Peter Tertzakian is an energy economist who has studied energy transitions and he has an interesting take on the future of oil and natural gas. In his post, “Don’t Type Oil and Gas Out of the Script,” Tertzakian compares oil and gas to typewriters, noting that typewriters didn’t disappear—they evolved into the word processors and keyboards we use more ubiquitously and efficiently than ever. Here’s an excerpt from his post:
Typewriters became word processors through a 15-year evolution of process and product innovation. At the end of the transition, words were being produced more efficiently and accurately than ever before. And all from the same QWERTY keyboard (though not necessarily of better literary quality).
The successful oil and gas company that transitions into the 2020s will look nothing like it does today. Leading companies in North America are championing efficient manufacturing-type processes in the field, aided by data science, delivering greater quantities of energy at progressively lower cost.
But what of delivering a better product? Are all hydrocarbon-derived barrels, molecules and electrons not the same? By definition, raw energy products like oil, gas and electricity are energy “commodities”, suggesting minimal differentiation. Yet that’s not true; for example, wide disparities between producers of oil can be identified.
Today, and in the future, delivering a better energy product will mean supplying a lower carbon consumable to meet pressing environmental challenges such as climate change. Minimizing water usage and toxic emissions are other, equally important dimensions of product differentiation.
Read Tertzakian’s entire post here.
Peter Tertzakian is the executive director of ARC Energy Research Institute. He has more than 30 years experience in the business of energy, spanning all systems from oil and gas to renewables.