Industry, Governments and AAPG Members

The New York Times ran an article back in April* noting that the world’s major commercial oil companies are reluctant to invest in research into alternative energy, implying that somehow this constituted a moral failure. Hooey. First, these are oil and gas companies, not alternative energy companies, and second, there is no reason for any commercial enterprise to invest in anything unless the potential exists for a return on that investment. That can be perceived as either good or bad, but truthfully it’s neither; it’s just the way the business works.

Let’s not confuse capitalism with government: Any business that doesn’t make a profit is a failure and does not stay in business long. Taxes on those profits fund government programs, and it’s the government’s role to use tax money to look after its citizens without an expectation of profit. It’s a bit different where the government runs a national oil company, but in either case, society benefits from the resulting abundant, inexpensive supply of energy.

Private companies may spend a certain amount of speculative money on research not associated with their core business, but only after enough money has been salted away to pay taxes and salaries, maintain equipment, comply with regulations, provide for the immediate future and provide a return to the investors who fronted the heavy up-front costs of the industry. But commercial companies are only going to put earnest money into alternative energy research if and when there is a potential profit in it, and if and when they feel their company should expand the scope of work beyond their oil and gas core competency.

About 80 percent of AAPG members are employed by industry. Some of our members manage or work for companies large and small, some own small companies, many consult to the industry. The AAPG-fostered science that helps our members do their jobs ultimately benefits industry. Thus there is overlap and a definite synergism between AAPG and industry. Regulations that help or at least do not hurt industry allow it to continue to provide livelihoods for some 20,000 AAPG members and millions of other workers and professionals, from roughnecks to engineers to bankers.** No wonder that AAPG members tend to be both thoughtful and vocal about the politics that affect the industry.

But AAPG is not the mouthpiece for the oil and gas industry; that’s the job of the American Petroleum Institute. At the same time, a discouraging amount of nonsense, ignorance and misinformation about geology and the oil and gas industry float around in the public and political domain, and it’s a fine line we walk. AAPG is a scientific organization and its external credibility is based on a history of objective studies in geoscience. Policy-makers have come to AAPG for information, and we have a reasonably wide audience among them in large part because we have not tried to be other than objective.

AAPG has an active Public Outreach Committee, and AAPG’s Division of Professional Affairs has assembled a number of statements that outline the geologic issues that affect our members, present the geoscience and give the member perspective on those issues. Many of these are U.S. issues, in part because that’s where such issues were initially raised, in part because two-thirds of AAPG members reside in the United States. AAPG also supports an information and communication effort in Washington, D.C., where David Curtiss makes our science available to legislators. READ CURTISS' BLOG

The oil and gas industry is unlikely to be pushed entirely out of business by governments or regulations any time soon because the world needs, in both the dire and absolute sense of that word, the energy that this industry supplies. But neither business nor AAPG members should be expected to invest in alternative energy research when there is as yet no reasonable expectation for a financial return on that investment. You can’t draw water from a well for very long if no water seeps back in.


*“Oil giants loath to follow Obama’s green lead,” by Jad Mouawad, New York Times, April 8, 2009.
**“Oil and Gas Industry Supports 9 MM American Jobs, 7.5 percent of GDP,” Rigzone, American Petroleum Institute, Sept. 9, 2009

Comments (0)

 

President's Column

President's Column - John Lorenz

President's Column

President's Column - Ted Beaumont

Edward A. "Ted" Beaumont, AAPG President (2012-13), is an independent consultant with Cimarex Energy.

President's Column

President's Column - Paul Weimer

Paul Weimer, AAPG President (2011-12), is a geology professor at the University of Colorado, Boulder.

President's Column

AAPG Presidents offer thoughts and information about their experiences for the Association. 

VIEW COLUMN ARCHIVES