MIT Technology Review Insights conducted a global survey of 350 C-suite executives and nine industry leaders across North America, Europe, and Asia-Pacific in late 2022. The survey, sponsored by Shell, resulted in the release of the 2023 Digital Technology: The Backbone of a Net-Zero Emissions Future report. Dan Jeavons, Shell’s VP of computational science and digital innovation, shared his insights with Aman Srivastava, TWA deputy editor in chief, about the findings of the report and how advancements in digital technology will affect the oil and gas industry.
Aman Srivastava (AS): The survey conducted by MIT seems very comprehensive. How did you move ahead and conceive this project and report?
Dan Jeavons (DJ): Shell is often recognized as a frontrunner in the digitalization of the energy sector, including in support of the decarbonization of our operations and products. But for digitalization to be an impactful lever of the energy transition, the whole sector needs to digitally transform. Not only the energy sector, but all industrial sectors.
Sector-wide digital transformations are needed because it will take collaborations and ecosystems of digital solutions to truly understand and reduce industrial emissions.
That is why we strived to understand the readiness of the industrial sectors in embracing digital solutions as a decarbonization lever. We identified MIT Technology Review Insights as an authoritative partner to carry this survey based on their track records of qualitative and quantitative research and analysis.
MIT Technology Review is a world-renowned publication linked to the world's foremost technology institution. Its editors' deep technical knowledge, capacity to see technologies in their broadest context, and unequalled access to leading innovators and researchers give us confidence in the findings of the report.
AS: Stephanie Jamison from Accenture said, "Every situation is different; there’s not a single playbook that works everywhere," in regard to solutions towards digital technology implementation. Do you believe there can be standardization brought among various industries?
DJ: Standardization is indeed a challenge, but it is a necessity. Deep decarbonization of energy infrastructure and consumption will require a comprehensive digital transformation to be applied right across the energy value chain.
This is not to say that digital technologies and solutions cannot be proprietary or protected by IP [intellectual property], but that the data on which they work will need to be interoperable alongside value chains. We must be able to track emissions along the energy value chain to effectively reduce the emissions of the energy sector. This requires, for example, defining and rigorously applying standards for data reporting.
Common data standards also mean that once you have gathered good-quality information you can maximize its value by sharing it with others in your organization or your suppliers and customers.
The more recent progress in ledger and Web3 technologies are offering new solutions to help build a trustworthy flow of data between energy or industry players while retaining the privacy and confidentiality of the data.
Companies compete on data gathering and analysis of data but should not compete on the form of data storage. Shell has already made significant progress in helping to establish common industry platforms. For example, we are a founding member of OSDU, the Open Subsurface Data Universe, an industry standard for managing subsurface data. OSDU aims to accelerate innovation and increase efficiency by enabling seamless sharing of subsurface data across the industry. The fundamental principle behind the OSDU platform is that it is “open” and provides a level playing field and a more accessible marketplace for vendors.
Good ideas can come from anywhere and can be adopted quickly with standardized formats. That is why we are also a founding member of the Open Footprint Forum, which is developing open and vendor-neutral industry standards to provide consistent and accurate measurement and reporting of environmental footprint data.
We recently took the next bold step in supporting standardization of digital solution in energy by making open source the code for the data ingestion element of our Sensor Intelligence Platform: the Real Time Data Ingestion Platform (RTDIP). It aims to provide easy access to high-volume, historical, and real-time process data for analytics applications, engineers, and data scientists wherever they are. I believe this data ingestion capability is a foundational capability for the energy transition.
AS: You mentioned that “blockchain has the potential to develop trustworthy and transparent carbon markets.” Can you please give a brief description of the blockchain technology and how it can prove to be a gamechanger.
With the arrival of Web3, energy markets are at the cusp of the Fourth Industrial Revolution. The convergence of AI [artificial intelligence], blockchain technology, edge computing, and the IoT paves the path to a more decentralized and collaborative version of the internet. Blockchain technology is a digital and decentralized ledger that keeps multiple copies of transactions and makes data tampering close to impossible.
Shell is building capability in blockchain, and already have multiple blockchain proof of concepts and pilot projects in areas ranging from proving the origin of energy to equipment source verification. We are exploring blockchain to track low-carbon energy and certificates from their origin through every stage and transaction.
There are a wide range of opportunities for applications of Web3 and blockchain technology to support the urgent energy transition. For example, Shell and a number of other global firms have launched Avelia, a book-and-claim solution to help scale the supply of sustainable aviation fuel (SAF).
Avelia, currently in pilot phase, aims to demonstrate the credibility of the book-and-claim model, using blockchain technology to ensure secured allocation of SAF’s environmental attributes to companies and airlines after the fuel has been delivered into the fuel network.
