How North American Energy Can Compete – Enablement of a Digital Oilfield with a “Connected Field”

Did you know that accountants were hesitant to adopt spreadsheet programs like excel? Or that it took us decades to fully adopt trains, automobiles and computers? Do you think these things changed our lives? Of course! How could we conceive where we are today without them? But it took a while for them to gain “steam” (pun intended).

The situation with the Digital Oilfield in North America follows these familiar lines. It is a transformation that I cannot adequately explain since I only know how to build the enabling technology. How it’s going to be used is up to each person acting individually and resulting in a collective connected effect. Sure, I can give some examples or find people who have done this or that. But that’s the tip of the iceberg. The “killer example” is going to be different for every team in an energy company.

The enabling technology for the Digital Oilfield is called a “Connected Field”. It takes the Oilfield improvement areas listed below and binds them together. It’s the enablement of seamless intercommunication and coordination that truly leverages a Digital Oilfield. Without it, it’s an Oilfield that uses new Oilfield technology – not the exciting “Digital Oilfield” that truly propels the energy business to the next level.

There are so many ways to get a Connected Field wrong for a Digital Oilfield. Even with the right telecom vendors, it’s so easy to say “we don’t need QoS (Quality of Service)” – simply because the decision maker doesn’t know what it is. The fallacy is that there is a belief we already have a Digital Oilfield. There are already real world examples of a true Digital Oilfield using a Connected Field. And they are all in the Middle East; lowering their costs and increasing their supply. I cover a real world example later, so it will be easy to see the difference.

But let’s go back to the beginning. What is a “Digital Oilfield”?  The concept was first presented in the seminal study: “The Digital Oilfield of the Future: Enabling Next Generation Reservoir Performance”, IHS Cambridge Energy Research Associates, Inc., 2003.

A Digital Oilfield makes the following improvements to the Oil & Gas business – and a Connected Field enables most of them; that is, you need a connected field to truly leverage the benefit to the full extent.

DigitalOilfieldImprovements

So what is a “connected field”? It is a data communications system that has these characteristics:

  • Completely and seamlessly covers the area of interest (like cellular data might cover all of the downtown of a city). This allows users to just turn on a device (sensor, video, etc.) reducing or eliminating the need to involve IT to justify a business case to obtain capital to expand the network. It just works. Technicians are not required to tune antennas at the user level. A rig can just move itself and still have full connectivity to all its services while it is moving and when it reaches its destination.
  • It is a committed That is, it is not a “best effort” network, shared with other companies and people in the area (like cellular data).
  • It allows full control – that is, it has quality of service (QoS) capabilities to prioritize business critical applications or applications requiring better service to function correctly (voice, video).

Let’s examine what is not a connected field:

  • Cellular data from any major telco. The reason why it is not is that it has no QoS and is best effort (no committed bandwidth) and may not cover the entire field without boosters (which are technically illegal according to the Telecommunications Act).
  • MPLS networks – in themselves, they would help if the purchaser buys QoS. If the cost of buying the right networks with QoS was used to price the rent option, it is likely that the system could be built from scratch less expensively. That is, a Digital Oilfield should consider the “rent vs buy” options like any procurement decision.
  • Satellite – the price per Mbps with QoS and dedicated bandwidth is horrendously expensive. Unless the company (including all teams and phases that work in the area) only expects to operate in the area for 6 months or less, it’s frequently the case that it is cheaper to build.
  • SCADA (legacy 450 & 900Mhz) – really this is only for “tin can on a string” SCADA data – that is monitoring / telemetry. There are now new SCADA radios that can supply QoS and bandwidth rates at 18Mbps or above but most Oil & Gas companies, especially in North America are not using them. Most of the SCADA radios in use today use technology that was developed during World War II and they have not been updated. We’re talking punch card era technology.

And of course, I hear all the skeptics. So what does a Digital Oilfield do  in practice? Here’s an example:

Petroleum Development Oman (PDO)

  • Connected field coverage: 45,000 sq. km (17,000 sq. miles)
  • Increased a mature (brownfield) oilfield’s production by 100K barrels/day. At $90/barrel this is $3.2 Billion/year in additional revenue within one year. (Ok, yes, price of oil… but this was done in 2012 – even at $30 that’s $1 Billion)
  • Reduced drilling & completion days to online from 39 days to 14 days ($1M per drill saved). Including completions, saved $5M per well.
  • 10 month payback.

What does the Connected Field network look like for PDO?

As of the end of 2013, Petroleum Development Oman field has:

  • 6600 broadband connection points
  • 52 base stations
  • 13 Gbps total capacity, the equivalent of 500 connected homes or the bandwidth provided to a 4000 person office building
  • 130,000 end devices

Compare this to a field of that size in North America; there are maybe 10 cellular base stations covering the entire thing. Everything overloaded to the point that it does not work that well (e.g. “worse than dialup” is what I frequently hear).

