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Technology review


Transforming the energy industry with AI

For oil and gas companies, digital transformation is a priority—not only as a way to modernize the enterprise, but also to secure the entire energy ecosystem. With that lens, the urgency of applying artificial intelligence (AI) and machine learning capabilities for optimization and cybersecurity becomes clear, especially as threat actors increasingly target connected devices and operating systems, putting the oil and gas industry in collective danger. The year-over-year explosion in industry-specific attacks underscores the need for meaningful advancements and maturity in cybersecurity programs.

However, most companies don’t have the resources to implement sophisticated AI programs to stay secure and advance digital capabilities on their own. Irrespective of size, available budget, and in-house personnel, all energy companies must manage operations and security fundamentals to ensure they have visibility and monitoring across powerful digital tools to remain resilient and competitive. The achievement of that goal is much more likely in partnership with the right experts.

MIT Technology Review Insights, in association with Siemens Energy, spoke to more than a dozen information technology (IT) and cybersecurity executives at oil and gas companies worldwide to gain insight about how AI is affecting their digital transformation and cybersecurity strategies in oil and gas operating environments. Here are the key findings:

  • Oil and gas companies are under pressure to adapt to dramatic changes in the global business environment. The coronavirus pandemic dealt a stunning blow to the global economy in 2020, contributing to an extended trend of lower prices and heightening the value of increased efficiency to compensate for market pressures. Companies are now forced to operate in a business climate that necessitates remote working, with the added pressure to manage the environmental impact of operations growing ever stronger. These combined factors are pushing oil and gas companies to pivot to new, streamlined ways of working, making digital technology adoption critical.
  • As oil and gas companies digitalize, the risk of cyberattacks increases, as do opportunities for AI. Companies are adding digital technology for improved productivity, operational efficiency, and security. They’re collecting and analyzing data, connecting equipment to the internet of things, and tapping cutting-edge technologies to improve planning and increase profits, as well as to detect and mitigate threats. At the same time, the industry’s collective digital transformation is widening the surface for cybercriminals to attack. IT is under threat, as is operational technology (OT)—the computing and communications systems that manage and control equipment and industrial operations.
  • Cybersecurity must be at the core of every aspect of companies’ digital transformation strategies. The implementation of new technologies affects interdependent business and operational functions and underlying IT infrastructure. That reality calls for oil and gas companies to shift to a risk management mindset. This includes designing projects and systems within a cybersecurity risk framework that enforces companywide policies and controls. Most important, they now need to access and deploy state-of-the-art cybersecurity tools powered by AI and machine learning to stay ahead of attackers.
  • AI is optimizing and securing energy assets and IT networks for increased monitoring and visibility. Advancements in digital applications in industrial operating environments are helping improve efficiency and security, detecting machine-speed attacks amidst the complexity of the rapidly digitalizing operating environments.
  • Oil and gas companies look to external partners to guard against growing cyberthreats. Many companies have insufficient cybersecurity resources to meet their challenges head-on. “We are in a race against the speed of the attackers,” Repsol Chief Information Officer Javier García Quintela explains in the report. “We can’t provide all the cybersecurity capabilities we need from inside.” To move quickly and address their vulnerabilities, companies can find partners that can provide expertise and support as the threat environment expands.

Cybersecurity, AI, and digitalization

Energy sector organizations are presented with a major opportunity to deploy AI and build out a data strategy that optimizes production and uncovers new business models, as well as secure operational technology. Oil and gas companies are faced with unprecedented uncertainty—depressed oil and gas prices due to the coronavirus pandemic, a multiyear glut in the market, and the drive to go green—and many are making a rapid transition to digitalization as a matter of survival. From moving to the cloud to sharing algorithms, the oil and gas industry is showing there is robust opportunity for organizations to evolve with technological changes.

In the oil and gas industry, the digital revolution has enabled companies to connect physical energy assets with hardware control systems and software programs, which improves operational efficiency, reduces costs, and cuts emissions. This trend is due to the convergence of energy assets connected to OT systems, which manage, monitor, and control energy assets and critical infrastructure, and IT networks that companies use to optimize data across their corporate environments.