Given the nature of renewable energy, especially solar and wind power, the electricity generated is not always readily available (without storage) and is often geographically removed from where the electricity is needed. Moreover, with the advent of prosumers—consumers who also generate energy that can feed back into the grid—existing energy systems need a deep overhaul.
These changes in the energy system will exponentially increase the number of transactions, including micro-transactions, which will take place every day between many players and energy assets. These must be recorded and managed in ways that guarantee data transparency, trust, and verifiability. That is where blockchain is such a promising solution. It is vital that transaction systems and regulations evolve to cater to this need.
Blockchain technology also provides a system that facilitates trustworthy automated transactions without the need for human intervention using smart contracts. Smart contracts mean we can pre-program certain rules into a protocol or a ledger, which self-executes when certain conditions are met; for example, to create energy certificates or proofs of emission reductions for a value chain.
Web3 and blockchain are still maturing technology and the use cases keep growing. The key takeaway is that many proof of concepts have been done in the energy sectors and products are already deployed. This is a complex topic which is brilliantly explained in another piece with MIT Technology Review Insights by my colleague Sabine Brink, our blockchain and Web3 lead. You can read it on our website, where she also elaborates on the shortcomings of these technologies and the way forward.
AS: It is very interesting to hear that energy industry leaders demonstrated willingness to experiment with new digital technologies. Can you give a few examples of the frontiers in oil and gas which are yet learning to adapt to new technology?
Digitalization is transforming the energy industry by improving efficiency and safety as well as facilitating the use of renewable energy. For example, digital innovation plays an important role for Shell in adding value through increased productivity and lower capital and operating costs. We are actively working on a range of digital technologies including robotics, 3D printing, cloud computing, and advanced analytics.
It is true that digitalization has been and is supporting our oil and gas operations, but not only. It is already a key enabler of our efforts to decarbonize. Let me take the example of computational sciences and high-performance computing (HPC).
Our grasp of computational technology helped us to lead the way in technological developments in exploration in the 1960s, 70s, and 80s, and demand for computational design and analysis has increased dramatically since mid-2000s across increasingly varied domains. And we maintain a top-tier HPC facility to enable faster and sharper insights from computational sciences, aided by advanced visualization. The main HPC areas of application for Shell are geophysics, seismic imaging, material science, and fluid dynamics at various scales. But our growing businesses in low-carbon energy solutions are beginning to rely on HPC as well.
An example of HPC in our conventional operations is the estimation of rock properties using computer simulations. Rock core sampling is utilized to determine the physical and chemical nature of the rock of a hydrocarbon reservoir. Digital modelling of the reservoir’s rock based on the computed tomography scanning (CT scan) of a core sample is now being used to accelerate the evaluation of hydrocarbon saturation levels, permeability, and porosity of a reservoir’s rocks. But our HPC infrastructure and code optimization capability have also proven to be true differentiators in helping us accelerate the energy transition.
For example, we are working with Dow on electrifying some of the most energy-intensive elements of chemicals production. The computational modelling of such processes is highly challenging because the questions to answer are by nature multiscale (from plant to molecules) and multiphysics (they involve numerous complex laws of physics). With recent advancement in electro-thermo coupling models, and in HPC, we have jointly developed advanced modelling frameworks to design and patent innovative electric heating concepts at plant scale. In 2020–2021, we secured new patents, onboarded additional research institutes in the project, and earned the financial support of the Dutch government. In 2022, we started a pilot demonstration of an electric chemical cracker at our research center in Amsterdam.
This is only an example of how our deep expertise in HPC has moved beyond conventional oil and gas business problems into designing the decarbonized energy system of tomorrow.
Innovation in digital and AI is key to help us make the massive changes needed for the energy transition to be successful, particularly in these four areas.
1. Digital technologies can make it possible to design and operate entirely new energy systems at the device, plant, and regional scales—transforming the carbon footprint of these industrial processes.
2. They can provide the tools and mechanisms for optimizing the energy efficiency of operations and enabling the sharing economy.
3. They can enable more accurate greenhouse gas emissions tracking and transparent reporting across supply chains.
4. They can also enable more effective monitoring of carbon offsets.
AS: There was an example you mentioned on how AI applications helped a particular installation to identify potential leaks and prevent a series of errors. This is a classic investment to adapt digital technology and have highly advanced preventive maintenance. How do you think the oil and gas industry should change their mindset towards these types of investments?
DJ: I agree with you that we should not reinvent the wheel. The time is too short to bring digital solutions at the scale required for them to effectively enable reductions in carbon emissions. To do all this requires a different mindset and culture. As I say in the foreword of the report, not every leader is yet convinced that we need to find ways to partner with customers and suppliers to make the case for digital technology to be at the center of driving decarbonization.
