HOUSTON—At a forum that brought together great thinkers from the energy industry and the IT industry, Al Walker, chairman, president and CEO of Anadarko Petroleum Corp. (NYSE: APC), praised the role of technology in allowing his company to do its job better.
Walker was the keynote speaker at Microsoft’s Global Energy Forum 2015. He began by marveling about the ability of the younger generation to pick up any piece of technology and master it within minutes. “I’m never going to learn all of the functionalities and capabilities of my phone,” he said. “Younger people seem to adapt to technology a lot quicker. I believe that part of the reason is that younger folks aren’t bound by the fear of failure that became so pervasive in our society.
“I’m not really sure that anyone fully appreciates what technology can do for us. But I am pretty sure of one thing—if you don’t change, you’re going to like being irrelevant even less.”
Walker reminded the audience that the oil and gas industry is technologically driven, using the examples of deepwater drilling, 3-D seismic technology and big data techniques. He also mentioned horizontal drilling and hydraulic fracturing.
“The marriage of these gave rise to the shale revolution, which is a big part of the reason why we’re talking about importing oil and enhancing our strategic influence around the world as a result,” he said.
He used an analogy from baseball regarding slugging percentages and batting averages. “The former is not actually a percentage,” he said. “It’s simply a measure to determine a player’s offensive capabilities.
“In the business of oil and gas and E&P, we use technology to improve our chance of success. This really sets in place how we allocate capital.”
The combination of horizontal drilling and hydraulic fracturing has caused the U.S. to be the No. 1 oil and gas producer in the world, and it has encouraged President Obama to establish a goal in 2014 to cut imports in half by 2020. “We’ll meet that goal this year,” Walker said.
Of course, these types of disruptive technologies also can have negative impacts. “Technology in our business has been so successful in the energy business that supply of oil and natural gas today exceeds demand,” he said. “As a result, commodity prices have fallen dramatically since the middle of last year, and price has moved down the curve.”
This will force energy companies to do things better, Walker said, but not necessarily bigger. The focus is more on greater efficiencies in drilling and completions, which again is driven by technology.
Beyond supply dynamics, he said, producing these resources in a sustainable manner is a priority. “Our company was one of the first in the nation to partner with the EDF [Environmental Defense Fund], the state of Colorado and others to develop new leak detection standards that utilize leading-edge infrared technology and other technologies to detect and address methane leaks,” he said.
Furthermore, the country has made great strides in reducing its CO2 output, and much of this improvement is being driven by the fact that electricity generation has moved from coal to natural gas. This has forced carbon emissions to their lowest levels since the early 1990s, Walker said.
“Translation: We’re producing more while emitting less, and we’re continuously improving,” he said.
Water usage is another area where technology comes to the fore. Walker said the industry is recycling or reusing up to 100% of the water it uses in its operations. It’s also using water that doesn’t compete with other needs such as effluent in Colorado.
Additionally, technology has enabled the industry to dramatically decrease its surface footprint. “We produce 20 times the amount of energy over the lifetime of these wells as we used to with a larger footprint,” he said. “We’ve also installed lots of pipelines using automation and remote monitoring, eliminating, believe it or not, more than 40 million truck miles in Colorado alone.”
Walker noted that the key going forward is collaboration between government officials. “The climate of limits needs to be avoided,” he said. “I’d like to see us have an environment where … we have an optimistic view of what technology can do. Let’s use the economic success that we’ve had to continue to drive new technologies and solutions.
“Advances in technology that you’ve made, those that we’ve made and, more importantly, those that we will continue to make together have the potential to create a tremendous opportunity.”
Contact the author, Rhonda Duey, at firstname.lastname@example.org.
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