Monday, April 08, 2013

The Case for Simulation-Based Training in the Oil and Gas Industry

A recent white paper put out by GSE Systems titled, The Case for Simulation-Based Training in the Oil and Gas Industry, Upstream and Downstream, highlights the many benefits and advantages of training simulators within the oil and gas industries. With a focus on the shortage of skilled workers in the field, and companies needing to attract and retain skilled operators, the study concludes that training simulators are an essential tool when it comes to evaluating new hires and improving the learning experience for the younger generation. When it comes to training, the oil and gas industries face many challenges in terms of cost, risk, and safety. Training simulators help companies overcome these hurdles by providing safe, risk-free virtual training environments where operators can repeatedly practice for difficult operations they will have to preform without error in the real-world.

Oil and Gas Simulator-Based Training
GSE White Paper: The Case for Simulation-Based Training in the Oil and Gas Industry

The report discusses the skills gap in the oil and gas industries, looking at the causes and characteristics, and how simulation-based training can help fill the gap, as well as provide operational and financial benefits to companies. Jim Eberle, CEO of GSE Systems, says:
"Statistics show that U.S. universities are producing only about 20 percent of the engineering graduates they did 20 years ago. Thus, the petroleum industry needs to train its recruits better and faster on systems that are more complex than ever before. They also need to make sure that they retain those recruits over the long term. New innovations in simulation-based training will allow industry trainers to accomplish these goals in less time with lower costs."

The report compiles a number of statistics that paint a clear picture of where the cause of the personnel shortages in the oil and gas industries are coming from. The World Energy Council forecasts that energy consumption will double by the year 2050, so the oil and gas industries will need to significantly increase their workforce to match that demand. However, The American Association of Petroleum Geologists reports a 70-percent decline in the enrollment of students in geoscience programs in the last 40 years. Coupled with a report by the Cambridge Energy Research Associates that states that half of all engineers will retire by the year 2015, the need for an efficient method of producing new talent quickly is clearly needed. The white paper includes a number of a helpful statistics that helps readers understand the industries and the challenges they face, as well as the advantages and benefits provided by virtual training simulators.
  • Visiongain, a research company that provides analysis of the worldwide energy, metals, and telecommunications industries, estimates in a white paper titled, The Oil & Gas Virtual Reality Training and Simulation Market, that the global oil and gas simulation market is worth more than $2 billion. The report projects a steady growth over the next ten years as North America is a leader in both the oil and gas industries, as well as the virtual training simulation industry.
  • The U.S. Energy Information Administration's International Energy Outlook predicts a global increase in consumption of oil-based liquid fuels by more than 30%, and natural gas consumption will increase by more than 50%, by the year 2035.
  • M&M Protection, a hazard control management consultant, states that the loss to industries due to accidents will be in the range of $1-2 billion over the next ten years. At that rate, the prevention of a single predicted accident would justify the cost of developing a training simulator.

Training Simulator Return on Investment

The return on investment to oil and gas companies, provided by adding simulators to their curriculum, is clearly laid out in the report through the illustration of many different examples. Take for example, a refinery that generates $220 million per year in revenue. Through the use of simulation-based training, start-up time is reduced by five days per year, equating to a savings of $2.7 million. Reduce start-up time by only three days and you still save $1.6 million each year. Increase your operating efficiency by .5 percent and you reduce your operating expenses by another $1 million. Get the picture?

As a result of simulator-based training, companies report savings of up to 1 percent of their fuel and power costs, which may seem small, but can work out to a $500,000 savings depending on the size of the company. The white paper states that simulation-based training, prefaced with traditional classroom methods covering process fundamentals, is the most efficient and cost effective process for educating new employees and preparing them to work at a refinery or on an exploration and production platform.

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