Exploring the Impact of Artificial Intelligence in the Oil and Gas Industry in Houston, Texas

The Rise of AI in the Oil and Gas Industry: How Houston is Leading the Way

HOUSTON, Texas (KTRK) — “Have you ever had a dream, Neo, that you were so sure was real? What if you were unable to wake from that dream? How would you know the difference between the dream world and the real world?”

Laurence Fishburne’s character, Morpheus, in the 1999 blockbuster, “The Matrix,” asks Neo, played by Keanu Reeves, some important questions, ones that we might even be asking ourselves as artificial intelligence, or AI, seeps further into our everyday lives.

And while the concerns with AI are very real and being explored, we’re not living in a science fiction movie – yet.

In fact, true AI is still decades away, but what many are working with now is a type of AI called machine learning.

“It’s very difficult to take humans out of the picture,” said Dr. Birol Dindoruk, distinguished professor of petroleum and chemical engineering at the University of Houston.

That picture Dindoruk is referring to is oil and gas, one of the many industries where AI is assisting people, as they make critical decisions, and in some cases, to avoid catastrophes.

“We’re building the applications that are, you know, monitoring every device on every offshore oil rig in real time so that they can see with 18 hours in advance before something fails and just shut it down,” said Tom Siebel, CEO of C3.ai.

Siebel told ABC13 oil and gas was actually one of the industries that adopted AI early, with Shell’s exploration of its use dating back to 2016.

Siebel’s C3.ai is a cooperative effort that allows oil and gas companies to share AI technology and applications with each other. So rather than withhold the information from competitors, the goal is to collaborate.

As Dindoruk and Siebel explain, AI is at work in oil and gas, diagnosing issues and assisting with maintenance.

One way Shell uses AI – to track their half a million valves all over the world.

“They can see what’s going on. They can predict when a valve is going to be stuck open or closed before it happens, and if one of these valves gets stuck open or closed, things go real bad, real fast, right? And so, they’ve decided to make these applications available to Aramco, Eni, Chevron, Phillips,” Siebel said.

Chevron’s chief information officer Bill Braun told ABC13’s Tom Abrahams on his show “This Week in Texas” last summer that they’re using robots to do tank inspections.

“It’s one of the more hazardous parts of our business to put a human into a confined space that might hold hydrocarbons or other dangerous substances,” Braun said.

But what happens to that human’s job?

That person could now be the one controlling the robot, but there’s still concern jobs would go away entirely, though Braun said he sees that being the extreme.

“We think of it as all jobs will be affected by AI in some way, and the vast majority are going to be just improvements in terms of the productivity, and hopefully, reducing some of the things that are least enjoyable in their work,” Braun said. “Some jobs will inevitably go away and some will be created, but I think the small set will be on those extremes.”

“I’m hopeful someone gets 20% of their productivity back,” he added.

And in oil and gas, Dindoruk sees AI increasing efficiencies – if it’s used correctly and with checks and balances.

“In fact, the expectations are, in terms of returns, quite high, worldwide could be trillions of dollars, the savings and what we get out of it,” Dindoruk said.

Trillion indicates a lot of zeros, but apparently not too far off when it comes to what Houston, already designated the energy capital of the world, could contribute.

A recent report predicts the value of AI in the oil and gas sector will rise to nearly $6 billion by 2028, with Houston being a hub for innovation in the development of AI in the industry.

“There’s over 80 startups dealing with energy, energy transition, clean technology that are right here in Houston, and so, how Houston will continue to apply things like AI into the energy transition we think is a really important part of how it’s going to show up as well,” Braun said last summer.

“People don’t realize how much innovation happens here,” he added.

The February 2024 report identified some of the trends driving the explosion of AI in oil and gas: stepped-up use of data, higher demand for energy efficiency and sustainability, automation of repetitive tasks, optimization of exploration and drilling and enhancement of safety.

If anything, Dindoruk says, AI is another tool to have in your toolbox.

“AI can help us to extract that information sometimes we don’t see as humans because we have certain bandwidth. We have to sleep at the end of the day, but (a) machine doesn’t have to sleep,” he said. “While we are sleeping, it can sift things extremely fast, faster than us. Those are all advantages. AI will learn.”

And so must we, at least when it comes to asking the right questions.

“Learning how to ask the question properly, which is what’s called prompt engineering, I think that is the skill that people really need,” Siebel said. “You don’t need to be a data scientist. You don’t need to understand deep learning. You don’t need reinforcement learning.”

Siebel says it also helps to understand generative AI. Google describes generative AI as the “use of AI to create new content, like text, images, music, audio, and videos.”

“And what that enables us to do is make these applications accessible to tens of thousands of people in these oil and gas companies without them having to know what machine learning models do, how deep learning works or what AI does, but it gives them the right answers so they can deliver the right job,” Siebel told ABC13. “It tells them when there’s going to be a device failure on an offshore rig, so they could pull the plug on the oil rig and avoid environmental hazard. So I think that it’s difficult to overestimate the importance of generative AI.”

According to Dindoruk, AI in the oil and gas industry is unavoidable. And for those looking to better understand it, he says awareness is a start.

“Not everybody is going to be an expert on it, but being aware of it will lead to being able to ask the right question,” Dindoruk said. “So if you can ask the right question, at least we can get an answer.”

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