How Can AI Shape the Future of Capital Projects? – Robert Harms

Peter Perri 0:02

From Energy.Media Energy.Media, this is Energy Superheroes with Peter Perri am excited to do our fifth episode of the Energy Superheroes podcast today we have Robert Harms. And I’ll let him get into his background and the companies that he’s with. But he’s just given a power talk on artificial intelligence. And Robert goes into the weeds of AI in a way that I think very few people can do. He knows he knows AI. Well, he also talks about a company called EPC Lens. And we have a lot of VP C’s in our audience here. So I’m sure that we’ll get into some of that. But before we do, I’d like to just get into Robert’s background a little bit. So welcome to the podcast. Robert, it’s great to have you.

Robert Harms 0:52

Thank you very much, Peter. It’s I since I’ve learned about you and what you’re doing have been very enthusiastic and happy to support it. And all the people in your audience that that you’re working with, I think it’s terrific platform. So thanks.

Peter Perri 1:09

Great to have you. So let’s, let’s start with just a little of your background, could you tell us how you got involved in the energy industry? And what led you to the place where you are today?

Robert Harms 1:22

Yeah, it’s a lot, that’s a bit of a torture. Starting with my original intention was to be a combination. I love physics and, and music. So when I started actually, when I, you know, post school, I actually went into or even before it finished, I became a professional musician was traveling around us playing some complex music, like Russia and some other things that very few people like can and, and, and, But what fascinated me was these large, large capital projects, the like, piece of these great, you know, statues of production and manufacturing of the, you know, the facilities and what they do, and how they, they really are the engines of the world, you know, taking natural resources, and turning them into something, just, you know, a little prettier, but something that drives civilization, and that’s what these facilities are. And that’s the way I saw them in their, in my perspective, they’re, they’re, they’re, they’re beautiful, I think I find it very, very pleasing it, particularly a petrochemical facility or nuclear plant. But, so I did I transition slowly, educationally over to, to construction and to project management. And with, with an eye on on law, and, and that was in, in about 9192. When I started doing that was with brown and rude at the time, they became Kvr ultimately, and we were working on bids. Mostly we were I was, was delighted and privileged to be part of the lump sum team in Canada. Now most of their work was being most of the projects were reimbursable cost plus types, but we had a team on the union side that was doing lump sum projects. So I learned under I had a terrific initial mentor was this fellow who he drove a project and so he was the big bear and he took me under his arm and called me Little Bear and I was just trying to figure stuff out and but the technical part of it and became slowly kind of got shifted to the side because it’s the business part of it that became so fascinating to me with respect to the law, the productivity, the actual delivery of the project, not so much the particular engineering of any particular project. But so since then, I’ve worked through a number of different organizations and construction, construction management and then into engineering EPC, different models, projects up to date, then consulting since 2003. I started consulting started my own company. And then I started getting the phone calls and requests to take on different things around the world for the companies like Shell stat oil, which is now Equinor Suncor Canadian natural resources was the strategist for the original horizon project for the execution breaking that down with all the international EPC companies renewables, the wind farms in Germany and in Canada, interesting projects very, very different than, you know, oil and gas to power projects and mining, mining the largest mining mills and in the world and in Saskatchewan, northern Saskatchewan. So I’ve spent done my done my time, living in a little ATCO little trailer with ice, you know, three inches thick come on the window, and that’s no joke. And just hoping that the generator outside the diesel generator doesn’t go down because your alarm noise from anything. But throughout that, so that’s about 2324 years and when the market crashed primarily Canada, in the US and around the world as well, in the Middle East doing some, some interesting projects there.

