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No matter how you slice it, the last few decades haven’t been easy for the oil and gas industry. Ripples from the 2020 economic downturn are still being felt, and another looks to be on the way. Additionally, the decades-old equipment used in the industry isn’t getting any younger. Those would be big challenges on their own, but they also exacerbate what is perhaps the biggest challenge the industry faces: public, government and international pressures to become more sustainable, safe and efficient.
Dan Morrison, industry executive consultant on oil and gas at Hexagon Asset Lifecycle Intelligence (ALI), and contributor to a recent white paper on enterprise asset management (EAM) for the Oil and Gas sector, explains that in modern times, the burden to reduce carbon footprints is one of the biggest roadblocks to securing investment and insurance in the industry. This will only get worse as governments ramp up to hit their Paris Agreement targets.
“In the old days, the strategy was to punch as few holes as possible, suck out the reserves to a point of economic recoverable limits and get out of there,” he says. “Your maintenance operations strategy in the field was run to failure. And it made sense, as you could still produce the liquids and flare the gas to the atmosphere. Those days are over.”
Bert Verplancke, regional sales director of Asset Performance Management Solutions at Hexagon ALI agrees. He notes that many oil and gas companies are even creating new sustainability departments to address these challenges. These teams ask questions like:
- How can we produce energy more efficiently and sustainably?
- How can we maintain equipment, so that it produces less waste, greenhouse gases and flaring?
- How do we modernize our technology through digital transformations?
- How is data collected and used to enable us to learn more about our systems?
The answer to a lot of these questions and challenges, at least in part, can be addressed using predictive maintenance. “The oil and gas industry has been around since the late 1800s, it’s seen many disasters and has needed to reinvent itself numerous times,” says Morrison. “I’ve seen the oil and gas industry evolve and it will need to reengineer itself. Predictive maintenance is really at the core of that. But we’re being conservative by driving profitability…You can be an environmentalist and a pragmatic and see the only way forward is transition.”
What a Green Oil and Gas System Would Look Like
Verplancke paints a picture of how an oil and gas system optimized by predictive maintenance would work. Imagine a company that has been doing maintenance on a single pump for the sixth time in the past year. By collecting data on how the pump is running and how often it needs to be fixed, a predictive maintenance system might advise that this strategy is getting too costly.
Essentially, the system would crunch the numbers and determine that it would be more cost-effective to replace the asset with one that uses less energy, results in less flaring, has a higher uptime and a new warranty. But for that predictive maintenance system to work properly, it will be hungry for data.
“If your data is not high quality then it’s garbage in, garbage out,” says Verplancke. This is important to note because if the system recommends that the company make the capital expenditure for new equipment, then it needs to be accurate. Otherwise, it would be a big waste of money and more detrimental for the environment to buy the new equipment.
The solution here is to create digital twins of the assets which are included in the predictive maintenance algorithms. This would involve adding sensors, industrial IoT systems, big data collection/computational resources and artificial intelligence tools. In other words, the oil and gas company will need a technology partner well-versed in their operations to help set this all up.
The current reality isn’t as high tech; in fact, it’s riddled with systems that are decades old. Morrison explains that the reason for this was the industry’s focus on efficiency. As previously mentioned, the traditional approach was to buy what was needed to set up the well and run it until it fails.
Plant operators in the EU face hefty tax penalties for greenhouse gas emissions, designed to penalize those who neglect the issue. So, the question becomes, how can we mitigate this tax burden while reducing operational costs? And this new framing makes preventative maintenance and strategic asset management very appealing because they allow you to increase uptime while lowering emissions.
“Production methodologies are changing [based on] preventative maintenance,” said Morrison. “[Plant operators used to run] old equipment because it was effective…but today those methods [are changing] and that’s where you’re seeing the embrace of digital transformations and the incremental digital twining of assets.”
Oil and Gas Companies Going Green Isn’t Just a Regulatory Need—It’s a Business Opportunity
Oil and gas companies becoming greener using digital twins and preventative maintenance isn’t just about addressing the pressures to do so from the public and governments. There are financial benefits to these green trends, as well.
