Petroleum

Big Tech is Now Involved in Big Oil

Big Tech and Fossil Fuel

As the notion of environmental sustainability and climate change have been propelled into the spotlight in recent years, many big tech companies and major corporations have revealed plans to take steps towards reducing their carbon footprints and minimizing their impact on the environment. A reduction in fossil fuel consumption has been listed as a chief priority for companies like Amazon, Apple, Google, and Microsoft. In order to meet common initiatives such as becoming carbon neutral, these companies have highlighted how their eco-friendly policies and carbon-free campuses have eliminated much of the need for fossil fuels. However, while these companies have been vocal advocates for reducing the world’s dependence on fossil fuels, data and research show that many of the big tech companies have been collaborating aggressively with fossil fuel companies to produce more oil and gas.

Employee activism, coupled with pressure from external organizations and general consumers have compelled many major American companies to pursue efforts related to environmental sustainability. Amazon, Microsoft, and Google are three of the biggest tech companies that have promised to dramatically slash their fossil fuel consumption. Microsoft has a stated commitment to sustainability that references the need to accelerate global progress towards a more sustainable future. Since 2012, Microsoft has claimed that their operations have been carbon neutral, while they have also been one of the biggest purchasers of renewable energy in the country. Similarly, Amazon has boasted about the company’s ambitious goals to invest in sustainability partnerships to protect the future of the planet. Google also has some of the most prominent sustainability objectives, with claims that sustainability is built into every part of the company.

As big tech companies have been moving forward with sustainability initiatives, they have also paradoxically been growing their business ties with fossil fuel companies. While consumers and advocacy groups have pressured Amazon, Apple, Google, and Microsoft to reduce fossil fuel consumption to limit environmental impacts from acid rain, deep-water oil drilling, and fracking, these companies have simultaneously been working with fossil fuel producers to develop new methods to extract more oil and gas. As the easy-to-access oil and gas reserves have become largely depleted from drilling sites around the world, big tech companies have started to develop advanced technology that has allowed fossil fuel producers to access hard-to-reach reserves and improve the overall efficiency of their operations.

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Lucrative Partnerships

Over the years, numerous scientists, energy analysts, and political figures have attempted to quantify the amount of crude oil, coal, and gas that is left on the planet. Concerns related to the peak oil theory and the end of the fossil fuel era have continued to plague fossil fuel producers. However, as fossil fuel reserves have become increasingly hard to find and hard to extract, big tech companies have been able to step in to help fossil fuel companies find new reserves and keep the industry above the edge of profitability. In addition to the improved drills and pumps that have continually been innovated by petroleum engineers, American tech companies have started to strike lucrative partnerships with energy firms to develop artificial intelligence tools that have improved drilling operations and augmented fossil fuel refinery production.

According to Vivek Chidambaram, the managing director of Accenture Energy Consultancy, the oil and gas industry spends about $20 billion annually on high-tech cloud services, which accounts for roughly ten percent of the tech industry’s cloud market demand (O’Brien, 2019). The fossil fuel industry uses cloud services for the on-demand availability of computer system resources for data storage and advanced computing power, without the need for continual active management by industry executives. Energy experts remain bullish on the fossil fuel industry’s application of cloud services to store valuable operations and exploration data, even though it is unclear whether the extraction industry has benefited from the initial multi-billion-dollar investment thus far.

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Source: Pixabay

Industry Innovation

In the early days of fossil fuel exploration, the industry relied on engineers to innovate. Today, artificial intelligence has become the technological savior. Amazon, Google, and Microsoft have fueled a new artificial intelligence revolution with computer algorithms that have started to automate and streamline the process of fossil fuel reserve discovery. The fossil fuel industry is using advanced computer software to find accessible and affordable reserves of oil and gas rather than relying on traditional engineering and geological mechanisms to discover new reserves. Employing new computer technology and artificial intelligence tools have enabled the fossil fuel industry to better compete with wind and solar companies, which are quickly gaining momentum in the race for clean and sustainable energy generation.

In 2018 alone, the oil and gas industry paid companies like Amazon, Google, and Microsoft more than $1.75 billion on artificial intelligence software, which is projected to grow to four billion dollars annually by 2025 (Cole, 2019). Digitizing operations and simplifying the optimization process will help the fossil fuel industry improve efficiency and increase the production of oil and gas in a time when the world is projected to continue to need an increasing supply of energy in the near future. Since 2000, the overall demand for energy has surged by more than 80 percent, which has primarily been achieved by doubling fossil fuel usage (IEA, 2019). In Southeast Asia alone, fossil fuel use is projected to surge significantly in the coming years. Rising incomes, rapid industrialization, and urbanization are increasing the demand for energy in the world’s developing countries. Even after publicly celebrating their sustainability initiatives, big tech companies are simultaneously moving forward with plans to help supply the world with more fossil fuels.

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Ethical Concerns

Exxon Mobil, Chevron, Shell, and BP have started to establish long-term development agreements with American tech companies. While these partnerships have been the subject of increasing scrutiny, tech companies have been vigorously defending their actions. Prior to agreeing to work with fossil fuel companies, Microsoft CEO Satya Nadella held an internal meeting with top executives to discuss the ethical dilemma of selling its artificial intelligence and cloud computing software to the fossil fuel industry. Since the development of partnerships between big tech and big oil would increase the production of oil and gas, Nadella became concerned about the subsequent increase in greenhouse gas emissions that would come as a result of Microsoft’s partnership with fossil fuel companies. Ultimately, even with these concerns expressed, Microsoft moved forward with key fossil fuel partnerships while continuing to reiterate the company’s efforts to work on environmental sustainability initiatives.

