The energy transition is not new for mankind. People managed to transition and adapt to a variety of energy resources and changing environments from the wood-burning stoves to nuclear power. Only crisis pushes humans to a change, such as the infamous fog of London in December of 1952 that killed thousands of people. After that, the local air pollution was hard to ignore and it brought a clean air act.
Today we are empowered by a variety of technologies and scientific understanding that we should not ignore and put it into a good use. Educated actions, not slogans are required to build and execute a sustainable energy plan forward. Skilled human resources grown by oil and gas industry shouldn't be ignored. For energy transition projects “A lot of skill sets required… you are talking about chemistry and chemical engineering, mechanical engineering, supply chain logistics, knowledge of (the Earth’s) subsurface. These things are needed on a daily basis in oil and gas, and they are also needed in these new parts of the energy industry,” said Kenneth Medlock III – senior director of the center for Energy Studies at Rice University’s Baker Institute.
ENERGY TRANSITION
Energy Transition planning and execution has to be managed with the eyes wide open. It starts from the mining the natural resources needed to build solar photovoltaic(PV) plants, wind farms and electric vehicles (EVs) that generally require more minerals than their fossil fuel-based counterparts.
According to IEA – International Energy Agency, the energy sector becomes a leading consumer of minerals as energy transition scales up
Development and production of many minerals required for energy transition are also more geographically concentrated than hydrocarbon resources. The world’s top three producing nations control more then three quarters of global output of lithium, cobalt and rare earth elements.
Increase in mining for critical minerals for energy sector, naturally, leads to the increase in processing of the ore, transportation and production. Such an increasewill create extra pollution as well.
1. All industries are responsible for control of pollution
2. Recycling increase and mining sites remediation and reclamation efforts
3. Policies and Investments to support long-term Sustainable Development Goals over short-term profitability drivers
4. Higher prices of the mineral resources are to be expected as a result of tight supply
5. Decline in or equality of the resource: exploration for mining industry and ore bodies mapping is required
6. Prices increase for raw materials lead to increase in costs of battery production and electricity networks. For example, according to IEA 2020 report, copper and aluminum currently represent around 20% of total grid investment costs in electricity networks.
7. Redundancies in energy supply must be designed and maintained.COVID-19 and Texas freeze of 2020 have demonstrated that “Just in Time” supply delivery model fail us with basic needs
So, where is efficiency in supporting communities? It is in minimizing our mistakes, having a backup plan with mechanical solutions where possible in absence of electricity, educating ourselves how to use physical maps without GPS and handheld devices, minimizing consumption where possible and maximizing reusable supplies.
These are individual and organizational decisions that will support sustainability of organizations and communities.
LEADERSHIP
We are transitioning without noticing the change throughout our lives and all problems we are facing are always new in one respect or the other and require use of scientific principals and adaptation. Adaptation is only possible if old filters are removed from the selection of best resource for the problem at hand. For example, HR specialist should not rely on key word searches for new set of skills or for redeploying an engineer from one industry into the other and shall not ask for “10 years of experience” in the industry that just been born. This is an example where a convenience of artificial intelligence, deployed for reduction of the number of resumes to look through, works against our goals. Skill gaps observed in clean energy production and distribution industries looking for digitally capable workers and inability to fill the required staff positions surprises me. It should not be a problem in a city such as Houston where the number of technical “overqualified” people at 35-55 age group with engineering and geoscience degrees seeking reemployment is especially large.
Acceptance of new reality is the most difficult skill for any human. Realization of what is reusable from our societal experience to support the future will reduce unavoidable experimental mistakes. There is also scale of the problem that prevents people from acting on it: bigger problem less likely somebody is working on it and takes a “wait and see” approach.
Managers cannot afford to delegate an understanding of new technical realities and need to look at them from a value- not cost- point of view. Developing innovative solutions engineers are forced to use old words that describe a new phenomenon that existing managers understand. It creates generational and disciplinary communications break-downs
Oil and Gas organizations were built on a command-and-control model with sequential manufacturing process flow and vertical hierarchy of management in mind. This decision-making style is challenged by a large number of variables needed in the analysis of the investment opportunity in a rapidly changing business landscape today. Humans naturally are needing to simplify the task. Where could these simplifications be made? How should management make the decision in the Energy industry today? There are technologies that can help but they are NOT replacing the responsibility for a decision.
Technologies are changing but geologic and mathematical principals are not. Poorly selected assets will not become profitable if artificial intelligence is applied in the analysis. Fundamentals of the fit-for-purpose opportunity selection must be applied. The skills in using this approach are coming from experience inworking multiple projects with different challenges and sharing the stories of tested different assumptions and methods used in the field. Lookback studies must be deployed with fresh analysis of all available data.
DIGITAL TRANSFORMATION
Now most companies are engaged in one or the other sort of #digitaltransformationprogram or #supplychainoptimization. Some are looking for the best technical startup to solve their business problems. Hackathons are hosted around the globe solving a selection of well-scripted tasks. These are lab experiments testing the algorithm development. These experiments need to be tested for scaling up in an operational setting.
If these solutions are scalable, they need to be accepted by the organization and that requires transformation of Human behaviors: the purchase of the plumbing tools does not make the purchaser into a plumber. One still needs to learn the trade and be able to think a problem through and make the decision. Digitalization will expose more data, will help with clustering of the information and will speed up the diagnostics with the correct problem statement defined by a human and time available for the analysis before the action. So we return to a leadership and decision making once again: how one makes the decision with partial data and limited time? How does one select the critical variable to address among all other variables available in the decision equation? The balance between human intelligence and artificial intelligence now often called Augmented Intelligence where a human has very important role in setting up the problem statement and making a conclusion on what it actually means.