Together the Connected Field collects 36 times more data enabling more accurate and improved decisions. It delivers 4 Mbps anywhere within the field of coverage (compared to less than 300kbps in some fields available today). You can drive around in a truck all day long and everything just works.

No messing with devices, changing networks, etc. Need to talk to the engineer in head office and start a video chat about a valve to show him/her the valve? Done! No problems. Want to implement an intelligent video system to monitor the flare stack, look for pipeline leaks, identify personnel not wearing PPE, etc.? Want a “mobile worker”? (Please do not confuse it with a “mobile OS” which is simply an operating system built to enable mobile workers that have a network.) With a Connected Field, you just do it! No need to price in a brand new network to enable the business case.

The cost of all this? Less than 1% of the total injected capital into a greenfield area. And if a true connected field is implemented that is multi-use and multi-team capable, the expenditure is less than what they spend today.

Despite the impressive track record how many Digital Oilfields are there in North America? None. Some are close with partial implementations but it’s localised and not well championed at the executive and board levels. How many in the Middle East? Quite a few. Middle East operations have the direct support of the board of directors/families and executives. Would this situation have any bearing on the current supply / demand and geopolitical climate? Hmm….

Do we need gigabit broadband? Do we need fiber?

Do we need it now? No. This question deflects from the true purpose of this infrastructure upgrade. A plant cannot grow without first planting the seed. So let me explain why the world needs fiber and gigabit.

The main issue is about an end-of-life asset (copper) versus a 100-year or more asset (single mode fiber, SMF). There is no theoretical speed limit for SMF (at least not yet). Therefore, once installed, there will not be a need to dig it up or do anything special other than replace the fiber transceivers on each end. Copper, on the other hand, is at the end of its useful life. Small incremental improvements are being made but we can see the end of copper in our lifetime. New cable installations are now almost exclusively SMF.

Here’s the bandwidth side; the side everyone seems to focus on. Don’t think of technology as it is known today. And remember that when companies put fiber in the ground, they are thinking very long term. First off, think video. Don’t think about anything else. None of it generates traffic like video does. Video killed the internet star. (thanks Netflix, thanks YouTube)

Here’s the best example of the future. Think “telepresence”. Telepresence is immersive video calls – not the un-immersive video calls we’re all used to now. You actually feel like you are there with the person. I’ve personally experienced telepresence. And since then I experience intense disappointment at launching typical internet video. I’m spoiled now.  The question is, will telepresence become inexpensive enough to be used in everyday contexts? Does the earth revolve around the sun?

Think of what telepresence might mean for medicine (“house calls”) or business meetings (way less airline travel) or the environment (with so many less flights!).

What does telepresence mean in terms of bandwidth? Telepresence is 20mbps per session for HD (1080p). Ultra HD (4K) is something like 6x that requirement or 120mbps. Compare that to today’s video streams for Netflix which is 2Mbps HD & 12Mbps for UltraHD (4K).

Now think about multiple people in a household launching simultaneous telepresence sessions. The gigabit threshold is now being pushed! Now think about aggregate “highway” for just the block you live in. How much will multiple households push? LOTS!  How much will the city generate? (expletive amount!)  How much will the country generate? (GAH!) How much will the world generate!? (Ahhhhh!!!!)

Should we start preparing for this now? Or wait until this happens and then wait another 5-10 years while every road and sidewalk to be dug up at the same time? And complain about it the whole time? (how we can’t move with so much construction)

I know what I prefer. I prefer telecom companies to start being proactive right now. And it would be great if my house has access to fiber. Even if I don’t need it right now.

And let’s put the internet in context. The internet and bandwidth to that internet is the “railroad” of our era. Our very way of life now depends on it. The UN has recognized that democracy depends on internet speed and has started a commission on broadband. Every single first world nation and many hundreds of nations have federal funding to build broadband infrastructure. The technology that rides on top the internet has the ability to help catapult so many game changers that many unsolvable world problems might become solvable.

And all this technology rides on a nation’s, a household’s ability to access it (broadband).

There, does that put Gigabit and fiber in context?

More on telepresence:

https://en.wikipedia.org/wiki/Telepresence

The End of Emergency Broadcasts – Now a Pull, Not a Push

One would think an emergency broadcast makes sense for everyone. What I noticed today was that my shortwave weather radio has a weekly test so you know you’re getting broadcasts. Then I noticed that I receive emergency alerts via twitter & email; neither of which have test messages. Presumably because we are all so afraid of “spam”?  Never mind that in the modern age, you can use filters to put the test messages in a folder you don’t see unless you want to confirm your getting emergency messages.

I think I’m on to something profound here but not exactly sure what it is… Hopefully twitter and email work in the Zombie Apocalypse.

Who says satellite is the only option for offshore?

Tampnet owns the largest offshore 4G network (which is its deployment in the UK’s North Sea – a significant Oil & Gas area similar to the Gulf of Mexico).

