Expert predicts the digital future of the green process industries – Transcript
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John Nixon: Hi and welcome to today’s episode of the Industry Forward Podcast. Where we discuss key trends and transformative technologies affecting everything from consumer-packaged goods (CPG), aerospace to automotive and energy.
I’m John Nixon, Global Vice President of Process Industries at Siemens Digital Industries Software. With me today is Thiago Ribeiro. He’s the Global Head of Energy, Chemicals, and Infrastructure, at Siemens Digital Industry Software as well. Thiago, it’s always a pleasure.
So, Thiago, when you were here last, we discussed how the products we produce from petroleum are so vital that it would be nearly impossible to completely turn off the tap. We’re talking about lifesaving medications, fertilizers and more—all necessary for survival and all sourced from crude. And we then posed the question, “would it therefore be possible to create a green economy that still uses oil and gas?”
Our conclusion was, “yes, it is possible.” In fact, I would say, “it is vital.” And today, we’re investigating that [green process industries] future, in a little more detail.
Okay, Thiago, we’ve seen some modernization … in the energy sector. We’ve got advanced nuclear, we’ve got renewables, green energy is what you hear it called. We’ve got fusion energy [around the corner]. There’s a lot of excitement around new forms of energy that … are born digital.
I’ll tell you what excites me. If we can go a little bit deeper into this. I’m seeing, for example with fast reactors and small modular reactor manufacturers, we’re working with them on the manufacturing floor. So, they’re designing and simulating everything that’s going to happen within the fabrication of the parts and equipment that are going to go into this new technology.
And then we’re going to have to bring it into the field. So now you’re going to have to operate at scale. You’re going to have to develop power generation. Now you’re going to have to account for civil, structural, subsurface, GIS (geographic information system) information. [It’s] a wide array of federated data with [all] your contractors on site who are … receiving, inspecting, assembling, constructing, operating. And then, or I should say handing off (as part of the startup procedure) and then moving into operations. There’s a whole life cycle that starts to evolve at scale. And that’s a real challenge right now.
So, when you talk about the complexity of data, and it’s compounded by [all] these silos of federated information, federated data from all the different parties. And there [is] quite numerous number of parties involved in just building one plant, let alone all of the power plants, all of the power generation we’re going to need for data centers, for behind the meter operations of [say] chemical plants.
So, what overwhelms I think a lot of people is the sheer challenge of scale that now exists around this data. What are your thoughts around this current modernization that [must] occur.
I know we’ve got a lot of brownfield, right? We’ve got a tremendous brownfield footprint in legacy oil and gas and petrochemicals and refining. You’ve also then got the more recent developments around fusion energy, … advanced nuclear, wind and solar, geothermal. And they start digital and with current technologies.
I mean, if you look at this holistically, we’ve got a real challenge here in front of us in that supply chain of data, is what occurs to my mind.
Thiago Ribeiro: Right. So, this is a very interesting topic. And let me take a step back over here, right?
John Nixon: Sure.
Thiago Ribeiro: Because let me try to cut it in pieces.
So, let’s talk about traditional energy companies. Let’s focus on oil and gas, for instance. There [are] a lot of challenges in deploying digital technologies. And you know the reasons, John. We’ve discussed one of them; so, there’s a lot of volatility in the market (referring to a previous podcast).
And honestly, my perception is, well, there is a little bit of a mentality here and there. This is changing overtime, of course. But there is a little bit of mentality that: “it always worked for me that way. Why should I change? Right?”
But the problem is those assets, they’re getting older and older. You see that sometimes we go to an oil and gas facility, and the same assets have been there for the past 50 years, right!? And what we see [is] that those [equipment] and processes, they’re not competitive anymore. Specifically, when we compare that with more recent technologies and renewable technologies and advanced nuclear and fusion energy.
Those [green energy] companies, a lot of them are now being born digital. And the reason is, taking a step back again, imagine designing equipment for the first time, something that nobody has seen. This is a marvel of engineering. There is a lot of complexity involved.
You need to prove first to your regulator that you can do it in a safer way that is going to add value to society, not put that … society at risk. So, the right way of doing that is to use [all] the digital technologies that we now have available from artificial intelligence (AI), GPU (graphics processing unit), high processing computing (HPC) [and] everything in our stack to create perfect scenarios in our digital world. [So, we can] understand the possible configuration that [that equipment] and processes should have. So, when I deploy them, they are going to work when I need [them].
So those companies, specifically renewables and nuclear, don’t have the deep pockets that oil and gas have. So, they don’t have the luxury of failing multiple times. So, they want to make sure that by the time they receive the license and approval to deploy those reactors, it’s going to work the first time. So that’s why they’re building a true, comprehensive digital twin, not just of the equipment, but the entire processes.
Because, like we’ve mentioned, a true digital twin needs data coming from different parts of the supply chain. Sometimes you need a digital twin of the equipment. Sometimes you need a digital twin of the construction. And of course, when you deploy [this] equipment, you will need a digital twin of operation. You need to monitor that and identify trouble, problems that may happen and even predict the future.
