Could linear change become exponential? Technology in oil and gas

Many energy executives typically think of change as a linear progression – point A leads to point B, and so on. That’s not surprising, considering many have spent their entire careers in a mature industry where a single infrastructure project can take decades to plan and build.

It’s also one of the major reasons that 78% of energy executives are willing to say that oil and gas should be our primary fuels only until cleaner energy can replace them, as found in EY’s recent Perceptions survey. These executives aren’t seeking to speed their own demise; they simply recognize the challenges involved in changing the world’s energy mix.

In their minds, the timeline for that evolution spans several decades, at least – and maybe longer.

But what if we are closer than that to a disruptive innovation event? We know major technology leaders, investment firms and even traditional oil and gas companies have been working on breakthroughs in transportation energy for years.

Of course, some of these innovations are expensive or have a long way to go to build name recognition among US consumers. But what if deep-pocketed and innovative technology companies, along with hedge funds and private equity, became more involved in a major energy shift?

Is it possible that an all-electric vehicle – with a strong brand presence, instant consumer recognition and cachet – could upend the transportation market and reduce oil demand much faster than the energy industry anticipates?

It’s probably safe to say it would, even if the price wasn’t completely competitive.

Is a game changer like that possible in energy?

Several technology companies have tremendous capital reserves, intellectual firepower and a proven track record of taking on – and disrupting – mature industries. Plus, they have an unmatched ability to sustain a significant cash burn until a project takes off and begins adding to the bottom line.

In other words, when technology is involved, change is often exponential, not linear.

The challenge for oil and gas executives, then, is managing their businesses for success today, and also for those innovative revolutions of tomorrow.