The Internet of Things
According to Robert McKeeman, CEO of Atlanta-based Utility Associates Inc., the Internet of Things has different definitions, depending on the point of view and the type of data. Some people define it as small devices talking to one another with simple messages, like a thermostat or telemetry equipment at a drilling rig site, such as a drilling pump or separation equipment. But McKeeman also includes video as one of the solutions available through Internet of Things technologies.
Utility focuses on providing Internet of Things solutions that range from simple data messaging to real-time streaming video for the oil and gas and other industries. One Utility customer, Houston-based Stage 3 Separation LLC, which provides solids control services, uses Utility’s wireless vehicle routers and fixed location routers to track and communicate with its mobile assets. Utility also provides broadband and WiFi access for drilling sites and telemetry and asset tag information so anybody with a smart phone or tablet can have a WiFi hotspot on site like at their home or office.
“It’s not just about simple telemetry - not that telemetry is simple, but about complex information from real-time video streaming from a remote job site,” McKeeman told Rigzone.
Last year, the company acquired a company that manufactures video recorders and cameras used in police cars. It plans to apply this equipment to the energy market segments it services, and is in the early stages of migrating the technology for use in its business sectors such as public transit.
“We see tremendous potential for this technology to allow operators to have more visibility in their operations, including offshore oil rigs.”
While machine to machine, or devices talking to one another without people in the transaction, remains a significant part of M2M that will continue to grow, McKeeman sees satellite and other devices that allow companies to know what’s going on at a work site will be a game changer for the oil and gas industry. McKeeman predicts that devices at oil and gas equipment at drilling sites will get smarter and smarter, leading to endless possibilities such as monitoring when equipment actually needs to be serviced, not when it’s scheduled for service.
The size and cost of oil and gas equipment means it will take time for existing equipment to be replaced with smart equipment. It will take 10 to 15 years, but the trend of more intelligent equipment is coming as the performance of communication equipment doubles and prices drop by half every 18 months, as cited in Moore’s Law.
“Manufacturers are looking for way to be stickier with their customers, so they’re building devices that are constantly reporting data back to the manufacturer.”
This trend is occurring in the airline industry, where airline engines are constantly reporting performance data back to the manufacturer. The trend now is that airlines don’t own engines, but rent them by the hour, a trend that could also be applied to oil and gas. The solids control customer with whom Utility works already rents separation equipment for drilling mud on a day rate basis, and has a very powerful incentive to know what’s going on with equipment to keep it rented.
The remoteness of some oil and gas operations and high price tag associated with replacing equipment is prompting oil and gas companies to look to using real-time predictive information to anticipate equipment failures.
“If a critical piece of equipment breaks, you can’t just run down to the hardware store and get a spare part,” McKeeman commented. “It’s cheap to fix something, but expensive to replace something.”
Devices will become smarter out the kinds of information they report, particularly things out of the normal operating range.
“Ultimately, drilling rig operators and equipment manufacturers will want to gather data over the life span of the equipment to see all its costs – including maintenance, supplies and fuel.”
The purchase price is just part of a piece of equipment’s total cost. Information over a product’s life span can allow an operator to compare and contrast the costs of different pieces of equipment and get the most value out of spending. They can also benchmark themselves with their competitors to ensure they are getting the most value out of their equipment spending.
McKeeman said the trend towards Internet of Things technology not only in upstream, but midstream and downstream operations, and onshore and offshore. McKeeman noted that one of Utility’s pipeline customer uses the company’s wireless vehicle router technology for driving along pipeline routes to perform maintenance checks.
“Our wireless video router provides real-time Internet connectivity in remote places,” said McKeeman. “This connectivity is critical for companies whose operations are not in a major metropolitan area with cell coverage, but the boonies. In some cases, it makes sense to buy satellite coverage, but companies who need to communicate in real-time still need a solution to address this need.”
The case may be more compelling for offshore oil and gas operations due to the complications of dealing with equipment issues 300 miles offshore versus driving 50 miles to an onshore site, but McKeeman also anticipates seeing more connectivity in oil and gas operations, certainly in onshore development. Cellular service will continue to get faster and cell carriers such as Verizon invests billions each year to enhance and build up a cellular networks. In some cases, customers have bought a particular cellular modem that works on a certain carrier, but customers driving back and forth between different cellular coverage areas – with different carriers servicing areas two to three miles apart — are now wanting to ensure they have the best cellular coverage possible no matter their location.
To address this issue, the company was awarded in July a patent by the U.S. Patent and Trademark Office for the technology used in the company’s Rocket Vehicle Router family of products, which can automatically switch between 3G and 4G LTE to provide fast, reliable connectivity available wherever a vehicle travels.
Early adopters include major oil and gas companies that operate in larger, remote offshore sites with infrastructure valued in the billions and operational costs run into tens of millions a day. These companies’ operations are very sensitive to shutdowns. The ability of equipment to report self-health will make operations even better.
Smaller wildcatters are more likely to be slower in adopting this technology due to costs – although some are sophisticated when it comes to technology -- but as time goes on and Internet of Things is more widely adopted, secondary operators may begin to acquire equipment embedded with Internet of Things capabilities on the secondhand market, McKeeman noted.
In terms of safety, “I can’t think of a scenario where M2M or Internet of Things equipment makes operations less safe – I think it would make equipment safer because you have better information on that equipment,” McKeeman noted. “The more information on pressure and temperature that you have, the better off you are.”
Flyable drones are another trend that McKeeman sees for the Internet of Things.
“We really see that there will be more and more for streaming video more in the way of video drones travelling around collecting data at various sites,” McKeeman commented.
In June, the U.S. Federal Aviation Administration approved BP’s use of unmanned aircraft to conduct surveys and pipelines of other infrastructure on Alaska’s North Slope, Reuters reported earlier this year.
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