2022January/February

Editorial: Industry must work together to ensure the world knows our value

Jeremy Thigpen, 2022 IADC Chairman

By Jeremy Thigpen, 2022 IADC Chairman

Now more than ever, the drilling industry needs to stress the criticality of, and advocate for, the work we do, emphasizing the immense value oil and gas creates for the world. As IADC’s 2022 Chairman, I plan to build upon and strengthen our organization, highlighting the vital role the drilling industry plays in supporting both the developing and the developed world.

I obviously cannot accomplish this alone: I need the talents and commitment of each of you. Imagine the impact we could have if every person working within the drilling industry would volunteer some time, expertise and experience to advance our industry. Our collective efforts can yield demonstrable results when we collaborate, share knowledge, tackle common problems and develop solutions to critical issues.

In my view, one of the key challenges we face is educating the public on hydrocarbons’ critical role within civilization – something we all take for granted. In response, IADC has assembled an educational website – drillingmatters.org – to highlight the value of hydrocarbons to humanity. I strongly encourage you to explore the website, share it with others and collaborate with IADC to build upon and improve the content. This site should be a key resource – within and outside of our industry – to share and learn about the vital work the drilling industry does to alleviate energy poverty and to supply products used worldwide every day.

We know oil and gas will continue to be a critical part of the global energy mix throughout our lifetimes and beyond. According to the US Energy Information Administration, both OPEC and non-OPEC oil production will grow through 2050, with OPEC production growing at almost three times the rate of non-OPEC production during this same time frame. To meet increasing demand, countries will need to rely on increased exploration and increased drilling and technology advances. This is an opportunity for our industry to continue to show the world how we deliver safely, reliably and efficiently, while reducing our environmental impact.

In support of this increasing demand, we must continue to develop and deploy new technologies, which enable us to deliver our services more efficiently. This is especially important, as many of our previous investors have redirected their financing to alternative energy ventures and other new businesses at the expense of oil and gas companies. Without additional capital investment, energy companies may not be able to satisfy global oil and gas demand.

Currently, according to Wood Mackenzie, planned investment in oil supply falls about $600 billion short of what will be needed globally to meet projected demand in 2030. Exploration companies will need to increase drilling budgets by 54%, equating to more than half a trillion dollars, to forestall a significant supply deficit in the coming years and the inevitable resulting energy poverty. Our advocacy efforts at IADC can help foster more favorable public perceptions of the benefits of oil and gas, facilitating a broader understanding of the negative social and economic effects of diminishing our capacity.

IADC provides several avenues to assist, including through committee membership. Last year, IADC added two new committees:

Sustainability Committee – seeks input on the principles, ratings and frameworks that make the most sense for drilling operations; and

Energy Efficiency Subcommittee under the Advanced Rig Technology Committee – aligns operators, drilling contractors, vendors and regulators in the overall energy transition.

IADC is also continuing to advance initiatives started in prior years, ranging from technical committees to IADC’s government and industry affairs team. IADC’s efforts span from Europe, the UK, Brazil, the Middle East and onto Asia Pacific, Australasia and Latin America. Cooperation is achieved by reaching out to regulators, public officials and the public to educate on the value of our industry’s work, thereby helping to shape regulations.

In a recent article in The Atlantic, IHS Markit’s Vice Chairman Daniel Yergin suggested the term “energy transition somehow sounds like a well-lubricated slide from one reality to another. In fact, it will be far more complex.” He points out prior energy transitions were “energy additions – one source on top of another,” not “an almost complete switch … from hydrocarbons.” Complicating this, he writes, is a lack of understanding of the “degree to which the world depends on oil and gas.”

This fundamental misunderstanding could lead to irresponsible and detrimental regulation, bureaucracy and funding deficits that impede investment in technologies needed to achieve carbon reductions while delivering vital services. These are important issues for our industry. Therefore, I ask industry professionals to please consider donating to DRILLERSPAC. DRILLERSPAC is our industry’s political action committee (PAC), which is planning its first in-person events this year in Houston and Washington, DC. The PAC studies the policies and voting records of candidates and donates funds to the campaigns of those who stand up for drilling.

Standing up for drilling and the value our industry creates is something we all must do for a multitude of reasons, including attracting the next generation of talent – this is absolutely critical as the drilling market recovers. The opportunities for next-generation drilling professionals will be plentiful for those who are smart, ambitious and believe in the value this industry creates.

I believe in the value our industry creates worldwide and hope you do, too. Let’s work together to make sure our industry’s value is better understood in 2022. DC

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