In this episode of the Oil and Gas Sound Off Podcast, Joe Perino discusses how the Internet of Things is evolving in upstream oil and gas.
What is the Internet of Things, or IoT?
According to Wikipedia:
The Internet of things (stylised Internet of Things or IoT) is the internetworking of physical devices, vehicles (also referred to as “connected devices” and “smart devices”), buildings and other items—embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data.
In this podcast, Joe discusses:
- What is IoT?
- Current status of IoT in oil and gas
- Cybersecurity in IoT
- Challenges for IoT in oil and gas
- Where are we now?
- Where are we going?
- Where to start improving?
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Data Driven Production Conference
IoT Global Standards Initiative
Oil 101 – A FREE Introduction to Oil and Gas
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What is Upstream?
Hello, I’m Joe Perino and welcome to Sound Off.
This podcast is part of the EKT Interactive Learning Network and is brought to you by Oil 101, a free 10 part introduction to the oil and gas industry.
Hi, this is Joe Perino and welcome to another podcast. This one I’m going to do on the Internet of Things, or IoT, with a special focus on oil and gas, in particular the upstream area.
Now I’ve been wanting to do this podcast for a while and I’ve been waiting to do this after a series of conferences, events, and meetings that have been taking place here in Houston.
As I’m speaking, it’s October 2016.
These conferences, exhibits, and meetings help shed some light on a number of aspect of IoT that I wasn’t aware of before and perhaps you weren’t either from the available literature and what you can find on website.
With that, let’s begin by talking about what the Internet of Things is.
One of the best definitions is from Wikipedia
Internet of things (IoT) is a network of physical devices, vehicles, buildings, and other items embedded with electronics, software, senors, actuators, and network connectivity that enable these objects to collect and exchange data.
That means that this data can be exchanged from physical devices and humans, as well as between physical devices such as machine to machine communication.
But this IoT definition is only the tip of the iceberg along the greater trend toward digitization and this industry trend toward digital transformation.
Now IoT is already occurring in many industries as well as in the consumer market.
For example, you can buy a refrigerator today that has a WiFi internet connection and a camera so that from your smartphone from a remote location, you can look at the status of your refrigerator, what is inside of it, and you can control the temperature, and other various functions of the refrigerator remotely.
If it were to fail or have a problem, it would notify you. This is the kind of thing that’s going on.
Now other industries like manufacturing, automotive, electronics, have been adopting this for some time.
Internet of Things in Oil and Gas
Now oil and gas, which has traditionally been lagging behind other industries in our uptake of technology, this hasn’t gotten very far yet.
Right now it is mostly in the hype cycle phase if you use the Gartner term, but bits and pieces of it are beginning to roll out.
We’ve had big data analytics for a while. We’ve had cloud and large storage databases for a while.
We’ve got visualization and other tools that we’ve had for a while, but it hasn’t been put together yet on a platform-wide solution basis. I’ll talk a little bit more about that later.
Now how would this manifest itself in oil and gas.
Let’s take an example of a field battery in the upstream. You have the well itself, including maybe downhole sensors. You have the Christmas trees, you have all the processing equipment, heater treaters, tanks, you may have a compressor, you may have a pump, you may have a power generator package, you may have gas lift compression going on, or you may have also other types of artificial lift mechanisms in the area.
All of these things are going on to separate the oil, gas, and water, store it, and get it ready for transport. All of these devices would have a digital and physical personality, and most of them would be connected.
A number of them of course being able to transmit real data on some periodic basis, perhaps even in real time, while others would only need to transmit data a few times a day, such as a tank level. That’s one example.
If we look downstream and just outside the refinery itself, we can see that in the transportation area, we’re talking about all of the transport and terminals and volumes of things that are flowing down to the retail point.
You’ve got trucks, you’ve got tankage, you’ve got all kinds of things moving in that area that can all be connected.
This is the idea around this and we might ask, what’s different about all of this? Well these things haven’t always been connected before.
Each part of the business has been in its own silo, they have to collect their own data, the data’s not integrated, a lot of decision making is fragmented.
All of these things were not possible because A, we couldn’t connect it all and B, we did not have the computing power and tools and data stores to be able to get a handle on all of this.
Now, that technology is available.
