt to shore up funding for badly needed infrastructure improvements.

Crowley Maritime Corporation has acquired majority ownership of Accord Ship Management (HK) Limited and Accord Marine Management Pvt. Ltd.

To catch a rising economic tide this year, the Port of Long Beach will need to modernize and find new efficiencies to move increasing amounts of cargo at a faster pace, said experts gathered earlier this month for the Port’s 10th annual “Peak Season Forecast” at the Long Beach Convention Center.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA