Efficiency and Security for the Energy Industry FEATURE
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The energy industry, from oil wells to electricity in your home, benefits from complex communications within its system. IoT is making it more efficient and safer.

The move to the Internet of Things (IoT) is getting a lot of support from the energy production and distribution industry, probably for the simple reason that it has more to gain than anyone else. The industry's operations are vast, widely spread out, and frequently operate without supervision from human eyes. Failure can be costly and dangerous. There's always a threat of fire and danger of toxic substances from the oil and gas well to the factory and the home.

IoT and even the internet itself has not been used for industrial communication for that long. Most energy industry operations go back to a computerized communications since the middle of the 20th century: supervisory control and data acquisition, or SCADA. A SCADA system links all of the devices--say all of the oil wells, storage tanks, pumps, and other devices in a field—to a control center, generally using a communications method designed specifically for it.

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But SCADA has some major problems. No matter how SCADA communicates with all of devices within a system, there is often no way built in to have the systems talk to each other. The hub-and-spoke approach, in which SCADA devices can communicate with each only by routing messages through the control system, can be both complex and inefficient. Connecting SCADA setups to the internet usually requires custom software to get them talking to each other and requires extreme caution to prevent attackers from monitoring the traffic or breaking into a system (there is fear of danger of hackers getting into SCADA systems through the internet access of PCs, even if SCADA has no intended internet connection.)

Internet of Things Provides Cost Savings With Real-Time Data

Fielding Services, an oil and gas field service company, says of the IoT: "For the oil and gas industry, it enables a new era of situational awareness at a time when it is needed more than ever. Less experienced field personnel can step into the ranks faster when they are supported by sensors and information presented to them in real time when they walk onto a well pad or into a processing facility. Technology will find a way to connect and share information.  IoT is huge, topping out at 2 trillion and estimated to reach 7 trillion by 2020. IoT will touch every industry, including oil and gas."

IoT can improve energy efficiency through application in just about any area. Belayim Petroleum Co. (Petrobel) in Egypt is using IoT on rigs in the Mediterranean off the Nile Delta, allowing production management and troubleshooting to be managed from an on-shore control center. (The system uses Cisco First Mile Wireless and United Communications to link the rigs to headquarters.) The result is an estimate savings of $125,000 per rig per month.

How Retail and Consumers Benefit from IoT

On the retail side, gas stations are important users of IoT, from reporting their fuel balance to processing sales by getting payment information from a mobile phone. Verdeva's Efficient Vehicle Assessor provides features that offer pay-as-you-drive service and makes installment payments on tickets. The goal is to save time and money while minimizing the exposure of drivers. The system can also be used to notify insurers on driving mileage without tracking vehicles (this would also require owner's agreement.)

Heating and oil consumption in homes has yet to be captured by IoT services, but they have a considerable indirect control on petroleum consumption by saving electric utilities requirement increasing the efficiency of residential use. People Power in Palo Alto has designed a system that allows home residents to use an iPhone or Android phone to control a considerable range of electricity-consuming devices. It has started a variety of consumer services, including one in Oahu, Hawaii. "It will help you save money on your energy bill and cut down on energy pollution on Oahu," People Power CEO Gene Wang told the Pacific Business News. Organizers say the IoT installation can lower residential cost by 20%.

Improvements in Security Needed

IoT implementations have a two-sided effect on security. Key IoT facilities are designed to detect and help prevent dangerous developments, such as leaks. But they must also be designed to prevent snoopers and hackers to break into the system and steal data or, worse, steal control and cause damage. Cisco, for example, is engineering safety for many systems including energy: "The Cisco Secure Ops Solution is a next-generation cybersecurity, secure-access, and compliance solution for critical infrastructure. The solution provides a highly secure industrial automation and control systems environment to protect workers and facilities in the energy industry. Delivered as a managed service, the Cisco Secure Ops Solution combines on-premises technology and processes to implement and maintain layered security controls."

Improvement in security of all IoT applications is needed. A report overseen by Sen. Ed Markey (D-Mass.) found that wireless phone connections or built-in systems such as General Motors' OnStar can provide contact to control systems in the car. Possibilities include "causing [vehicles] suddenly accelerate, turn, kill the brakes, activate the horn, control the headlights, and modify the speedometer and gas gauge readings." A gas well or an oil refinery has different links among communication systems than a car, but in their cases too, allowing attackers to sneak into an IoT control through a vulnerable connection.

IoT use offers great improvement in both control and security by providing greater capability and eliminating the vulnerability of SCADA systems once penetrated. But the advances require through, precise, and accurate security installations to avoid the risk of protecting the dangers of old systems only by accurately creating new ones.

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About Steve Wildstrom @swildstrom

Steve Wildstrom was a veteran technology journalist who wrote the Technology & You column at BusinessWeek.