April 2018, Vol.245, No.4
Features
PART 2: Entegra Solutions President – Racing and ILI an Odd Companion
The March issue of P&GJ covers part I of Mark Olson’s journey as a not so successful race car driver to a much more substantial In-Line-Inspection business entrepreneur. Below is part II of the interview.
P&GJ: How did you transition from race driving to energy, and what are the correlations between the two?
Olson: There was never really a transition. I went from working at a pipeline operator, to starting a pigging company, to racing, to starting an automotive parts company, back to starting a pigging company – all while consulting in pipeline integrity.
After driving 10 races in 2008, I quickly determined that I’m a better business person than a race car driver.
I’m often asked, “Why do you race?” The assumption is that I’m some sort of thrill-seeking, adrenalin junky. But that couldn’t be further from the truth. I’m obsessed with racing for the same reason I’m obsessed with Entegra.
No disrespect to my driver-friends, but to me racing is just an engineering exercise. Races are won in the shop. Championships are won in the off-season. I love racing because it’s such a pure form of competition. You put your best possible product out on the field of battle with no place to hide, no excuses.
P&GJ: What were some of the challenges you faced in starting Entegra Solutions and how has the company evolved since its founding?
Olson: I think the biggest challenge to starting any business is market acceptance. If you build it, will they come? For Entegra, this was never a big risk. With a couple of phone calls, we had our first tiers of the management team in place, and the capabilities of the team were well known. So, for us, it was more of a question of whether MFL/Caliper ILI had become so commoditized that there was no place for even higher technology and an even higher level of service.
The biggest difference for Entegra is our new financial partner, Intervale Capital. With our previous venture, we had to sell very early on to a larger service company in order to have access to the infrastructure and resources required to achieve the vision. Intervale has afforded us the resources to build the company that we’ve always wanted to build. Almost every day, the board challenges me.
In one year of commercial operations, we’ve built 6-inch to 24-inch capabilities, along with some duplicate tools. We inspected more than 50 pipelines in our first year. Yes, we’re small and young, but no ILI company in history has ever grown that fast or accomplished that much. By spring of 2018 we’ll have 4-inch to 32 capabilities, with two and three tools of each size.
And we’ve doubled down again, times two. With twice the number of metal loss, ID/OD, and caliper sensors and twice the sampling frequency, the data resolution is four times the previous state of the art. We’re seeing 1/8th inch round, 10% deep pin holes. We’re seeing the long seam on ERW pipe, 100% of the time. The caliper sensors can feel the texture of the inside surface of the pipe.
We’ve made a management commitment to 45-day report turnaround time. With ASNT ILI-PQ requirements, this means that our staffing has to lead the demands of our business by six months to a year. So, will we be under 45-days, 100% of the time? Maybe not always, but we are committed to staffing for 45-day turnaround. And in the rare case where a line has an abnormal level of complexity, we’ll communicate the complications within the first week or two. This commitment is a core value – to do what we say we will do.
From a data analysis perspective, our roots go back to the Pipetronix days of the mid-1990’s. We believe a significant investment in human capital and in human-based decision making (vs artificial intelligence) results in a better end product. With a proprietary defect set comprised of hundreds of individual anomalies, we’ve developed very complex sizing algorithms.
Our success is based on experienced human data analysts reviewing every inch of a pipeline. We verify the interaction rules and specific morphology of each pipeline anomaly to ensure that the best sizing algorithm is applied. We correlate all available data sets to correctly characterize each pipeline feature and anomaly and to ensure that the pipeline operator’s rehabilitation program is optimized.
P&GJ: In keeping with that last question, how has the ILI business changed during this period?
Olson: When we started CPIG 17 years ago, there were only three or four MFL service providers in the world. Now there are more than 20. In 2003, high-res MFL/Caliper ILI inspections cost $2,500 per mile. Now it’s less than half that price.
P&GJ: So how can you be profitable if you do twice as much work to make the same revenue?
Obviously, that is the elephant in the room. You either have to provide significant, quantifiable value or you have to find a way to cut your costs by half or more. But no one really benefits from a race to zero.
We believe that we have demonstrated, not only at Entegra but reaching back over 20 years, that using the highest possible data resolution combined with human-based decision making results in the best possible input to our customer’s asset integrity management processes. It’s a no-brainer. We only have to save our customers one dig per line segment to justify our value.
P&GJ: What is your business strategy, and have you had to revise it to conform to business conditions?
