Oil pipelines with valves at a refinery where the machines communicate using microprocessors
Oil and Gas

The Industrial Internet of Things and What it Means For the Oil & Gas Industry

Written by Tom Gorman Posted December 22, 2017
Tom Gorman

Tom Gorman

Almost two decades into the dotcom boom, the internet has become a climate for digital revolution on all fronts. We are seeing digital communication occur not just between humans, but between things, introducing new methods of data cultivation and opening the floodgates to petabytes of untapped information. The network formed between devices, machinery, and vehicles embedded with data-collecting sensors that engage in real-time information exchange is referred to as the Internet of Things, or IoT.

graphic representing the industrial internet of things

The Internet of Things has ushered in an era of total interconnectivity with a broad array of applications, ranging from controlling the temperature of your home from a mobile device to monitoring highways for traffic incidents and then using that data to project cautionary messages onto road signs. Rather than targeting life hacks like IoT, the Industrial Internet of Things (IIoT) conjures the power of big data to channel improvements in system health and operational efficiency.

We are all familiar with the expression, time is money, but for entities in the oil and gas industry, non-productive time can have a severely detrimental impact on revenue. In order to consider the benefits of IIoT for the petroleum industry, it is first important to understand the industry's pain points-non-productive time, injury and loss, and manpower. IIoT reconfigures these expenses in a way where things we once defined as fixed costs become variable costs by introducing us to technologies we previously didn't have access to. In leveraging IIoT, oil and gas participants are not reorganizing old data, they are creating new data.

In 2014, cost per barrel hit unprecedented highs, settling around $100/barrel. As fracking and other excavation technologies came to market, that $100 dropped down to $50 and this left providers scrapping to increase volume to compensate for the significant decline in value. On top of that decline in the value of its services, the oil and gas industry is run by an aging workforce, most of whom will retire within the next decade. This duality has made automation an imperative for the oil and gas industry.

Creating a Collaborative Ecosystem

Efficiency is indicative of a healthy infrastructure, and by optimizing how the parts of a system interact, oil and gas companies will limit waste that has previously subtracted from profits. This optimization comes from machine-to-machine communication (M2M), where, if we are talking about an oil rig operation, the drill pipe sends information to the blowout preventer, and the blowout preventer relays the message to the fuel tanks and so on.

This process occurs automatically, creating a perpetual, telemetric dialogue for a proctor to access from a dashboard. M2M communication requires embedded microcontrollers, sensors, and processors that connect through an internet gateway. The smart devices then connect to the cloud, transmitting the data and processing in real-time.

System Health Analytics and Preventative Maintenance

The Oil & Gas Journal cites preventative maintenance as the number one imperative to running a successful operation in their industry. The key to surviving the fluctuating price per barrel is consistency, running "a continuous, uninterrupted operation." At $50 per barrel, there is no room for downtime, and any mechanical malfunctions translate into irrecoverable loss. Because machines are incapable of communicating when they are ill, the oil and gas industry has relied on scheduled maintenance to detect errors when they are still in the early stages of degradation. No matter how routinely oil and gas participants perform system checkups, all manual procedures are subject to human error and unforeseeable failures.

In an attempt to cut costs, Oil and Gas businesses are replacing refinery specialists with novice contractors, who can't yet recognize the warning signs of damaged equipment. And on the flip side, veteran personnel may become jaded to maintenance procedures and subject the system to negligence unknowingly.

By installing microsensors on preexisting machinery, Oil and Gas companies can gain unlimited access to a pool of data describing system health in real-time, allowing operators to become intuitive to the network's ebb and flow and making it possible to pinpoint skewed numbers. Real-time performance analytics distance business owners from the expense of damage control while catalyzing production.

Not only will business owners experience a decline in system failures, but also a decrease in on-site accidents. There is an inherent risk associated with the oil and gas industry; the operation is dangerous and easily corruptible. In the past, we have seen oil rig explosions, exposure to toxins, workers falling from extreme heights—it is not an easy environment to work in. Because many of these accidents occur due to system error, IIoT preventative analytics have the potential to greatly reduce these accidents, minimizing lawsuits based on gross negligence.

