As the debate over climate change escalates, the resources extraction and oil and gas industries continue to face structural transformation due to volatile pricing, stringent environmental regulations, and job losses.
Complex issues make this anything but a simple for-or-against binary policy question, given that Canada’s economy remains anchored in the resource industry while continuing to expand into new growth sectors—a critical and a strategic approach for any high-performing economy.
In this polarizing debate, however, are the key issues being addressed? Beyond aspirational timeframes to cleaner energy production, what real progress has been made? What is the plan for displaced oil workers as a result of this transition? How does western Canadian natural gas, light oil and bitumen production compare to other global production streams after factoring in wider social and environmental metrics?
Also, how does Canada get top dollar for the oil and gas it already produces? For that matter, how can the oil and gas industry, which is already significantly invested in alternative energy, help in the transition to greener energy?
And what of the big questions? How does the need for perpetual economic growth play into climate change? How does global population growth fit in? Or increasing urbanization? And what does it mean to be a country like Canada where its regions are rich in different resources but depend on one another to realize the full value of those benefits?
It’s a long list that merits deeper reflection.
It is also important to recognize western Canadian oil and gas has been significant advances that are rarely acknowledged.
Some oil and gas producers have, for instance, already achieved net-zero-emissions production in certain fields by replacing thermal energy generators at remote well sites with solar power and methanol-powered fuel cells in combination with electric-powered pumps, air-activated control systems and electric dump valves and flow controls.
Alberta is also home to the world’s first refinery designed to capture CO2 process emissions from the outset. It’s already producing diesel from synthetic crude, followed by bitumen processing in 2020.
Others in the industry have taken a second look at depleted oil reservoirs and delineated an inferred resource estimate of 6.7 million tonnes of lithium carbonate equivalent, which now ranks Alberta among the largest lithium resources in the world. If successful in commercializing this resource, it will spur a new industry in the province: one that aligns with global efforts toward the electrification of transportation and the creation of a lower carbon-intensive economy.
An ecologically focussed private group has also jumped at the opportunity to help Alberta’s industry reduce methane emissions by financing the cost of swapping high-bleed pneumatic controllers for lower GHG emitting units. The outlay costs are recovered through reductions in fuel consumption and carbon offset credits.
A host of consortiums are now tackling water issues, air emissions and environmental degradation because, by all indications, the political will to wean the global economy off fossil fuels simply isn’t sufficient to curb the need for continued economic growth and employment, which drives the continued unrelenting escalation of global oil consumption beyond the current 100 million barrels per day.
Meanwhile, Canadian producers are among the most effectively regulated, environmentally and socially responsible producers in the world—which, in the short term at least, is probably the best justification for its products in the global marketplace.
The next step: change
Innovation has always been a cornerstone of oil and gas development. Three of the most recent step-change industry innovations have been: 1) the successful extraction of bitumen from oil sands at the turn of the millennium; 2) the application of horizontal multi-frac technology in tight and shale gas reservoirs; and, 3) the application of horizontal multi-frac technology to shale oil reservoirs.
Together they transformed a “sunset industry” into what it is today. All were met with enthusiasm until the shadows of these technologies came fully into view—most notably growing carbon dioxide missions.
Shale gas flooded the North American market after the 2008 financial markets crash and collapsed the price of natural gas. By 2014, new supplies of shale oil—together with growing oil sands production and a slowing global economy—cratered global oil prices in 2014 from $100 per barrel to $34 a barrel, which gradually recovered to the current $50 to $60 per barrel.
This new commodity-price reality is forcing the energy industry to search for new efficiencies while also fixing vexing environmental problems. The adoption of information and communications technologies (ICT) may hold the keys to overcoming intense competitive pressures while regaining the industry’s social licence to operate.
Various industry consortiums—IBM Watson for Natural Resources, for example—are bringing together producers determined to improve their operations through the application of AI.
Other companies, such as Enbridge Inc., go it alone—even though they do so in what is becoming a typically collaborative Alberta model: sharing their advances with industry and vendors.
At the end of 2019, ICTC bumped into Enbridge at an ICT hiring symposium in Calgary. After learning about the formation of a new technology initiative within Enbridge called the “Lab,” ICTC requested an interview.
The following Q&A is with Tuong Lee, Enbridge’s Director Technology & Information Services Transformation, responding to a list of questions via email. Some responses are slightly abridged.
(Calgary-based Enbridge Inc. is one of North America’s biggest pipeline companies. It has a workforce of about 13,600 people, primarily in Canada and the United States. Its network of gas transmission and midstream pipelines cover about 41,850 kilometres in 31 U.S. states, five Canadian provinces and offshore in the Gulf of Mexico. Enbridge was also an early investor in renewable energy, which includes a growing offshore wind portfolio.)
Q: Technology has always been a driver of efficiencies and safety, but when and how did the Lab come about?
A: In 2019, Enbridge mobilized the Technology + Innovation Lab (the Lab) to adapt to changing needs and accelerate technology-driven business solutions. Recognizing the benefit of harnessing data to unlock value through digital technologies, like machine learning and artificial intelligence, Enbridge envisioned a platform for creativity and experimentation to solve some of Enbridge’s toughest business challenges.
The Lab provides an environment in which employees drafted from different departments can come together to solve real-world problems for the company and its customers.