With billions of OT and IT data points captured from physical assets each day, oil and gas companies are now turning to built-for-purpose AI tools to provide visibility and monitoring across their industrial operating environments—both to make technologies and operations more efficient, and for protection against cyberattacks in an expanded threat landscape. Because energy companies’ business models rely on the convergence of OT and IT data, companies see AI as an important tool to gain visibility into their digital ecosystems and understand the context of their operating environments. Enterprises that build cyber-first digital deployments similarly have to accommodate emerging technologies, such as AI and machine learning, but spend less time on strategic realignment or change management.

Importantly, for oil and gas companies, AI, which may have once been reserved for specialized applications, is now optimizing everyday operations and providing critical cybersecurity defense for OT assets. Leo Simonovich, vice president and global head of industrial cyber and digital security at Siemens Energy, argues, “Oil and gas companies are becoming digital companies, and there shouldn’t be a trade-off between security and digitalization.” Therefore, Simonovich continues, “security needs to be part of the digital strategy, and security needs to scale with digitalization.”

To navigate today’s volatile business landscape, oil and gas companies need to simultaneously identify optimization opportunities and cybersecurity gaps in their digitalization strategies. That means building AI and cybersecurity into digital deployments from the ground up, not bolting them on afterward.

Download the full report.

This content was produced by Insights, the custom content arm of MIT Technology Review. It was not written by MIT Technology Review’s editorial staff.


Transforming the energy industry with AI 2021/01/21 14:00

China’s surging private space industry is out to challenge the US

China’s space program might have been slowed by the pandemic in 2020, but it certainly didn’t stop. The year’s highlights included sending a rover to Mars, bringing moon rocks back to Earth, and testing out the next-generation crewed vehicle that should take taikonauts into orbit—and possibly to the moon—one day. 

But there were a few achievements the rest of the world might not have noticed. One was the November 7 launch of Ceres-1, a new type of rocket that, at just 62 feet in height, is capable of taking 770 pounds of payload into low Earth orbit. The launch sent the Tianqi 11 communications satellite into space.

At first glance, the Ceres-1 launch might seem unremarkable. Ceres-1, however, wasn’t built and launched by China’s national program. It was a commercial rocket—only the second from a Chinese company ever to go into space. And the launch happened less than three years after the company was founded. The achievement is a milestone for China’s fledgling—but rapidly growing—private space industry, an increasingly critical part of the country’s quest to dethrone the US as the world’s preeminent space power. 

The rivalry between the US and China, whose space program has surged over the last two decades, is what most people mean when they refer to the 21st-century’s space race. China is set to build a new space station later this year and will likely attempt to send its taikonauts to the moon before the decade ends. But these big-picture projects represent just one aspect of the country’s space ambitions. Increasingly, the focus is now on the commercial space industry as well. The nation’s growing private space business is less focused on bringing prestige and glory to the nation and more concerned with reducing the cost of spaceflight, increasing its international influence—and making money.

“The state is really great at large, ambitious projects like going to the moon or developing a large reconnaissance satellite,” says Lincoln Hines, a Cornell University researcher who focuses on Chinese foreign policy. “But it’s not responsive to meeting market needs”—one big way to encourage rapid technological growth and innovation. “I think the government thinks its commercial space sector can be complementary to the state,” he says.

What are the market needs that Hines is referring to? Satellites, and rockets that can launch them into orbit. The space industry is undergoing a renaissance thanks to two big trends spurred by the commercial industry: we can make satellites for less money by making them smaller and using off-the-shelf hardware; and we can also make rockets for less money, by using less costly materials or reusing boosters after they’ve already flown (which SpaceX pioneered with its Falcon 9). These trends mean it is now cheaper to send stuff into space, and the services and data that satellites can offer have come down in price accordingly. 

China has seen an opportunity. A 2017 report by Bank of America Merrill Lynch estimates that the space industry could be worth up to $2.7 trillion by 2030. Setting foot on the moon and establishing a lunar colony might be a statement of national power, but securing a share of such a highly lucrative business is perhaps even more important to the country’s future. 

“In the future, there will be tens of thousands of satellites waiting to launch, which is a major opportunity for Galactic Energy” says Wu Yue, a company spokesperson.