Robert Harms 5:54

But doing you know, as we go through these projects, we, particularly as a, you know, a contracted individual or contracted company, there are things that we repeat that we keep repeating, because we don’t have the time to re engineer some of these processes. And sometimes we just don’t have enough time to think about it, we know it’s a problem. We know that planning is a problem. We know that estimating cost management is a problem that we know, you know, not by their nature, but by their nature reserve. They’re the solutions, they’re the means and the methods, but it’s the things that that when we get forced into making decisions and doing things, and that cause enormous friction and things that go wrong. Those are the things I started adding those up and said, hey, there was a couple of key things that we can do here, if we can find some solutions to that that just are a little bit more than well, we need more communication, better planning, and, and a software tool that, you know, those are those worked in the 80s and the 90s and early 2000s. And that’s something but we’re into the fascinating area now. And so taking that 25 years of experience and turning that into an opportunity to change things and to educate. It’s fascinating and very exciting to very cool.

Peter Perri 7:13

So I want to go back to two big bear you tell me about this mentor? What’s the best advice he ever gave you?

Robert Harms 7:24

Oh, well, I’ve had four mentors, that I think that really, really I was very fortunate to have good mentors, to be in particularly those mentors, where they were all older, much older, like not five or 10 years, these guys were all in their 60s and 70s. And they had come off of you know, careers of 3040 years of working weathers construction. One guy was the you know, a vice president of Bechtel. And, you know these of construction for Bechtel. So you know, their perspectives, the things that they had gone through, are just absolutely fascinating. As a matter of fact, I started writing papers about it, because there’s just no way to educate people. But the most, there are a couple things early on, we were really wasn’t. It wasn’t so much a lesson that sat down where he says something he told me, but each mentor is common. There’s a common denominator in that they’re all students, astute students of the human condition. Every successful person I know, is really a philosopher is a psychologist, a philosopher, a politician, and a an a negotiator of people really, you know, that’s it, it drives that’s what drives you know, creates, enabled success for people. And his, the first one, his name was Andre. And he was originally from Quebec. And he grew up in that he grew up in the trades, and in the Union spec, so that would have been, you know, 90 minus 90 minus 50 years. So the same team right 1945 Or something like this, he was, he was a kid and in in Quebec in getting into some of the brawls and some of the Union hassles that that they had at the time. That’s a very different time than then what certainly what we experience and what I experienced today, but it was, it was the way he approached people was still very, was still very old school. And he was and after running so many projects in a lump sum environment. It was how he selected certain individuals to put around him so that it was he didn’t have to be a manager. In that sense. He just didn’t have to all you have to do is He was just he was a maestro, you know, not that we were all that talented we, you know, we weren’t we were ambitious and, and hard ass but we weren’t, you know, we weren’t brilliant. We were anyway, the but it was how he picked the people. And, you know, it was just to watch him do that and to hear him talk about these people when they’re not there. And to be on that inside and to hear his his observations about people. That was, I think that was the most significant thing from my, from my first experience from my first mentor.

Peter Perri 10:36

It’s great, yeah, it’s, it’s so important to select the right people to have around you. Because there, if you have the wrong people, you can put all the management controls in place you want, but it’s not going to be effective. You’ve got to have the right people at the end of the day, and then those controls end up becoming more like guidelines. Because if you have the right people, you can trust them to make the right decisions. So I think that’s awesome. So in your, in your career working on these projects, I love the word you use engines of the world to describe these facilities, because we’re obviously very focused on large industrial facilities and engines of the world is an awesome moniker. What would you say that in working on those facilities, from your earlier career that you’re the most proud of? The facilities, we like the natures of these facilities. Yeah. You mentioned, you mentioned working on petrochemical and nuclear facilities in these different plants. What in that time? What would you say that you’re the most proud of as far as your accomplishments working on those facilities? Yeah,

