Safehub’s Sensor Solution Mitigates Downtime and Increases Safety for the Oil & Gas Industry
When an earthquake hits, refineries and power plant operators face a series of complex issues, ranging from continuity of operations to safety of staff and the local community. Plant managers confront the challenge of balancing the risk of maintaining operations, with protecting their employees from unknown hazards that may arise from facility damage. Safehub’s sensor technology provides actionable insights after an earthquake, helping to reduce downtime and increase safety by giving decision-makers location-specific damage estimates for all operating units in a plant.
The Need for Sensor Technology in the Oil and Gas Sector Is Imminent
There are currently 732 operating refineries worldwide. Together, they refine between 82-83 million barrels of oil each day. In the United States, almost half of the refineries are in areas where earthquakes occur, with 15% percent located along the west coast – an earthquake hot zone.
Even minor earthquakes can lead to significant financial losses for these refineries.
For example, in 2020, two of Marathon Petroleum Corporation’s refineries in California were hit by a 4.5 magnitude earthquake, requiring them to shut down multiple units to assess the integrity of the equipment and ensure they avoided any spills or releases.
The two affected refineries produced 160,000 barrels and 157,000 barrels per day when they were hit. The second refinery returned to regular operation relatively quickly, but the first one took more than eight hours to resume operations. From a cost perspective, eight hours is a significant amount of time to cease refinery operations.
According to the American Institute of Chemical Engineers (AIChE), a U.S. refinery that produces 80,000 barrels of oil daily can expect to lose between $340,000 to $1.7 million each day their refinery is not operating.
The financial impacts of halting refinery operations are evident. However, with so many refineries located in areas where seismic activity occurs, the priority is to incorporate proactive solutions providing concrete data that can inform decisions around minimizing downtime when an earthquake occurs.
Safehub can assist refineries in reducing unnecessary downtime and expediting their business resumption.
Safehub Sensor Technology Offers Immediate Insight After Disaster Strikes
Following an earthquake, plant operators and management often find themselves asking questions like:
- Has damage occurred to equipment or structures in any operating units?
- What hazards do continued operations pose to plant staff and the surrounding community?
- Does this incident require escalation and evaluation of units for structural damage?
Safehub uses IoT sensors and analytics to provide structure- and equipment-specific data immediately following an earthquake, including but not limited to:
- Immediate texts and emails specifying which facilities were affected by an earthquake.
- Color-coded indicators showing which facilities did not incur damage, and those likely to have been damaged.
- Detailed data analytics on any facilities that were affected, whether damage occurred or not.
- Recovery time estimates if damage is detected.
- Projected financial loss if damage is detected.
This data makes it possible to obtain a snapshot of the damage before an onsite investigation, helping leaders develop strategies to minimize business interruption.
When installed throughout a refinery, operators obtain immediate insight on the functional state of key structures and equipment, allowing them to make objective decisions following an event.*
This unique, asset-specific data allows the company to make informed decisions aimed at avoiding unnecessary business interruption and significant profit losses when earthquakes strike.
Calculating the Potential ROI for Safehub Sensors
How much can Safehub save companies in the energy space?
To understand the return on investment of Safehub sensors, we must first calculate the potential loss associated with one earthquake.
What is your estimated downtime cost per day per facility?
(Daily downtime cost x # days down = Total potential losses)
Losses associated with plant outages and downtime can quickly add up from hundreds of thousands of dollars per hour to millions per day. Safehub sensors allow operators to avoid spending unnecessary time on decision-making and inspection, protecting the plant from operational losses and easing liability concerns. The price of Safehub sensors varies based on the size of a plant and number of operating units fitted with sensors; however, the annual cost (averaging $10-$20K) is significantly lower than potential losses incurred from an unnecessary shutdown.
If a single earthquake strikes and the sensors immediately determine that no damage occurred, operators can easily save hours or days during their earthquake response*, providing an ROI of more than 10X per event. If the refinery is located in an earthquake-prone region – like California, which is hit by earthquakes thousands of times each year, or Japan, which records approximately 1,500 earthquakes annually – the potential return could easily be in the millions of dollars per year.
Increasing Safety with Insight to Unseen Damage
Often, the layout of an operating unit makes accessibility to critical equipment challenging. Piping, instrumentation, fireproofing, and cable runs can obscure an inspector’s line of sight and make conducting a visual assessment virtually impossible.
Safehub sensors provide detailed information about damage to facilities that may not otherwise be easily detected, helping decision-makers make informed decisions about refinery shutdown caused by functional or safety concerns. In addition to reducing downtime, sensors allow plant management to save on costs like scaffolding, survey, and inspection.
Having building-specific data provided by Safehub Sensors would prove invaluable to the oil and gas industry for increasing safety by allowing facility managers to escalate emergency response if unseen structural damage was detected by the sensors after an earthquake.
*Sensor data provided by Safehub does not account for necessary downtime due to power outages or routine flaring processes.
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