The problem is, China has to make up decades’ worth of ground lost to the West.

How did China get here—and why?

Until recently, China’s space activity has been overwhelmingly dominated by two state-owned enterprises: the China Aerospace Science & Industry Corporation Limited (CASIC) and the China Aerospace Science and Technology Corporation (CASC). A few private space firms have been allowed to operate in the country for a while: for example, there’s the China Great Wall Industry Corporation Limited (in reality a subsidiary of CASC), which has provided commercial launches since it was established in 1980. But for the most part, China’s commercial space industry has been nonexistent. Satellites were expensive to build and launch, and they were too heavy and large for anything but the biggest rockets to actually deliver to orbit. The costs involved were too much for anything but national budgets to handle.

That all changed this past decade as the costs of making satellites and launching rockets plunged. In 2014, a year after Xi Jinping took over as the new leader of China, the Chinese government decided to treat civil space development as a key area of innovation, as it had already begun doing with AI and solar power. It issued a policy directive called Document 60 that year to enable large private investment in companies interested in participating in the space industry. 

“Xi’s goal was that if China has to become a critical player in technology, including in civil space and aerospace, it was critical to develop a space ecosystem that includes the private sector,” says Namrata Goswami, a geopolitics expert based in Montgomery, Alabama, who’s been studying China’s space program for many years. “He was taking a cue from the American private sector to encourage innovation from a talent pool that extended beyond state-funded organizations.”

As a result, there are now 78 commercial space companies operating in China, according to a 2019 report by the Institute for Defense Analyses. More than half have been founded since 2014, and the vast majority focus on satellite manufacturing and launch services.

For example, Galactic Energy, founded in February 2018, is building its Ceres rocket to offer rapid launch service for single payloads, while its Pallas rocket is being built to deploy entire constellations. Rival company i-Space, formed in 2016, became the first commercial Chinese company to make it to space with its Hyperbola-1 in July 2019. It wants to pursue reusable first-stage boosters that can land vertically, like those from SpaceX. So does LinkSpace (founded in 2014), although it also hopes to use rockets to deliver packages from one terrestrial location to another.

Spacety, founded in 2016, wants to turn around customer orders to build and launch its small satellites in just six months. In December it launched a miniaturized version of a satellite that uses 2D radar images to build 3D reconstructions of terrestrial landscapes. Weeks later, it released the first images taken by the satellite, Hisea-1, featuring three-meter resolution. Spacety wants to launch a constellation of these satellites to offer high-quality imaging at low cost. 

To a large extent, China is following the same blueprint drawn up by the US: using government contracts and subsidies to give these companies a foot up. US firms like SpaceX benefited greatly from NASA contracts that paid out millions to build and test rockets and space vehicles for delivering cargo to the International Space Station. With that experience under its belt, SpaceX was able to attract more customers with greater confidence. 

Venture capital is another tried-and-true route. The IDA report estimates that VC funding for Chinese space companies was up to $516 million in 2018—far shy of the $2.2 billion American companies raised, but nothing to scoff at for an industry that really only began seven years ago. At least 42 companies had no known government funding. 

And much of the government support these companies do receive doesn’t have a federal origin, but a provincial one. “[These companies] are drawing high-tech development to these local communities,” says Hines. “And in return, they’re given more autonomy by the local government.” While most have headquarters in Beijing, many keep facilities in Shenzhen, Chongqing, and other areas that might draw talent from local universities. 

There’s also one advantage specific to China: manufacturing. “What is the best country to trust for manufacturing needs?” asks James Zheng, the CEO of Spacety’s Luxembourg headquarters. “It’s China. It’s the manufacturing center of the world.” Zheng believes the country is in a better position than any other to take advantage of the space industry’s new need for mass production of satellites and rockets alike. 

Making friends

The most critical strategic reason to encourage a private space sector is to create opportunities for international collaboration—particularly to attract customers wary of being seen to mix with the Chinese government. (US agencies and government contractors, for example, are barred from working with any groups the regime funds.) Document 60 and others issued by China’s National Development and Reform Commission were aimed not just at promoting technological innovation, but also at drawing in foreign investment and maximizing a customer base beyond Chinese borders.

