Automation: How It’s Changing the Oil Patch
The report below from the Houston Chronicle about smart machines in the petroleum industry is helpful because it is fairly precise about how many jobs are being lost. As in many businesses, a complete wipeout of jobs is not what’s happening, but the increased efficiency of advanced machines does remove a significant chunk of human workers.
Here’s a video showing a fully autonomous oil-drilling rig — with no human workers in sight.
Fewer jobs are available throughout the economy now because of machines and software performing more tasks that once were jobs for humans, yet the immigration admittance machine remains on auto-pilot which needs to stop, because. . .
It’s a different world today, and people need to wake up to how different the employment universe has become. The energy sector has been touted as an area of job growth, but not so much due to automation.
Fewer jobs in oil patch as automation picks up, Houston Chronicle, December 21, 2016
More automation in drilling could shift work from fields to desks
The oil patch will have fewer jobs in the not-so-distant future as drilling rigs become increasingly automated, with companies putting the latest advances in drilling technology into the field next year.
These new rigs, using sophisticated software and robotics, could reduce the number of people working in the oil patch by up to 40 percent over the next few years, energy analysts said, while requiring more people in information technology to remotely monitor operations and troubleshoot problems. As with manufacturing and other industries that have become increasingly automated, the advances mean that oil and gas companies will likely need more brains, less brawn, and fewer workers overall.
It also means that many of the more than 215,000 U.S. jobs lost in the two-year oil bust — including about 100,000 in Texas — may never return as the industry recovery gains strength.
“That’s always been the Holy Grail to not have to touch the pipe and totally automate the process,” said Byron Pope, an energy analyst at Houston investment bank Tudor, Pickering, Holt & Co. “They’re automating more of the process and eliminating some of the human variability and error.”
Among the automated systems coming into operation next year is the “iRig” of the Houston oilfield services company Nabors Industries. Nabors’ technology, which it calls “iRacker,” uses automated robotics to lift long pieces of pipe from racks, piece them together and drive them into drilled holes to build the wells. Schlumberger, the world’s biggest energy services company is launching its “Rig of the Future,” which aims to drill more holes and deeper horizontal wells from a single location in West Texas shale fields, meaning the industry will require fewer rigs and fewer crews.
Rise of smart rigs
The technology is here, and the oil sector only need embrace it to save money and increase safety, said Chris Papouras, president of Nabors drilling solutions division. Papouras said the systems developed by Nabors and other companies mean that dangerous jobs, such as running steel pipe down wells, that required four or five workers, can be done with a push of a button, increasing efficiency and dramatically reducing the risk of injuries near the wellhead.
“The rig is still treated as dumb iron,” Papouras said. “The oil and gas industry still operates using old models. This is not a technology challenge. This is really a culture shift.”
Within a few years, the number of people on site for each rig at any given time could fall from an average of 25 to 15 people, analysts said. In addition, small “mom and pop” services companies that run pipe casing or attach drilling tools for larger companies could be forced out of business in the years to come. The rigs will automate most of the work of the casing crews as well as that of directional drilling crews that drive attachments to the rig and guide them during drilling, allowing companies like Nabors to do more of the work themselves, rather than hire third-party contractors.
ABB, a Swiss technology company, last year opened two new automation and robotics integration offices in Houston to work more closely to energy customers, said Brandon Spencer, ABB’s vice president of oil, gas and chemical in North America.
Bringing oil patch to Houston
Advances in wireless and sensor technology mean that even when wells are producing oil in remote fields, the temperatures and pressure levels can be monitored remotely from Houston without routinely having to send workers out to sites hundreds of miles away.
This technology is already used for deepwater drilling in the Gulf of Mexico, and is now making its way to onshore production.
“They’re running all of the Eagle Ford from Houston,” said Spencer. The Eagle Ford shale play is located in South Texas, about 250 miles from Houston.
New technologies, however, don’t necessarily mean fewer jobs, Spencer said.
ABB, for example, is teaming up with Microsoft to build what’s touted as the world’s largest cloud-based computing platform for industrial customers, including energy firms, allowing them to collect and analyze massive amounts of data to monitor performance, improve precision, and develop better techniques and processes. This will require large teams of computer scientists, software developers and other highly-skilled technical workers.
“It’s about redeploying the manpower; it’s different skill sets,” he said. “All of this big data still requires a lot of manpower.”
More data and information technology specialists also will be needed as the oilfield services sector consolidates and integrates the systems, products, and services of different companies, said Chris Wolfe, who leads the oilfield services practice group at the Dallas-based law firm Haynes and Boone. Schlumberger, for example, bought Houston-based Cameron International in part to boost its technology offerings, while Paris-based Technip is merging with Houston’s FMC Technologies for much of the same reasons.
General Electric is buying a majority of Houston’s Baker Hughes to marry a lot of the drilling and services work with the GE digital platform.
“A lot of investments in analytics are coming,” Wolfe said. “Information services has been underfunded in the oilfield services historically.”
Adding to the problem?
The downturn has spurred many exploration and production companies to adopt new technologies and create efficiencies beyond the discounts they received from services firms during oil bust, said Ahmed Hashmi, BP’s global head of upstream technology. Services companies do a wide variety of work for production companies, including drilling, cementing, and hydraulic fracturing, or fracking.
Large, further diversified services companies like Schlumberger and Baker Hughes could make things easier for producers like BP by helping them produce more oil at lower costs as the industry recovers. While the industry is working through global oil glut, the world will still need 35 percent more energy by 2035, Hashmi said, most of it coming from oil and gas.
The industry got into this mess largely because of drilling technologies that began opening oil and gas reserves in shale rock formations about a decade ago. Today’s technological advancements mean the energy sector can extract 5 trillion barrels of oil and gas globally by 2050 – twice what world is forecast to demand – although much of it won’t make economic sense to produce.
“Technically, the world is awash in oil and gas,” Hashmi said. “That’s on the back of technology.”
TECHNOLOGY’S IMPACT IN THE OIL PATCH
Automated drilling rigs could cut the size of a drilling crew from
25 workers to
15, a cut of nearly
Source: Industry analysts
By the numbers
of oil patch jobs could be replaced by technology
fewer workers who could be needed on site per rig within a few years
Texas oil jobs lost in bust that may never return