Hydrocarbon Processing - April 2022 - 75

Digital Technology
K. LATURKAR, Facility for Rare Isotope Beams, East
Lansing, Michigan; and K. LATURKAR, Validation
Associates LLC, Framingham, Massachusetts
Blockchain and the downstream segment:
Increasing efficiency through technology
Oil and gas companies are finding creative
ways to look for solutions to new
problems in the face of climate change
and growing environmental awareness.1
These creative solutions are aimed to
achieve their profits and investor expectations,
while reducing their impact on the
environment. As organizations seek out
new technologies, blockchain proves to
be one that is consistently useful. The use
of blockchain technology is transforming
the way supply chains are audited, energy
markets are designed, waste management
is executed and much more.2
Blockchain may not appear to be the
intuitive choice for most who seek to
accomplish
tasks
associated with
downstream segment. Unless
the
studied
extensively, employing blockchains may
be counterintuitive, especially with the
headlines about how Bitcoin consumes
more energy than a small nation.3
Yet, it
is also critical to remember that not all
blockchains are crypto or related to Bitcoin.
Many companies are implementing
this technology internally or by building
conglomerate blockchains that use far less
energy than external blockchains.4-6
Blockchain: Why use it and what are
the benefits? When discussing the specific
uses for blockchain that companies
are utilizing, it is important to define exactly
what it is and how it is beneficial. Essentially,
it is a network of decentralized
systems that store a database. Blockchain
as a decentralized system7
that provides
consistency and immutability, resulting
in a firm foundation of trust and certainty
that has the potential to revolutionize the
world.8
Therefore, if two companies were
to share a blockchain with data on their
mutual supply chain, they would both be
FIG. 1. Possible use cases of blockchain technology for regulatory compliance.13
Hydrocarbon Processing | APRIL 2022 75
confident of having the same data, unaltered
in any manner.9
The companies will
have a permanent record of what has been
happening in the supply chain, which
they can audit confidently whenever it
is needed.
Downstream segment and blockchain.
There are a variety of ways that
oil and gas companies use blockchain to
streamline operations, increase optimization,
promote environmental sustainability
and reduce their carbon footprint.10
Blockchains are adaptable to a variety of
use cases for everything from compliance
tracking across supply chains, managing
waste, optimizing pipeline inspections,
to paying environmental taxes with smart
contracts.1,2
The following are some examples
of blockchain uses relevant to the
downstream industry:
1. Regulatory compliance.
Environmental compliance
is one of the most stringent
requirements of the oil and gas
industry. It is important for
companies to make sure they meet
the requirements of regulatory
agencies-blockchain is a prime
solution for this purpose. Since
everything in the supply chain
is easily trackable within the
company, including suppliers
and distribution partners, it is no
surprise that many companies find
this application very beneficial.
The European Union (EU),
for example, requires companies
to allow independent verification
of certain environmental safety
measures in energy-related facilities
and make this information publicly
available.11
Such measures are easy
to implement with blockchain.
The companies can log that safety
measures were implemented, the
inspectors can record that they
have been verified, and anyone
with access to the public chain
can confirm that these steps
Hydrocarbon Processing - April 2022

Table of Contents for the Digital Edition of Hydrocarbon Processing - April 2022