“China realizes there are certain things they cannot get on their own,” says Frans von der Dunk, a space policy expert at the University of Nebraska–Lincoln. Chinese companies like LandSpace and MinoSpace have worked to accrue funding through foreign investment, escaping dependence on state subsidies. And by avoiding state funding, a company can also avoid an array of restrictions on what it can and can’t do (such as constraints on talking with the media). Foreign investment also makes it easier to compete on a global scale: you’re taking on clients around the world, launching from other countries, and bringing talent from outside China. 

Although China is taking inspiration from the US in building out its private industry, the nature of the Chinese state also means these new companies face obstacles that their rivals in the West don’t have to worry about. While Chinese companies may look private on paper, they must still submit to government guidance and control, and accept some level of interference. It may be difficult for them to make a case to potential overseas customers that they are independent. The distinction between companies that are truly private and those that are more or less state actors is still quite fuzzy, especially if the government is a frequent customer. “That could still lead to a lack of trust from other partners,” says Goswami. It doesn’t help that the government itself is often very cagey about what its national program is even up to.

And Hines adds that it’s not always clear exactly how separate these companies are from, say, the People’s Liberation Army, given the historical ties between the space and defense sectors. “Some of these things will pose significant hurdles for the commercial space sector as it tries to expand,” he says.

Other challenges

None of these new companies are yet profitable, and it will be quite some time before they are. “There isn’t any sign of indication that this industry will flop,” says Hines. “But many experts do think a lot of these companies will go out of business.” Apart from the challenge of attracting customers outside China, many companies are still trying to figure out who exactly their customers ought to be. 

American companies like SpaceX and Blue Origin had billionaire founders ready to burn cash to take on large risks, push past big failures, and finally get off the ground. And while a Chinese billionaire entered the industry last year“there is no Chinese Elon Musk to push these riskier ventures forward,” says Hines. It’s also unclear whether Chinese companies, even those supported by wealthy backers, will have that appetite for risk.

Zheng says one thing Spacety has offered is exceptional transparency with clients for whom it is developing satellites—something that’s still uncommon for Chinese firms. “Many of them have no kind of spaceflight experience,” he says. “They want to see and learn what goes on, but the large companies won’t allow for that. We’re different.”

Lastly, China needs to figure out a legal framework that can guide the commercial industry in more explicit terms, and specify what’s allowed and what is not. It is the only major space power without a specialized space law. (The American version is Title 51 of the United States Code.) While the hope is that free enterprise can generate innovation, national governments are still liable for whatever space activities a country’s private companies conduct. There’s a need to license and approve these missions, ensuring that governments know what they’ve signed up for. 

Despite all this, China’s space industry is rolling forward. These new startups haven’t just adopted American business practices—they’ve also begun to embrace American startup culture as a way to foster business relationships and grow. During my video call with Spacety’s Zheng, the company’s Beijing CEO, Yang Feng, briefly dropped in to say hello, on his way back from a party where he’d been schmoozing and enjoying drinks with many peers and partners in the industry. “It’s part of the way we do business now,” Zheng said. “Innovation is not just new technology itself—it’s also a new way of doing things.” 


China’s surging private space industry is out to challenge the US 2021/01/21 12:00

Biden’s first steps as president: Action on covid and climate

A flurry of executive orders is expected to take place over the next few days from the new US president as he takes residence in the White House. Here are the highlights of those he has signed so far.

The “100 day mask challenge”

Biden’s first order is part recommendation, part requirement: it requires people to wear masks on all federal property, and recommend that governors and local elected officials follow suit. The wording also attempts to turn masking, a vital public health recommendation that can help to stop the spread of covid-19, into a public challenge, calling for all Americans to stick to wearing masks for the next 100 days. —Abby Ohlheiser

Rejoining the Paris climate accords

Biden wasted little time setting a new tone on climate change, an issue he has pledged to make a centerpiece of his presidency. As promised throughout the campaign and after, Biden began the process of bringing the nation back into the Paris climate agreement on his first day in office.

