18 Apr The Impact of Technology on The Energy Industry
The Impact of Technology on The Energy Industry
April 18, 2014
Technology Helping the Energy Industry?
Advances in technology promise solutions to some of the biggest problems faced by the oil and gas industry. In the Wall Street Journal’s Risk and Compliance Journal, John McCue, vice chairman and leader of Deloitte LLP’s U.S. Energy & Resources practice, discusses how improvements in shale oil and gas production, and nano-engineered materials may have positive impacts not only on the gas and oil industry but also on the power and utilities industry.
The power and utility industry currently relies on the low costs and lower emissions profile of natural gas, which serves as the key baseload fuel for electric power companies. But how will oil and gas companies be able to maintain the production levels needed to keep prices low?
According to McCue, oil and gas producers are working to increase recovery levels and improve process efficiencies in the North American shale plays. Advancements, such as multi-well pad drilling, multiple fracture stages, and improved well and pipe design, have already boosted drilling efficiencies significantly. Producers also are using fewer rigs to extract more oil and gas in less time, which keeps costs down. Further advancements promise to keep driving efficiencies in shale production. For example, scientists and engineers are studying how different types of rock fracture produce hydrocarbons and learning how to optimize drilling in shale formations through more precise well siting.
New Techniques Help Oil & Gas Industry
McCue notes that use of new seismic software based on radar and sonar techniques is helping producers identify and target “sweet spots” in real time. He references other new methods including hydraulic pulsing and reducing water use with water-free fracturing technologies, which are used to stimulate oil and gas flow. According to John McCue, “The effects of these technologies will be magnified as producers use advanced analytics tools to gain insights from the data and continue flattening the cost curve.”
The use of nano-engineered materials is another technological advancement that has great application to the oil and gas industry. McCue says, imagine materials lighter than a feather, stronger than steel, more conductive than copper, impermeable to standard gases and as thin as an atom. Advanced nano-engineered materials are creeping in across the entire energy value chain and will have a multitude of impacts. He points out that for oil and gas production, nanotech particles increase the strength to weight ratio of pipelines, making them more durable, while nano-coatings help equipment resist corrosion. He also mentions nano-balls, which are used to prop shale fractures open to optimize oil and gas flow and reduce water and chemical requirements.
Continuing Education Needed
When questioned about whether the technological advancements alone will help the industry position itself better in the future, McCue mentions the need for increasing technologically savvy employees. McCue states that, “…there is one important caveat: as the industry becomes increasingly technology-driven, companies will need to employ greater numbers of “knowledge workers.”
For that reason, he supports ongoing efforts to increase the number of students in science, technology, engineering and math through education initiatives, partnerships and apprentice programs, immigration policy changes, increased research and development funding, or other efforts. He concludes the interview by observing that “…it will be the combination of technological know-how and a pool of job candidates who know how to harness the power of technology that will serve the power and utilities industry further into the 21st century.”