The ability to monitor flow and pressure build-ups of the multiple phase mixture (oil, gases, brine) through a pipeline in real-time is critical for the safe and efficient transport of fluids from the wellhead to remote production facilities. Because pipelines may span many kilometers along the sea bed, normal maintenance procedures at depths of up to 10,000 feet are costly both in time and resources. In 2001, the sensor technology available to the petroleum industry to monitor these deepwater pipelines for flow assurance was neither reliable nor durable. Failures due to corrosion were resulting in the release of oil and gas, which negatively impacts the environment, causes loss of production, and presented a significant safety hazard. Luna Innovations Incorporated, a small business based in Blacksburg, VA, had begun to develop some fiber-optic-based techniques to address this problem. Their approach, while exhibiting a high degree of innovation, also contained a high degree of technical risk. As a result, the acquisition of sufficient funding to develop the technology to the point of substantial mitigation of the risk was presenting a significant challenge.
and Economic Impacts
Through the ATP project, Luna was able to successfully develop an integrated temperature, pressure, and shear stress sensor based on their patented fiber-optic sensor technology. This integrated sensor can be deployed for point-source measurements at critical locations along the pipeline and is uniquely suited to meet the critical performance parameters expected of devices deployed in the environment. Further uniquely addressing a strong industry need, Luna also developed a sensor that can deliver distributed pressure data along entire kilometers of pipeline. The ability to remotely measure pressure along the entire pipeline has been a ‘holy grail’ of sorts in the oil and gas industry for the following reasons:
- Flow problems can be identified more quickly to avoid plugging and catastrophic failure.
- Maintenance philosophy on production wells and pipelines can be shifted from schedule-based to condition-based, resulting in dramatic improvements in efficiency.
- Hydrocarbon delivery can be maximized.
In 2002, Luna had formed a joint venture, Luna Energy LLC, with Baker Hughes, a Fortune 100 oil services company to facilitate the introduction of the technology into the nation’s production infrastructure. In 2004, because the risks to implementation had been largely mitigated, Luna Energy became a wholly-owned subsidiary of Baker Hughes. Luna Energy’s mandate from Baker is to continue to advance the fiber-optic technology developed under the ATP program. As this occurs, the economic impact already realized – increased oil and gas production, better environmental performance, improved safety profile - will continue to grow under Baker Hughes.
Moreover, the enabling nature of the technology developed with ATP support has also translated into other technical spillovers. The project was originally focused on solutions for hydrocarbon processing, but the sensors are also being used as a feedback mechanism for a drag reduction system for the U.S. Navy. The sensors are able to provide information that enables the minimization of drag on future Navy ships and submarines. Currently the sensors are deployed on two test ships under the Navy X-Craft program and Luna is an active partner in the ongoing development. In addition, the instrumentation that Luna has developed as a result of the ATP program has attracted interest from NASA, Boeing, Northrop Grumman, General Electric, and others for applications ranging from structural monitoring to increased power generation efficiency to noise pollution reduction to enhancing the capabilities of robotic surgical tools. The economic impact in these fields will continue to grow as Luna Innovations commercializes the technology for the respective industries.
The technology developed under the ATP project has been demonstrated to have the following very large economic impact via the joint venture partner, Luna Energy:
- Production of higher producing wells is expected to be increased by up to 350,000 barrels of oil per year
- Taking into account the reduction in maintenance cost and the current value of oil, the estimated effective cost savings is up to $6M per well, per year in the higher producing wells
- Assuming a conservative 25% annual increase in in-service deepwater pipelines and no increase in private property damage rates, the 5-year U.S. annual benefit as a result of the proposed technology may top one-half of a billion dollars
- The formation of Luna Energy LLC resulted in the creation of approximately 30 new jobs
More to the point, given that oil is a commodity that is vital to this nation’s interests, the benefit to the American people of increased production from existing wells is a step toward greater energy independence.
Date created: July 12. 2006
August 21, 2006