How the ‘rise of the machines’ will transform oil and gas

Fully autonomous operating systems are common in many industries, including mining. How soon will they reach the oil and gas sector, and what will it mean for the people working in it?

| follow Jesse Snyder on Twitter

March 16, 2015

Subscribe Email This Post Print This Post Bookmark and Share

Rio Tinto’s Pilbara mine, located in West Australia, will be among the world’s first fully automated mines
Photograph courtesy of Rio Tinto

In Australia’s Pilbara region, a flat western landscape defined by its red earth, mining for iron ore has been going on for more than 50 years. And while machines and contraptions of increasing complexity are used to get that ore out of the pit, they’ve always needed the help of humans – until now. Today, driverless trucks climb up the terraced roadways of the mines, navigating speed and distance by way of sensors. They haul the ore to a nearby rail terminal where train locomotives are operated by engineers in Perth, 1,500 kilometers to the south. Even the drills work autonomously. Only the shovel operators and a small crew of maintenance people are needed on site.

“New technology is always scary; you have deadlines to meet.”

– Carl Kuhnke, transportation expert

The mines are majority-owned by U.K.-based Rio Tinto, which began automating its operations in 2008. High labor costs and a bleak outlook for iron ore prices have the company chasing economies of scale at its operations, where it plans to raise production to 360 million tonnes per year by 2017. That’s up from 290 million tonnes in 2014, the sum of which already made up 95 per cent of the company’s global iron ore production. In time, the company plans to dig its ore, process it, and ship it to deep sea ports in Cape Lambert and Dampier, Australia, entirely without the need for human intervention.

The technology Rio Tinto is using in its Pilbara mines could easily be deployed in the oil and gas sector – and right here in Canada, too. Suncor Energy is currently piloting similar automation technology in its haul trucks, and could replace all of its drivers with autonomous technology by 2018, according to a Bloomberg report. But automation will impact the energy sector far more broadly. An offshore rig in the North Sea is about to test the dependability of a rig floor robot that can single-handedly piece together an entire downhole assembly. Automatic welding machines are becoming increasingly hands-free. The operation of facilities now rarely requires workers to be in the plants themselves. All of this raises an interesting and controversial question: How far can – and should – automation go?

Scott Dunbar, an associate professor at the University of British Columbia who has spent plenty of time researching what the mines of the future will look like, is cautious to speculate about when the Rio Tinto model will reach the oil sands. But he has no trouble seeing a scenario in which the majority of current oil sands operations are automated in 10 to 15 years.

“I can certainly see economics driving the haul trucks technology in the oil sands, because those drivers are expensive,” Dunbar says. Drivers can command salaries over $100,000 per year, and, as such, replacing the drivers of a fleet of, say, 40 trucks could add up to significant cost savings. And, in the absence of those drivers, the specs of the trucks themselves will likely change. For example, the 400-tonne trucks currently used could be replaced by smaller 200-tonne trucks that travel in close proximity to one another. Such a switch would create less disruption in daily production when a haul truck requires maintenance, Dunbar says.

Rio Tinto loads the first ships from its Cape Lambert, Australia, deep sea port
Photograph courtesy of Rio Tinto

While it’s further down the theoretical road than driverless trucks, it’s entirely plausible that robots could ultimately reinvent the entire way oil sands mines are operated. Rather than using the enormous, lumbering machines of modern-day mines, companies could eventually use “swarm” technology whereby millions of fist-sized robots collectively perform a singular task. Applied to mining, the lightweight automated machines (imagine small dragonfly-like drones) use a chemical process to break down small volumes of ore and transport it to a central location. The method, which was outlined in a report by Dennis Franklin of Computer Sciences Corp., is based on the activities of ant colonies, which order workers into long queues with each body carrying a small load. When hordes of Colombian leaf-cutter ants carry bits of vegetation across the forest floor and bring it to a specified storage area, they are in effect carrying out a highly efficient mining process.

Swarm technology remains highly theoretical, but current machinery is already moving in that direction. The logic is that without the need for individual drivers, lighter and more fuel-efficient machines could cut costs. And while these driverless technologies may seem futuristic, they’re not out of the realm of possibility – or even probability.

