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Digitalisation will drive decarbonisation, but people are the key, not technology

The world is changing, and it’s changing fast. A shared sense of urgency is emerging as momentum builds for net-zero action amid COVID-19 and ahead of this year’s COP26 UN Climate Conference in Glasgow.

Complex and marginal, the downstream industry must act now if it is to navigate the global shift to a new energy mix successfully. Buoyed by the industry’s innovation mindset, digital technologies will play a vital role in transitioning to a lower-carbon future. But the sector needs pioneers – governments and businesses that are willing to step up and deliver change. 

This was the compelling message delivered by Carlos Maurer, Executive Vice President of Sectors and Decarbonisation at Shell, as he set the event’s theme in his keynote speech to more than 600 oil and gas professionals logging in to the virtual Future Downstream Conference, held 2–3 March 2021.

In its third year, Future Downstream 2021 attracted more petrochemical and refinery operators, downstream service companies, downstream automation and digitalisation specialists and technology suppliers than in any previous year.

Fifty plus influential speakers from across the world came together to explore the disruption, digitalisation and innovation shaping the downstream oil and gas sector.

During the two-day event, 10 topical panel sessions encouraged debate on machine learning, AI, asset performance management, data analytics, cyber security, supply chain management and digital transformation. Digital providers were also on hand, presenting real business cases, offering insight and demonstrating best practice within the industry.

Welcoming the global audience, Adam Soroka, Managing Director of Cavendish Group, said: “Future Downstream aims to prepare the sector for a technology revolution and for defining a digital roadmap ahead. If data is considered the new oil, embracing transformation and innovation will be the only way forward. 

“The downstream industry is continually evolving with new rivals and new regulations coming into effect, which will further accelerate transformation and digital adoption. Coupled with the impact of decarbonisation and ESG compliance, refineries will have to rethink their sustainability plans over the coming years. Green Refining and Digital Refining are becoming phrases that stakeholders and investors increasingly want to hear.” 

In his keynote speech, Shell’s Carlos Maurer explored the three key trends driving downstream businesses – sector decarbonisation, the need for wide-ranging collaboration and the importance of digitalisation.

With the disruption of Covid-19 making all three more prominent and more essential, he talked about Shell’s sectoral approach to achieving net-zero ambitions, the company’s commitment to be the partner for change – championing collaboration to deliver the economies the scales needed to accelerate decarbonisation goals –  and the digital solutions that Shell is deploying across all sectors to drive the transition, including digital twins.

He said: “At Shell, we recognise the need for change. Within the downstream sector, we need to change ourselves. We need to reduce scope 1 and 2 emissions. And we have a vital role in helping others accelerate their decarbonisation journeys.

“Tackling climate change is an urgent challenge. It is not just about 2050. It is about what we do this year. Shell will contribute to a net-zero world… We will do this by reducing emissions from our operations and from the fuels and other energy products we sell to our customers.

“It also means capturing and storing any remaining emissions, using technology or balancing them with offsets. We are transforming our business and finding new opportunities. We will provide more low-carbon energy such as biofuels, hydrogen, charging for electric vehicles and electricity generated by solar and wind.”

The combination of IIOT, hybrid machine learning, data contextualisation, 3-D modelling, AI-enabled drones and wearables, and other digital technologies are crucial in unlocking cleaner energy solutions and delivering efficiency in the refinery world.

Shane McArdle, Senior Vice President of Production at Kongsberg Digital, warned that organisations that are not data-driven will be held back. Looking at the business case for adopting digital twin technology, he outlined the cost of human error and the large gaps to be filled by making operations more data-driven.

“Today, 81% of industrial workers are frustrated due to the lack of access to data. This equates to around 5.3 hours per week in wasted time trying to collect and access data. 66% of all delays that extend longer than one week are directly attributed to the lack of access to data and information. This ineffective knowledge sharing culture costs companies up to US$47m in lost productivity each year.

“80–90% of industrial accidents that cause costly unplanned downtime are attributed to human error.” By gathering data into a digital twin – a virtualised replica of an industrial reality and its dynamic behaviour – organisations will improve operational efficiency by enabling remote operations, predictive maintenance, automation and significantly improved collaboration.

Looking at what sustainability means for the chemical industry, Bob Maughon, Executive Vice President, Sustainability, Technology & Innovation and Chief Technology and Sustainability Officer at SABIC, focused on enabling circular chemistries and the circular carbon economy.

He told delegates that while the industry is a hard to abate sector, "the reality is that 85% of the carbon emitted results from the energy used to drive the processes, only 15% of the carbon is a result of the chemistry itself. So to address carbon neutrality, you also have to decarbonise heat."

Outlining the company's commitment to recycling plastics and reducing production through alliances with partners, customers and collaborators across the value chain, he said: "We are clearly engaged with TRUCIRCLE around our closed loop initiatives and designs for recyclability, and we're very involved in mechanical and chemical recycling."

"Reducing production is the most critical issue for the industry, and we're advancing circular renewable polymers and the use of renewable electricity. You can see this with our partnership with NEOM, the conversion of our polycarbonate facility in Cartagena, Spain, to run entirely on renewable power, and our commitment to investing in startups."

Building a circular carbon economy will need a portfolio of solutions, and SABIC prioritises these as electrification, energy storage, recycling, bio-based feedstocks, hydrogen, CCS and CCU. "We must drive science-based prioritisation. The focus should be on the most impactful solution, and clear scientific direction is needed," he said.

Noorddin Taj, Technology Strategy, Architecture and Digital Innovation Lead at bp and Marijn Bezuijen, SME and Business Opportunity Manager for Predictive Maintenance at Shell, joined Adam Soroka to share the key takeaways and close two days of great discussion.

The downstream industry has a clear role in the energy transition, but it needs to act now. To stay competitive, companies must adopt low-carbon strategies that account for demand trends and regulation shifts and leverage digital innovation. 

Digital transformation is not about technology. It's about people. Noorddin Taj said: "It's about transitioning an organisation to think differently and work towards moving everyone in the organisation from point A to point B. Strategy, capability, culture and technology all need to align together to work towards a successful digital transformation."

The stark truth is that digital transformation is no longer optional. Marijn Bezuijen said: "Not only can technology help detect, localise and quantify emissions, it can also optimise efficiency and predict maintenance.

"The diversity in plant feedstocks and products is increasing rapidly, and that requires much smarter technology at every level to ensure safety, product quality and profitability."

Shell and SABIC are among the growing number of companies that are pioneering digital-twin technologies using AI, IoT and big data to manage operations. To find out more about bridging the physical and virtual and how it can lead to real benefits, join the Cavendish Group at Future Digital Twin on 26-27 May 2021.