A year ago, the idea of the oil industry being in need of saving might have sounded almost silly. While it’s true that there were already some large companies with major bills about to come due, and there was already a gradual process being made toward alternative energies, the oil industry was still immense and powerful.
Coronavirus’ Impact on Oil
The latter was before COVID-19, however, and when the viral outbreak became a full-fledged pandemic, the oil industry suffered quickly and profoundly. Lockdowns resulting from the coronavirus were described as a savage blow to oil, crippling prices, and all but eliminating demand around the world.
As if that weren’t enough, meanwhile, allied efforts to protect the industry by cutting back on production were interrupted by a counterproductive price war between Russia and Saudi Arabia. The end result was that the industry was left so deeply wounded that some began to ask if the world might simply begin to move on from oil and gas to whatever extent possible.
Over the past several months since all of this happened, the oil industry has seen both positive and negative signs. On the positive end of things, crude oil price charts show that the extreme lows of the second quarter of 2020 were temporary. The price bounced back. On the negative end though, this bounce was only partial, and may not be sustainable. Oil is still not worth anything close to what it was in 2019, and with ongoing concerns about more coronavirus outbreaks and lockdowns to come, demand has not been reliably restored either.
What Does Oil Do Now?
This leaves the industry in a sort of limbo. Is the oil industry in the beginning stages of a gradual but full recovery? Or was what happened this past summer an inevitable but unsustainable recovery masking the long-term severity of the problem?
There’s some debate over the possible answers to these questions. One thing we know for sure is that businesses within the oil industry are not going down without a fight. Saving the industry will be a mammoth effort, however, and one that will likely require a great deal of innovation. And that’s where IoT may come into the picture.
IoT Helps Save Oil
Already, there are numerous ways in which the IoT can be of use in the oil industry. These include:
Full Process Transparency
Through connected systems and sensors, oil industry companies can gain new levels of transparency on the whole cycle of oil — from production to storage, to delivery. Data can be fed into overarching networks to give companies the clearest possible picture of how much they’re producing, where they’re storing it, and how shipping operations are going. With this information, inefficiencies can be recognized and addressed easily.
Automated Damage Control
The implementation of IoT concepts and technologies is vital for automation. In the oil industry, that can mean turning damage control into an automatic process. Issues such as leakage in pumps, drills, or even storage facilities can be recognized by connected technology, such that systems are shut down, waste is minimized, and repairs are called for — all without any human input.
The idea of predictive maintenance is simple: It means that a given system or piece of equipment alerts you to the potential (or likely) need for maintenance in advance, allowing you the opportunity to address a problem before it becomes more severe. It is one of the most basic yet most significant aspects of the IoT in industry, and in oil specifically, it can lead to astronomical savings.
Efficient Well Assessment
One inefficiency that occurs regularly in the oil industry is that wells dry up, and only at that point are new wells tapped. But with advanced, connected sensors and equipment helping to monitor drilling activity, this can be anticipated more easily. It’s a small difference, but one that can save significant time in moving from one well to the next.
Many oil IoT use cases are already in full-effect and being used productively. However, with the oil industry facing an unprecedented challenge, it’s worth considering IoT in a new light. Collectively, the functions and processes discussed above can save billions of dollars for an industry that needs every penny it can scrap right now. For that reason, it’s conceivable that broader implementation of IoT practices could at least play a role in helping the industry recover.