Greetings from Anchorage, Alaska! As the new Industry Strategist for the energy industry at OpenText, I’m proud to come from a US state where the energy industry is of paramount importance. Alaska is home to Prudhoe Bay, the largest oilfield ever discovered in North America. It’s also a state where over 25% of the GDP and 85% of revenues are generated from the energy industry.
I’ve been part of the industry for more than 20 years and have worked with critical technologies along the way that help keep the world running. From downhole logging devices in oil & gas wells to sensors that automate power generation facilities to software that predicts critical asset failures, I’ve always worked closely with technologies that are vital to the energy industry. What excites me most about OpenText™ is the power that information management brings as energy companies face the next set of business challenges.
This is particularly true today as we undergo the energy transition.
The energy transition
There is one fact about every oil well that rings true: it increases in production and then declines in production due to geological constraints. This is true for every oilfield and there always comes a time when the production decline from existing producing wells is faster than the rise in production from new wells. Case in point: Prudhoe Bay peaked production at 2 million barrels/day in 1988 and produces at less than 500,000 today. The world isn’t running out of oil, yet there certainly are constraints to the speed at which it’s produced.
The challenge of energy transition
There has been a great deal of talk about energy transition. The term refers to the global energy sector’s shift from fossil-based systems of energy production to renewable energy sources like wind, wave and solar.
While the energy transition is inevitable, hydrocarbon-based fuels and the speed at which we can exploit them will play an integral part in that transition and the world economy. And because of that, across the entire energy value chain, capital projects will need to be completed on time and within budget. Operations will need to keep critical assets running and maintained. Health, safety, and environmental compliance will continue to be of utmost importance.
Companies across the entire energy value chain will need to capture, organize, integrate, protect, govern, and exchange information like no other time in the history of the energy industry.
Referring to the energy transition, Bain & Co said that “The industries under the most pressure to change are the same ones that have the experience and organization necessary to transform the world’s use of energy and resources.”
In fact, I might go one step further and say these industries are the only ones with the existing global reach and capabilities necessary. There’s no doubt that we’re witnessing an accelerating trend towards the use of renewables but, even with our very best efforts, we simply will not be able to meet surging demand with renewables alone. The global population is predicted to be 9.7 billion in 2050 – a full 25% more than it is today. That’s a whole lot more mouths to feed and energy resources to consume.
According to irena.org, the energy transition will be enabled by the use of ‘information technology and smart technologies’. Bringing us neatly back to OpenText.
Data is the new oil
I sometimes wonder if the Economist had some sort of bet to see if it could create the world’s fastest cliché when it said that ‘data is the new oil’. However, it does seem quite appropriate here.
The energy transition and its scale will be like no energy transformation before. There is a pivotal role for digital technologies in replacing and automating previously physical and manual processes. Of course, digital technologies are only the tools. It’s the data you have and what you do with it that’s important.
Helping companies across the energy and other sectors securely capture, govern, and exchange information with suppliers and customers on a global scale will be imperative. It’s the only way to ensure that we transition to an energy environment that’s affordable, available, sustainable and inclusive.