The fol­low­ing guest per­spec­tive was authored by Brent Potts, Senior Direc­tor of Glob­al Mar­ket­ing for Oil, Gas, and Ener­gy at SAP, ahead of this fal­l’s ASUG Best Prac­tices: Oil, Gas, and Ener­gy con­fer­ence (Oct. 6 – 8, in Hous­ton; reg­is­ter here).

The term ​“ener­gy tran­si­tion” has become com­mon­place in dis­cus­sions about the future of ener­gy. But a clos­er look at glob­al trends reveals that what’s actu­al­ly unfold­ing is less of a tran­si­tion and more of a diversification.

As will come into focus for atten­dees at this fall’s ASUG Best Prac­tices: Oil, Gas, and Ener­gy con­fer­ence (Oct. 6 – 8, in Hous­ton; reg­is­ter here), this shift is fun­da­men­tal­ly reshap­ing how ener­gy com­pa­nies oper­ate, invest, and innovate.

Why ​“Diver­si­fi­ca­tion” Is a Bet­ter Fit Than ​“Tran­si­tion”

While renew­able ener­gy sources are gain­ing ground—and are expect­ed to reach 35% of glob­al gen­er­a­tion capac­i­ty this year, match­ing that of coal — fos­sil fuels remain dom­i­nant. Elec­tric vehi­cles (EVs) are grow­ing in pop­u­lar­i­ty, espe­cial­ly in Chi­na, where over half of new cars are elec­tric. In the U.S., EVs made up 9.2% of new vehi­cle sales last year. Yet, more than 90% of new vehi­cles still run on hydro­car­bons, con­tribut­ing to a fleet of 290 mil­lion vehi­cles, of which only 1.4% are bat­tery electric.

Glob­al­ly, coal demand rose by 1.4% last year, nat­ur­al gas by 2.7%, and oil con­sump­tion increased by 0.8%. Even as oil’s share of glob­al ener­gy demand dipped below 30%, its use in avi­a­tion and chem­i­cal feed­stocks con­tin­ues to grow. These feed­stocks are essen­tial for pro­duc­ing plas­tics, phar­ma­ceu­ti­cals, cos­met­ics, and syn­thet­ic rub­ber. Nat­ur­al gas, too, plays a dual role — as fuel and as feed­stock, par­tic­u­lar­ly in nitro­gen fer­til­iz­ers that sup­port agri­cul­ture for near­ly half the glob­al population.

The U.S. Ener­gy Infor­ma­tion Admin­is­tra­tion (EIA) projects that pri­ma­ry ener­gy demand will rise between 16% and 57% by 2050. This growth will include increased con­sump­tion of oil and gas. In this con­text, ​“tran­si­tion” implies leav­ing fos­sil fuels behind, which is clear­ly not hap­pen­ing. Instead, we’re wit­ness­ing a broad­en­ing of the ener­gy mix.

The Com­plex­i­ty of Ener­gy Diversification

Ener­gy diver­si­fi­ca­tion intro­duces new lay­ers of com­plex­i­ty. Com­pa­nies are not just adding renew­ables — they’re expand­ing into car­bon cap­ture, hydro­gen pro­duc­tion, EV charg­ing, and lithi­um devel­op­ment. These new ven­tures require dif­fer­ent busi­ness mod­els, tech­nolo­gies, and oper­a­tional strategies.

To suc­ceed, ener­gy firms must pri­or­i­tize effi­cien­cy, prof­itabil­i­ty, and envi­ron­men­tal stew­ard­ship. This means embrac­ing dig­i­tal trans­for­ma­tion, par­tic­u­lar­ly cloud tech­nolo­gies and AI. The ener­gy sector’s use of cloud ser­vices is expect­ed to grow near­ly 20% annu­al­ly through 2033.

Tech­nol­o­gy as a Strate­gic Enabler

Man­ag­ing this diver­si­fi­ca­tion demands robust tech­nol­o­gy solu­tions across the entire val­ue chain — from explo­ration and pro­duc­tion to dis­tri­b­u­tion and retail. Key capa­bil­i­ties include:

• Real-time sup­ply chain and demand plan­ning to respond to mar­ket fluctuations.
• Human cap­i­tal and field ser­vice man­age­ment for opti­mized work­force deployment.
• Sup­ply chain man­age­ment for sourc­ing mate­ri­als, equip­ment, and services.
• Sus­tain­abil­i­ty track­ing to meet reg­u­la­to­ry requirements.
• Ana­lyt­ics and AI for per­for­mance opti­miza­tion and exec­u­tive decision-making.

These tools help com­pa­nies main­tain vis­i­bil­i­ty, reduce costs, and adapt quick­ly to chang­ing conditions.

Asset Man­age­ment and Oper­a­tional Efficiency

One of the most promis­ing areas of inno­va­tion is holis­tic enter­prise asset man­age­ment. By inte­grat­ing IoT and mobile tech­nolo­gies with pre­dic­tive main­te­nance, com­pa­nies can reduce main­te­nance costs by 20 – 30% and cut down­time by up to 50%. This is espe­cial­ly valu­able in upstream oper­a­tions, where logis­tics and asset reli­a­bil­i­ty are critical.

