Bulk handling facilities must continually work to increase throughput and achieve exacting cargo requirements. Planning for bulk commodity distribution presents unique challenges, including complex interrelated tasks and disruptions from weather changes and equipment failures. Planners work to ensure streamlined processes for product disbursement, but sometimes the performance outcome doesn’t match that plan. They are left asking unanswerable questions, such as “Is this the best process I can do?” or ‘How do I know I set a reasonable target?”
Continued oil price volatility has increased pressure on oil companies to find new ways to decrease costs to maintain margins. Unpredictable revenues make it difficult for companies to accurately manage and deliver on their profit commitments. Effective value chain optimization and inventory management is one area where savings can be made.
With increasingly intensive regulation of greenhouse gas emissions over the last decade, government support for the development of renewable energy resources (via research grants and tax credits), and low natural gas prices, coal-fired generation has been on a steady decline in the US. According to the US Energy Information Agency (EIA), coal-fired generation declined from about 2.0 trillion kwh in 2008 to less than 1.3 trillion kwh in 2016. During that same period, natural gas-fired generation increased from 0.8 trillion kwh in 2008 to 1.4 trillion kwh in 2016; and renewables increased from about 0.4 trillion kwh in 2008 to about .6 trillion kwh in 2016.
Blockchain is a digital ledger where transactions made in bitcoin, another cryptocurrency, or any other digital contract are recorded chronologically and publicly. It provides facility similar to other publically shared documents (Google Docs for example), enabling participants to view, and authorized participants to change, the contents while maintaining the latest version of the document. This ensures that everyone has the same, most current version of information at all times. Participants can create rules for the ledger, enforcing contracts and transactions based on predefined conditions all parties agree to upfront.
R. Buckminster Fuller created the Knowledge Doubling Curve in 1982. Fuller observed that in 1900 human knowledge doubled each century, but by 1945 knowledge doubled every 25 years. Today, knowledge doubles every 13 months, and IBM predicts that the Internet of Things (IoT) will hasten this doubling effect to every 12 hours by 2020. The rapid growth in world population – which added 5.5 billion people since 1900 – has also contributed to the increase in knowledge.
The energy market has never been more diverse. Waves, wind, and sun have been harnessed for power and we can access previously unavailable sources of oil, gas, and coal. Worldwide demand for energy rose by about one-third between 2000 and 2014 and will continue to grow in part due to urbanizing populations and the expansion of the middle class in China and other developing economies. Energy companies need to meet this demand as profitably as possible, even as markets continue to shift and change.
2.5 quintillion bytes of data are created each day, much from sources that didn’t exist ten years ago. The explosion of information from social platforms and the Internet of Things has created a data deluge. So, how can you use analytics to ride the wave instead of drowning in it? What can smart commodity market participants do to get the most value out of commodity analytics?
Gaining maximum value from big data requires companies to rethink how they approach analytics.
From being in the doldrums in 2015, commodities as an asset class rallied during 2016. Will 2017 Trump last year’s commodities revival? Exactly a year ago, I reflected on what had been a disastrous year for commodities, with all 18 of our most closely tracked assets languishing in the red in terms of price returns for 2015.
When computers were first developed, only people who knew operating system commands could use them. The advent of graphical interfaces changed that. Before the arrival of the internet, information was carefully curated and coded by librarians. Now anyone with a web browser has access to encyclopedias’ worth of information.
The commodities industry has always been data intensive, but the volume, velocity, and variety of data generated today is staggering. It is estimated that 90 percent of the world's data was created in the last two years, much of it from data sources that did not exist just a few years ago.