Posts Tagged ‘Digital Energy’
Virtualized Operations for the Rest of Us
Recently, I was reading an article in the Digital Energy Journal Issue 22. What caught my eye was the title, “How virtual collaborative environments can save $120,000,000″. That’s an intriguing title and I was curious where the $120M came from. Much of the article quoted people at Capgemini. That ultimately led me to the paper that Capgemini calls “TechnoVision 2012 for Upstream Oil and Gas” (the Capgemini link will take you there for the whitepaper and a video). Basically, it’s Capgemini’s grand vision for using IT technology to change how E&P does its business. I agree with most of what I read but was struck by the scope of the vision. Their vision clearly targets the super-major size energy company. The vision is a collection of really big projects. I wanted to look at the vision through the eyes of midsize businesses. This is actually a continuation of my post “Microsoft and the Energy Industry“.
I’m not going to try to restate the details of the Capgemini vision here. You can get a copy of the whitepaper for yourself using the link provided above. The DEJ article considers the benefits of building a virtual representation of a manufacturing/production facility much like what can be done with a 3-D CAD program. That model is then connected to real-time data from the actual facility as well as data from other sources. The result is a virtual working environment which allows control and maintenance of the facility, collaboration with facility coworkers (including showing them as avatars) and collaboration with remote experts as needed. I think that the article presents a version of the Capgemini vision but is overkill. For example, I don’t agree with the need for avatars walking through and interacting in the virtual environment. That idea may be appealing for a public presentation but in actual use it would get old and clumsy.
The ideas were sufficiently intriguing that I digested the TechnoVision paper. Fortunately, there were no avatars mentioned there. What was appealing in that paper was a clearly useful list of business drivers. They are:
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The Growing Influence of NOCs (National Oil Companies)
This means national and regional politics won’t be declining anytime soon.
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Exploiting Unconventionals
This means the need to access unconventional sources of energy.
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The Aging Workforce
The baby boomers continue to retire with more people leaving the industry than enter it.
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Alignment of Quality Provisions
Aligning long term investments with oil price cycles
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Increased Public Scrutiny for Compliance Excellence
While the current oil release in the Gulf was not included as a motivating factor in the paper, but increased public scrutiny is now a certainty.
All of these factors affect the midmarket as much as the super-majors. The problem is the midmarket doesn’t have the same level of resources. I argue that the midmarket can get much of the same benefits as those referenced in the Capgemini paper by using low cost, commodity hardware and software as mentioned in my previous post referenced above. No avatars, just control panels built from commodity portal software, like Microsoft SharePoint or IBM WebSphere. Those same tools can also be used for collaboration although there are other low cost alternatives. Let’s not forget about the growing selection of low cost social media tools that can be hosted internally if you’re not ready to use cloud computing for mission critical applications.
I believe that you would be best served by thinking of my vision as well as the Capgemini vision as frameworks. A framework is just standard base of tools from which to build your own unique solution. That solution must contain business processes which include more external collaboration with experts and trading partners. Those business processes should also be automated with tools that allow quite a bit of flexibility and adaptability. Business process management tools are becoming increasingly mature and flexible. They can provide all the adaptability most companies need.
In summary, I agree with the bulk of Capgemini’s TechnoVision but advocate addressing the same issues with a somewhat more pragmatic approach. Commodity hardware and software tools used to automate more inclusive business processes can now be an effective alternative for companies of all sizes. The business drivers listed above still apply to all segments of the energy business and must be addressed. A framework based on common tools will allow projects to be simpler and faster to execute. And let’s not forget that they will offer a dramatically higher probability for success.
Until next time, thanks for stopping by…
Microsoft and the Energy Industry
The new issue of Digital Energy Journal (Issue 25) is just out. In it is an article about Microsoft’s new products and directions relevant to the energy industry. With my interests in IT leadership, manufacturing operations and E&P surface operations, I was immediately compelled to read it. Since I have a long history with Microsoft both as a customer and a channel partner I have some well entrenched ideas about how Microsoft fits into the manufacturing and energy world (mostly good with a dash of frustration).
As I read the article, a couple of points jumped out at me. First is the use of the Xbox 360 with the upcoming Kinect user interface device (shown in the image on the right). It is a controller-less device that allows the user to control a game like a Nintendo Wii but without any hand held controllers. This device is primarily intended for the gaming world but has potential for the manufacturing and E&P worlds as well. For example, Halliburton Landmark has just announced a new application called GeoGraphix Discovery 3D. It will build on their GeoGraphix product and make that visualization environment easier to navigate.
