How Tech Is Becoming an Integral Player in Energy Solutions Analytics are shaping decisions about where and how energy producers tap natural resources and how we can build our greener future.
By David Koji Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
Most people don't realize that simply firing up their laptop, desktop, tablet or mobile device contributes to massive use of energy. When we think of energy, it tends to be in very broad-based terms: electric companies, oil refineries and green energy solutions. Technology companies, however, are playing a growing role in the energy sector.
Opportunity awaits.
It seems as though we've recently hit a wall in finding solutions for a greener world. We've harnessed wind power, converted solar rays and mass-produced electric cars. In the past few years, organizations have sprung up to help advance the greening efforts. But with fierce competition for capital, the kind of green that spends often is in short supply for sustainable causes. In contrast, the tech space is constantly innovating and appears to have no shortage of funders on the horizon.
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As companies realize the vast energy needed to operate cloud-based platforms and other emerging technologies, they understand they must do more than switch to smart bulbs and mobile-controlled thermostats. At the same time, energy companies are starting to see the need for updated technology. During the past three years, technology has skyrocketed in the energy sector. That's particularly true for data collection services such as locating and extracting real-time information.
New technologies allow oil and gas companies to monitor their equipment from start to finish. This gives them opportunity to streamline the refining process and produce more at a lower cost. The problem lies in maintaining profit upstream while lowering prices for consumers downstream. The tech industry isn't quite ready to provide these solutions. Budgets of more than $20 million upward are projected to fund analytical programming capable of tracking all this streamlined data. In other words, huge business opportunities exist for tech companies who can take advantage of the increasing cloud-based need to run the energy sector more efficiently.
Skepticism still exists.
It remains to be seen whether the tech industry can build solutions that are appealing enough to be acceptable for major players in the energy industry. There's plenty of skepticism about allowing technology to do the job of consulting. And there's at least one self-fulfilling reason why: Data drawn from technology is consistently more simplified than data gathered by consultants.
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Many energy companies make the issue even more convoluted. Leaders as Opportune LLP confirm that "energy firms have been widely reported as delaying or cancelling many billions of dollars in capital project additions. Technology consulting firms are vital to improving the capabilities of current working assets to optimize output until additional units can be put in service." No one wants to reinvent the wheel -- or the microprocessor chip. But it wouldn't hurt to make the ride a little smoother. In the very near future, companies will need to adapt if they wish to reduce production costs and achieve greater efficiencies.
Technology is just part of the solution.
While data processing will continue to become more tech-savvy, we'll still need analysts to sort through the data and provide context. Technology merely makes it easier for those analysts and consultants to find solutions that don't require customers to pay higher prices. Energy leaders who loosen the reigns a bit will discover real excitement. After all, these very changes will allow their companies to perform at extremely high levels while enjoying lower costs.
Visionaries who helm the largest energy companies stand to face the most resistance to new business models. The conventional wisdom has been to supplement upstream costs with downstream cash from end-users. But as oil prices drop for consumers, energy companies haven't done much to change how they acquire it, or the expenses they incur.
Energy companies already use technology to find stable wells below the surface. But they're only starting to apply technology's power to the analytical process and inform their consulting efforts. But there's no denying technology is poised to become a huge player in the energy marketplace. And once analytical tech is implemented, energy companies will really start to fire on all cylinders.
Related: This is Why You Should Become Green Energy Entrepreneurs