Rejoining the Paris agreement, which will officially take a few more weeks, doesn’t create any new binding climate policies in itself. But it will require the US to submit revamped emissions targets before the UN climate conference later this year, as well as a plan for deep reductions by midcentury. The grand hope is that the world’s second-largest emitter returning to the international fold will build more momentum behind the global goal of preventing 2 ̊C of warming. After four years under Trump, however, the US will need to repair extensive damage to its international relationships and achieve real progress on its domestic climate policies before it will be seen as a leader rather than laggard on the issue. —James Temple

Canceling Keystone

Biden also issued a sweeping executive order on climate change that directed federal agencies to begin reviewing, and where appropriate reversing, the Trump administration’s efforts to loosen or unravel dozens of energy and environmental policies.

It revoked the construction permit for the controversial Keystone XL Pipeline, which would transport crude oil from Canada to Illinois. In addition, it called on agencies to start the process of creating tighter rules on methane emissions from the oil and gas industry; enacting new vehicle fuel economy standards; setting stricter efficiency standards for appliances and buildings; and establishing what’s known as a “social cost” of carbon, nitrous oxide, and methane, determinations used to more accurately evaluate the costs and benefits of federal policies by incorporating the environmental effects of these greenhouses gases.

Separately, the order directs the secretary of the interior to review the Trump administration’s efforts to remove land from and allow oil and gas exploration on or near national monuments, including Bear Ears and Grand Staircase-Escalante. It also asks the department to halt and evaluate the environmental impacts of drilling plans in the Arctic National Wildlife Refuge.

The new administration plans to enact more aggressive action on climate change on January 27, including signing an executive order that puts the issue at the forefront of domestic and national security policy, the Washington Post reported

Each of these steps could provide greater regulatory certainty to states, companies, and investors and otherwise boost the markets for a variety of climate tech and clean energy industries. But accelerating US emissions cuts enough to meet the Paris goals—or to achieve Biden’s own targets of carbon-free electricity by 2035 and net-zero emissions economy-wide by 2050—will require pushing stricter climate legislation through Congress. And it’s going to remain tricky to enact anything too ambitious with only a slim Democratic majority in the Senate.

Federal covid response

Following up on the recent announcement of a proposed $1.9 trillion covid relief and action plan, the president signed an order that will shift some key positions within the federal government that will be crucial to the new administration’s pandemic response. Biden will be reinstating the Directorate for Global Health Security and Biodefense, which Obama created after the Ebola epidemic. Under Trump, the directorate’s staff—along with its work and general mission—were largely absorbed by other offices in the National Security Council. Biden has in the past implied, somewhat misleadingly, that the office was completely eliminated.

The order creates a senior position reporting to Biden that is responsible for managing the effort to produce and distribute vaccines and medical supplies, which will be held by Jeff Zients, a former director of the National Economic Council. —Abby Ohlheiser

Rejoining the WHO

In the middle of a global pandemic, Trump began the process of formally withdrawing the US from the World Health Organization. Biden’s first-day order halted that process—and announced that Anthony Fauci would lead the US delegation. —Abby Ohlheiser

Changes to immigration rules

Biden plans to undo many of President Trump’s controversial immigration policies through a combination of executive orders and proposed legislation. Among the orders today, he has announced that his administration will end the Muslim ban, halt construction of the US-Mexico border wall, preserve the Deferred Action for Childhood Arrivals program, or DACA, and revoke Trump’s order to exclude noncitizens from the Census count. Other important changes that will go to Congress include new pathways to citizenship for 11 million immigrants without permanent legal status, and steps to modernize the immigration court system and clear current backlogs. —Eileen Guo

Pausing last-minute regulation changes

Some of Trump’s final actions in office were to issue orders that changed various regulations, including introducing new cybersecurity measures on cloud computing companies and removing an ethics block on public servants earning money from lobbying after they leave office. An order from the new White House puts all those sudden changes on hold, for now. —Bobbie Johnson

Extending a block on evictions

As we reported in December, thousands of eviction hearings are taking place by videoconference and phone call—a technological disparity that is often leading to people being forced out of their homes unfairly. Without further action, the CDC’s eviction moratorium, which was set to expire on January 31, meant tens of millions were at risk of losing their homes in the middle of a pandemic. An executive order from Biden extends the block through the end of March—at least for those who can prove they are unable to pay. —Eileen Guo

This story will be updated with more actions and executive orders as they are announced.


