The man vs. machine debate that will reshape the oil and gas sector

Cisco’s latest research report suggests M2M technologies will be targeting energy companies grappling with a looming talent shortage


Within the next decade, the Canadian oil and gas sector will be scrambling to fill no less than 150,000 positions as veteran workers retire.

There are a number of viable options to bridge the labour gap and among the solutions on the table is to invest in connected devices and mobile technology.

It may sound dystopian, but basically the idea is to use technology to slash the number of workers in the field needed by companies.

“The question is not how can we optimize a specific workflow process, but how can we eliminate the need for people performing daily remote tasks,” says Brad Bechtold, business development manager for the oil and gas industry at Cisco Systems Inc.

In an industry where the average salary is about $123,000 year and one where an estimated 45,000 people are eventually going to retire by 2022, it’s not hard to appreciate the attractiveness of the idea.

Advances in machine to machine (M2M) and increasing 4G and Wi-Fi connection speeds are leading many oil and gas outfits to adopt mobile strategies for most operations.

Cisco’s most current Visual Networking Index forecast estimates that by 2018 the average 4G speed will be 18,824 Kbps, up from 10.995 Kbps in 2013; the average 3G speed will be 8,494 Kbps, up from just 4,712 Kbps two years ago. In the next four years 4G is expected to account for 63 per cent of total mobile traffic in Canada, that up 37 per cent from 2013 figures.

The same report estimates that M2M traffic will grow 66-fold from 2013 to 2018 reaching 19.3 Petabytes per month in the next four years.

“The biggest driver of change in the sector will be massive adoption of M2M sensor technology,” says Bechtold. “We estimate about 116,000 connected sensors in the industry currently. That will easily grow to more than 420,000 by 2017.”

Miners are not being replaced by machines yet but there are other tasks in the industry that are increasingly being handled by connected devices.

Many sensors used for monitoring pipelines are passive. Most collect data such as pressure and flow rates in isolation and require personnel to physically travel to remote locations to retrieve the data from a sensor.

Even newer sensors hooked up to satellite networks are not able to transmit data to command stations in true real-time, according to the Cisco manager. “They’re only able to monitor conditions between substations which are typically 50 kilometres apart.”

By contrast, sensors on fibre optic cables running alongside pipelines are able to detect leaks in 10 metre increments. This drastically reduces the need to send out personnel to remote locations.

Higher bandwidth availability and its lower cost are making cellular-based systems more viable alternatives. In the last four years many companies have switched to 3G and 4G systems.

“In one operation, pipeline monitoring was costing at least $500,000 per sensor when you take into account the personnel involved in the operation,” according to Bechtold. “A switch to cell-based systems reduced the cost to $40,000.”

In the near future M2M sensors will also become prevalent in automation and the use of unmanned vehicles in worksites. Some of these drones can be equipped with sensors that monitor company assets and send back data and video to operators in faraway command centres.

“The model that’s emerging can be likened to the one developed in offshore drilling where the use of sensors has reduced personnel in some oil rigs from 100 to just 10 people,” says Bechtold.

Download the industry brief: Creating a collaborative network in the oil and gas industry, from Allstream. 

photo credit: Jaimito Cartero via photopin cc

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