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Let’s go through each prediction.
Goldman Sachs believes a supply shortage and insufficient investment in new supply will drive a bumper year for the overall commodity market but specifically energy as well. There's gonna be new investments in oil, gas, metals, all kinds of stuff. Basically, the beginning of a new supercycle in commodities.
The chart above shows steady growth for oil & natural gas.
But, the big growth is in worldwide demand for LNG growing by 90%!
So, for natgas producers who are maxing out on available US pipeline infrastructure for domestic sales, having the possibility of getting into the LNG supply chain opens up a huge opportunity to increase revenue outside the US.
New EPA OOOOb/c regulations will increase the required LDAR inspection frequency between 200-700%. I estimate there's gonna be 1.4 million more inspections needed, an increase of 471%.
This will cost an estimated $831 million across US operators.
The new super-emitter regulation is a game-changer because it makes EPA enforcement easier. The EPA will hire organizations like GHG Sat to use their fleet of satellites to fly over the US to look for 100kg/hour leaks. You could fly a satellite over the US every day looking for 100 kilogram-per-hour leaks.
Getting midstream pipelines approved by FERC is going to take serious negotiation. Operators who can prove methane intensity for their entire supply chain (upstream through midstream) have a chance of negotiating a new permit.
As I mentioned above, I estimate operators will need to do an additional 1.4 million more EPA OOOO b/c inspections, an increase of 471%. If the average LDAR inspector can do 400/year, that’s an additional 3,500 qualified inspectors needed. This comes at a time when finding qualified people is difficult.
In addition, the Inflation Reduction Act (IRA) provides billions of dollars in subsidies for solar, wind and hydrogen projects. So, oil & gas producers will be competing with government-subsidized organizations for talent.
Up till now, operators have been able to turn in a “bottoms-up” emissions inventory report based on EPA formula estimates. Some operators believe this overstates their emissions. The EPA & environmental groups think bottoms-up estimates is significantly underestimated.
Starting in 2023, proving your methane/GHG intensity with actual measurements will become increasingly mandatory.
The following initiatives will drive this move:
CleanConnect.ai has a project called ProveZero that helps operators prove their GHG/Methane intensity using computer vision & machine learning to generate blockchain-based energy certificates. The ProveZero certificate can be used to generate proof for OGMP, Regulation 22, IRA methane intensity or any other certification program.
If you’re interested in hitting OGMP 2.0 Level 5, I hosted a webinar with Thomas Fox titled, “How to Achieve OGMP 2.0 Level 5 (Gold Certified) in 2023.” You can register and get instant access to the replay by clicking here:
With the increase in regulations, the need to prove your emissions, and the difficulty in hiring qualified personnel, oil & gas companies will increase their investment in automation.
Industrial automation is growing steadily at 10% CAGR and computer-vision automation software is growing even faster.
CleanConnect.ai’s computer vision Autonomous365 suite enables operators to “clone” experienced employees into virtual agents that can be in 10 places at once. This allows producers to operate more efficiently and profitably.
My company, CleanConnect.ai, just received a government certification from CO called Alt-AIMM (alternative approved instrument monitoring method) that allows operators to use computer vision to replace manual LDAR.
Our computer vision suite scans for gas leaks, liquid leaks, fire, smoke, security violations, combustor efficiency, flare monitoring, and much more. And it works 24x7 in any weather conditions.
You can learn more at: https://www.AutonomousLDAR.com.
Mark Smith is the co-founder of CleanConnect.ai and the host of Digital Roughnecks.