Oil and gas readies for the digital decade
Digital transformation will shape the energy industry of the 2020s
The energy industry is under increasing pressure to adapt and evolve in a wider macro environment where concerns around climate change and the drive for sustainability have become increasingly prominent. Its future will demand efficiency, safety, security and a reduced environmental impact.
There is no doubt that the sector will change significantly over the next 10 years, driven by these requirements and the industry’s response to them. We believe that these changes will be particularly marked in four key areas.
“Data is the new oil” has become a oft-used phrase in recent years. What that means in practice is that new technologies such as blockchain, the internet of things (IoT), machine learning (ML) and artificial intelligence (AI) are shaping the energy companies of the future and ushering in a fourth industrial revolution.
Technological innovation is unlocking and enabling new fuel sources; helping capture greenhouse gases (GHG) for safe disposal; improving energy efficiency; lowering the cost of renewables; and transforming oil and gas production, its transportation and its end-uses. For instance, at Finboot, we are already supplying Spanish oil and gas firm Repsol with our unique blockchain technology solution to improve the certification process of its petrochemical products.
Climate change is the topic on everyone’s lips, and this is unlikely to change throughout the 2020s. How do businesses rapidly transform the way they deliver energy, as demanded by consumers and regulators? The first step will be to accurately measure and monitor their impact and then adopt a phased approach to minimising their GHG footprint.
Blockchain, IoT, ML and AI are shaping the energy companies of the future
Few understand that accurate measurement of impact remains a challenge and, looking ahead, it would be surprising if accurate—and standardised across the industry—measurement is not a core business requirement. Here, technologies such as blockchain can play a pivotal role in verifying a company’s sustainability credentials, making it an invaluable tool for the sector going forward.
We are at an inflexion point in energy supply chains. Digital advances are changing the traditional roles of industry players in the power sector—a consumer with solar panels on their home becomes an energy producer. Energy producing and consuming devices will communicate with each other rather than through a grid operator. The next generation of appliances will be able to monitor the demand for power, as well as the price, and adjust run times to when prices are low or electricity generation capacity is in excess.
US policy makers have taken a hands-off approach, while Europe frets over the market dominance of digital giants
Renewables will look to provide more and more of the global energy supply as their costs continue to fall. Batteries and gas-fired power plants will backstop the intermittency inherent in renewable energy supply. This will all be made possible with the implementation of technology that creates a truly ‘smart’ energy ecosystem.
Governments are increasingly driving the need for data. Whether it is for product verification or audits, collection of data for every part of your supply chain is fast becoming a mission requirement. Data is the lifeblood of digital and its collection and storage will become ever more fundamental operational requirements.
US policy makers have thus far taken a more hands-off approach to digital, while Europe worries about the market dominance of some of the digital giants. Other national governments opt for more restrictive policies on the application of digital innovations within their borders, such as China’s Great Firewall and Russia’s recent dictat to install monitoring software on all mobile devices. The world appears headed towards an asynchronous view of the role of digital innovation and its use in societies, but the one clear truth is that standing still is not going to be an option for governments or organisations.
The energy companies that want to survive to be the successful firms of the 2020s as a whole face potentially existential threats. Today, they are unable to answer with confidence many key questions: Where does its oil come from? What is its GHG footprint? How much leakage exists in its plants?
The analogue tools of yesterday are not fit for this purpose. Digital transformation requires leadership and we are seeing the emergence of new energy leaders who see digital transformation and data as a gateway to opportunity, not just survival. We believe that, over the next ten years, opportunities will abound, but only for those energy organisations who are ready to adapt to the new digital future.
Finboot is a London and Barcelona-based software innovation firm that facilitates the adoption of distributed ledger and blockchain technologies into daily business operations