EnerSys CEO Russel Treat recently appeared on Red Wing’s Oil and Gas HSE Podcast hosted by Mark LaCour and Patrick Pistor. Russel discussed what it means for pipeline operators to achieve operational excellence and shared his perspective on how to achieve efficiency and compliance in a regulated industry.
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Announcer: In a global industry where anything can happen, where mistakes can cost far more than dollars, one oil and gas sales expert, one HSE professional, and the greatest PPE provider on the planet must come together. Two men, one brand, one mission. “Red Wing’s Oil and Gas HSE Podcast” with Mark LaCour and Patrick Pistor starts now.
Mark LaCour: Hey, it’s Mark LaCour. This show is for everybody who has an interest in HS&E in the oil and gas industry, brought to you buy Red Wing, the leaders in PPE. Ensure your people go home safe every day. Joining me today is my captivating co‑host, Patrick Pistor.
Patrick Pistor: Oh, Mark. I had to wake up for this one. I forgot what all my buttons do.
Patrick: It’s been a while.
Mark: Audience, we’re doing a first. We have all three of us are remote. It’s a bit of a technology challenge. We’ll see how it comes out, the show comes out. Patrick, we have a guest today, don’t we?
Patrick: We do. We have Russel Treat. He’s the CEO of EnerSys and the host of the Pipeliners Podcast, which I am really excited to start listening to, now that I know about it. Russel, welcome.
Russel Treat: Thanks, guys. Glad to be here. I’m really excited about the opportunity to talk about safety.
Mark: It’s cool to have a fellow podcaster on our podcast. Huh, Patrick?
Patrick: Yeah. Somebody that knows the ins and outs and is recording locally, so the audio quality should be top‑notch on this episode.
Mark: Speaking of top‑notch, before we get into your story, Russel…Hey, if you want to support this show, do us a favor. Just leave us a review on iTunes. It takes all of a minute. It’s the number one way to help support the show and keep things moving.
Russel, I’ve got to ask you. You’ve been in the pipeline industry for a very long time, haven’t you?
Russel: Yes. We measure it in decades.
Mark: Like pipelines.
Mark: How did you get started in this crazy industry?
Russel: It’s an interesting conversation. I’m a civil engineer by education. I spent some time in the military. With respect to you guys, I was in the Air Force. I was sleeping in the air‑conditioned barracks…
Russel: …while you guys were camping in tents in the dirt, if you were fortunate enough to have a tent.
Mark: Have a tent, yup.
Russel: When I got out of the military, I looked at a lot of different industries. I worked for about three years in cryogenics, which is liquefied oxygen, and nitrogen, and CO2, and that kind of stuff.
About age 29, I started my first business. About 18 months in, I sold that into a group called Software Marketing. What we did is we commercialized technology. We would look for what we called a device.
A device being something that was built and a customer was using it and referring it to their friends. Not a product, meaning no team behind it, no marketing plan, no roadmap, all that kind of stuff. We commercialized technologies.
I found out what I really liked was oil and gas. I liked the business. I liked the people. I did some work around coil tubing. I did some other work around compressor analysis. Just really liked the business and made a decision that I wanted to get full‑time into oil and gas.
I left that company and joined a company called BMP Energy Systems, which was a software company doing measurement. That’s where I started to get into the oil and gas business.
That led to the focus on pipelining. That’s the genesis, how I got there. Took me a little longer than most, but I landed in the business as quick as I could get here.
Mark: That’s cool. The cool thing is, because you and I spent a little bit of time together, is you all are heavy…We’re fast‑forwarding to now. You all are heavy into pipeline controls, aren’t you all?
Russel: Yeah, exactly. We focus on software and solutions for the pipeline control center. All the stuff that people would typically refer to as SCADA and a bunch of other tools related to logbooks and shift handover and workload analysis and fatigue management, things that are related to regulatory requirements that impact the pipeline control center.
Of course, because we’re doing that, we also work in things like leak detection and just pipeline safety in general.
Mark: Everything you do, if you think about it, touches pipeline safety, right? All those controls, if some valve opens somewhere where it shouldn’t or it doesn’t open when it should, people can get hurt.
Russel: Yeah, that’s absolutely right. I’m always a little cautious when you talk about all the bad things that can happen when things don’t go the way they’re planned.
