Exclusive Interview with John Cannizzo, founding Chairman of cautiosystems, Inc., a private company.
Friday, after the close of a very volatile week in the global stock markets (post-Brexit) I happily sat down with John Cannizzo, the founding Chairman, President and Chief Technology Officer of cautiosystems to discuss the importance and benefits to the industry, community and our planet about his ‘disruptive’ work in the field of energy security in the world;s Oil & Gas fields, and refineries, what happens and how.
Q: John, what is the Internet of Things (IoT)?
A:Paul, while there have been sensors collecting data for many years, only recently has the Internet been used to transfer that data. Early attempts simply used existing sensor systems, including SCADA, and then added an Internet attachment “box” to use the Internet to transfer data.
The Internet of Things is a new class of devices which directly collects sensor data and communicates that information with a host over the Internet. More than a one-way communication of sensor data, the data exchange is often two-way and can effect a change of operation at the remote IoT device.
Q: With predictions of huge market sizes for IoT, why are there so few viable implementations?
A: Predictions of IoT market size range from a low of $300 Billion to a high of $19 Trillion by 2020. You can bet with that much at stake, there are some major players working on a solution. Names such as AWS (Amazon), Cisco, Dell, Ericsson, GE, Google, HPE, IBM, Microsoft, Oracle, Salesforce, SAP, and many more are working on solutions. The question is, solutions for what? The applications range from commercial sensor networks to connected children’s toys. When you’re trying to be all things to all people, you often lack the focus to provide a viable solution to anyone. A few certain things are that chip vendors are announcing products targeted at the IoT market almost daily, and that IoT produces huge amounts of data. Knowing how to apply all the new IoT silicon products, and how to store and make sense out of all that IoT data are just a few of the keys to success in the IoT market. cautiosystems has the skill and the focus to provide the right IoT solution today.
Q: Why did cautiosystems choose Oil & Gas as their first IoT market?
A:The global market for oil worldwide is about 95 Million barrels per day. At $50 per barrel, the daily market is $4.75 Billion per day, or $1.73 Trillion per year. With such a large market, it is surprising that most oil fields still use technology that is 20 to 100 years old. While there is huge spending for oil exploration and refining, getting the oil out of the ground is surprising archaic. With the big motors or hydraulic drive powering the pumps, and their bearings and connecting rods, when breakage occurs it is often extensive and costly. Not only is breakage expensive to repair, it can take days, weeks, or even months. Sometimes the well must be re-drilled, costing hundreds of thousands to millions of Dollars. With all that downtime, there is no oil being pumped. So not only is the breakage expensive, the cost of downtime for a 500 barrel per day well is $25,000 per day or $750,000 per month. Part of the cautiosystems function is to detect problems before they occur and alert operators so that preventative actions can be taken. Another issue facing the Oil & Gas producers is theft. Theft from the oil field averages 18% across the U.S., and reaches 28% in some areas. It is much higher in other parts of the world.
Only cautiosystems integrates surveillance and anti-theft technologies into its systems to prevent theft and catch thieves in the act.
Q: With all that sensor data and surveillance video, how can anyone keep up with it?
A: The cautiosystems technology was designed from the beginning to be easy to use, even with no technical staff. While a customer can view any sensor or surveillance data at any time, the system will automatically alert a customer via email, phone, text, and/or on-screen if there is a potential issue. Since the system is Web-based, it can be operated from and alerts received by any intelligent device connected to the Internet, such as a PC, tablet or cell phone. Advanced analytics make the operation of such an advanced system simple.
Q: Isn’t all this technology expensive?
A: Not at cautiosystems. While existing SCADA vendors aren’t in the habit of updating us on their prices, we know a vendor with a name we all would recognize charges $200,000 and up per well to install their system, and they charge more per month than cautiosystems charges in two years. Not only does cautiosystems bring the latest, most advanced technology to the oil field, the price is affordable for any oil producer.
Q: cautiosystems claims it is an environmentally friendly company, yet your firm work with Oil & Gas, how is that possible?
A: Despite the reputation Oil & Gas companies have, all these companies want to comply with environmental laws and regulations, and often spend enormous amounts of money to do so. cautiosystems makes it less costly to protect the environment, and provides capabilities that simply aren’t available anywhere else. Our explosive gas sensors offer lab quality readings that will automatically alert operators when (for example) methane levels rise, and even close valves or take other protective actions. Not only do methane leaks cause explosions, methane is a greenhouse gas with 21 times the global warming potential of carbon dioxide. So yes, cautiosystems helps our Oil & Gas customers be more environmentally responsible. Our pressure and flow sensors record even small changes in pipelines. If a theft attempt occurs or a pipeline leaks or breaks, alerts are sent. The system can close valves to prevent ongoing oil loss. Most of the oil-related environmental disasters across the globe have been caused by a ruptured pipeline, and cautiosystems could have prevented or limited the effect of them. Preventing oil spills and limiting greenhouse gasses protects the environment and cautiosystems is proud to be a part of that.
