When you start your car in the morning or cook your dinner at night, chances are a satellite is helping you do it. Sound unlikely? Here’s how it works.
We depend on fossil fuels pulled from the Earth’s crust for 82% of the energy we use. The world may not need more carbon dioxide in the air, but we still rely on fossil fuels to power our businesses, heat and cool our homes, cook our meals and move our vehicles. Investment in renewable energy has grown fivefold since 2000, but experts expect us to still be getting 75% of our energy from fossil fuels in 2035.
Why? In developed nations, demand is largely flat, except for transportation. But emerging economies are growing fast, lifting billions out of poverty, and the rise of their middle classes is powered by fossil fuels. So there is no end in sight in our quest for the Earth’s hydrocarbon wealth.
There is a new quest, however, to recover those hydrocarbons in smarter, safer ways that have less impact on the environment. As companies search in ever more challenging places, they also need higher efficiency and lower costs so they can better handle the unpredictable rise and fall of prices. And that’s where satellite and information technology are leading the way.
The Digital Oil Field
Oil and gas wells may depend on “roughnecks” to man the heavy equipment, but decisions about where to explore and how to produce are driven by Big Data. Energy companies use sensors to search, manage drilling and inspect for problems. “Digital oilfield” technology finds energy sources we could never find before. It estimates reserves and provides data that helps engineers figure out the best ways to get at them. It monitors equipment and detects failures and potential failures fast. Together, they are getting more out of known reserves and lowering the environmental and safety risks of doing it.
Stallion Oilfield Services is a customer of the satellite operator SES. It operates hundreds of drilling and production rigs across the United States. The company depends on satellite for voice communications and real-time monitoring of drilling. “Voice and data communications are the lifeline of any oil and drilling operation,” says Pedro Buhigas, Director of Technology. “We never know from one day to the next where we may be asked to go, and what type of communications we may need.”
Spreading the Intelligence
As Pedro noted, today’s energy companies need the talents of engineers, geologists and data analysts in more corners of the world than ever before. But that demand far outstrips the supply. Satellite links let experts work on multiple sites at the same time without ever leaving home. By spreading the talents of their best people around the globe, energy companies can run more of their operations at peak performance and reduce their risks.
SpeedCast is a service provider with operations across Asia and Africa. For a UK-based oilfield services company, it created a network that connected all of the client’s offshore rigs to a single global service center. “They estimate,” said a SpeedCast executive, “that centralizing their support for the rigs let them reduce overall costs by 30%.”
When things go wrong in the energy business, it can have terrible impacts, from the burning oilfields of Kuwait in the first Gulf War to the Deepwater Horizon disaster. The same satellite and information technology that boosts performance can also help companies comply better and faster with environmental and safety rules. By capturing and recording data in real-time, satellites show companies where their real risks lie and give regulators powerful tools to drive enforcement.
A Better Place to Work
Satellites and IT make the wellhead a better place to work. They bring in media and Internet connections that let crewmembers keep up with the world and connect with home. In Australia, NewSat and Amstar developed a network for Gorgon, one of the world’s largest natural gas projects, which offers entertainment, Internet and telephone service to crewmembers living on the site. In boom times, the energy sector can have as many as one million job openings going unfilled, according to McKinsey, and a better workplace can help companies compete.
Satellite also makes possible remote medical care that improves the lives of crewmembers while saving their employers money. Transporting a sick crewmember just 50 miles by helicopter for medical care can cost up to $10,000. A boat ride from the Gulf of Thailand and emergency jet to Singapore can cost up to $150,000. Remote medical systems let medics at the wellhead collect health data and share it with faraway doctors, who can diagnose, prescribe care and make the decision to evacuate if needed. According to one firm, InPlace Medical, telemedicine lets teams resolve 80-85% of situations quickly without the need for transport, which delivers better care as well as saving money.
The benefits do not end in the oil or gas field. The world’s pipeline networks are key to getting the product to refineries and tanks. There are 2.9 million kilometers of pipeline in just the ten countries with the biggest networks. How can energy companies monitor such a vast web of pipe? They use satellites to gather sensor data on temperature, pressure, vibration and other critical factors. By 2022, there are expected to be 90,000 such sensors in pipelines and another 200,000 in electricity grids around the world.
For all of these reasons, the energy sector is expected to invest three times more in satellite in 2022 than it did in 2012. Today, it is spending about 25 cents per barrel of oil on satellite and IT, according to Oil and Gas Investor. That’s a smart move, McKinsey reports, because energy companies can see a 10-25% reduction in operating costs as a result. That explains why nearly 60% of oil and gas executives told Lloyd’s Register in 2014 that future breakthroughs in their business would be driven by “bits and bytes,” not physical hardware.
You may not put a satellite in your fuel tank. You may not pop one in the oven. But satellites are helping to secure the high-energy lifestyle we lead while the world searches for more sustainable ways to power our future.