One of the many sources of incomprehension between US and European geologists, beyond calling Devonian Pennsylvanian (or vice-versa) and figuring in feet instead of meters, is the royalty check. A European geologist’s reward for discovering a 100 million bbl oilfield may be a pat on the back, but an American, even early in his or her career may be cashing a number of (probably small) checks in respect of stripper production in the boondocks.
Europeans know about corporate farm-ins and outs, but a significant part of the US scene is driven by deals. A geologist works up a prospect and then promotes it to a corporation which gets the land, drills the prospect and if it is successful, rewards the ‘inventor’ with the famous royalty check. As you can imagine, the moment a geologist walks in to Big Oil’s offices is a potentially dangerous time. What’s to stop the big guy stealing your idea without a by-your-leave?
AAPG president Robbie Gries speaking* at the opening session of the AAPG conference in Houston last month electrified the assembled ageing geologists, awardees, spouses and acolytes with a tale of double-dealing worthy of a Cohen brothers movie. One Gries ‘case history’ involved an AAPG member, the VP of a major company, who agreed to review her deal. The company took a couple of months reviewing the project, all the while assuring Gries that they were looking seriously into the deal, asking her not to show it to anyone else and so on. In the end, they called to say that management has turned the deal down. End of story. Except no, in the interim they had run geophysical surveys, leased adjacent land and were starting their own project on the same play.
Gries considered that the VP and his geologists ‘were clearly dishonest, unethical and despicable.’ Gries did not attempt to seek redress for this particular wrong. At other times in her career she was involved in litigation - and discovered that it is a costly and unpredictable process. To offer wronged geologists another form of redress, Gries is advocating that the AAPG should consider taking its own code of ethics more seriously.
The AAPG’s Code of Ethics offers a range of sanctions for misconduct. From a private admonition through temporary suspension to expulsion. But... in the last 10 years, the AAPG has not brought a single ethical charge against a member. Gries reasons that ‘we are either exceptionally ethical or just not bothering to initiate a grievance.’ Gries’ suggestion is that the AAPG should either apply its ethical code or abandon it. If it chooses to enforce the Code - she asks an important question - is the membership ready to devote funds to defending the Association in its enforcement of the Code? An action which may well entail paying considerable monies to insurance companies and their lawyers!
Apache Corp.’s Larry Brown, in a guest editorial for the Journal of Petroleum Technology (March 2002) makes a similar case for bolstering the Society of Petroleum Engineers’ Guide for Professional Conduct. Brown argues that the SPE ‘should adopt a Code of Ethics and Professionalism .. [which is] .. broad, encompassing the core ethical and professional practice criteria of existing licensing organizations.’ He further advocates the setting up of ‘appropriate enforcement mechanisms’ and the devotion of a proportion of the SPE’s publication effort to discussion and education in these fields.
Hearing Gries’ story of shady practices I was reminded of many stories of software developers who showed their embryonic ‘killer app’ to large corporations. They too had their business proposals rejected - but then saw the corporation launch an identical product shortly afterwards. I am not sure if my view of such cases reflects that commonly held by the programming community, but my impression is that anyone walking in to large corporation with the next Excel (or should that be Visicalc?) had better arm themselves with some watertight contractual documentation before stepping into the lion’s den. I don’t hear many calls for ethics in this context either. The assumption is rather that everyone will be as unethical as they can possibly be. The only restraint being such contractual engagements as cannot be wriggled out of after the fact.
It’s the law!
This raises an interesting question. Where do you draw the line drawn between the law and ethics? What constraints on these deals should we expect to be contractual and what should derive from a Code of Ethics? I am not sure what the answer to this question is - it probably depends on a lot of things like local laws, circumstances and culture. But I think the question, when turned around give us some insight into the problem. If we separate from a Code of Ethics those issues which are normally dealt with in contract law, we have the beginnings of a natural division of labors.
If you can write a contract to cover the disclosure and non-exploitation of a geologist’s prospect that can be defended in a court of law, then there should be no need to ‘re-legislate’ for such activities in a societal Code. I’m not sure what geological or engineering activities really cannot be handled by contract. Doctors need ethics to help decide life and death matters like whether to treat a patient with no insurance - but geologists? Maybe the AAPG could help out by drafting some type contracts for typical deals - but my feeling is that ethical enforcement would be a potentially ruinous course for the Association.
*You can read a summary of Robbie Gries’ arguments in the April 2002 AAPG Explorer.
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