What got me excited is the ability to apply an Xbox/PC/Network system to create business visualization environment at an affordable cost. Many of us are old enough to remember when cell phones were big, expensive and had to be installed in your car by a technician. We can also remember what happened to their use when cell phones got cheaper and more portable. Their use grew geometrically as well as their applications. Now consider the large and hugely expensive visualization environments now sold to the E&P industry. Then consider what happens when you can have something acceptably close to the same functionality but on commodity hardware. The cell phone evolution gets replayed for visualization systems.
Now let’s consider what happens when that same commodity visualization environment gets connected to 3-D CAD environments of manufacturing plants and E&P surface operations along with other business applications. Now combine that new mix of tools with a more highly regulated and monitored operational environment. That will happen thanks to incidents like the current BP spill in the Gulf of Mexico and numerous industrial explosions, fires and chemical releases. The best way to image what I’m talking about is through an example.
Let’s image we’re in an ordinary conference room. We’re facing a wall with three large screen monitors in a row. On the middle monitor is a 3-D model of a process manufacturing plant, offshore platform or some other organized industrial collection of pipes, tanks, buildings and equipment. As we walk through this facility we can reach down and touch a piece of equipment as we pass it. When we touch it, its spec sheet and maintenance history are displayed on the screen on the left. If we are concerned about what we see we touch the equipment again with another gesture of our hand and we dictate a note to be attached on that piece of equipment. That note appears on the screen on the right and a flag appears on the equipment shown on the center screen, indicating the need for follow up. All of this data can also be displayed and accessed in a more tradition way on PCs or laptops located elsewhere (or in the same room). This kind of scenario could have applications for the management of these operations to be able to more easily survey and diagnose issues in their facilities. Connecting to a master data management system would allow such a system to be applied to multiple, similar facilities and managed together more easily. Environmental, maintenance and operational data can be displayed together in more intuitive ways. That can lead to the avoidance of future problems of all sorts. This is industrial strength business-IT alignment.
You can use the above example as a base from which to imagine a scenario more specific to your own experiences. Just don’t forget that we’re seeing this using commodity hardware and lower cost software. This puts such a system within reach of mid-sized manufacturers, energy and service companies. That’s a game changer for those mid-size companies.
The second point that jumped out to me in the article was Steve Balmer’s vision of the energy industry’s migration toward cloud computing. He’s probably right but I struggle with that idea when applied to large quantities of data that need to be brought down to a local system for use and analysis. It really depends on how cloud computing standards, security and infrastructure evolve. I have commented on cloud computing issues in the past so I won’t do it again here. If you’re interested, just click on the cloud computing tag in the tag cloud to the right of this post.
In summary, I think that whether you love or hate Microsoft they are one of the very few companies that can provide a sufficiently diverse, integrated set of applications and devices to allow the creation of such architectures at relatively low cost. Let’s hope that Steve Balmer’s vision for the energy industry can become reality and not get bogged down in bureaucracy or drifting priorities along the way.
Thanks for stopping by. Stay tuned for more…
2010 Digital Energy Workshop
This week I attended the 2010 Digital Energy Workshop here in Houston. It is an event sponsored by the Society of Petroleum Engineers, Gulf Coast Section and a number of vendors to the energy industry. The intent of the workshop is to address the technologies and issues driving the evolution in the use of digital technologies in the E&P industry. As an old manufacturing guy, I have my own preconceived notions about the state of this evolution. In the manufacturing world we had to address the same issues a couple of decades ago. The process manufacturing world lives on slimmer margins. The E&P world has not had to face that reality until recently, and not that much even then.
The focus of this industry has been on optimizing drilling and maximizing recovery from a field (35% is a reasonable number). As such, there is quite a bit of material and work focusing on reservoir modeling, geological tools and the operations of the drilling process, such as directional drilling. But when we talk about what we call digital energy we are talking about the integration of data from downhole sources, operational data and business data in such a way that organizational silos are not constraints to business improvement. Good decisions are made faster than ever before. Since the Houston area is one of the primary centers for this industry this event attracts vendors who see digital energy as a major business opportunity.
