Ever since I was asked to opine on the future of the oil and gas industry, I have been looking for inspiration, but clouds of doubt have filled my crystal ball. When I shuffled my Tarot cards, I discovered I didn’t have a full deck.
You would think that with more than 55 years of experience in this business I should be able to tell with some degree of certainty what is likely to drive business, technology, and human resources in the coming year. The truth is, I have no idea what will happen to our industry next year or any year after that. So many factors can and will affect our future that any prediction I could make would be the sheerest conjecture. So instead, I will write about what should happen.
Energy demand should continue its growth, but in stormy seas
The world’s need for energy is not going away, and the role played by fossil fuels will continue to dominate. Until a viable and deliverable renewable energy source that can meet the world’s demand is developed, oil and gas will rule. Exploration, leasing, drilling, and production will continue to be a political football game, refereed by bureaucrats with little knowledge of, or often interest in, the facts. On the world stage, the battle between the haves and the have-nots will intensify, as will the threat of global terrorism. The incidents of world strife in producing countries should break the political logjam that has denied our access to public lands, arctic areas, and vast offshore leases. The long-awaited road to energy independence in the US should be opened for traffic, potholes and all.
Technology should be the great enabler
Development of new tools and techniques will enable exploration, drilling, and production to find and exploit deeper, less accessible frontiers. Advances in every sector will be realized. One major area of technical growth should result in increasing the recovery factor of existing reserves. Starting with the use of 4-D seismic and its associated processing, operators will gain a better understanding of reservoir drainage patterns, discover bypassed hydrocarbons, and improve formation stimulation designs. Well construction will be able to reach farther and more efficiently than ever before as new techniques of extended-reach drilling, casing drilling, and geosteering make better wells placed more precisely in reservoir sweet spots. And greatly improved stimulation technology will improve reservoir contact while delivering higher fracture conductivity.
Advances in production technology will improve our ability to produce and process more heavy oil, enabling access to huge, untapped reserves. EOR techniques will improve oil mobility, sweep efficiency, and ultimate economic recovery. We should make better use of our assets.
We should preach beyond the choir
The “big crew change” is upon us, and we should be ready. But will there be enough geoscientists, engineers, and technical experts to continue the race? Like the fabled Cassandra, the industry has decried the looming shortage of technical staff, but is anyone listening? Our industry is not well thought-of by a large fraction of technical students. Even as fewer young people sign up for science and engineering education, even fewer accept to work in our industry despite historically high starting salaries and benefits. We should do a better job of “selling” our industry to the public. Starting with 10-year-olds, we should sponsor education outreach to identify and attract young, technology-minded people. We should initiate follow-up programs to sustain their interest. Scholarships and summer internship programs should be expanded. We cannot wait; in fact, many fear we have waited too long already.
We should learn to help ourselves
Technological innovation will allow the industry to drill farther with a smaller environmental footprint. (Image courtesy of Halliburton)
Technical markets don’t just grow; they must be created and nurtured. It is therefore incumbent upon us all to expand our scope. Instead of waiting for nations to realize that clean-burning natural gas is a great energy resource for elec- trical power generation, we should take the initiative to expand that market. We built refineries and petrochemical plants to bridge the gap between crude oil and petroleum products, fuels, fabrics, and plastics. Why shouldn’t the oil and gas industry build power plants and run them more economically and with smaller carbon footprints than the existing infrastructure? We could create our own markets for natural gas. T. Boone Pickens’ foresight should be accepted by every producer. Already, compressed natural gas (CNG) and LNG have been proven viable for transportation uses. Recently, an LNG railroad engine was introduced, and the Cum-mins Corp. has launched a new line of multifuel truck engines. Instead of waiting for the market to develop, we should take the initiative by equipping our service stations with CNG and LNG fuel pumps. If Detroit won’t do it, our industry should build and operate vehicle conversion enterprises. The technology exists; there is even a CNG motorcycle reportedly tooling around Oklahoma.
The crystal ball has cleared. It says we should wake up before the “hanged man” card is dealt!