Bryan Young reports on how oil and gas, pipeline and remote data monitoring are seeing dramatic increases in speeds and capacity at a greatly reduced cost thanks to a breakthrough in satellite technology
As the industry looks for additional ways to cut costs while trying to endure the drastic drop in global oil prices there is at least one line item that until now had to be accepted; the high costs for remote network access via satellite. Used for everything from generating real-time information about unmanned pipelines and oilfield operations to workers accessing the ethernet and internet, without satellite communications industry giants risk disruptions that could create environmental disasters, production outages, or other financial pain.
But a recent breakthrough in commercial satellite technology is allowing monthly rates to plummet, saving oil & gas companies hundreds of thousands of dollars per installation per year, while greatly increasing upload/download speeds - for operations that are out of microwave and hardwired areas.
As a result, oil and gas companies looking for effective ways to pinch pennies are taking a hard look at network infrastructure expenditures.
James Clemons, a US-based expert in oil and gas communications, believes satellite technology is drastically improving with each passing year and will only get better. Speed and stability during periods of violent weather are among the advances.
He also says convenience is another advantage that oil and gas companies can expect. When a well dries up and operations must be moved from one isolated terrain to another, there is no need to buy a new satellite. This advance in technology allows for these modern satellites to be mobile. Simply pick up the tripod and relocate it anywhere within the contiguous 48 states and stay connected. “It’s a definite improvement and less expensive. You can radio several remote locations into one master,” Clemons says.
High premiums became the norm for industrial satellite internet connections, in part because the technology was just not advanced enough (until now) to handle the amount of data transmission as would be needed for this type of application. As new satellites come online within the coming months and years the speeds and capacities will continue to increase while the cost are projected will decrease even further.
As an example, this type of enterprise-level service with faster upload/download speeds is provided by companies such as Real Time Communications (RTC). Both fixed and mobile applications within the contiguous 48 states are available.
Savings in every market cycle
In the recent past sensitivity to online costs was, perhaps, overshadowed by the higher cost of oil, which enabled larger profits for companies. Now the “new oil order” suggests that the industry is seeking a new equilibrium, which may be a nice way of saying low prices will probably be volatile but trapped within a stingy range.
Corporate leaders such as BP Chief Executive Bob Dudley have warned that oil producers could suffer even more losses in 2016 if already record-low prices lose more ground. "Prices are going to stay lower for longer; we have said it and I think we are in this for a couple of years. For sure, there is a boom-and-bust cycle here," Dudley said.
The good news is savings on satellite online services will still be available when crude oil prices begin to rise again. In fact, as technology continues to improve, monthly fees may continue to decline, providing even larger positives for an industry beset with unruly market declines.
Lower rates and increased upload/download speeds are the result of upgrades to hardware and the use of the Ka band, which supports mobile applications and has much more bandwidth than the previously used Ku band satellites. The capacity expansion is what allows for reception without interruption.
Providers such as RTC are now able to offer 1MB up/5MB down capability with a total of 20GB of data per month at a dramatically reduced price. This technology will soon allow for even faster speeds and greater capacities. By the end of 2016 the company projects it will be offering 2MB up/15MB down with a 50GB capacity. Installation costs have also dropped by about 30%.
With the perspective of three decades of experience, Clemons can fully appreciate how much technological progress has been made. In the old days companies would have to pay monthly fees for many analogue circuits. “When satellites came along, they eliminated the need to have a circuit dropped into every faraway rig or oil field,” he says. “So suddenly you did not have to pay for half a dozen separate sites.”
Clemons and other experts in the field believe that current speed and capacity will double again when a new satellite becomes available online within the year. And this will be a boon for new projects the size of the Keystone Pipeline that have lengthy unmanned segments that require remote data access.
Bryan Young is president of RTC.