The Future Is Now: Implementing the Industrial Internet of Things Into Oil and Gas

The global economy is evolving rapidly in the age of digitalization, and the oil and gas industry has been disappointingly slow to realize it is behind in some of the most revolutionary technologies of modern times. The slowness to adapt has hampered the industry from realizing some of the benefits that others have gained from analyzing and implementing useful data that can benefit every aspect of operations. Other industries, during the past 10 years, have begun implementing strategies, technologies, and data-based decision-making processes driven by data collected through automated monitoring or manual collection within industrial operating facilities. The application of data collection dissemination through passive or active things is termed the “Internet of things,” or IoT. The use of IoT within industrial facilities, with higher requirements for ruggedization or extreme operating conditions, is termed the “industrial Internet of things,” or IIoT. The application of IIoT within oil and gas promises to revolutionize the oil field by enabling the acquisition and accessibility of far greater amounts of data, especially for tasks that previously have been managed through historically analog documentation and storage processes.

What is It, and How Will It Affect Oil and Gas Facilities?

Simply put, the IoT involves a network of intelligent computers, devices, tools, and sensors that comprehensively collect and share vast amounts of data. The collected data is sent to a central cloud-based service where it is then aggregated with other analytics and finally shared with end users in a manner that can be assessed for implementation. The IoT is on the front lines of automation in a variety of everyday industries and has produced a promising track record to date.

But, most importantly, the IoT stands to revolutionize the oil and gas industry by allowing for the efficient capture and use of important data. A number of innovative companies have started to implement the IoT by leveraging intelligent, connected devices in their facilities, and they are ahead of the game accordingly. Not only have these companies experienced noteworthy improvements in operational efficiency but also, with better communication between operators and contractors and reduced environmental and safety issues, they have proven that data transparency from a cooperative network of devices stands to benefit just about everyone operationally involved.

Good and Comprehensive Data Takes Away Guesswork

This kind of access to real-time information can take the guesswork out of so many different aspects of production and facility upkeep and holds the untapped potential to protect bottom lines, efficiency, maintenance, and personnel safety. Digitalization has the power to transform the way oil and gas facilities do business by harnessing data analytics to perform industrial maintenance and predictive maintenance better and to create a connected infrastructure.

At present, much of this information is inefficiently processed through bureaucratic protocols and 20th century methodologies (such as immense amounts of paperwork), segregated from the very people who would benefit the most from having access to it. This lack of data transparency has created real-time problems that often lead to accidents, unnecessary rework, and delays in shutdown activities, resulting in unplanned downtime, which is one of the largest effects on an operating facility’s economic performance. Some estimates state that these inefficiencies and accidents caused by data blindness have squandered as much as 5% of annual production and regularly cost untold billions of dollars every single year. Using IIoT strategies in operations creates a transparent data environment where oil and gas facilities can implement data-driven strategies to reduce human error through better accountability, transparency, and objective communication tools. Companies are coming around to the reality that an intelligent adoption of the IIoT can be used to leverage data that improves maintenance processes and realizes substantial cost savings. For the first time in history, an industrial workforce can be fully connected and data-driven so that workers, tools, and information can be delivered in real time with paperless work-flow management, progress tracking, and quality assurance so that industrial facilities are safer and more productive than ever before.

The Renewed Need To Adopt the Industrial Internet of Things in Oil and Gas

In a scramble to get up to date in a changing and ever-volatile business climate for energy companies, digital spending in oil and gas is expected to exceed $30 billion per year within the next decade. Recently, the World Economic Forum (WEF) estimated that a digital transformation of the oil and gas industry had the potential to produce $1.6 trillion dollars of value for all of the different players invested in the future of oil and gas. This renewed interest in digital technologies is anything but new to the scene for oil and gas veterans. Once upon a time, the energy business was an early innovator for harnessing big data in field operations. However, in the past several decades, the industry has fallen noticeably behind with the implementation of digital tools into oil and gas infrastructure.

The technological neglect can be attributed to outdated regulatory frameworks, no real standardization in how data is formatted upon collection, and a gross inability to share information across a company ecosystem in a timely fashion, leaving meaningful data uselessly stranded and detached from internal management systems.

A personnel challenge presently facing the oil field also has forced technology into the equation. As the older guard of senior industry leaders and engineers are leaving the ranks by retirement, digitalization has become all the more important for companies as they prepare to bridge the gaps opening up between technology and personnel experience. 

How Do Oil and Gas Facilities Join the Digital Age?

We live in exciting times from a technological perspective, where simple everyday devices allow us to connect with data that, in another era, would have been inaccessible to people in the field. Thanks to the ubiquitous nature of smartphones and tablets in the modern world, we have data-sharing platforms that are ready-made to behave as IoT tools so that people can easily access data being stored in the cloud. The advent of these intuitive devices should allow a well-designed system to be straightforward for personnel to access and understand with minimal training.

Three foundational tactics that are key to implementing IIoT solutions should be taken into consideration while implementing them into a facility. These tactics, in and of themselves, do not generate value; they are enablers for systems that, when implemented, will drive tremendous value.

Data Structure. The IIoT opens up an entire ecosystem of products that are capable of automated data sharing through robust integration tools. In order to realize the most value out of this ecosystem, a site must ensure that any data required for cross-product use is well structured and available. This means that systems, equipment, and documents should be identified using a consistent companywide naming convention to avoid confusion and redundancies. Absolutely all data should be in a format that can be digitized easily for cloud storage.

Connectivity. Tablets, sensors, and tools will require a means to communicate with a cloud-based data infrastructure. This means that investing in reliable connectivity throughout any facility is of paramount importance. A 4G/LTE network should be readily available for all devices that require access to the Internet for data sharing. Additionally, a key strategy for any information technology department should be to provide a secure and open means for IIoT systems to share data, which might mean a change in procedure for how proprietary production data systems and nonproduction IIoT systems are segregated for security purposes. The ability to back up and store information is vital for safeguarding data in the advent of a connection issue.

Ecosystem. The development of a hardware and software ecosystem that is able to manage data and provide useful assessments of the information compiled is mandatory. Oil and gas companies will benefit from the development of dashboards that analyze data from the field and use convenient interfaces such as smartphones and tablets that can be transported easily by personnel into the field. Think back to the introduction of the smartphone: The device itself provides limited direct value; however, when a user can configure the device, download and leverage a wide selection of applications, and leverage data from other sources, the return on investment becomes tremendous.

The list of benefits that oil and gas operators and facilities have received from digitization is vast and has been welcomed readily by forward-thinking companies that have embraced this inevitable change. Outstanding potential exists for even further innovation in the years ahead thanks to the data-driven progress spurred on by the IoT, and the oil and gas business collectively will have the opportunity to use cloud-based data as a means to protect the industry’s profitability with increased efficiency and improved productivity and by minimizing human errors. At the end of the day, sharing information with ease and transparency will positively affect every phase of production, permitting workers and contractors to take advantage of the rich pools of data that energy companies possess from their upstream and downstream assets.

Mark Litke is president of Cumulus Digital Systems and serves on the company’s board of directors. Before cofounding Cumulus, he was a portfolio development manager at Shell TechWorks responsible for building and managing the organization’s downstream, integrated gas, and new energies business portfolios. Before joining Shell, Litke led sales and business development efforts with government and enterprise customers at Aurora Flight Sciences and held engineering positions at Boeing and MITRE. He holds a BS degree in aerospace engineering from Embry Riddle Aeronautical University and an MBA degree from Northeastern University.



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