What are the key issues surrounding IoT and its maturity and implementation?
Well there are a number of them.
A Basket of Technologies
Let’s start out with the fact that it’s not a single technology but a basket of technologies from the sensor side all the way up to the business process execution side.
At the sensor level, one requires some type of virtual personality or digital signature there.
That means you have to have smart equipment ranging from static pieces of equipment that may have an RFID tag to other pieces of equipment that are generating data.
Flows, pressures, temperatures, levels, or some other type of reading. Of course those have to have some way of transmitting that.
They also have to have embedded cyber security so that they cannot be hacked.
As I will mention later, it’s not enough to stop penetration at the network layer, at the network level that is, but industry is asking for cyber security from the bottom up, from the device, sensor, or actuator all the way up through the system.
This will then prevent people from hacking into a battery or on an offshore platform or on some other type of facility and getting deep into the systems and shutting things down and causing major disruptions, accidents, or explosions.
The next area after the sensors and devices themselves is the communications layer, the connectivity layer.
In this space, we have to accommodate a number of devices and methods, both wired and wireless, and there are a number of mature technologies in that space already.
WiFi, satellite, cellular, etc. There’s also a new one called low-power public WAN, applier such LoRa, that’s capital L-O, capital R-A. I have now entered the oil and gas market and it’s important to realize that we have to have networks for both the sensors, some sort of back hall network to bring all this data in, but also a mobile network to connect out to vehicles and other devices that are moving in the field.
There’s going to be a combination of these things.
An Example in Complexity
Perhaps the best example of a supplier in that area is the Texas company, WellAware.
WellAware uses a mixture of 4 technologies. Satellite, cellular, 900 megahertz radio, and this new low-power, wide-area network technology. In this case, RPMA technology.
RPMA stands for random phase multiple access technology, a relatively new way to communicate over a very broad range, for example, up to 400 square miles per tower, and collect data from wireless devices. In addition to collecting all of this data over the network, the data is also typically encrypted.
In addition to the issues with each of the layers in to IoT model, there are 3 other areas where there are complications.
The first complication is interoperability and by interoperability, we mean the ability to plug and play different devices, different applications with the whole platform.
Now at present at the device layer, we do have interoperability with basic analog or digital signals using 4 to 20 milliamps or the HART Protocol, but the digital personality that would be transmitted is not standardized at this point nor are applications standardized to plug and play with various platforms, be it Predix or Splunk or whatever platform one might have.
That’s an issue.
Actually, closely related to that, it’s worth mentioning the work going on at ExxonMobil. ExxonMobil started an imitative to promote a truly open control system and has contracted with Lockheed Martin to do so.
You might ask,
Well, what is an aerospace and defense company doing in the process control industry?
You have to think about it. Lockheed Martin has designed an open system for aerospace vehicles and aircraft which allow plug and play of the various devices used for navigation and control of an aircraft.
Exxon asked, “Well why can’t we do that in the process control industry for our refineries and our plants and our platforms?”
At present, all control systems tend to have a proprietary network with devices that are only compatible with that, except for those who have to have a special interface.
Exxon wants to drive this toward full interoperability where they can mix brand A, B, and C on the same open network.
It would still be secure and if any time they wanted to upgrade, they would not have to replace the entire system, which is what they’re facing now across much of their installed base.
It’s worth watching what’s going to happen in this space over the next few years.
Moving on to the second complication, I want to return to the subject of cyber security.
Most cyber security approaches are what I call top-down. They look at the network and protecting the network from being penetrated by viruses, worms, and other bad actors.
This is not sufficient.
We all remember Stuxnet, which penetrated the Iranian nuclear programs centrifuges and caused a shutdown. In that case, the virus penetrated the network, got into the PLCs or programmable logic controllers, and then shut everything down.
It’s obvious that we need to do something from the device layer upward at each device that’s intelligent in the field, a pump off controller on a beam pump, or other devices as well as protect from the top down.
This is going to require some new designs at the field device level.
Now we currently use passwords and codes, but these may not be strong enough to really protect the device from being hacked, so some attention needs to be paid with this as we design and update the field devices and other pieces of equipment in the field for digitization.
