This blog is based on a segment of CBC’s “Business Report, Calgary Eyeopener with Loren,” featuring Enverus Intelligence® Research’s (EIR)* very own Al Salazar. Listen to the full segment here.
The energy sector is definitely drawn to the potential of artificial intelligence (AI). The promise of making things work better and more efficiently is too tempting to ignore. But this opportunity isn’t free – it comes with its own set of challenges. Follow Al Salazar as he navigates through the intricate challenges and uncovers how oil and gas companies are responding to the advent of AI, leveraging its transformative potential and examining its extensive impacts.
AI’s legal labyrinth: Unraveling questions of responsibility and control
The swift embrace of AI is a double-edged sword, presenting both hurdles and possibilities. The energy sector, eager to exploit the merits of AI, is wrestling with who gets to own and access data, a matter that’s growing increasingly delicate. At the same time, with regulations on AI just beginning to take shape, there’s a heightened level of complexity. The rise of AI is poised to shake up the job market, mostly because of how it can automate roles. This, combined with the legal questions it raises about who is responsible and how far their power reaches, is pushing both people and businesses to rethink their game plans.
Notably, the European Union has taken the initiative with a new set of rules on AI, aiming to layout expectations for its future oversight. Canada is not far behind, making progress with its draft AI and Data Act. Despite these emerging challenges, there’s an optimistic side to the story; AI has the potential to unlock human ingenuity, redirecting time and effort towards tasks that boost creativity and drive big innovations forward.
The oil and gas response to AI:
As the world gallops towards an AI-driven future, the oil and gas industry is no exception. Strikingly, surveys reveal that all top 20 oil and gas producers possess distinct AI strategies. Furthermore, an overwhelming 90% of energy companies are committed to exploring and adopting AI, solidifying the notion that AI is not just passing through but here to stay.
From exploration to operations, AI’s role in the oil and gas industry is increasingly becoming integral. This includes:
- Deciphering geological surveys for enhanced extraction
- Fine-tuning refinery operations for optimal output
- Predictive maintenance and simulation analysis contributing to pipeline safety; this is particularly noteworthy
- AI’s prowess is unmissable on the power grid management front, particularly for smart grids and demand forecasting
These applications are reducing the handling complexities of vast data sets significantly.
The potential challenge (or opportunity) for AI:
Modern data centers, housing AI’s powerhouse, demand enormous energy. To put things in perspective, these centers use about 300 terawatt hours (according to the International Energy Agency), approximately 1% of the global electricity demand. The likes of Google, Microsoft and Amazon combined clock in at around 70 terawatt hours, highlighting AI’s substantial energy footprint. The CEO of EQT, North America’s gas titan, speculates that data centers may soon rival residential gas consumption – a claim both astonishing and potentially exaggerated. Some estimates suggest a far leaner figure, around one-third of the CEO’s aforementioned speculation. Nevertheless, high-energy consuming components, such as Nvidia chips, corroborate the escalating demands. With an exponential rise in data use in the past decade, we can certainly anticipate robust growth in energy consumption by data centers.
How Enverus is adopting AI:
EIR has wholeheartedly adopted AI, proudly unveiling our premier generative AI product Enverus “Instant AnalystTM “. This AI solution can sift through, search and summarize research from a vast collection of documents housed in the Enverus Intelligence® Vault
Enverus Instant AnalystTM goes beyond simple text search functions to deliver actual answers. It pulls insights from more than 25 years of trustworthy energy research, offering precise outcomes rooted in sector-specific expertise. A compelling scenario emerged when a client asked if the AI could estimate the economic effects of discontinuing two drilling rigs, a query that underscores AI’s potential to transform the roles of financial analysts within the energy industry.
As we explore the intriguing overlap of energy and AI, Al Salazar remains hopeful about the extraordinary capabilities of this technological powerhouse. One example, we believe, is how Gen AI has the potential to make everyone a power user of software. What if the software of the future does the work of understanding what you need instead of you having learn how to use the software? Well, you won’t have to wonder for long, because that future is now. Read here.
AI is much more than just a game-changer. It’s molding the destiny of the energy industry, paving the way for higher efficiency and leading the charge in groundbreaking advancements. As we delve further into this AI-led revolution, we encourage you to learn more about how Enverus is adopting AI and how it can help you accelerate the pace of discovery. What would you ask Instant AnalystTM?
Authors
Al Salazar
Senior Vice President, Enverus Intelligence® | Research (EIR)
Al Salazar is a seasoned member of the Enverus Intelligence team, bringing more than 23 years of experience in the energy industry with a focus on fundamental analysis of oil, natural gas and power.
Throughout his career, Al has held key positions at EnCana/Cenovus and Suncor, where he honed his skills in forecasting, hedging, and corporate strategy.
Al’s 15-year tenure at EnCana/Cenovus was particularly impactful, where he contributed significantly to the company’s success. Al earned his bachelor’s degree in applied energy economics from the University of Calgary in 2000, followed by an MBA with honors from Syracuse University in 2007. Al’s academic background, coupled with his extensive professional experience, has equipped him with a deep understanding of the energy industry’s complexities and the necessary skills to navigate them effectively.
Chris Griggs
Product marketing manager for Enverus Intelligence® | Research (EIR) and Trading & Risk. Chris Griggs leads the development and communication of the value these products provide various industries, including oilfield services, investment funds, wealth management departments, banks, E&P oil and gas departments, and midstream operators. Chris helps provide customers across the energy ecosystem with the intelligent connections and actionable insights that allow them to uncover new opportunities and thrive.
* About Enverus Intelligence®
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as a foreign investment adviser. Click here to learn more.
