Category: Oil & Gas

29 Apr 2016

Insight vs. Hindsight

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:

power_of_1_percent_big

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.

10 Dec 2015

Operator Error

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.

January 2016

Adam Marriott