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John Lorenz, AAPG ACE2010 Presidential Address

ACE2010 New Orleans, Louisiana

ACE2010 New Orleans, Louisiana


AAPG President John Lorenz addresses the opening session of the 2010 AAPG Annual Convention & Exhibition in New Orleans, Louisiana on April 11, 2010. 

Full Transcript

Now it is my distinct pleasure to introduce you and welcome to the stage the president of AAPG, Mr. John Lorenz.

AAPG is about the science. We're a scientific organization. It's written into our constitution, and the science of geology has brought us from dipping oil out of oil seeps to oil wells that are drilling offshore and remote environments, places all over the world.

We started-- in Titusville in the United States, anyway, we started drilling our first well based on an oil seep. There was a surface manifestation there that we knew was there. It wasn't until the science of geology had developed enough to the point where we could see below our feet. Imagine, below our feet, what the rocks looked like. And at that point, we had to sell ourselves, because the science of geology was still developing.

The Spindletop oil field, developed in 1900, was developed on scientific theory. There was no oil seep when Spindletop was drilled. And a matter of fact, the fellow that drilled that, Lucas, ran out of money several times because he could not convince the investors that there was oil there because everything else had been drilled on oil seeps. He had the science. He had the concept of what was really below there. And finally, it blew out 100,000 barrels of oil a day, a little over 1,000 feet. And what that did was it allowed transportation, heating, and so much else to become part of our national legacy and drive and improve civilization.

Science is becoming more and more important. What you're looking at here is a graph of the number of barrels of oil of energy you recoup from the ground for every barrel of oil you put into it. And back in the 1930s, it was a ratio of about 100 to 1. More recently it's down to about 20, 25 to 1. If you look at the enhanced oil recovery, we're less than that. We're down 8, 10 to 1. If we're looking at some of the unconventionals, significantly less.

The science is becoming critical and crucial to being able to extract from the subsurface the energy that we need to run civilization. AAPG is scientifically oriented. We're primely, we're supremely poised to contribute to this global problem.

So what's the value of science? Science allows us to go from looking at one-dimensional data. You've got a well. That's one dimension. And it allows us to take core indications of various properties, cross beds, fractures, laminated bedding. It allows us to go from one-dimensional data to three dimensional ideas of what's really down there in the subsurface. OK? It makes a big difference. If you have a reservoir that looks like one of these slides, you're going to get entirely different drainage pattern than if you have a reservoir that looks like the other. And it's the science that allows you to make that distinction.

In turn, industry has contributed significantly to the development of science, the technology of being able to measure in the subsurface what's actually there, whether it's wellbore image logs, whether it's core, whether it's geophysical technology. This has allowed us to recreate geological systems in the subsurface that nobody has ever seen at the surface. It's amazing.

Now, this is a slide that Larry Nation gave me. And what it shows you is kind of interesting. It's a cautionary tale, if you will. What it shows you is the development of the rock-- so rock and roll industry-- compared to production in the United States. And it's a very close correlation, a lot closer than a lot of people are modeling other things. And what this would lead you to believe was that, to solve the energy crisis, all you have to do is write more great rock and roll songs. Doesn't necessarily work that way, but you could draw that from this correlation, couldn't you?

So it pays us all to be a little skeptical in our thinking and to use a lot of the geoscience that we've been developing over the years to not only find what we're looking for in terms of oil and gas, but to view the entire world and the problems. Now, this is a correlation that you can perhaps believe a little bit more in. What you're looking at here is all the wells that have been drilled each year since 1949-- that's the fuchsia color across there-- compared to the dry holes.

And what you see is that, as you drill more wells, yeah, there's some more dry holes, but the ratio doesn't change. Matter of fact, you get out there to the far end, and the ratio actually improves. We're developing the science. We're redefining a little bit in terms of what's actually a successful well. But the science has continued to improve and allow us to maintain this ratio, despite the fact that oil is getting harder to find, the pools are getting smaller, we're drilling in deeper environments, we're drilling and more remote and more hostile environments. You guys are doing a great job, right? Using the geoscience, we're maintaining that ratio.

So how does AAPG fit into this? I mean, how does AAPG, as a professional organization, help us maintain that ratio? AAPG gives us the tools to do this. AAPG gives us publications, it gives us head bird conferences, where we advance the science, publications where we disseminate the science, conventions like this one, where we're coming primarily to see the science-- except when you get to my age, you come and you do a lot of networking, and don't get to see nearly as many of the talks as you'd like to see. But AAPG is really involved in the science.

Now, AAPG-- just let me just talk a little bit about AAPG. If you lay it out nicely and squarely like this, it looks like it's fairly well organized, but in fact a lot of times it looks like a bird's nest. This is in fact a strength of the operation. I know it frustrates Rick like crazy, but this is a strength of the organization, because there are a lot of different entities, and they're all bringing new ideas into the mix, into the fray. And in the middle there, you'll notice there's 36,000 AAPG members. And each one of them has very strong opinions, strong ideas, and a good, strong scientific background, which means that sometimes we get wrapped around the axle about some various events.