Remote Monitoring

This is how IIoT tackles human capital management. As the aging workforce enters retirement, they will be replaced by IIoT remote monitoring centers, off-site facilities where operators process incoming data from the microprocessors. This is also a means of reducing accidents; if less workers are subjected to the risks of such a caustic work environment, inevitably there will be less accidents and injuries.

The average oil rig worker makes 100k/year, a salary scaled to the risks and niche skillset required to do the job. Perhaps, as the aging workforce dissipates organically and we discover new applications for the big data propagated through IIoT networks, Oil and Gas companies will be able to downsize their workforce while still maintaining the same rate of production. M2M collaboration across an IIoT is not a human replacement, but supplement rather. We are not replacing humans with machines; we are simply enhancing understanding with absolute human to machine collaboration and helping experts do their jobs more efficiently.

By sending analytics from offshore rigs, directly to a mobile device, workers can respond to data remotely, managing system adjustments without physically being there. This access comes from a custom dashboard that corresponds with all microprocessors.

Asset Management

Oil and Gas cultivation comes with natural limitations, an organic but finite asset, and for this reason asset management is imperative for the oil and gas industry. Although the public awareness of fossil fuel scarcity is at its peak, rate of excavation is as well. Every year, we see emerging technologies that allow oil rig operations to drill faster and with greater accuracy—multi-well pads, mobile rigs, electrically powered rigs.

Oil pump jack drawing illustrating how the industrial internet of things helps all the parts communicate

The IIoT creates interconnectivity between these technologies, providing a platform for them to converse. In supporting M2M communication, oil and gas enterprises will be able to access minute by minute data illustrating productivity and mapping out the life cycle of each well, while simultaneously determining the coordinates of oil-rich reservoirs to drill into next. Not only, does the IIoT provide inventory management, but also helps operators decide when its time to move on.

Machine to machine communication is the IIoT's selling point, but I find it also improves human to human communication as well. Human communication is one of the greatest barriers to enterprise in general because it often goes overlooked, especially for companies with a large, international workforce. The IIoT has the potential to bridge gaps in communication between workers by funneling data into a user-friendly dashboard that can be accessed from anywhere. Granting all workers access to the same data pool will eliminate departmental divide and foster a unified vision to carry into practice, helping the whole system run more cohesively, humans and machines alike.

Of course, we are still uncovering ways to apply IIoT big data, and to be frank, there are some technologies the oil and gas industry does not know how to apply yet. Nevertheless, it is better to be at a surplus than a deficit, and for the first time in a while, the oil and gas industry has access to more numbers than they know how to process.

Getting Started with IIoT

Chetu programs gateway solutions for the microprocessors, sensors, and processors that make M2M dialogue possible. These devices connect to the cloud so they can be accessed in real-time. Chetu begins with the processors and continues through to the connectivity services. A Universal Plug and Play protocol provides an interface for communication between smart devices, because although the microprocessor gives them the capacity to connect with one another, the IIoT requires internet connectivity. Chetu leverages REST and SOAP protocols to enable JSON and XML inter-software communication.

After completing the necessary back-end development, creating a network for the microprocessors to transmit data through, Chetu focuses on engineering a dashboard where operators can visualize the data and then use it functionally.


Chetu, Inc. does not affect the opinion of this article. Any mention of specific names for software, companies or individuals does not constitute an endorsement from either party unless otherwise specified. All case studies and blogs are written with the full cooperation, knowledge and participation of the individuals mentioned. This blog should not be construed as legal advice.

Chetu was incorporated in 2000 and is headquartered in Florida. We deliver World-Class Software Development Solutions serving entrepreneurs to Fortune 500 clients. Our services include process and systems design, package implementation, custom development, business intelligence and reporting, systems integration, as well as testing, maintenance and support. Chetu’s expertise spans across the entire IT spectrum.

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