Risk and Uncertainty Take Center Stage for Oil & Gas in the Energy Transformation

The Energy Risk USA Conference in Houston, Texas brought together representatives from various oil and natural gas companies to discuss pertinent trends, key risks, and emerging technologies that will affect the energy industry. Panelists and speakers touched on a various key trends and issues. These include increasing regulatory complexity, adoption of emerging technologies such as robotic process automation (RPA), artificial intelligence (AI), and blockchain, and the impact of distributed generation on current business models.

Regulatory Complexity

Oil & gas companies are increasingly worried about the propagation of a patchwork of regulations focused on decarbonization across different jurisdictions. Since many clients in attendance represent the major players with global operations in the space, there is a sense that the multitude of vague and potentially conflicting regulations makes it more difficult to determine appropriate action in different geographies, increasing the risk of noncompliance and muddying long-term strategic planning efforts.

Advanced Analytics Growing Pains

New tools such as AI, blockchain, machine learning, and RPA were hot topics in the Energy Risk USA conference. Panel discussions touched on current efforts undertaken by companies in implementing these technologies in increasing operational efficiency and providing insight in decision-making. Some companies have started to use these tools, particularly RPA and blockchain, to reduce operational inefficiencies. Many panelists hoped to apply AI and machine learning to make better sense of customer behavior to aid in strategic decision-making. However, even some of the largest companies in attendance are cautious about over-investing in these technologies. There is some consensus that these technologies are not cost-effective enough to consistently use (given that data collection, cleaning, and analyzing are resource-intensive). Many companies are taking a wait-and-see approach before doubling down.

Distributed Energy Resources Potential

The last panel was a discussion among utility companies of distributed generation's impact on their overall business. There was consensus among the panelists that more collaboration is needed among all stakeholders (customers, regulators, investors) to provide a mutually agreeable service, and that service needs to be balanced with the need to be nimbler in a rapidly moving world. The last point was the need to expedite data collection. Obtaining customers’ historical consumption data is currently onerous. One panelist noted the need to increase investment in this space for utility companies to provide better service to their customers.

Similar to their counterparts in the utility space, oil & gas companies are increasingly worried about a rapidly shifting world. These companies are investing in efforts to be as nimble as possible to meet constantly evolving stakeholder expectations.