Not every industry has been quick to adopt artificial intelligence (AI) into their business models. The energy industry is one of them. Some of the reasons as to why it’s been so slow on the uptake include concerns about security, the cost, and a lack of expertise in the area. However, according the experts, integrating AI into the energy industry could result in immediate improvements. It would allow oil and gas providers to increase productivity and therefore lower expenses.
One key area of the industry that AI could help with is in sourcing the best drilling locations. Currently there are far too many false positives when it comes to locating suitable places to drill for oil, and AI could cut that number down significantly. AI could also be used to determine the most cost-effective shipping routes for vessels carrying gasoline while taking factors such as whether into consideration.
Rashed Haq is global lead for AI at Publicis.Sapient and he believes there are several primary drivers for energy firms integrating AI early on. The first is in regards to production costs. “There continues to be long-term price uncertainty, so the earlier that companies can improve production, refining, and distribution costs, the better,” said Haq. “While not every use case has been deployed by any single company, there has been enough application of AI technologies in various processes that we can estimate about a 10 percent reduction in [exploration and production] costs over time.”
Another key driver for the early implementation of AI is the aging workforce of the energy sector. “Some estimates say 30 percent to 40 percent of the workforce in oil and gas will retire in the next decade, taking with them much of the knowhow that these companies rely on,” said Haq. “Moving to robotic process automation, and building knowledge-based expert assistants can go a long way to mitigate for workforce aging for skilled labour. This is not just a cost savings issue, which has been estimated at close to 20 percent to 40 percent savings, but also a potential ability-to-operate issue.”
Other areas that AI will be used in the energy industry include robotic automation various tasks including ship vetting, and improved automated drilling. “There are some aspects that couldn’t be done before that help [from AI], meaning that these are not things that are just reducing cost of manual labour, but processes that are qualitatively different such as moving from single-variable based drilling planning and strategy to multi-factor based usage,” Haq said.