A look at 2022 for refiners
We’ve bid farewell to 2021, at long last. The champagne bottles have been popped, well-wishes have been exchanged, and there’s confetti on the floor. The year is now 2022: Happy new year!
So… Now what?
2021 was a bit of a rocky year for refiners, with the need to navigate a market only starting to recover from the still-ongoing COVID-19 pandemic. Amidst this, there was also growing pressure to keep up with an increasingly environmentally-concerned market and industry, with moves made to prepare for and embrace the energy transition.
Looking back, the previous year saw commitments made by O&G refiners to achieve net zero by 2030, and industry experts had to ask a tough question: Will we ever return to “normal”?
We’re certainly trying, at least. Millions around the world are getting their vaccines and booster shots, and markets are opening up again. Amid pandemic disruptions, the refining and petrochemicals industry is off to a strong recovery.
Even so, there are other fish to fry.
The possible greening of the O&G
The energy transition was all anyone could really talk about in 2021, with an overarching call for reduced activity and growth in oil and gas. However, not everyone was in agreement. Most significantly, the UN Climate Change Conference (COP26) – which was seen to be the most significant climate summit held between world leaders since the 2015 summit that ultimately resulted in the Paris Agreement – achieved what could only really be described as a relatively toothless commitment made in the way of phasing down on the usage of fossil fuels.
At the end of the 12-day discussions, nations agreed to come forward with improved Nationally Determined Contributions (NDCs), or climate action plans, at the COP27 summit due to take place from 8-20 November this year. Most importantly, leaders agreed to stay the course in keeping to the UNFCCC’s goal of 1.5 degrees Celsius.
Apart from that, India famously pledged to phase down fossil fuel usage by 2070, and the Beyond Oil and Gas Alliance (BOGA) was formed. Despite the COP26 climate talks achieving less than activists might have hoped for, it amplified the public’s voice of dissent with regard to the industry’s environmental and energy goals. We have seen that pressure put upon industry stakeholders has led to action, with some projects put on hold.
The general consensus from the industry as a whole, when it comes to the energy transition, seems to be that the energy transition must (and will, inevitably) take place – but while that’s in the works, oil and gas are still necessary in easing refiners and stakeholders into such a transition. In other words, there is no overnight solution to this conundrum.
The question now is how long this demand is going to last, especially with alternate solutions being researched and steadily implemented. By 2030, we could be looking at a vastly different market in terms of fuel demand.
Constant vigilance: A cautionary note toward digitalisation
The pandemic saw an unprecedented number of people working remotely, and ended the debate over the need for the O&G to adopt technology and digitalisation. The message was clear – innovate and keep with the changing times, or get left behind.
Digital twin technology saw a sharp uptick of interest, as refiners sought to replicate onsite conditions and results on a platform that allowed for easy access and monitoring. With AI technology improving in leaps and bounds, it might not be any stretch of the imagination to think that perhaps refiners will soon be able to access digital twins in a Meta-esque metaverse!
In the drive for digitalisation, it can be all too easy to get swept up in the latest and shiniest. With so many goodies in the market, refiners must remember to prioritise safety, and make sure that workers know what they need to look out for in the digital sphere. With cybersecurity becoming a growing priority, refiners will need to identify possible cracks in their current cyber landscape, and stay ahead of potential risks and threats to ensure reliable and resilient operations.
What’s more, 2022 will likely see refiners explore how they can bring more of their existing workforce aboard this new technology, and focus on updating their skillsets. As technology improves, so must the workforce – and so people and organisation must both realise their unique responsibilities in this regard.