The pipeline business, when you look at its track record, it’s really quite a safe business. There has always been and continues to be a big focus on safety. If you think about pipelines, unlike process facilities, they can be located in neighborhoods.
Mark: A lot of people realize that a pipeline is the safest way to move anything, safest way for people, safest way for the environment. Not just hydrocarbons, but anything.
Russel: Yeah and by an order or magnitude or more versus the alternatives. The alternatives, I truck it. I put it in a railcar. I put it on a barge. Pipelines are by far safer than any of those alternatives.
Mark: The other thing is the pipeline industry as a whole, at least here in the U.S. and in Europe ‑‑ I don’t know about the rest of the world ‑‑ has a very integrated, very strong culture of safety.
Russel: Being a technologist myself, we’re always trying to push new ideas to the pipeline operators. The pipeline people, they’ve very technically savvy. They’re also very risk‑averse, and that’s for good reason. Change presents risk. They’re running these systems. Some of these systems they’ve been running for decades. There’s pipelines in the U.S. that are 60 and 70 years old.
One of the things that people don’t understand about pipelines, you think about what metal rusts, right? If I park a car in the backyard and I don’t do anything about, it rusts. These pipelines, they’re maintained. They have cathodic protection. They have coating systems. It can be demonstrated that these pipelines will work for a very, very long time, if they’re properly maintained.
Mark: There’s actually a role called pipeline integrity, and that’s all those men and women do. They maintain the integrity of that pipeline. The other thing I think is really cool is, if something’s in doubt, they shut it down until they fix it. They don’t keep running if they think there’s a problem. They shut it down. They go ahead and lose that revenue to go fix whatever the problem is.
Russel: That’s absolutely right, Mark. People who operate pipelines, they understand their fiduciary responsibility to the public and the environment. They take it very, very seriously. There’s a lot of professionals, and they’re really aware of the responsibility they have as pipeline operators.
Patrick: Russel, we touched on it a little bit, just a little bit ago, about the infrastructure and getting these pipelines built. Can you give our audience a time frame of when a new pipe needs to get installed with the regulatory, the build, the approvals?
We’re not just talking you need a pipeline and we’ll turn it on tomorrow. This is, like we said, a decades‑long process to get something built.
Russel: Can be. What’s interesting about that is the construction process is actually the shortest piece of the whole timeline. It’s the regulatory approval process that can really be difficult.
If you think about that, when you run a long‑line pipeline, and it’s going across multiple states and multiple cities, and even across an international border, you think about the number of governmental agencies that have to be involved permitting a pipeline, the tough part is getting through the regulatory approval process.
Patrick: Has that process got easier, more difficult? We had the big button where the Keystone XL Pipeline, but the smaller pipelines, is it easier for a pipeline to get installed with the regulatory environment? Or has it become slower and more cumbersome in recent years?
Russel: If you go back and you look at the first half‑dozen executive orders that Trump wrote, three of them were about pipelines and about removing the regulatory constraints. One of the things that’s been done, there’s actually now a special office. I wish I could remember. I did an episode on this in the Pipeliners Podcast following the API Pipeline Conference.
There’s now a special office in the government that works with pipelines and others that are trying to get things permitted that have complex permitting processes, where they’re working to expedite and streamline the overall approval process. They’re trying to put predictability into the regulatory approval process.
That’s a big change since the change in the administration, so I would say that, overall, the regulatory process has streamlined. It’s not like there’s less things to do. It’s just that the agencies are being more responsive.
Patrick: If you live and work in these areas where a pipeline’s getting put into pace, you know the alternative is, as Mark said, trucking it somewhere. If anybody’s been to the Permian Basin in the last month or two, or six months, that infrastructure is pretty much stretched to the max. They need more pipelines to get put in, but it’s just a matter of time.
Russel: That’s right. Every time there’s a boom with a new oil and gas play, first you start producing, and then you start having to build the infrastructure. The infrastructure, what’s called takeaway, all the pipe, all the tanking, processing, and pipelining, that could take quite a while to get built out.
Mark: It also has to not only pass all the regulatory stuff, like we just talked about. It also has to make economic sense. That’s why, until the need is there, the constraint is there. There’s lack of transportation. There’s not pipeline until there’s enough need that it makes economic sense for a pipeline company to go build a pipeline.
