Drone operators in sectors that range from agriculture to construction have quantified the difference this technology can make to the bottom line, yet the benefits of the technology are especially apparent in large-scale infrastructure projects with high regulatory burdens and high consequences if something goes wrong. Examples of these projects include highway and pipeline inspections, but the energy industry has and will continue to recognize these benefits in more ways than one.
The energy sector as a whole is seeing gains on account of the sheer scale and scope of their operations. Oftentimes, their assets are in remote locations, and while the professionals managing these assets might never set eyes on the assets, they still have to make decisions about upkeep and repair. Any information that helps decision-makers is advantageous, and new technologies like drones make information accessible that was previously not available.
The value of this information is based on its mobilization in a pragmatic approach to the inspection process for numerous types of pipeline monitoring and construction operations. Ultimately, that approach is focused on the risk that energy companies deal with in numerous capacities, and drone-collected data is used to both assess and mitigate risk which impacts the bottom line and beyond.
Hype vs Reality and Augmentation vs. Replacement
Talk of the billions of dollars that drone technology represents has been going on for years. In some cases, that hype helped to compel adoption, but just as often it proved to be a double-edged sword. Robert Blank from SolSpec mentioned that he’s had several clients who battled unrealistic expectations on account of that hype, largely perpetuated by vendors making lofty claims about the future of this technology, further inflating expectations. For the most part, drones are no longer being positioned as a “silver-bullet” solution, but there’s still a great deal of hype associated with applications of the technology that are not commercially viable options today. It’s an issue that boils down to hype versus reality, which is ultimately why professionals like Blank are focused on delivering value to their customers using the technology available today.
“A lot of what we’re doing is really just about augmenting the inspection process and automating workflows,” Blank said. “What I mean by that is the same number of people are doing what they’ve always done, but they’re able to get a lot more work done with dramatically higher consistency. Instead of one person going out and saying they inspected a site or asset visually, that same person is able to quantify their assessment with turnkey data and analytics through automated workflows. They’re able to turn what was a very inexact process into one that results in simplified, decision-ready information, backed by data in a matter of weeks.”
As an example of what that can actually mean, Blank mentioned how drones have impacted expectations about the effectiveness of erosion control devices for stormwater management and geohazards. With the analytics that SolSpec has developed, they’re able to model exactly how water would flow over that surface within hours. That analysis allows them to confirm whether or not that system is installed correctly, which makes a world of difference to the operators and contractors whose best interest is to ensure that these systems are installed to spec to avoid spurious warranty claims. However, the technology also goes far beyond augmented inspections.
Traditionally, pipeline inspections trend towards a very reactive process. If an operator can get ahead of an issue like soil erosion, they can avoid a hillside blowout that could cost hundreds of thousands of dollars to address. Unfortunately, many energy companies can’t afford to send crews out to monitor everything at all times, which inhibits a proactive approach to the problem. Drones have allowed energy companies to more effectively prioritize their resources and assess what needs to be done from a system-wide standpoint. This translates directly to cost-savings because their crews operate more efficiently.
“Problem-solving in any context, not exclusive to drones, comes down to a relentless pursuit of understanding, tied to an appropriate action,” Blank told Commercial UAV News. “You've got to have an intimate understanding of why the problem is occurring to begin with, and whether the solution you propose truly solves that problem. Drones are tools capable of providing information that has completely changed how our clients understand and address their goal of reducing risk while maximizing efficiency.”
Accuracy is something SolSpec is focused on with their suite of industry-specific analytics to help users make decisions quickly. In terms of what that means for companies in the energy industry, their tools have replaced the use of GoogleEarth, which is simply not granular or current enough to be useful. Their users immediately understand the value of a tool which provides more than just current, high-resolution imagery, but there are challenges associated with how this adoption process plays out as companies move from the exploration phase to the scaling phase of drone operations.
The Challenges of Scale
One of the biggest challenges associated with the adoption of drone technology often comes down to a question of “build or outsource?” That is to say, should an organization build their own drone program or outsource drone services and data processing and analytics as necessary? While many organizations adopt a hybrid model, this challenge has proven to be secondary to a much bigger one that impacts companies both large and small.
