Technology Fuels Energy Sector's Rapid Evolution

At the well and at the light switch, energy technology is pushing boundaries.


To many Americans, energy companies are corporate dinosaurs. While other industries have undergone dramatic changes in recent decades, oil and gas companies remain tethered to fossil fuels and an infrastructure built to support the extraction and delivery of diminishing resources. As regulated monopolies, utilities often don't come off much better: They routinely struggle to restore power following major storms and are notorious for less-than-exemplary customer service. Intermittent spikes in gas prices and disasters such as BP's 2010 oil spill in the Gulf of Mexico have further sullied the industry's reputation.

[See Duke Energy Uses Charlotte as its Living Lab.]

Much of the criticism, of course, is well-deserved. "As you can imagine, these are not companies that customers typically love," says Rick Nicholson, group vice president at IDC Energy Insights. "They're tolerable." A closer examination, however, reveals an important trend that could alter some public perceptions. Once-lumbering energy conglomerates are quietly reinventing themselves with advanced technologies to cut costs, empower consumers, and reshape how they harness and distribute energy.

The three corporations selected by U.S. News as America's "Most Connected" energy companies—Sempra Energy, Duke Energy, and Chevron—reflect this embrace of innovation. Sempra and Duke are conducting some of the nation's most ambitious efforts to engineer intelligent energy grids and encourage conservation, while Chevron relies on NASA-style mission control centers to tether its global operations together.

These companies are at the forefront of a wider energy revolution that affects everything from how oil companies locate the fuel that reaches gas tanks to pinpointing the most efficient time of day to operate home appliances. "The energy industry may well be the highest tech industry in the world," says Joe Stanislaw, a senior advisor on energy and sustainability for Deloitte. "When you're drilling down two, three, four, five miles, that's like going to the moon."

"It is one of the most technology-centric industries," agrees Judson Jacobs, research director at IHS CERA, an analysis firm that specializes in energy issues, "and it really doesn't receive the credit for what it is."

[See From Microgrids to Smart Meters, Sempra Pushes Energy Tech.]

Sempra's San Diego Gas & Electric subsidiary boasts a diversified technology portfolio that includes a groundbreaking test of a microgrid, a self-contained power grid. Designed for remote communities, military bases, and universities, a microgrid can function on its own using locally derived energy such as solar power if a major grid fails—and could have important industry-wide applications. The utility also connects with customers through an extensive smart meter network that provides homeowners with an array of online tools to monitor energy usage.

On the East Coast, Duke Energy, which serves the Carolinas, Indiana, Kentucky, and Ohio, has partnered with a consortium that includes Charlotte, the city where it's based, Cisco, and Verizon to create a "first-of-its-kind" model for urban sustainability in the downtown core, which the company hopes to replicate elsewhere. Occupants of about 70 commercial buildings can track and manage their energy consumption via kiosks in lobbies and over the Internet. The Envision Charlotte initiative aims to cut consumption by 20 percent over five years through behavioral changes and upgrades to buildings, such as automated systems that adjust thermostats and switch off lights.

Chevron, meanwhile, has attracted buzz in tech circles with plans for at least a half-dozen state-of-the-art mission control centers, collectively dubbed the "i-field," that allow the company to remotely oversee global operations that span from Argentina to Australia. This digital oil field, one of several established by major oil and gas producers, uses advanced sensors, data analytics, and cutting-edge communications to identify and remedy problems and better pinpoint energy reserves, capabilities that lower costs and increase safety.