THE ESG ISSUE
Automation Integration is Energy Transition By Brendan Gilbert, Solaris Oilfield Infrastructure
W
ith ESG and energy transition rising in importance, it’s critical for those of us in the industry to understand energy transition and educate our partners on the opportunities it presents. Energy transition does not mean an eradication of our need for fossil fuels. Rather, it is about embracing a culture committed to more responsible, safer, and sustainable use of our fossil fuels. To put it more simply, it is about finding better ways of doing things that protect our people and environment. Companies are increasingly adopting technologies like automation, advanced data analytics, machine-learning algorithms, real time, and remote monitoring. These are necessary innovations, but without the ability for seamless integration, our industry will continue to be challenged to do more by our investors and consumers. Parallels can be drawn between what the U.S. automotive industry experienced in 2008 and what the oil and gas industry is experiencing today. More than a decade ago, the U.S. automotive industry came under siege as we crashed into the Great Recession. Iconic brands faced insolvency and collapse. A fatal combination of poor financial planning, short-sighted decision-making, and unpopular product manufacturing sent the companies into a tailspin when the financial crisis hit. Yet, by 2012, U.S. automakers were once again a world leader in vehicle production and sales. This resurgence was achieved through a pivotal shift to long-term strategic planning, responsible decision-making, and commitment to designing and manufacturing products aligned with global trends. Automotive leaders embraced key principles such as fast innovation, comprehensive technology integration, and generating an enthusiastic customer base. They leveraged partnerships with tech companies and built scalable ecosystems and IoT connectivity that not only provided predictive maintenance tools but improved maintenance uptime, assessed failure risk, and centered all this around the driver experience. In essence, they transformed the driving experience
through infotainment. In June 2020, Aswini Choudhary and the Forbes Technology Council called this automotive revolution “The Convergence of Technology and Manufacturing.” By merging technology with manufacturing capabilities, today’s automobiles have innovative features allowing them to keep pace with the global trend towards diverse mobility, autonomous driving, electrification, and connectivity.1 Just as the U.S. automotive industry faced a combination of regulatory pressure on safety and efficiency, shifts in consumer demand preference, and the financial crisis of 2008, similar events are confronting the oil and gas industry today. First, ESG became a quickly growing point of emphasis for investors and consumers. Then, energy transition emerged as the world developed technologies and equipment in other sectors — like the automotive industry — that are driving down the demand for fossil fuels. This growing pressure for transformational change in the oil and gas industry culminated during the COVID-19 pandemic and the resulting supply glut. Investors reacted swiftly to stem the flow of cash to the industry, and world leaders ushered in sweeping and nebulous goals focused on carbon neutrality. Yet, what remains is the need for fossil fuels. Like the automobile, we cannot do without it. So, we are now faced with the question – how do we achieve energy transition in a world dependent on the production of oil and gas? Our industry has made strides adopting technologies to digitize and automate. We have programmable software with real-time health monitoring features, and some equipment can be remotely operated. In large part, however, these are add-on features to equipment based on designs several decades old. Moreover, given the highly segmented nature of operations, these technologies are not integrated into a single platform. The average drilling or completion project still has 5-10 suppliers providing their own equipment, hardware and software, each with its own varying level of advanced technology. In a 2021 Accenture survey, more than 90% of oil and gas companies recognized the need to change, but less than 20% says they’ve achieved a significant level of
“We are faced with the question - how do we achieve energy transition in a world dependent on the production of oil and gas? ”
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Well Servicing Magazine/July 2021
