TRLs gauge progress on technology, commerciality

Investors may invest in the development of new ideas, expecting a high return on their investment by rationalizing that since the risks are high, so must be the rewards. In reality, many new ideas do not work commercially for various reasons that are sometimes not readily apparent when starting on a path to develop new technologies. Moreover, it is through fits and starts, trial and error, and much iteration that some new ideas have historically flourished to become worthwhile advances on the status quo. If, for example, a manufacturer believes his widget is ready for commercialization, he had better be certain that his potential purchasers and end users share his thoughts, quite apart from any consideration of technical readiness levels (TRLs). The oil and gas industry is littered with well-intentioned technologies that have been shelved because end users were not convinced of the products’ readiness or value.

That said, TRLs may help as a useful marketing tool to show that widget’s readiness. A TRL voting exercise can serve as a reality check by removing much of the subjectivity, not to mention personal enthusiasms, from the equation. It may even result in a complete change in business plan.

Marine technology development

Determination of TRL figures was part of a RPSEA project on deepwater direct offloading systems by Remora’s HiLoad DP equipment. Remora A.S. is the Norwegian originator of the technology, working on it since 2001 and patenting the HiLoad DP device as a system to more safely and efficiently transfer crude oil from storage on an FPSO vessel to a shuttle tanker so that the latter vessel could transport the crude to an onshore processing facility.

FIGURE 1. TRLs were used to gauge progress during a RPSEA technology development
project, with a projection for TRL three years later. (Source: RPSEA)

Although subjected to model tests and field trials, the technology had not yet been fully evaluated for the U.S. Gulf of Mexico’s (GoM’s) deepwater environment. The project objective was to evaluate the suitability of the technology as a preferable operating and economic alternative for offloading crude in GoM deep waters, determining if it would meet U.S. GoM requirements to enable functioning successfully for both steady-state production situations and in standby roles for emergency situations.

Two TRL votes were conducted: one early in the project Jan. 9, 2013, and the second at the end of the study Sept. 5, 2013. The voting panel was comprised of people from operating companies (end users) and nonoperators, all familiar with offloading operations and fully briefed on this project. All individuals were deemed qualified to vote (generally 15 to 35 years industry experience), with a composition as follows:

The same individuals were polled in the second votes, but only eight voted. Each voter was asked for an assessment of TRL based on the RPSEA TRL scale. The development of marine technologies such as offloading is known to be historically slow, so voters also were asked to give their assessment of TRL at some point three years in the future, assuming all goes well in the operation of a HiLoad DP.

The results of the voting are shown in Figure 1. The operators were more conservative than the nonoperators, giving TRLs that were lower. In the second vote that trend reversed a little:

After nine months of thinking about it and reviewing further engineering design, operations, economics and environmental work, the operators had increased their TRL assessment by half a TRL level and the nonoperators by about a fifth of a TRL level. It did seem to be a perceptible increase but, as these studies went at RPSEA, it was not very much considering the expectation had been to increase TRL by one or more levels as a result of the RPSEA process and funding.

Looking into the future for three years, it was interesting to see how the consensus was that even after three years of successful operation, an offloading technology would still be a half level from being fully accepted and proven (i.e., TRL of 6.4 instead of 7), which gave an insight as to how slow-moving and conservative the marine business can be. If that had been a downhole device for drilling operations, one doubts there would be any question at the end of three years of successful operation that the device would be fully proven and a TRL 7.

Example 1 shows: (a) how this particular study effort was not very effective in advancing TRL and (b) the use of TRLs on a technology that involves large capex, estimated at $132 million for a typical U.S.-built unit for a GoM application.

Subsea downhole production technology

“Intelligent Production System for Ultra-Deepwater Short Hop Wireless Power and Wireless Data Transfer for Lateral Production Control and Optimization” is the name given to a novel system for providing controls and power to downhole subsea production systems in a radically simpler and more economical way than current hardwired systems. While the capex required is much less than in Example 1, the potential payoffs are a high multiple.

