Two prerequisites for breakthrough energy productivity clearly give competitive advantage. First, truly effective energy strategies recognize the need for fully integrated solutions from the primary fuel to the final product or process. Second, breakthrough energy efficiency requires a consistent day-by-day, year-by-year process of continuous improvement with unwavering senior leadership.
This is rarely the approach most companies adopt. When energy prices rise or new energy-related legislation looms, they seek quick-fix solutions. Unrealistic or ill-informed goals often are demanded from existing internal teams and accompanied by few, if any, additional resources or new ideas. The outcome is a raft of disparate, non-integrated measures implemented in a hurry by existing teams and vendors. Results are usually marginal, underlining the perception that energy efficiency is an optional extra and not strategically essential.
Occasionally, a company recognizes the need to establish long-term energy management processes, along with investment plans and fully integrated approaches. Restructuring the energy footprint of a multibillion-dollar company on a worldwide basis to achieve breakthrough productivity and climate change results is a task that calls for enormous process and project management skills, accompanied by sophisticated legal, regulatory and investment management expertise.
When such companies reach out to the market to find expertise, they all too often come up dry. Even if their internal teams truly understand what’s needed, which is itself a rarity, they hit real challenges in finding the appropriate expertise to put in place the necessary internal processes, tools and projects. Typically, they either find highly qualified integrated energy solutions expertise incapable of tackling the depth and scale needed, or they find resources that can deliver scale, but in a narrow part of the solution.
This is no surprise as the market is structured for historical demands. Fully integrated expertise was needed only for small-scale programs that all too often were never replicated. The energy expertise that was called for tended to deliver standalone quick-fix efficiency solutions, which, although useful, fall short of the possibilities offered by integrated approaches.
I recently had the privilege to participate in the Energy Manager Workshop at the prestigious Industrial Energy Technology Conference in New Orleans, and the equally prestigious Globalcon meeting organized by the Association of Energy Engineers in Austin, Texas. It’s clear that this lack of scalable energy productivity capacity is becoming the critical barrier to successful implementation. Everyone I meet in the productivity business worldwide is overloaded with opportunity, and still not scratching the surface of the true demand. As in any market transformation, the stress for some is an opportunity for others.
Restructuring the world’s energy footprint for environmental, social and economic reasons is becoming the survival challenge of the 21st Century. This column generally focuses on the challenges of industry, but industry’s challenges pale in comparison with the challenges of the world’s cities, most of which must contemplate halving their energy use in less than a generation while remaining competitive and attractive.
Where will we find resources that can take on these energy challenges, and deliver results measured not in billions, but in trillions of dollars of productivity? They must be energy-literate, capable of taking on multi-decade energy efficiency and supply infrastructure projects measured in hundreds of millions of dollars. They must be comfortable dealing with, and influencing, the regulatory and legal frameworks that too often conflict with efficiency. They need to bring a truly global perspective to solutions, following their client’s needs around the world and drawing on the best and brightest talent, technologies and practice.
Organizations that have most of this skill set exist today. They are the world’s leading corporations in the oil and gas industry. The new politics of energy is increasingly challenging their historical leadership of the oil and gas part of the energy chain. As countries envision a world of limited or even shrinking oil and gas reserves, nation states are increasingly consolidating control of their oil wells and gas fields.
Is it beyond imagination that the oil majors will make the cultural shift necessary to see they have always been in the business of keeping the world’s energy systems moving? In the past, they focused their formidable talents on delivering fuels at low costs, high quality and in vast quantities. In the future, keeping the planet’s energy systems moving will require equally formidable talents focused on delivering efficiency at low costs, high quality and in vast quantities. Is this a marriage made in heaven: an industry seeking to redefine its future and a world energy productivity market demanding rapid scalability?
Peter Garforth is principal of Garforth International LLC, Toledo, Ohio. He can be reached at [email protected].