By Peter Duncan, PhD
Founder & Co-Chairman, MicroSeismic, Inc.
As I sit in my office anticipating the holidays, the family time, the good eats, I don’t feel the least bit sad that 2015 is almost over. Frankly, this has been a terrible year for our industry in general and MSI in particular. We have been stripped of probably 4 or 5 years of revenue growth from our business and endured the pain of “right-sizing” our staff levels proportionately. Right now it looks like we will enter the New Year with the rig count below 700 and oil trading below $40, setting us back to where we were in 2008.
But let’s look at this from another perspective. Take this quote from Mike Binnion, CEO of Questerre Energy. Mike writes a semi-regular blog with a Canadian oil industry focus that I always enjoy reading. In his December 8 blog he makes the following observation: “Since 2008/09 America has revolutionized the world by changing the global energy paradigm. They did it with disruptive innovations in fracking technology. They have fueled their recovery from the financial crisis while at the same time being the only G20 country to meet Kyoto targets. Many in the US are calling hydraulic fracturing a green technology as a result.”
It’s interesting that one of the first fund-raising presentations I ever made on behalf of MSI and our frac monitoring business was at a greentech venture conference back in 2006. Frac’ing was not nearly so well known a process back then and shales were still largely George Mitchell’s playground. I felt distinctly out of place. But what Mike says rings true. America now imports less than 50% of its hydrocarbons once again. The use of natural gas to generate electricity is helping us reduce our carbon footprint. Cheap energy is fueling a rebound in our economy. Unemployment is down. And I can now fill my gas tank for $30 instead of $50. The success of our industry has put money in almost everyone’s pocket, but has cost a lot of my colleagues their jobs. We are victims of our own success.
In 1973 there were lineups at the pump, gas shortages and rationing all over the country, and reputable predictions that we would be out of hydrocarbons by the end of the decade. You almost had to take out a mortgage to fill your tank. Gas prices jumped 36% in 1 year. Amazingly, in constant dollars, it costs less to fill your tank today than it did then. So while we celebrate the passing of 2015, allow a little time to applaud and give credit to what the industry has achieved. Every time you fill up at the gas station, see a sign advertising gas at under $2/gallon or simply drive by a gas pump, let that trigger a reminder of what got us through that crisis to where we are today – oil industry innovation. Then pray for a little price stability so we can get back to work.