Oil and gas refining is a tremendously complicated and dangerous business, and mistakes can lead to a thousand kinds of death and disaster — fire, explosions, poisonous fumes, environmental pollution, and chemical spills are all possible if something breaks or someone makes a mistake.
One of the worst oil refinery disasters of the 21st century came on March 23, 2005, when BP’s Texas City refinery was starting up again after a maintenance shutdown period. The refinery, built in the 1930s, sprawls over 1,200 acres. Amid the labyrinthine maze of pipes, tanks, and towers, about 1,800 workers produce about 2.5 percent of all the gasoline in the United States in addition to jet fuel, diesel, and chemical feed stocks.
It only took a handful of crucial failures in that vast and complex machine to cause a catastrophe that day. At the isomerization unit, where gasoline was boosted into higher octane grades, workers were starting up a device called a raffinate splitter, a 170-foot tower for distilling chemicals. Unknown to the people in the control room that afternoon, several key safety systems for the unit weren’t working properly. Partly because of a computer system giving out false readings of fluid levels, the operators filled the splitter to its maximum capacity, and then kept filling it.
Three emergency release valves opened, sending fuel into a 27-foot-tall “blowdown stack” that had first been installed in the 1950s. This system was meant to safely dispose of excess fuel from the raffinate splitter, but the sudden influx was too much for it to handle. Next to the blowdown stack, a diesel pickup truck had been left idling. Just 150 feet away there was an encampment of temporary trailers, where dozens of workers were preparing to restart another part of the refinery.
When the blowdown stack overflowed, a 20-foot-tall geyser erupted from its peak, spewing a small backyard swimming pool’s worth of fuel into the air. Worse than the liquid fuel was the vapor cloud that billowed around it, quickly spreading over an area the size of three football fields.
A survivor of what was to come heard the truck’s engine begin to over-rev because of the vapor cloud. Someone radioed the control room about what was happening, and someone else ran for the truck to turn off the engine. That person never made it. Before an alarm could even be sounded, the truck backfired, igniting the explosion that had been brewing for the past 90 seconds.
The 200,000-square-foot vapor cloud turned into a fireball and a powerful explosion. Windows were shattered three-quarters of a mile away. As the shock wave swept over the refinery it cracked walls, broke glass, and blew the roofs off of hazardous chemical tanks. Worst of all, it flattened the nearby camp of flimsy work trailers, many of them full of people. Flying debris in the trailers killed 15. Overall, 180 people were injured.
In addition to the human toll, the Texas City explosion cost BP about $1.5 billion.
Far away from Texas City, in an office building on Clarksville Road in West Windsor, the Mistras Group makes products and offers services to prevent such tragedies from happening in the first place. Now the company has a new way to inspect facilities both inside and out without putting anyone in harm’s way: drones.
Mistras recently bought a small Texas-based company called Aetos that uses flying, crawling, and submarine drones to do the work that is now usually done by men climbing on ropes or flying around in helicopters.
Mistras, a collection of companies that all specialize in asset protection, conducts what the business calls nondestructive testing. Although the majority of the work is done in the oil and gas sector, Mistras also works on bridges, factories, pipelines, power plants, windmills, aircraft, water tanks, elevators, and pretty much any infrastructure that needs to be inspected or monitored.
Former Bell Labs engineer Sotirios J. Vahaviolos, a Greek immigrant and graduate of Fairleigh Dickinson University (1970) founded the company in 1978 together with two venture capitalists, calling it Physical Acoustics Corporation. In an interview with U.S. 1’s Barbara Fox, published in the August 7, 2002 issue, Vahaviolos explained why he left AT&T to start his own company.
“Before the breakup the old AT&T was the greatest company ever created. It paid for my education and made me a better person. But you could not survive there if you were a loner. They wanted team players. I wanted to create a more nimble Bell Labs, to make decisions more quickly, without all of the signatures, and be more market driven.”
Its first products were acoustic sensors that could be attached to crucial components, such as beams in a building. The sensors use sound waves to detect stress or cracks and warn of potential danger. Since then Mistras has grown into an international company with annual revenues of more than $700 million. Over the years it has acquired multiple companies in the asset protection sector, gradually expanding the scope of its business. In 2000 it branched out from making products (sensors) into offering services by buying Quality Service Laboratories, a company that did in-person inspections.