Q: cautiosystems prevents breakage, downtime, and theft, what else do they do?
A: cautiosystems provides a complete oil field management system. Maintenance logs allow a customer to track regular maintenance, repairs and upgrades. A variety of reports are available covering sensor data, flow rates, surveillance data, and many others. Every installation includes a GPS sensor that automatically maps the customer’s well locations and assists the customer in other geolocation services. As many oil producers are partnerships, full reporting is available to partners showing oil sales, the partner’s share of that sale, and all other matters related to the operation of that partnership. Now the transparency that oil investors have longed for is available from cautiosystems. Advanced analytics take data across longer periods of time and across multiple customers to further reduce costs and limit downtime.
Q: cautiosystems says they can prevent theft, but other than staring at surveillance screens, how is this possible?
A: We at cautiosystems design and build our own surveillance cameras to guarantee the quality and feature set. These cameras are beyond normal surveillance cameras. They detect motion in an intelligent way. For example, a tree branch blowing in the wind is ignored, but a person or vehicle is detected. The included facial recognition detects who should be on the oil field and who should not. Even an employee, who is normally at the oil field during the day, but shows-up at 3:00 AM, will be detected and alerts sent. Pressure and flow sensors are used to insure that the oil that leaves the well, arrives at the separator (an apparatus that removes water, mud, and other contaminants from the oil), and then arrives at the tank. Tank level and flow sensors along with time and surveillance insure that oil is only removed from the tank at scheduled times, the amount of oil removed makes it to the refinery, and that full payment is recorded. Attempts to remove oil from tanks at unscheduled times, or by any other method, causes alerts to be sent. Surveillance cameras are automatically moved to visually record any attempt at theft.
Q: What if my wells are far from a town or any way to access the Internet. How can the cautiosystems equipment work?
A: cautiosystems’ installers work with customers to insure they can get an Internet connection. All cautiosystems equipment is Internet connection agnostic, meaning wired, wireless, cellular, or satellite Internet connections are supported. The satellite system provides connections from any point with a view of the sky anywhere on earth.
Q: John, SCADA systems have a lot of expensive equipment to buy, and it’s difficult to install and use. How is cautiosystems different?
A: Paul, with cautiosystems, there is nothing to buy. The installation fee includes all equipment and cautiosystems repairs or replaces any defective equipment. cautiosystems even provides upgrades. Installers trained by cautiosystems make sure everything is working, insuring the customer’s experience is trouble-free. The install fee is about 1/10 of traditional SCADA suppliers.
Thank you John, and have a terrific 4th of July Holiday.
All the best, Paul Ebeling, Analyst HeffX-LTN
About John Cannizzo, PhD
John is Chairman, President and Chief Technology Officer of cautiosystems, Dr. Cannizzo is a senior executive/technologist/engineer and was Director of Advanced Technologies at Konica Minolta for 15 years where he reported directly to the Company’s Board of Directors.
Dr. Cannizzo is directly responsible for most of the basic technologies that are used by the company today, e.g. print controllers, proprietary controller architectures, proprietary print imaging firmware, proprietary network and I/O protocol stacks, and parallel processing and chip architectures.
Among the accomplishments were Minolta’s 1st internally developed printer which led to nearly all of their current products; their network protocol stacks that were the fastest in the industry and included embedded Active Directory, embedded security certificates, SSL printing, scan to email, and other advanced features; created a parallel print controller that averaged over 400 pages per minute; and taught other groups across several divisions advanced chip and controller architectures.
With his father’s life-long participation in the Crude Oil, Nat Gas, and petrochemical industries, Dr. Cannizzo participated as a consultant to several projects. Oil exploration, exploration techniques, geothermal power, valve design, instrumentation design, refinery operations, bio-fuel research, organic photovoltaic panel design, and urea procurement/shipping were just some of the Oil-related areas he John participated in.
With his science and technology background, Dr. Cannizzo brings a unique perspective to the Crude Oil and Nat Gas business.
John is a former President of the Ferrari Club of North America, and a Club Director for the past 20 years.
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