Internet of Things Strategies for the Energy Sector

Whether thinking about managing oil and gas, water, or other infrastructure facilities or considering industrial efficiency, robotics, and automation, you may be pondering how the Internet of things (IoT) can be used to leverage resources. Forward-thinking strategies include not just staying on top of regulatory changes that affect the IoT ecosystem but also influencing them.

The Internet of things involves the collection of data by sensors and other devices that is then sent to a processor for analysis and decision making. IoT is not a completely new concept in the energy sector, as systems for wirelessly reading automatic meters, obtaining tank measurements, tracking industrial assets, and monitoring smart grids have been in use for decades to manage and control systems. But today’s IoT is now much more advanced and complex.

All IoT systems have in common three aspects: 1) hardware, such as devices, sensors, and tags, that collect the data and perhaps communicate with each other; 2) networks, whether fiber, licensed 4G (and soon 5G) wireless networks, unlicensed technologies such as Wi-Fi and Bluetooth, or even satellite; and 3) a means to process information for decision-making and action, which can occur at the device level or in the cloud.

What is new? Advances in chip technologies and lower chip costs now allow for faster, more powerful processing of larger amounts of collected data. Faster and more nimble wireless networks provide connectivity at greater speeds. And, advents in machine learning and other forms of artificial intelligence can analyze and process all this data in faster and more intelligent ways.

The one-two punch of processing plus connectivity will allow for the proliferation of sensors and devices far beyond what we see now, all collecting more information and transmitting greater amounts of data. This raises concerns about issues such as privacy and the protection of the information (whether contained on the devices or sent over the networks), as well as potential cybersecurity risks to the devices and networks, to include unauthorized access and control. The growth of IoT also drives the need for more wireless spectrum.

What does this mean? Business decisions should consider cybersecurity risks—especially when building “critical infrastructure;” developing a supply chain that may include parts from China; or considering sales to the federal government. Right now, industry best practices in network and device security are being developed by the current US administration (led by the departments of Homeland Security and Commerce). As part of a broad cybersecurity risk analysis, federal agencies are focusing on managing the integrity of the US supply chain to ensure that devices sold in the US are manufactured with components that are “safe” from cyber risks. Proposals being considered for best practices may, at best, become de facto standards of conduct or could even become law or regulation. If the business community wants to successfully self regulate, it needs be a part of these discussions to shape policy.

Read the full column here.


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