メニュー
Date :Mar 3, 2022
As companies emerge from the COVID-19 pandemic and its devastating financial impact, many CEOs and other business leaders are looking for ways to innovate to stay relevant and economically competitive. From the hospitality industry to retail, more companies invest in technologies that can showcase their products in new and exciting ways while also keeping customers interested.
The oil and gas industry is no exception. With more customers shifting toward alternative energy, oil and gas companies are looking to modernize, cut costs, and become more energy efficient. Successful digital transformation can help businesses achieve these goals.
In this blog post, we take a closer look at the current profile of the global energy market and how digital transformation is helping companies to stay competitive.
Today’s oil and gas industries were born out of the Industrial Revolution of the 20th century and quickly became integral to the growth of major world economies¹. According to some estimates, the 2021 global market size of oil and gas production was around $2.2 trillion, and it’s expected to increase by nearly 10% in 2022². Many oil and gas companies are still some of the most profitable businesses globally³. However, the nature of the energy market is rapidly changing. Even though the oil and gas market is still enormous, it was more than double its current size in revenue just a decade ago⁴.
This change is in large part due to transitions in energy demand. Fossil fuels are becoming increasingly unpopular due to climate change and concerns around the impact of environmental pollution on marginalized communities, which tend to live closer to energy plants⁵. At the same time, as states and cities are transitioning to cleaner energy sources like solar and wind power, fossil fuel companies are facing more pressure to lower their greenhouse gas emissions.
Despite the decreasing demand for oil and gas, utilities that specialize in these areas will still provide a significant portion of the world’s energy production in the foreseeable future. And it’s still lucrative to be in the business — since the start of COVID-19 and the leveling out of the pandemic, the price of a barrel of oil has risen to around $100⁶.
But no company will remain unaffected by the current social and environmental transitions. To stay competitive, oil and gas players will have to find ways to respond and adapt and show they support a cleaner future — instead of fighting against it.
Some oil and gas companies have already had to find ways to change their energy mixes — either forcefully or by choice. For example, one of the largest utilities in California, San Diego Gas & Electric, has had to adapt to stringent state rules to transform its energy supply. The California Public Utilities Commission has asked major utilities to help the state achieve a goal of having nearly three-fourths of its energy mix come from renewable sources by 2032⁷. SDG&E has adapted by already transitioning around 40% of its energy mix to solar and wind power⁸.
However, SDG&E also had to invest in alternative solutions to meet its other obligations, like significantly reducing greenhouse gas emissions while not incurring damaging financial costs. The utility, like many others, has looked at ways to strengthen its grid with the help of digital technologies and data acquisition systems that can better monitor and detect when certain parts of its energy network have failed or aren’t working efficiently⁹.
Digital transformation — where data, technologies, software, and automation are used to transform systems, processes, and workflow across organizational structures — is a powerful strategy companies can use to meet environmental and political goals in a way that’s also economically beneficial.
The following technologies are now frequently used to effect change in the oil and gas industry:
Digital transformation can occur at every point of the plant design, initiation, and operation process. When it comes to plant design, many digital tools are now available to streamline processes.
PlantStream, for example, has developed sophisticated computer-aided design (CAD) software to aid plant engineers¹⁵. Many oil and gas companies already use the software to design complicated pipeline systems. The benefits are numerous: for instance, the software can route 1,000 pipes in a minute while also considering the properties of the fluid going through the system, the connections, and the pipe sequence. In addition, the technology allows utilities to create quick, precise cost estimations and collect large amounts of data.
Plant designs can, of course, also be highly complex as they have to take workability, operability, maintainability, and safety within a limited amount of space into account. The PlantStream CAD software can streamline the process, reduce costs, and free up design engineers’ time, allowing them to focus on other tasks.
Oil and gas companies won’t look the same 10 years from now. With increasing emphasis on addressing climate change and laws that govern greenhouse gas emissions, these organizations will have to adapt to stay afloat. In many instances, this will mean changing their energy mix and contributing to sustainability initiatives.
Many companies are now also looking toward digital transformation to help save costs. This type of transformation will ultimately also help utilities to meet climate requirements while increasing the efficiency of their production lines. Everything from high-speed internet and cutting-edge software to drones and robots can completely change the effectiveness of a company’s operations. As the world changes, economies and industries must change. And companies set on staying competitive and sustainable will have to figure out how to modernize their business models, too.
Connect with an expert to start your PlantStream journey.
Realize more efficient 3D plant design through seamless workflows.