Major industry vendors like Halliburton, Baker Hughes, Schlumberger, ABB and Microsoft were major sponsors. Other, smaller firms like OSIsoft, Merrick Systems, Business Fundamentals Group, MicroStrategy and Performix were also sponsors. While this list of vendors is not as large as it will be in the future, it does contain some major corporations with a major commitment to digital energy offerings. Microsoft and Merrick Systems were the only two with booths at the show. I suspect that it won’t be too long until we see SAP, Oracle, Emerson and Honeywell at this event. All of them have a story to tell to the E&P market.
I heard a few comments about OPC-UA vs. WITSML. Both are communications standards but differ in focus. OPC-Unified Architecture is intended to provide just that, a unified architecture for control equipment and instrumentation which allows the equipment from vendors that adopt the standard to work together automatically. This offers the customer lower costs and greater flexibility when they build their control systems. WITSML is somewhat similar but much more focused on the specific needs of the E&P industry. The point of the comparison is whether or not a more generalized standard is better than one focused on one industry. This sounds like a future blog post to me so I won’t pursue it here.
The various presentations we heard varied from high level overviews of what is digital energy and what’s next to specific case studies of individual projects. What struck me was the similarity to events I attended in my manufacturing past. Those past events, like this one, reflected an industry waking up to new possibilities and technologies. The fact that this was only a one day conference is consistent with the new but growing interest in the topic. The presentations from this conference will be posted in a few days and they, in turn, will also become fodder for my blog posts.
Another interesting point that struck me is that the Gulf of Mexico now has a lot of fiber optic cables connecting the platforms. This means that the bandwidth available for platforms to connect to their on-shore operations centers is dramatically greater, allowing many more options than for those which continue to rely on low bandwidth satellite connections. Conversely, many on-shore fields are still limited to cellular or satellite connectivity. The ramifications of this seem to me to be worth yet another future blog post. Integrated operations of a geographically disperse collection of equipment using different connection pipes (bandwidth) using standardized applications is an intriguing concept.
Finally, one last observation was the literature review that the organizers did. Initially that seems like a dry topic (well, actually it was still a dry topic at the end). What stood out to me was the number of case studies that reported notable savings. Each study was a little different but, collectively, the direction was the same. This industry is starting to understand how to make and save money with this technology. As the number of these types of case studies increases, the number of use cases available to software developers and hardware manufacturers increases as well. That implies rapid growth in product features and diversity. It’s all good.
As you can see, there will be more posts from me on these topics in the future. Stay tuned…
Brokering Clouds
I recently attended an interesting presentation on cloud computing (I’m a sucker for the topic). It was just another perk for being a member of the Houston SIM (Society of Information Management) chapter. The presenter was Gene Phifer, Managing Vice President at Gartner. It covered a history and other background information as well as an interesting perspective from Gartner. I have included a couple of slides here but, unfortunately, I am not able to provide the entire presentation.
While acknowledging the benefits that we have all come to appreciate, he also included a warning of the existing problems. As I have pointed out in previous posts, there is a lot of excitement on the benefits but not enough attention to the risks (they will all eventually be addressed, but not for a while). In my official role as the cloud computing Grinch I want to be sure to draw your attention to the risks associated with those tantalizing benefits. From the Gartner presentation they are:
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Data/Process Location & Isolation
- Security, privacy & ownership
- Security, privacy & ownership
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Regulatory, Compliance & Policies
- Limits, e-discovery, investigations
- Limits, e-discovery, investigations
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Portability between Providers
- Lack of standards, vendor lock-in
- Lack of standards, vendor lock-in
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Provider Trust Management
- Transparency to provider operations
- Immature vendors and certifications
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Uncertain Failure Remediation
- SLA guarantees, redundancy
- SLA guarantees, redundancy
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Integration and Process Integrity across the cloud
- Technical & Support issues
- Technical & Support issues
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Bandwidth & Latency
- Accessing or integrating “clouds”
- Accessing or integrating “clouds”
- Licensing Issues
- Uncertain Financial Models
Now that I have fulfilled my “party pooper” responsibilities I can return to my usual optimistic tone. His presentation went on to highlight the aggressive expansion of both Microsoft and Google into more sophisticated cloud offerings. While Google’s preferences are not surprising, seeing all of Microsoft’s offerings shown on one slide was interesting. While I was aware of each of their cloud based products, seeing them listed together was enlightening. Microsoft is making a real push into cloud computing, which is quite a balancing act for them.
