TLDR: The rapid advancement of drone—unmanned aerial vehicle (UAV)—technology now connects several burgeoning disciplines such as remote sensing, mechatronics, and data science. The energy industry has embraced a handful of obvious uses such as inspecting flare stacks, offshore platforms and to some degree methane emission monitoring. There is a very basic level of comfort with robotic platforms themselves, but this is hardly close to widespread adoption; several enabling technologies and business models need to be in place first, but this is happening rapidly.
Earlier this year, Darcy Partners was commissioned by a group of oil and gas operatorsto scout and research UAV technologies to identify best in class technology companies as well as spot relevant technology gaps for the energy industry.
Today, automation and robotics applications have gained tremendous traction, moving from military to hobbyists and consumers, and now into the commercial space. In 2015, ‘drones’ attracted around US$500 million of venture capital (VC) spending, a 4x increase from 2014. Not surprisingly, a strong wave of hype and marketing has made its way into the oil and gas (O&G) industry, among other capital-intensive industries such as agriculture and construction.
This post outlines the market segments and trends that we feel are most relevant to our oil and gas community. We’ll zoom in on a few of areas in future posts, but it makes sense to start with an introduction for those discussions here.
As with any transformative technology, there is a period of uncertainty around how to deliver value to the end user— what is more valuable, the hardware, software? We make no bets here, but it does complicate corporate buying decisions as new entrants approach things from different angles and create a vendor deluge challenge. Below is a comparison of the technology stack and related business models we think are relevant – of course, this is a simplification, but we want to establish some consistent vocabulary before digging deeper:
As you can see, this “simplified” illustration is a bit complicated, but let’s walk through it.
Basically, a drone is an unmanned data acquisition platform– perhaps in the future it will also perform physical tasks, but we’re not there yet. Most funding has gone toward platform development, which is growing quite mature in some ways, making use of carbon fiber frames, smart batteries, more affordable sensors, such as light detection and ranging (LIDAR) pucks and so forth. There are many platform types to choose, from multiple-rotor, single-rotor, fixed-wing, hybrid or tethered UAVs that must also be evaluated against ground based vehicles and crawlers; the choice ultimately depends on the mission and operating environment, but there is no golden bullet.
Looking at the original equipment manufacturers (OEMs), the trend is toward end-to-end platforms that include all the advanced guidance, navigation and control features and data analytics capabilities “out of the box.”
Guidance, Navigation and Control (GNC)
The GNC system is essentially the “brain” of the robot. For analogy, you can think of some of the advanced guidance and navigation features as the “frontal lobe” of the brain, and the control system as the “brain stem.” Practically speaking, however, the use of aerial drones in the O&G industry today requires a highly skilled pilot to operate a drone. The drone is typically outfitted with global positioning system (GPS) based navigation system, which can become a challenge in the complex, remote, and mostly metallic environments comprising many O&G assets. Consequently, service providers today will often have strong military or advanced aviation backgrounds capable of managing complex flying environments. In time, however, the idealization of an end-to-end “drone in a box” will become [more] normal and folks will perform highly automated operations with less skilled human involvement; we aren’t there yet though. For this to happen requires some enabling technologies to allow advanced drone localization to compensate with GPS challenges, and perception to sense/avoid objects autonomously.
Technologies such as real time kinematic (RTK) GPS, visual odometry, structure from motion, and simultaneous localization and mapping (SLAM) are extremely popular right now. Other industries (i.e. automotive) and projects such as NASA’s Mars Rover have contributed greatly to the knowledge transfer here. In addition, tools to add semantics to image processing have important uses (i.e. deep-learning); a UAV may need to understand the difference between a pigeon and a Cessna when navigating in open air space if we want to get to full autonomy. Some of the biggest names in technology still grapple with the best way to approach this – are these features, or do they require an entirely new architecture?
As drones become commonplace, we should expect a precipitous rise in pure-play software companies to enable insights from various combinations of remote sensing platforms—micro-satellites, permanent sensors, etc.—about O&G assets in a single package. We may not be able to predict exactly what this will look like, but we know that technology must evolve to seamlessly integrate with enterprise software applications to fully capture the value of information – it is not uncommon for data to be transferred to the client on a portable storage disk. Some of the bigger names like 3D Robotics and Airware have made notable pivots to pursue the enterprise software space.
Service Business Models
A handful of specialized service companies have begun to emerge as market leaders for energy and they possess the classic advantages of being first to market. These firms play the role of technology absorbers from the innovators in different parts of the value chain. As processing and data analytics solutions mature, these companies will benefit. However, we are arriving at a crossroad where these vendors will face some crowding out from competition. The labor-intensive model of today will be challenged by the foregoing enabling technologies, and the first movers are taking different approaches to deal with this threat – subcontractor models, pilot marketplaces, internally developed software, strategic partnerships and more.
In summary, there are certain use cases that are no brainers and the industry should adopt this technology for them. However, there are only so many flare stacks in the world, and many of the broader applications are yet to be fully explored due to the foregoing technology gaps and regulatory limitations that we did not address here.
Darcy Partners was chosen to review these topics in our Drones in Energy joint industry study, and will share the results of our scouting and validation work at our Nov 29th forum.
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