Challenges in Applying Internet of Things to Oil and Gas
The last area I want to talk about is the simple fact that it’s difficult to apply IoT to oil and gas.
It’s true there are many areas that are fairly simple but we’re not simply dealing with two-dimensional point-of-sale data in a retail store.
We have lots of complications, particularly as you get toward drilling. Three-dimensional data, missing data, noisy data, data of all types, data that has lags, some data that’s fast, slow, you name it.
All of this complicates the issue of trying to move this data and get it up to where it can be conditioned and then searched an analyzed, and then used to make better decisions.
I think we can all appreciate that the oil and gas base is not an easy industry to work in for various reasons.
We’re slow to take up the technology, it’s difficult to apply, the players don’t share very much, we have a lack of standards.
All of this means that it’s going to take some time for this technology to fully mature, so let’s take a step back and ask where are we now in this progression.
A short summary would be that we have a lot of applications and experimenting going on with some good results and some not so good results.
A number of firms are using big data and analytics on rotating equipment, on artificial lift.
They’re using it on the design of completions and stages, frack stages.
This is growing.
You don’t see it too much in downstream at all yet. Most of this has been in the upstream area.
Players In IoT for Oil and Gas
As far as the players in the industry, I mentioned IBM earlier, GE Predix seems to be the most oil and gas focused platform available.
IBM has not introduced a platform but has the technologies if they chose to do it.
Then you have a lot of boutique big data and analytics firms out there.
At last count, and I’m looking here on my paperwork, I think there were 8 or 9 of them that I found that were specific to oil and gas that have been operating for the last, no more than the last, say 3 or 4 years and many of them in the last 2.
There’s a lot of venture capital money behind these small firms. Eventually someone’s going to break through, there’ll be a shakeout and it’ll probably be a handful left or they’ll get acquired.
In the data storage area, we have a pretty rich data set now.
We have 3 major suppliers of Hadoop, so a person can go with that or they can buy Hadoop through SAP or some other source.
Then as I mentioned, we need to work on some sort of standard at the sensor level, down at the device level that is.
Both for wired and wireless, and there hasn’t been a standard there. Different people are doing different things.
Standardization and Sharing Data
Then finally, there is no process execution standard at all and I don’t know of anybody who has adopted a BPM platform to do all this work, at least in a major segment of their business.
We have lots of things going on.
Perhaps one of the best ways to characterize it was from a presentation I saw at the Data Driven Production Conference in June from Chevron in which they had basic produce their own, call it roll your own Hadoop platform where they could plug and play a number of different solutions.
It was connected to their sources of data in the upstream and they were doing a number of experiments around production and other areas. I think this is going to go on for some time until things shake out, but this nevertheless is a very powerful trend in the industry.
To summarize, it seems pretty evident that a lot more work has to be done, but who will step up and do this? We have a consortium for example, Energistics, that could be the vehicle for translating the Internet of Things Global Standards Initiative to oil and gas.
That’s one thing. We could also do a better job of sharing data.
The upstream is notorious for not sharing data, for example, artificial lift systems and so forth.
There’s a little bit of that being done now but it’s not widespread as it is in the chemical industry, for example.
Of course the 2 groups of people that could give this the biggest push forward would be the operating companies themselves, along with the leading service companies and manufacturers.
If such a consortium could be assembled, then the standards for field devices, communication, and digital personalities could be established across a widespread set of equipment and devices being used in the oil patch today.
Now one might ask, “Well, where would we start?” I think there’s 2 areas we would start with and number 1 is safety systems, for example, blowout preventers.
They’re just starting to be monitored by third parties with GE’s contract and we know that the Bureau of Safety and Environmental Enforcement wants to have these all monitored by the offshore firms, so these plus other systems could be standardized in terms of at least the ability to monitor their key characteristics so that data can be collected and safety can be monitored remotely.
The second area I would suggest is of course in production.
Even though work has also been done in drilling completion, but I think that area’s a bit more sensitive to the particular operating company and probably would not be the first place they would want to cooperate.
Finally, we simply need to raise the level of awareness across the industry among all players so that everyone understands what needs to be done and then finally, we can get a movement behind this and pick up the ball from the Global Standards Initiative.
As always, if you’ve got a question or a comment about this podcast, we would love to hear from you.
Thanks again for listening.