Pumps & Systems staff spoke with Pulsafeeder vice president of product management Alex Bokiba about the state of the industry entering 2018.
What should end users know to be up to date on IoT/cyber security? How would you describe the industry’s readiness to deal with this issue?
While much is written about shifts in the pumping industry towards networked-sensors and enhanced communications capabilities, we’re seeing a cautious approach regarding the rollout of IIoT-based communications, on an as-needed basis, for each pumping application, in each industry.
Legacy communications systems (such as SCADA) remain adequate for many pumping applications in conservative industries, like power generation, refining and chemical manufacturing, because they provide the required amount of feedback and control, and are much easier to secure than cloud-based protocols.
Many operators today are still evaluating the (potential) efficiency and convenience benefits that might be gained from extending control of pumping applications beyond a plant via the cloud, and they’re measuring these conveniences against the potential threats that could arise via hacks. This is particularly so for applications that impact the public drinking water supply or for applications in sensitive petrochemical environments.
For some applications – such as remote location, or offshore oil & gas, it is clear to see how satellite - or IIoT-based communications can enhance a process. But for other pumping applications (that occur within the walls of a singular plant) the adage - “if it’s not broke, don’t fix it” still applies to addressing their communications needs.
What should we expect from the oil and gas industry in 2018?
On a global scale, increased upstream production in the United States has created an abundance of supply for global markets. While oil prices are stabilizing in the mid-$50/barrel range, it is clear that O&G companies continue to seek ways to lower their break-even point (BEP) to produce refined petroleum products profitably.
In order to lower the BEP, O&G companies will rely upon equipment suppliers to deliver less expensive products that are more reliable and more energy-efficient. For pumping equipment (particularly in offshore environments), the drive to make pumps smaller, lighter, and more efficient - yet still capable of addressing API standards as well as temperature and pressure requirements remains a key objective.
Suppliers that meet this criteria will be rewarded while suppliers that continue to serve customers using older models once supported by higher oil prices will have a difficult challenge ahead.
On a macro-level, the shift towards a lower BEP is beneficial (not just for 2018, but for the foreseeable future) because it has forced the industry to innovate. Over the next few decades, prices will eventually rise, as reservoirs deplete. Eventually, alternative energy sources will occupy a larger percentage of the energy mix - but until that happens, it is imperative that O&G producers continue to innovate, in order to maximize efficiency.
What are you most optimistic about in 2018?
In the power generation industry, we’re seeing a continued global shift away from coal-fired plants, towards natural gas power plants. Legacy coal plants require a tremendous amount of water for the cooling applications. But natural gas plants need far less water to generate electricity, and they are almost 40-percent more efficient. This is why almost all of the new power plants being built in China, India, Africa and other parts of the developing world are standardizing on natural gas combined-cycle (NGCC) techniques. For decades, Pulsafeeder pumps have been used in most of the natural gas power plants in southern California - and the lessons learned at these plants are now being leveraged around the globe. This trend in “repowering” legacy power plants, and building new gas-fired plants in Asia not only represents a business opportunity for diaphragm metering pumps, but it also provides tremendous benefit to the environment – as natural gas power plants emit far less CO2 emissions into the environment, and they use far less water for cooling applications.
Also, we are optimistic about a return to stability for prices in the oil & gas markets. Although geo-political issues may continue to play a role on a small scale, the general trend in the industry is moving towards greater stability – which is critical for planning, and green-lighting new projects. The most recent downturn stalled dozens of projects, not just because of low prices, but also because of the constant fluctuations that hindered visibility. But today, the industry seems to have turned the corner: Oil & Gas prices are rebounding to acceptable levels, and they are being accompanies by a sense of market-wide stability that is imperative for planning purposes.