As long as our politicians don’t get involved, like what happened with Keystone, [laughs] it usually works pretty well.
Russel, I want to back you up a little bit. There’s something that you talk about that Patrick and I both find fascinating. You call it POEMS. What does POEMS stand for?
Russel: [laughs] POEMS is our software product. It stands for Pipeline Operations Excellence Management System. I guess that raises the question, what is operations excellence?
Mark: That’s exactly where I was going with that. Patrick and I are big fans. What is operational excellence?
Russel: I’ve listened to you guys talk about this on your podcast before. I think my answer would be similar. I think simply stated, in pipelining a lot of the operators talk about triple zero. That’s no injuries, no incidents, no releases, zero, zero, zero.
That’s a part of operations excellence. The other part of operations excellence is on schedule, on spec. Operations effectiveness is everything you’re doing to deliver your commitments on spec and on schedule, without incident, without injury, and without release. That’s operations excellence.
Mark: I like how you brought the business side of that, because a lot of people skip over that. I think I’ve been guilty of that myself, too. You also have to think about hitting the milestones, your budgets, your delivery dates. All that is part of operational excellence.
Russel: Right. If we didn’t have business objectives to hit, we wouldn’t need safety, because we wouldn’t be doing anything. [laughs]
Mark: That’s right.
Patrick: How do those two balance? With pipeline, we stated earlier that if there’s an issue, pipeliners don’t have a problem turning off the pumps and fixing it, but when those pumps aren’t running, there’s not product flowing through the line, that’s money not going in their pockets.
Where is the balance, when there are incidents ‑‑ small, medium, large ‑‑ business, versus that safe operation?
Russel: It’s a great question. It’s not really an easy question to answer, because I think each operator has to answer that question for themselves. The whole idea of operations excellence is to have a philosophy about how I operate that goes to how I accomplish my objectives, and how I balance it with safety.
I’ll give you an example. When we put in place operating plans for a pipeline control room, we have a philosophy that we advocate. It goes like this, an idea which we call permission to operate. Permission to operate, simply stated, means this, I retain position to operate, so long as I understand what’s going on.
We tend to think about shutting down when we get a clear indication of a problem, an alarm, a pressure drop, or something like that. Sometimes, these systems go to places that we don’t understand what’s going on in the process.
That’s really where most of the most severe incidents occur, where the incidents with the largest consequences occur. It’s where, for whatever reason, given change being made in the system or operating condition, I don’t really understand what’s going on, and I keep operating, anyways.
What we establish is this idea of permission to operate, where the controller, the person, the chair in front of the screens with the responsibility, when they don’t understand, they have a fiduciary responsibility to make the process safe.
Now, I say make the process safe, versus shut down, because they’re not exactly the same thing. It might be that I just need to lower flow rates and lower operating pressures to be safe. That might be better than shutting down.
If I just shut down pumps, and I quick close valves, I can create hydraulic transients that cause me more problems than if I did something different. That’s a long way to say that permission is the idea is, I continue to operate, so long as I understand. When I lose understanding, I make the system safe until I understand.
Patrick: Has this ability to understand your situation gotten easier with the software that’s come into play, versus taking the human element out? Just a little bit of my background shipping product offshore, all of our systems were manual.
That means manual sounding tapes and manual opening and closing valves. The times that I didn’t understand what was happening was usually user error. You had a problem with the sounding tape, or something just wasn’t right.
You had a couple minutes where you’re trying to figure things out. I’ve never had to use software to help me with this stuff. Has it simplified the process, or has it made it more complex? Do the guys understand how to use the software to understand their operating parameters?
Russel: Again, it’s a great question. The way I would have to answer that is, it depends. Let me try to unpack what I mean by that a little bit. Because I’m getting more data than I used to, because data, instrumentation, communications, software, all of that’s getting less expensive. I’m getting more and more data.
From the standpoint of, I have more available to me, yes, it’s getting better. The flip side, however, is I have to take all of this data, and I got to contextualize it in a way that’s meaningful. I tend to use the airplane cockpit as an example for this a lot.
If somebody’s telling me, “Your altitude is this. Your fuel is this. Your rate of climb is this.” They’re telling me, they’re telling me, they’re telling me, or I’m just reading the numbers, that’s much different than an effective graphical representation, where I can just scan it and understand.
