07 Jun Oil and Gas Runs on Data and Now We Need Data People
The oil and gas industry runs on data. Today, our industry is in desperate need of smart people who understand data and how to put data to work.
These are my remarks prepared exclusively for, and delivered at, the DATAcated conference on May 18-19, 2021. Check out my actual presentation on YouTube. If you’re keen to see the comments posted by the live audience (they were bemused by my laugh track and canned applause), watch the LinkedIn version, starting at 142:10. Wish you were there!
Built to Last
My role in life is to yell words of encouragement to the oil and gas industry about how digital tools will help them survive. A bit like how soccer Moms yell at their kids from the sidelines. It certainly makes me feel better.
You may have noticed the enthusiastic support I received this year from my new celebrity sidekick and micro terrorist, Covid-19.
The virus has made my job much easier because the CovMeister has pointed out all the flaws in an industry business model that is built on paper, is inherently manual and labour intense, and for safety reasons, insists that people work in pairs close together. A lot.
My efforts recently received another unexpected boost, this time from cyber criminals who attacked and shut down Colonial Pipeline.
I think ransomware is just Russia’s way of teaching Americans about where their energy comes from.
And where am I coming from? I live on BC’s wild west coast. The view from my front door includes float planes.
Yes, they are indeed vintage 1950s Dehavilland Beaver and Otter aircraft. I never understood why DeHavilland chose to name its planes after mammals that spend a goodly amount of time under water. That’s not where you find planes. I think the military does a much better job. Their friendly flying drones are called Reaper, Predator, Hawk and Blackbird. Much more reassuring.
But these old planes illustrate a hidden truth about fossil fuel engines, and indeed the oil and gas industry. It’s built to last.
Runs on Data
My big idea for you to consider today is that oil and gas runs on data. This is because petroleum is toxic, flammable, explosive, corrosive, poisonous, and asphyxiating. Actually, that sounds more like the relationship you have with a bad roommate than with a precious commodity that rules the world.
It’s because of petroleum’s more dangerous features that the industry runs entirely on the data it has about the stuff.
It might not surprise you to learn that our energy industries are sitting on enormous quantities of data. Suncor once estimated that they only used 1/2 of 1% of all the data that they collected.
That’s like my shoes during the pandemic lockdown. I have a lot of them, but I only really wear slippers now.
It might surprise you to learn that oil and gas practically invented big data. The upstream industry has been selling its subsurface data for years. But for the most part, the industry stops there. Data is viewed as something scarce, to be hoarded, or put on a shelf and ignored.
The industry is in desperate need of smart people who understand data and how to put data to work. It’s simply not fair that the industry whose product lights the night, and fuels our cars, is losing out to Mark Zuckerberg.
There are fortunes to be made if you can just figure this out.
Data Centric Business Models
Here are just a few examples of data being put to work.
How much thought do you give to grains of sand? Oil and gas cares a lot about sand, or rock in general.
Enersoft uses inexpensive camera sensors to take HD photos of drilling cuttings. As a drill bit is grinding through rock on a new well, it sends the bits of rock and stone to the surface. These are called cuttings and are used by geologists to figure out what’s down there. Geologists pore over their cuttings like a prospective bride looks over the diamond in their engagement ring.
Enersoft takes its photos, feeds them into a machine learning algorithm, and pieces them together. And searches for value at the grain of sand level. In real time. While you’re drilling.
The old fashioned way was to send the cuttings off to the lab, and wait 6 weeks. The cost of all that lab kit is in the multi-thousands of dollars.
Enersoft generates 2 terabytes of data per well. In comparison you can store the entire library of all available data about all the half million wells in Western Canada in 250 gigabytes. It’s a million times more data per well.
Or how about Rogue7?
They believe that the human operators of pipelines can’t possibly optimise pipelines fast enough given how much data that pipelines generate. Instead, you feed a machine learning system operating data from your pipeline and the algorithm can then predict the pipeline performance 4 hours ahead of time.
Those 4 hours are immensely valuable. Operators can fiddle with the dials to improve the performance, avoid a bottleneck, reduce emissions, and extract a little more capacity. Or maybe play a quick game of Super Mario.
The kinds of data involved include product orders and volumes, product composition, throughput rates, energy prices, outages, pressures, and general availability. Pipeline data was never collected with this purpose in mind.
Or how about Imperial Oil?
Their Kearl oil sands plant is so big it has 50,000 maintenance projects to schedule and deliver every week. This is nigh impossible for even a well functioning team to execute, but it’s child’s play for a computer, if you have the right data.
Big Oil Runs On Data
What’s common to all these examples is that they’re based on data. The oil and gas industry runs on data. and it is in desperate need for people who understand data and how to put that data to work, in the form of algorithms and analysis.
The industry has some of the crunchiest problems to work on because of the complexity, the scale and the enormous backlog of data not yet touched.
And now the industry must face its greatest challenge — how to keep the trains, planes and automobiles running while we transition to new energies. All of which will require data to pull off.
At DATACated you’re going to hear about a lot of different industries, and all their clever ideas. Me, I just want to keep the lights on and my car running. Not to mention finally taking a flight on a much needed vacation on a plane larger than a Dehavilland Beaver wearing more than my slippers.
These are my remarks prepared exclusively for, and delivered at, the DATAcated conference on May 18-19, 2021. You can watch my actual presentation on YouTube, or if you want to see the audience commentary, watch the LinkedIn version, starting at 142:10.
Check out my book, ‘Bits, Bytes, and Barrels: The Digital Transformation of Oil and Gas’, available on Amazon and other on-line bookshops.
Take Digital Oil and Gas, the one-day on-line digital oil and gas awareness course.
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