Technological innovation has played a vital role in the growth of the global energy sector in the past years, especially the major energy players which have invested heavily on technologies to make their operations more efficient. With the rapid technological changes in the sector coupled with sustainability being a central concern for the industry, we find it helpful to thresh out some of the key issues surrounding technology and innovation in the energy sector.
As such, we invited Dr. Robert Perrons, professor of Technology Management and Strategy at the Queensland University of Technology, to answer a few questions on this matter. Prior to his academic stint, he worked in a wide variety of technical and non-technical roles for Shell International’s Exploration & Production division, including being the company’s Executive Coordinator of R&D.
Dr. Robert is a member of the United Nations’ Resource and Energy Expert Group, and is a technical adviser to MIT's Mining, Oil & Gas Club and several energy and resource sector technology start-ups around the world. He works for the Australian Government on an ad hoc basis as a member of their Expert Network, where he provides advice about the energy industry and emerging innovations in the energy sector.
Below are Dr. Robert’s insightful answers to our questions on innovation in the energy sector.
What is the role of innovation in the success of Energy firms in terms of surviving uncertainties and instabilities in the overall economic and political environment they operate in?
When it’s going well, innovation plays a vital role in helping industries like the energy sector to manage uncertainties and deal with instabilities effectively. If you look past all the hype about innovation, it really is about solving problems and/or making things better. Uncertainty and instability are only one such challenge facing the industry, and innovative ideas and fresh approaches can clearly help us not only to work around them, but to turn them into opportunities and succeed in spite of them.
How would you describe the R&D spending level (in terms of % of revenues) in Energy firms vis-a-vis companies in other industries?
“R&D intensity” (a ratio of a company’s R&D spending divided by its overall sales in a given year) is notoriously low in the oil & gas industry, but there’s a bit of unevenness within the sector. Historically, many service companies have had an R&D intensity of between 2-3%; international oil companies, by stark contrast, have typically been less than 0.5%. That’s a lot less than companies like Microsoft, which invested about 14% in 2016, Intel (21% in 2016), or AstraZeneca (25% in 2016).
With numbers like these in front of us, there’s no escaping the fact that the oil & gas industry proportionally spends significantly less than other sectors.
How do you think innovation can help the oil and gas industry to survive and compete in a carbon-constrained world?
Technology can the oil & gas industry work towards carbon mitigation in two important ways. First, we can make big gains to reduce the emissions to which we directly contribute. The precipitous decline in the price of sensors makes it cost-effective to make our entire production system “smart,” thereby allowing us to have a high degree of situational awareness about what’s happening in our production systems. By having our finger constantly on the pulse of the patient, we’ll be able to reduce—and, eventually, eliminate altogether—our direct emissions.
The second way in which oil & gas innovation can help to curtail global warming is by playing a helpful role with the development of carbon capture and sequestration (CCS). The world’s carbon dioxide levels are reaching proportions now where it may not be enough to reduce future emissions; capturing and burying the carbon dioxide that’s already out there may be a very important part of our future strategy on this front. And who has the know-how about how to drill wells in the ground and move pressurized fluids around in a reservoir? The oil & gas industry does.
How are digital technologies like Big Data, cloud computing, Internet of Things, blockchain, etc. changing the competitive dynamics of the sector?
I’ve been fascinated by how these kinds of digital technologies have “Uberized” other industries—that is, how they have resulted in tectonic kinds of disruption in other sectors whose business models hadn’t changed in over a century, e.g. taxis. Digital technologies can result in dramatic shifts in power and profitability, and these shifts can happen at a pace that surprises the people and companies caught in the middle. As industries become violently transformed by these forces, the underlying business model becomes more driven by data than by the physical assets or the physical commodity that the industry has historically been about. As they’re saying these days, “data is the new oil.” In that business environment, being the aggregator of the data and being the company that can more intelligently decipher what all that data means is what will attract profitability.
How would you say can a platform like TechnologyCatalogue.com help to accelerate technology & innovation?
The industry is quickly becoming more technology-intensive, but an unfortunate consequence of this is that there are a lot of people—including new startups, etc.—who are waving their arms and screaming to get your attention. With all that screaming, it can be hard to filter out the noise to get the signals that you really want to hear.
TechnologyCatalogue.com is an excellent way to make sure that you’re hearing the right things while turning down the volume on the rest. In other words, that platform will help you to focus on what will deliver the most value for your specific business.
Jointly with Dr. Robert Perrons, TechnologyCatalogue.com offers an intensive Innovation Excellence course for companies in the energy industry. This course gives participants knowledge of how innovation and R&D happen within the Energy sector. It also shows participants how to get better results from their organisation’s innovation-related activities by teaching them how to apply a broad range of tools and processes to get the technology deployed and maximize outcomes. The course will typically be provided over three days with 4-hour time slots per day. It has recently been provided online to a major NOC in the Middle East, and was very well received.
Curious? Please send an email to email@example.com and we will share the course outline with you.
Discover and deploy technological innovations to accelerate energy transition. That’s the objective of TechnologyCatalogue.com. With over 600 technologies and 60,000 unique users of the platform, TechnologyCatalogue.com supports the energy transition by providing a platform that bridges the gap between technology suppliers, end-users and experts, and facilitates technological innovations towards a more sustainable energy sector.
Aside from the global platform, TechnologyCatalogue.com also provides customized services for companies and industry organizations, tailored according to their specific needs to get the technology deployed!
We understand what it takes to get technology deployed, including all change management aspects related to new ways of working. Over the years, we have facilitated more than 1,000 technology deployments for global and regional operators resulting in >$1 billion of value added.