For exam­ple, turn­ing aging oil refiner­ies into renew­able fuel pro­duc­ers is becom­ing a viable busi­ness case. As the world shifts toward low­er-car­bon ener­gy sources, repur­pos­ing exist­ing infra­struc­ture can accel­er­ate sus­tain­abil­i­ty goals while main­tain­ing profitability.

New Rev­enue Streams and Mar­ket Opportunities

Ener­gy diver­si­fi­ca­tion also opens doors to new rev­enue streams. The bio­fu­el mar­ket, for instance, is expect­ed to grow by 30% over the next five years. Com­pa­nies that can effi­cient­ly inte­grate these new lines of busi­ness will be bet­ter posi­tioned to compete.

End-to-end vis­i­bil­i­ty of the com­mod­i­ty sup­ply chain is anoth­er strate­gic advan­tage. It allows firms to antic­i­pate price swings, man­age inven­to­ry, and respond to dis­rup­tions with agility.

Bal­anc­ing Today’s Real­i­ties with Tomorrow’s Priorities

Despite the push toward renew­ables, fos­sil fuels remain essen­tial. The chal­lenge for ener­gy com­pa­nies is to bal­ance cur­rent demand with future sus­tain­abil­i­ty goals. This requires a nuanced approach — one that rec­og­nizes the endur­ing role of hydro­car­bons while invest­ing in clean­er, more diverse ener­gy sources.

The term ​“ener­gy tran­si­tion” may per­sist in pub­lic dis­course, but ​“ener­gy diver­si­fi­ca­tion” more accu­rate­ly reflects the industry’s tra­jec­to­ry. It’s a shift toward a mul­ti-source ener­gy land­scape, not a depar­ture from tra­di­tion­al fuels.

Embrac­ing Com­plex­i­ty with Confidence

Ener­gy diver­si­fi­ca­tion is not just a trend — it’s a strate­gic imper­a­tive. It brings com­plex­i­ty, but also oppor­tu­ni­ty, to busi­ness­es in all indus­tries. With the right tech­nolo­gies and mind­set, ener­gy com­pa­nies can nav­i­gate this evolv­ing land­scape effi­cient­ly and profitably.

From cloud com­put­ing and AI to pre­dic­tive ana­lyt­ics and sus­tain­able asset man­age­ment, the tools are avail­able and more advanced than ever before. But the key to suc­cess, as ever, is to embrace inno­va­tion, stay agile, and align oper­a­tions with both mar­ket demands and envi­ron­men­tal responsibilities.

ASUG Best Prac­tices for Oil, Gas, and Energy

Learn more about this and many oth­er valu­able top­ics at the upcom­ing ASUG Best Prac­tices: Oil, Gas, and Ener­gy con­fer­ence in Hous­ton, Texas, from Octo­ber 6 – 8, where you can con­nect with peers, learn from indus­try experts, and dis­cov­er how to dri­ve trans­for­ma­tive results in your organization. 

Atten­dees can expect a packed agen­da, with Kurt Aerts’ open­ing keynote on ​“Accel­er­at­ing Trans­for­ma­tion at Scale — Exxon­Mo­bil’s Cloud Jour­ney with RISE with SAP” kick­ing things off on a high note.

Else­where, Oxy and CIT­GO will dis­cuss the future of oil, gas, and ener­gy, fol­lowed by Cono­coPhillips dis­cussing their expe­ri­ences going live with SAP S/4HANA on RISE with SAP. Sem­pra will dis­cuss dri­ving sup­ply chain excel­lence, while CIT­GO will present ​“Zero to Hero: Align­ing Main­te­nance and Sup­ply Chain in Oil, Gas, and Energy.” 

Pre­ci­sion Drilling will focus on trans­form­ing Asset Man­age­ment, while Hilcorp will talk about their jour­ney with RISE with SAP. Chevron is set to dis­cuss their ​“clean core” evo­lu­tion and growth beyond SAP BTP, while South­west Gas and Chevron will team up[ to present cus­tomer-led strate­gies for SAP BTP, SAP Mas­ter Data Gov­er­nance (MDG), and data trans­for­ma­tion, while Mer­it Ener­gy dis­cuss­es real-world inno­va­tion with SAP BTP using SAP Build and SAP Data­s­phere. Oxy will also share lessons from the field, and Mess­er will dis­cuss their SAP BTP-pow­ered inno­va­tion story.

Still not enough for you? How about dozens of experts, from SAP and part­ners, dis­cussing every­thing from prod­uct roadmaps to agen­tic AI to Data­bricks? This con­fer­ence will have it all. Reg­is­ter here today, and don’t miss your oppor­tu­ni­ty to watch the future of oil, gas, and ener­gy come into focus.

Brent Potts is Senior Direc­tor of Glob­al Mar­ket­ing for Oil, Gas, and Ener­gy at SAP.