“The biggest challenge that I’ve seen companies run into is associated with scale,” Blank continued. “What I mean by scale is that flying and analyzing five miles of pipeline is not the same as for 500 miles in a single week. There’s a substantial amount of computing resources required to chew through the data quickly for the latter case. It’s something we’ve dealt with first-hand, which prompted us to build software to service enterprise clients on a massive scale, which we soon realized many others found valuable for other purposes. So it’s an addressable challenge and one that should be kept front-of-mind for any company navigating the drone landscape.”
Given the dichotomy between the adoption of drone technology for a small team versus adoption across an entire organization, the notion of a hybrid adoption model to work through the challenges of scale makes more sense than ever. By utilizing a vendor while still keeping certain elements under internal control, companies can get their feet wet while learning how they should employ the technology in the short term and long term. Companies don't need to jump into full-blown drone program, and unrealistic expectations tie back into the reality of the technology versus the associated hype.
“There's a preconceived notion that you have to be able to stand up this huge drone program right out of the gate, but that’s not necessarily a requirement,” Blank said. “The thing is, there's a lot that goes into standing up a drone program, and the nuances are not always apparent at first. So, it’s usually better to focus on the short term wins while also realizing that you don’t have to reinvent the wheel for continued long-term gains. We’ve got you covered however you want to approach it.”
An example of what it means to not reinvent the wheel is associated with data processing and management. Generally speaking, oil and gas companies collect a tremendous amount of data to begin with, but do they need to build the equivalent of Google Drive from scratch to gain value from drones? The answer is no. They just need to know how to organize their data in a user-friendly system, and can work with a 3rd party provider to do it more effectively so it lands in the hands of the right stakeholders at the right time. That is the essence of what it means to focus on and realize a “short-term win”.
These kinds of results and “wins” are not always immediate across a company, but the division using the technology usually recognizes an immediate value. Additional value typically comes from the refinement of that process or from adjacent departments adopting the technology, which immediately begins to unlock value that wasn’t possible even 5 years ago.
Beyond the Bottom Line
When it comes to quantifying the value of drone technology, the calculation is usually related to how drones are making a given process faster, cheaper or safer. But what does it mean to utilize the technology to avoid a problem that could be costly to repair and require a major commitment of resources and potential PR nightmare or stock price drop? Given the variables in oil and& gas that require the involvement of many different contractors and sub-contractors, the reality is that a pipeline owner/operator is rarely the one directly engaged in construction. Using drones to avoid disputes about the work that is or isn’t being done in the field has proven to translate to immediate cost-savings and lowered risk.
“More often than not, operators hire contractors and subcontractors who hire their own subcontractors, etc.,” explained Blank. “So the layers start stacking up really fast. If you have a couple hundred miles of construction, you might have several dozen crews working out there at one time. At the end of the day, the owner/operator is still going to assume liability for all of those moving pieces, and that’s a big responsibility. If the operator and contractor both have a baseline of data to refer to, it's usually pretty clear where the burden of liability or warranty falls at any point throughout the project lifecycle. Contractors committed to quality pipeline construction like Hanging H love these defensible records and will provide reports to the owner/operator after a job is completed as a final QA/QC verification whereas other contractors who are trying to get the job done as quickly and cheaply as possible usually have a dramatically different opinion.”
Data doesn’t lie, and that’s why drone data has proven to be critical for oil and gas companies and contractors when it comes to litigation. For most energy companies, litigation isn’t about “if”, but rather “when”. With data from a drone that provides stakeholders with timeline and historical project snapshots, companies have been able to avoid finger-pointing games that are costly in terms of both time and money.
The value of using drone technology to avoid a "contractor or landowner dispute" is fairly well understood within the industry, but the more nuanced monetary value around what it means to capture better data or the impact of a more efficient workflow isn’t as easy to convey. That’s part of the reason the adoption of drone technology can vary widely, even when the value is positioned in terms that stakeholders can easily grasp.
“When it comes to ways this technology impacts the end deliverable, we’ll often integrate aerial data as a supplement to data they are already capturing in the field or customizing reports based on preference,” Blank explained. “That way they can see everything in the exact format that's most helpful and familiar to them. None of that really changes anything on our end, but the value gets translated to the client in a way that doesn’t require much effort for them to adopt. All of it needs to make sense for their workflow and to stakeholders to minimize the gap between action and outcome. From there, we can begin to establish far more definitive value.”
Drones have proven to be essential elements in efforts to map, measure and mitigate issues for pipeline inspections of all types, but their ultimate value is about how they can do so in ways that are both measurable and immeasurable.