Olson: Our strategy is no secret. We’ve always embraced tried and true science with no expense spared for people or for technology. Our position in the marketplace is (and has always been), “highest resolution, highest service, at a competitive price.”
We can’t always compete with the price of lower resolution technology and less sophisticated data analysis, and we don’t really try. Our tools cost more to develop and produce, and our data analysis process is more manpower intensive and costly, but we believe that we’ve demonstrated time and again to be the most cost-effective ILI service provider out there.
P&GJ: How many employees do you have and where are your offices located? Is Entegra in a growth mode?
Olson: Our technology center is in Toronto, Ontario; our U.S. operations base is in Indianapolis, Indiana; and we have a sales office in Houston, Texas.
This business is about people, and some of the smartest and best people in our business live in Toronto. At Entegra, we are committed to our focus on people; and our commitment to Toronto is critical to our success.
Indianapolis is as much a logistical center of the country in the north as Houston is in the south. Indianapolis is called the “Crossroads of America”, and if you look at a map, you can understand why. Likewise, if you look at a pipeline map, you can understand why Entegra is located in Indy. Detroit, Chicago, Pittsburgh, St. Louis, Dayton, Cincinnati, Columbus, Louisville, Des Moines, Minneapolis, etc. are all only a few hours from Indianapolis. Hence the choice of Indianapolis for our US Operations. We are committed to engaging and growing our own talent.
P&GJ: What would you say separates Entegra from its competitors?
Olson: Our competitors are technology companies, and they’ve been commoditized, at least to some extent. But unfortunately, they’re married to their existing platforms and can’t afford to retool. They can’t afford to keep up and to take advantage of technology advancements.
We beat them on technology and experience. Personally, I’m not a technology guy. Our sales guys geek out on the technology advantages that we have. Twice the sensor density and twice the sampling rate. Who can’t sell that! But I could care less about the technology advantage – we’re not smarter than the competition, we’ve simply taken advantage of having a clean sheet of paper and designed a drastically superior tool.
I’ll take the 4X data resolution advantage. But I’m most enamored by what we can do with the data resolution advantage. As a veteran pipeline integrity manager, I’m most passionate about the impact we can make on the asset management decision making. When we can better distinguish a benign pipeline feature from a potentially injurious anomaly, we made a difference.
P&GJ: How positive are you about business prospects in the near future, and what factors do you see driving the industry forward?
Olson: Our business prospects are bright. We’ve delivered an entire tool range of MFL/Cal/IMU tools that have much more than exceeded even our expectations (and trust me, our expectations are very high).
Our assumption going into the startup of Entegra was that MFL technology was pretty played out and mature. We didn’t expect to be able to see 1/8th inch round, 10% deep metal loss features. We didn’t expect to be able to see the long seam in ERW pipe, 100% of the time. We didn’t expert to be able to “feel” the seamless pattern in seamless pipe using the caliper sensors only. We were most concerned about the market share we could address.
After a year of operations, our questions about market acceptance have been answered. Yes, there are some pipelines out there that don’t warrant our somewhat more expensive assessment. But there are plenty of pipelines out there that benefit from our highest resolution, highest service level approach to ILI.
P&GJ: Can you tell us about your family?
Olson: The son of a high school math teacher, I’m most proud of my ladies!
Most engineers I’ve met have clearly out-kicked their coverage. I’m no exception there. Lori Linnemeier Olson is a pipeliner’s wife. She used to own and manage three coffee shops, and besides running our household, she runs our auto parts distributorship and volunteers wherever she can. She’s truly a Proverbs 31 sort of wife. Plus, she puts up with me.
Iris is a mini-me. As an oldest child, she reads several books a week, super-pragmatic, patient with her sisters, self-assured, and might be a future President of the United States. @olsonforpresident.com
Hannah Beth is one of the most natural athletes I’ve ever met. Unfortunately, she doesn’t have a competitive bone in her body. Otherwise she’d be unbeatable. In third grade she competed in cross country with the fourth- to seventh-grade team. She consistently finished mid-pack or better without trying (just running with her friends). A motor that won’t quit. In swim team, a switch flipped at the age of 5, and she has never lost a race since. Nonetheless, she’s completely oblivious and could hardly care less. Also devours multiple books a week.
Evelyn Marguerite-A is her mother’s daughter. The center of attention and social butterfly, Evelyn is passionate about gymnastics and her dad! In the end, it appears that the guy got the girl(s)! P&GJ
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