The Role of satellites in oil and gas pipeline monitoring for leak & theft detection

A number of media stories recently converged to highlight the vulnerability of oil & gas pipeline infrastructure and the role of remote monitoring in preventing future incidents. A number of media stories recently converged to highlight the vulnerability of oil & gas pipeline infrastructure, the dramatic costs of these exposures to energy companies and the role of remote monitoring in preventing future incidents.

While most eyes were focused on the thousands of litres of crude oil spilling into the streets of Los Angeles, north of the border the Canadian government announced that pipeline companies will be liable for all costs and damages related to oil spills, regardless of whether they are at fault.

The bottom line is that energy companies need to think even harder about the short and long-term impact of pipeline incidents, and how they can be prevented moving forward.

Today’s Pipelines: The Good, the Bad and the Preventable
Current events do not change today’s reality that pipelines are critical energy infrastructure enabling the transport of crude oil from source to refinery and back to the distribution network. Not to mention the fact that that it is often cheaper and quicker to transport crude by pipelines. In fact, according to an estimate by the American Congressional Research Service, pipeline transportation costs about $5/barrel versus $10-$15 by rail.

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While anti-pipeline advocates often point to safety concerns, a recent magazine article pointed that, since 1996, more than twice as many barrels of crude oil have been spilt while being transported by tanker trucks compared to pipelines.

Regardless, it is headlines like the recent Los Angeles oil spill that make it easy for people to object to pipelines on the grounds of environmental and public safety. It is just the latest in a list of similar incidents in both remote and residential areas, including:

Mayflower, Arkansas: In March 2013, a reported 5,000−7,000 barrels of crude spilled into a local neighbourhood, wetlands, and lake. Local residents were forced to evacuate their homes and there were many reports of harm to both human health and local wildlife. Cleanup efforts are ongoing, and many residents still have not been able to return home.

Prudhoe Bay, Alaska: In March 2006, 200,000 gallons of oil spilled from a BP pipeline onto the Alaskan tundra. Since the leaking oil was covered by the winter snow, it remained undetected and wasn’t until a worker smelled the odor that the leak was discovered.

Mexico: In December 2010, an oil pipeline in San Martin Texmelucan, Mexico exploded when thieves were attempting to steal oil from it. The explosion killed at least 27 people, injured 52 and scorched more than 115 homes. One Mexican energy company discovered 1,421 illegal fuel taps in the first six months of 2013, accounting for 2.7 million barrels of fuel and billions of dollars in losses.

Nigeria: In January 2013, at least three people were killed after a pipeline explosion caused by thieves trying to tap a pipeline outside Lagos. This is just one example of the 150,000 barrels of crude stolen every day in Nigeria, accounting for around $6 billion in losses annually.

Oil Theft: A $37 Billion Problem
The numbers around fuel leaks and theft are astronomical when looking at individual problem areas, but are positively staggering when combined on a global scale. One source estimates that global losses in theft from pipelines and other sources top $37.23 billion:

The numbers around fuel leaks and theft are astronomical when looking at individual problem areas, but are positively staggering when combined on a global scale.

While most assume that illegal taps are make-shift operations, many pipeline theft operations are incredibly sophisticated, involving secondary underground pipelines that route product miles away from the eyes of energy companies.

Revenue Loss from Pipeline Breaches in the U.S.
Like fuel-theft, unintentional pipeline breaches are a real-headache for energy companies in the U.S. and abroad. Pipeline breaches can happen for a whole host of reasons, including corrosion, material failures, incorrect operation, excavation damage and natural forces, to name just a few.

If energy companies ignore these breaches, they do so at their own peril, and run the risk of facing the high costs of environmental clean-up costs, regulatory fines, lawsuits and damaged reputation.

According to the US Department of Transportation Pipeline and Hazardous Materials Safety Administration, corrosion accounts for 20% of significant pipeline incidents. The leak in the Alaskan tundra was reported to have been caused by internal corrosion that had created a quarter-inch hole in the bottom of the transit pipeline. The resulting leak meant that BP was forced to pay millions in cleanup and restitution costs, including $255 million to the state of Alaska.

Material and weld failure account for another 20% of the pipeline breaches. It has been reported that the Pegasus pipeline that leak near Mayflower has had seam failures during pressure tests. The Mayflower leak has cost ExxonMobil more than $70 million in damages.

Pipeline Monitoring Solutions: A Case Study in Prevention

Pipeline Monitoring Solutions: A Case Study in Prevention
The solutions related to pipeline leak and theft detection are as varied as the problems, and can include visual inspections, protective coatings, “pigging” and cathodic protection systems among others.

One energy company in Latin America has adopted a different kind of remote pipeline monitoring solution that uses high sensitivity pressure sensors placed at the infeed and outfeed of pipelines to detect changes in pressure that may indicate a leak. Since the system relies on high sensitivity sensors rather than flow meters, it can detect smaller variations in pressure which means it can detect smaller leaks.

The system relies on satellite communications where cellular or radio are typically not available. Since only processed data and results are being transmitted, the energy company was not required to install a satellite broadband system. Instead they opted for an L-band based satellite telemetry system that was lower cost, more reliable and secure.

Every five minutes, encrypted data is sent from the remote monitoring stations via satellite to the pipeline monitoring service. Immediacy is crucial as in the case of an illegal tap, it can take less than 15 minutes to fill a tanker. In the event of a leak, the system immediately notifies the operator via email, SMS or Web that a leak has been detected at a specific location.

The solution led to the discovery of 300 events (included 15 illegal taps) detected over just 40 kilometers of pipeline in a three month span. The system can pinpoint the location of the leak within 200-300 meters of the actual leak which makes repair activities much easier. All the data can be integrated seamlessly to the existing SCADA system.

Why L-Band Satellite for Pipeline Monitoring?
One of the aspects that makes the above solution unique is the choice of a satellite system that uses L-band frequencies. L-band satellite technology was chosen for this (and many other oil & gas and SCADA installations) for a number of reasons including reliability, low initial investment in equipment and infrastructure as well as low monthly communication and maintenance costs.

The energy company’s L-band satellite terminals also require very little space to install, do not require pointing, are inconspicuous, programmable, mobile and are not affected by rain.

The Long and Short of Pipeline Monitoring
With losses due to leaks and theft climbing into the billions, and incresed public scrutiny around incidents in the U.S. and abroad, energy companies need to implement solutions that monitor flow through pipelines, reduce risk, and protect people and profits.

While it’s difficult to say if innovative pipeline monitoring solutions could have prevented the incidents discussed in this article, smart & cost-effective options exist that energy companies can leverage to minimize risk while reducing total cost of ownership. Only time will tell if these solutions will be adopted to reduce the flow of pipeline leaks and theft, and the inevitable stream of media headlines that ensue.


Anu Sood is the Global Channel Marketing Manager at SkyWave Mobile Communications, a pioneer in the M2M market. She is responsible for working with partners around the world to develop, promote and market their unique satellite-based M2M solutions and leverages nearly two decades of technology expertise in the telecommunications, software development and satellite industries.

To learn more, listen to Anu’s on-demand webinar, “Remote Monitoring for Leak & Theft Detection”.

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