MOVING MINDSETS IN PUSH FOR OILSANDS INNOVATION
Whether it’s about environmental performance, growing productivity or reducing costs, Canada’s energy sector is poised for change in 2017 as innovation and technology play increasing roles.
While this will require capital and intellectual investment, equally important is a shift in the prevailing mindset.
More than two years after the oil price collapse began, too many people are still looking in the rearview mirror — whether it’s wishing for prices to improve or complaining about government — rather than looking forward.
“We need to get excited about disruption. We can’t have nostalgia about the past,” says Suzanne West, president and CEO of Imaginea Energy.
Many companies that dominate today’s headlines — Google, Facebook, LinkedIn, Yahoo and Amazon, for example — were created in the aftermath of the tech wreck in 2000.
A fair amount of hand-wringing occurred when that world crumbled, but the tech sector moved forward. Today, the global community benefits from those efforts every minute of every day.
“The market forces cause people to think differently,” says Mike Gerbis, president and CEO of The Delphi Group, an Ottawa-based consulting firm.
The same mentality must be applied in the energy space, those attending the Future of Oil and Gas 2017 Symposium heard Tuesday.
“Are we in the fuels business or in the hydrocarbon molecules business? If you think in terms of hydrocarbon molecules, that’s where the opportunity lies,” said Gordon Lambert, chair of the Alberta Climate Leadership Task Force on Technology, while moderating a panel session on innovation. What could that look like? Think of carbon as a material rather than a fuel. Carbon is a dominant material used in the Boeing 787 Dreamliner.
“There are enormous opportunities in the next generation of materials,” said Marty Reed, chief executive of Evok Innovations, a Vancouver-based clean tech fund that’s a collaboration involving Suncor, Cenovus and the B.C. Cleantech CEO Alliance. That’s just one example. A question on the minds of many at Tuesday’s conference was how Alberta can attract the kind of investment Google made in Montreal last fall when it committed $4.5 million to artificial intelligence research there.
Fortunately, the necessary skill sets and expertise exists here to interest companies active in the digital space.
“The digital economy, industrial Internet of things ... I think we, in the energy sector — in Alberta and British Columbia — are very wellsuited to take the lead on that,” said Reed. He believes it’s possible, given the talent here, to build a digital company for half the cost of a similar venture in Silicon Valley.
The Calgary advantage, in terms of the digital world, is not only in the city’s engineering brain trust, but also the fact there is heavy industry in this province, which doesn’t exist in Silicon Valley.
This presents an opportunity to marry the digital and industrial worlds; taking domain experts out of the energy sector and bringing people with software and technology skills to the table.
As Reed points out, there’s a lot of ‘dumb’ steel in the field. The more equipment that can be outfitted with data gathering sensors, the better the utilization and efficiency. Ultimately, it allows for maintenance and replacement schedules that can be pinpointed from a distance.
“Digital will change the energy game,” says Reed.
ARC’s chief energy economist, Peter Tertzakian, expressed a similar view in a blog post Tuesday.
He pointed out the dramatic increase in rig productivity that’s taken place in Texas during the past five years.
But it’s not about more “horsepower and better drill bits,” said Tertzakian. It’s because of what Reed describes.
“Big data, optimization, Internet-of-things and machine learning are rejuvenating a hitherto fossilized industry,” Tertzakian wrote.
To get there will require an innovation ecosystem that facilitates the sharing of ideas and experiences across disciplines, not one in which “like is with like.”
“You need collisions across disciplines to spark the innovation you need,” says Reed.
Part of this process requires eliminating the silos that have long characterized the energy world — not to mention the academic milieu — that arguably has limited progress.
“I have the great displeasure of having seen the same thing invented many times, with people thinking these are their ah-ha moments in institution after institution,” Joy Romero, vice-president technology and innovation at Canadian Natural Resources Ltd., said Tuesday.
“This is one of the saddest travesties of our country, because we waste the human capital. If innovation and knowledge were better shared, if it was more open, people would be building on that knowledge, versus repeating it.”
No matter how one looks at the landscape today, it’s time to look forward at what’s possible, not backwards at what was.
It’s imperative the barriers to innovation — within industry, in academia and government — are eliminated so the energy sector, and more importantly this country, can take control of its economic future.
Big data, optimization, Internet-of-things and machine learning are rejuvenating a hitherto fossilized industry.