Amazon’s New Rationale For Working With Big Oil: Saving the Planet

Amazon has a new justification for forging controversial partnerships with fossil fuel companies.
 ERIC BARADAT/AFP via Getty Images

On December 5, Stewart Fry, Vice President of Enterprise Information Technology & Services for BP, took the stage at Amazon Web Services’ re:Invent conference in Las Vegas to talk about two seemingly contradictory matters: how migrating the fossil fuel company’s vast digital enterprise into the cloud was helping to accelerate oil production, and how the same move would help fight climate change.

As Fry explained it, BP’s decision to become a “cloud first” company in 2016 was already reaping rewards. Moving their databases from local servers to AWS data centers was causing them to run over 30 percent faster on average. By harnessing new “refinery optimization” tools, calculations that once took BP seven hours could now be completed in under four minutes. “We’re seeing really good benefits,” Fry said. “The most notable being around cost agility, reduced capital, and improved performance.”


Now BP was going all in, shuttering its two European “mega data centers” and moving everything that was hosted there, including 900 “business critical applications,” to cloud computing company AWS. The move wasn’t just about making oil refineries run more smoothly, though: According to BP and Amazon, it was about making them greener. BP’s new cloud real estate would be powered in part by renewable energy the oil company will supply to AWS’s fast-growing, energy-gobbling data center empire.

The partnership, which has received comparably little attention, capped a year of aggressive expansion into the fossil fuel market for AWS. In addition to forging new alliances, over the last several months Amazon has hosted and participated in a string of oil and gas industry-focused events, ostensibly to help it woo potential clients. It has done so even as it was releasing its much-touted "Climate Pledge," a series of sustainability commitments including a plan to reach net-zero carbon emissions by 2040, and despite the fact that thousands of Amazon employees have publicly criticized the company for working with the fossil fuel industry as the world burns.

Amazon’s recent efforts to silence the critics within its ranks, along with its own public statements about the BP data center expansion, reveal a company working hard to greenwash its fossil-fuel partnerships and make them appear aligned with its broader sustainability mission.


According to an Amazon press release, BP’s “cloud first approach” is helping it “simplify processes and enhance productivity as part of its strategy to help advance the energy transition.” Fry echoed this sentiment during his talk. “We agree the world needs to move to net zero emissions, and we support a rapid transition to a low carbon future,” the BP executive told the assembled technologists. Big data, he said, is allowing the company “to rapidly develop new ways to tackle emissions.”

But there’s another, arguably far more significant reason reason fossil fuel companies are keen to digitize, automate, and migrate into the cloud: It’s good for the oil business. A recent report by consulting firm Rystad Energy found that the oil industry could save up to $100 billion annually through automation and digitization, amounting to about 10 percent of its annual expenditures.

“A lot of this is related to three goals,” said Audun Martinsen, head of oilfield services research at Rystad Energy. The first two goals, he said, are improved efficiency—doing more with fewer people and less physical infrastructure—and improved safety. The third goal is enhanced productivity. “More up time, making sure field and wells are producing more hours per day and days per year,” Martinsen said.

AWS’s oil and gas division website is full of practical examples of how the cloud company can help boost oil field productivity. Its “data lakes” offer a more efficient way to store and manage huge datasets, like the troves of seismic survey data BP has amassed, “speed[ing] up the time to first prospect or oil.” Its machine learning tools help companies create “more accurate 3D models of rock and fluid properties,” that reveal exactly where to drill to maximize production. A case studies page is filled with testimonials from happy customers, including Shell, Hess, and Willbros, who’ve used AWS services to do more survey work, monitor wells, optimize pipeline routes, better estimate project costs, and improve cybersecurity.


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“We are beginning to optimise production and anticipate maintenance needs in ways not available to us previously,” Katy Venn, a spokesperson for Woodside Energy, a large Australian oil and gas producer that works with AWS, said in an email. According to Venn, the ability to organize and interpret a wide variety of sensor data with the services of cloud providers represents a “significant step-change opportunity” for the industry.

“Seven years ago, nobody [in the oil industry] had any idea what they could do with this,” said Mark Kerzner, president of Elephant Scale, a company that offers training on big data tools and AI. “Right now, everyone feels it’s the competing edge.”

“It’s been a bit of a digital race,” Martinsen added. Big tech companies like Google, Microsoft, and Amazon are “wanting to create alliances now,” he said, in order to edge out competitors in what is already a multibillion dollar market.

Amazon’s BP announcement came shortly after Canadian oil company Cenovus Energy announced it had struck deals with both AWS and IBM to more efficiently process and analyze its data. In November, oil company Suncor announced it had selected Microsoft Azure as its “strategic cloud partner.” In September, just days before Microsoft employees participated in a high-profile climate walkout, the tech giant struck an even bigger deal—a three-way partnership with oilfield services company Schlumberger and Chevron to “accelerate creation of innovative petrotechnical and digital technologies.” In a statement, Chevron’s Joseph Geagea said that the new partnership would “bring prospects to development more quickly and with more certainty.”


More high-profile partnerships are likely on the way.

