An article titled “What’s next for Big Oil?” recently published in the McKinsey Quarterly mentions that the major oil companies are struggling to replenish their reserves amid increased competition for new sources of petroleum. Figure 1 gives a graphical view of the Ratio of reserves added (excluding acquisitions) to reserves produced in given year; for major oil companies.

Nations are now encouraging pragmatic energy policies and implementing state-of-the-art technology to mitigate the harsh economic impact of volatile energy prices, global climate change and to manage their energy security requirements. We believe that technology innovations can significantly contribute towards the development of clean, efficient, affordable energy sources over the longer term, while continuing to contribute towards improving the efficiency across various segments of the energy value chain.

Increasingly Information Technology (IT) is playing a role of a facilitator in realizing complete benefits from such innovations. Such technological breakthroughs will help countries manage the energy needs of its population, grow their economies and reduce poverty.

Approaches to enhance energy security

The US Energy Policy Act of 2005 (EP Act) lays down the guidelines to incorporate alternative fuels and conserve energy. The goal of the EP Act is to enhance USA’s energy security. Several parts of the EP Act are designed to encourage the use of alternative fuels to help reduce U.S. dependence on imported oil.

Any step which contributes towards either creating new sources of energy or helps in reducing energy consumption enhances energy security. Encouraging the use of renewable energy sources like bio-fuels, solar power and wind power through tax credits and other incentives for such technology innovations will help in reducing our dependence on fossil fuels whereby enhance energy independence. Conservation and energy efficiency initiatives also contribute to enhancing energy security as it results in using less energy for undertaking the same tasks.

In the World Energy Council report on “Long-term energy Scenarios”, one of the ecologically driven scenarios described, appears to be the ideal solution for achieving energy independence. This is a scenario based on new renewable energy resources allowing a gradual phasing out of most fossil fuel use and also creation of a new generation of inherently safe small-scale nuclear reactors, which achieve public and political support. The indicated possibilities over the next century are huge; For instance, global fossil fuel dependency may decline from its present 76% to scarcely 20%. There will also be huge shifts lying behind these global figures. The present developing countries that accounted for 34% of world primary energy consumption in 1990 are expected to account for about 50% by 2020, at least 60% by 2050, and over 70% by 2100.

Technology led energy security initiatives

In this paper we discuss a few of the outstanding technological breakthroughs that are going to define the energy security strategy in the 21st century. An environmentally sustainable energy system necessitates technological breakthroughs, which can bring about a paradigm shift in the way we extract, produce, deliver and use energy. Harnessing energy successfully from various sources will require advanced materials, new designs, and storage solutions.

Recent scientific advances in the field of Nanotechnology will contribute significantly in developing advanced materials and devices, which will enhance cost effectiveness and increase operational effectiveness. Nanotechnology will induce efficiencies in the entire energy value chain leading to substantial reduction in energy demand and ecologically sound production of energy, which in turn will lead to energy independence for energy consuming Nations.

In Power Transmission, a major challenge is to develop new transmission line materials that are light in weight and have lower transmission losses. Individual carbon nanotube fibers have an electrical conductivity similar to or better than copper at only one-sixth the weight and with negligible eddy current loss. Several researchers have demonstrated that a carbon nanotube fiber bundle could carry currents of 100 million amperes per square centimeter – 100 times the current carrying capacity of the best low temperature superconductors. With current technology, losses in power transmission lines are about 7% in the United States. Research has shown that reducing these losses by 1% would result in annual energy savings of 4×1010 kilowatt-hours – an annual energy savings roughly equivalent to 24 million barrels of oil.

Fuel cells are a key enabling technology for many renewable energy systems and represent a critical bridge between traditional fossil-fuel energy systems and a clean, distributed and diverse energy infrastructure. Fuel cells and the associated hydrogen-based energy storage systems also provide a revolutionary opportunity to transform our energy system from, one based on the instantaneous use of power generation to one where energy can be efficiently stored and dispatched.

In a fuel cell, hydrogen and ambient oxygen react electrochemically to produce water and electricity, without emitting air pollutants or greenhouse gases. In an electrochemical reaction there is no combustion, so the efficiency can be far higher than existing technologies. The only immediate products of the reaction are electricity, water, and heat.