Today Mistras is a publicly owned company with about 5,700 employees in offices all over the world, and Vahaviolos is still the CEO. The company’s stock was $12.65 when it was first publicly traded and was listed at $25.22 as of press time.
Its new subsidiary, Aetos, is just six people, but Michael J. Lange, vice chairman of business development and strategic planning, believes that the small group represents the future of the inspection business. (Mistras is in the midst of an SEC-mandated quiet period and cannot yet disclose the financial terms of the acquisition.)
“In the future, this stuff will be most likely part of everyday life in the industrial world,” Lange said. Even outside of industry, robots could easily take the place of people dangling from ropes to get at hard-to-reach, dangerous places. For instance, when Mistras Group inspected Mount Rushmore for corrosion, it had men on ropes rappel down Teddy Roosevelt’s forehead. Today the job could be done faster and more safely with a drone fitted with a high-resolution camera.
Lange said Mistras started getting interested in the unmanned vehicle business when he saw competing companies using drones to inspect offshore oil platforms, which were quick to adopt the new technology.
While Lange cut his teeth in the petrochemical business, the founders of Aetos all come from an aviation background. Aetos Group president Aaron Cook grew up in Grand Rapids, Michigan, where his father worked in the pharmaceutical industry and his mother worked for an insurance company. Fascinated by air shows from a young age, Cook planned a career in aviation and earned a degree in aviation from Northwestern College in Michigan, and a bachelor’s in business from Davenport.
Cook, CEO Bill Donberg, and technology VP Tony Saubrey all worked for Northwestern College, a community college that specializes in pilot training. Cook was director of aviation, Saubrey was a flight instructor, and Donberg was chief pilot. “We started a UAV training program in 2009, and we quickly realized that there was an opportunity on the service side of this industry,” Cook said.
The technology already existed — it had been pioneered by the military, and had since passed into civilian products — and the need existed. All that was missing was a business that put two and two together. “It’s as if Boeing made airliners, and there was a guy who wanted to go on a vacation to Florida, and there was no American Airlines,” Cook said. Aetos would be the American Airlines of the drone inspection business.
Aetos started off doing consulting, but the business really took off in early 2015 when the FAA granted the company a license to fly drones for commercial purposes. Since then it has done hundreds of inspections at refineries all over the country, mostly located along the gulf coast, and are expanding into other arenas.
“One of the advantages of our technology is that it’s so efficient and so productive,” Cook said. “We do multiple operations weekly. Some of the assets that could have taken weeks to inspect with scaffolding, we can do in a matter of hours.” Take, for example, a 300-foot-tall column with a flare at the top. Not only would it take weeks to build the scaffolding and send workers up, exposing them to the danger of falling, but the refinery would have to shut down the unit during the inspection.
Because any work taking place six feet off the ground or higher triggers extra OSHA safety regulations, there is a further speed advantage for using drones instead of workers. While drones are not always a replacement for in-person inspection — you can’t beat the human eye for high-resolution imaging — drone video can be used to target inspections and repairs better, meaning less scaffolding, less work, and less down-time for a refinery.
In addition to aerial inspection, Aetos can do precise mapping and surveying of facilities. Anywhere there is a storage tank, there is also a containment dam surrounding it, of an equal volume to the tank, so that if the tank is breached, the spill will be contained. Because the dams erode over time, surveying them periodically is crucial to ensure they will work when needed. Drones equipped with laser measuring equipment can do the same job of a surveying team on foot, but do it much faster.
Aerial surveys of plants aren’t exactly a new idea, but a drone can get a lot closer to equipment than a plane or even a helicopter, and can do it for cheaper. “Flying an expensive piece of equipment over the top of your multibillion dollar facility adds a certain level of risk,” Lange said. A helicopter crash could be catastrophic. A drone crash? The thing weighs 10 pounds.
The work isn’t limited to the skies, either. Drones with tank treads can get inside vessels or pipes where it would be dangerous to send a human worker. Aetos even has a drone with magnetic treads that can crawl up the sides of metal containers.
Robots can do more than just a visual or infrared inspection of these areas for damage or corrosion. Sometimes Aetos is asked to retrieve objects that were dropped into inaccessible areas or left behind by workers. Because facilities have to be cleared of any debris or foreign objects before being put into service, a single Coke bottle could hold up an entire project. A small robot can grab it without any of the danger and expense of sending a worker into a confined space.
