How oil and gas operators can increase jobs and profits in the robotics age.
By Brent Potts
The Iron Roughneck, a hydraulic machine made by National Oilwell Varco, has almost completely automated one of the most dangerous oil processes on the rig floor. In the past, divers used tongs to manually connect and disconnect segments of pipe deep beneath the ocean’s surface. Today, iron roughnecks perform the same function but are operated remotely. While this automated solution increases both safety and efficiency on the rigs, it also removes the need for drillers.
That is only one of the many examples of how increased automation is contributing to a reduced need for field workers in operations. Nabors Industries, the world’s largest onshore driller, stated in January that it eventually expects to be able to operate each of its drilling rigs with just five workers, down from 20.
Technology advancements are helping countries produce more goods than ever before. In fact, from 2003 to 2016, U.S. manufacturing output increased by almost 40 percent, with U.S. factories now adding annual value of a record $2.4 trillion. This is good news because a healthy manufacturing industry is a key contributor to a thriving economy. In a report by Deloitte, investment in manufacturing has a ripple effect on the overall economy: “Every dollar spent in manufacturing adds $1.37 to the U.S. economy and every 100 jobs in a manufacturing facility creates an additional 250 jobs in other sectors.”
However, over the past 10 years, machines have been a major contributor to the estimated 5 million factory jobs eliminated by North American manufacturers. Looking ahead, predictions vary widely on future job losses caused by automation. On one extreme, professors at the University of Oxford estimate that 47 percent of total U.S. employment is at risk from machine learning and robotics in the next 10 years. On the other side, McKinsey & Company believe automation will fully replace only about 5 percent of jobs by 2055.
A Good or Bad Thing?
History is full of examples of technology transforming industries for the better. Consider the agriculture industry. In the 1900s, 41 percent of the U.S. labor force farmed. Today, less than 3 percent of workers are in agriculture and yet U.S. farmers are some of the most productive in the world. At the same time, as technology displaced farm workers, they eventually moved to cities and found higher-paying industrial jobs.
In much the same way, robots are not eliminating oil and gas jobs – they are changing them. Oil and gas engineers already are working on technology innovations that would enable a fully automated rigs to be maneuvered into a new location using satellite coordinates, build a steel tower on its own, drill a well, then disassemble automatically and move to the next site.
To make this vision a reality will require new jobs and a better educated, highly skilled workforce. Not only do oil and gas operators now need people who can control machines such as the Iron Roughneck, they also need software specialists, data scientists, design engineers, artificial intelligence technicians and highly skilled staff. Even better, 80 percent of operations executives reported they were willing to pay more than the market rates to fill open positions, according to Deloitte.
Turning Vision into Reality
By implementing next-generation robotics and automation, and investing in a workforce with the skills needed to manage operations, O&G companies could increase the number of available jobs as well as efficiency and profitability. These are a few technology innovations that can help O&G operators embrace opportunities posed by robotics and automation:
* Adaptive operations – Seamlessly connecting the drilling process with transportation, delivery and other upstream processes helps to more closely align operations with orders. When supply chains are connected in real-time, it is possible to instantly make changes based on demand or events.
* Data analytics – Digital data is being used to constantly monitor the health of assets such as drilling equipment or driverless trucks to predict future failures. These data-based insights allow operators to move away from reactive or scheduled-based service models.
* Intelligent networks – Intelligent asset networks facilitate communication between operators and their different partners to provide all parties with a better understanding of how the materials are used and maintained.
* Better decision-making – When real-time data is captured and shared across an organization’s network, it is possible to strategically determine and implement best practices. Trends and issues on a daily basis can be analyzed in real-time to make immediate changes and improve profitability.
* Innovative research – Investing in new applications for automation in the field and in the office requires bringing together mechanics, electronics and software across the entire operation. New collaboration tools enable inter-department teamwork and communication between business networks, giving companies greater agility to respond quickly to changing market trends and fostering future industry innovations.
Despite the hype and fear surrounding robots replacing jobs, automation is changing the industry for the better. The growth and adoption of robotics is creating incredible opportunities for operators up and down the value chain, not to mention providing a safer work environment. By embracing robotics, automation and other new technologies, oil and gas operators can unleash the power of innovation, create new jobs and future-proof their companies.
Brent Potts is senior director of industrial marketing for oil and gas at SAP.