On October 7 and 8, both Amazon and Microsoft participated in oilfield services provider Weatherford’s “Production 4.0” conference in Houston to showcase their products. On October 22, AWS held an “oil and gas day” in Houston that drew over 500 industry officials, according to Sirivan Chaleunxay, AWS’s Oil and Gas Business Development Lead for Europe, the Middle East, and Africa. A few weeks later, Chaleunxay attended the Abu Dhabi International Petroleum Exhibition and Conference, which bills itself as the “world’s largest and most influential event for the oil and gas industry.” Microsoft was also present at the event, which it used to announce the opening of a UAE-based “AI Centre of Excellence for Energy” backed by Schlumberger, the oil company Baker Hughes, and others. Daryl Willis, Microsoft’s Global VP of Energy, said in a statement that the center would “infuse the energy sector with the power of the intelligent cloud, enabling innovation to flourish as never before.”

On November 14th, the National Oil and Gas Authority (NOGA) of Bahrain and AWS teamed up to hold a workshop at the swanky Capital Club in Bahrain’s Financial Harbor district. More than 70 individuals from the IT and oil industries attended, according to a press release by NOGA. Several weeks after that, AWS was hobnobbing with the oil industry yet again at re:Invent 2019, the company’s yearly industry expo in Las Vegas. In addition to the BP announcement, this year’s re:Invent featured a workshop on how AWS-networked sensors could help companies monitor oil fields in real-time in order to “reduce operating expenses” and “minimize downtime.”


Just this past week, at the Consumer Electronics Show in Las Vegas, Amazon announced it would be teaming up with another oil giant, ExxonMobil, to make it easier for everyone to purchase the company’s fossil fuel products. Later this year, 11,500 Exxon and Mobil gas stations will become responsive to Alexa, meaning those who have the Amazon voice assistant set up in their car can simply tell it to pay for their fuel, and the transaction will be run through Amazon Pay.

An Exxon gasoline pump with the Amazon logo emblazoned boldly over top made an inauspicious addition to an expo known for featuring cutting-edge and futuristic technology.

In addition to new partnerships, there have been new hirings. Sunil Garg, founder and CEO of the oil and gas industry-focused data science company dataVediK, said that AWS has, in the last year and a half, made a big push to hire people from fossil fuel backgrounds. Indeed, a keyword search for “oil and gas” on AWS’s LinkedIn jobs page turned up nearly 30 new postings in the last two weeks. More than 700 current AWS employees’ LinkedIn pages are responsive to the same keyword search. Among those whose job title specifically includes “oil and gas,” many were hired in the past two years.

All of this comes as Amazon is trying to reposition itself as a leader in the fight against climate change. Alongside the September release of its so-called Climate Pledge, Amazon produced a first-ever estimate of its company-wide carbon footprint, something it had been criticized for not doing sooner. In October, Amazon released a company position statement asserting that human-caused climate change “is real, serious, and action is needed from the public and private sectors.”


In its very next position statement, however, Amazon made clear that the urgency of climate change didn’t warrant severing its fossil fuel ties.

“The energy industry should have access to the same technologies as other industries,” the position statement reads. “We will continue to provide cloud services to companies in the energy industry to make their legacy businesses less carbon intensive and help them accelerate development of renewable energy businesses.” In response to a list of detailed questions for this story, Amazon sent a slightly modified version of this position statement, and reiterated its own climate goals outlined in its sustainability pledge.

The position statement enshrines Amazon’s emerging narrative that working with the oil and gas industry is a better for the planet than not doing so.

To be fair, the company does have some data to support a narrow aspect of this claim with respect to cloud hosting. A recent AWS-commissioned report by 451 Research concluded that AWS cloud servers are, on average, 3.6 times more efficient than in-house data centers run by major companies. Considering both efficiency improvements and AWS’s renewable energy usage, AWS data centers can perform the same tasks with significantly lower carbon emissions, per the report.

However, Gary Cook, an IT sector analyst with Greenpeace, cautioned that efficiency improvements alone don’t always make companies greener because of a well-known economic rebound effect. “Generally, improved efficiency invites much higher rates of consumption,” Cook said. He was also skeptical of the report’s carbon emissions reductions figures, noting while AWS claims to have hit 50 percent renewable energy usage globally, that figure “doesn't reflect what is happening on the ground” in its large data center hub in Virginia. There, Greenpeace’s independent analysis pegs the actual renewable energy supply at just 12 percent. (Amazon has called this report “inaccurate,” saying that it overstates both “current and projected energy use.”)

BP’s newly-announced renewable renewable energy procurements for AWS also help feed the narrative that working with the oil industry is about accelerating the energy transition. According to BP, beginning in 2021 it will add 170 megawatts (MW) of new renewable capacity to AWS’s European power mix, including 122 MW from an onshore wind farm in Sweden and 50 MW from a solar farm in Spain.

Cook said this amount of power was a “good start” toward addressing the company’s rising power demands at its emerging European data center hubs. But here, again, context is key. Critically, he said, the amount of power actually flowing into AWS data centers is likely to be considerably less after it’s adjusted to consider capacity factors, or how much of their full power-producing potential these wind and solar farms can meet. Considering capacity factors of about 30 percent for wind and slightly less for solar, Cook felt the procurements will, at best, supply enough power for one or two data centers, based on his own analysis of their energy needs.

And none of this changes the fact that the tools and services AWS is offering companies like BP are explicitly aimed at helping to accelerate oil production.

“Fundamentally,” Cook said, “AWS is providing tools to help BP go look for more oil and drill more oil. Which is taking us in the opposite direction in terms of the energy transition we need to address climate change.”

As of publication, neither Google nor IBM have provided comment for this story. Microsoft and BP declined to comment.