Aetos even operates small submersible robots, each no more than two feet long, that can go inside pipes or canals to look for blockages. “In our most simplistic form, we’re a data gatherer so that asset owners can make better decisions,” Cook said. “We do that using robots so that people don’t have to go into these precarious places.”
Aetos doesn’t make the drones, but buys them from specialist companies. They are a great deal more advanced than the ones found on the shelf at Best Buy. Many of them are similar to the flying and tracked robots that the military and police have used for years to send first into dangerous situations.
The company uses two-person, pilot-observer teams to do the inspections. One person flies the drone while another keeps an eye on the surroundings and the functioning of the machine. Video from the drone goes to a computer, where an inspector can see live footage and tell the operators where to go next. Since everyone at Aetos is a qualified pilot, everyone gets a turn at the controls.
“It’s exciting, but it’s also a significant challenge,” Cook said. “It’s a ton of fun when you go into a facility and change the way that people see work being done. On the other hand there’s always a risk of letting a customer down because you’re dealing with new technology, and in a lot of circumstances, the work there has never been done like that before.”
Mistras overall took a hit when oil prices fell last year, putting a damper on the construction of new oil refineries. Its stock fell by about half, hitting a low of $13 in mid-2015. However, the downturn wasn’t as bad as one might think considering that more than half of the company’s revenues come from the oil and gas business. Lange said that with revenues down, the petroleum industry came under pressure to operate more efficiently and save money. The industry also had incentive to maintain old equipment better since it was less likely to be replaced. All of this meant good business for Mistras and Aetos. By early 2016, the company’s stock about tied its all time pre-oil-crash high.
Mistras hopes to expand the business beyond oil refineries. Lange said other potential uses of drones include water towers, which in many municipalities require an annual inspection to check for corrosion. Rather than send a human up, a drone could do the job in minutes. The underside of bridges is another area that drones could easily reach. Another is wind turbine farms.
Drones could also come in handy in a disaster scenario. For example, during the 2011 Japan tsunami, an American drone maker, Honeywell, sent in one of its drones to the stricken Fukushima nuclear power plant to survey the tangled, radioactive wreckage. The ruins were hazardous for humans to enter, so it made sense to send a drone ahead whenever possible. The technology has gotten better since then, and Lange sees them playing a bigger role in future scenarios involving radiation.
“You couldn’t put a person in that environment, but this thing is expendable … when it lands, put it in a plastic bag and throw it away.”
Cook said that currently, FAA regulations require anyone operating a drone to stay within line-of-sight of it. But if that regulation goes away, whole new possibilities would open up. For instance, drones could be used to deliver packages or to perform long-distance search-and-rescue missions.
Another hurdle is getting people to think of drones when they need the kinds of services that they can provide. “It’s an educational process, getting people to think outside the box.”
Because commercial drone services are a very new business — the FAA only made rules for them in 2014 — Mistras and Cook are essentially on the ground floor of a new industry. Lange said he hopes to expand it at a rapid pace, using graduates of Northwestern. “It’s a new aviation career path,” Lange said. “It’s all about getting people to think outside the box about what the value for this stuff is.”
Cook compared the state of drones today to the way cell phones were in the 1990s. For the first time, they were functional business tools, and people were still figuring out how to use them and even what to call them. “It’s great technology, but there’s so much more to come, Right now we’re in bag phone days,” he said, referring to the nickname of a bulky Motorola from the ’90s.
Cook said Mistras was unusually forward-thinking in buying his company. “To have the foresight to see the opportunity for this technology … that doesn’t always happen in a larger company,” Cook said. “I applaud Mistras for seeing the opportunity for building the company and providing a higher level of safety and a higher level of service.”
Because FAA licenses are not transferable, Aetos will continue to operate under its current name, which is Greek for “eagle.” In an odd coincidence, Mistras also has a Hellenic name, which refers to a fortified town near Sparta.
Lange said the commercial drone business is just getting started, and that he expects to see 10 to 15 percent annual growth from Aetos. “We can get an inspector’s eye into a lot more places, faster and cheaper, so it provides ultimate value,” he said. “For this business, the sky’s the limit, literally.”