Smart Oil Refineries Are Getting Eyes and Ears

Smart Oil Refineries Are Getting Eyes and Ears
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Why you should care

Because as energy consumption spikes, it’s not just oil prices we need to worry about. 

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The author, David Ovadia, is a software portfolio manager for GE Digital.

OZY and Predix from GE — the cloud-based development platform built for industry — have partnered to bring you an inside look at the future of digital industries, where people, data and productivity meet.

Energy consumption around the world continues to climb. Seems we have depthless needs to power our businesses and daily lives. “The world needs more and more energy,” Marco Annunziata, chief economist for General Electric, recently wrote in GE Reports. “And the energy industry must meet that growing demand in a period of higher uncertainty and volatility.” How much extra juice are we looking to consume in the next few decades?

Between the years 2012 and 2040, worldwide energy demand is projected to jump by 48 percent, according to the U.S. Energy Information Administration’s International Energy Outlook 2016. This rising demand could trigger concerns about higher oil prices and the effects of fossil fuels on the environment. It also means oil refineries will have to uncover innovative new ways to improve efficiency, adaptability and sustainability. “The oil and gas market is undergoing a deeper and more complex transformation, one that will have powerful repercussions over the coming decades,” Annunziata says.

The key to getting ahead of the curve? Oil refineries have been getting smart about how their machinery runs, outfitting equipment with the latest technology, which increases efficiency to meet ongoing demands. Sensors constantly monitor conditions like vibration, chemistry changes and temperature. Information then flows into smart software that runs on a platform like GE’s Predix, where it gets analyzed to provide insight — such as what machine needs to be adjusted or what process requires a tweak. Think of it as a digital brain that can transmit early warnings so you can inspect your equipment weeks or months before significant problems develop, enabling you to nip them in the bud and maximize equipment uptime. For downstream oil and gas companies, it’s all about maintaining as much uptime as possible, says Chris Niven, research director for Oil & Gas Energy Insights at the International Data Corporation. “Monitoring sensor performance is an excellent way to predict device failure even before it happens.”

As oil refineries get smarter — thanks to the Industrial Internet— there’s a watchful eye on every step of the production process. As a result, refinery operators no longer have to study every chart and monitor huge amounts of numbers throughout each day to pick up on potential vulnerabilities in the plant — which can be overlooked with this approach. Instead, high-tech solutions do the heavy lifting, with greater accuracy and more lead time to resolve problems before they escalate. Companies are also using this data to establish better benchmarks for performance and leverage dashboards and other analytics to optimize product mix with market demand, Niven says.

To be sure, digital solutions won’t be a cure-all for oil refineries, which will likely experience additional challenges in the years ahead. For starters, as oil and gas companies develop new technologies for upstream production, the refineries will require a workforce with higher levels of engineering and operations expertise. There’s also the expectation that with the industry’s aging workforce, with as many as half of employees expected to retire by 2025, there will be a shortage of younger workers to fill the skills gap.

But by outfitting oil refineries with sensors and high-tech digital solutions, at least many plants are moving in the right direction. “Plant operators will be able to avoid some of the random failures by picking up on more precursors — some kind of sign that there’s a problem, which nobody has picked up on because they didn’t hear a change in sound or they didn’t see anything different,” says process engineer Mike Roe, who started working at an oil refinery 37 years ago and has seen a rapid transformation of digital technologies impacting the industry. “Now, the software will pick it up and catch stuff early so they don’t have major failures.”

On Monday, GE and Baker Hughes agreed to combine GE Oil & Gas and Baker Hughes to create a world-leading oil and gas technology and services provider. The new name of the company will be Baker Hughes, a GE Company.

With $32 billion of combined revenue and operations in more than 120 countries, Baker Hughes, a GE Company, will draw from GE’s digital technology expertise and Baker Hughes’ capabilities in oilfield services, offering customers best-in-class physical and digital technology solutions for productivity. Learn more.

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