In the August issue of American Oil & Gas Reporter, we discuss Real-Time Data and how innovative technology is the key to having the most efficient Last Mile Operation.
Only 12 percent of Fortune 500 companies from 1955 are still in existence. How and why has that happened? Technology continues to disrupt legacy behemoths. Data and the story they tell are vital to the current and long-term success of any product, service or company. Predictions say by 2020 there will be 50 zettabytes of stored data. That is the equivalent of 50 billion 1.0-terabyte disk drives. By 2030, that number is expected to increase by an order of magnitude. The central promise of big data is that it provides a better way to gain insights into the real-world challenges businesses face every day.
In the past, collecting and interpreting vast quantities of data was not feasible because the technologies automating that process did not yet exist. Today, innovative big data and digital-enabled technological solutions are changing that status quo in increasingly complicated last-mile logistics in the proppant supply chain.
Proppant consumption per well in the United States has doubled during the past five years and quadrupled in the past decade. The percentage of the cost for proppant delivered to the blender in a modern hydraulic fracturing operation can account for 20-25 percent of total well cost, up from a small fraction only a few years ago.
“How can oil and gas companies be assured that “smart” containerized sand delivery is effective, flexible, and more cost-effective than traditional pneumatic or silo operations? The answer is in the data”.
Oil and gas companies are undergoing a digital transformation driven by an explosion of collected data, yet many organizations and legacy processes simply cannot keep up with or leverage all the data being generated in the field. The nature of a completion operation is inherently erratic. Daily proppant demand at a well site will increase or decrease regularly from what was expected and planned for at the job’s onset. Allocating and assigning resources to supply a well site that is so inherently inconsistent takes extraordinary agility, flexibility and attention to detail.
When managing inputs from multiple railroads and multiple transload facilities, combined with erratic wellsite daily demand, the supply chain team must be equipped with the tools to make necessary adjustments on the fly. A single hour of downtime waiting on sand can cost an operator upwards of $20,000. An effective last-mile delivery operation is more critical than ever to a fracture treatment’s success and profitability. Accordingly, the companies responsible for transporting, storing and delivering proppant must understand the value of organized data and provide operators with the resources and analytics they need to identify and solve the unique problems inherent in last-mile operations.