What's new in production

It happened in 2008. That was the year, according to one source, when Internet-connected devices came to outnumber Internet-connected people. Whatever the ratio in oil and gas production operations is now—and excepting periodic skewing by the vagaries of our business—we know which way the trend is going. You know it’s a new era, when you get notifications that your home thermostat is offline.

It’s easy to visualize the benefits, as they would apply to oil and gas production. The usual suspects—safety, productivity, regulatory compliance, asset management, blah blah—perform symphonically at the direction of oilfield conductors thumbing their getting-smarter smartphones.

But you know all of this. Let’s go a little further by taking a look at Deloitte’s take on the subject. As the firm points out, “The opportunity to automate thousands of wells spread across regions (a large company handles more than 50,000 wells) and monitor multiple pieces of equipment per well (a single pump failure can cost $100,000 to $300,000 a day in lost production) makes production the biggest potential O&G beneficiary of IoT applications.”

First, their definition: The Internet of Things (IoT)…basically integrates sensing, communications and analytics capabilities. Core enabling technologies have improved to the point, that its widespread adoption seems likely. The IoT’s promise lies not in helping O&G companies directly manage their existing assets, supply chains or customer relationships—rather, IoT technology creates an entirely new asset: information about these elements of their businesses.

Published by Deloitte University, the firm’s think tank, Connected barrels: Transforming oil and gas strategies with the Internet of Things, has a lot to say on the subject:

“The new period of much lower prices is taking hold in the O&G industry. Addressing this structural weakness in oil prices requires more than financial adjustments. It demands a change in the industry’s approach to technology: from using operational technologies to locate and exploit complex resources, to using information from technologies to make hydrocarbon extraction and every successive stage before sale more efficient and even revenue-generating.

“Enabling this shift to information-based value creation are the falling costs and increasing functionality of sensors; the availability of advanced wireless networks; and more powerful and ubiquitous computer power. Together, they have opened the floodgates for the amount of data that the industry can swiftly collect and analyze. Sensor prices have tumbled to about 40 cents from $2 in 2006, with bandwidth costs a small fraction of those, even five years ago, helping the industry amass individual data sets that are generating petabytes of data.

“The industry is hardly resistant to adopting these new technologies. During the past five decades, it has developed or applied an array of cutting-edge advances, including geophones, robots, satellites and advanced workflow solutions. However, these technologies primarily function at an asset level, or they are not integrated across disciplines or do not incorporate business information. According to MIT Sloan Management Review and Deloitte’s 2015 global study of digital business, the O&G industry’s digital maturity is among the lowest, at 4.68 on a scale of 1 to 10, with 1 being least mature and 10 being most mature. ‘Less digitally mature organizations tend to focus on individual technologies and have strategies that are decidedly operational in focus,’ according to the study.”

IoT growth generates visualization growth. This report includes an eyebrow-raising statement: “It has been estimated that only 1% of the information gathered is being made available to O&G decision-makers.” This begs an interesting question: What if 100% of the data were made available? What could any single human being, or a group of us, no matter how supernaturally perspicacious, do with it? The CPU between one’s ears is most certainly not following Moore’s Law—legions of Pokémon Go-obsessed teenagers actually being an argument for its inverse—yet the volume of data being shoved through this processor is growing madly.

Thus, what follows the IoT explosion may well be the growth of visualization tools to deal with the data. Nicely defined by the Interaction Design Foundation, “Data visualization is the graphical display of abstract information for two purposes: sense-making (also called data analysis) and communication. Important stories live in our data, and data visualization is a powerful means to discover and understand these stories, and then to present them to others. The information is abstract, in that it describes things that are not physical.”

A well-executed visualization of complex data can be startlingly effective. The idea is not new. What could be regarded as the first masterpiece of data visualization was created two centuries ago, with pen and paper. Called by some the best statistical graphic ever drawn, a map by Charles Joseph Minard (1781–1870) portrays the losses suffered by Napoleon’s army in the Russian campaign of 1812, along with much more data related to the campaign. It’s easy to comprehend, and a joy to behold. Minard, by the way, was an engineer working in Paris as an inspector of roads and bridges, when he created this remarkable graphic.

You can take this to the bank—data visualization beyond the asset level, woven into the fabric of your organization, is going to be a big deal in this business. If your idea of data visualization is a 3D bar chart, then there’s much glorious discovery ahead of you. A good place to start is The Visual Display of Quantitative Information, by Edward Tufte, a book that should be required reading for, well, everyone. And, if you think the arguments in that book ring true, then wait until you read what he has to say about PowerPoint.