I think big challenge from a safety perspective, as we implement more technology, is how do we contextualize the information visually, so that it’s easy to interpret and use for making decisions?
Mark: How far away are we from completely removing the human element with that? The data’s being captured and interpreted. Are we a few decades away from that interpretation being pulled out and letting the software just run the system, or will there always be the human interaction?
Russel: [laughs] That’s a great question. I actually took a real deep dive for about nine months into artificial intelligence, Internet of Things, and all the buzzwords du jour, if you will. It was interesting, I went to the ENTELEC Conference, which is an energy telecommunications conference, a year ago.
I was on the board, and I got asked probably 20 times, “What’s the big deal with data analytics and Internet of Things? We’ve been doing this for 30 years.” To some degree, that’s true. The math, the algorithms, the approaches are not new. We’ve been doing them for a long time.
However, I don’t think we’re ever going to get the human completely out of the process. AI is really good at seeing something it’s seen before. It’s not very good at making sense out of something it’s never seen before. That’s where the humans come in.
Humans still do a better job of analytical analysis and gut feel. We don’t have AI that does gut feel. “Something in my gut’s telling me this isn’t right.” That’s an important element in any kind of operation safety, is experience teaches you things that you just know in your person that you can’t necessarily articulate.
Trying to get that kind of knowledge into a machine, I don’t know that we’ll ever get there.
Mark: Russel, let me come at that in a little bit different tack. Our industry has a aging workforce. A lot of guys my age are retiring. There’s a lot of young people coming into our industry, a new, younger workforce.
Does the technology help the younger workforce stay on top of things easier than the way it was done in the past, or does the technology get in the way, because it’s something brand new they have to learn?
Russel: I think it makes it easier, particularly for the young guys. The young guys grew up with this technology, and guys my age ‑‑ I turn 60 here in a couple of months ‑‑ I grew up, and I was building computers on my kitchen table when I was in the military. That was my hobby. Soldering them together, booting them up, and programming them from scratch way back in the day.
Nowadays, these guys are growing up with technology, so they’re used to using technology. They have a different level of comfort with it and access to it than our experience. I think technology and the way that the younger generation ‑‑ guys 20 years or so younger than me ‑‑ are engaging with that is really, really good.
I think the challenge is more the hands‑on mechanical how‑does‑it‑feel experience that’s getting lost.
Mark: I agree with you. A lot of these young people coming into our industry have great educational background, but they’ve never picked up a wrench. They’ve never been to a well site. They’ve never seen somebody weld.
There’s places for all that experience. It’s one of the things, as an industry, I’m concerned about, because I see it coming at us like a freight train, this lack of talent. It’s a huge problem.
I know that upstream, the service companies laid off a bunch of people in the last couple of years, but I’m telling you, the entire industry soon will not have enough people that want to come work in it. I don’t know what we’re going to do as we’re getting there.
Technology definitely plays a part in this. I like some of the stuff that you’re doing. A lot of the stuff that y’all are doing actually doesn’t replace people, but it allows you to run effective operations safely and efficiently with less people. I think that’s pretty cool.
Russel: That’s absolutely right. The other thing you can do is a lot of the things that we have done historically that are just repetitive tasks. The need for that’s gone away. There is no need in this day and age to run a guy around in a pickup truck with a clipboard taking numbers down to fax to a central office.
That’s an anachronism. Anybody that’s doing that’s living in the past. There are still people out there doing that.
Mark: I know there are. I wasn’t going to say anything…
Russel: They’re still out there, and what’s interesting, at least in the pipelining world, that’s the fallback position. If everything goes away technology wise, then we’re going to put people out on trucks, and we’re going to run the pipeline that way.
Patrick: I think one of the new risks we’re falling into, Russel, is you mentioned these kids grew up with technology and games and how to use it. I’m worried that we’re having a generation of users come through, and not like you did, building a computer on your table and learn how to code it.
Everything’s so simple nowadays that are the technicians coming out, or the guys using the system, are they able to troubleshoot? Are they able to fix an issue when it comes up. There’s still a lot of bugs in the software.
The oil field is a little slower to adopt these things. Are we putting more users out into the field, or the guys that you’re seeing use the software, do they have a sharp mind. Are they able to do that troubleshooting?
