The Future is Now Blog Series: Industrial Sustainability Goes Digital.

Industrial Sustainability Goes Digital

By Tom Hassenboehler

March 28, 2019

Many have written recently that data is the new oil, while others have explained why the analogy does not hold. This debate misses a more interesting trend: the increasingly symbiotic relationship between major industrials and digital tech.

Industrial energy companies that extract and refine natural resources including oil and gas, coal, and minerals are no stranger to digital technologies. An example is “the digital oilfield,” an umbrella of digital technologies that, for many years, has enabled oil and gas companies to capture data up and down the value chain and use it to optimize the performance of reservoirs, wells, and other facilities.

Today, oil and gas companies, as well as other industrials are expanding these efforts. As a result, the combined power of natural resources and new data platforms are poised to create billions in value while also improving sustainability and reducing emissions.

Energy and tech firms are natural partners because they can leverage each’s unique strengths to create new efficiencies. Most recently, ExxonMobil and Microsoft announced a partnership to implement cloud, analytics, and machine learning applications in the Permian Basin. The initiative will enable decision-making based on real-time data from oil field assets spanning hundreds of miles and could help improve methane leak detection and emissions management.

Earlier this year, energy services company Schlumberger and automation expert Rockwell Automation announced a joint venture that will offer digital services to the oil and gas sector. The new company, Sensia, will enable automated communication and assessment capabilities across equipment and analytics to turn masses of data into useful business information. Total and Google Cloud have also developed a partnership to develop artificial intelligence (AI) programs to help geologists and engineers automate and improve analysis of technical data and images such as from seismic studies.

Imagine a future where these kinds of partnerships have become commonplace. In this future, widespread use of advanced seismic data, ubiquitous micro-sensors, and enhanced reservoir modelling has decreased oil and gas production costs between 10 and 20 percent. Robots now inspect and repair the most dangerous and remote infrastructure. Data processing speeds have continued to increase exponentially, enabling more accurate and quicker decision-making during emergencies. In addition, new apps are beginning to emerge that translate industrial data into consumer-friendly information about the sustainability of downstream products. Many fueling stations now have a code that, when scanned, provides easy-to-understand comparisons of emissions, water use, and other production practices. With this information at their fingertips, consumer demand is growing for fuels with the highest sustainability ratings, and in turn driving more sustainable practices by companies.

Some worry that this kind of future will be one that “automates the climate crisis.” But recent studies show it doesn’t have to be that way.

The World Economic Forum and Accenture published an analysis showing that digitalization can create a total of $1.6 trillion in value for oil and gas companies and consumers while reducing CO2 emissions by 1.3 billion metric tons. The study analyzes dollar savings and emissions reductions from digital applications such as “real-time supply/demand balancing through 3D printing” and “digital customer services.”

The Environmental Defense Fund (EDF) also recently published a report discussing strategies for how oil’s digital transformation can be leveraged to reduce methane emissions (which are exponentially more potent than CO2 emissions). Each year $30 billion in methane is released into the atmosphere, and EDF explains how “asset automation,” “smart ecosystems,” and other digital strategies can enable a win-win for industry and the environment alike.

Data analytics, AI, 3D printing, and blockchain aren’t inherently good or bad; each is a tool that can be deployed in myriad ways to achieve a desired outcome. It’s up to all of us—innovators, policymakers, environmental advocates, even oil and gas companies and big tech—to use them to build the future we want.

Tom Hassenboehler is the Founder and Executive Director of EC-MAP.  This blog post is part of a preview of our forthcoming white paper, “The Role of Digitalization in Driving Demand for Industrial Decarbonization.”

Further Reading:

Digital Transformation Initiative: Oil and Gas Industry (white paper), World Economic Forum in collaboration with Accenture

Fueling a Digital Methane Future (report), Environmental Defense Fund in collaboration with Accenture Strategy

The oilfield digitalization opportunity executives can’t afford to miss,” Medium