How Digital Transformation Improves Perceptions of Oil and Gas Industry
Digital transformation offers opportunities beyond the technical goal of increased production. It may also enhance sustainability, the work/life balance, and the public’s perception of the industry.
The final afternoon of the 2020 ATCE saw a wide-ranging virtual special session that covered an important but often overlooked facet of the unfolding digitalization revolution. While the rising wave of digital technology usually has been associated with production optimization and cost savings, panelists emphasized that it can also positively influence the global perception of the industry and enhance the lives of its employees.
Chaired by Weatherford’s Dimitrios Pirovolou and moderated by John Clegg, J.M. Clegg Ltd., the session, “The Impact of Digital Technologies on Upstream Operations To Improve Stakeholder Perception, Business Models, and Work-Life Balance,” highlighted expertise taken from professionals across the industry. Panelists included petroleum engineering professor Linda Battalora and graduate research assistant Kirt McKenna, both from the Colorado School of Mines; former SPE President Darcy Spady of Carbon Connect International; and Dirk McDermott of Altira Group, an industry-centered venture-capital company.
Battalora described the complex ways in which digital technology and the goal of sustainability might interact, highlighting recent SPE and other industry initiatives such as the GAIA Sustainability Program and reviewing the United Nations Sustainable Development Goals (SDGs). McKenna, representing the perspective of the Millennial generation, described the importance of “agile development,” in which the industry uses new techniques not only to improve production but also to manage its employees in a way that heightens engagement while reducing greenhouse-gas emissions. Addressing the fact that greater commitment will be required to remove the “tougher two-thirds” of the world’s hydrocarbons that remain unexploited, Spady explained that digital sophistication will allow heightened productivity for professionals without a sacrifice in quality of life. Finally, McDermott stressed the importance of acknowledging that the industry often has not rewarded shareholders adequately, but pointed to growing digital components of oil and gas portfolios as an encouraging sign.
After the initial presentations, Clegg moderated a discussion of questions sourced from the virtual audience. While the questions spanned a range of concerns, three central themes included the pursuit of sustainability, with an emphasis on carbon capture; the shape that future work environments might take; and how digital technologies power industry innovation and thus affect public perception. In addressing the first of these, Battalora identified major projects involving society-wide stakeholder involvement in pursuit of a regenerative “circular economy” model, such as Scotland’s Zero Waste Plan, while McKenna cited the positives of CO2-injection approaches, which he said would involve “partnering with the world” to achieve both economic and sustainability goals. While recognizing the importance of the UN SDGs in providing a global template for sustainability, McDermott said that the industry must address the fact that many investors fear rigid guidelines, which to them can represent limitations for growth or worse.
The work environment for the future was also a central topic, especially regarding a growing awareness of the work/life balance and its importance to a company’s culture, appeal, and retention of employees. With “normal” employment patterns and work habits suspended or altered by the COVID-19 pandemic, the industry, like so many of its counterparts, faces a new way of working individually and collectively. The panelists shared their experiences in adapting to new workplace realities, but all agreed that face-to-face interactions remained crucial and were unlikely to be completely supplanted, all pointing out that, from boardroom to classroom, societies have remained able to interact in person while remaining as safe as possible. All panelists also agreed that, whenever a post-COVID world arises, the positive byproducts of reduced commutes and emissions, as well as decreased physical footprints for businesses, would remain, but face-to-face interaction would still keep human connections at the heart of the industry. Furthermore, they agreed that while increasing automation may appear to be a threat to employees, the situation cannot be interpreted in a zero-sum manner. McKenna said, “We may need fewer engineers, but we may need more rig hands with wrenches.”
The ability of new technologies to drive innovation, and thus potentially a more-positive public perception for the industry, represents an important pathway, according to Spady, who noted the industry’s past failures to plan for the future and the importance of abandoning an “echo-chamber mentality” to achieve greater self-awareness. He also mentioned the industry’s need to “weave in and out of the fabric of society” rather than isolating itself in the oil patch, an approach that can enhance the public’s understanding of its charge. Several panelists agreed that the industry has not done its best in emphasizing its successes or being consistently transparent about its shortcomings. The advent of new digital technologies can offer the industry a means of more-aggressive involvement in environmental and life-quality initiatives. As McDermott said, “We have gotten the reputation of not being concerned about our surroundings, which is ironic because we’re such a technical industry … we’ve lost an opportunity to be on the right side. But if you look at the industries that can help, we are best-positioned to solve these problems.”