Health of geophysical industry critical to market recovery
Energy is one of the most important markets in the world, and the geophysical industry is the foundation of ensuring safe, affordable, and accessible oil and gas exploration and development.
Energy is one of the most important markets in the world, and the geophysical industry is the foundation of ensuring safe, affordable, and accessible oil and gas exploration and development. While OPEC’s landmark agreement at the end of the year to cut oil output boosted crude prices and optimism for some semblance of market certainty, no one can predict what the oil services market holds for 2017. One can be certain, however, that global energy demand will continue to increase, and that demand cannot be met without the geophysical industry.
From discovery to delivery, a viable geophysical industry is essential to providing energy resources to the world. In the past year, the geophysical industry enabled the discoveries of significant energy resources that were previously overlooked and thought impossible, beneath thick salt and within shale formations, doubling the world’s proved oil and gas reserves since the 1980s.
For decades, the geophysical industry has pioneered technology providing the blueprint for locating and producing safe affordable energy and the more than 6,000 petroleum-based products indispensable to everyday life. Oil and gas powers the equipment needed to construct cities. It powers the equipment to harvest crops and produce food, and the hundreds of millions of vehicles moving citizens and goods around the world. It is the foundational material for innovative and life-saving technology, from mobile phones to medical imaging devices.
Although the industry is currently in challenging times, the demand for these products and energy is not going away, and fossil fuels will dominate the energy supply for decades, requiring the ability to explore and develop resources currently out of reach. Critical resource plays are moving farther offshore and into more complex onshore formations.
As the cornerstone of the energy industry, the International Association of Geophysical Contractors’ (IAGC) members are driving technological innovation, reducing risk, and enhancing recovery. Even in the midst of the downturn, they have not let technology become stagnant, demonstrating a relentless pursuit to innovate and improve, so the discoveries that are impossible today are possible tomorrow.
Our members strive to provide trusted experience, improved confidence, and reduced uncertainty in the interpretation of the subsurface for their clients. Likewise, IAGC works to reduce regulatory uncertainty by promoting and ensuring a safe, environmentally responsible, and competitive exploration industry. The industry’s viability hinges not only on navigating one of the longest crises in the oil services market, but also overcoming the many present and real regulatory challenges pushed by the anti-fossil fuel lobby around the world.
Unfortunately, attacks from environmental extremists do not diminish with the price of oil, but resources do. The geophysical industry is often the first expenditure at the earliest stage of exploration and the first presence of oil and gas in a geographic area. As a bellwether for the service industry, it has been the hardest hit by the current downturn and the target of increasing anti-development environmental activist agenda.
Environmental groups are disseminating misinformation about the geophysical industry because of its critical role in exploration and development, saying seismic exploration is the gateway to oil and gas drilling. They believe if they stop seismic exploration, they can halt development.
These extremists are increasingly advocating for application of the precautionary principle to exploration and development activities around the globe. This approach requires weighing the evidence showing any effect of a proposed activity more than the evidence showing no effect; where effects are disputed, they argue activity should be resisted without boundary or reason.
This principle resists decision-making based upon the “best available science,” mandated by US law. In practice, however, we see increasing challenges to exploration industry activities calling for “precautionary” mitigation measures and agency decisions, regardless of the proposed activities’ actual limited impact on the environment or affected species. In the Mediterranean, environmental activists attempted unsuccessfully to oust IAGC from a treaty group after it urged science-based mitigation, rather than strict adherence to the precautionary principle. And even in the US, the principle is flexing its muscle.
The Obama administration recently denied applications to conduct seismic surveying in the Atlantic, kowtowing to environmental activists and substituting politics for science. The decision directly contradicted the Bureau of Ocean Energy Management’s own repeated findings that there is no scientific evidence of sound from seismic surveys adversely impacting marine animal populations, the environment, commercial fishing, or coastal communities. IAGC is working to reverse this egregious decision and see these surveys proposed for the Atlantic permitted without delay.
Since IAGC increased its focus in regulatory and government engagement and advocacy just over three years ago, it has been shaping and leading the oil and gas industry’s dialogue on the geophysical industry’s interaction with the environment, and engaging government and regulatory entities with credible scientific, technical, and legal analysis. IAGC will continue to advocate for informed energy policies that are based on the best available data, so that exploration is supported by scientific impact analyses, and development decisions are made with an updated understanding of the resources available.
As the oil services market recovers, be assured that the IAGC is working now to ensure that the industry is positioned for future success and the exploration industry still has the opportunity to operate onshore and offshore around the world for decades to come. And as new resource plays are discovered, and existing fields are yielding more than anticipated, one will find the geophysical industry at the forefront of turning yesterday’s overlooked and impossible into today’s discoveries.
Nikki C. Martin
International Association of Geophysical Contractors