Robert Harms 11:50

it’s aggregate. It’s, it’s, you know, there’s a concept of the wisdom paradox, where we’re smart and, and very ambitious. And we’re very quick to pick up on things when we’re 20 years old. And by the time we get to 5055 years old, it, it’s it, we started out we know very little, but we’re very good at learning. And then by this point in a career 25 years later, the wisdom paradox is that the knowledge is there, the a lot of observation that right or wrong, good or bad, right? However, we formed that getting to a point where there’s an there’s an aggregate of information, that that we’ve that we get to slowly learn in combination, again, with, you know, with philosophy with psychology, with, you know, business intelligence, these business, international business, sophistication, and savvy, it’s really the, it’s not any individual project, because they all contribute in one way or another. And particularly, and this is one of the advantages of doing projects that are in larger projects, as you go through a three years spell, and you learn a ton. And then you kind of, you know, if you get some time to, to network that in your brain, to really think it through deeply and understand, to understand those things, you rarely get an opportunity, the three years is the is the information gathering point, and then you get an opportunity to think about it. And now I’m in that, in that position, where I got all this information expertise from different kinds of projects, that’s nuclear mining, that, that you know, that super big holes with, that you dig in, or in order to get just a little bit of uranium and gold, you know, it’s, these are fantastic things that that you know, the public just don’t understand being in, you know, in the far north, where you live, when you go out at 45 Minus, you’ve got to have somebody with you, because you can die in three minutes. And so the, all of these things that contribute to your education, to me the most, I’m most proud of most pleased with it’s the Yeah, that accumulated wealth of knowledge and how now that becomes a very different value than when I was when I was 25 years old, and how I could contribute to that project. And so that it’s a very exciting stage to be at this now.

Peter Perri 14:29

That’s great. And I’m interested in this company, EPC Lens that you talk about, could you from a project standpoint, and maybe incorporating AI since that’s what your power talk was about. Could you talk about a project for EPC working with EPC Lens and how they might benefit from working with you guys and in the context of for an EPC implementing AI in their organizations? Today, whether it’s for Project controls, or whatever you think is maybe the lowest hanging fruit use case, for any PC today.

Robert Harms 15:12

Yeah, yeah, thanks for that. It’s a, it can be a seemingly simple question, but it’s a very large complex answer. And it grew out of a group of a notion out of recall of its, you know, earlier was speaking about these little nuggets where I thought we could, little places gaps, you know, omissions or things that we can do better where there’s, you know, too much friction, and too transactional, too much energy is spent, and we start a project. So I’ll go back to, you know, the problem that we faced, and we still faced that problem I wanted to fix, and I think I did was with EPC Lens was, we started the front end of a project, and we start, you know, scoping out a project, we’re looking at a concept. And the one of the things that we need, at the very beginning is we see, we need to look at a business case for a project. And that is basically the basic cost it but it’s more of a very high level, you know, a executive board level strategy, you know, what we’re going to build where, and, and, and when. And from that, just from that front, you know, early decision to proceed with that, to investigate it and getting it down into what’s, you know, a sanctioned project, the information that goes into that we’ve been typically been working on some, it’s vague. And, and the engineers, the project control the estimators, everybody knows it’s fake. So we try to try to work with that. And so I thought that, at that point, you know, getting to the point, we’ve got a sanction project and a project execution plan. If we can sharpen up, how do we sharpen up that information? Well, the typical answer is what we do more engineering, do more engineering. That’s part of it. But you it’s, it’s, it is a contributing factor, but it’s not the whole answer, a big part of the answer, a big part of the solution is understanding what the market does around the world. And what