Biden’s first steps as president: Action on covid and climate 2021/01/20 23:22

Why Trump’s last-minute cyber order could have limited impact

The news: Hours before leaving the presidency, Donald Trump issued an executive order that requires American cloud computing companies to do more to verify the identities of their foreign customers. The stated aim is to help prevent hacking operations against the United States, although the timing and scope of the order mean it is surrounded by uncertainty.

What it says: The order instructs the Commerce Department to write new customer vetting regulations within six months for “infrastructure as a service” products offered by American tech giants such as Google, Microsoft, and Amazon. The new rules would set minimum customer identity verification standards and record-keeping requirements for cloud companies that sell to foreign customers. It includes sales made through resellers, which hackers have used in order to hide their identity before committing abuse. 

Late in the day: The timing of the executive order—which was announced on the evening of January 19, the end of Trump’s last full day in office—is exceptional. Not only did it arrive just as the curtains close on his presidency, but it comes in the wake of an extraordinary hacking campaign against American government agencies and major companies. US intelligence agencies say the Russian government is “likely” behind the espionage campaign, a charge Moscow denies. The full impact of the operation is still being calculated.

Uncertain impact: In a statement released last night, National Security Advisor Robert C. O’Brien said attacks of this nature “played a role in every cyber incident during the last four years, including the actions resulting in the penetrations of United States firms FireEye and SolarWinds.” But whether rules like this would actually stop foreign hackers in practice is a source of debate. And since the order was signed so late and will take months to have any impact, the question of whether it lasts in its current form falls to Joe Biden’s incoming administration. Any of Trump’s executive orders could be revoked or tweaked by the new president, who is expected to sign a wave of such orders quickly as he comes into office.


Why Trump’s last-minute cyber order could have limited impact 2021/01/20 18:57

InSight’s heat probe has failed on Mars. Is the mission a failure?

For two years now, NASA’s InSight probe has sat on the surface of Mars, attempting to dig 5 meters (16 feet) deep in order to install the lander’s heat probe. The instrument was going to effectively take the planet’s temperature and tell scientists more about the internal thermal activity and geology of Mars. 

InSight never even got close to realizing that goal. On January 14, NASA announced that it was ending all attempts to place the heat probe underground. Affectionately referred to as “the mole,” the probe is designed to dig underground with a hammering action. But after the first month of its mission, it  was unable to burrow more than 14 inches into the ground before getting stuck. NASA has been working since to come up with some kind of solution, including using InSight’s robotic arm to pin the mole down with added weight to help it loosen up some dirt and get back to burrowing.

It never really worked. The Martian dirt has proved to be unexpectedly prone to clumping up, diminishing the sort of friction the mole needs to spike its way deeper and deeper. Ground crews came up with a last-ditch effort recently to use InSight’s arm to scoop some soil onto the probe to tether it down and provide more friction. After attempting 500 hammer strokes on January 9, the team soon realized there was no progress to be had. 

It’s discouraging news, given that NASA just recently decided to extend InSight’s mission to December 2022. During that time, there won’t be much of a role for the heat probe. Bruce Banerdt, the InSight principal investigator, says that the planet’s temperature could still be measured at the surface and a few inches below the surface using some of the instruments on InSight that still work. “This will allow us to determine the thermal conductivity of the near surface, which might vary with season due to changing atmospheric pressure,” he says.

An illustration of how InSight’s mole was supposed to be deployed on Mars.
DLR

And while the mole was unable to accomplish what was expected, it’s not accurate to see this as a failure. “We have encountered new soil properties that have never before been encountered on Mars, with a thick, crusty surface layer that decreases its volume substantially when crushed,” says Banerdt. “We do not yet understand everything we have seen, but geologists will be poring over this data for years to come, using it to tease out clues to the history of the Martian environment at this location.”

InSight will continue on with some of its other investigations, especially the measurement of seismic activity on Mars. It turns out the Red Planet is rocked by quakes all the time.


InSight’s heat probe has failed on Mars. Is the mission a failure? 2021/01/20 16:08

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