Good morning, everyone.
As usual at the start of a Shell presentation, a reminder of the legal restrictions around using what I’m going to be talking about.
I am very excited to be at SpaceCom, and to speak to you today. The way this forum brings together industries – medical, space, and energy – is deeply important. I really welcome this chance to explain why collaboration between all our industries is so vital to the future of global energy.
The energy industry already uses exciting technologies from other sectors. Just to name a couple:
We use docking technology that was developed for space vessels combined with gaming consoles. We use MRI scanners like the ones you find in hospitals to get a better understanding of rock formations. And we have a way of displaying satellite images the way Google Earth does, but looking below the earth’s surface rather than at streets. Exciting stuff!
Technologies like these are very important because they help us do our job better: Find and evaluate new resources. Monitor our operations and make them more cost efficient. And make everything we do more sustainable.
Collaboration is already a key feature of innovation in the energy industry. And I’m sure there is a lot more collaboration to come between our industries. Why should we spend years developing technologies that others are already using successfully?
I’m going to sketch the kind of collaborations that are most interesting to a company like Shell. Some of them are quite unusual. All of them will make a difference.
Challenges for the energy industry/Shell
Across all our industries, we have a lot of common ground, especially when we look at the challenges ahead.
For instance, society clearly needs us all to meet high expectations of performance and behaviour. But it also needs us to deliver the products and services that enable us to live a modern life. In Shell’s case, that means delivering more energy in a sustainable way, so that all the essential aspects of life can function well, from education and healthcare, to business and communication. Then more people will be able to escape from poverty. And the quality of people’s lives can be maintained and enhanced.
On the technology front, the challenges for any industry include finding the right innovations, and bringing them through to successful deployment.
Costs are a major challenge these days. In the energy industry, the low oil price has had a big impact on competitiveness, and on our ability to manage capital and operation costs.
The final challenge I would mention is competition. I think for all of us, in our different spheres, competition is getting tighter. Every cent and every minute counts.
All these challenges force business to adjust and adapt. For Shell, that has meant a major shift – let me explain why and how.
According to the United Nations, there will be more than 9 billion people on this planet by 2050. That’s up from around 7 billion today. To put that in perspective, that means adding a city the size of Houston every 11 days.
At the moment, the short-term outlook for energy markets is pretty uncertain. But, in our business, projects and investments can run to 30 or 40 years. So it’s crucial for us to balance the short-term with the long-term view. In the long term, we expect energy demand will continue to rise, as both populations and prosperity increase.
That means the global energy system is going to go through a major transition this century. We must build a sustainable energy future. But this is an enormously complex challenge. We see technology at the heart of a successful transition.
No single energy source will be enough to meet demand. We will need all the sources we can muster. And our focus has to be on cost-effective solutions that secure supply and reduce climate change and air pollution.
Renewable energy sources are crucial. Shell’s Scenarios team reckons they could be supplying as much as 25% by 2050. But that still leaves 75% of energy demand needing to be met by traditional sources – like oil, gas and nuclear. And renewables still need flexible back-up, for the times when the sun doesn’t shine and the wind doesn’t blow.
At Shell we believe that especially natural gas has a crucial role to play, partnering with renewables, now and in the long term. It’s flexible. It’s abundant. It produces half the carbon dioxide of coal. When it’s sold in liquefied form, natural gas is a global commodity, tradable and transportable everywhere. It’s also one of the few energy sources that can meet all our energy needs: electricity, heating, plastics and fuels, all at reasonable cost to the end user.
Innovating to meet the challenges ahead
As you can see, there are opportunities to be positive about. But that doesn’t take away from the challenges ahead. And innovation is absolutely crucial to meeting them.
Energy innovation is needed on every scale. Shell is looking at nanotech-scale solutions to improve the performance of catalysts. At the same time, we are using satellites miles above the earth, to gather data so we can explore deep into the earth.
I could just tell you a lot of innovation success stories from within Shell – we have many! But let’s be realistic….
There is always a trade-off that must be achieved in technology development: between speed and cost. And it is crystal clear to me that, for Shell, collaboration with the right partners inside and outside our industry is often the best way to get innovations to the field, and to market, at the highest speed and lowest cost.
Let’s look at some of the collaborations that are already working well.
Collaborations already in play
I mentioned that we use satellite technology. In fact, it has a lot of applications for us.
In this arena, Shell is not just adopting what someone else has done. We are fully engaged, leading the development of radar detection of hydrocarbons. That includes us working directly with international satellite operators.
Let me give you an example of how we use InSAR, Satellite images of the Earth's surface, combined to show subtle movements of the ground surface. Back in the 1990s, we ran one of our first InSAR monitoring campaigns, at our Belridge oil field in California. That was in collaboration, first with the European Space Agency, and then later with NASA.
