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Spring brought the petroleum industry again to the front pages of the media thanks to the skyrocketing energy prices in general and oil prices in particular. Pretending to be innocent of the high prices and reluctant to confess that the high prices provide unexpected extra income through the taxation of the energy and fuel for the state budgets, governments in Europe joined the media’s approach of blaming the oil companies from profiting excessively from the situation. The industry responded professionally and calmly to this challenge with a populist tune. This professional and calm atmosphere characterized the AAPG Annual Convention in San Antonio (April) and the 19th World Petroleum Congress in Madrid (June).
But what should a professional organization do to assist the industry to defend itself and its consumers from the unjust campaign of introducing new taxes to tap their resources through the “Robin Hood Tax”? Yes, this story is not about the turnover and revenue of oil companies, but about the security of supply and sustainable development of the world in general and the petroleum industry in particular. The higher profit of the companies serves the security and sustainability of supply only if it is to be re-invested in grass–root exploration projects. In the media and in the public the issue of the “Peak Oil” story is frequently and shockingly treated without mentioning that this is an issue, because exploration has been consistently underfinanced in the global petroleum industry since the 1980s. It is obvious that a scenario in which the annual reserves’ growth from field extensions is three times higher than the new reserves booked from new discoveries – as exposed by Dr. Donald Gautier (USGS) in one of his excellent presentations in the 19th WPC – can’t be maintained without risking the security of supply and sustainability. We have to find the ways and means of enhancing global exploration activity.
The ways are clearly defined – among others – in the strategy of the AAPG, answering what to do, where to do it, how to do it and who does it. Our programs regularly focus on frontier regions and well-known regions with neglected upside potentials. Our programs comprise lessons learned from successful grass-root exploration projects and appraisal and field development projects. Our programs – jointly with sister organizations – respond to the challenges of the frontier regions and difficult development areas, and they highlight the respective technologies to be applied. Who will do it? This is what is addressed in our special programs as well as our care for the next generation of professionals. This includes, but is not limited to, the mentoring of students and professionals with specific youth programs, Imperial Barrel Award, youth sessions in national and international conferences and last but not least, establishing and coaching student chapters at universities.
The means are the profits earned by the companies. When profits were low at the turn of the Millennium with oil prices around 10 USD/b, no assistance for the companies was expected since it was not market conform. We agree, but to take away the financial basis of the security and sustainability is not market-conform either. Moreover, even worse is the indication of lack of strategic vision, and improvised actions without vision leads to chaos. The global petroleum industry has to invest 22 trillion USD from now until 2030 to meet future energy demand, as Tony Hayward, GCEO of BP stated in his plenary session speech at the 19th WPC. With this fact as background, we cannot afford chaos.
Thus, the challenge is clear: Robin Hood or Sustainability.
There is no doubt what should be the answer. Professional associations like AAPG are open to assist in bringing the interested parties together to find solutions. It is a moral obligation to do it – otherwise, as a famous Hungarian poet of the 20th century writes: “If you do not contradict peccants, you will be their accomplice.”