How the internet of things is powering the oil and gas industry

Learn how the Internet of Things is being used to connect pipelines, optimize refinery shutdowns, and more in the oil and gas industry.

Jeffrey Lee article author avatarJeffrey LeeNovember 15, 2018
How the internet of things is powering the oil and gas industry

The Internet of Things (IoT) is transforming the oil and gas industry at a rapid pace, with industry experts projecting that IoT solutions could eliminate unplanned well outages, boost crude output by 10 percent over a two-year period, and increase profits by nearly $1 billion for large O&G companies.

In fact, IoT applications in this industry are predicted to increase GDP by as much as 0.8 percent, or $816 billion, over the next decade. With so much potential, it makes sense why 62% of oil and gas executives are developing a digital strategy to transform their business.

In this article, we’ll explain how IoT technology has delivered value for upstream, midstream, and downstream oil and gas companies. While this value can be achieved in a variety of different ways, we’ll examine major IoT use cases for each of the main parts of the oil and gas value chain.

Upstream — Preventative maintenance for remote oil and gas equipment 

A typical large oil and gas company may find itself monitoring more than 50,000 wells and multiple pieces of equipment (small and large) per well. The costs of equipment malfunction tend to cascade. A single malfunctioning machine can slow production, and result in regulatory non-compliance.

Oil and gas, IoT, Particle

Thankfully, IoT technologies are helping businesses protect valuable in-field assets. By examining oil and gas extraction practices, we can see how IoT technologies stand to revolutionize equipment maintenance. Extraction sites are filled with highly complex and expensive equipment. Traditionally, that equipment was safeguarded solely by infrequent and imperfect in-field inspections. Due to their scale and complexity, even minor technological malfunctions can result in reduced efficiencies and significant financial losses.

Now, an inexpensive IoT device can be deployed to remotely monitor equipment, track maintenance schedules, and prevent malfunction. If a piece of equipment begins to malfunction or underperform, the IoT device will instantly issue an automated alert. Doing so will limit losses caused by inefficiency, and help prevent full-scale failures and equipment damage. In this way, IoT devices help transform equipment maintenance from a responsive process into a proactive one.

Midstream — Environmental monitoring and regulatory compliance

IoT-powered sensors can also allow oil and gas operators to adequately monitor environmental conditions and ensure compliance with regulations on emissions and waste. In the past, an oil and gas field agent would need to physically inspect an extraction or processing site to ensure regulatory compliance. Now, an IoT device can be deployed in the field to remotely monitor essential compliance metrics, such as oil leaks and gas emissions.

Oil and gas, IoT, Particle

Not only does this functionality reduce the costs associated with field monitoring, it is also much more responsive. Whereas a field agent may only be able to visit a given site once a quarter, an IoT device can provide constant, up-to-the-minute data in real time. This responsiveness helps limit the extent of penalties when non-compliance does occur. In the case of leaks and emissions, regulatory penalties are often proportional to the amount of materials released. IoT devices could therefore limit an oil and gas company’s exposure to penalties by allowing them to respond to leaks proactively.

Downstream — Enabling distributors with real-time supply chain data

In 2017, nearly 6 million Americans still use home heating oil (HHO) to heat their homes. This oil is typically stored in giant oil tanks and is periodically refilled by licensed oil distributing companies. For consumers, this process of monitoring oil levels, ordering, and refilling is not only inefficient but also cumbersome. However, TankClarity has created a smart sensor that notifies homeowners and delivery companies when fuel levels are low, which saves both parties time and money.

Oil and gas, IoT, Particle

With Particle’s Device Cloud, TankClarity can provide this data to oil distributors, which has become a primary revenue driver for them. Distributors are also using this information to help predict consumer consumption in future weeks, months, and years. Real-time data has helped TankClarity improve their relationship with oil distributors and create an ecosystem that is valuable to customers and suppliers.

How to start your IoT journey

The oil and gas industry is incredibly large and complex, which means there is no one-size-fits-all IoT solution. However, Particle provides all the tools you need to develop a customized IoT solution that works for your specific business problem.

Developing your own connected device has a few key benefits. First, you can easily customize and tailor a solution to meet your organization’s specific needs. You will not be tied to a rigid system that cannot adapt to your fleet’s evolution and shifting requirements. Second, you can scale new revenue channels by having open access to any business or performance data you need, and integrate these data streams into your existing analytics platforms.

Starting your own IoT project may seem challenging or near impossible (as a matter of fact, nearly three-fourths of self-initiated IoT projects are considered a failure, while a third of all projects were not seen as a success). The two biggest contributors to the failure rate are: lack of internal IoT expertise and platform (hardware/software) reliability. With Particle, you have full access to IoT experts, a large community of IoT enthusiasts, support services, and professional engineering services (Particle Studios) to help you get your IoT projects off the ground. Additionally, you will be building on top of an enterprise-grade, production-tested IoT platform used across the industry.

Start your journey by checking out Particle’s hardware development kits on the Particle Store, or contact our team of experts at to discuss solution development. To learn more about how IoT is powering the oil and gas industry, check out the complete report here.