Then the presentation moved into its most interesting phase for me. We started covering the development of cloud applications and assembling them into solutions to business problems. There is now a large selection of application development environments available and covering a broad range of sophistication. The Spectrum of Cloud Computing slide above showed up in this section of the presentation. I like it because it captures the various cloud environments that are possible. It’s easy for the definitions of public, private and hybrid cloud environments to blur. This slide captures the spectrum with a little more granularity and 
clarity.
One point that stood out to me was the idea of cloud brokers. While I’ve heard of cloud brokers before, I hadn’t paid much attention to the concept. It’s actually an intriguing concept once you imagine a future where the cloud-based applications and services are more plentiful, complex and available. The slide on the right is handy for visualizing the attributes of brokers.
There were other slides in the presentation that emphasized how complex these ecosystems will become and the need for brokers will grow. I found a handy resource guide for such brokers as of this moment in time. Its link is here. I found another article on selecting a cloud service broker that is consistent with this presentation. Its link is here.
I am now convinced that the notion of cloud service brokers will become very important to our business. Our target markets are mid-size manufacturers, mid-size manufacturing related service business and independent E&P companies with interest in the notion of Digital Energy. Understanding the cloud service broker universe is now a priority for us. It’s moved way up the priority list. I believe that the risks listed above will provide a useful list of metrics against which to evaluate these brokers. As we get into it, the list may vary a little but this list will provide a good starting point.
Since I am unable to provide you with a copy of the presentation, I would like to provide some alternative. I found a complimentary eWeek article and provide the link here. Stay tuned for future posts on cloud service brokers. They should be interesting.
Thanks for stopping by. See you next time…
Digital Energy and Collaboration
As I was doing the research for some previous posts I came across the Statoil website and their notion of Integrated Operations. The images included on this post are from their site. That is their phrase for what others (me included) are calling Digital Energy. I believe that Statoil has a rich site on this topic. It’s obviously an important topic for them. I agree. The above link will take you to their Integrated Operations pages.
One thing to remember is that Statoil is the Norwegian oil company and their main activities are located on the Norwegian Shelf. They also do exploration and production many other places as well. Unlike the Gulf of Mexico for the U.S., the Norwegian Shelf is loaded with all kinds of bad weather and harsh conditions for offshore exploration and production. Like the Gulf of Mexico for the U.S., they have the opportunity of locating operating centers along their own native shore line. Since conditions on the Norwegian Sea are much harsher than the Gulf of Mexico, their motivation to minimize offshore platform staffing is 
much greater than here, although it’s a growing concern here. That drives the development of those operations centers and the need to integrate them with their platforms.
That development of those onshore operation centers drives what I see as a very mature model of information sharing and collaboration. For example, they seem to have made heavy use of fiber optics to connect platforms. However, fiber loops in the Gulf have been growing as well. What that means is that high bandwidth to offshore platforms is becoming more the norm, providing the infrastructure for better communications and collaboration. That means better video conferencing, application sharing and access to cloud computing. That results in more effective collaboration between those on-shore command centers, production platforms and corporate offices including more real-time data availability. Decisions become much more real-time and less bureaucratic.
The result of this increased connectivity between platforms is an improved ability to manage and optimize the operations of an entire oil field. This improved connectivity also means the ability to use more off-the-shelf software. The availability of more software tools is also increased by the growing adoption of the WITSML standard from Energistics. The WITSML standard is the most mature, but others are evolving (like PRODML and RESQML). These data standards allow system vendors to build products that can interoperate. The growth of these standards is slow and painstaking. I know, I did a tour on the Energistcs group as a company representative, primarily on the PRODML standard. For me, it was like watching grass grow. You can do it for a while but eventually the frustration will get the better of you. The industry will benefit from the work of more patient people than me.
For those of you who prefer video to reading I am providing a link to Statoil’s film page. Obviously, these short films focus on Statoil’s efforts but they are also educational. There is one video focusing on operations which captures the essence of what I have been writing about. It isn’t overly technical for those of you with more of a business focus.
What excites me is the high bandwidth communications to each operating location, either on land or sea, combined with more use of off-the-shelf software supporting common data standards like those from Energistics. This will allow producers, vendors and consultants to become connected in new and creative ways. Such improved collaboration will allow better decisions to be made faster. We are already seeing that infrastructure evolving. However, its use needs to be more wide spread and include smaller players than we see today.
Once again, thanks for stopping by. I’ll see you next time.