INDUSTRY

By Steve Fisher, Editor in Chief -- Roughly two weeks ago, SGI held its Energy Summit 2002 in Houston, Texas, to discuss the collaborative visualization technologies that are advancing the science of oil & gas exploration. Supercomputing Online interviewed Bill Bartling, director of global energy solutions at SGI to see what came of the summit and generally how things went. SCO: SGI recently held an energy summit titled "Visualizing the Future: The New Energy Industry" which focused on the benefits of technology in reducing cost and increasing efficiency in oil and gas exploration. Overall, How did the summit go? BARTLING: SGI’s Energy Summit was by all measures a very successful event. There were approximately 150 people in attendance including press, software partners, customers and other constituencies representing major oil companies and independents. The speakers represented a wide array of technologies, presented both from the perspective of those that build and those that use the technologies. The entire spectrum of the technology solution was reviewed, from visualization, distributed graphical decision systems, high-end application software, broadband technologies, interconnecting reality centers and managing collaborative content to automation of oil field processes. This was cast in the light of the rapidly changing business environment of the energy industry, which is dominated by an aging workforce, a dramatically increasing cost of producing oil, and a per-barrel price of oil not materially changed in over 100 years (in inflation adjusted dollars). It was pointed out that in spite of the publicity that the mega-mergers of oil companies have received, the major gains in their business performance has come from the application of new and better technologies and the utilization of larger and larger data volumes to constrain their decisions. SCO: Bill Richardson, former U.S. Secretary of Energy & currently a candidate for governor of New Mexico gave the keynote address. What did Mr. Richardson have to say? How was his address received? BARTLING: Secretary Richardson spoke on a number of topics, centered around national security, environmental compliance and the role of technology in the history and future of the oil business. He highlighted the key elements of the current energy debate in Congress and how each of the bills differ from each other – the House bill providing for increased supply, while the Senate version emphasizes efficiency and conservation. He spoke at length about the reliance that the oil industry has on technology as well as the industry’s aggressive development and adoption of new technologies to sustain and grow their business. Secretary Richardson has held key policy positions throughout his career that determined how the US positioned itself on the global energy scene, and he has been witness not only to the many disruptions in supply but also to the US response to such disruptions. In our post 9-11 society, the topic of energy security clearly is on everyone’s minds. Secretary Richardson articulated the high degree to which the US and its allies are dependent on Middle East oil, and discussed the fact that the Russian supply is coming on line as a possible alternative. He reminded everyone that Saudi Arabia still has sufficient excess capacity to exceed the daily production of any other OPEC country and could supply nearly 40% of the daily consumption of the US. But one of the big debates in the past year has been electricity and its deregulation. We saw rolling blackouts in California, significant price increases and the collapse of Enron, one of the key energy traders. Restructuring has thus had sporadic success, with some states showing much more success than others. He then polished his crystal ball and stated that oil will hover around $25/bbl while gas will sit in the $3-4 range, at least for the next few years – a price that’s insufficient to drive the economics of the Alaska natural gas pipeline without government subsidies. The talk was very well received, even in an oil symposium in Houston, where it seemed as if there wasn’t a person admitting to be a Democrat besides Secretary Richardson. The Q&A session over lunch revisited issues about the Caspian Sea oil business, Middle East politics and it’s the latter’s potential impact on the supply of oil to the US. A number of people approached Secretary Richardson privately to thank him for his participation and public service and to compliment him on his remarks. SCO: I'm guessing that the Oil & Gas people would've been some of the first to get onboard with visualization technologies such as those provided by SGI. Please provide a little background on SGI's Oil & Gas business and how it's been doing recently. BARTLING: Indeed, the oil and gas industry was early to adopt this technology. The first large visualization systems from SGI started showing up in company laboratories in the late ‘80s and early ‘90s, with SGI desktop workstations preceding them by a few years. Texaco completed construction of the first Reality Center (large theater display) in the oil business in 1997. Since then, over 120 Reality Centers have been built for the industry, with companies like BP, Statoil and others leading the charge. We are seeing multi-national major companies aggressively adopting and expanding these technologies, with the national oil companies of Europe, Latin America and the Far East keeping pace. Companies are not stopping at just having access to these theaters, but now they are craving the ability to share the models they build in them with co-workers and partners around the globe, all in real time. Today, software is being developed specifically for these theaters, focusing on ultra-large, multi-disciplinary data volumes, collaboration among teams of people and long-distance connectivity. This is driving the market for large visualization systems and changing the work process to a more efficient, global state. SGI’s Visual Area Network extends the reach of the graphics supercomputer-driven Reality Center to the field operations as well as the engineers’ and scientists’ desktops. There’s a great article expanding on the Visual Area Network concept posted at http://www.sgi.com/features/2002/jan/launch/index.html. SCO: Alright, say I'm an Oil & Gas executive and I need technology solutions for my business. There are a lot of competitive offerings out there. Why do I choose SGI? BARTLING: Short answer is that if you want to play in the high-stakes business of oil exploration, you want to do it with enough data to maximize your chances