This guest post is written by Microsoft Partner OSIsoft.

 

This was my first CERAWeek. I have been to many industry events over the years, and CERAWeek is unique. The content is primarily panels of industry leaders chaired by IHS CERA strategists. Daniel Yergin, IHS CERA chairman, leads most of the plenary sessions. Daniel's deep, wide-ranging knowledge, preparation and interview style result in informative and entertaining sessions.

I also learned a term-Shale Gale. Shale Gale is the revolution in the discovery of huge U.S. natural gas reserves locked up in layers of shale; the Marcellus Shale formation in the Appalachian Basin is one of the biggest gas discoveries. The gale indicates the ramifications of this discovery, which are gusting over the energy landscape. I heard the Shale Gale was the rage of CERAWeek 2010; it was discussed frequently this year as well.

To give you an idea of the Shale Gale's effect, during the North American Energy Plenary session we learned of possible energy flow reversal. Dominion Resources owns an LNG terminal on Chesapeake Bay. The terminal was designed to import gas to fuel Dominion's electricity generation. With so much gas nearby in the Marcellus Shale Formation, the need to import gas is much lower. In fact, Dominion is considering reversing the LNG terminal; yes, the U.S. may start exporting energy.

One more interesting note on the Shale Gale: a key technology for getting at this energy is a technique called fracking (short for hydraulic fracturing). Although the Shale Gale is a bit of a revolution, fracking is very much an evolution. The techniques were developed over many years, mostly by independent U.S. and Canadian exploration and production companies. The oil and gas industry is not just about the super majors-the small, creative, risk-taking independent E&P companies play an important role in this business as well.

You don't get to see many celebrities at industry events. CERAWeek had plenty, including a number of CEOs. Two notables were John Rowe of Exelon and Microsoft's Steve Ballmer. John Rowe gave a refreshingly honest talk. His delivery was slow and direct; perfectly timed humor reinforced his points. His talk, in a nutshell:

  • Wide availability of gas has made combined cycle gas the most economical way to generate electrical power in the US.
  • John likes nuclear over wind, but realizes the cost of building new nuclear power plants makes the economics tough.
  • He reflected on what comes after gas. He used to think nuclear; but now believes a blend of gas, wind and solar is equally viable. Smart systems to coordinate the mixed generation, with the T&D grid and load, are required to make this viable. That was music to OSIsoft-we would like to see more people looking toward this holistic approach to our power infrastructure-cooperation across the entire electrical power value chain.

Steve Ballmer delivered Wednesday's dinner keynote. I've seen and heard Steve present three times before-so I somewhat knew what to expect. I am pretty sure many in the audience were surprised when Steve broke out of the conservative delivery protocol used by the other CEOs. Steve uses the entire stage and speaks with a very wide dynamic range. The thesis of Steve's talk was how consumer information technology moves into business. In some respects, this is a reversal of earlier IT trends; think of how long before mobile phones made it to the consumer. Steve demonstrated Xbox Kinect-your body as an input device rather than wands, controllers or mice. I watched the audience as Steve delivered-they were engaged, and I believe Steve's points hit home. 

OSIsoft had our own celebrity participating. Pat Kennedy, OSIsoft's CEO and founder, participated in a panel titled, "Managing the Grid of the Future." Larry Makovich of IHS CERA chaired the session. Pat's participation was centered on the importance of software and data. When asked what the "killer app" of smart grid would be, Pat responded with dealing with two important challenges: the four percent problem and intermittency. We push the grid to its limit a small percentage of time, and we don't always deal with that gracefully. Intermittency problems are a reality with solar and wind generation. Industry can supply load, curtailment and generation capacity to help deal with both the four percent problem and intermittency.

Finally, the undisputed three top celebrities were George W. Bush, Bill Clinton, and Henry Kissinger. Mr. Kissinger shared with us his experience and insight in world politics; the Middle East and China were areas of focus. Presidents Bush and Clinton shared the stage with Daniel Yergin for the final session of CERAWeek. Daniel interviewed George and Bill-asking the same questions of each. They discussed the immense challenges of being president, the Middle East, and domestic policies. It was interesting to see the responses-in general they agreed on foreign policies and had some disagreement on domestic policies. Equally interesting was the contrast between the two styles.

CERAWeek 2011 was a great experience. It was a great opportunity to get a good understanding of energy issues by industry leaders. I look forward to attending next year.

About OSIsoft, LLC

OSIsoft (www.osisoft.com) delivers the PI System, the industry standard in enterprise infrastructure, for management of real-time data and events. With installations in 107 countries spanning the globe, the OSIsoft PI System is used in manufacturing, energy, utilities, life sciences, data centers, facilities and the process industries. This global installed base relies upon the OSIsoft PI System to safeguard data and deliver enterprise-wide visibility into operational, manufacturing and business data. The PI System enables users to manage assets, mitigate risks, comply with regulations, improve processes, drive innovation, make business decisions in real time, and to identify competitive business and market opportunities.

Founded in 1980, OSIsoft, LLC is headquartered in San Leandro, CA, with operations worldwide and is privately held. Learn more about OSIsoft and the PI System at www.osisoft.com.