You Can Strike Oil In China: Four Reasons The Satellite Market Is Taking Off

By Michael Kanellos

China has more oil than people thought.
Orbital Insight, a Palo Alto-based startup hoping to capitalize on the growing interest in mining satellite imagery, undertook an interesting assignment: it captured, and then analyzed, satellite images regarding the world’s 20,000+ oil storage depots to try to determine the real-time supply of oil.
How? 

It focused on the shadows being cast on the inside of the world’s 20,000+ oil storage tanks. 

Oil storage tanks have floating ceilings: a short shadow indicated a well-stocked silo while a long one indicated potential shortages. 

And while doing their shadow analysis, Orbital discovered a funny thing. 

China had 2,000 more coastal tanks than people thought, said Orbital’s Shwetank Kumar at the Center for Effective Global Action in Berkeley, California this week.
The hunt may not be over either: South American nations regularly do not report their oil inventories either, he added.
So what do you need to know?

It’s a Huge Opportunity
The global satellite market is growing at 19.54%, according to some estimates. 

Venture capitalists invested $1.8 billion in space startups in 2015.
But more importantly, a growing raft of companies want to couple their data with imagery. 

I attended the conference to speak about the epidemic of water leakage—over 30% of the water in many areas of the world drips away before it gets to your tap. 

Satellite imagery can be matched with pressure data to pinpoint leaks. 

Farming and health care companies are mining data. 

Even stock traders are getting into the act.
The world takes an estimated 1 trillion images a year: it’s only going to expand.
Hello from Beijing: an image from Orbital insight

It’s Multifaceted
Like other digital imaging markets, there are a number of entry points and companies are carving out areas of specialization. 

Orbital’s stock-in-trade, for instance, revolves around blending satellite data with other streams like commodity prices or poverty index. 

The satellite images aren’t the end goal: they become a source of data for macroeconomic analysis.
Planet, meanwhile, is putting up an armada of Dove CubeSats – or very small, but capable —satellites for capturing images of life on earth. (I wrote about CubeSats back in 2005 when it was a research project so it’s gratifying to see it come to fruition.) 

Planet’s goal is to use “space to help life on earth,” said Planet’s Tara O’Shea. 

The satellites capture images at three to five meters of earth space per pixel. 

That’s fine enough to capture the progress of road building in India or the Amazon and far greater than the 30 meters per pixel resolution of Landsat. 

At the same time, it’s not deep enough to pinpoint faces, license plates or personal information. 

In Palawan, an island in the Philippines, the company is helping map the 50% of roads that wouldn’t ordinarily show up on maps.
To avoid the cost creep that can impact companies developing hardware, Planet tries to develop and launch quickly. 

It has developed 13 different versions of its satellite in 3 years and a new vehicle gets launched every three to four months. 

By contrast, it typically takes three years to launch a conventional satellite.
A Dove Cubesat from Planet.com

It has 70 satellites in orbit today and should have 100 by the end of the year. 

That will give the company the capability to take a new, comprehensive image of the earth every day.
By contrast, you have DigitalGlobe, a publicly-held company that recently bought the Radiant Group for $140 million. 

It specializes in super-high resolution photos. 

A traditional Landsat image might take up half a gigabyte, said Shay Har-Noy. 

An image from Planet might come to 16GB. 

One of DigitalGlobe’s images can weigh in at a hefty 941GB: more data, more insight. 

The company takes on projects like mapping Australia to help map out water and agricultural issues.

It’s Not Just About Hardware
Software is where you will see most of the startup activity, says Ruchit G Garg, a Microsoft alum who has founded Harvesting, which uses satellite imagery to optimize harvests. 

The data will help farmers, but mostly it’s for banks and insurance companies. 

Ideally, better data will lower the barriers to credit, he says. (SlantRange is taking a similar tack with drones.).
Likewise, Facebook is using satellite data as part of its plan to bring Internet access to emerging nations and rural communities. 

1.6 billion people worldwide live outside the reach of mobile networks, said Andreas Gros of the Facebook Connectivity Lab. 

99% of the world, however, lives within 80 kilometers of a city with a population of 10,000 or more. 

The idea is to leverage that as much as possible.
Combining imagery with census data is giving the company greater insight into population density and settlement patterns. 

So far, Facebook has scanned 27 million square kilometers and amassed 500TB of data. 

It can analyze some countries for density in population density eight hours.

It’s Not Just About Space
If there’s one meme that kept getting past around at the event, it was “ground truth,” i.e., information from people on the ground that confirms or expands satellite data.
Prabal Dutta at the University of Michigan is overseeing a project to pinpoint grid outages by using cell phones as sensors. 

73.8% of Kenyans, after all, have cell phones.
Traffic? 

70% of the traffic in Kenya comes from Matatus, or drivers for hire, said UC Berkeley’s David Schonholzer. 

Three million people use this precursor of Uber on a daily basis. 

His department is integrating sensors to monitor drivers—how fast they accelerate, whether the go off-road, how many sudden stops or sharp turns they take—to improve road safety. 

If you tried to analyze grid or road traffic with imagery alone, you’d only get a partial answer.