Bright oil and gas future will rely on innovation, efficiency

Panelists from ConocoPhillips, Chevron and Rice University chart past and present forces enabling their industry's future.

By Jim Montague

CT1703 ABBcustomerworld Day3

A bad headache with no remedy is worse than a super-bad headache with medicine close at hand.

For instance, booms and busts have buffeted the North American and worldwide oil and gas industry throughout its history. However, despite recent price-drops and other challenges, ConocoPhilips and Chevron reported in a panel discussion at ABB Customer World 2017 that recent technical innovations and accessible raw material resources have them feeling optimistic about their industry's performance going forward.

"The two big technical revolutions disrupting oil and gas, and causing players to rethink their business strategies, are unconventional reservoir development of oil and natural gas from shale, and large-scale performance improvements aided by data analytics," said Greg Leveille, CTO, ConocoPhilips. "The U.S. was the world's largest oil producer for much of the 20th century, began a 35-year decline starting in the mid-1970s, and regained the title due to unconventional oil."

Leveille reported that the U.S. has daily production of 25 million barrels of oil equivalents, compared to Russia's 20 million barrels and Saudi Arabia's 15 million barrels. However, the U.S. would only produce 12 million barrels of oil equivalents per day without unconventional production, which combines horizontal drilling with hydraulic fracturing. 

"This combination lets us access oil and gas we could never reach before," added Leveille. "As for data analytics, where it used to take us 20 days to drill a well, we can now do it in just 13 days. In addition, data analytics can be used anywhere, which makes it most powerful when combined with unconventional oil production. This is why we expect to achieve even more in the future."

Leveille, Trond Unneland, senior upstream advisor, Chevron, and Chuck McConnell, executive director, Energy Environment Initiative, Rice University, teamed up for the panel, "Designing business transformation and the future of energy production," at ABB Customer World this week in Houston.

Innovate—cautiously

Despite the positive influences of fracking and data analytics, Unneland cautioned that a steady stream of innovations is no guarantee that end users will employ them.

"Energy companies produce and consume lots of high-tech solutions and must constantly improve, but they're also slow to test and adopt them compared to mainstream consumers or the companies we've worked with in Silicon Valley," said Unneland. "Consumers and IT-based firms know the early bird gets the worm, but oil and gas players would rather be the second mouse that gets the cheese. This is because it's more costly to be the first to adopt new oil and gas innovations, so they stick with what's tested and reliable. Even when innovations are adopted, there's usually a step back period before benefits begin to arrive."

Unneland added the game-changing innovations in oil and gas in the past few decades include deepwater/subsea applications, real-time reservoir management, 4D seismic technology, horizontal drilling and fracturing, and data analytics. He added that emerging technologies in oil and gas include mobile computing, data science, cloud computing, cognitive computing and the Industrial Internet of Things.

"Our multi-department energy initiative focuses on three things: accessibility to secure energy sources, affordability of those sources, and environmental responsibility," added McConnell. "Then we look at what talents the industry needs, so they can develop dynamic workforces."

Implement—consistently

Leveille added that more powerful, capable and portable computing resources are greatly aiding ConocoPhilips projects. These tools perform high-end machine learning, visualization, site simulation and other functions.

"Five or 10 years ago, our major facility and well projects were mostly custom-designed, one-offs that a team would assemble and execute," he explained. "Now, we're developing capital expenditure projects with similar designs that are more repetitively executed, including well pads, oil sands processes and other rapid, low-cost experiments. This consistency gives us more leverage, and it's very liberating. We're going to do many more wells and other projects like this in the next 15 years."

Unneland added, "Upstream processes can now put sensors everywhere like downstream applications already do, and that's enabling a lot of improvements for us. However, where we used to hire data scientists to work with our geoligists, what we need now are hybrid, “petro-techs” that know both earth science and computers. We're doing some of this training at our Center for Interactive Field Technology at the University of Southern California."

Leveille added that ConocoPhilips is also providing more training in collaboration. "Our applications need to know more about how different measurements are interacting, and so we're coordinating our facilities and operations engineering people to do it," he added. "This is letting us look more closely at data for individual rigs, and even take a computer game approach, so operators can begin to compete with each other on improving performance. This whole thing becomes self-perpetuating, and it's enabled by this atmosphere of innovation."

Unneland added that even little data innovations can be a big help. "We recently had an issue about how to dispose of water from unconventional oil sites," he added. "So someone developed a smartphone app that shows site position, amount of water to be disposed and other details, and it's been a big help."

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  • I believe we are still a way from counting on wind and solar technology, as well as, wave technology. For the time being I believe we have to continue, as a world, to count on oil, gas and coal for the major energy fuel inputs. However, I would like to think that hydropower has an immediate offer of answering the question as to sustainable power in the U.S. and around the world and it doesn't have to be huge undertakings. For example if we can contain the flood waters that plague some areas, destroy cities, farms, industries, take lives and homes and just continue on its way to the seas, we can control the re-distribution of these waters to other areas that need water for human consumption and for agriculture, industry and the growth of life as we see it. The Mississippi river every year has floods in at least one or more of its tributaries from winter/spring rains or snow melts and takes out major cities all along the river to the sea. Every year. every year we also spend billions to recover and build new dykes and systems to try to do the job of containing it but watch it overtake the manmade facilities, wipe out New Orleans and just go to the gulf. The containment must be relocated to the tributaries with deep dredging and fields to be able to pump out the flood waters and pump it to dams and reservoirs already in existance in the rockies and western part of the U.S., fill them up and when they are discharged generate hydropower. If necessary put in more dams downstream and generate more. If we did this we could end the droughts all through the southwest and supply the water for consumption and agriculture so needed for the future growth of the population expansion we foresee, not just here but for the needed food all over the world. we could even keep Mexico in water which we are presently not doing per treaty and allow them to participate in growth and sustenance of their own country, not ours. I think there are about 7500 dams and reservoirs in the west at the moment and their could be double that with flood waters contained and pumped to the west. All these pumping and piping programs would not be any problem or challenge as we could follow all the roads and highways and install the piping above ground, automate and by controling mechanism regulate where the waters would go and use a switching system to change piping systems on regional or national central systems. We have the capabilities in steel making and in construction and in dams and hydropower plants. This program could maintain manower for 50 years or more once the west was cared for and we moved east to the trouble areas there. And we could introduce it to the world to use the waters of rivers much larger than we have, the Congo for example the largest in the world could supply water for all of Africa, if it weren't controlled by one person. And the Amazon in Brazil could supply all waters needed for many areas in all of south America. I believe for each hydropower plant started a hydrocarbon power plant can be shutdown. I also believe that the amount of water we have on earth never changes and was given to us to use and grow and create. But nothing tells us what we do with it or how we should distribute it for all of mankind to survive. I think we were given this opportunity to ensure that all man has a right to a free and clean water to drink and grow foods and for all life to survive. The waters will continue to rain and snow and recycle to the seas and so-on. We are just helping it on its path.

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