Oil & Gas: The Use Case for the Internet of Things and Low-Power Wide-Area Networks

This blog post is the first of several on use cases for LoRaWAN IoT technology in the oil and gas industry. In this first post, we look at the broader benefits of IoT in the extraction, transportation and production of oil and gas, and how IoT can help them increase productivity and reduce cost.

The Trans-Alaska Pipeline (TAPS) is one of the world’s largest pipeline systems. It stretches 800 miles across the beautiful, yet unforgiving, frozen tundra. It begins on Alaska’s North Slope in Prudhoe Bay, goes southward over the towering Brooks Range of the Northern Rockies and ends at the Valdez Marine Terminal at the head of Prince William Sound where tankers await.

Since going into production in 1977, TAPS has delivered more than 17 billion barrels to more than 21,000 tankers. Today, the pipeline accounts for approximately 17 percent of the United States’ annual oil production, and it is the largest pipeline within America’s 2.5 million mile pipeline network that criss-crosses the country.

*Image courtesy of Hexagon Geospatial
*Image courtesy of Hexagon Geospatial

Now in its 40th year of operation, TAPS is a microcosm of the oil and gas (O&G) industry’s challenges to modernize and increase production, while boosting efficiency, in a challenging business environment of low oil prices, insatiable demand and increasing scarcity of resources.

TAPS has a risk profile that is shared by the majority of the 2.5 million miles of pipeline systems in the U.S. ProPublica estimates that more than 50 percent of the pipelines are more than 50 years old. Their advancing age makes them increasingly vulnerable to accidents such as pipe leaks and ruptures that could have a devastating environmental impact, while inflicting high human and financial costs.

Modernization of aging infrastructure is one of the primary reasons that 80 percent of oil and gas companies plan to spend the same, more or significantly more on digital technologies for communications and IoT in the next three to five years, according to a recent Oil and Gas survey by Accenture. Replacing an oil pipeline or rig that fails in the field can easily mean millions a day in lost revenue and production. Rather than “patch, repair and rebuild,” it’s usually more advantageous to predict and address maintenance problems before they escalate which is why LoRaWAN IoT solutions are an ideal match.

The O&G sector is one of the most capital-intensive industries in an industrial economy. LoRaWAN can give O&G companies a reliable, inexpensive way to proactively manage and monitor their aging infrastructure, equipment and system in remote geographies. LPWANs and LoRa®-compatible products are transforming the way O&G companies can monitor, maintain and manage their infrastructure, machines and production in the field in very remote regions at the point when oil is extracted from the ground; to its storage and transportation; to the refineries; to its transport and storage for customers.

LoRa-based remote monitoring applications can link machines or infrastructure like pipelines, oil platforms and storage tanks using device sensors that have a long range (approximately 15 miles), long battery power life (approximately 10 years);  bi-directional communication capabilities; and are extremely low cost.

LPWANs and LoRa®-compatible products are transforming the way the O&G industry monitors, measures, manages and maintains their infrastructure and production in the field, and how fuel is delivered to their customers.

These remote monitoring applications produce actionable data that can improve the reliability, safety and performance across all levels of the O&G supply chain. These improvements enable better decision making, create new ways for safer, more efficient operations and bring important information from all over the business directly to the people who need it most.

For example, data received several times a day from the system monitoring of the oil platforms could be transmitted back to its centralized production center giving the O&G provider greater value, control and understanding of the production levels of its oil platforms.

Similar to other sectors like cities and municipalities who are moving to IoT, the O&G industry can often leverage “smart” IoT technologies – low-power, wireless sensors and cloud infrastructure – and integrate them into existing infrastructure and systems from offshore oil platforms in the Gulf of Mexico to arctic oil fields in Alaska’s northern slope.

“With potential infrastructure savings as high as 80 percent, wireless has become the default option for remote monitoring for wellhead automation, equipment maintenance, asset management, safety, health and environmental monitoring,” said Jeff Kreegar at ON World.

LPWANs’ low total cost versus alternative technologies give it an overwhelming advantage for delivering efficiency, cost savings and productivity improvements for O&G providers extracting, producing and refining, and delivering oil and gas to the marketplace.

Wellhead, Oil Rig and Pipeline Monitoring

Operating wellheads, oil platforms and pipelines are often in “offline,” harsh and rural environments and geographies where cellular coverage is inconsistent or nonexistent.  However, using LPWANs in these areas allow its sensors to locate points of failure, remotely and dramatically reduce the risk of down times and saves a considerable amount of cost.

In refinery operations, LoRaWAN applications can provide valuable information that is updated several times a day, including flow rate and pipe pressure as well as provide companies with the ability to deploy it more widely into other parts of the refinery, which allows them access to more data and greater insight into the operations of their refinery.

In wellhead operations, monitoring of the pump jack and wellhead operations to reduce unplanned downtime maintain safety and regularly compliance are just a few of the ways LPWANs can be utilized in Pipeline Monitoring.

As noted earlier for pipelines, LPWANs allow companies to monitor and proactively maintain their O&G pipelines for leaks and ruptures with more breadth, greater precision and dramatically lower cost.

With the vast majority of offshore O&G production being conducted in remote and extreme areas devoid of traditional communications, LPWANs with their low cost and longevity (long battery life) are ideally suited for monitoring oil pressure, flow rates, temperatures and other KPIs during the drilling and extraction process for offshore oil rigs.

Oil Tankers

At sea, smaller scale LPWAN deployment allows the ship’s crew to monitor its vast cargo area, and gather data about its oil cargo including temperature, pressure and flow rates. LPWANs can give more data about their cargo, while also allowing the monitoring of areas of the ship previously not accessible. The captain and his/her crew not only have a greater understanding of the condition of their cargo, but their workload is reduced considerably.

On the macro level, IoT and LPWANs allow O&G companies to integrate sensing, communications and analytics capabilities into their existing infrastructure and system at a relatively low cost. Its promise and potential are not only helping O&G companies more efficiently and profitably operate and manage their existing assets, supply chains and customer relationships, but it’s also giving them a treasure trove of updated data. This information will help O&G companies make more informed decisions that will help them produce more with less, while growing and evolving their businesses for decades to come.

In our next post, we will take a closer look at one part of the O&G business – fuel delivery – and how LoRaWAN technology like Senet’s is helping fuel delivery companies deliver propane and home heating oil more efficiently to their customers, while delivering more ROI to the company’s bottom line.

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