It’s easy to get swept up in the excitement of something new happening, but change is a constant of pretty much every industry at every time, so while it is tempting to put a label on change, it’s probably more important to focus on the job in hand. There are fascinating technologies currently being implemented in the oil and gas sector, but there always has been and there always will be, suggests Kay Rieck, an experienced market observer and investor.
Everyone’s very quick to label things, looking at ways to claim that this is the dawning of a new epoch, a radicle change on everything that has gone before. With a couple of notable historic exceptions, the reality is that change is iterative. It happens little by little, and different aspects of it happen at their own pace.
People like to come up with grand titles for things: we are in the midst of the third industrial revolution, this is the dawn of industry 4.0… These are interesting times certainly, but scrambling around creating labels is only really useful when you are trying to come up with a contentious title for a speech at a conference.
The four potential game-changers
There are several fascinating technologies that are slowly making their presence felt in the oil and gas sector at the moment. Four in particular are attracting a lot of attention.
Artificial intelligence is taking the oceans of raw data that is collected by the oil and gas sector, collating and converting them into actionable information. It is complimenting and augmenting the knowledge that the industry has about where potential oil and gas deposits can be found, enhancing production schedules and spotting potential safety issues before they convert themselves into actual safety problems.
The blockchain meanwhile has the potential to do several things in terms of making the market significantly more efficient, as well as creating a new markets for waste and flared gas by using it to power crypto mines onsite at remote oil and gas projects. In this regard it also has the potential to create a financial incentive to cap the many orphan wells that litter north America and are potentially adding to the greenhouse gases in the atmosphere. Up to now, many of them have been seen as someone else’s problem, but that changes when you put an economic value on them.
The internet of things (IoT) is also changing what’s possible, helping ensure that repairs and replacements are ready for when a piece of equipment actually requires them rather than when an estimate suggests that it is probably time. It’s the sort of thing that will lead to a demonstrable improvement to a project’s bottom line because it will reduce outright machine failures.
Robotics and automation could well offer the solution to a growing headache for many oil and gas projects as potential workers are lured into other industries. They can be used to reduce levels of staffing at remote projects, enhance surveying and make it possible to make inspections and repairs at different points in the production process than might be possible with human intervention.
The one epoch that everyone’s talking about
While each of these technologies are individually fascinating and combined could well change the very nature of the oil and gas sector, we all know that the only change that anyone is really going to be talking about over the next few years will be how the world operated before Covid-19 and how the world operated after Covid-19. Anything else, changes in technology, changes in working practices, the shape of the industry itself, will be secondary to the changes that the disease has created.
There are several potentially seismic changes taking place in the oil and gas sector. The technologies listed above all have the potential to have a profound impact on what’s possible and the way that business is done. So does the loss of talent to other industries, particularly as alternatives gain momentum. The problem is that trying to create a new era out of them is mostly a distraction from what’s really going on and how businesses need to respond.
During the century that oil and gas have been at the centre of the world’s energy mix, many technologies have risen and fallen. Some of these have had a real impact on the way that business is carried out which seemed utterly revolutionary at the time but with hindsight were simply another step towards a future that will always remain just that.
Sometimes it’s best to leave the historians to put labels on things after the event. For those of us that are lucky enough to be in the thick of the daily business of getting things done, we need to focus on doing what we do best: looking at what’s available, applying it to our specific circumstances and making sure that we keep learning so that we can do it better the next time around. Leave the historians to label the epochs after the events.