Robert Harms 17:23

with respect to an OEM of a large compressor, well, we tend to put in information, which is very basic, and very high level. And it’s got, we talked to a couple of different or the project will talk to a couple of different OEMs. For you know, the big, the big equipment, the big stuff that goes into the project, and they get some of that information, they start plugging that in. And as soon as it’s plugged into that, and then with the cost, the schedule around those things, it’s plus or minus 25%, at the very best. And by the then that saw six months later, when that we actually put that into a project execution plan for something for somebody to sign off on to say that this is now our budget, this is our plan, that information is obsolete, the market has changed. And you take a look what’s happening now, there is no estimator on the planet who will give you a number for what it’s going to cost for the just the logistics for a project because it’s just it’s impossible to forecast right now. So that that nebulous uncertainty, if we can sharpen that up. So this is so we created a system, which is what I call reflective market intelligence, which takes a continuous feed from all of the marketplace. So that you don’t have to call a couple of different vendors and then call back and have a couple of different meetings. It’s a continuous feed of what we call dimensional data. And that’s the business data in these organizations plus their sentiment. And what they’re seeing or believe they’re going to see, because they’re talking to all these different clients and they’ve got their upstream supply chain is is enormous and it’s dynamic. It’s, it’s volatile. So it’s getting that perspective on a continuous basis feeding into dashboards and reports on a continuous basis for the EPC farmer, that for the owner in Category Management for construction companies and manufacturers to have that understanding of what what’s happening on a daily basis in that market with respect to the metrics, the business and the dimensions of that. So we created a system to make that work, where we took the cost of from a project and the energy required by the resource energy, the human capital energy required of a project to do that and the owner to that category management, turn that into a central platform where there’s value for everybody. Reduce the individual costs by millions of dollars for any large enterprise where it’s and be able to accelerate compress, I should say the schedule the need for getting information. And so we’re not dealing with six month old information or two month old information, we’re dealing with present information, nothing more than four weeks old. So this is that that’s the, that’s the core of it sort of the, you know, the engine of EPC Lens. With that network system of information, we’re able to level up on the data, and not just have a, you know, some simple graphs and simple reports. Now, when we’re looking at complex correlations, we have the opportunity to look at correlations, complex correlations across different disciplines, and even across different industries. Right, a mining company is using the same people in Saskatchewan, Montana, and Colorado, as, as you know, a lot of the engineering and the designers and the constructors, in the end the trades people using that same resource base, but they don’t have any real visibility into you know, what’s happening. There are some high level reports available in the world, some great companies do some, you know, create some insights, etc. But it’s, it’s not a hardly any use to a project, what the project means is relevant data that’s moving, and so that, that you can, you can be informed about 444 decisions. And from that the AI starts kicking off in a really exciting and grand way of what we can see what we can correlate and interpret from this and help to create strategies and contingencies. So that’s a lot. That’s a long elevator speech, like I tell people that if they want the full elevator speech, they’ve got to go to the top for the bill.

Peter Perri 21:50

No, that’s, that’s great. That’s, that’s really helpful to understand that EPC Lens is, is really bringing a lot of value to the table with its data. So that’s, I think, excellent. I’m curious to know, you know, that your PCs, well, what are some of the EPCs, that you said that you would say are really forward thinking and really well positioned? In today’s marketplace? In terms of using advanced technology like AI to be successful?

