Revealing Robust Oil and Gas Company Macro-Strategies using Deep Multi-Agent Reinforcement Learning

The energy transition potentially poses an existential risk for major international oil companies (IOCs) if they fail to adapt to low-carbon business models. Projections of energy futures, however, are met with diverging assumptions on its scale and pace, causing disagreement among IOC decision-makers and their stakeholders over what the business model of an incumbent fossil fuel company should be. In this work, we used deep multi-agent reinforcement learning to solve an energy systems wargame wherein players simulate IOC decision-making, including hydrocarbon and low-carbon investments decisions, dividend policies, and capital structure measures, through an uncertain energy transition to explore critical and non-linear governance questions, from leveraged transitions to reserve replacements. Adversarial play facilitated by state-of-the-art algorithms revealed decision-making strategies robust to energy transition uncertainty and against multiple IOCs. In all games, robust strategies emerged in the form of low-carbon business models as a result of early transition-oriented movement. IOCs adopting such strategies outperformed business-as-usual and delayed transition strategies regardless of hydrocarbon demand projections. In addition to maximizing value, these strategies benefit greater society by contributing substantial amounts of capital necessary to accelerate the global low-carbon energy transition. Our findings point towards the need for lenders and investors to effectively mobilize transition-oriented finance and engage with IOCs to ensure responsible reallocation of capital towards low-carbon business models that would enable the emergence of fossil fuel incumbents as future low-carbon leaders.

Towards DeepSentinel: An extensible corpus of labelled Sentinel-1 and -2 imagery and a general-purpose sensor-fusion semantic embedding model

Earth observation offers new insight into anthropogenic changes to nature, and how these changes are effecting (and are effected by) the built environment and the real economy. With the global availability of medium-resolution (10-30m) synthetic aperture radar (SAR) Sentinel-1 and multispectral Sentinel-2 imagery, machine learning can be employed to offer these insights at scale, unbiased to the reporting of companies and countries. In this paper, I introduce DeepSentinel, a data pipeline and experimentation framework for producing general-purpose semantic embeddings of paired Sentinel-1 and Sentinel-2 imagery. I document the development of an extensible corpus of labelled and unlabelled imagery for the purposes of sensor fusion research. With this new dataset I develop a set of experiments applying popular self-supervision methods and encoder architectures to a land cover classification problem. Tile2vec spatial encoding with a self-attention enabled ResNet model outperforms deeper ResNet variants as well as pretraining with variational autoencoding and contrastive loss. All supporting and derived data and code are made publicly available.