The oil and gas industry are dealing with massive disruption on several fronts from increasing oil price volatility due to Coronavirus and the failed OPEC deal. Combined with complexity of a rapidly changing energy sector where digital technologies, the drive for greener energy and demand for more consumer-centric services are putting shareholder returns at risk and reconfiguring policy mandates, industry players are forced to make a significant re-evaluation of energy value chains, assets and operations. The way we produce and consume oil & gas is shifting. Renewable energy sources, such as wind and solar, are growing exponentially and are expected to account for nearly 70% of global electricity production in 2050. Transport is being electrified, with 50% of all new cars sold globally forecasted to be electric by 2033.
Governments, investors and business leaders need to adopt practical solutions that can be deployed across the world at scale. The arrival of 5G along with wider adoption of AI technology into the physical world will make it possible to substantially enhance the opportunities to scale cleaner energy generation technologies, enable efficiency gains in manufacturing, our homes, retail stores, offices and transportation that will enable substantial reductions in pollution. Policies that incentivise the accelerated development and deployment of Industry 4.0 solutions will require politicians and regulators to better understand the opportunities that 5G alongside AI will enable. The OECD published a paper "What works in Innovation Policy" and observed that "Policies ignoring or resisting the industrial transition have proven to be not just futile but result in an innovative disadvantage and weak economic performance." Entering the new year will allow us to develop and deploy solutions for the 2020s that make use of the next industrial revolution with 5G and AI to enable dramatic efficiency gains across all sectors of the economy and to enhance renewable energy generation. The emergence of India, China and others as industrial economic powers is occurring at a time when we now know the damage that such pollution causes and hence there is a need to work together, collaboratively to solve a global problem. Embracing technological change and enhancing its capabilities to deliver better living standards alongside sustainable development is the best option for those who really want to make an impact on climate change at scale in the 2020s and beyond. I wish to thank Henry Derwent, former advisor to Prime Minister Margaret Thatcher and former CEO of IETA for his efforts to promote technological innovation and scaled up financing with Green Bonds.
As digital disruption continues to permeate all industries, offshore operations are among those set to benefit. From predictive analytics and Big Data in oil and gas, to the blockchain and AI, seven industry experts give their opinion on how technology is leading to greater efficiency in the oil and gas industry. "By switching to digital work instructions, oil and gas companies can build a huge bank of data for audits and simultaneously use the information to predict when failure will occur. That, perhaps, over-simplifies the enormity of the situation but it is such a critical solution to a vast array of issues. There is the famous study by MIT Technology Review, which found that only 0.5% of all data is ever analysed. This was published in 2013 so is certain to have gone up, but not by a huge amount and there is a long way to go in terms of adoption in the oil and gas sector. "The nature of the oil and gas industry means health and safety, compliance and audit checks are frequent and detailed.
Recently E&P sat down with digital experts to discuss the Big Data challenges facing companies on the digital transformation journey. Among the group were Philippe Herve, vice president of oil and gas solutions for Spark Cognition, and Jonathon Shea, president of TAB. The conversation touched on many topics, including artificial intelligence (AI), predictive analytics, personnel issues and more. E&P: What are the three biggest data challenges facing the upstream oil and gas industry? But when performed manually, predictive analytics requires data scientists and technicians to be constantly collecting and analyzing new sensor data from all assets to monitor their health.
In November, in a dive into what is driving enterprise interest in the Internet of Things (IoT) we found that, for the moment at least, enterprises are still wrestling with the problems the IoT poses rather than harvesting the benefits that it offers. There is nothing unusual in this given that the IoT is still a relatively new phenomena and there are considerable -- and justified -- security fears dominating enterprise strategies around the IoT.