AI Is Revolutionizing An Already Hi-Tech Oil & Gas Industry
Fayth Franzoy Gillespie
Principal, Tactica Strategies
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[Editor’s Note: Artificial intelligence or “AI” may need to be controlled but it has a very practical side as we see with the way it is being used by the oil and gas industry.]
“It’s not your father’s oilfield anymore.”
Isn’t that the truth. Technology changes at a head-spinning pace and every day new ideas, solutions, and products enter the field. Gone are the days of blind guessing in exploration and hoping for the best. In places like New Mexico, gone are the days of routine venting and flaring. With every passing moment, the industry evolves into its best version yet.
Artificial intelligence (AI) has grown rapidly since the days of computers playing chess. As it has advanced, it has become integrated into our daily lives (even as I write this, text prediction is giving me suggestions to finish the sentence). AI takes many forms, from simple rule-based systems that use conditional statements like “if this happens, then do that,” to more sophisticated forms like deep learning, which mimics the neural processes of the human brain to learn from datasets.
The development of more powerful computer hardware, such as specialized AI chips, has enabled researchers to build larger and more complex neural networks that can tackle more challenging problems. Recent breakthroughs in areas such as speech recognition, natural language processing, and image and video recognition, have opened further possibilities for AI applications.
The energy industry is not exempt from this revolution. In fact, AI is already optimizing the way the industry operates. Ernst & Young conducted a recent survey where 50% of oil and gas executives say that their companies are currently utilizing AI in their operations. Beyond that, a whopping 92% of oil and gas companies are either currently investing in AI technology or will be within the next 2 years.
If you imagine AI only as robots taking over the world, this is going to seem like a paradox, but increased safety is a key benefit of using AI in the field. AI technology can monitor operations to identify hazards and quickly send alerts directly to personnel on the ground and remotely. AI enabled cameras can detect leaks, fires, equipment malfunctions, and human-involved accidents, reporting them in real-time.
Results from field monitoring can be analyzed to predict potential hazards. Autonomous vehicles and drones can be used to inspect equipment, pipelines, and other critical infrastructure in hazardous areas. Emergency situations can be simulated using Virtual Reality and Augmented Reality in safety training.
Downtime not only equals down profits, but it can also create safety and environmental risks. Using AI can take predictive maintenance a step further, by providing a look ahead at upcoming maintenance. AI will continuously monitor and analyze sensor data, detecting patterns and anomalies that could indicate an imminent failure.
Other data like field notes can be layered in, giving service teams a detailed appraisal of the potential disruption. Once an upcoming issue is identified, AI can trigger a work order and a parts order, streamlining the maintenance process. By predicting failures before they occur, catastrophes like spills or fires can be altogether prevented.
Taming the data beast. Oil and gas companies have massive amounts of data across every area of operation, produced in every geographical business unit, and for every business line. In all of these datasets, there is an opportunity to utilize AI. Geological data can be used to predict the most promising new exploration sites then evaluate the economic viability of the potential project.
AI algorithms can optimize transportation routes, modes, and schedules, then recommend changes to improve efficiency. Demand forecasting technology can improve inventory levels to ease supply chain volatility. Endless financial forecasts accounting for different market scenarios can be quickly generated. The best part, a robust platform can bring all these siloed datasets into one place, unlocking more meaningful insights that are accessible across the organization.
Even in the back-office, AI can reduce manual processes by automating repetitive tasks. Invoices can be generated, automatically sent, and payments recorded immediately upon receipt. Human resources can pre-screen job applicants to identify the best candidates. Legal departments can use AI to insert information into draft contracts, scan contracts for non-standard terms during reviewing, and track deadlines and obligations.
Although we’ve already touched on a wide range of applications, speaking this broadly severely understates the power of AI. Each one of these uses could be further dissected, unveiling more and more opportunity. Despite the generalization, it is easy to begin to imagine all the ways that the industry is going to change in the coming years. Automation will increase. Environmental impact will decrease. The skills required of the workforce will become more technical.
Whether we like it or not, AI is here to stay in some format. While the scenes from sci-fi movies where machines take over the Earth loom in the back of everyone’s minds, the real-life opportunities are vast. AI will only go where we take it, but no matter where that is, I am constantly reminded of my favorite quote from the Digital Wildcatters, “evolve or die.”
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