LED Technology Highlights on Efficiency, Savings in Oil, Gas Industry

Oil and gas companies face a number of challenges working offshore, including how to light their operations. Rigzone spoke with Michael Schratz, Global Marketing Director for Dialight plc, a provider of high-specification lighting fixtures designed for use in industrial, commercial, hazardous location, transportation and public infrastructure applications, about how LED lighting technology is changing the way that oil and gas and other industries are illuminating their operations.

The UK-headquartered company is operated out of the United States, and also has offices in Denmark, Germany and Mexico.

Rigzone: How have the lighting needs of industries such as oil and gas changed over the years? What are some factors behind these changes? What are some trends you see going forward?

Schratz: In general, the lighting needs of our customers especially in the oil & gas industries have not changed. They require high quality, long lasting, reliable and safe lighting fixtures that will meet or exceed their minimum lighting requirements. What has changed is the introduction of LED technology for these types of applications which enhanced each of these requirements, which represents improvement in energy and maintenance savings, longevity which translates to overall total cost of ownership savings. There are several reasons forcing the conversion to LED technology, though we still have a lot of lights to replace. We estimate more than 5 million lights in oil and gas applications need to be replaced.

Rigzone: How does using older generation T8 fluorescent technology for illumination on a round-the-clock operation image oil and gas exploration and production operations onshore and offshore?

Schratz: The biggest issue with fluorescent lighting technology for illumination on onshore and offshore production applications is the constant shock & vibration which causes the bulbs to fail prematurely. In most cases, the maintenance associated with traditional lighting technologies is the driving force to convert, especially in hazardous areas where permitting, scaffolding, production down-time and supervision have significant costs associated with them. In high vibration or extreme ambient temperature type applications, most traditional lighting technologies often fail and will not reach their rated lifetime. Many customers that have installed HID or fluorescent type technologies will claim that the bulbs may only last a few months due to the extreme environments.

Rigzone: What are some of the dangers/risks associated with using conventional lighting? How does this play into safety?

Schratz: Associating the terms dangers and risks to conventional lighting may not be fair, especially when safety is such a major concern in these types of applications. What we would like to highlight is the improvement in safety aspects of LED lighting compared to the incumbent technologies. For some, the improved safety aspects of LED lighting are the most important characteristics. Compared to the traditional high pressure sodium light fixtures (same type of “orange-ish” lighting we have on our streets in the U.S.) typically installed in these environments, LED lighting provides a much needed quality of light improvement, lasts years longer, and contains no mercury or hazardous material which requires special recycling. Certainly compared to these lights, the color quality improvement represents safety improvements by having the ability to read labels at night without requiring a flashlight. The T-rating improvement means our customers now have the ability to install high quality “white” light to mimic fluorescent or metal halide color quality that may not have been an option previously with LED technology.

Rigzone: What kind of energy, cost savings are associated with using industrial LED light versus conventional lighting? What are the savings for offshore and onshore oil and gas operations?

Schratz: The energy savings for large oil & gas applications is massive. Typically a 400 watt HID light fixture can be replaced with an LED fixture around 175 watts. In addition, the energy savings also directly correlates with carbon dioxide (CO2) emission reductions as well as providing the flexibility to add more lighting on a circuit to improve light levels. For rig applications, I will defer to a quote directly from one of our recent rig case studies with Horizontal Well Drillers.

In addition to the substantial maintenance savings, HWD has also realized significant fuel savings as well. With two massive diesel generators running in alternating 12-hour shifts, the company’s electricity cost computes to roughly $1 per kWh—a rate far higher than any utility provider in the United States. Even with specially-negotiated fuel rates, HWD’s fuel bill is a major chunk of its operating expenses.

“The more we can do to reduce the load, this translates into direct cost savings,” said Mike Dillard, manager of Northeast Operations at Horizontal Well Drillers. “Switching out from fluorescents to the Dialight LEDs on the derrick saved us about 60 percent in our energy costs immediately and freed up capacity to power other activities more critical to the operation.”

Rigzone: Can you discuss some of the global growth trends driven by government regulations and environmental initiatives that will impact the oil and gas industry and its lighting needs?

Schratz: In general, the industrial/hazardous market is still less than 1 percent converted to LED technology. This may be in part due to the fact that there are a lot of lights to change in current applications. In one refinery example, a Dialight customer has over 20,000 HID lights installed and on an MRO basis, it will take years to convert. In the new build market, those projects may take years to materialize and many have already specified traditional lighting so we have to work extra hard at this stage to convert those specs to LEDs.

Where government regulations and environmental initiatives may have an impact is on the ban of certain incandescent and fluorescent bulb types. There are areas of the world looking to mandate a ban of any bulb containing mercury, which would leave the only option being LED technology.

Rigzone: Are the cost savings associated with upstream or downstream oil and gas facilities or both? Are these types of lights used for drilling rigs, onshore facilities or both?

Schratz: Certainly energy and maintenance costs savings are associated with all types of industrial environments, not just oil and gas, but the actual maintenance savings dollars in these environments can be drastically higher. We have rig and refinery type customers that claim it costs more than $1,000 to change a light out when considering all of the scaffolding, permitting, etc. is considered.

Typically, many of the same type of lights are used in oil & gas applications.  In the rig world, we see more linear style lights installed than area, task or flood lighting types though there are still requirements for those. It really depends on the mounting height of the equipment used in the application, the target area of illumination and the amount of light required to illuminate a space.

Rigzone: Are you seeing more solar-powered LED lighting fixtures used in the oil and gas industry?

Schratz: Every now and then we see a specialized application that may require solar, but the majority the installations to date in these industries are not paired with solar.

Rigzone: Are you seeing increased demand for LED lighting in the U.S. oil and gas industry? What about other parts of the world? Is demand for LED lighting increasing in deepwater plays? What about onshore?

Schratz: Certainly, the U.S. oil & gas industry has seemed to install LED lighting in a more rapid pace than other areas around the world, though Europe, Middle East, Asia and Australia are quickly catching up. To date, the upstream and downstream markets alike have seemed to latch on to the technology quickly with the majority of the installations being at the refining and rig applications, both on and offshore. Since many capital projects are specified years in advance, many of the installations to date have been completed on an MRO basis though we are working hard to change that.