There are AI algorithms. They are able to run in the background. And it’s not a reactive model that waits for the problem to happen so we can intervene. Those models, they anticipate possible problems so you can send the right team to that equipment or process to intervene before the problem happens, which will reduce downtime, which will increase productivity and reduce costs.
So of course, those traditional energy companies … are looking into that and they are learning from those new companies that are being born and they’re also deploying these technologies on a larger scale at their operations as well. And this is what I see as a trend.
The oil and gas companies are learning from other industries. They are deploying model-based system simulation, advanced simulation. They are using artificial intelligence. They are using high-fidelity models and building their [comprehensive] digital twin.
But you’re right before. We need to start at the digital strategy. That is the only way we can make sure that the majority of the projects are actually achieving their targets and creating value to these companies.
John Nixon: You mentioned digital twins. You mentioned digital twins in design. You mentioned digital twins during construction and then of course into operations. And what I’d like to do in future episodes with you, I want to dive a little deeper on what we mean by digital twins and how that’s pulled together.
John changes the topic.
So, Thiago, you’re a chemical engineer. I want to kind of tap into that.
[Assume] we’ve got green energy, okay? And green energy, you mentioned earlier [in a previous podcast] , could be used in, let’s say, “a more efficient and lower carbon,” let’s say, “a more renewable,” and this is an ironic statement, “a more renewable or a greener means to produce oil and gas products.”
Take me on a little bit of a path there in what you’re thinking as a chemical engineer [for green process industries].
Thiago Ribeiro: Oh, absolutely.
I mean, we are moving towards electrification all around the world, right? And that has an impact in many industries, including … oil and gas.
Nowadays, we have advanced enough technologies to produce, for instance, synthetic fuels. And these synthetic fuels … have properties that are pretty much alike to the natural compounds that we use in mobility.
That is just one facet of it. We can also use this same technology of electrification to produce raw matter, such as hydrogen, [which] is heavily used in downstream [chemical processes], by the way.
But we can also use this green hydrogen to produce green ammonia, and from green ammonia, green urea and green fertilizers.
We can also use that in the chemical space, because we need chemicals for pharmaceuticals, to manufacture plastics, and we can use this technology to produce greener forms of plastics that are carbon neutral—or even carbon negative. Meaning that we are actually pulling CO2 from the atmosphere and condensing it into a product, avoiding it to be released back into the environment. So, there are different routes that we can take [to make green process industries].
And this is a new form of technology, which reminds me of one of the statistics from the International Energy Agency. I think it was a couple of years ago, John. They released a report saying that 50 percent of the technologies that society requires to decarbonize our whole species … do not exist yet. We will need to go into R&D (research and development) [to] develop these technologies; which is [a] very exciting [concept] for any engineer, right?
(Correction: the report states: “Most of the reductions in CO2 emissions through 2030 [will] come from technologies already on the market today. But in 2050, almost half the reductions [will] come from technologies that are currently at the demonstration or prototype phase.”) [1]
John Nixon: Well, and that comes back … to a colloquialism that I like to use of molecules to market. That everything really starts all the way back in the laboratory, all the way back to that early concept.
And if we’re to develop those technologies, we need a digital backbone for said technologies and our ability to drive their efficacy … in their evolution and their use for the future generations.
John changes the topic.
So, Thiago, a question for you.
What do you think future generations will think about our inefficient use of oil and gas, the way we just consume it in ineffective, inefficient internal combustion engines and in the way in which we do power generation versus a lot of the uses we’ve discussed here.
Thiago Ribeiro: This is a very complex answer, John, because we need to put things into context. This is not the first energy transition we are going through as a society, right? We went from biomass to coal. And then from coal to oil. And then we’re moving from oil to natural gas and then renewables, right?
So, society has been progressing over the times. When I think about the first industrial revolution about the use of coal, I cannot blame those guys who are using coal. That was a technology that was available.
And look at the progress that we made as a society of using coal. We had this revolution [in] equipment and machinery and that improved in every single aspect of society. From mobility to healthcare, from food production, this was important at that time.
But it wouldn’t make sense for us to keep using coal because we know that its impact [on] the environment is much higher than using oil or using gas. Now, … fast forward to a couple of decades, yes, we’re using oil and gas. And that has been important, a driver of economic growth. There is a strong correlation between the [human development index] and the use of energy. And it doesn’t matter the source [of the energy], but it’s important to have accessible energy to allow societies, especially developing societies, to grow.
Now, in the future, what I would assume that this new generation will think of is that, well, it was needed. Perhaps the oil and gas industry is still needed. If I’m putting a little bit of judgment here or there, I could say that, “we could move a little faster than we are right now, right?”
But this is a political discussion. There is a lot of… [geopolitical] tension, a lot of regulations, a lot of commitment coming from the private sector. Yes, we as a society can move faster.
But you know what? I’m an optimistic person and I do believe we will make the transition. And because we already are.
