The oil and gas industry is operating in a time of unprecedented uncertainty. As the industry navigates their current challenges, they are looking to discover new ways to reduce drilling and completion costs.
In this new economic landscape, saving every penny through the supply chain during a hydraulic fracturing operation is crucial. A necessary piece to this supply chain is water management. Implementing cutting-edge telemetry and data management software platforms will provide producers some much-needed relief.
There is no question that information technology and data management have witnessed tremendous growth and progress within the oil and gas industry in recent years. Data is now seen as a key business enabler, whereas in the past, it was often seen as a by-product – an add-on service that was a challenge to implement and integrate into existing operations. Even today, while SCADA equipment has been adopted at many permanent facilities, the more temporary upstream facilities and water movement equipment usually go without. In today’s market, unconventional producers need a system that can be installed in minutes, can integrate with existing sensors, and can be redeployed along with the other equipment to the next well pad – a system that is simple, cost-effective, agile, and trustworthy.
Velvet Energy is a prime example of a Canadian oil and gas producer that has made smart, simple changes to their water strategy, resulting in a significant positive impact to their operations and bottom line. They are Canadian industry leaders in produced water reuse and were recently named a 2020 Energy Excellence Award Champion for their Water Recycling Project in the Gold Creek area of the Alberta Montney play.
Velvet partnered with Random Acronym for one of the first implementations of WaterTracker and FieldTracker in Canadian upstream oil and gas. WaterTracker is a cloud-based, water specific tool intended for the aggregation, analysis, and reporting of industrial water inventory, movement, and usage. FieldTracker is a portable remote hardware implementation that allows for the remote monitoring of water-related data (volume, flow rates, levels, pressure, and temperature) intended to provide reliable and up-to-date water data during hydraulic fracturing operations. It is self-powered, satellite and cellphone compatible, remotely configurable, and intrinsically integrated with the WaterTracker database.
Guillermo Guglietti, Water Advisor at Velvet, explains how FieldTracker differs from a SCADA network:
“A lot of [SCADA and sensor] vendors have the technology, but the parameters they care about are not necessarily what we as a client care about. When a vendor shows up and says they have SCADA – yes, the operation is optimized – but it’s not optimized to capture how much water they move and what the trends are. SCADA will give you the number and a snapshot of what is going on, but as a scientist, engineer, and especially an operator, you need to understand the trend to make useful decisions. The tendency or the gradient of the data is as important as the instantaneous reading.”
Guglietti goes on to say,
“FieldTracker enables us to turn water data into something that is useful to us; we know how much water is in a borrow pit, how much water is in a well, what the temperature is of those water lines, and from there, we are able to optimize how much fuel we use and how much heating we apply. It enables us to plan the whole job from day one; we can understand what the relationship is between all the variables, make immediate projections, and actively manage the risk of too much or too little water being at the right place at the right time. That has been by far the biggest benefit – management of risk which directly translates to operational savings, and access to real-time data to optimize what we should be doing in the days ahead – that’s been key for us.”
Marlon Fleming, Director of Random Acronym, shares the origin behind the development of FieldTracker:
“We started making software to manage field data, to manage water data in particular. A common response that we received was that the problem is not managing the data, the problem is in getting the data in the first place; getting it in as real-time as possible, with an accessible and consistent format. That was really the driver behind FieldTracker. We needed to step beyond the software and do that hardware piece so that we could get data in from the field, A) fast enough so that it’s still useful, fresh, and operationally relevant; and B) do it in such a consistent way that even after the operation is done, the data is clean enough to optimize cost and diagnose what went on in terms of field operations.”
The deployment of equipment for the task of gathering water flow data has often been expensive, cumbersome, time consuming, and not easily transported to remote locations. FieldTracker is comparable in size to a hamburger box, and the ease of set up requires one person to screw in just one connector, and the system is deployed. With little training required, the system is incredibly intuitive and straightforward. Capable of autonomous operation for up to 5 years, FieldTracker eliminates the need to send staff to the field on a regular basis to manually collect data. The same operational intuitiveness also applies to the software platform. The mobile friendly web application presents high level overviews, detailed charts and tables, as well as alarms and alerts to manage critical early warnings. The graphical user interface and data visualization of FieldTracker gives you the contextual analysis that allows for agile decision making. “It comes back down to trust and speed of decision making, and if you have to go away and correlate for hours after being asked a question, you lose your window of opportunity,” says Guglietti.
Producers also receive value from unburdening field staff by leaving them to do what they do best instead of collecting water data. The reactive approach to water movement vendor field updates is replaced with a proactive approach that allows producers to relay real-time information to the field for improved risk mitigation. Guglietti points out that,
“FieldTracker is out of sight, out of mind. It is easily deployed, and you know that it is doing its job. People trust it, the energy companies trust it, the service providers trust it. The confidence in the data matters just as much as having the data. The industry is perfectly comfortable making decisions with technology already, but it is very difficult to make an agile decision when you get a spreadsheet three weeks after the job is done. You need accuracy and relevancy in the data to have the agility in the field.”
FieldTracker is not the first implementation of telemetry for the purpose of tracking water movement, but in the case of Velvet, it is the first implementation of telemetry to track water in a holistic way that is intended to not only plan further into the future, but get real- time results and trends to measure effectiveness. The takeaway is that integrating FieldTracker in a holistic way allows for the ability to make informed decisions, rapidly mitigate risk, and operate with a smaller margin of contingency, which correlates to a lower cost in terms of the amount of water and heat used for hydraulic fracturing.
Reducing the volume of water and the amount of heat used to move water in the winter season makes economic sense as much as they make an improved environmental, social, and corporate governance (ESG) case. In today’s market, investors are demanding that producers meet ESG criteria for investment to proceed. Guglietti explains how FieldTracker helped improve Velvet’s ESG metrics:
“If you can work with smaller water supply volume contingencies, you’re leaving more water in the rivers that you didn’t need to remove or pay for. Companies that have zero risk tolerance will over build their storage capacity and “over operate”, meaning a producer pays more than it needed to for water. Companies that are comfortable taking a bit of risk, because they have the tools to do it effectively, will be confident with a thin contingency. Because we are confident in the data, comfortable working with it and mapping out different scenarios, we were able to reassess reservoir storage requirements and decided to reduce our 200,000 m3 reservoir to 70,000 m3. That angle on ESG is huge, let alone the CAPEX and OPEX savings by sizing the reservoir accurately in the first place. The other piece is that we don’t have to run a 40 million Btu heater for 20 days, or that we only have to run it a few hours a day as opposed to running it 24 hours a day; the savings on diesel consumption are substantial. A single unit will take over 5,000 litres of diesel a day – not the cleanest thing to run.”
The success of Velvet Energy is a compelling story because it demonstrates how cost savings and environmental improvements can be realized simultaneously. However, breaking the status quo is always about the human condition; it is never just about technology, it is about implementing a solution that becomes trusted. Producers that come out in front will be those who embrace the “Internet of Things (IoT)” trend, diligently integrate it with their existing operations, and realize that real value is created from data when informational context and associations are made inside and outside of the organization. In an arms race to develop better ideas to reduce the bottom line, sensors, telemetry, and data management that result in decision-making support are proving to be powerful weapons.