Too often in the energy industry, proprietary systems are the norm, and data sharing is rare. This reduces the opportunities for smaller innovators (such as startups or research labs) to participate in the ecosystem and also limits the ability of partners to collaborate easily across organizational boundaries.
It is for this reason that Shell has pushed so hard, leading the industry in developing common data standards and platforms such as the OSDU, the Open AI Energy Initiative, and the open sourcing of our RTDIP.
To kick-start an ecosystem of AI solutions to help transform the energy industry, we launched the Open AI Energy Initiative, together with C3 AI, Baker Hughes, and Microsoft in February 2021. It is our contribution to avoid recreating the wheel and instead keep innovation going forwards.
We went even further in helping accelerate and build open ecosystems by open sourcing our core data platform: RTDIP. This code has gone through years of development and provides time-series data management capability. By sharing it via the Linux Foundation Energy, we hope to encourage collaboration, accelerate innovation, and benefit organizations across the energy industry and beyond.
RTDIP aims to provide easy access to high-volume, historical, and real-time process data for analytics applications, engineers, and data scientists wherever they are. I believe this data ingestion capability is a foundational capability for the energy transition. The open-source model of shared development offers a viable “middle way” between purchasing standard products and creating bespoke systems.
Open source also offers a way to collaborate and support integration across value chains. Increased interoperability helps companies co-create solutions easily for frictionless flow of ideas and data. Furthermore, by enabling market access for smaller entities, open source can support rapid innovation.
Using open data standards means that businesses can reduce the time and effort required to collect and store their data. While data is a valuable product, everyone’s innovation efforts will be best spent on analyzing the data and developing new solutions.
AS: In the survey, the energy industry had only 11% confidence in saying that technology partners and suppliers, along with data sharing and open standards, will be needed to achieve decarbonization goals. Data is a huge aspect of technological upgrades. Sharing data has always been an issue within the oil and gas industry. How can we improve this barrier of data secrecy while collaborating with each other?
DJ: This is indeed a challenge which many are debating, and some are addressing. We are convinced that the ability to share data across supply chains is essential to achieve deep decarbonization, in any economic sector. That is why we are leading in the first open source and open data innovation projects in the energy sector (OSDU, Open AI, and open sourcing our RTDIP with Linux Foundation energy).
Any digital transformation relies on clean data, and interoperable data are a requirement for open innovation. As we observe in the current debates in Europe and in the US on digital and AI regulations, the open access of company data for research purpose is a bone of contention. I believe that improving the barrier of data secrecy will require the oil and gas industry to
1. Further build trust in how the data is shared and managed, including with innovative digital solutions.
2. Demonstrate leadership’s support that this is the right thing to do and to unlock new business value.
3. Deepen strong digital cultures in corporations.
AS: “Digital has the ability to create incentives and new business models to accelerate the energy transition.” Can you please elaborate on this from a young professional’s point of view? Is this a call to be more entrepreneurial?
DJ: It is a call to be open to digital technology disrupting the energy system as we know it and embrace new business models, innovation partnership, and customer relations. Our innovative digital solutions are already helping our traditional industrial and commercial customers reduce their carbon emissions, which is a new type of service offering in our relationships.
Take, for example, in the aviation sector: Avelia, mentioned earlier, is the world’s first blockchain powered digital book-and-claim solutions for scaling SAF, which we launched with Accenture and Amex GBT.
With Avelia, airlines and business customers could simultaneously reduce emissions in their respective scopes, while ensuring transparency and accountability by avoiding issues such as double counting. By spreading the cost and benefits of SAF across the aviation value chain, Avelia allows airlines to start accessing more affordable SAF today and increases access to SAF for corporates looking to reduce emissions from their business travel.
This is also the case in shipping. There, optimizations to the way in which ships are operated can make a significant impact in terms of CO2 emissions reduction. Shell’s Just Add Water System helps guide a vessel’s position in the water to cut fuel consumption and associated greenhouse gas emissions. The technology has been developed by Shell, working with the University of Southampton, and has been deployed on more than 62 ships so far. We have achieved up to a 7% reduction in emissions on our own ships using the software and we are now working with Kongsberg Maritime to make the solution available across the industry.
To summarize, the future of energy is decarbonized, decentralized, and digital. In this net-zero emissions world, digital technologies and solutions will be the backbone of energy systems where customers and prosumers will be empowered to make real-time choices about their preferred energy products. With the right control points in the data and energy value chains, we will strive through the energy transition while providing the energy the world needs.
