However, digital technology is not perfect. The system can experience technical issues that could lead to downtime – a situation that can disrupt the process flow and potentially translate to large financial losses.
The Oil and Gas industry is one industry that could experience significant financial setbacks if its system goes through a period of downtime.
As it turns out, the cost of downtime is proportional to the length of time it remains unresolved. The longer the period of downtime the more costly to the industry.
A study conducted by MIT Sloan revealed that downtime that exceeds one day can result in $25 Million in losses for a typical Liquified Natural Gas (LNG) facility. According to the same study, LNG facilities average 5 incidents of downtime every year.
That is $150 Million in annual losses due to downtime!
Why does downtime result in massive financial losses to the Oil and Gas industry?
A report published by Cisco disclosed that the standard digital platform of a facility in the Oil and Gas industry generates an estimated 2TB of data every day – both upstream and downstream.
With that much data to process, it becomes a challenge to have the information transmitted, stored, and analyzed.
It is not possible to simply reduce the amount of data to be collected because processes in the Oil and Gas industries use sensors extensively. There will always be a large volume of data coming in.
The go-to digital-based solutions would be to utilize cloud-based technology and incorporate hybrid storage in the process. However, these solutions would still require the transmission of massive data.
On average, offshore facilities transmit data with an Internet speed of only 2Mbps. That would be very slow.
With data transmission becoming the crux of the issue, the best solution would be to come up with a process or a system whereby the data would be handled onsite or as close to the site as possible.
The best solution would be to integrate edge computing in the IIoT – Industrial Internet of Things.
What Is Edge Computing?
Edge computing is a process that brings the computing and data storage functions closer to the physical hardware where all the information is being gathered – the edge.
The advantage of having data processed close to the source is that it reduces the probability of real-time transmission experiencing latency or technical issues. Also, processing data locally is cheaper compared to having it processed at a centralized or cloud-based location.
Edge computing was the natural response to the growth of the Internet of Things (IoT) – the system whereby physical devices such as the PC, mobile gadgets, and other hardware are connected to the Internet to send and receive data.
The concept of the IoT was embraced by industries that are defined by more complex processes like manufacturing and Oil and Gas and expanded to what is referred to as the Industrial Internet of Things or IIoT – a system whereby physical devices are connected to the Internet for the purpose of managing data from complex processes in more efficient ways.
How Does Edge Computing Work?
For example, let’s look at how edge computing can help companies study data that are transmitted by sensors from the sites where drilling operations are taking place.
Sensors are used by Oil and Gas companies to monitor and manage their field operations by gathering key data including seismic images.
A single sensor that gathers data can transfer the information across the Internet without issue. What happens when the number of sensors transmitting data across the Internet increases by hundreds or thousands?
The risk of data transmission experiencing latency issues will rise exponentially. The bandwidth may not be enough to ensure the smooth transmission of data. Therefore, increasing the size of the bandwidth will lead to greater processing costs for the Oil and Gas company.
With edge computing, the physical devices and hardware become the local source of processing and storage of data from these various processes.
An edge gateway can be created which functions to process data coming from a designated edge device and send only relevant data back to the cloud. Likewise, in the event real-time data is needed by the application, the edge gateway can re-send data back to the edge device.
What can be the edge devices? The edge device can be any physical device that is connected to the IIoT – the sensor, a laptop or notebook, a smartphone, or a CCTV camera.
As a result, there is no need for the Oil and Gas company to pay for additional bandwidth.
What Are The Benefits Of Edge Computing For The Oil And Gas Industry?
With edge computing, the processing system becomes more efficient and allows the Oil and Gas company an effective means of transmitting and receiving key data expediently to help it make the big decisions.
An efficient processing system yields many benefits to the industry. For Oil and Gas, these benefits are realized in the areas of cost savings, faster processing and storage of data, maintaining the integrity and privacy of the data, and reducing the risk of the process experiencing latency issues.
- Cost Savings – There is no need to spend for additional bandwidth as only relevant and useful data will be transmitted.
- Faster Processing/Storage of Data –The innovations in digital technology have introduced more powerful smartphones and other physical devices that have the ability to run an algorithm without having to go through a cloud-based service. Data can immediately be processed from the physical device and transmitted/stored in the edge gateway.
- Maintaining Integrity/Privacy of Data – With a limited number of physical devices connected to the edge gateway, it would be easier for the company’s team of IT specialists to encrypt the data being transmitted from the edge devices.
- Lower Risk of Latency Issues – For the reason that the edge computing brings processing closer to the site, there will be a reduced risk of the system experiencing latency issues.
Conclusion
Edge computing is leading the new technological revolution in the Oil and Gas industry.
The system has provided the best solution to overcome the challenges faced by the industry such as price volatility, unstable demand, tight government regulations, and the rising costs of labor and materials.
Edge computing addresses these challenges by presenting a system that has been proven to reduce costs and incidence of latency issues, improve transmission and storage of data as well as security.
With these benefits, oil and gas companies are able to make game-changing decisions faster without compromising their budgets by increasing investments in their technological infrastructure.
After years of falling behind the technological revolution, edge computing finally gives the Oil and Gas industry the ability to catch up and embrace the advantages of digitizing its processes; transforming what was complex into more efficient systems.
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