of success. The data volumes used in today’s exploration business are in the tens to hundreds of gigabytes, and SGI builds the only graphical computers that can effectively and efficiently handle this much graphical data. The success rate based on these large data volumes and a graphical decision system has increased from 10% to as much as 70%. If I were an oil executive, I would prefer to have the 7-out-of-10 chance to find oil with my $10-50 million (or more) “bet” if I can get it. And I can only get it from SGI. In addition, the use of ultra-large, complex data for rapid and accurate exploration is in use by all the majors. They are now taking only weeks to finish analyses that took months to a year before they began using visualization software and hardware. So, if you are an oil company wanting to compete successfully in the high stakes exploration business, you need to have what your competitors already have … SGI. SCO: I believe it was the end of January or beginning of February that SGI announced the entire Visual Area Networking vision. Please remind the readers what that vision is all about and tell us how the energy sector has responded to it? BARTLING: Yes, SGI launched the Visual Area Network concept on January 29, 2002, along with several new products: SGI Onyx 300 visualization system with InfiniteReality3™ graphics, SGI® Onyx® 3000 visualization system series with InfinitePerformance™ graphics subsystem, Silicon Graphics Fuel™ visual workstation and OpenGL Vizserver™ 2.0. Visual Area Networking is an analogy to the Wide Area Network, in that it extends the reach of your infrastructure to other parts of your company or community. But in contrast to the WAN, the Visual Area Network is not about back office infrastructure; it’s about the foundations of the technical business decision process, the technical computing enterprise. The Visual Area Network is SGI’s response to the changing needs of the technical computing markets, where data models are becoming increasingly large and complex and the scientists and engineers who analyze them increasingly geographically distributed. Analyzing such enormous data volumes in real time can only be done through advanced graphical decision systems, such as those powered by Silicon Graphics Onyx-class graphics supercomputers. The other recognition is that there is a proliferation of low-cost desktop, laptop and handheld devices capable of showing images, but not capable of generating or storing them. The Visual Area Network provides access via these devices to graphical supercomputers that house the large, complex models, rendering the devices as thin clients providing views of the images created by the supercomputer. In addition, it connects people in various locations to both the data and each other by giving them simultaneous access to the supercomputer-based model. The Visual Area Network in addition recognizes that, because data will be geographically distributed (data streams collected from distributed real-time sensors), we need to manage these data stores in a single virtual file system. These data are becoming more and more real –time-based, requiring real-time computation, and in turn requiring real-time visualization distributed to all the members of the team that is managing the project, regardless of their location. The energy sector has responded very positively to this idea. This is precisely the platform that will support the next major technological breakthrough in the energy industry – connecting people with their data and their colleagues across long distances. It provides the infrastructure for real-time analysis of data from active oil wells, the first major step in automating the biggest element of the oil and gas process. SCO: Bob Bishop was another of the big speakers at the summit. Please give the readers an idea, a breakdown, of what Bob had to say. BARTLING: Bob spoke of the explosion in data acquisition in the energy and other industries and SGI’s role in helping them handle it via graphical decision systems. The advent of broadband networks, both wired (copper and fiber) and wireless, will connect people with their data and their teams across distances to data unrealized. This is being supplied by the telecom industry today, but the other element of realizing this new infrastructure is the Visual Area Network, which at its core relies on graphics supercomputers to drive distributed decision systems. This means that people in remote locations can participate in a joint session that is dealing with enormous (tens to hundreds of gigabytes) and complex (multi-dimensional objects) data without copying the data or the applications that analyze it. Bob emphasized that SGI’s singular mission is to provide advanced computational capacity to technical and creative users. Our proven technologies are delivered to the people who define their company’s core worth through their engineering, scientific or creative work. Examples of these range from SGI’s most well known industry, Hollywood special effects companies (e.g. Industrial Light and Magic), through manufacturing companies (Daimler-Chrysler, Boeing, Lockheed-Martin), to academic and government labs (for climate modeling, among many other computational applications) and into oil and gas (BP, Chevron-Texaco, Exxon-Mobil, etc). SGI’s mission is well focused, narrowed to a differentiated niche and targeted at the core of the value creation of the world’s biggest industries that are solving the world’s most difficult problems. SCO: Is there anything you'd like to add? BARTLING: The Energy Summit was designed to communicate that SGI is narrowly focused on technologies that target technical computing-dependent industries. Energy is one of those industries core to SGI, along with manufacturing, aerospace, medical imaging, biochemistry, climate modeling, space travel, astrophysics and defense that demand the highest technology to solve seemingly impossible problems – in real time. SGI’s technologies have a measurable, material impact on the profitability of energy companies, contributing with our partners to reduce cost and cycle time while expanding opportunities to regions inaccessible before. Investments in SGI’s technologies are clearly evident at the bottom line and much more so than from any other technology addressing these most difficult problem areas. We were most pleased to present this year’s forum to discuss the road ahead, and we look forward to next year, when we will re-visit the application of technology to this important global business. ----- Be sure to check out the video from SGI’s Energy Summit.