Technology entrepreneurship redefining global energy game
The ongoing technology boom that is reshaping the oil and gas industry and providing access to resources once deemed unattainable is also redefining the global energy map, an energy expert said in an address at the Deloitte Energy Conference on 21-22 May in Washington, DC.
“It’s not about the resources; it’s about the technology to access the resources,” said Dr Joseph Stanislaw , independent senior adviser at Deloitte and a co-founder and former CEO of Cambridge Energy Research Associates. His whitepaper, “Next Frontiers: How Technology is Radically Reshaping Supply, Demand & the Energy of Geopolitics,” examines various aspects of the changing global energy landscape. “In the case of unconventional shales, for example, we’ve known about them for decades or longer, but technology is what has made those resources real,” he said. “Technology is the value-creator.”
Advanced hydraulic fracturing technologies and horizontal drilling methods have made the US the No. 1 producer in the world, with natural gas from shale accounting for more than 30% of US natural gas production, compared with just 2% in 2001, he noted.
Energy companies now rank among the most important and sophisticated technology companies in the world, Dr Stanislaw said. “The modern-day wildcatters are energy-technology entrepreneurs – geoscientists and software engineers – who drill wells on computer screens before drilling in the field. Three-dimensional computer imaging, along with new steel alloys for drill bits and other innovations are radically changing energy development production.”
New players to the game
Key developments, Dr Stanislaw noted, include the arrival of dozens of new energy-rich countries such as Brazil, the Philippines, Argentina, Angola and Suriname, Poland and Israel to the international energy scene, as well as the expanding role of energy in on geopolitics. “No change may be more important than the introduction into the energy game of dozens of new players, including reinforced superpowers like Brazil, Canada and Russia.
“Areas with high resource potential have gone from being easy to develop to difficult, and the situation in those countries will remain difficult,” Dr Stanislaw continued. “But the more we push the resource horizon to those areas, there will be openings for companies with the technology.”
Argentina, for example, a country with huge reserves of tight shale gas and oil, recently renationalized its energy company YPF. “But that company can’t develop those resources on its own,” he pointed out. “China is holding blind positions in US shale plays to try and learn about the technology.”
Dr Stanislaw believes the biggest challenges for the industry lie in ultra-deepwater areas such as Brazil, East and West Africa, and the Gulf of Mexico, and in the Arctic. “The Arctic will become a bigger province over time because there is a large resource base there. We have not touched the onshore reserves yet; that’s maybe a decade away. We need to consider developing the technology to access those resources in an environmentally safe and appropriate way.” He also believes it is important to use resources such as water to produce oil and gas more efficiently.