While managing a crude oil logistics company, I was amazed at the inefficiencies inherent to the manual process of oil production and logistics. Human error is manifested when a production company wants to know oil tank levels and has to call a pumper (or even a truck driver) to gauge the water and oil levels in a well site storage tank. A pumper may gauge the oil level down to the quarter inch while a truck driver might measure and record at half or even whole inch increments. If it’s an older tank that doesn’t utilize separators, it’s often just a guess as to how much water a tank has below the oil. With so many steps to pumping, gauging, switching tanks, changing the pump jack engine speed, knowing when the pump quits, and hauling the oil/water away… there is slop!
Let’s look at the gauging error of one inch in an oil tank on a well site. If a 400 BBL oil storage tank that is 20 ft high, every inch of oil represents about 1.66 BBLs of crude (or water). A sloppy truck driver may be measuring an inch off depending on whether his strap gauge makes it through the sludge on the bottom of the tank, or if the gauging strap is calibrated the same way as the pumpers. He may haul away an inch of oil more than what his paper run ticket represents. What’s an inch, you say? On some wells, we would send a truck twice a day to pull the oil from it. Two inches a day for 365 days is 1,211 BBLs a year that goes unaccounted for. In the oil price heyday of 2011-2013, that’s a potential loss of $133,298. Even in the low oil prices of January 2016, the loss could be $36,330 – coming at a time when every dollar may be more important. Human error is part of the job, but how to do we minimize error when accounting for oil production? With a marriage between sensors and “IoT”. You may have heard of IoT
At a Long Beach, CA sensors conference in June 2015 I was introduced to the term “Internet of Things”, or IoT. It also took a major stage at this year’s 2016 CES convention in Las Vegas. My marketing brain couldn’t understand why a technology would use such a vague term as “things” to classify their platform. But as I learned more about IoT I realized that it’s all about connecting machines (or “things”), to other machines and people via the internet or wireless communication. IoT enables us to see real-time data and gives us insight to make better decisions – and even control that “Thing” remotely. A classic example that you may be familiar with is the NEST thermostat. It learns your heating/cooling patterns and automatically adjust your heat to suit your daily temperature desires with the goal of adjusting back down when appropriate. It saves us money and that’s only half of it. Connecting your thermostat via the internet allows you to control your home’s temperature remotely from your phone via the Nest app. This way you can keep an eye on how high your kids are turning your heat up during the winter while you’re at work, and turn it back down with their app. IoT is a two-way, real-time informational control application between human and machine.
The beauty of IoT is that it takes little infrastructure to install. The NEST uses existing wireless internet to connect with the home owner. The ability to control your devices remotely is not a new concept, just easier today than it ever has been. We saw connectivity in the oil fields start to show up in tablets and electronic tickets first. Sensors started showing up on top of oil tanks, oil pipes, and pump jacks on many new wells. Access to tank monitoring helped us coordinate when to send trucks to pick up oil. The immediacy – data at our fingertips – helped us make better decisions to run our operations more efficiently.
Getting some drivers to be comfortable using a tablet and wireless technology was another issue. It was symptomatic of the “stay on course” war mentality to use oily paper tickets regardless of all the new, nimble technology available through IoT. Socrates said “The focus of change is to focus all of your energy, not on fighting the old, but on building the new”. The oil & gas industry, and most industrial environments, can increase efficiency and safety by adopting sensors that transmit information via IoT to their computers and mobile devices.