I can remember hearing, way back in 1977, the president of a major oil company that I worked for say that the United States had run out of oil and gas – there was not much left to find and develop.
It seemed like a defeatist attitude for the leader of an oil company to have, and I wondered why I was working there.
In that context, the possibility that the United States could be energy independent – as suggested by several studies, including a recent forecast by the International Energy Agency – is astonishing to me. It also is amazing to consider that we petroleum geologists made it happen, along with a little help from our engineering colleagues.
It all brings to mind Parke Dickey’s famous 1958 quote: “Several times in the past we thought we were running out of oil, whereas actually we were only running out of ideas.”
The ideas brought forth by petroleum geologists have literally changed the world – again and again and again.
AAPG members Dan Stewart and George Mitchell most recently demonstrated this when they persisted with their belief that shales could be gas reservoirs – and eventually brought in the Barnett Shale play. Because of their ideas – their vision – and determination the world will never be the same.
Daniel Yergin, vice president of IHS, calls it the “unconventional oil and gas revolution.” He says that it “is having a bigger impact across the country, including in non-producing states, than is generally recognized.”
According to an IHS report released this January, in the United States the unconventional oil and gas play provided over 1.7 million jobs and $63 billion in annual government revenues in 2012. By the end of this decade the numbers could grow to three million jobs and $113 billion in annual revenues to the U.S. government.
Many of those new jobs are in states without unconventional oil or gas production.
Instead of building facilities to import LNG – like we planned to do in 2008 – the United States is building facilities to export LNG. American energy is so inexpensive that industries are moving back to the United States from China.
And what about the rest of the world?
There are many formations in basins around the world that appear to have tremendous potential for unconventional oil and gas production, including (just to name a few):
Of course, the main impediment to unconventional oil and gas exploration everywhere is politics. And obviously, not all conditions – political, financial or geological – are equal around the world.
A prominent German AAPG member, for example, recently told me that energy in Germany is three times more expensive than U.S. energy.
Eventually, maybe, the tremendous financial benefits that the United States enjoys from the unconventional play will persuade non-U.S. politicians that their perceived worries are exaggerated and they will give the play a chance.
Wherever and whenever politicians give geologists the freedom and incentive to look for unconventional oil and gas, we have demonstrated we will find it – and it will make life better for the citizens of the countries where it is discovered.
Often, all it takes is a little thought – and there’s always plenty of room for new ideas.
Edward A. "Ted" Beaumont, AAPG President (2012-13), is an independent consultant with Cimarex Energy.