Keep in mind that it isn’t just the oil and gas sectors being driven towards more environmentally friendly options—all industries are. This means that the customers of the oil and gas sector will be looking for greener energy suppliers. “Companies want to buy LNG, but they don’t want it from suppliers that are improperly maintained—they want a lower carbon footprint,” says Morrison. By implementing preventative maintenance, organizations go above and beyond measuring those emissions. They are implementing measures to reduce them which can divide a supplier from the herd.
It also isn’t just about selling your energy inventory; it’s also about getting access to that supply. Morrison adds, “To get investment in Africa, for instance, you need a preventative maintenance system to mitigate flaring. That’s one of the biggest market changes.”
Green initiatives can also open doors to the oil and gas companies that were once believed to be closed. Take the emergence of carbon capture. By implementing this technology, it’s possible to take a brownfield asset and reduce its carbon footprint. “[These assets] might have been abandoned before,” said Morrison. “But now they have 20 to 25 years of life left. Again, preventative maintenance will be critical to maintain this system.”
The global green trend even opens new revenue streams for the oil and gas sector. When you think about it, geothermal energy is a green opportunity that the industry is uniquely qualified to capitalize on. For instance, Morrison talks of the emergence of low-temperature systems that use pentane as a flashing agent. “Those types of techniques really complement the skill sets of oil and gas companies,” he says. “The greatest thing about geothermal is that it doesn’t matter if the sun is shining, or the wind is blowing. There is also hybrid geothermal, where you are producing hydrocarbons at the same time.”
How Oil and Gas Companies Go Green
So how do oil and gas companies make this digital transformation? Traditionally, making this shift has been a difficult one—for any industry. For one as large and complex as oil and gas, it doesn’t look to be any simpler.
“If you haphazardly try to implement predictive maintenance, if it’s not based on sustainability goals and if it doesn’t come from the top, then there is a high chance of failure,” said Morrison. “It has to be driven from all levels.”
Verplancke agrees, noting that it can be very difficult for industry veterans to come onboard, because they remember how it used to be done. “They commonly say, ‘you don’t have to tell me anything, I’m the predictive maintenance.’” So, the shift is also cultural, Verplancke adds. “Sustainability is not something that only comes out of maintenance. It only works when it’s a board decision and everyone from security to cleaning is sustainable—not just the technical departments.”
For example, take the difficulties of getting any form of certification for the predictive maintenance system. To do so requires a companywide shift towards meeting the requirements of said certification. It needs to be a part of the corporate culture.
“The management of the company needs to be more proactive with [implementing] a sustainability manager and a department that sets internal alignments with the software, measurement and implementation tools being selected… The culture has to change,” Verplancke says.
But setting companywide goals and getting leadership buy-in isn’t enough to get a predictive maintenance system up and running. In the end, this is a complex engineering and IT project. So, what best practices can be implemented to get the digital transformation done right the first time? Morrison notes that a common failure point is the idea that this form of digital transformation needs to be all or nothing.
“You need to eat an elephant one bite at a time,” he says. “It’s not an effective strategy to make a digital twin of the whole system [at the start]. It’s about doing it one item at a time. You need a goal for the journey and set rules.”
Morrison also explains that for the project to work optimally, it helps when the engineering and IT groups implementing the digital transformation understand the technology. Similarly, it’s best when the technology suppliers also understand the oil and gas industry. “They need core expertise and subject matter experts in that industry,” he says. “When you don’t understand the industry, that’s when you get bad starts.”
Verplancke notes that starting small with a preventative maintenance system can also be beneficial from the perspective of changing the company’s culture. By first focusing the preventative maintenance system on one item, you get your proof of concept.
“With a proof of concept in one plant,” says Verplancke, technicians will now say “’we did that recently and the results were astonishing.’ Now everyone [in the company] is saying ‘we want what they have’ and everyone gets involved. Create a global template and roll it out sequentially. That’s the way to achieve your goals.”
To learn more, visit Hexagon, or read the white paper “HxGN EAM for Oil and Gas.”