Sunday, September 9, 2018

Is there a future for geologists?

A few weeks ago, I posted the article below on Linked-In where young geologists ask me questions about an uncertain future. I received a large, positive response from my peers. As such, I decided to post it here as well.  The article is not overly technical so most of this readership should have no trouble following it.

Hi Lucas,
 I think your question about the future of petroleum geology or in mining is on the mind of many starting geologists. So I made it into a Linked-In post. I don't know the future, but these are my thoughts. I think that the demise of fossil fuels is greatly exaggerated. Even more than a hundred years after oil and gas became key energy sources, we do still use a lot of coal. Yes, we may switch to electric modes of transportation, although I think that will take many decades as well. The combustion engine will be around for a very long time.
You have to realize that electricity, nor hydrogen for that matter, are sources of energy. Rather, they are carriers of energy and need an energy source to be generated. You could cover our planet with extensive fields of windmills and solar farms or roofs covered with solar panels that doesn’t mean we can power with them ALL our energy needs. Personally, I think geothermal has a better chance to become a major source of energy.
However, current world demand for oil alone is growing annually by 1 to 2 million barrels per day per year. Even with significant rates of growth, the ‘renewable forms of energy’ will not likely keep up with overall energy demand let be replace the fossil fuels. Don’t forget we have to power over the next century nearly 4 to 7 billion more middle class lives than today. I see more promise with nuclear, but in the end all energy that we generate comes at a price, both economically and in terms of the environment. The unsightly occurrence of wind farms in the Netherlands has already caused resistance to these ugly structures, just to mention one simple issue.
We have had electric car technology for decades and not thanks to a Aha-moment of Elon Musk. Practicality and costs is what kept the combustion engine as the front runner. A decade ago we thought that the hydrogen engine would create a hydrogen-based economy, just ask Jeremy Rifkin. These ideas come and go. I hope all these energy sources will become important parts of the world’s energy portfolio but replacing fossil fuels will take many decades if not centuries in my, not always, humble opinion.
More worrisome is the idea of ‘peak oil’. The rate at which we are drilling up ‘unconventional’ oil and gas (if that is really the correct term) is frightening and so is the decline rate of individual wells. Nothing is infinite and yes, when economic we will keep on tapping increasingly more difficult sources of hydrocarbons, e.g. gas-hydrates. We even may find better ways of producing oil and gas from ‘conventional’ reservoirs or better, the severely depleted reservoirs of days past. The production of the cheapest stuff has peaked and is declining in importance. We have seen manufactured oil and gas production before and we have gone through times when geologists were not that much in demand - that will change again. 
It is the low-hanging fruits that are drilled today, but the abandonment costs of these unconventional wells is building while they rapidly deplete; they will become a tremendous environmental liability. Geologists will be required to understand these unconventional reservoirs and extend their useful lives. Right now, we drill those wells ‘statistically’ but there are reservoirs involved and enhanced production, although not economic right now, will play big again. You can only drill statistically within a pool; there are many a train-wreck that drilled statistically in an area without hydrocarbon reservoirs.
The ‘manufactured production’ will hit a wall; this is in my mind a WHEN, not an IF. Look no further than the old Renaissance petroleum company. Look no further than the old PennWest and many other wrecks that will follow. Companies that feel that geology is a nuisance will hit the wall or see the light. My own company, Eucalyptus Consulting is mapping both conventional and unconventional reservoirs. The reduced data collected from these unconventional pools will prove to be a big mistake and my company is developing ways to better evaluate all these horizontal wells, so that we can provide better answers when these wells run into problems and they will. Do I see a future for geologists? You bet but our role will always evolve.
 I don’t know much about mining, but it is my experience that you are either in mining or in oil & gas. Some make the switch from one to the other more-or-less successfully but often it is painful and less successful than a dedicated career in either one. Like everything else, this may change because both industries have much in common.
We are standing at the beginning of a new commodity boom and whether in oil & gas or in mining, our careers are about to be in demand again for the coming 5 to 10 years. So many have retired or abandoned the industry disappointed and ‘damaged’. We have lost a lot of good professionals and the industry, due to economic reality but also due to short-sightedness, will pay a high price to reclaim all the lost expertise and the experience-continuity in our workforce. So, yes all the recent suffering will soon be forgotten and the arrogance of ignorance will rule once again until the next downturn. 
The current downturn was the worst in a generation, you probably will come out of school with perfect timing. Don’t think that is because you are smart, many smarter than you have bitten the dust in a great but harsh industry. But being lucky is very important as well.

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