I recently had the pleasure of participating in an E&P company’s internal reservoir characterization technology forum. The eclectic meeting covered topics ranging from the implications of peak oil to ways to improve recovery factors.
In the course of discussion AAPG member Kirt Campion made an insightful remark to the effect that when times get tough there is less margin for error, therefore we should be putting more geoscience into understanding plays, not less, i.e., if you’re going to develop a play in tough economic times, it’s best to know as much as possible about it in order to minimize the amount of money spent unproductively. Although the initial cost can be higher, good geoscience properly applied leads to more efficient exploration and recovery. The up-front cost is higher because data aren’t cheap, plus there is a time-and-effort cost associated with assessing that data, but the returns justify the investment.
The value of good geoscience is illustrated by the situation immediately after World War II. At that time oil reserves had been severely depleted by the war effort because emphasis had understandably been placed on maximum production from known fields rather than on finding new ones. In the effort to rebuild reserves, U.S. companies independently set up 22 geological research laboratories and hired numerous new Ph.D geology graduates to staff them. Staff members were provided with generous budgets and encouraged to do research on a wide range of topics.
As chronicled* by James Parks, who had himself been hired by the Shell lab in the early 1950s, these company laboratories contributed significantly to the advancement of hydrocarbon-related geology, discovering new traps and methods, and developing new concepts. Significantly, laboratory staff members were encouraged to publish their research, thus much of this research got into the public domain.
Most of these research laboratories are much smaller than they once were, and some have been phased out entirely. Industry is still spending many millions of dollars on research, but typically it is geared more toward specific applications, and publication is not a priority. As the company laboratories were decimated by mergers and downsizing many of the laboratory-staff geologists went on to academia, where they helped teach the next generation of geologists. Thus the benefits from this system accrued to both the industry and the science of geology.
At about the same time the industry research laboratories began to fade, and largely in response to the oil embargo of 1973-74, government-sponsored energy research programs began to investigate unconventional fossil-energy sources. These programs were administered by entities such as the Gas Research Institute and the U.S. Department of Energy. The government funded research into low-permeability sandstone reservoirs, in situ coal gasification, oil shale, etc., and, as with the industry laboratory staff, researchers were encouraged to publish their results. Many of the concepts and techniques that are currently being used by industry, such as those used to exploit tight gas reservoirs, were developed by DOE-funded research at universities, national laboratories and other research institutions.
Funding levels for these government-sponsored programs have varied widely with shifts in the political climate, but overall they have diminished steadily as memories of the unavailability of gasoline at any price and long lines at the gas pumps have faded. Some money is still being allocated to entities such as the Research Partnership to Secure Energy for America for fossil-energy research, but by far most of the current U.S. DOE funding is being directed toward CO2 sequestration, even though we are now more than ever dependent on hydrocarbons.
AAPG can’t and doesn’t try to fill this research gap, but it does foster and disseminate the research that is still being done, securing the legacy of geoscience research past and present. We are building small research programs such as PetroGrants, whereby industry research dollars would be directed through the National Science Foundation to universities, and we help fund student research through the Grants-in-Aid program. The U.S. DOE helps fund the Petroleum Technology Transfer Council that AAPG administers and which disseminates research results locally. More importantly, AAPG still publishes hydrocarbon-related geoscience and holds research and technology forums on cutting-edge topics. In effect, AAPG has become a corporate research memory for the industry, and the value of belonging to AAPG and contributing time and effort toward building the AAPG geoscience programs has never been higher.
*Parks, J.M., 2003, Unintended consequences of oil company research laboratories, Oil-Industry History, v. 4, p. 32-41.
John C. Lorenz, AAPG President (2009-10), is president of Geoflight LLC, Edgewood, N.M. Before forming his consultancy in 2007, Lorenz was Distinguished Member of Technical Staff for Sandia Laboratories, a geologist for the U.S. Geological Survey and a teacher in Morocco for the Peace Corps.