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Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

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Why Big Tech Is Backing Big Oil

Big Tech and Big Oil have one very important thing in common: Big Business. And the ultimate goal of any business is to make a profit. That means that despite all of its outspoken support for climate change mitigation initiatives and renewable energy, Big Tech is openly working to make Big Oil’s life easier and its output greater.

In a recent example, Schneider Electric listed the benefits of Microsoft’s machine learning and its internet of things products for oil and gas companies. These tech products make the oil and gas industry a better managed, safer industry through remote monitoring of production and infrastructure assets and predictive capabilities allowing for pre-emptive action before something breaks down.

This actually doesn’t sound that bad. Who wouldn’t want a safer oil industry? In the meantime, Microsoft is also utilizing its artificial intelligence and machine learning expertise to help advance climate research aimed at tackling the environmental challenges we are facing, as the company puts it.

Google is another Big Tech major that feels perfectly fine with doing business with the oil and gas industry while setting itself ambitious emissions goals. Schlumberger for example has created a data-processing platform on top of the Google Cloud Platform to provide agility to its customers and accelerate oil and gas discovery. As the company says, “oil and gas companies like Schlumberger rely on Google Cloud to scale workloads, such as seismic interpretation, regression analysis and classification, and fast basin modeling and simulation. With Google Cloud Platform, these workloads scale up in minutes, including clusters with several hundred (or thousand) cores and are billed based on the compute seconds used.”

Last year, Google made headlines when The Guardian reported it had made donations to conservative think-tanks that deny climate change. The company defended itself by saying it was not unique.

“We’re hardly alone among companies that contribute to organisations while strongly disagreeing with them on climate policy,” a spokesperson for the company told The Verge in October. Related: These Oil Stocks Are Soaring As Middle East Risk Explodes

Indeed, there is nothing particularly unusual about doing business with companies or funding organizations, with which you disagree on some topics, if there is some mutual benefit somewhere. With oil and gas, this mutual benefit is obvious: Big Tech provides the products, Big Oil pays for them. With think-tanks, it’s pro-Big Tech regulation that is motivating the donations.

Amazon is yet another case in point. Like its peers, it has a line-up of products specifically targeting the oil industry. These, Amazon says, “can help Oil and Gas companies can accelerate digital transformation, unleash innovation to optimize production and profitability, and improve cost and operational efficiencies necessary to compete under the pressures of today’s global energy market.”

Like Google, Amazon is under pressure from critics, but while for Google these come from inside the company, Amazon is being criticized by outsiders for the environmental impact of its services, which, it turns out, is pretty sizeable. Just last week the Washington Post reported that the company had threatened to fire two employees who had voiced environmental criticism against their employer. This will no doubt be added to Amazon’s negative score in environmental protection by those inclined to keep scores, right next to its doing business with Big Oil.

However, the marriage of Big Tech and Big Oil is not necessarily an evil one. On the contrary. While a lot of new technology products and services for the oil industry seek to improve production, they do not seek to do that through more drilling. In fact, machine learning and AI help Big Oil drill less and extract more as they make exploration results more accurate and reliable and improve drilling efficiencies. Related: US Urges All Americans To Leave Iraq After Soleimani Assassination

Besides that, technology is helping the oil industry become safer. Smart tech for oil field workers and site inspectors and drone deployment for pipeline monitoring are but a couple of the ways in which technology can be good not just for the oil industry but for the environment.

So, on the face of it, Big Tech is being hypocritical, not least because it doesn’t seem as willing to advertise its business with Big Oil as it is its renewable energy purchasing plans. Yet, it’s worth noting it again: Big Tech companies are businesses and as such they will look for opportunities to sell their products and services to those who need them and can pay for them.

There is no pragmatic reason for Big Oil to be an exception to this rule and despite what many might imagine in these climate panic-fraught times, pragmatism is how business is done, not ideology. Whatever Goldman Sachs says, it didn’t pull out of Arctic drilling because of its ideological beliefs. It is a lot more likely it pulled out of Arctic drilling because for now, Arctic drilling is not really a profitable investment area in the places where Goldman can invest in it. Selling cloud services and AI capabilities to Big Oil is a profitable business for Big Tech. There is no pragmatic reason they should stop doing it just as there is no respectable reason they should be that shy about it.

By Irina Slav for Oilprice.com

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Leave a comment
  • Lee James on January 06 2020 said:
    I see no problem with the oil industry doing business with Big-Tech business. We are in transition. We still need petroleum, while we shift to clean energy.

    I've appreciated how much Big hi-tech has contributed to our clean energy infrastructure. In fact, private industry has been in the lead while our federal government touts fossil fuel.

    Thank you Microsoft, Apple, Amazon (yes, even Amazon!), Facebook, Walmart, Tesla, the Berkshire-Hathaway utility companies, the cities of Austin, & El Paso, State of California, New England coalition of electric generators, State of Texas, Florida Power, Next Era Power, State of Hawaii, and the U.S. military for moving ahead with clean energy and energy efficient technology! (Readers, feel free to fill in additional responsible parties.)

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