Oil and Gas Innovation Goes Well Beyond Fracking
Linking the oil and gas industry with innovation these past few years isn’t controversial. The pairing of hydraulic fracturing and horizontal well drilling was a novel idea that set off an energy revolution over the past decade, remaking American energy fortunes and ushering in a new global oil reality (and increasingly a new global natural gas reality, as well). But innovation’s impacts on global energy security extend beyond the novelty of fracking. As David G. Victor and Kassia Yanosek write for Foreign Affairs, oil and gas companies are leveraging some of the same trends that are spurring on the information economy to extract hydrocarbons more profitably:
There are three trends driving the new energy revolution: smarter management of complex systems, more sophisticated data analytics, and automation. The first trend has allowed companies to become much more efficient while drilling for oil and gas in ever more complex geological environments…Simpler, standardized designs make drilling and production platforms easier to replicate, less expensive, and less likely to suffer costly delays and over-runs in construction. […]
Oil companies…have begun to use complex algorithms to analyze massive amounts of data, making it easier for them to find oil and gas and to manage production…The industry has also begun to use data analytics for “predictive maintenance,” reducing unplanned downtime by analyzing historical data to predict equipment failures before they happen. […]
Soon, intelligent automated systems will enable remote drilling, controlled almost entirely by a handful of high-tech workers in onshore data rooms hundreds of miles away…In the future, automation, along with better data analytics, will make it easier to manage the variation in supplies that comes from using renewable sources such as wind and solar energy and more complex, decentralized grids. It can also make the grid more reliable.
It’s worth your time to sit down and read the whole thing. The authors embark on a brisk tour of the changing (and changed) energy industry in the 21st century. Big data, automation, and systems management aren’t just a hallmark of companies like Amazon—they’re also helping the bottom line of energy producers, and that’s good news for the global economy.
It’s also worth noting that new technologies don’t come with ideologies. When imagining how the international community might meet the climate targets set out in Paris in late 2015, many greens include the optimistic hope that technological breakthroughs will (in time) make clean energy options like wind and solar the only obvious choices. While it’s true that the cost of renewables has dropped significantly just in the past couple of years, it’s also true that breakeven costs for many fossil fuel operators has also come down over that same period of time. There’s no reason to think that innovation will favor one specific energy source over another—there exists the potential for breakthroughs in every corner of the industry, and that’s a tremendously exciting thought.