A primary justification that big tech companies have used to defend their fossil fuel partnerships is that global development is dependent on affordable and reliable oil and gas resources. While investments in alternative forms of energy has risen sharply in recent years, the U. S. Energy Information Administration has maintained a forecast that highlights how coal, gas, and crude oil will continue their global energy dominance for decades into the future. By 2040, fossil fuels are still expected to account for 78 percent of global energy use. Moreover, rapid economic growth in developing countries like China, India, Indonesia, and Brazil is expected to cause global energy consumption to nearly double by 2040 (Cusick, 2016).

From the tar sands of northwestern Canada, to innovations related to hydraulic fracking within the Permian Basin of western Texas, new discoveries and technological advancements have continued to propel the fossil fuel industry forward. In addition to profiting off the industry, American tech companies hope to be able to continue to fuel global development, economic growth, and the creation of more sustainable and efficient production and refinery practices using their cloud services and artificial intelligence software.

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Reducing Environmental Impacts

Big tech companies have expressed hope that their software will help reduce the environmental impacts of some of the new forms of fossil fuel extraction, such as deep-water oil drilling, horizontal drilling, and hydraulic fracking. Since each of these new extraction methods has a greater impact on the environment than previous easy-to-drill practices that were abundant throughout the 20th century, tech companies like Amazon, Google, and Microsoft have designed products and services to enhance the development of efficient production methods. Although less than a week after publicly announcing a partnership that would provide Chevron and oilfield services giant Schlumberger with Microsoft’s innovative Azure cloud computing platform, Microsoft became that target of Democratic presidential candidate and Vermont Senator Bernie Sanders when he said, “It is unconscionable that amid global climate protests, tech giants like Microsoft are announcing major partnerships with Big Oil.” Moreover, in a tweet that was released as part of the annual September 20th global climate strike, Senator Sanders announced, “We must hold them accountable, demand they break ties with the fossil fuel industry, and move rapidly to sustainable energy.”

The pressure to abandon fossil fuel contracts has even resulted in internal employee protests at companies like Amazon and Microsoft. In response to employee backlash, Amazon CEO Jeff Bezos has pledged to have 100 percent of its energy use come from solar power and other renewable energy sources by 2030 (O’Brien, 2019). Moreover, Amazon also made headlines in 2016 for joining Google and Apple in a pledge to uphold the Paris Climate Agreement, while the U.S. as a whole under the leadership of the Trump administration has decided to abandon the agreement. However, over the past several years, Amazon’s clean energy efforts have dwindled after landing deals with companies like BP, Shell, and Halliburton. Instead, the company has invested heavily in data-based services and machine learning technology for enhanced fossil fuel exploration, oilfield automation services, and remote site data transportation (Merchant, 2019). In response to both internal and external criticism, Jeff Bezos has argued that Amazon is committed to helping the fossil fuel industry, rather than vilifying them (Merchant, 2019).

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Long-Term Sustainability

While some energy experts believe that big tech partnerships with the fossil fuel industry may increase carbon emissions, others hypothesize that technological advancements and software improvements could cut carbon emissions, thereby reducing the fossil fuel industry’s impact on climate change. Aseem Prakash, the director of the Center for Environmental Politics at the University of Washington, has said that denying artificial intelligence and cloud computing software to the fossil fuel industry would not address environmentalist concerns about the global dependence on non-renewable sources of energy. Instead, by allowing big tech companies to partner with fossil fuel companies, industry operations could be streamlined, costs could potentially be reduced, and less pollution would be generated (Merchant, 2019). Furthermore, by reducing the cost of production, this may open the door for fossil fuel companies to invest in other sustainability initiatives.

As developing countries continue to achieve higher levels of livability and growth, the demand for fossil fuels will continue to increase in the coming decades. Artificial intelligence and advanced computing software provided by the tech industry may help to achieve long-term United Nations climate goals. While American tech companies have also been investing in renewable energy generation, the current global energy profile is heavily dominated by fossil fuels. Making investments in current energy generation techniques could help to reduce carbon emissions in the near term, while also setting up for a future with less global greenhouse gas emissions. Moreover, in addition to using technology to find new oil and gas reserves and increase the production of fossil fuels, artificial intelligence could help with reducing the risk for environmental disasters related to pipeline leaks and drilling hazards. Artificial intelligence has also been used for predictive maintenance, which reduces downtime due to corrosion and other infrastructure issues. Overall, while the tech industry has received significant backlash from the general public, some politicians, and environmentalists for partnering with the fossil fuel industry, these partnerships will ultimately enhance sustainability in the long run.

Sources

Amazon. (2019). “AWS for Oil & Gas.” Amazon Web Services.

Cole, A. (2019). “Google and Amazon are now in the oil business.” Vox.

Cusick, D. (2016). “Fossil Fuels May Not Dwindle Anytime Soon.” Scientific American.

Epstein, A. (2016). “The Truth About Apple’s ‘100% Renewable’ Energy Usage.” Forbes.

IEA. (2019). “Southeast Asia Energy Outlook 2019.” The International Energy Agency.

Merchant, B. (2019). “Amazon Is Aggressively Pursuing Big Oil as It Stalls Out on Clean Energy.” Gizmodo.

O’Brien, M. (2019). “Big Tech’s eco-pledges aren’t slowing its pursuit of Big Oil.” Associated Press.

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