David Marriott, Director of Oil and Gas speaking with Utah Lieutenant Governor Spencer Cox about grants awarded to Spectra Symbol for technological development in Oil tanks
I saw the comparison between Insight vs. Hindsight recently in an article I read about efficiency. I immediately thought about what I do every day – integrate sensors on existing well sites. These sensors collect real-time data which is sent to the cloud and delivered to computers and mobile devices. It’s amazing what we can do with so much information at our fingertips today!
Do you ever wonder sometimes, like I do, how we got anything done without our smart phones? We were inefficient! Cell phones became affordable to the masses just after I graduated from high school. If I wanted to hang out with my friends in high school, I would pick up the corded land line and call their parents’ homes to see if, by chance, they were there. If not, I would jump in my parent’s car and start driving around to locations where my friends usually ended up. I wasted a lot of time, gas, and money seeking social interaction… or maybe I just couldn’t take a hint… Fast forward 15 years and I know exactly where each individual friend is and waste no time wondering where, when, or with whom I will be spending time. If my life was a production (and it sometimes is), communication, clarity, and immediacy turns my world into a streamlined, and yet complex story. It’s complex because I have to make sense from the influx of information from many sources. It’s streamlined because I have intell that empowers me to use my time more efficiently. Then there’s my wife, my family, and my friends who add the drama to said production. Better insight into the lives of those in my personal circle helps me alleviate some of the drama that I encounter when making decisions exclusively from hindsight.
My brother-in-law was interviewing for a new job recently and the interviewer asked him about a time when he failed at work, to which he responded, “Hindsight is 50/50”. He meant to say “Hindsight is 20/20” and realized afterword that his original statement is so often valid. Hindsight isn’t always clear; it doesn’t always tell us the truth. That’s why we do our best to preface our decisions with relevant insight.
When I ask small and large oil producers how they monitor their tanks, a majority of them describe a scene that eerily reminds me of driving around town on a Friday night looking for my friends! Oil field pumpers drive around every day similarly reaching out to their “friends”, or in other words, their oil wells. These wells don’t call the pumper, they don’t let him know when they’re halfway full, about to overflow, or are too tired to keep pumping. These wells are selfish, and make the pumper manually dig for their secrets, demanding time and attention. Who wants a high-maintenance friend? EP Energy, located in the Uinta Basin in NE Utah, began instrumenting their wells with sensors a few years ago. Each pumper was immediately able to manage three times the number of wells with real-time sensor insight. I imagine it’s because with better data and analytics, they were able to:
- Spend less time at each site
- Reduce operational risk
- Improve efficiencies
- Reduce the cost of maintaining equipment
- Avoid unplanned down time – a huge cost savings to the bottom line.
An article by Ravi Kalakota called “Power of 1% Improvement – ROI & Use Cases for Industrial Big Data”, said that the Oil & Gas industry would see $90 Billion in saving from reduced capital expenditure with the introduction of machine-based, automated, predictive analytics powered by the Internet of Things (IoT) which is commonly used for asset management, transportation optimization, and supply chains. Here is a nice chart from GE that puts the ROI of IoT and instrumentation into perspective:
In the name of efficiency, it’s time to make our well sites smarter, more automated, and more easily managed by fewer people. It’s time to collect and analyze data that drives decisions from insight rather than from hindsight. Check out Kodiak’s liquid level tank monitors, pump sensors, and other oil field sensors to see a greater ROI in your oil field.
Roustabouting: Retrofitting old tanks to become efficient requires special effort.
When you come across a tank that has been in the field on a long-producing oil well, things can get a little rough when opening tank top access ports. For example, in October, we had a crew installing a new liquid level instrument on an oil tank that looks to have been in the field for over 20 years. The 4” port was rusted solid. We had an 18” wrench on hand, and it didn’t move the port cap. Then a field worker showed up with a 24” wrench, and a 250-pound frame. Still nothing. Finally, the field manager showed up with what I call a He-Man wrench. The thing might have been 45” long! But even that didn’t budge the port. We took it up a notch and put the wrench on the threads themselves to gain more leverage, but it didn’t budge.
