Posted by Jon Kelly on 2021-03-29
Canary discusses the future of field service with Fuels Institute
Canary CEO Jon Kelly recently spoke with Jeff Hove from the Fuels Institute. They discuss how modern technology is transforming risk management and lowering costs for UST owners. Listen to the full conversation or read the transcript below!
JEFF: Welcome everybody to the next episode of Carpool Chats. I'm very excited about this conversation we're going to have today. It's a topic that I've been involved with for about the past 20 years or so, and it relates to the ownership and operation of underground storage tanks.
The petroleum retail industry is extremely regulated. Not only does the owner have to answer to regulators, there's also the insurer. It is a federal requirement - as you all know if you have an underground storage tank and store petroleum gasoline or diesel fuel - you have to have financial responsibility, and mostly that comes as insurance. You're either insured through a third party or you show that your company has its own self-insurance mechanisms to meet those financial responsibility requirements. It's a huge topic and over the years, it stems from having petroleum releases and the petroleum getting outside of our containment and outside of our tanks and ultimately contaminating the environment around the facility, possibly even getting into groundwater. It's a very serious topic and I know that for a lot of owners out there, this keeps them awake at night.
One of the things that has happened over the past few years here is EPA has revamped a lot of the rules surrounding underground storage tanks, and that includes things like secondary containment of tanks, lines, sumps, interstice monitoring, etc. All of these fit together to try to make sure that we don't have releases. At the end of the day, it's good for the owner-operator because the last thing you want to do is have an extremely expensive claim with your insurer because there was a release of petroleum. Not only are you shutting your location down to either excavate or put in a big extraction system, but you also have downtime when that happens as well as fines and penalties that can occur too. So it's always best that the owner-operator catches this before anybody else, right? I mean that's our job as we try to manage the fuel supply system.
So our guest today has got some really cool new tools that help owner-operators and fuel managers really assess what's going on at the site. Jon Kelly with Canary Compliance is going to dive into a little bit about some of the things that his solution is designed to do in terms of reducing risk while saving some money.
So without further ado, Jon, how about a little bit of background on yourself before we get going here?
JON: Sure absolutely - thanks Jeff. Appreciate you having me on today. It's always fun to get engaged with the folks here at the Fuels Institute.
A bit of background about me - I got my start in the petroleum industry working for ExxonMobil. I spent a few years with them and then ultimately got connected to a fuel retailer who was constantly complaining about the challenges associated with remotely managing all of the tank-related information that you were talking about earlier. Inventory management - in terms of timing up deliveries - responding to alarms, managing compliance paperwork; all that type of stuff. So that was the problem that Canary was developed to solve. We started out really focusing on remote connectivity with a hardware solution and since then we've evolved and grown into a software company that really specializes in remote management of storage tank data. Specifically, we focus on the field service component of how to respond when things do go wrong.
JEFF: Fantastic, perfect. So to bring it back a few more steps - what are some of the issues that you saw out there that made the light bulb go on in your head as you saw a better way of skinning the cat?
JON: You pointed out in your opening comments that the two things that people are really concerned about when they own underground storage tank equipment are risk and cost. Those are the two biggest things. Most people want to mitigate their risk at the lowest possible cost.
Some people are very proactive and respond when the equipment on site indicates a potential leak detection issue, so they deploy a service technician out to the field because it's the responsible thing to do. When the technician arrives, however, maybe they find the alarm wasn't as serious as they thought it was or it was something they could have addressed remotely. But the intent was to avoid one of these really high cost release events that you were talking about earlier.
What we kept seeing was that technicians were going out on these nuisance service calls where they would show up, and the only evidence they had of a problem was that someone on site said “hey something's beeping, something's going on, some piece of equipment isn't working - can you come and help?” So they would go out on these investigative service calls, wasting a lot of time and a lot of money - because not all gas stations are conveniently located right next to these service company facilities. They were spending a lot of time on the road often to get there and find out that it was something they didn't need to come out for or something that they could have addressed remotely. We kept seeing this slow bleed of maintenance dollars from petroleum retailers and we thought: there's got to be a better way to get the information from the tank monitor to someone who makes a decision about dispatching and then ultimately to the service technician who's responsible for doing the work.
We think of the service techs in this industry as the unsung heroes - they keep the wheels turning and the fuel flowing at all these locations. A lot of times they're just flying blind because the information never quite made it all the way to them when they get in their truck to head out and solve a problem. Closing the information loop is what we realized was really important and where we decided to focus.
JEFF: That's fantastic. So in other words, your application is remotely getting the alarm and you're able to filter the alarm - for lack of a better term - to see to see what the actual impact is and see what is really going on at the site, because obviously we've got store clerks that - let's face it - it's a pretty high turnover rate in this industry for store clerks and it's hard to keep them trained. Thank goodness they're picking up the phone and calling and saying “something's beeping at me.” I don't know what it is because it wasn't too long ago they knew enough how to turn it off right away to fix the alarm and get back to work. We've had those experiences too, but is that a correct assessment of your application? It's trying to filter out the noise so that you're really only sending those service techs out when there is an absolute need?
