U.S. energy executives are looking to emerging technologies like artificial intelligence and intelligent automation to improve business operations, but do not expect it to eliminate jobs, according to KPMG's 2018 U.S. Energy Outlook Survey.
In fact, 51 per cent see technology replacing tasks so employees can focus on strategic activities, and 32 per cent plan to use technology to improve products and services.
"Emerging technology is disrupting the status quo, and concepts around digital labour and cognitive technology are being explored industry-wide, resulting in concerns over how the workforce will be affected," Regina Mayor, Global and U.S. energy sector leader, said in a statement. "However, utilizing innovative tech to alleviate mundane and time-consuming tasks will put organizations in a strong position to make big change as they operate with a more efficient workforce."
On new technologies, the KPMG survey of 92 energy execs shows only mild concern over the impact of autonomous vehicles on the energy industry. Sixty-five per cent of respondents say autonomous and electric vehicles (AV/EVs) won't disrupt their businesses. In fact, the majority (59 per cent) don't expect business model changes due to growing adoption of AV/EVs to occur for at least five years, if at all.
Focus on core business
The survey points to a growing sense of optimism among energy executives, with 59 per cent expecting an improved U.S. economy in the next year. Eighty-three per cent plan to increase or maintain headcount. When asked about top strategic priorities over the next year, 21 per cent cite reduction of cost structure, 21 per cent cite acquisition of competitors or relevant businesses, 16 per cent plan to invest in new products or geographies, and 11 per cent point to reducing operational complexity.
However, the executives do see barriers to achieving growth over the next year: 38 per cent have concerns over volatile commodity/inputs, followed by 15 per cent who cite a lack of customer demand and 13 per cent who identify regulatory constraints as a hurdle. While there is still concern over commodity prices, expectations for 2018 are higher: 45 per cent estimate the average price of Brent Crude oil to be between $50-$59, and 49 per cent expect to see prices in the $60-$69 range.
Deal activity remains high, with 54 per cent of respondents indicating a likelihood to be involved in a merger or acquisition this year. Twenty-nine per cent indicate consolidation of core businesses as the biggest driver of M&A activity, and only six per cent say bankruptcies or restructuring are an M&A driver.
On the renewable energy front, while renewables are making a strong appearance, executives indicate the future of energy is a mix. The top renewable sources for investment are solar (14 per cent), offshore wind (seven per cent) and biomass (seven per cent).
However, 54 per cent of respondents say they have no plans to invest in renewables, and 44 per cent believe the nation will achieve a 50 per cent renewables footprint by 2035, while 30 per cent say never.
"The industry is making great strides to add renewables into the mix, but power is a growing demand for our world," added Mayor. "To achieve a sustainable future, we need to create an energy ecosystem that includes both renewables and fossil fuels, and looks at the less mature and untapped resources that will allow us to harness energy globally for the long-term."