So global climate change-- yeah, it's an important issue, and we bring things to it. But it's not necessarily something that we should allow to dominate our particular organization at this point. You know, that said, I think the polar bears are not going to go floating gently off on the ice floes anytime soon. They're going to get their own back before they do.

All right, let me talk a little bit in detail about how AAPG membership breaks down. We've got about 36,000 members here, and about 7,200 of them are employed by major oil companies, and another 2,000 of them are employed by the service companies. These are very important components of AAPG. Not only do they do help sponsor meetings like this, but they provide a lot of the authors for our publications. They are just a tremendous asset to us as an organization. And hopefully we give enough back to them, in terms of providing tools for their members to continue doing their jobs, that we maintain this very strong relationship. We've got a corporate advisory board that Bobby Ryan chairs, and it's just a tremendous organization to see in action.

We also have an equally large-- matter of fact, a larger group composed of consultants, independents, and small oil companies. These are defined as something less than 200 employees. These are also a very, very important part of our organization. The small independents use our publications, they provide chairs to our sessions. These people are just the backbone of what AAPG is all about.

We've got people in academia, students and professors. And if you look at this, the education chart here is probably the professors-- though they don't necessarily break that out that way-- but the ratio is about five students to one professor on this chart, and that's about right. What we'd really like to do is drive up the number of professors that we can get, because the professors are going to bring the students into the organization.

We've also got about 300 people who list their primary employment as environmental, which is very interesting to me, because Mike Jacobs tells me that the division of environmental geology, our environmental operation here in AAPG, has about 1,100 members. And that's telling you something about our commitment. There are more people who are members of the division of environmental geology than actually work in the environmental geology operation. So this is very important. This tells you something about our philosophy. Yes, we're out there drilling wells, but we're also good stewards of our environment.

Then you get into the various state and federal regulatory operations. These are very important people, people like Edie Allison, working for the Department of Energy. We need these people, because these are the ones who help regulate our industry. And the more we can get them into our organization, the more we can, in fact, have an influence-- that the science influence their decisions, the good rational decisions about how we go about actually conducting our business.

Finally, we've got about 1,400 retired people that still belong to AAPG. And this is very telling. This tells me that even though they're no longer active in the petroleum industry, they're still interested in the community of AAPG. It's a great statistic to have.

We're globalizing. We're getting out and beyond. And let me just tell you a brief little anecdote here. We had our international convention exhibition, our ICE, in Cape Town, South Africa a year and a half ago, and I had the pleasure with some friends of climbing Table Mountain. And unfortunately, it was foggy that day. But as we got to the top-- we were kind of a little faster than the next group ahead-- and there's somebody up on ahead. And you see that little red disk on the back of the middle guy's shirt? You look closer, gosh, these guys are every place, right?

Well, not surprising. We've got 1/3 of our membership is, in fact, international. This is where we have the most potential for growth. This is where we have great opportunities to help promulgate our science into the rest of the way the world.

As I was in fact making some of my visits associated with being a president for year, I had the opportunity to talk to a variety of student operations. And the constant theme-- there were a variety of questions, but the constant theme was, we're graduating soon. Last year, oil industry snapped up everybody. This year, it's not so fast. Will there be jobs for the oil finders?

And you've got to remember that oil finders are not built in a day. Experience counts for more in this industry than probably any other industry that I'm aware of, just because we're dealing with incomplete data sets. We're dealing with subsurface data, where we've got this one dimensional data, instead of three. It's very difficult for somebody straight out of school to start applying school learning. It's like the difference between school English and fluency in English.

Experience really counts for a lot in this. And this is our AAPG awardee, Bob Allen. 87 years old, still working and finding oil, in Ardmore, Oklahoma. It was my pleasure to visit to Ardmore Geological Society, and he was my host. His experience over the years has found tremendous amounts of oil, and done some tremendous amount of good for our industry.

So will there be jobs for future oil finders? Yes. Population growth is going up. Each one of them is going to need oil, energy of some kind. Oil still is, as Scott Denker says, bridge. Per capita consumption, in fact, is going up. So each one of those new people that wants energy is going to want more energy than today's people in their position. Oil's getting harder to find. We're going to need geologists to find it.

And we've got an aging workforce. People my age, we're going to wander off and do something with a canoe, someday pretty soon. So yes. Where there are jobs-- and it's difficult to tell the students that yeah, you'd have to be patient a little bit-- what we have to do is get the students into the industry, so they start developing the experience like Bob Allen. And then when we have the need, by golly, we'll have it. We'll have this experienced workforce.

So, yes. Will there be oil finders? You betcha there will be. This, despite the fact that there are misconceptions out there. With that, I thank you very much. It has been a distinct honor to be your president for this year.

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