When we think about the depletion of the ozone layer, you remember that time, John. I’m not the only one that is a little bit old here. And we had this huge problem in the 90s. And guess what? Societies from different parts of the world, we committed towards this great goal [to] stop using chemicals that would deplete the ozone layer.
Fast forward, we did it! And the ozone layer is healing right now!
So yes, we have a huge problem [on] our plate right now, which is climate change, CO2 emissions. But I do believe that we will transition because now we have the right alternatives, the right synergies and the right technology to deploy.
John Nixon: And Thiago, as you’re talking about this, I think about the journey of whale oil, coal, kerosene and now we move into green energy [and green process industries]. You know, just as we as individuals, we start out in childhood and then we grow into adulthood. [As] our perceptions and our maturity evolve [with] our understanding of the world around us.
So, if you look at it as a species, right, we started off for centuries with biomass, and then we discovered things like whale oil and its use. But then we started to discover the uses of coal. And then we moved into the refinement of this “rock oil” that we now refer to as crude oil. And so that consciousness of our species has matured along with our use of energy so that we become more cognizant of its impact on the world around us.
So, to your point, I think future generations will see … this century, the 21st century, as an inflection point where we started to accelerate not only our digital posture, but we accelerated our maturity as a species in our use of energy that powered that digital future.
So, I, like you, am very positive about the future and hopefully future generations won’t judge us too harshly.
Thiago Ribeiro: I hope so. Thiago laughs.
John changes the topic.
John Nixon: One question I wanted to ask you, know, what’s funny is when I hear data and AI and these concepts, I start to think, “as we grew up, we always saw, TV shows and movies about the future.”
Some were very dystopian, right, around technologies. Others, like my favorite, Star Trek, were always very hopeful about what the future might look like for our species.
When you think about science fiction, right, just to have a little fun here, what is your reference when you think about that? Is it like a Blade Runner dystopia? Or is it a [Star Trek: The Next Generation] pursuit of goals for our species? What comes to your mind when you think of AI, and you have sci-fi on the brain?
Thiago Ribeiro: Honestly, I think of Iron Man. Both laugh.
I mean, technology can go both ways, right? So, technology can be used as a weapon, but technology can also be used to protect humanity and increase and improve our society.
I mean, I don’t want to give any spoilers if you did not watch [Avengers] Endgame. Do not listen to that part. But when Tony Stark, snaps his fingers, and defeats Thanos and saves humanity, he was only able to do that because, number one, collaboration, and number 2, the amazing technologies, including AI, that he has developed for his suit.
So that’s what I think when I think about technology. It can go wrong, but I do believe as an optimistic person that it will be there when we need it to improve the quality of our next generation.
John Nixon: So, you have a very positive outlook like myself. I see more upside than I, and there [are] of course always challenges and concerns. As adults, we realize that.
But I also look at “the future is very bright if we can use this technology appropriately.” I love your reference to Iron Man.
And if people go to your LinkedIn profile, right now, and go look at your picture, you look like Iron Man. Thiago laughs.
So, I can see how you have that reference. I love that. That’s a great one. Thiago laughs.
And with that, we’ve reached the end of another episode of the Industry Forward Podcast. Thiago, it has been an absolute pleasure having you back on the show.
Thank you for your insights into the modernization of the green subsegment of the energy sector [and green process industries]. It really highlighted the incredible potential of digital twins for both traditional and green energy [and process] companies.
We also delved into how electrification can pave the way for greener production of essential materials, chemicals and products that are traditionally produced using petroleum. This showcased, I hope you see, a hopeful path forward for our planet. Which I think is something we all need to hear right now.
Well, I hope this podcast helped you process your process industry questions. Hello, puntastic.
To our listeners, thank you for tuning in and joining us on this journey. We always appreciate your continued support and look forward to sharing more exciting discussions with you next time. Until then!
To learn more about green process industries, click here.
John Nixon – Global Vice President of Process Industries at Siemens Digital Industry Software
As Group Vice President for Process Industries at Siemens, John leads a global team that helps process industries leverage digital solutions that enhance efficiency, accelerate innovation and achieve sustainability goals.
John has over three decades of experience in strategy, operations and technology deployment for energy, chemicals, life sciences and CPG. He is well versed in the operational and business pressures of industry, including regulatory demands, decarbonization, talent gaps and the push for innovation.
Thiago Ribeiro – Global Head of Energy, Chemicals and Infrastructure at Siemens Digital Industry Software
As Global Head of Energy, Chemicals and Infrastructure at Siemens, Thiago defines strategy, investment priorities and go-to-market guidance that drive profitable growth and long-term customer value.
Thiago has over two decades of experience in chemical engineering and the energy industry. He has led large-scale digital transformation for companies worldwide, such as in the United States, Canada, Europe, the Middle East, South America and Asia.
Connect with Thiago on LinkedIn
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[1] IEA (2021), Net Zero by 2050, IEA, Paris https://www.iea.org/reports/net-zero-by-2050, License: CC BY 4.0
