Lee Nichols of Hydrocarbon Processing magazine and Carole Nakhle of Crystol Energy joined us recently to talk about how shifting external pressures and the promise of digitalization are impacting the energy industry.
Global energy use and sources are in transition. At a societal level, the pressure on energy companies to address sustainability in new and proactive ways has reached a high point. And from a technology viewpoint, AI and other aspects of digitalization are poised to make a disruptive shift in how energy companies do business and run their assets.
We recently combined those topics in a lively conversation-style webinar. With highly informed Lee Nichols, editor of Hydrocarbon Processing magazine, orchestrating the discussion; and Carole Nakhle, CEO of London-based Crystol Energy, as the featured expert in energy markets, we had an extremely spirited conversation. We also received a host of great questions, which kept the session going 15 minutes past the scheduled end point!
Carole, who is a prominent commentator in international media on energy developments and trends, gave her view of what’s happening globally with energy. She talked about the reality of the sheer numbers involved in the global energy picture, and the reality that oil and gas demands will continue over at least the next decade to dominate the global picture. This is regardless of the pace of adoption of renewable sources, based on the growth of energy demand in Asia and the size of the global energy market.
Fossil fuels enter into every aspect of our modern societies, and it will take time and effort for people the world over to drastically change their habits and consumption patterns, she said. As experience shows, the energy transition is an evolution rather than a revolution.
The questions coming in online showed a wide diversity of views, and how the debate related to the energy transition is indeed polarized. For now, however, the answer seems to reside somewhere in the middle.
The engaged and spirited nature of the questions drove home how vital this issue is to even the most technical people in the industry — and how engaged people are in the subject. Then the discussion turned to digitalization and how crucial that trend is as a business weapon, given the volatility of world economics today.
What Does the Future Hold?
A few weeks later, I had the opportunity to give a presentation on the impacts of digitalization on energy at the European Refining Technology Conference in Warsaw, Poland. At that event, Bain’s charismatic partner Jose de Sa gave another view of the world’s energy picture.
Bain, he explained, has developed three future energy scenarios. One of them, the “Green Transformation” scenario, shows the global oil demand dropping by 10% from now through 2030. But another, the “Oil and Gas Superabundance” scenario, shows global demand rising by 11% by 2030. According to Bain’s tracking of actual performance of energy markets globally, the world is actually tracking very close to that higher demand scenario.
Bain’s projections also show strong divergence by region, with Europe being far different from the rest of the globe in its more rapid shift to non-hydrocarbon energy sources. So the way that you interpret this information will be colored by which region you are in.
It’s clear that digital technology provides one of the most important strategic weapons in a company’s arsenal for preparing itself to thrive in this uncertain economy of energy transition. We are driving towards the “self-optimizing” plant of 2030 to provide a disruptive way that downstream companies can elevate their margins, their sustainability and their agility. More on that to come in future blogs!
Carole and I are now working on a document providing more extensive answers to the various questions asked during the webinar. I’d like to invite you to listen to the recorded webinar, and look for the question and answer document, which we’ll distribute in the coming weeks.
And due to your popular demands as listeners, we’ll continue the conversation!
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