Russel: When you talk about the technicians and the mechanics, those guys understand, and they get it. They know that they need to figure out what’s wrong. I think it’s the other users, the management people, the accounting people, the regulatory people that tend to get thrown in.
If you give me a number on the computer screen, then the number’s right. It’s the assumption that everything’s correct, rather than intelligently and persistently questioning, “Yeah, is that number right? How do you know?”
Mark: Also, I think that there’s a bit of a need for more of the ability to think strategically. I’m guilty of this myself. I catch myself sometimes, I open up the Weather Channel app on my phone to see what the temperature is outside instead of just walking outside.
I think that ability to think strategically is something we need to continue to foster in this industry, because when everything else doesn’t work, your ability to think your way through a situation could be a lifesaver.
Russel: That’s the most important part of it as we go forward, is the people that are working in the business, they do need to understand systems, and they need to understand their systems and how they work, and be able to think through those systems.
I think that’s a really key point.
Mark: Russel, we don’t get a lot of pipeline people on this show. We’ve talked about pipeline, we’ve talked about pipeline controls, talked about our future workforce.
When you start thinking about the pipeline industry, let’s say here in the U.S., there’s a need for more pipelines. The pipeline industry is building more pipelines literally every day, which means there’s the potential chance of more people having something bad happen to them.
When you think about the industry ‑‑ because you’ve been in it for a long time ‑‑ when you think about it, say 20 years ago, 10 years ago versus now, we’ve actually moved the needle a very long way. It’s gotten really rare that somebody gets hurt anymore, and I think that’s an awesome thing. Do you think that trend is going to continue?
Russel: Yeah, in fact, I do. There’s an interesting initiative in the pipeline space that’s relatively new called the Safety Management System initiative. It’s like SIS, but more as a program for pipeline operators.
It’s not a regulatory requirement. It’s an API guideline, but a number of the big operators are adopting this approach. I think that approach is going to cause pipeline operators to just get better, because now they’re going to be looking at everything I’m doing as a program.
What am I training? How am I training it? What is the competencies I require of my people? Do they have those competencies? What are my policies and procedures? How do they relate to best practices? What technologies am I implementing? What’s my integrity measurement program?
All this stuff, and I begin to look at that holistically, so that I can take my management resources attention, my money, and dedicate it where I’m going to get the best return in safety on my investment.
Safety is just a different way of looking at operations. Safety and operations are like two different sides of the same coin.
Mark: Yep, you’re preaching to the choir here. We’re right there with you. [laughter] You’re preaching to the choir. I get the sermon twice every Sunday.
Patrick: On that same topic of the SMS, at face value, just seeing one company has a good strong system. They’re using software. They’ve got good technicians. How are these policies, procedures helping when you have to cross companies?
The product’s being shipped from one station. It’s going down a pipeline, but it’s going to somebody else’s facility that has a different safety management system, may not have anything in place, has a power outage.
Is there a software solution or a policy in place that these companies can rely on to make sure that when two, or three, or four companies that are shipping through the same pipeline to different facilities are all on the same page, that they know that product’s coming, they know they have space to send product to, and they’re not going to deadhead a pump or have a spill at the site?
Russel: There’s two parts.
Patrick: I know that I threw a lot in there, but… [laughs]
Russel: I’m going to frame the question maybe a little differently and put it in the context of, how do these guys operate?
Every pipeline, you can think of a pipeline as a bunch of pipes with ins and outs. Within my system, there’s one and only one operator.
It doesn’t matter who’s shipping on it. I’m just putting product in the train car. I’m not running the train. There’s only one guy running the train. That’s the thing that people need to understand that’s going on.
The second thing is every place that I’m exchanging product, every one of those guys have interconnect agreements. Those interconnect agreements address things like operating pressures and controls visibility across the site between the two parties, but there’s always a very clear demarcation between where Pipeline A ends and Pipeline B begins.
The way we operate, A and B don’t have to have the same operating policy, philosophy, or even controls, because the way we exchange the order to exchange product allows each of us to address that in our own way. Did I answer your question?
Mark: That’s pretty cool.
Patrick: I want to dive a little bit deeper, because I’ve seen firsthand scenarios where a facility that was receiving pipeline fluid lost power and couldn’t pump out. Whether they couldn’t, or they didn’t have the ability to talk up the chain fast enough to let the pumping station know that we had a power outage. Product kept coming. My understanding was they couldn’t shut off the valve. They’d rather have a spill at the storage facility than a spill erupt from the pipeline.
