The Dark Future of Energy Exploration
Productive divisions are losing research and development funding to “renewables.”
September 15, 2013 - 12:00 am
(The following is a fictional account of an oil and gas company of the future, illustrating what happens if green-movement goals continue to be incorporated into the industry vision.)
The year is 2020. You are the vice president of the exploration and production division of an oil and gas company. One of your exploration teams has successfully located an oil-rich area using a 3D seismic interpretation system, which helps the geophysicists survey the underground layers, hone in on a given area, identify its composition, and estimate the location of a potential oil deposit. These scientists are called “seismic interpreters,” and they now rely on virtual exploration and technology more than ever to analyze the subsurface of the earth remotely.
Once the deposit was found, a well was built. You had the survey team continue to generate more 3D seismic surveys over time so that the production team has a 4D seismic data set. The team also sent fiber optic cables down the well to monitor the production, so that they know how the work is progressing and how long it will take to complete the operation.
Down the hall, another success is underway. Your second exploration team has discovered a large deposit of shale gas. You’ve had two horizontal wells built in parallel, and a 75-multi-stage fracturing operation take place using gelled LPG as frac fluid to minimize the clean-up. The wells are producing at an admirable rate.
With these two successes, you should be celebrating, but you are not.
Your division is only one of many in the company, and despite your significant successes, the rest of the company is faltering. Further, not only are you and your division isolated and ostracized from most of the company, the other VPs are eyeing your R&D budget, looking for ways to redirect these funds into their own divisions. They might even be successful, with the new R&D equalization legislation, but only if the company doesn’t completely fail first.
Fifty percent of the corporate R&D budget is spent on “renewables,” “emerging” energy sources, and “sustainable” technologies. Emerging energy sources? Why are solar and wind still called emerging, you wonder? They’ve been around for decades and still don’t deliver. Your successes stop at the end of the hall. Your floor can sustain itself; it’s the sustainables division downstairs that can’t. Why are they such a large part of the budget? It started out with a small experiment, conducted voluntarily by the CEO and approved by the board of directors. Then it grew because, even though the experiment was not succeeding, no one on the board was complaining. Other oil and gas companies followed. Then, it became law: the R&D equalization bill.
You look at the reports on your desk one more time. The light flickers a little before going out, and the entire building goes dark, as the office was powered by a wind farm, and the wind has calmed down. Due to the Minimum Renewables Act of 2016, oil and gas companies are now required to use a minimum of 50% of their office electricity from renewable sources. Your work may soon be snuffed out by another cold hand: government regulations threaten to shut down your wells and prevent future wells from operating, but that is another story.
Let’s try to keep the above just a story. While there are many possible avenues for innovation, the oil and gas industry should move forward with a single-minded focus on its own productive capacity. It should develop innovations that secure the future of the industry by improving exploration and production of fossil fuels, saving money, and reducing waste and pollution.