“These aren’t state-of-the-art technologies,” says Carl Kuhnke, managing director of the Saskatchewan Centre of Excellence for Transportation. Any vehicle equipped with a wireless connection, he says, can be equipped with the sensor technology required to operate the vehicle autonomously. “You get into a brand new Ford these days with Ford Sync and Bluetooth, and those additions they have, they are exactly the same technologies you would put in these [haul] trucks.”
Automation’s effect on oil and gas will go well beyond ­­open-pit bitumen mining, too. A Norwegian company called Robotic Drilling Systems is piloting its drill-floor robot technology in April on an offshore project in the North Sea. Using a rotating grabber arm, the robot can piece together the entire downhole assembly of a drill rig; it can thread in the drill bit, torque lengths of pipe together, send the assembly downhole and then retrieve it, all without the need for an iron roughneck.

The company intends to automate every other section of the drilling process, including top-drive operation and mud circulation. “It may be a few years before we cover all tasks on a drilling rig, but in principle there is no task that we cannot do,” says Lars Raunholt, the vice-president and founder of the company. Even completion tubing could be fed downhole autonomously, he says.

For all of these technological advances and the efficiency gains (and cost savings) they promise, there are still some who aren’t entirely comfortable with turning everything over to machines. That’s particularly true in the oil and gas sector, where operations often still rely on qualities like instinct and intuition that machines haven’t yet managed to perfect. “The process on a drill rig is very dynamic, so you cannot rely on the same sequence all the time; you have to be able to make changes, and make changes fast,” Raunholt says.

His company uses intuitive software that can, in theory, work fully autonomously, which Raunholt says differentiates it from the ADR rigs now used in North America.

The expansion of the Pilbara operations at Cape Lambert, Australia
Photograph courtesy of Rio Tinto

But the electric drill-floor robot is unlikely to replace its semi-autonomous hydraulic counterparts in North America’s shale plays. That’s because the cost to install the robot currently runs in the neighborhood of $2 million, a high price to pay by almost any standards. That’s why, for now at least, Raunholt says the technology only makes sense on offshore projects where operators are willing to pay higher costs to cut drilling times. Whether autonomous operations will become the norm in the notoriously conservative oil and gas industry is a wide-open question. But the cost savings involved with automating production are becoming harder than ever to argue with, even in an industry facing tight margins and therefore little room for error. “New technology is always scary; you have deadlines to meet,” says Carl Kuhnke. “Nothing is guaranteed.”

Men Not at Work

“It may be a few years before we cover all tasks on a drilling rig, but in principle there is no task that we cannot do.”

– Lars Raunholt, VP & founder of Robotic Drilling Systems

Does automation put the energy industry’s workforce at risk?

Mention industrial automation and people tend to conjure up the typical Hollywood doomsday scenario, where humans are forced to live under a repressive, ruthless and hyper-intelligent robot empire. But, in fact, the truth seems far more innocuous, unless, of course, you happen to be a member of organized labor. For these workers, a world in which thousands of jobs are filled by tireless robots might be nearly as bad as the one portrayed on the big screen.

And that world is coming, according to the results of a survey of 2,551 researchers and makers of new technology – including autonomous robots and artificial intelligence – done by the Pew Research Center last August. The question was whether robots would indeed take the place of humans in the workforce. The respondents were almost unanimous in their belief that, by 2025, such technologies will have dramatically altered our workplaces. But they were split down the middle as to whether this would affect workers negatively or not. About half said technology would widen the gap between rich and poor and create social tension, while the other saw a more positive future where humans and robots could work ­together in harmony.

For the oil and gas sector, which often touts job creation as one of its key contributions to both the economy and society, automation poses a conundrum. On the one hand, it could help the industry cope with persistent labor shortages, and potentially improve efficiency and lower costs in the process. On the other hand, eliminating the need for thousands of employees – and the ­economic spinoffs that ripple out from their ­employment – could make the already challenging task of selling the public on the industry’s virtues even more difficult.

Still, the outcome could be a win-win for workers and their employers. Yes, small numbers of haul truck drivers or roughnecks will be replaced, but the robots that replace them will create jobs – safer and more skill-oriented ones– in maintaining these complex machines. More broadly, it could redirect people towards a focus on more creative pursuits within the industry, rather than repeating the same tasks day after day. As one survey respondent put it, “Advances in A.I. and robotics allow people to cognitively offload repetitive tasks and invest their attention and energy in things where humans can make a difference.”

More posts by Jesse Snyder

Follow @AlbertaOilMag

Issue Contents


One Response to “How the ‘rise of the machines’ will transform oil and gas”

  1. Darrell says:

    4 million in savings isn’t worth it – just reduce 2 executive jobs and you have the same result.