At a field like Belridge, water injection is an essential part of oil production. If the injection is inadequate, you can get borehole failure. But, with radar satellite measurements every two weeks, accurate to a few millimetres over 30 million pixels, we were able to optimise the injection rates and avoid borehole failure.
Since those early years with InSAR, we have been very active in developing new technologies, so that we can measure and monitor surface deformation. Today we have 4D reservoir monitoring – from the borehole, on the surface, and from space. Movements in the reservoir, as we produce oil, translate to millimetres measured at the surface.
At Belridge, we have measured surface subsidence at the millimetre level for intervals as short as 35 days, over a span of several years. We are able to observe surface deformations simultaneously, over areas as large as 4000 square miles.
And there are more applications coming through. We have shown that reliable subsidence measurements can be obtained in urban areas – which are much more challenging to monitor than an oil field.
Satellite technology has many other uses as well. We use satellite radar (or SAR), along with optical and thermal satellite imagery, to map oil on water. This keeps us prepared for any emergencies and able to respond quickly to them. It’s an important tool for protecting the environment.
These technologies can also help us to detect natural seepage, when we are exploring offshore. Clearly, the world’s rising energy needs make finding and extracting new resources a critical goal. We use SAR and optical imagery when we are being detectives, working to locate oil on the ocean surface, and then deduce its point of origin on the sea floor.
The innovations involved here come from another great example of collaboration. The Gulf Offshore Satellite Applications Project, known as GOSAP, is a joint effort by companies and institutions. In the early 1990s, ESA sponsored a pilot project by GOSAP, involving about 30 companies, universities and government agencies, to find new methods for detecting oil on the ocean’s surface. They were able to acquire their own satellite, airborne, submarine and ‘sea truth’ data, to evaluate the commercial applicability of ERS-1 and Radarsat satellite data.
GOSAP is the most successful of the collaborations in this area that Shell has engaged in so far. And we continue to pioneer and develop the applications of these technologies. There are many, major, uses. Among them: to find new resources, to protect the environment, and to establish levels of naturally occurring oil for environmental baselines.
Now let’s look at an example combining satellites and gravity.
I’ve talked about radar, optical and thermal satellite images giving us information about the earth’s surface. We can also find out about the geology beneath the surface, using satellite gravity measurements.
In fact, Shell is combining measurements of gravity and magnetic data from space with high-resolution gravity and magnetic measurements on the earth’s surface, to help us explore for hydrocarbons.
Models of the earth’s geology are being continuously improved, using data from ESA’s gravity satellite – the Gravity field and steady state Ocean Circulation Explorer, or GOCE, to give its proper title. Included in these better models are potential locations of subsurface energy sources.
The measurements of earth’s gravity by the GOCE satellite have unrivalled precision, compared with other satellites. This is due partly to its very low orbit – about 255 kilometres from the earth’s surface – and to its gravity gradiometer sensors.
The traditional way to generate 3D models of the earth’s underground uses information acquired on the ground or by aircraft. With the GOCE satellite’s gravity data, we get homogeneous global coverage. This can be used to improve and validate models of the earth based on traditional datasets.
The GOCE mission ended in October 2013. But the gravity data from this super-low orbit has greatly improved our understanding of what’s inside the earth, including areas where oil and gas might be present.
Understanding of that gravity data is still at an early stage, according to experts in the GOCE and Geoexplore project, from Germany’s University of Kiel and the Netherlands Organisation for Applied Scientific Research (TNO). Shell has started to work closely with these experts.
So watch this domain – there are more exciting developments to come!
Where we want to go from here
Clearly, space technologies have a lot to offer the energy industry. No other platform can provide us with an overview of the whole earth.
However, there is a lot of work to do. And there are some challenges to be dealt with.
On the one hand, the earth observing community are still getting to grips with the needs of, and sometimes even the need for, oil and gas.
On the other hand, we in the energy industry need to be more open about our needs. We tend not to give too much away, because we worry about competition issues. Also, it takes quite a bit of time for our community to adopt innovation from outside the energy sector. We tend to prefer the proprietary development route, mainly for competitive reasons, and because our needs are very complex.
There are things we can do to overcome these challenges. As an example, Shell has supported the establishment of an Earth Observation subcommittee, in the International Association of Oil and Gas Producers, or IOGP. Through this subcommittee, cooperation is growing between the earth observation and energy sector. Key areas include oil spill response, and identifying new applications for space technology.
Going forward, I want to see us building together on the innovations in earth observation that can benefit from open development. I want to see more de-risking of space technology, so that we can develop new applications for the energy industry that keep people, the environment and investments safe.
In particular, I want to see us building on the business value that we are already getting from InSAR. This collaboration embodies the benefits of collaboration between industry and research institutions.
There is another example of good collaboration between NASA and Shell. Together we developed a robotic sampler, based on a NASA sensor, which travels through subsea piping to safely take samples inside reactors and tanks that are about to be decommissioned.
