Digital Oilfield: The Future of Telecommunications for Oil and Gas
By 2017, the United States is set to become the world's top producer of oil, a net exporter of the fuel by 2030 and nearly self-sufficient by 2035, according to the latest reports from the International Energy Agency. As the country sees a surge in exploration, spearheaded by the natural gas boom, drilling operations are taking place in new, remote and geographically challenging areas where communication options are extremely limited. This challenge has presented a highly profitable opportunity for the telecommunications industry.
Oil and gas operators generate large amounts of critical, time-sensitive exploratory and operational data that needs to be transmitted to analysts, who may be thousands of miles away from a drilling site. Until recently, most oil and gas operators have relied on expensive satellite circuits (VSATs) with high latency and limited bandwidth. Today, the majority of the industry in North America can access high-speed, wireless broadband connectivity by utilizing the extensive rural network provided by Energy Broadband, a subsidiary of ERF Wireless.
What originally started as a wireless internet service provider (ISP) network company serving traditional customers and banks in rural areas in 2004, soon discovered its ability to serve a highly profitable vertical market in oil and gas. A new niche with a new name was born: Energy Broadband.
“There was a need for a wireless solution to replace the traditional VSAT circuits that were too slow, expensive and lacking the amount of bandwidth needed to run the very intensive software programs between well sites and central offices,” says Dr. Dean Cubley, CEO and President of ERF Wireless. Dr Cubley served as NASA's Antenna Subsystems Manager during the Apollo program and has been a founding partner in 23 high technology companies in the telecommunications industry.
Thanks to advancements in cloud computing, sophisticated computer applications can transmit data to a geologist from anywhere in the world, using specially designed mobile broadband towers (MBT). This “nomadic technique,” as Cubley calls it, allows for connectivity to follow drilling rigs, which usually relocated every few weeks. Powered by on-site generators, the MBTs provide critical wireless access for remote monitoring of drilling progress.
Traditionally used VSATs have a signal delay of about 800 mili seconds, making it too difficult to operate intensive software programs properly, whereas MBTs have a typical delay of about 60 mili seconds.
“That makes a world of a difference in terms of how these programs work,” says Cubley, who estimates that geologists can now monitor 10 to 20 rigs at a time remotely rather than one at a time on location.
A new 'digital oilfield' niche is born.
“Our extensive rural network for the oil and gas industry is the largest in North America — larger even than those of AT&T or Verizon,” says Cubley. “While they (the national carriers) are concentrating efforts on covering cities across the nation, we are providing a service that allows our nation's oil and gas exploration to move forward into areas never before thought possible.”
Although ERF Wireless continues to serve its original wireless ISP customer base, the company is highly focused on expanding its services across the vast and rapidly growing oil and gas industry through Energy Broadband. And with some 3,000 rigs currently operating in North America and counting, it looks as if the market belongs to Energy Broadband.
“There's enough of a market for us to continue to grow almost indefinitely without running into strong competition, because there are so many wells being drilled,” says Cubley. In time, the company's technology can serve as an equally valuable asset to complementary industries, such as mining. For now, Energy Broadband remains focused on the large supply of “low hanging fruit” available in the oil and gas industry, where word is spreading fast.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.