This article was originally published in Forbes Technology Council
Dr. Francois Laborie is President of Cognite, supporting the full-scale digital transformation of asset-heavy industries in North America.
Thirty years. An incredible amount of time if you think about it. Enough time to grow up, study and get a job. Enough time to bring the internet to the masses and make it an essential part of human life. Enough time to change behavior and create new habits, jobs, challenges and opportunities. Thirty years is what lies ahead of us with the anticipated reinstated climate timeline. The President-elect has promised to put American back on the climate change path by 2050, in line with the Paris Agreement.
If the U.S. abides by this timeline, we are looking to a future powered by renewables, which could grow the economy and help save the planet. But at the moment, the nation has a long way to go. Fossil fuels are still very much part of today's energy mix, and incentives are lacking to make solid inroads toward a fully green future. That said, this is the same nation that was given 10 years to make it to the moon and got it. So, I have no doubt that 30 years is more than sufficient.
To succeed in this new 30-year era, energy companies will have to be dual-minded. They will have to embrace both a short-term and long-term approach to ensure their survival. The short-term approach will be about continuing to satisfy the demand for energy through the currently available power sources, as efficiently and sustainably as possible. This will require rapid digitalization, which in turn demands prioritization, investment and a radical shift in organizational mindset. The long-term approach will be all about renewables. This may seem like an uphill battle for an energy company that feels an expiration date breathing down its neck. So, let's break the road ahead down, decade by decade, with some predictions and insights.
In 10 Years
• We will be far less wasteful. We already have identified ways to reduce energy consumption and cut carbon. But to do it in practice, you need data. Data from billions of points across the infrastructure, fused into a single source, synthesized and made readable and relevant. In my time at Cognite we have tested this very scenario, among legacy oil and gas, projecting a 10% cut in overall energy use and putting the industry on track to fulfill the emissions reduction goals. This is an achievable goal.
• We will also have made inroads in the inevitable move to bring renewables into the energy mix. I see that today most of the fossil fuel players have already put this on their road map, and energy-hungry countries, like the U.K., are already making renewable a mainstay in their power mix. The upcoming Biden-Harris administration has already hinted that oil and gas expansion and new projects will be more challenging, and economic and environmental impact assessments will be increasingly rigorous. The new favorite child is likely to be renewables, as it holds the promise of millions of jobs — 10 million of them, according to Biden.
In 20 Years
• Our workforce will possess new skills that will increase the pace of change. Digitalizing assets across the energy sector and putting the data to work will require a new skill set, which will likely be increasingly prioritized for the next 20 years. A combination of analytics, software development and even domain expertise will be the winning combo, I expect, and the energy sector could be the driver of this reform, urging youth to pursue a technological-focused future.
• Offshore wind will truly scale. Fossil fuels begin their eventual decline during this decade, and the oil and gas industry will have embraced the opportunity to convert their competence and much of their infrastructure to this enterprise. Wind emerges as the heavy hitter on the power grid, data-backed to ensure stability and consistency in delivering power to America and beyond. The early investments in the 2020s will pay off, and power companies will truly understand that sustainability doesn't have to come at the expense of revenue.
Beyond this, I believe we will also see an increase in carbon capture and sequestration initiatives from oil and gas players. These will be supported by the same digital technologies that are already beginning to make oil and gas operations more sustainable and efficient.
• Policy changes will have proven effective in driving the industry toward sustainability. If the policy changes with what we're expecting to now be introduced in the 2020s, I expect we'll be seeing returns on investment made to renew American infrastructure, from better transportation networks to advanced cybersecurity systems and smart and resilient power grids, among many others. The decision to pass the "Expanding Access to Sustainable Energy Act of 2019" will prove pivotal, stimulating the American expansion of offshore wind development by keeping ownership and operation in the U.S., thus boosting the U.S. economy. Because of this the country will continue to push incentives and define policy that makes the expansion of renewables as efficient as the building of the American highway system.
In 30 Years
• The United States will have securely reinstated itself as the predominant energy producer. I believe the raw, innovative capacity of technology in the U.S. will be unmatched, and the country will continue to set the right policies and incentives to stimulate a clean energy sector. With the Paris Agreement fulfilled, the U.S. could set the standard for the next agreement, in which automation and artificial intelligence play a central role in securing a steady supply of carbon-free power for the next 30 years.
It is through cautiously optimistic lenses that I paint this picture of the next 30 years. Success will require energy companies to rethink the way they work, to make bolder bets, quicker moves and entirely new kinds of investments. But the industry shouldn't let the gap between where it is and where it needs to be prevent it from moving forward.