The technology is great. But the real goal of this collaboration is deployment. And that requires a clear maturation plan, and real-life assets ready to start using the technology.
I’m also keen to build on as the new opportunities in High Performance Computing
Shell has a global HPC centre of excellence, with staff at three hubs: here in Houston, and in The Netherlands and India.
To date, we have increased our HPC throughput by an order of magnitude. Thanks to that, we can process many more results from our geological surveys, at the same compute cost. Then we can feed all that output into the latest and most accurate algorithms to get the information we need in a cost-effective way. As a result we need to drill fewer wells, we have safer wells, and we reduce the risk in our exploration programme.
But we’re not resting on any laurels. We want to improve our computing capabilities even more. So we collaborate with companies such as Intel and NVIDIA. In essence, we use gaming technology to improve the way we process and visualise the geophysical data we are gathering – and, I have to stress, the amount of this is growing exponentially.
Another area where High Performance Computing is crucial is our use nano-scale modelling to develop the catalysts of the future.
A catalyst is a substance that speeds up a chemical reaction. We use these to produce the raw material used for toothpaste; or laundry detergents; or what goes into the dashboard of your car.
I’m talking here about ultra-large-scale computations to deliver nano-scale understanding and prediction of the reactions. The goal is to optimise the nano-scale properties of a given catalyst for a given purpose, and increase its efficiency.
Shell’s Computational R&D team predicts the geometric and electronic behaviour of catalyst particles from first principles, using quantum physics. The dynamic information that this modelling gives us helps to steer experiments and optimise the catalytic processes. This is uniquely possible through computational technology.
Shell vehicles for future collaboration
By now, you’ll have gathered how much value I place on collaboration, not just within our industry but far beyond its boundaries. Let me stress again: collaborations are crucial to develop the technologies the energy industry so urgently needs. And they are most worthwhile when the development makes its way right through to deployment in the field.
There is no single ‘right’ way to make a collaboration happen. Shell has a number of approaches.
One is Shell Technology Ventures. This part of our business invests in – and works with – companies that are developing promising technologies, for oil and gas and renewable energy.
In Oman, for example, we are taking part in a pilot project with GlassPoint Solar Inc. This involves a facility that heats water into steam, using sunlight instead of natural gas. The steam then heats the oil in a mature field, which makes it flow more easily into wells for recovery. The gas that would have been used for heating the water is now available for other uses – like cleaner power generation, or in the development of local industries.
Another vehicle for collaboration is Shell TechWorks. Small technology centres located in global innovation hubs – places where innovative companies, universities and venture capital form networks and feed into each other’s creativity and vitality.
A great benefit of this approach is the way it brings together experienced innovators and technology start-ups from outside the energy industry.
The goal of Shell TechWorks is to find faster, more cost-effective ways to deliver the technologies the energy industry needs. Technologies that are designed for environments where safety is paramount; and will enable us to produce more energy now, and into the future.
The first Shell TechWorks was set up on the MIT campus in Boston.
An example of a Shell TechWorks collaboration: between Shell’s exploration and deep-water operations and several companies including Bluefin Robotics, Oceaneering, and Boston Harbor Cruises.
This unique combination of expertise in data, autonomy and embedded systems makes it possible to do real-time chemical detection and identification of hydrocarbons that are seeping naturally from the sea bed. This autonomous underwater vehicle technology offers the potential to identify new reservoirs, and to detect leaks in existing operations.
Lots of good features are involved. There is no need for contact with the sea floor. And you get faster, more accurate, more cost-effective decision-making than with traditional methods.
My final example is the ultimate cross-industry bonanza. It’s a concept borrowed from space shuttles docking to space stations, and developed from video games.
The technology is called Automatic Pipe Sensing, and it solves an age-old set of hazards for humans. A typical drilling rig today may have lots of automation on board. But the task of running the drill string in and out of a well is still a manual task. It’s controlled by a driller with a joystick and some roughnecks on the drill floor.
We’ve combined a vision sensor – which was inspired by the latest games consoles – with sophisticated algorithms. This creates a computer system that can reliably locate the pin of a single pipe directly above the box of another.
So, at last, the process of drill string running can be reliably automated, like so many other aspects of drilling have been, by Shell and other industry leaders.
Another success for collaboration!
In this day and age, innovation cannot be just about technologies per se. It has to be about collaboration: working together to get ideas on the table; and working together to develop ideas further and drive them into full deployment.
Collaboration is how we meet our biggest challenge: that is, making our technology and innovation work as fast as possible, at the lowest possible cost. This will define the true success stories of innovation.
I am very enthusiastic about the possibilities out there for future collaboration between energy and other industries. I’m really looking forward to seeing those possibilities take shape and mature.
I hope my remarks have provided food for thought and discussion, starting here, today. And I’m excited to learn more about your own exciting innovations, and how they can help shape the future of energy.