Robert Harms 22:19

Yeah, I think in this case, you know, it’s a great question, I’ve got to be very careful with that, because a lot of companies, you know, they they’re protecting their, they won’t exactly discuss everything that they’re doing. And so to come out and say that these are the companies that are doing it better than everybody else that would be that’s a statement I simply wouldn’t make. And if I did make it, I would be wrong. So it there are there are a lot of the larger organizations and not only just on the EPC side, but it’s on the owner side that do the that manage those projects, companies like tech resources in you know, in the mining space and, and shell, you know, like Royal Dutch Shell and shell petrochemical LNG, Canada, there are a lot of companies that are doing a lot of things. But there was the there was the technologies with are more focus today, the advances are more focused on digital twinning and digitalization. And there’s a bit of a misunderstanding there. Well, there’s a large misunderstanding and misrepresentation, I think, from, you know, parts of the people who actually just deal with technology and calling it AI. Well, no, we’re not doing AI, what we’re doing is we’re there’s a lot of digitalization, that still needs to happen. And that is just taking old processes, old forms and, and things that we’re doing and turning it into transitioning to that the, you know, the binary world of the electron. So it’s, that is still a big part of industry and it surprises me still, how much of the industry is still has yet to go through that process? You know, you look at most of the conferences, and most of the, you know, the papers and periodicals out there. It really is about digital twinning and managing some of those systems, materials management, advanced work planning, getting that into, you know, into software. They’re going beyond digitization, or digitalization, they’re going into a world of you know, really looking at something in a more complicated and pattern driven way. And so, and there are a lot of different consulting organizations that are specializing in different things with respect to technology for you know, scanning with you know, with laser getting the 4d scheduling is another one you know, project could use project controls groups that are you know, really focused on advancing you know, the 3d design construction over time. You It’s really fascinating and connecting that with the with the planning tools. Some of the there is a transition time, but I think most of the large EPCs are all doing this. And if you want to look to take a, you know, a reroute to answer the question for your, for ourselves, it’s you look at the ones who are, who are doing lump sum EPC. And those are the ones that are focused on higher end technology, or just cheap grant engineering, I don’t know. But you know, we’re the world is moving less away from a fixed price, contract and EPC contracting, particularly competitive, contracting, and moving towards, you know, convertibles and different things, because things are changing so fast, you want to enter a 60, you know, a $20 billion dollar project. Well, the, you know, the world looks very, very different seven years from now than it does as you as you go into this. So it’s, you know, taking a decision on technology at the beginning, it’s a long term decision, now you’re painting yourself into a corner, whatever tech, you start, you start with on that project, and by the time you finish it, it looks like you’ve got an old Apple two plus sitting in the corner that said, still doing your cost reports. So I’m extending that that dialogue a little long, but the, I think the short answer is there are some very ambitious companies who have always been ambitious companies, in forward thinking they’re the floors of Bechtold. And those companies in the world and, and increasingly so in the Middle East.

Peter Perri 26:44

That’s, that’s a great answer, Robert. So let’s, let’s talk a little in general about obviously, a lot of this technology around digitization is driven around the mindset of also decarbonizing of also advancing the, the energy infrastructure to the point where it has a positive impact on the planet. So if I ask you just a general, what excites you most about the future of energy in the future of giving us advanced energy infrastructure? And what worries you the most about, let’s say, climate change and other issues that the planet faces?

Robert Harms 27:26

Well, let’s maybe a word, work backward with that little series of questions. What worries me the most is like, right now we are in the Model T era, right? We’re in this era, or where everybody’s putting up a, a grocery, a service station, or, you know, a, you know, a tire store or something like that. And we’re going through this process where there’s are so many opportunities, ambitions, and enthusiasms and ideas that are spreading out so fast horizontally. And it is an ultimately through the business cycle, the evolution of this, what it’s going to come down to is, you know, a number of key service companies, and some of them are competitive and, and are our peers and some do other things. And we’re the business is going to reorg. And the overall industry, I should say is reorganizing is about to reorganize in it in a very, very different way than I think it ever has in the past. And I worry about the increasing speed. And the lack we’re entering that where there’s a lack of definition and uncertainty about what can happen and what should happen. There are so many guns going off a duck’s right. It’s just it’s, it’s very difficult to navigate. And it’s very, very difficult for an organization to have any kind of a, you know, a confidence that the decisions that they’re making in where to go with AI advanced technology, that it’s so easy to be wrong. It’s so easy to to not pick, you know the right solutions, or even just get down that go down that find the right track, which is you know, what, this is why