JON: Yeah I think you've touched on a couple things there. There is operator training that's required these days. You talked about the changing regulations and now there is a requirement to make sure the site operator who's physically present has some level of training. But, as you pointed out, with such high turnover in those roles, I think it's very unrealistic to expect a site operator who also needs to know how to operate the point of sale system, update the shelves, keep the promotional materials up, and all those types of things, to be fluent in enough information about the tank monitor to determine what's a real problem and what's not. So you need to have extra eyes on the site and you can solve that with just getting remote access to that monitor.
That's one piece of it - but you also pointed out this idea of filtering out the stuff that matters, because I think that the reason why alarms are not responded to properly is often because they get ignored either by the person on site or the person remotely doesn’t understand tank monitoring equipment, which is complex and sophisticated stuff. To interpret it often requires significant training, so what we've tried to do is bridge that gap between this jargon that's coming out of this beeping machine on the wall and ultimately the decision to go out and do something about it in order to really make sure that the right things are being done at the right time.
We have developed some conditional logic - which is a little bit more than filtering that you talked about earlier - in order to dive deeper into the tank monitoring equipment and gather more information, because the more information that you can have in order to validate a problem, the better off you're going to be. Sometimes the same alarm can be triggered by multiple different causes and the troubleshooting for that may be very different depending on what the ultimate cause of the alarm was.
That's why we think it's important to go a little bit beyond just knowing “okay well what's happening?” in terms of what the machine is spitting out as an alarm type and go deeper to find out what's really going on, then get that into the hands of the people that can solve the problem. Because then they're in, they're out, and they're on with stuff; the retailer is happy because the site is operational and up for longer; customers are happy because they're walking in and things aren't beeping at them, and the store clerk isn't in the back room trying to decipher some antiquated machine on the wall. There's just lots of benefits to being faster, smarter, and more efficient with field service
JEFF: Yeah. Basically the field tech has a much much better idea before they even leave their shop to go to the site as to what's going on. I think that's huge. Another thing that the Fuels Institute works a lot on is fuel quality. I'm always interested in what that probe or that tank gauge is providing us. Yes, its primary goal is to detect leaks greater than whatever the threshold is - it escapes me right now - but we were talking earlier too about free phase water and water sediment as the two primary contaminants in our fuel. Is that something that the owner-operator can also get alerts on if you see an increase in free phase water in the tank?
JON: Yeah, the importance of fuel quality as you've mentioned is a growing concern. We've seen issues with tank corrosion and stuff like that causing all kinds of problems. Water in fuel is always a bad thing - there’s never a time when that's positive - so it's really important to get and collect the information from any of the sensors and probes - particularly the ones that capture water data.
One of the interesting things we've seen with this monitoring equipment and probes to sense water, is that people expect, just because they have the tank monitor on the wall and all the equipment on the ground, that it will tell them at the right time when something's a problem.
One of the things that we've recognized is that, oftentimes, the settings and the programming on these monitors are not correct. It comes down to a problem of data integrity with these pieces of monitoring equipment, where they're flagging something as a problem either too early or too late. Water is a really serious one in that case, because if you get too much water in your fuel, you could end up destroying engines of the vehicles that are on your site.
We actually had a customer who told us that, years ago, they had a policy in place that when water goes above a certain threshold, they wouldn’t allow any more deliveries until it was taken care of. We said, “that's a great policy - how do you enforce that?” They said, “well, we just know that every monitor is programmed to notify us at two inches.” We ended up - later on - getting access to all their monitors, and it turned out that they were all over the map in terms of where they were programmed. That was just due to technicians changing things with the monitoring equipment. With the right tools, you can confirm the integrity of all the settings and actually get the right types of notifications at the right time when it's not too early and not too late. This is a huge challenge with this type of equipment and something that I think modern technology allows people to overcome in a way that 10 or 15 years ago wasn't possible.
JEFF: Yeah and timing, it turns out, really is everything. Right down to if you've got an insurance policy that's a claims-made type policy. Each time there's a claim, there's a $10,000 copay or deductible. That timing is key if the owner is missing potential releases - maybe they're sporadic when the tank gets to a certain level or things of that nature and you catch it six months later. You could go back if you're not paying attention and your data shows that no you did not just have one small release here you had a series of umpteen really small releases and now all of a sudden you're looking at you know potential copay for each one of those and it's really expensive. So that timeliness and for the owner operator to be able to see that as soon as possible is important.
JON: Well, Jeff, if I can just dive in here - I think that's a really interesting point. There's real-time visibility to things that are happening, and I also think that the power of computing these days gives you the ability to notice patterns and trends that previously you weren't able to track. If you're just responding to everything as an individual event and not looking at some kind of pattern over time, then you're missing opportunities to learn about how to fix problems and solve problems and deploy resources efficiently, as opposed to just reacting constantly.
