Natural Gas Week – May 1, 2006
By John Sullivan

The Pros

When Allison, which never achieved hurricane status, hit Houston in early June 2001, it dropped almost 30 inches of rain in about five days. That much water quickly swamped the downtown section of the city - sending water into the basements of buildings throughout the downtown area.

"When Allison flooded downtown Houston, a lot of companies found their IT centers underwater very quickly,"Ferdman told Natural Gas Week. "This was their business operations suddenly gone - the ability to control their assets and do things as simple as write checks."

Downtime means lost money and the longer the downtime "the more money is being lost and no business can afford that," he said. To that end, a kind of niche industry has been growing and expanding with CyrusOne on the leading edge.

The new industry sets up disaster recovery systems for energy companies and their clients range from small independents to some of the super majors who have interests all over the world.

In a secured building complete with 24-hour security, CyrusOne has set up remote command centers where companies can come in times of trouble and run their operations. "I think there are a lot more companies practicing this type of response than say, before Allison," Ferdman said. "We have one company that every month sends their people over here to run operations."

The lessons that began with Allison were played out several times when Katrina slammed through the Gulf Coast, flooding New Orleans, swamping refineries and destroying or severely damaging dozens of rigs and platforms in the Gulf of Mexico.

One company that had been planning for such an event was Entergy Services - though officials said the sheer scope of Katrina overwhelmed them. A conference held last week in Houston by XioTech, CyrusOne and KPMG looked at the lessons that were learned from the IT standpoint by companies in the wake of the twin disasters last year and as the Gulf Coast prepares for the 2006 hurricane season.

"The primary lesson we learned - was communications," said John Wengler, chief risk officer for Entergy Services. "You have to be prepared for everything to go wrong and to go wrong at the same time." The utility, which is also one of the largest natural gas suppliers in Louisiana, found itself with its workers scattered, its corporate headquarters in New Orleans abandoned and most of its service to its coverage areas damaged or destroyed. Because of planning "the unthinkable," Entergy had recovery operations under way from remote command sites in Little Rock, Philadelphia and Las Colinas even as the floodnetback ing grew worse in New Orleans between Aug. 28-30. By Sep. 5, Entergy had switched from disaster recovery to planning for normal operations. The backup data centers helped, but some of the other lessons that Entergy learned were that one person needed to be in charge, Wengler said. That avoids duplication or conflicting orders with several people trying to be in charge. Also, he said, "you have to have plans in place to take care of your people - where are they going to stay, how will they get paid. What will become of them?"

While the conference focused on the lessons learned during the 2005 hurricane season, Ferdman said it is the small, day-to-day occurrences that companies need to really worry about. Those can range from a disgruntled employee to a child accidentally hitting the wrong switch - both of which happened - to a water main in downtown Tulsa breaking and flooding company data centers.

"Companies are looking at IT operations the same way that they look at drilling or production operations," Ferdman said. "They see IT as a part of the business continuation operation and are taking great strides in helping protect them and keep those systems up and running." -John A. Sullivan

This article was originally published online at Natural Gas Week

Copyright © 2006 Energy Intelligence Group, Inc