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Baker Hughes’ Annual Meeting 2021 brought together a diverse group of speakers from across the globe – virtually for the first time in its 22-year history. C-suite executives, government and policy authorities, technologists, and futurists all provided their unique thoughts on the outlook for global energy. While their perspectives were as varied as their backgrounds, a few themes came up repeatedly over the course of the two-day meeting.
Insight #1: Business as usual is no longer an option
A paradigm shift is happening in global energy. Speakers ranging from Microsoft CEO Satya Nadella to Total Chairman and CEO Patrick Pouyanné used their presentations to reflect on the many ways the old rules no longer apply. Their general consensus: To thrive in the new paradigm, energy companies will have to change their approach and focus on creating profitable solutions to the emerging challenges affecting both people and planet. That means finding a way to deliver affordable, net-zero energy.
The good news is that the change will bring opportunities along with the challenges. For example, as customers seek out greener energy solutions, companies have the chance to both redefine their business and strengthen their relationships with the consumer.
Insight #2: Technology must play a transformational role
New digital technologies, artificial intelligence (AI), and machine learning will be central to success in the coming decades. Many people assume adoption of new technologies and completion of a digital transformation will be enough, but during the panel discussion “New Energy Frontiers and the Role of Technology” Samsudin Miskon, a senior vice president at Petronas, reminded the audience about the famous quote from MIT professor George Westerman. The professor once quipped, “When digital transformation is done right, it's like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.”
Miskon noted Westerman’s caveat is doubly important in the energy sector, where transformation is the order of the day. Getting faster or better at tasks within the old paradigm will do little to make an entity more resilient to the rigors of the energy transition. Instead, companies will have to use technology to make their operations greener, more efficient, and forward looking.
Insight #3: Even in a changing world, oil and gas remain essential
While the next three decades will see major changes, don’t expect those changes to completely sideline hydrocarbons. Even in the most aggressive of energy transition scenarios, oil and gas will continue to play an important role for at least the next 30 years.
But the way we produce hydrocarbons will have to adjust with the times. During the session “The Role of Natural Gas in the Climate Agenda and Decarbonization“ the audience heard the many ways gas can change to meet the energy needs of a decarbonizing world. The bottom line: Application of technologies like AI must be used to reduce the carbon footprint of both oil and gas, and smart businesses are already busy reinventing themselves by transitioning from being oil companies to being more diversified energy companies.
Insight #4: Hydrogen will be a fundamental piece of the energy transition puzzle
Part of becoming an energy company means embracing new sources of energy. And hydrogen is one of the most promising sources available. Panelists in the discussion “Future of Hydrogen – Hype or Reality?” agreed the molecule is rapidly becoming both greener and less expensive, making it increasingly attractive in a world trying to reduce carbon emissions while still providing a reliable source of affordable energy.
During the event Baker Hughes and NOVATEK underscored the increasing practicality of hydrogen by announcing that they would begin a pilot program to introduce hydrogen blends into the main process for natural gas liquefaction, reducing carbon dioxide emissions from LNG facilities.
Of course, the full-scale emergence of hydrogen as an energy source will still require government backing and the development of significant infrastructure. However, with authorities from Brussels to Beijing signaling support for hydrogen, it looks like the world finally has all the tools it needs to kickstart the hydrogen economy.
Insight #5: Getting to net-zero means greater collaboration
Nearly every speaker was quick to note that meeting the ambitious emissions goals set by international agreements will require acting immediately, decisively, and collaboratively. No single entity can drive the necessary change alone, and only collective success will deliver meaningful global outcomes.
Several of the companies participating in the event even provided a glimpse of the type of collaboration necessary. During the meeting Shell, C3 AI, Baker Hughes, and Microsoft announced the launch of the Open AI Energy Initiative™ (OAI), an open ecosystem of AI-based interoperable solutions that increase efficiency and reduce emissions in energy operations.
If the experts at the meeting are correct, the partnership will be one of many that serve as steppingstones to a net-zero world.