july 2009 issue

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The Geo Beat
Learning From Our Failures

BY TOM SNEDDON, P.GEOL.
APEGGA Manager, Geoscience Affairs

Do we, I often wonder, put enough emphasis on our failures? Are we exploiting them for the lessons they hold?

In April 2008 I attended the SEG Distinguished Instructor Short Course entitled Reservoir Geophysics: Applications, presented by William L. Abriel. The presentation was sponsored by the Canadian Society of Exploration Geophysicists, the Society of Exploration Geophysicists, and the European Association of Geoscientists & Engineers.

It was an excellent course and the seven hours flew by.

During the presentation, Mr. Abriel digressed slightly to mention the example case history in the textbook was a little too good. In real life, 4-D seismic often produces ambiguous results and isn’t always so easy to interpret.

He went on to say it’s a shame companies junk the cases that fail, often without any internal attempts to learn anything from the failure. They certainly do not make these cases publicly available for the geophysical profession to learn from.

I couldn’t agree more with Mr. Abriel. One of my favourite observations is that engineers tend to learn most about their profession through their failures, while scientists in general and geoscientists in particular obsess about their successes. The reason usually given for this disparity in approach to professionalism is that engineering failures tend to be spectacularly public, while geoscience failures result in a dry hole or a sub-economic deposit that is only noticed by the shareholders, who were presumably prepared for that outcome.

I say “presumably” for a reason. Shareholders are briefed in advance of drilling that success is a game of probabilities. Even the most experienced and successful exploration team can do no better than promise to improve the odds that the investor may profit from a particular venture.

In fact, the Association of Securities Administrators of Canada issued National Instruments 51-101 (oil and gas) and 43-101 (metallic and industrial minerals) as the ground rules for disclosing technical information to the investing public to ensure investors receive the whole story before putting their financial support behind a venture. We don’t have to look very far back in history to recall why many companies (including the majors) had booked reserve write-downs because they didn’t agree with the way they were arrived at.

More recently we also saw write-downs occur because we didn’t get our pricing estimation procedures clearly stated to the same United States regulator that invoked an arbitrary valuation day. Since the oil and gas were real enough, they reappeared later.

Unfortunately the stock market reacted to the news badly. Sometimes the truth hurts, but that doesn’t reduce our obligation to deliver it.

There is nothing in the rules that requires us to explain what we learned from a given exploration program that came up dry. An ethical question we need to ask ourselves is, “Do we have an obligation to the investors and the regulators as professionals to wring the last bit of information from all that expensive seismic and drill hole data we collected before boxing it and sending it to archives?”

I believe we do, but I would like to know what colleagues in the geoscience professions think about it. Are there companies that, right now, require a full post-mortem after a dry hole? I would like to know about that, too.

Which brings up the concept of applying professional stamps to documents. Many geoscientists I have discussed this with have never used (or have never even possessed) a stamp. The usual argument for this non-practice is that nothing they do requires it.

The APEGGA Practice Standard for Authenticating Professional Documents can be downloaded from the APEGGA website at www.apegga.org. (Go to Publications under Fast Find, then click on Guidelines in the table of contents. It’s item number 26.)

The obligation to every member is to ensure that the final version of any professional document as defined in sections 6(2) and 8(2) of the Engineering, Geological and Geophysical Professions Act is authenticated with the date, and both the stamp and signature of the responsible professional. 

A good professional practice plan requires that any decision document should be signed and stamped by the person who was responsible for the document. If a team of professionals was involved in producing a complex report, the supervising professional signs and stamps the highest order document, which may be a summary report or map, that signifies the supervisor relies on the quality of professionalism shown by each contributor.

Each contributor also signs and stamps his or her contribution to the final product. This may be an appendix or it may be on the report proper below the signature of the supervising professional. The process is described in detail in Guideline for Relying on Work Prepared by Others (item number 29 in the Guideline page of the website).

The application of these two guidelines will be dealt with in detail in the September PEGG for the most basic geophysical program documents.

In closing, enjoy your summer vacation! My first year on the job has been exciting, interesting, rewarding, tiring and sometimes frustrating. The best part has been talking with colleagues in all three professions and hearing their views on professionalism; technology; life; and the whole thing.

I would like to thank everyone who has confided in me about professional life and look forward to meeting many more of you over the next year.