Before giving up, we grabbed a chain and attached it between the wrench and the catwalk, and started twisting it with a crowbar. Really, it was a make-shift come-along. After the constant pressure, somehow, the rust gave way and the threads moved!
Twenty-year rust can be pretty tenacious, but the come-along approach was the best way to unscrew the port. Add it to the toolbag in an industry where customers are trying to gain better Return on Investment for each well site, whether it is a 20-year-old stripper well, or a new high producer. At Kodiak Instruments, we specialize in the retrofit tank space—remote or old wells that need to become efficient to stay on-line. Our wireless instruments install in less than 30 min. (assuming you can open the port, of course), and deliver financial ROI in a similar quick-turn.
By Daniel Marriott
How to solve the high cost of retrofitting oil tanks?
Everyone wants more efficient tanks, and everyone knows that liquid level instrumentation will improve efficiency. But retrofitting old tanks makes owners hesitate, in spite of the benefits instrumentation gives.
One of the biggest challenges oil tank owners face when looking at a retrofit of their oil tanks is the huge installation costs. The cost of running power, wires, SCADA and communication to and from their remote oil fields can run 6-figures per site. This is an overwhelming hurdle for a retrofit, and can make any play for efficiency run dry before the project starts.
Does retrofitting oil tanks make sense if the site is a stripper well, or low-producing? Stripper wells make up about 11% of the US oil output; roughly 400,000 wells each producing 5 bbls or less daily. That’s a lot of well sites! An oil company in Wyoming has over 100 low-producing wells for which they pay a contracted pumper to manage each well $400 a month, or $40,000. Managing these wells includes visiting the location, strapping the tank levels, fixing broken or breaking mechanical items, and other miscellaneous management. Retrofitting wells not only provides real-time data for more efficient decisions, but also reduces the need for as much involvement from pumpers, saving the producer money. In a day of wildly fluctuating oil prices retrofitting oil wells may be the best way to improve efficiency, save management cost, prevent shut-ins, and optimize water and oil hauling schedules.
Enter Kodiak Instruments wireless solution: we observed the problems of power, communication and price, and created a new product. The Dual-Liquid Level Sensor gives a simple solution to a formerly complex problem. We combined our patented contactless Magnetopot linear potentiometer together with customized wireless and battery-operated communication to produce a world-class solution, that can last over up to 5-10 years without replacing the battery.
This solution doesn’t cost 6-figures, in fact, it can cost less than 10% of the cost of traditional sensing and traditional wiring. The install takes 30 minutes, and the wireless transmissions begin immediately giving the Dual-Liquid Level. Simple, inexpensive, made for the retrofit oil tanks.
By Daniel Marriott
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.
If you have been in the Utah Uinta Basin oil fields, you know one common challenge: paraffin or as it is known around there: “waxy” crude. This isn’t the sweet stuff from the Bakkan up in North Dakota or from the fields in East Texas, this stuff will turn into a candle of wax if you let it cool to 90 degrees or less. Typically, paraffin crude wells are continuously heated between 125 degrees and 185 degrees, which is quite hot!
So if your liquid level instrument is based on a dual-float system, like Kodiak Instruments, then you have a unique challenge. Floats that work in the sweet crude often get stuck in the waxy crude. Because of the paraffin properties in the crude along with other impurities and heat, the wrong floats can become coated and plugged, giving an incorrect product and water level reading.
Our answer? A balance between material, size, surface area and buoyancy. It needs to be heavy enough to fall if it gets high and dry during a tank pickup, and yet buoyant enough to stay afloat without falling below the surface. We use stainless steel floats in the waxy crude, and polyurethane floats in sweet crude. Each style of crude requires different factors. Our floats are rated for 10+ years in each environment.
If you would like to try our floats for a free tester, give us a call or email, and we’d be happy to show you how we solved the challenge.