Global Energy Show: Technology Will Not Replace Human Workforce; Oil And Gas Is Part Of Energy Transition
Service sector companies are unlikely at this time to deploy the sorts of capital-intensive automation technologies that would dramatically reduce the workforce on drilling and service rigs, says Kevin Krausert, president and chief executive officer of Avatar Innovations Inc.
“I have a hard time imagining right now a drilling company that has just racked up a whole bunch of debt or a frack company that has racked up a whole bunch of debt, which is now finally making money, is going to assume a major capital investment to do the full automation,” he told a session at the recent Global Energy Show conference.
The former Beaver Drilling Ltd. executive said that he sees oilfield service firms directing capital spending on technologies to improve their efficiency and competitiveness.
“Actually, it’s a matter of upskilling and not replacement, with the same number of people. That’s reflective of the broader changes we must think about in exponential technology disruption. Education must be a life-long journey. You have to constantly be upskilling your skills. Rather than looking at it as one degree and you’re good for 30 years, you need to tranche it out into little-sized chunks over your career.”
He added: “As we automate everything and throw AI on things, it’ll actually be our adaptability that’s our strongest skillset rather than the hard skill itself, because AI will potentially become better at it.”
Those in the oil and gas sector must cultivate adaptability and resilience by placing themselves in situations where they stretch their skills and networks, Krausert suggested, and this is what the effectual reasoning learning model that Avatar deploys aims to support in an environment where workers are safe to fail. Avatar has just launched its second CarbonTech accelerator, showcasing an 85-per-cent increase in breakthrough technologies compared to last year.
Meanwhile, VEERUM Inc. is a Calgary-based software-as-a-service provider that matches digital technologies with asset ownership. Its CEO, David Lod, told the conference panel that his company is not coming to reduce the workforce of its clients so much as it is driving productivity and efficiency, and letting clients make data-informed decisions. He said things like automation and robotics still lack the necessary human element.
“We’re not replacing the human processing of being creative, finding ways to leverage the technology to be more productive or safer. We are talking about taking knowledge workers here who might be spending half of their day or greater searching for data and trying to get organized, where the implementation of a new process or way to do work could free them up to do what they’re excellent at, and not the work that actually doesn’t need to be done.”
Ryan Arsenault, founder and CEO, CarbonAi, said automation for his business is about increasing efficiencies and “changing the landscape on data flows” so workers can make better decisions, and ensuring work is done properly and in an auditable and transparent way. CarbonAi develops and monetizes carbon credits — and other environmental assets — that result from companies tracking emissions and reducing those emissions.
“On the software side of our business we currently monitor 12,500 methane-reduction devices that were installed to reduce methane emissions in the Alberta marketplace. That aspect of the program has created jobs on the install, but there’s a backend data requirement on the crediting side where you need to go in and inspect devices and do other tasks related to that data collection on a periodic basis.”
He added: “That was always being done by field staff, but the way it was being completed was detrimental to the crediting process and it was not transparent enough. There were issues on the data side. And so, what we automated there was automation of a human-initiated workforce. People still need to go out to these devices. They’re not IoT; they’re not connectable. Human beings need to go connect to that work.”
As industry automates processes and digitizes workflows, according to Arsenault, this will not replace operators, technicians and other people in the field. What it will do is enable these workers to do their jobs more efficiently. He noted that there are labour challenges in terms of companies trying to get more people to work in the energy sector.
“On the engineering [and] technician side, we need these guys to be able to do more with less manpower. And so, I don’t think we’ll be replacing anybody. We’re just helping guys get the job done with a more efficient process.”
Energy transition needs oil and gas
The oil and gas industry is a meaningful and powerful partner for humanity meeting climate ambitions, Krausert told the panel. With the amount of capital coming into the energy-transition space, he said, he is optimistic companies can change what it means to work in the energy sector, aligning the value proposition of working in energy with a younger-generation workforce who is more committed to the climate than are older generations.
“It has been a tough industry to work in for the last seven years, but probably more importantly there’s a mistaken belief that the oil and gas industry isn’t a part of the energy transition. That’s where I think the Herculean effort in front of our industry is really in relating in simple terms to stakeholders outside our industry that energy transition is not just wind and solar. It’s also carbon capture and hydrogen, biofuels and things that we’re actually really good at.”
For its part, he noted, Avatar connects the opportunity between oil and gas and energy transition, demonstrating that if one works in the energy sector, then one is also working in energy transition.
It is “almost comical” to suggest that production of renewable diesel and hydrogen, or any other ‘green’ fuels and energy sources will not in large part come from the same companies currently producing oil and gas, said Lod. “You won’t see the Shells, Exxons and everybody else fold up their tents once this transition and diversification happens. They’ll be the drivers of this, and they’ll have their logos on the new facilities that’ll make this transition happen.”
Therefore, he said, these legacy organizations need support in moving towards the transition, and for young people coming out of post-secondary and looking to make a positive change in the world, working with these companies might be the best way to participate in change. “It must be done with a sort of digital and technology drive behind it to really unlock that free cash flow and opex. To make that transition smooth or more effective is critically important.”
For some of VEERUM’s larger clients, he added, they find the “new workforce” is demanding that digital tools be a part of the job. “They want to work with technology as part of that process. And so, the oil and gas industry must take it under significant consideration that this next level of workforce doesn’t want to do things the old way.”
A changing ecosystem
The workforce is changing, and for the industry to build a workforce culture that can utilize new technologies and understand what will work, what needs to be played with, and what are terrible ideas is a skillset that companies must cultivate, said Krausert. However, he noted, exciting as a new energy ecosystem might be, there will be losers as well as winners, as is the case within any ecosystem.
“But there is opportunity galore when you can sort of connect yourself into it. Because of the multiple pathways that a net-zero future will have — and anyone who says they know what that’ll look like in 2050 is either a liar or way smarter than me — you have to have that adaptability and that resilience built into your business.”
Every technological solution requires infrastructure and installation, said Arsenault, and one of the challenges as he sees it to the energy transition is the “silofication” of things such as data experts working with the infrastructure people to ensure, for example, a feasible offset project can take place.
“One of our goals as a business is to automate things as much as we can, accelerate the pace of reductions, and integrate functions and businesses together to allow us to get rid of this silofication. Infrastructure, deployment, data integration — if you want to accelerate these items together, obviously you still have regulatory boundaries you must cross. We’re involved in a lot of that in the world right now, trying to track a rapidly-changing regulatory landscape.”