I want to preface this by saying that I am a born and raised Calgarian. I love this city and it pains me to see the city and my neighbours suffering. Calgary, Alberta has long been a global hub for the energy industry. Certainly, the energy industry is slow to adopt new technologies, particularly when times are good and everyone is happy with their dividend cheques. Unfortunately, the past year or so has been more than a little gloomy in regards to the price of oil so I was particularly surprised to receive an invitation to the Big Data and IoT in Oil and Gas Conference. Here are some of my biggest take away:
New found optimism or a grudgingly overdue attempt at evolution?
First off, I was surprised there was even a market for an IoT conference in Calgary. The city is not particularly known for its plush tech start-up ecosystem, and energy firms can have a rather rigid IT environment. What piqued my interest is that many of the speakers were genuinely excited about the different ways IoT and Big Data can help a business cost-save in the field. There were case studies of firms operating relatively comfortably at sub-30 dollar oil because they were the earlier adopters of IoT and Big Data.
Understandably, many of the attendees I spoke to were also a little begrudging at the idea that this magical “new” technology can save the business while simultaneously laying even more people off. Others were of the opinion that this was just another item to add to the ever growing list of applications, tools, software, etc. that are purchased and not properly utilized.
“Crisis breeds creativity”
A repeat theme I heard a lot was “crisis breeds creativity” and I wholeheartedly agree. When times are good it’s easy to allow yourself to get comfortable in your business and technology practices. When times are tough, as of now, business leaders need to make challenging decisions and think about the long term vision of the firm.
On a macro level, this is a good thing for the industry because it will introduce different, more efficient, more economical, more environmentally friendly solutions. On a micro level, the impact is devastating on the thousands of people who have been laid off and their families.
Technology is a pathway to disruption
There is a saying: disrupt, or be disrupted. In the energy industry, which has a decidedly vanilla tech tool box, this is a real risk to a lot of firms. In-field tech has a number of challenges including basics like cellular and internet access. For a firm to implement in-field solutions the basic infrastructure needs to be there, which has a real big price tag attached to it.
At the same time, the firms that are using in-field solutions are reaping the economic and efficiency benefits. These are the firms that will be able to operate at sub-30 dollar barrels of oil. If the price doesn’t swing back up (I don’t believe it will reach the $100 barrels again for quite some time, if ever) firms will need to find a way to operate more cheaply. Thus, this disruption has been instigated by the low oil price. It will become the new standard.
I choose to see the downturn as a forest fire. In the short term the downturn (as well as the forest fire) is damaging, and painful, and yes – not all the firms will make it. However, the industry (and the forest) will be better for it because those that do make it through will be setting the standard for how the industry will operate in the future. Sometimes disruption is good for industry, it will make room new growth. Firms need to make a decision about how they’re going to make it through the fire. IoT and Big Data may not be the only right answer, but it appears to be an option that is working for those who use it. I’m excited to see how the industry responds and how those firms that make it through the fire will shape Calgary in the future.