A Time for Action The Importance of the Petroleum Engineer

McCOLLUM, L.F., MEMBER AIME, PRESIDENT OF CONTINENTAL OIL CO., HOUSTON, TEX. A Personal Responsibility As chairman of the API Board of Directors, one of my efforts this year will be to remind oil men that the responsibility for rescuing our business from its present predicament is in our own hands. The industry's healing must come from the energy and initiative of its own members. This paper concerns what we can do to help the producing end of the business fulfill its economic potentialities. If petroleum engineers and all the other groups in the petroleum industry will join me in the determination to face up to reality and find realistic solutions to our problems, then I firmly believe we can find our way out of the economic wilderness faster and in much better shape than may now seem possible. Unified Action in a Time of Crisis The record of this industry shows it can act quickly and effectively in a crisis. This we have proved again and again. We demonstrated it by supporting enlightened conservation policies when the unprecedented floods of oil pouring out of the East Texas and Oklahoma City fields threatened to drown the industry in an ocean of wasteful overproduction. We proved it in World War II in a way that this country's enemies will never forget and again in Korea and also during the Suez crisis. We can prove it now. There is no question of having the ability. We have it. The need is to use it now. The Influence of SPE The Society of Petroleum Engineers is a potent and highly respected force in the oil business. Its membership represents all phases of drilling and producing and includes people in top management, together with those more closely involved in conducting day-to-day operations and in carrying on basic research. Many of you are also members of various oil-industry organizations such as the API, IPAA, Mid-Continent Oil and Gas Assn., and others. You are known in the industry and your opinions have a decided impact on operations. In your own companies you are decision-makers, or the experts whose views form the basis of action taken by top management. You can exert a tremendous amount of influence toward overcoming many of the basic problems facing our industry today. No group. for instance, is in a better position to see that the industry understands the importance of applying good judgment and common sense in determining which wells need to be drilled and which can be avoided or deferred to a later date. The technology you yourselves have developed has revolutionized the whole concept of oil production. Now it is up to you to insist that the industry's performance is equal to its knowledge. All of you are acutely aware that the petroleum industry is beset on all sides by pressures which are tending to. narrow profit margins and to reduce our return. on investment. Costs continue to increase, prices are under downward pressure and very little growth has taken place in domestic crude-oil production in recent years. This is due in large part to a sharp slackening in the growth rate of demand and to the fact that we are stuck with substantial overcapacity in virtually all phases of our operations. Speed Up Industry's Efforts Being true to its own character and tradition, the industry is meeting these problems head on and will eventually solve them. What I propose is that we speed up the process. And that's where your leadership is needed. Within your own companies, each of you should preach the gospel of good judgment and plain common sense about drilling development wells. Each of us should make it a rule, and advise others to make it a rule, to ask of each new development drilling project, "Is this well necessary? Is it necessary now?". This is a major way by which we can get at the causes of our problems instead of bemoaning the effects. It is a challenge to you that can turn into one of the biggest opportunities of your careers. We should urge other branches of the industry that an all-out effort be made to overcome lagging demand by thinking up ways to stimulate consumption of gasoline, fuel oil, asphalt and everything else that comes out of a refinery. We should make every effort to expand research to find new uses for petroleum and new petroleum-based products. Let us plug for innovation and invention and imagination up and down the line-and for self-discipline, too. P. 345^