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Can Digital Resources Help in Wake of Ban on Russian Energy?

Cutting off oil, gas, and coal imports from Russia may be disruptive, but efficiencies in the US infrastructure and digital solutions may help in the long run.

As prices spike at gas pumps across country with Russian oil, gas, and coal imports off the table, the domestic energy industry seems to have digital resources available to help manage potential changes in production.

President Joe Biden’s ban on imported energy resources from Russia is meant to convince President Vladimir Putin to cease hostilities against Ukraine. While politicians argue about how to adapt to this latest turn of events, it may be possible for domestic suppliers of such energy resources to further increase production efficiently in response.

Digital resources from companies such as Cognizant and Rackspace are available to the oil and gas industries to help them modernize and operate more efficiently as well as digital transformation guidance from professional services companies such as Accenture and PricewaterhouseCoopers (PwC). For example, Rackspace offers cloud-driven intelligence services for usage optimizations, failure risk assessment, and predictive maintenance. Cognizant offers solutions to address leak detection and gas pipeline integrity. Accenture says it can help modernize energy and gas infrastructures via digital asset management and smart infrastructures to boost operational efficiencies. PwC says its analytics and solutions platform has helped a large gas station chain modernize with real-time data and competitive intelligence.

[Note: The above providers either declined to directly comment or did not immediately respond.]

'Not Going to Be a Cataclysmic Event'

How much the United States needs to rely on energy resources from Russia is being argued by opposing political parties, but it may be significantly less than countries in Europe. “It’s not going to be a cataclysmic event for us,” says Paul DeCotis, senior partner and head of East coast energy and utilities for consulting firm West Monroe. “We have enough refining capability in the US, particularly in the Gulf Coast region, that can scale pretty quickly.”

Land-based drilling on the other hand, he says, can be slower going -- taking six months to one year to access oil and turn it into a product. Even then, DeCotis says there may be short-lived impact from the ban. The United States has also shown resiliency in its natural gas mining and operations, he says.

Though the country is emerging from the heating season, when natural gas is in high demand, driving season is returning, which DeCotis says drives demand for oil in the form of gasoline.

Current events on the international level are worth acknowledging, but this is far from the first time that the oil and gas industries have had to adapt management of production to sudden changes. “When gas prices really fell, a lot of drilling sites closed,” DeCotis says. “They just couldn’t be economical.”

A glut of supply at that time saw some declines in fracked gas, for example. “Upstream impacts on the gas industry is very volatile,” he says. “I don’t think it’s as stable as the oil production side, which is older and battle-tested. I don’t see a real problem in the industry scaling up as necessary to meet demand. It just takes time.”

Electrical Energy Efficiencies in US

Meanwhile, efficiency of use in electrical energy in the US has been improving for decades, he says. Fossil fuels such as coal, gas, and oil generate about 61% of the country’s electricity according to the Energy Information Administration, which might make the ban on Russian resources a concern; but alternative sources are growing on this front. “Smart grid technology, the digital grid, increasing penetrations of small, distributed energy resources -- be they solar, wind, geothermal, fuel cells -- have been very effective,” DeCotis says.

That trend required investment in grid infrastructure to operate those technologies, he says, such as distributed energy resources and electrical vehicle charging stations. “The only way we really get the value out those from an economic perspective is if the grid could accommodate them.”

The dynamics of the electric utility resource planning have changed in years with demand becoming more variable and consumers generating their own electricity. “Putting distributed energy resources on the grid at various points, in some cases the utility has control over those resources and in some cases the utility doesn’t,” DeCotis says. The new challenge is co-optimizing demand and supply, where demand is variable, and it may be unknown where the demand will be. “Utilities are looking to have visibility into those resources and/or control,” he says.

Electric utilities feel a need to digitize, DeCotis says, as more technologies continue to be added to the grid edge. “Once things are digitized, utilities want to develop uses cases across multiple data platforms and databases to give insights,” he says. “It’s the next phase of digitalization, which is really the analytics piece.”

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