When it comes to the energy transition and positioning for cleaner forms of energy, “if you’re not at the table, you’re on the table,” said Rod Larson, CEO of oilfield services firm Oceaneering International Inc.

The words from the head of company, known for its subsea technologies and ROV services, came during a recent SPE Live virtual session on what’s needed and where the oil and gas industry is headed next.

Investors have heightened focus on environmental, social and governance factors, even as the threat of the global COVID-19 pandemic on demand and oil price volatility persists. Many are pushing toward more sustainable and responsible energy development to meet the world’s future demand amid climate change concerns as some add alternative energy to their portfolios.

The oil and gas industry should be part of the conversation, according to Larson, given some of the expertise it brings to the table. The industry must convince people that the energy transition won’t be the death of oil and gas business, he said.

“If they think that we’re just trying to defend our position because we’re trying to stay alive—it’s a survival instinct—they’re not going to listen or they’re not going to hear a word,” Larson said. “We need to explain to them the role we want to take in the energy transition. That we’re happy to take this journey.”

Larson, who also serves as chairman of the Petroleum Equipment & Services Association, added, “We don’t think about this differently than anybody else. We want a cleaner earth for our kids to live on and our grandkids and so on and so forth. So, we’re engaged.”

New Opportunities

Oceaneering began as a small diving company in the 1960s, but has since expanded into several other industries, providing engineered products and services. These include for aerospace; government and defense; material handling; renewable energy; science and research; maritime and cargo logistics; and entertainment, where it helps develop technologies used at theme parks—all what Larson called “natural offshoots of what the company has always done.”

The company believes, he said, there is more to come in these areas such as autonomous people movers and autonomous vehicles for factory floors.

For Oceaneering, being on the leading edge in technology, prepping oil fields for the next generation and getting itself ready for growth industries are part of the company’s strategy, according to Larson. Already in the renewable energy space, the company offers services and products that are ideal for floating wind, he said, before looking to the future.

New opportunities could emerge for today’s oil and gas players.

Hydrogen could be produced on offshore oil platforms, converting them to hydrogen production.

Subsea oil production knowledge could be transferred to subsea mining of rare earth minerals, considering the world currently doesn’t have access to enough of the minerals needed for increased dependency on batteries.

Several traditional oil and gas companies have already diversified into alternative energy to varying degrees, while others have focused more on reducing emissions and their carbon footprints amid the push toward cleaner energy.

Small Steps, Easy Paths

The transition calls for taking small steps down easy paths, or rather using known technologies, to reduce carbon emissions, Larson said. He mentioned carbon sequestration, reducing fugitive methane emissions, less flaring and better infrastructure integrity as examples.

“For us, that’s managing that infrastructure, things like using embedded sensors, drones to inspect, more analytics around machine learning, artificial intelligence, leveraging big data,” he said, “so that we can predict where problems might come and we can embed the sensors and do the inspections there without having to fly people on helicopters to offshore installations and have the carbon footprint associated with that greater human intervention.”

Digging deeper into carbon reduction commitments from Big Oil companies like Exxon Mobil Corp. and Total SA, about at least 70% of the reductions will come from vendors, Larson said. That means providing automation and ROVs—a few of Oceaneering’s specialties—are also key to reducing carbon footprints.

“Instead of having a tender vessel on location for weeks, we can drop off an ROV, do the work and the vessel can come back and pick it up when it’s around,” he said. Integrity management involves ensuring infrastructure does not have fugitive methane and there are no oil spills, he added.

All are achievable to reduce carbon footprints, while increasing renewables in the energy mix, he said. A challenge is, however, doing so without substantially increasing costs or lowering access to electricity.

Facing Challenges, Change

In the past when supply has outstripped demand, thoughts were for the cheapest barrels to be produced, putting more expensive deep water and tar sands at a disadvantage. “I think what we’re going to find now is not necessarily the cheapest barrels, but it’s the cleanest, safest barrels that are going to be produced,” he said.

Larson, however, warned that it also important to not leave people behind as growing populations’ appetites for products derived from petrochemicals rise along with energy consumption. Some parts of the world may be able to pay a bit more for cleaner forms of energy like wind but others will still need less expensive ones to survive.

Like many other industry players, Larson believes that the rumors of the oil industry’s death have been greatly exaggerated.

Turning back to history, he pointed out times when the industry has climbed up and out of energy crisis. In some instances, the downtimes called for finding more oil—to which the industry responded by finding oil in deep water, tar sands and shale. At other times, solutions to challenges called for lowering breakeven costs, with fit-for-purpose technology and “the factory that has become U.S. shale,” he said.

A stable environment is needed for the shift and it must be supported by science and driven by the market, Larson said.

“If we can take out some of the dramatic cycles that are driven by regulatory pressure or bad behavior in business, that allows us to invest, to have this stable, rational progression where we can reduce carbon emissions,” he said. “We can reduce our dependence on hydrocarbons writ large. We can move to a greater percentage of our energy that comes from renewables without leaving people behind and without creating destruction.

“We need that sort of stability to make the investments, both the investments in technology and innovation, but also the investments in infrastructure,” he added.