Techbits: Profitable Delivery, Use of Emerging Technology Addressed
Authors: JPT staff _ 
Published: February 2015

Techbits

With a mandate to understand how best to commercialize emerging E&P technologies for the benefit of all stakeholders, more than 60 technology managers converged on San Antonio, Texas earlier this year for an SPE Emerging Technology Workshop. The two-day workshop "Delivering and Using Emerging Technology to Make Money in E&P" used case histories to review the tools and processes that demonstrate how emerging technologies contribute to increased profits, how to accurately assess risks, and how to prioritize and assess the promise of an emerging technology.

"Over the course of two days and eight sessions, we reviewed many of the tools that can be used to evaluate a technology, as well as those that accelerate a new technology's adoption," said Bob Radtke, cochair of the workshop and principal of Technology International. "The key point in this workshop was to develop a set of tools such that an emerging technology could be properly proposed, vetted, and commercialized."

Keynote Speaker and Chairman of the Board of Ingrain, Gary Jones, discussed a model for delivering profitable technologies even in chaotic or uncertain market cycles. In what he called the "Burning Arrow of Time," Jones described the technology progression path as highly nonlinear, and that to manage this, the industry must become better at defining validation milestones. Validation of a new technology has both an external component, composed of the perceived value, market need, and speed to acceptance, and an internal component consisting of the expected rate of return, the complexity of developing and testing the technology, and the application range the technology will address. To move through product development and commercial growth with as few deviations as possible requires the ability of top management to manage validation with vigor or a willingness to hire that capability in. "This cannot be outsourced," Jones stressed.

Technology Adoption Challenges

The workshop's first session highlighted the challenges of getting new technologies off the ground. In his talk "Anatomy of an Underperforming Technology," Steve Jacobs of RMI reviewed historical examples of underperforming E&P technologies and highlighted the often decades-long time horizons to move a new technology from the idea stage to commercial use. He then proposed a "Technology Cube Model" to explain the three major technology acceptance factors—the immediacy and magnitude of a technology's benefit, early-phase reliability, and total cost compared to previous or alternative technologies. Jacobs said that the optimum technology would be placed on the corner of the cube corresponding to significant and immediate benefit, a high degree of early-systems reliability, and roughly the same comparative cost. To cross the so-called technology acceptance chasm between innovators or early adopters and the majority of customers, Jacobs listed several steps—among them, that technology providers must listen more carefully and focus on what customers will pay for, which is not always the same as what they want. He also suggested doing more market research and forming more development alliances with operators.