Sustainability in the Oil and Gas Sector: How will it be achieved, and who will measure it? (Sustainability Series, #3)

Oil and gas

Sustainability is at risk when asset managers are the judge, jury, and executors of the ESG agenda.

What makes a sustainable investment truly sustainable? And who gets to decide? At Eugenie, we believe that community members, labor, as well as impact investors, should insist on “community beneficial audits” of money managers that pitch clients on sustainability or ESG. This will enable managers to not only monitor, but also to define ESG and responsible business practices and risks discrediting sustainable investing.

Several locally-oriented funds and trusts across the U.S. are empowering communities with the agency in investment decisions to build long-term power for participants. Granting communities the power to design fund structures and veto investments can create influence if affected stakeholders are meaningfully engaged.

Net-zero by 2050 is no longer impressive. Greenhouse gas emissions must be halved by 2030, at least. Leading companies and countries need to accelerate to compensate for the laggards and secure their positions in a low-carbon economy. This race to net-zero is turning climate action from a drag to a driver of financial performance and economic growth – and potential competitive business and national advantage.

We endeavor to make these blogs relevant and informative to you, and we welcome your feedback. If these blogs inspire you to join us in solving the mentioned challenges, check out our opportunities, to connect with us.

Net-zero for the oil and gas sector

On Earth Day 2021, the US vowed to cut its emissions by at least 50% in the next ten years. On a similar note, one of the world’s largest oil majors has committed to being a net-zero company by 2050. Amid the growing climate concerns, the world is focused on actions in the energy sector, specifically actions of oil and gas companies. This has worked, having encouraged most oil and gas majors to set sustainability targets.

The fact that most of the world knows the oil and gas sector to be responsible for 42% of the world’s total greenhouse gas emissions hasn’t helped the majors’ cause. The COVID-19 pandemic highlighted the fact that the proliferation of oil consumption is due to demand and not supply – an indication of the possibility of a genuine pathway towards decarbonization.

While it’s clear that the sector needs to improve sustainability in its current fossil operations, the question remains how. At Eugenie, we believe that the answer lies in data i.e. the “new oil” is the answer! (And yes, we’re still NOT  a data company)

New oil > original oil

Research proves that a typical offshore platform of an oil and gas company runs at 77% of its maximum production potential. AI-driven advanced analytics are proven in their ability to aid in optimizing operational efficiency, leading to yielding returns as much as 30-50 times, alongside a considerable reduction in carbon emissions. Digital technologies can also help in reducing production wastage and in generating early warnings on security incidents. Digital twins and data-based diagnostic insights can improve operational reliability – resulting in reduced operational inefficiencies.

Digital Oilfields – Way to achieve operational efficiency

The alarming state of oil and gas operational failures would require prompt utilization of the available technological resources. Reduction of asset failures and sub-optimal utilization of processes, resulting in a high degree of carbon footprint can be achieved with the power of artificial intelligence. Reduced wastage and increased productivity of assets and processes are outcomes of AI-driven increased operational efficiency.

Petrochemical failures can result from poor asset reliability, resulting in fugitive emissions – incidents of leaks and unplanned release of toxic gases. Predictive maintenance holds the key to mitigate incident risks by timely identification of deficient assets and early warnings on asset performance anomalies. Cutting-edge technologies like machine learning can reduce the frequency of failures considerably.

If you can measure it, you can manage it

Industry 4.0 digital transformation technologies such as cloud and edge are accommodating existing operational processes. The reducing cost of sensors and other devices is nudging an increasing number of oil companies to invest in the Industrial Internet of Things (IIoT). Today’s machine learning models not only capture operational data in real-time but also learn from past patterns, giving a higher diagnostic accuracy. Every asset and process can be effectively quantified with smart technologies; Oil and gas companies can truly understand and quantify their carbon footprint with simulations and root cause auto-analysis.

Operational Excellence: A Step to Sustainability

Despite the limitations and discrepancies in data, Eugenie predicts asset and equipment failures with >90% accuracy. Eugenie’s Explainable AI, with root-cause analysis and diagnostic insights, enables effective operational decision-making. This decision-intelligence framework paves the way for the companies to introduce increased sustainability in their operations while reducing operational costs, thus enabling Eugenie to emerge as a pioneer for decision-intelligence frameworks in heavy industries.

Real-time Machine Diagnostics

Eugenie’s digital ecosystem includes products for batch data processing as well as real-time machine diagnostics. A large global oil major was struggling to accurately predict equipment failure probabilities on basis of sensor-generated data. This was important to them since unforeseen asset failure was a critical event due to the sheer enormity of operations, and the costs of reactive repairs and maintenance.

Eugenie tracked a “failing” state of assets to accurately predict the failures through a multivariate, multiclass approach of machine learning. This approach predicted cumulative machine failures based on the individual sensor data.

In addition to its technical brilliance, Eugenie’s human-centered design helps organizations correctly understand and interpret alarms and the suggested diagnostics.

Ecological and economical sustainability are not mutually exclusive

Oil and gas operations are not inherently eco-friendly, however, more and more companies of the sector are investing in research and innovations in various areas such as preventing methane leaks, water recycling, usage of renewable energy, and process efficiency improvements.

Long-term sustainability is not just an option, but an obligatory requirement from investors, customers, and governments. Carbon taxes are a stark reality for many industries, including oil and gas. A safer and greener future is a priority for the most progressive industries and oil and gas is no exception. With developments in reliability management using, a profitable transition to sustainability in conventional operations lies within reach,.

To learn more about how Eugenie has helped oil and gas majors ensure a profitable transition to operational sustainability, talk to us today or feel free to reach out to us at support@eugenie.ai.

To learn more about Eugenie, talk to us.