Robert Harms 29:30

we’ve got I want to launch this a nonprofit that’s called Capex Science. And it is that’s going that’s going to in the intent of that the purpose of that is to work very, very closely in collaboration with major universities. And we started this already on theoretical computer science and applied technologies and to looking at the new algorithms the new parts passes, and that are being discovered and you know, worked out and how quickly that can transition to practical applications. In the past, it’s been academia and the white papers have been 2030 years ahead of what we can think about doing. Right now we’re in a phase here, where we’ve got five years roughly, before quantum computing becomes a very real practical solution and tool in our kit for doing things, well, if we’re wrong, if we’re, you know, what are we going to do, you know, if we’re setting ourselves up, you know, for a 10 year it program, and we haven’t considered what that’s gonna be, you know, how it’s going to be affected by quantum computing. And we still don’t even know what quantum computing how it’s going to work. And so we’re, we’re in conversations with, with a couple of those companies in the US that are working on those technologies and software’s companies, say, institutions like Waterloo, University of Waterloo, and they have a big built in quantum computing departments. Now, these are things that are happening so fast, and the information that they’re getting that in turn transitioning that into something that’s real, for execution, while may seem rather improbable, or, or, as you know, suspicious, even to try and sell that, but that’s what’s happening, that is going to happen, it’s going to continue to compress and accelerate. So while I think that’s, there’s so much going on, there’s so much noise going on, it’s really the thing that bothers me the most is that it’s so difficult to find the signal, the true signal in all of that. So, so that is both a bad thing. And that’s one of the things I’m really excited about is moving that forward. I think that, you know, I, we need to industry needs to prepare to look at projects a little bit differently, largely because the projects are going to be different. They in what, you know, you look across the distribution and standard distribution curve of these kinds of projects Well, on the renewable side and aerospace. And in the you know, there are a lot of technologies that are carbon, sequestering co2, we’re growing into some new areas. And I think we’re, you know, that’s understood that we need to, we need to have create slightly different organizations to make that work. It’s not the standard old EPC monolith that goes into this. This is a this is an owner driven system working with all these someone who telecom microsystem, or packages of software, it’s getting specialization, where you go in you’re very, very quick. You’re very efficient, and you’re not. You’re not doing more than you need to do. Right, that I guess that’s efficiency. But the we’re transitioning to that, I think we could do that real well. The next part is that, again, it’s the it’s scary, but it’s also the most fascinating, and probably the most, one of the most difficult things to get our hands around from the EPC, purely EPC perspective, capital development perspective, is the ESG. It’s the environmental, the social, and the government’s elements, and the financing, that supporting all of these projects is driving all of these decisions, well, that is very, very quickly going to trickle into the project and how they’re getting manage. And right now traditionally, the projects get managed, with the ESG as completely separate elements outside of the project. Now we’re going to have to engineer and execute and strategize with communities with the environment in a much larger

Robert Harms 34:01

scale and greater intensity. And, and with a different kind of, and governance is changing in the work the world is changing. And we take a look at the you know how COVID don’t want to date the broadcast, but you know how COVID back and how it really disrupted the entire global supply chain and really illustrated or demonstrated the effects of that to people who weren’t really students of it. Right, and you’re taking a look at everything that’s happening now. Our world is so quick to respond to anything. And it does it radically. And you see it in the markets. You see it in the equity markets, where it’s no longer little bumps and sine curves and in the changes we go through radical swings and projects are getting caught up in that and right the next thing that you know we’re working on is the ESG and how to how to do that. No,

Peter Perri 34:53

I think that’s great, Robert, this has been awesome. We’re it we’re almost at time here but if not to put you on the spot, but if in one sentence, you could say something that the audience should learn from you that I didn’t ask. I would love to hear that before we end.

Robert Harms 35:10

Well, I think that get together closer with the industry and the think tanks that are out there because it’s no longer an abstract area of thoughts that is not practical. The bridging academia and business executives closer to projects is critical moving forward.

Peter Perri 35:36

Awesome. Robert, this has been great. Thank you so much for your time today to be here on Energy Superheroes. Talk about artificial intelligence EPCs. We even got into ESG, which is a favorite topic of everybody right now. So I appreciate your time today. We’re excited to have you. And we look forward to having Robert as well on power talks, where he’s going to go into more detail about artificial intelligence. You’ll be seeing that in the coming weeks. So thanks, Robert, for being here, and be sure to check out Robert on LinkedIn as well as his EPC Lens. You’ll be glad you did. Thanks for joining everybody. For more Energy Superheroes with Peter Perri, visit Energy.Media.