This technology is attractive to the offshore production community as it may simplify subsea operations and offer substantial overall economies well beyond the capex of an embodiment of this technology.

TRLs for examples 2 and 3 were established by RPSEA staffers and not an independent voting panel as in Example 1. In Example 2, the technology was shown to work in other oilfield and industry experience but was not proven in subsea or deepwater, which together posed serious new challenges. This RPSEA project succeeded in proving downhole live operations in onshore wells. At this point the TRL was deemed to start at a 2, and afterward the project reached a TRL of 5. Subsequently, the product has been tested by an unnamed operator, commercialized and is now being used in several wells. It also is being developed for higher temperature applications, implying some increase in TRL.

It was developed by Tubel Energy, a small Texas company, with support from the University of Houston.

Subsea inspection technology

The “Autonomous Inspection of Subsea Facilities” in this example responds to the growing need for subsea inspection of wellheads, subsea flowlines and seabed pipelines. In contrast to Example 2, it was developed by a very large corporation (Lockheed Martin), with the RPSEA study effort providing needed petroleum industry inputs in addition to the objective of advancing the TRL.

The value of using an AUV was first seen in the U.S. Navy and then in oceanographic communities, which encouraged the adaptation for petroleum industry requirements.

Once again the progress with TRL was dramatic, going from the initial stage of between TRL 2 and 3 to a test system operated in a live production situation in 76.2 m (250 ft) of water in the GoM inside 18 months. The final test arrangement was judged to correspond to a TRL between 5 and 6, implying once again that a shift of three TRL levels was achieved, going from 2.5 to 5.5. Within a matter of months the production version of the AUV was routinely operating at depths of up to 305 m (1,000 ft), and newer versions are expected to extend it to 2,438 m (8,000 ft) in the near future.

The capex in a production environment would be about $0.7 million.

Comments on results

Funding for Example 1 did not do much to advance TRLs, but for examples 2 and 3, the funding appears to have had a dramatic effect. That “moving the needle” may be of value in determining what additional investment should be made before the technology is widely applied in the field as well as represent a signal to operators how far the technology may be from actual trials and use.

That downhole device or survey tool might cost less than $1 million to buy but may ultimately be supplied and put in service hundreds of times and might become an enabler for many further savings in field developments. For example, the TRL may be a valued signal for commercializing an attractive technology.

Alternatively, with the quantitative indication from TRLs, the payoff may be judged not an attractive enough proposition to make the technology funding investment.

Historically, while TRL ratings may not have been explicitly used in the petroleum industry for making investment decisions, the judgment of seasoned industry experts was first employed and then calibrated by operating company feedback and comments to arrive at as careful an assessment as possible of the technology to fit market needs. That process has often been one of selection with best available judgments in the absence of the new logic of the quantification technique that TRLs can offer.

TRL conclusions

• TRLs are a frame of reference giving a useful quantitative assessment, better than a focus group or market research but not a perfect or absolute number;
• If used consistently, TRLs can be useful in gauging development progress and appear particularly useful when applied in small capex projects that may be of fairly complex technology;
• While employed as a known tool by technology developers, TRLs have broader practical value for business and management decisions;
• TRLs can act as a metric to differentiate among various options, to decide where and how much one should spend on related new technologies and assist technology developers in determining areas of weakness or needed improvements;
• In the world of the big crew change, TRLs may offer a way to codify available judgment to a similar end result, offering a metric that can be understood readily across different types of technologies and across different funding entities; and
• Since TRLs appear to gain importance as a function of larger capex and when safety is imperative, perhaps the onshore oil and gas industry should consider using TRLs since its associated costs and safety issues are on the rise while at the same time new and more complex products are being developed and marketed.

Acknowledgment
The authors are pleased to have the permission of RPSEA to cite the frame of reference of RPSEA in using TRLs and the experience with the specific RPSEA projects referred to.