Automation Integration is Energy Transition

By Brendan Gilbert, Solaris Oilfield Infrastructure

With ESG and energy transition rising in importance, it’s critical for those of us in the industry to understand energy transition and educate our partners on the opportunities it presents.

Energy transition does not mean an eradication of our need for fossil fuels. Rather, it is about embracing a culture committed to more responsible, safer, and sustainable use of our fossil fuels. To put it more simply, it is about finding better ways of doing things that protect our people and environment.

Companies are increasingly adopting technologies like automation, advanced data analytics, machine-learning algorithms, real time, and remote monitoring. These are necessary innovations, but without the ability for seamless integration, our industry will continue to be challenged to do more by our investors and consumers.

Parallels can be drawn between what the U.S. automotive industry experienced in 2008 and what the oil and gas industry is experiencing today. More than a decade ago, the U.S. automotive industry came under siege as we crashed into the Great Recession. Iconic brands faced insolvency and collapse. A fatal combination of poor financial planning, short-sighted decision-making, and unpopular product manufacturing sent the companies into a tailspin when the financial crisis hit.

Yet, by 2012, U.S. automakers were once again a world leader in vehicle production and sales. This resurgence was achieved through a pivotal shift to long-term strategic planning, responsible decision-making, and commitment to designing and manufacturing products aligned with global trends. Automotive leaders embraced key principles such as fast innovation, comprehensive technology integration, and generating an enthusiastic customer base. They leveraged partnerships with tech companies and built scalable ecosystems and IoT connectivity that not only provided predictive maintenance tools but improved maintenance uptime, assessed failure risk, and centered all this around the driver experience.

In essence, they transformed the driving experience through infotainment. In June 2020, Aswini Choudhary and the Forbes Technology Council called this automotive revolution “The Convergence of Technology and Manufacturing.” By merging technology with manufacturing capabilities, today’s automobiles have innovative features allowing them to keep pace with the global trend towards diverse mobility, autonomous driving, electrification, and connectivity.1

Just as the U.S. automotive industry faced a combination of regulatory pressure on safety and efficiency, shifts in consumer demand preference, and the financial crisis of 2008, similar events are confronting the oil and gas industry today. First, ESG became a quickly growing point of emphasis for investors and consumers. Then, energy transition emerged as the world developed technologies and equipment in other sectors — like the automotive industry — that are driving down the demand for fossil fuels.

This growing pressure for transformational change in the oil and gas industry culminated during the COVID-19 pandemic and the resulting supply glut. Investors reacted swiftly to stem the flow of cash to the industry, and world leaders ushered in sweeping and nebulous goals focused on carbon neutrality. Yet, what remains is the need for fossil fuels. Like the automobile, we cannot do without it. So, we are now faced with the question – how do we achieve energy transition in a world dependent on the production of oil and gas?

Our industry has made strides adopting technologies to digitize and automate. We have programmable software with real-time health monitoring features, and some equipment can be remotely operated. In large part, however, these are add-on features to equipment based on designs several decades old. Moreover, given the highly segmented nature of operations, these technologies are not integrated into a single platform. The average drilling or completion project still has 5-10 suppliers providing their own equipment, hardware and software, each with its own varying level of advanced technology.

In a 2021 Accenture survey, more than 90% of oil and gas companies recognized the need to change, but less than 20% says they’ve achieved a significant level of integrated digital transformation (dubbed “Connectivity” in the survey).2

The headwinds facing the industry are not just in the available technology, but also in the skill sets required to drive adoption. In a 2020 EY survey, nearly 43% of respondents cited “too few workers with the right skills in the current workforce” as the biggest challenge to digital technology adoption. Executives estimated that nearly 60% of their workforce needs to be reskilled, and that reskilling would take 10 months for an average worker. These seem like staggering statistics. However, the reality is we have more technology, automation and integration in our mobile devices or in the vehicles we drive every day than is required to drill or complete a well.3

The key to successful digitization and automation is harmonious integration of the equipment and processes on a synchronized platform that can communicate and operate in symphony. It must provide real-time performance monitoring, as well as readily accessible data to run on-demand customizable performance analytics. These analytics must then be able to drive machine-learning algorithm programming.

On the drilling side, we are seeing the step-change in automation integration. We have witnessed development of a nearly fully automated drilling rig, and adoption of remote operations centers capable of drilling wells without fewer people on a rig. This was achieved by integrating equipment and re-skilling personnel.

In the completions space, nearly all operations at the wellsite are burdened by segmented operations, particularly on the low-pressure side of the well (or “backside”). From logistics planning — calling trucks to deliver product when needed — to having personnel working close to dangerous equipment in high-risk zones, the backside of the well is not as safe or efficient as it can be.

At Solaris, we have embraced this challenge, first by launching automated silo systems capable of holding vast volumes of proppant, chemical and water to reduce unplanned logistics and the need for trucking, which helps cut carbon emissions. Supporting this equipment, we added a real-time visibility software platform called Solaris Lens® and automation tools for operating the equipment called AutoHopper™. While these achieve some level of automation and digitization, there is more opportunity ahead of us.

One of the most outdated pieces of equipment on the wellsite — the blender — is still a critical component to completion operations. Revolutionizing the blending process is a must, otherwise it’s no different than operating cars built in the 1980s with aftermarket enhancements.

At Solaris, we saw this as an opportunity to remove high-failure components such as hoppers, screws and proppant delivery belts. Embracing the concept of “Convergence of Technology and Manufacturing,” Solaris developed an integrated blending solution that combines with the sand and fluid silo systems, underpinned by a software platform to operate it all — sand, water, chemicals and the blending process — all from a mobile touch screen the size of an iPad.

Like the automotive industry partnering with IT companies, we partnered with AWS to develop a fast, scalable and serverless time series database to leverage the data from this automated equipment to build machine-learning algorithms so automation can take hold through integration. Lastly, all this low-pressure equipment is electric and can be run from a turbine or power grid source.

The integrated solution is still in field trials, but the results have been extraordinary. We saw sand concentration rates as high as 8.5 pounds per added gallon of water and reached nearly 27,000 pounds of sand ingestion per minute. Moreover, the operation was done remotely, generating the potential to reduce low-pressure personnel needs by up to 80% and relocating the remaining 20% to the safety of a data van. Operators don’t even need to wear a hard hat, let alone be exposed to the dangers of the high-pressure side of a well.

Automation needs integration for the transformational change that will drive a safer, cleaner, more responsible production of the fossil fuels we need to power our lives. The oil and gas industry is unlikely to benefit from a government-backed financial bailout like the automotive industry received in 2008. Therefore, the capital investment needed for these energy transition initiatives will have to be derived from a committed demonstration to true automation integration.

To achieve a true generational transition — one that has lasting impact — we must look beyond IoT “bolton” tech features. We must embark on a quest for true integration of sophisticated technologies with our equipment, people, and practices. Automation needs integration to achieve energy transition.

SOURCES

1. https://www.forbes.com/sites/forbestechcouncil/2020/06/19/the-convergence-of-technology-and-manufacturing-in-the-automotive-sector/?sh=145d0c6133d9

2. https://www.accenture.com/us-en/insights/energy/necessity-mother-reinvention

3. https://www.ey.com/en_us/oil-gas-digital-skills-survey/how-do-you-reshape-when-todays-future-may-not-be-tomorrows-reality

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