Tampnet just acquired Broadpoint (July 21, 2015) who owned 50 2G base stations in the GoM – and has plans to upgrade them to 4G.
http://www.tampnet.com/tampnet-to-acquire-telecom-infrastructure-in-the-gulf-of-mexico-from-broadpoint-and-enter-into-partnership-with-a-leading-telecom-carrier/

North Sea Coverage map:
http://www.tampnet.com/north-sea/

GoM Coverage map:
http://www.tampnet.com/gulf-of-mexico/

What Sensors & Big Data Can Lead To

This planet money follows a UPS truck where sensors & big data lead to small changes that make large bottom line impacts: 1 minute per driver per day over the course of a year adds up to $14.5M. One keystroke per driver costs $100K/year. 1 minute of idle per driver per day is worth $500K in additional fuel costs at the end of the year. Shaving all this time via efficiencies worked for the workers too. In the last decade, their wages & benefits have doubled.

http://www.npr.org/blogs/money/2014/05/02/308640135/episode-536-the-future-of-work-looks-like-a-ups-truck

Forget a bandwidth upgrade! Try these 4 things to make the home internet experience better

I work exclusively from home as a telecommunications consultant. And I have the smallest bandwidth package my ISP offers: 25 Mbps download & 2.5 Mbps upload.  I did have to upgrade at one point though. I initially had 0.5 Mbps upload. This is insufficient for video conferencing.

The house has two smart TVs, two workhorse desktop PCs & three tablets/smartphones. There can be concurrent sessions of Netflix running (Netflix running on HD only uses about 1 Mbps, Ultra-HD or 4K will require 15 Mbps – but that’s the future). I often use the internet for voice & video conferencing for work; connecting to the USA and abroad.

For all the techies out there, I should mention I live in western Canada, meaning all our internet traffic routes down to the USA (Seattle I think). All the Netflix and Google caching servers then are pretty far away. And if we need to reach eastern Canada the traffic routes down to the USA and then back up.

The principles I lay out here should work with any ISP and any geographic location. I need to stress this – Since I work from home my internet connection (and WiFi) must be highly functional. But only 25 Mbps? Here’s how I did it.

  1. Have the internet provider check the home’s internet’s *signal* levels. NOT bandwidth. They are required to repair any signal deficiencies, likely for free. This will help prevent packet re-transmissions and is particularly important for voice & video. This kind of problem is unlikely to show up on internet speed tests.
  2. Make sure the home computer is connected via wired Ethernet for performance reasons; especially if you feel that you don’t know what you are doing. This is because wired is a closed system where variables can be controlled. Wireless is an open system and the environment (and performance) is constantly changing.
  3. Make sure home routing/switching gear is top notch. $20 gigabit switches are fine, but routers under $200 will likely not function well. This is because routers are essentially PCs withpurpose built software. They make them cheaper by putting in less expensiveCPUs and less memory. A router above $200 will actually weigh more. This is a good thing. More CPU and memory takes more metal.
    1. WiFi – If integrating WiFi into the router, purchase an 802.11ac (latest standard) even though the consumer electronics cannot use the better bandwidth. Do not use the WiFi from the internet provider, if it was included with the ISP modem. The new technology in 802.11ac makes sure there is better signal to the device. Also make sure the WiFi router has 6 antennas (meaning 3 internal radios). Expect 2.4 Ghz to work better than 5.4/5.8 Ghz. This is due to physics and also, I believe that developers have spent less time ensuring 5.4/5.8 Ghz work as well.
  4. Have a good computer (good hardware). The processor and memory affect how fast bits & bytes can be converted and put on the internet. The rule of thumb is that if the consumer pays less than $1000 for the computer (desktop / laptop, not tablet), it probably is not that good and will need to be replaced in 2-3 years. With a computer over a $1000 expect it to last 3-5 years.

Prior to these changes I had problems all the time with Netflix. Now it is noticeably less frequent. I also had problems with video conferencing. Now when there are problems, I diagnose the problem as coming from the alternate party’s connection. That is, my audio/video is good on their end but their audio/video is bad on my end. It’s usually upload that is the problem and that is likely a result of each user’s upload rate with their ISP (asynchronous service).

The Oil & Gas industry needs to embrace new IP-based infrastructure for its fields

Brad Bechtold (@bradbechtold2) of Cisco via @CiscoCanada explains why the Oil & Gas industry needs to embrace new IP-based infrastructure not currently in oilfields. The concept he references is a “connected field” in which multiple IP communications technologies work together as a system. These technologies include UHF, VHF, LMRS, microwave, WiFi, fiber and satellite which are all today hotly debated as to “what works best” (answer: none, it depends on what you need to do).

http://canadablog.cisco.com/2015/02/12/why-the-canadian-oil-and-gas-industry-must-embrace-new-technologies/