Have you ever had that experience where the roads in your local area are successively dug up month after month by various utility companies all doing different jobs, but in the same place? When that happens, we find ourselves asking “Why can’t somebody co-ordinate all this?”. The benefits would include reduced disruption time, reduced pollution, knowledge sharing and reduced costs for each of the utilities concerned.
Can we apply a similar philosophy to the subsurface industries on a planetary scale? It’s difficult - after all companies need focus. Some companies have tried over the years to do subsurface things from a more holistic point of view – a number of big mining players have tried both hydrocarbons and minerals. Some big utilities from UK, France, Germany, Italy & Japan, have tried to do both hydrocarbons and electricity generation from other industries. The results from these twin-track efforts when conducted on a global scale have been mixed, and rarely stellar.
This is a time of great upheaval in subsurface industries, and in how our planet views resource exploitation. Could it be time for a new kind of subsurface company? One with a national or regional focus, but which covers all aspects of the subsurface resources? I’m talking about hydrocarbons (both conventional and unconventional), minerals, and geothermal. The geophysical, drilling, big-data and environmental know-how of the 21st century is increasing at a rapid pace – but these things are not cheap, and all come with technical and commercial risk. Any potential for shared costs and shared risks and shared disruption times would have benefit to all. The ability to talk to the public authoritatively and coherently at once about all aspects of the subsurface would help obtain that very necessary “social licence”.
The problem is that each of these subsurface potentials are very specialist tasks, so any such company would run the risk of being “Jack-of-all-trades” and "master-of-none". Perhaps the answer is something in-between – a kind of larger umbrella company that does business with a range of smaller & specialised local companies in its region. The larger company can bring capital, additional specialist expertise, and sufficient clout to sit at the table with government organisations that address energy, minerals, and environmental policies. It can have a managed portfolio of projects that will share risk. In this way, it can bring momentum to many individual projects that are currently stalled because of smaller clients and investors wary of geological risk. The deep geothermal scene in the UK is perhaps an example.
The public, rightly, are demanding that governments and industry deal much more carefully with energy and materials provision in the future. The luxury of different industries ploughing ahead with various subsurface explorations, especially onshore, without exhaustively examining ways to share cost and risk and minimise disruptions to the environment, may soon be a thing consigned to history. This will become increasingly important as the world wakes up to a coming demand-crunch for the minerals so vital to the renewable energy scene. China, India, Europe, North America, and Russia, and the larger emerging economies, will soon be clamouring and competing for a very finite supply of strategic metals and rare earth elements that the renewable energy industries depend on.
Do-able dream or doubtful distraction?
It may be an idle or naïve thought, and perhaps a utopian vision that will have many difficulties in practice, but here at Paetoro at least, we are having fun thinking about this issue. The thought that within certain onshore focus areas that do have multi-industry potential, subsurface exploration strategy can perhaps be more “joined-up”, covering hydrocarbon, strategic mineral, and geothermal potential in the same pass. Our focus areas have been selected with precisely this in mind.
I suspect some of the world’s super-majors and NOC’s are beginning to think like this. Maybe though, the opportunity is ripe for new companies to seize the day – those that have less historical baggage but who have been around long enough to sit comfortably with geological risk. If you already work in such a company, excuse my ignorance for not mentioning you, and please do get in touch! I'd love to learn more about what you are doing.