In that scenario, I saw a miscommunication between a receiving facility and the pumping unit weren’t talking, weren’t communicating. Are we getting past that? Are we beyond those type of incidents happening, because companies are able to talk to each other in real-time with software? Is there still a gap?
Russel: I’m certain there’s gaps out there. There always is. I think that for that kind of situation, you’ve got to go all the way back to the hazard analysis that was done when these guys were figuring out how they were going to operate together.
If they’re able to pump into a facility and they lose power, and they have no way to handle the fluid without having a spill, that’s a fundamental flaw.
If you did an analysis of that, I almost would have to think that that goes all the way back to the original hazard analysis, or there was some change made after the original hazard analysis that caused that to be a possibility.
That’s a flat out failure in your safety planning, in my view. That should have been caught in the beginning.
Mark: That shouldn’t even be possible.
Patrick: I hate to throw in little anecdotal scenarios, but it’s something that I observed, and I wanted to see if you had seen how things — so it’s good to hear that it should have been addressed at the planning stage. That’s a good enough answer for me.
Russel: What I’m seeing ‑‑ and this is throughout the midstream and pipeline space ‑ I see the safety processes and the hazard analysis processes, all of those to me seem to be tightening up.
My experience is that people are casting a broader net when they’re having those conversations. They’re not just doing it with themselves. They’ll bring in their interconnect parties, they’ll bring in outside consultants. They will bring in the resources necessary to design the system for safe operations.
I see that being a very serious thing all the way up and down the management change in these operations companies, that the executives take that up front hazard assessment and implementation very seriously. If there’s a failing, it’s in the MOC over time, and maintaining the level of integrity that was designed in up front.
Mark: Russel, this has all been really great stuff. We’re going to need to get you back on the show, because we can talk about this for hours. We’re getting to the point where we can start winding the show down.
Patrick: We need to do the next conversation on Russel’s show. We’ll go over to the Pipeliners Podcast.
Mark: That’s true, yeah. It’s time for the Redwing Safety Tip of the Week. Do you have a safety tip for our audience, Russel?
Russel: Oh my gosh. Here’s the thing that I think is always true. What’s the most important safety tool? It’s the thing between your ears. The most important thing you can do is think about every action before you take it.
I think nearly every failure you see from a safety standpoint ‑‑ and there’s loads of really good YouTube videos out there on this kind of stuff now. [laughs] It’s like, “Oh my God, that guy’s a knucklehead.” If somebody says, “Here, hold my beer,” and then engages a task, that’s not good.
My tip is think before you act. I know that’s so simple and so uninteresting, but I really think all safety gets down to that. If you don’t know, ask.
Mark: Russel, that’s not non‑interesting. We’ve had some senior HS&E leaders from an extremely large company say the exact same thing, [laughs] so you’re in good company with that one.
Patrick: To Russel’s point, there’s a lot of good YouTube videos of people. They think they’re doing a good job, and I’m looking at glaring safety violations that could catch them in a bind. Like Russel said, situational awareness and using that thing between your ears is key.
Mark: If you need a place to store what’s between your ears, what better place than a Redwing offshore bag. I’m joking folks. Don’t cut your brain out and stick it in an offshore bag.
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Russel, I want to give a shout‑out to you and your show. If people wanted to find your podcast, where should they go?
Russel: You can go to iTunes Podcast or any of the tools on your smartphone, and just search for Pipeliners Podcast, it will find it, and you can subscribe. The website is pipelinerspodcast.com. We’re easy to find.
Mark: If people wanted to reach out to you directly, I’m guessing LinkedIn is probably the best way?
Russel: Absolutely. Link to me directly on LinkedIn. My name is Russel Treat. Send me a connection request on LinkedIn. I love to get them. That’s the best way for me to stay connected to people that are interested in these subjects.
Mark: It is always valuable. We would love to do that. Russel, one more thing, we didn’t give you a chance. If people want to find out more about your company, where should they go?
Russel: We actually have a couple of companies in Eneract Energy Services Group. One is Gas Certification Institute, which we do measurement training. That’s gascertification.com. EnerSys Corporation is the company that does the pipeline control centers and the software for same. That’s enersyscorp.com.
Transcription by CastingWords