The goal of the Lab is to sharpen our competitive advantage through innovation in four key areas:
– Asset utilization and performance
– Asset health monitoring
– Workforce productivity
– Customer experience
The [motto] in the Lab is “learn fast.” Ideas that drive innovation and deliver business value within three to six months are our priority. The Lab uses Agile practices to develop products in six to 12-week increments and applies a customer-centric approach to deliver the right product for the right people in the right way. We focus on features that drive value for our customers.
Who is involved in this initiative?
Employees from functions across the organization partner with the Lab to produce advanced technology products. Specialists are brought together, and open collaboration is encouraged.
Based on the nature of the product being developed, we work with business experts and engineers from integrity, field operations, infrastructure planning, capacity management, engineering, supply chain management and senior leadership.
Technical specialists in the Lab have a variety of multidisciplinary skills, including Agile product delivery, user experience design, industrial predictive algorithms, data engineering, and sentiment analysis.
How many people make up the Lab?
The Lab operates in two locations (Calgary and Houston) with a total of 80 employees and growing!
We are actively recruiting for top talent with the technical skills and the entrepreneurial drive to solve the energy industry’s most complex, challenging problems.
What are some milestones and accomplishments so far?
We are especially proud of the advancements we have made in the area of data mining and creating product-specific algorithms such as:
– Optimization Engine for power consumption
– Neural Network for asset classification
– Clustering for defect classification
– Visual Analytics for fine-grade object detection in conjunction with other disruptive technologies (e.g. Augmented/Mixed Reality)
What is the Lab working on now?
We are focused on transforming data into information that drives high-confidence decision making. The Lab is applying artificial intelligence and predictive analytics to improve the efficiency of our business operations and environmental performance. We are building advanced technology products to accurately predict commodity commitments and deliveries, power consumption and cost, and maintenance requirements on our assets.
Is the value proposition/ROI straightforward, or is it more complex than that?
The Lab product teams unlock value by making the things we do more efficient, delivering energy faster, maximizing cost-effectiveness and raising asset performance levels, all while continuing to keep safety top of mind. By streamlining and optimizing the way work gets done, we have a positive impact on the bottom line by:
– Improving capital discipline and return on invested capital in an increasingly competitive environment;
– Leveraging data and analytics to enhance decision making;
– Optimizing how people work together, how processes perform, and how assets become more productive.
Can you talk about the collaborative dimension of Lab’s work with energy, tech industries and other partners?
The Lab collaborates and engages with innovators, researchers, and regulators in the emergent areas of augmented reality, advanced analytics, and cloud service providers. We share what we develop and learn with our peers—all with the goal of protecting the public and the environment. We will continue to expand external partnerships.
In collaboration with other industry partners, Enbridge uses augmented reality to transform reams of technical data into a 3D rendering of pipeline sections. By combining sensor data from the pipeline with raw information about the movements of earth and water in three-dimensional images, we created a “Star Trek-style holodeck” that enables geo-hazard experts to “see” the pipeline and the forces acting on it without digging. This holographic system allows engineers to peer beneath the soil to pinpoint potential hazards and assess changing geological conditions.
The Lab has developed a Green Power Transmission predictive maintenance model to identify wind turbine blade defects, estimate time-to-failure and remaining useful life. This unique solution helps optimize turbine servicing, avoid downtime and predict mechanical issues and is a potential game-changer in a sector grappling with increasing maintenance costs. The Lab is sharing our findings with industry and academic peers to help improve the viability of the wind energy industry and secure a greener future.
In partnership with industry vendors, the Lab has developed a solution using High Fidelity Dynamic Sensing technology, which uses multiple senses (sound, touch, sight) to enhance leak detection capability and incident prevention. This pipeline industry partnership is focused on developing and testing enhancements to the solution—including data processing speed, longer-distance optics and a system health screen.
What are some of the challenges the Lab has faced/faces (for example, digital skills shortage, corporate culture adjustments, etc.)?
Some of the challenges we are all seeing in the energy industry related to the following:
- Emerging Technologies – Technologies such as artificial intelligence have positively disrupted other industries and are poised to have an impact on ours;
- Changing Workforce – It is essential to source individuals who have competencies in advanced technologies, analytical skills, and cloud-based technologies;
- Mindset Shift – Individuals are required to embrace more Agile ways of working, to fail-fast to learn fast, and embrace experimentation and risk-taking.
Encouraging innovation is a vital component of our future success. It requires effort to nurture a culture and mindset of openness and fearless leadership, where people are free to speak up, collaborate, and do and be their best toward achieving organizational outcomes.
What do you find most interesting about the Lab’s work, how does it fit into the bigger energy picture and why is it important?
The future is about data – no matter what business you are in.
It is a misnomer that energy companies and pipeline companies are not technology companies. In fact, industrial applications like ours have endless avenues for opportunity. The reason technology is important is that it comes down to one thing: a competitive advantage. Technology will improve our returns, reliability, customer interaction and reduce emissions.
Freeing up the experts from the routine of data gathering and encouraging them to apply ideas and energy in unconventional ways will unlock new value. The Lab is an enabler for this to happen – for teams to come together, collaborate, and think outside the box.
Optimizing services through automation, digitizing, and exploiting disruptive technologies of machine learning/data analytics will change the way we do business in the future. Our industry can benefit from the innovative products we create as we push the boundaries of what’s possible by using the very latest that technology has to offer. Regardless of what the future holds, technological proficiency positions us for success. It will improve our performance, competitive position and customer interactions – both today and in the future.