The most economical way to produce hydrogen at the present time is from natural gas, through a process known as reforming that does lead to small air pollutant and greenhouse gas emissions. However, hydrogen can also be produced from water and electricity, as well as from biomass and green algae. If the electricity used to produce the hydrogen is generated from renewable technologies, then the entire energy cycle of producing the hydrogen and using it in a fuel cell to produce electricity is air pollution and greenhouse gas emission free.

Figure 3 below shows the history of fuels in global use and envisioned Hydrogen-Energy future. The figure highlights the reducing dependence on hydrocarbons as the primary energy source by 2100, which will be substituted with increased usage of hydrogen.

Quantum computing can also significantly contribute towards improving design and control aspects of energy management systems. These kinds of computers run with very low energy consumption and are many times faster than current silicon based computers. Quantum computing relies on quantum physics by taking advantage of certain quantum physics properties of atoms or nuclei that allow them to work together as quantum bits, or qubits, to be the computer's processor and memory. By interacting with each other while being isolated from the external environment, qubits can perform certain calculations exponentially faster than conventional computers with negligible energy consumption.

Artificial Intelligence in electrical power systems can contribute significantly in demand side management (DSM). Unlike conventional DSM programs where customers are encouraged to modify their level and pattern of electricity usage, the intelligent systems would have electronic intelligence such as a smart chip for every device hooked to the grid, from power plants to substations to home appliances. The continual communication and interplay of smart devices will optimize the grid for economical rates, reliable service and environmentally clean operations.

IT as a facilitator for realizing these technologies

Leveraging IT will increasingly be a critical lever for optimizing existing fuel sources, developing new sources, operating and maintaining assets, manufacturing equipment, delivery, and monitoring energy use. IT could immensely contribute in the area of introducing new devices that can operate in real-time, facilitate dynamic pricing, risk management, demand side management, energy efficiency and monitoring energy flows. Figure 4 provides a snapshot of the energy supply & demand - IT imperative relationship in the energy security space. We are observing an explosion of initiatives in the drive to ensure energy security and IT has taken a center stage like never before as a facilitator to realize the benefits from the state-of-the-art technologies.

Contribution of IT to the energy value chain

In the following section we have provided some of the areas where IT has been making significant contribution to the various segments of the energy value towards enhancing energy security.

In the exploration & production segment, IT will facilitate improved finding and recovery rates and drive efficiencies, for example in:

• Estimating reservoir boundaries using of remote inference techniques.
• Development of a reservoir simulation model able to accurately predict the production capacity of a given reservoir.
• Assist the line managers and corporate office function in tracking of production operations.
• Delivering new technologies and techniques to increase recovery and reduce “dry holes”.

In the refining segment, IT will improve plant operations, reduce manpower requirements and drive efficiencies, for example:

• Flexible software solution that supports refining operations will help in managing plant assets more effectively.
• IT enabled control systems will help in managing a plant’s operational and environmental performance characteristics and assist in complying with government regulations.
• Software solutions will help manage both sales and purchasing operations. The system must facilitate the purchase of feedstocks; help track feedstock and product inventories, demand forecast and supports tracking of sales of a wide range of fuel outputs. Such systems will have the ability to easily handle multiple product origins, multiple units of measurement and multiple currencies.

In the network or delivery segment, IT will improve knowledge of energy flows to optimize delivery, for example:

• IT systems will help track energy flow, usage and losses and also assist in handling contingencies which may occur for a variety of operational and accounting-related reasons.

In the consumption or end-use segment, IT will be a key factor in delivering advanced devices to enable demand side management and reduce overall demand, for example devices such as:

• Automatic Demand Controllers
• Tools for monitoring equipment performance in energy-intensive industries

Conclusion

By 2030, there is likely to be even further changes to the energy mix and the way energy delivery systems operate. We are of the opinion that advanced, efficient, cleaner, affordable energy technologies will play a key role in managing the energy demand to improve energy security and IT will be a key enabler in the implementation of all such technology led solutions. IT and the state-of-the-art technologies discussed in this article have a symbiotic relationship as behind the successful development and deployment of these advanced technologies is IT based systems without which it would be impossible to derive the benefits from such technological breakthroughs.

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