There's a lot of conversation in many industries about artificial intelligence and although I think that term is a little bit over-hyped in some cases, I think that the point of it is to capture individual data points, apply business intelligence to it over time to notice patterns. Ultimately the end goal of that type of technology application is to get into predictive maintenance with equipment where you can catch problems before they happen as opposed to retroactively finding stuff that's going on. I think that's the journey that the industry is on at the moment and, whether it's insurance companies or the retailers themselves, everyone benefits from catching these things early by evaluating patterns and trends.
JEFF: Absolutely. One of the things I've been hearing about is the connectivity of reporting. What's happening at the monitor or at the gauge is that massive amounts of data - and I'm sure there's data there that I'm not even aware of that could potentially be collected - but the fact is that we're living with connectivity. So now you've got a flow of data and maybe your insurer wants that data; maybe the regulator wants that data; and for the owner operator it could be a huge efficiency to avoid sitting down at the end of the month and do some type of reconciliation with numbers. To more seamlessly transfer data so that the owner operator isn't having to deal with the bureaucracy or all these new requirements. It sounds like there's some new standardization efforts that might be coming. Granted, almost every state manages their own UST program, so you've got every state that's at different points in the ball game - some of them are very automated, some of them know absolutely nothing about what's going on in that realm. What should the owner operator expect to see in the next six to 12 months when it comes to reporting?
JON: As you mentioned, there are a number of stakeholders in the world of underground storage tanks. You've obviously got the owner-operator themselves. You've got the regulating bodies - whether it's the state, the EPA - but the regulators. You've got the service providers who are often involved in compliance. Testing companies, insurance companies - all of these people are looking for access to data with respect to underground storage tanks. The problem is that there has never been any kind of consistent digital protocol to refer to underground storage tank equipment. The consequence of this is that everything has to be done somewhat manually, and it is incredibly tedious. If you ask any of the compliance testing companies or any of the retailers that are out there about all the registration, the permitting, all that type of stuff. A lot of this stuff could be solved by creating a data standard that the industry all agreed on to say “okay we're going to refer to our equipment in the same way,” which is going to allow data to be transmitted efficiently, reliably, and accurately between different software databases and platforms.
We noted this problem a while ago when we were talking to our customers, service companies, and regulators themselves - everyone's complaining about the lack of clean data and what we ended up doing was reaching out to the Petroleum Equipment Institute, which is an organization that represents many of the equipment manufacturers and service providers in the retail fuels industry. We also reached out to Connexus which is a data standards development organization that used to be associated with NACS. What we said was “okay, we've got the subject matter expertise over here with the PEI companies, and we've got Conexxus with the data standards development process.” So we brought those together and we're in the process of developing an underground storage tank data protocol, which has had a lot of support from service companies, regulatory agencies, and retailers who are looking for ways to streamline a lot of the administrative activity that's associated with their underground storage tank equipment. We've made great progress already this year and are our second feedback cycle to review what's ultimately going to be an xml schema, which is essentially a blueprint for how to build a database with this equipment in it. I think it's going to be a really great addition to this world of underground storage tanks to help people really streamline how they manage all of this data, improve efficiency, and ultimately improve outcomes.
JEFF: That sounds fantastic. So we're looking at a situation where we're going to notice any type of release sooner, which is a cost savings by itself. The owner-operator or the fuel manager is going to get the data right away, they're gonna save money wasted trips by service techs, and potentially - if the standard goes through - save time on the reporting aspect of things. That's the best of all worlds in my opinion. At the end of the day, our job is to run businesses with the least amount of impact on the environment possible, and this sounds like a perfect scenario.
Since your system is able to interface with most other back office systems, how does that interface occur? I realize we're running out of time here too, but we can wrap this up quickly.
JON: It's an important question because within the world of storage tank management, there are many different facets of managing compliance and operations. Lots of retailers have work order management systems. What we're finding is that it's important to integrate with people's existing technologies to allow small, specialized, niche service and software providers to have an impact. I think more and more what we're seeing is open, api-driven software becoming common at the enterprise level with retailers and with service providers.
I was having a conversation recently with a service provider who was telling me that “in 2020, as a modern service company, we need to be able to troubleshoot things remotely and then, if we have to go to the site, we need clear instructions on what to do when we get there. We need to be able to get that information into our service technician's hands in the best and most efficient format possible.” The way you do that is by integrating with work order management systems. We see more and more of that happening and I think it's the wave of the future as people look for special providers to come in and add value.
JEFF: Great, great. Unfortunately we’re out of time, but I could probably ask a ton more questions. This has been really helpful, Jon. I really appreciate your time today and I would encourage, regardless of the size of the retailer - whether you're a mom-and-pop single owner location or you're a large chain - this is something that could really add to your staff and your risk management. As time goes on, we're going to be hearing a lot more about what each one of these companies is doing to mitigate risk. That's kind of the buzzword these days when we talk about environmental and social governance plans. What is your company doing preventatively to reduce these risks? It's extremely important and it's going to continue to be so. So Jon, thank you very much for your time. I’m sure Donovan will splash the Canary Compliance logo and your contact information up there during this but hopefully we get a chance to talk again soon.
JON: Absolutely - very good Jeff. Thanks so much for having me. Appreciate it
JEFF: Alright Jon - have a good day.
JON: You too.