Understanding the scope of U.S. and global resources and reserves, including the associated risks, rewards, standards and potentials are challenging enough in normal times.
These are not normal times.
“Moving forward seems to become increasingly challenging because of the politicization of our industry,” said Ronald Harrell, chairman emeritus for consulting company Ryder Scott.
That tension is why the next generation of potential oil and gas professionals are staying away from the profession.
“There are seriously declining university enrollments of petroleum engineering students across the United States,” he said.
Peel away that layer and he said you’ll find even more bad news.
“Even the students who are present may not be staying long,” said Harrell.
Where are they going?
Not far, actually.
“Many (petroleum engineering) students have or will likely change majors from petroleum to chemical, electrical or other branches of engineering and technology,” he said.
Harrell, immediate past chairman of the University of Houston Petroleum Engineering Advisory Board, has been tracking such trends for decades.
And, according to recent media coverage, he has reason to worry, as undergraduate enrollment in petroleum engineer is down 75 percent since 2014, as reported in the Wall Street Journal’s Aug. 6, 2023 article, “Big Oil’s Talent Crisis: High Salaries Are No Longer Enough.”
“Much of this change in engineering majors clearly reflects much more emphasis on electronics-driven technology across the E&P world,” Harrell said.
The reasons for the move, he believes, reflect the growing influence of both operational technology and the increasing improvements in our more complete understanding of geology – both in the exploration phase and in techniques to more efficiently commercialize previously discovered hydrocarbon accumulations.
Exacerbating the politicization are worries about climate change. Students are moving away from careers in petroleum engineering, even though he believes the industry is now doing a better job in addressing their concerns, especially their worries about environmental impacts, such as leaks and other releases of both oil and gas in the air and on the ground.
Petroleum Reserves and Resources Forum
An active member of four university engineering program advisory boards, Harrell comes to this crossroad from the perspective of a reservoir engineer. He knows, though, that no single discipline has all the answers.
“We must strive to help maintain connections between faculty, students and employers! Other forms of professional expertise have been – and continue to be - important contributors,” he said.
Which brings us to the Petroleum Reserves and Resources Forum, sponsored by AAPG Division of Professional Affairs and the Society of Petroleum Engineers’ Oil and Gas Reserves Committee, to be held in Houston next month, May 20-23 at the Norris Conference Center.
The forum is designed to touch on the current realities and future aspects of a number of the dynamics on the horizon.
DPA President Bruce Falkenstein believes the forum, which will bring together 20 leading industry experts, can benefit all AAPG and SPE members.
“This will be a very informative four-day event for all geoscientists, engineers and managers, not only those practicing this highly specialized and necessary skill, but also for those interested in learning about resource and reserves estimation and for those in middle and higher management who need to stay informed of the current practice and issues,” he said.
Specifically, five themes will be addressed:
- U.S. and Global Resource Potential
- Unconventional Resource and Reserves
- Reporting Qualifications Standards
- Reservoir Characterization Risk Reduction
- Reserve and Resource Reporting: The Investment Perspective
“I spoke to this forum nine years ago and have been honored to be invited to speak again,” said Harrell.
Harrell will give a keynote address at this year’s forum.
He has been an SPE member since before even there was an SPE.
“I was a senior PE student at La Tech University when my professor gathered a class of fewer than 10 seniors to announce we were no longer AIME (American Institute of Mining, Metallurgical and Petroleum Engineers) members but had become essentially charter members of SPE!” he recounted.
Further, he became chair of the organization in 2000 and helped lead the 2007 introduction of the Petroleum Resource Management System. Now retired from RSC, he has been selected as an SPE Distinguished Lecturer and delivered 34 lectures in 17 countries in 2007-08.
The quantity of the years are not as important to him as are the associations.
“As a lifetime member of SPE, I have personally benefitted through being invited to serve on several committees and or focus groups alongside men and women across America and the world. In almost every case, many of the people I have served with over time have become lifelong friends. During the course of many of our committee meetings, we often engaged in fairly strong debate about a particular matter – or the specific wording of proposed definitions. Along with input from others, we never failed – over time – to reach agreement,” he said.
He said the collaboration has left its mark.
“It’s been my ability to work closely with hundreds of clients and to observe so many, many evaluation engineers and geoscientists who had little to no reserves-directed training except that learned from their employers’ business operations,” said Harrell.
Setting New Industry Standards
The elephant in the oil and gas room, as well as every other room across society these days, is artificial intelligence and how it will affect the industry. According to a 2023 Forbes article, “How Multibillion Dollar Investments In AI Are Driving Oil And Gas Sector Innovation,” all of the top 20 global oil and gas producers, state-owned or public-listed, have a clear AI strategy for their upstream, downstream and midstream businesses, and 92 percent of worldwide oil and gas companies are either currently investing in AI or have plans to do so in the next two years. Further, AI is already making an impact in raw materials procurement, inventory, logistics, operational decision-making, back-office management and, of course, cybersecurity, and the strategic importance of energy infrastructure.
It’s the wildest of wild frontiers.
“Neither I, nor anyone I know, claims any unique expertise in the impact of AI anywhere across our civilization,” said Harrell. “My guess is AI may be focused on technologies beneficial more to the exploration and discovery of hydrocarbons, the physical efforts to drill and develop, produce and market these valuable resources.”
There must, then, be an effort going forward to ensure that all in the industry are playing the same game (and understanding all that is in flux) before coming up with an agreement on how best to move forward.
The forum will go a long way in fostering that agreement.
Harrell said it is not about imposing a set of rules.
“We need some industry-recognized reservoir evaluation practices. It will take every piece of the industry to make it more productive, better managed, safer and more attractive to investors,” he said.
For more information or to register for the DPA Petroleum Reserves and Resources Forum, visit AAPG.to/petroforum2024.