An open letter to the president of the SPE

Oil IT Journal Editor Neil McNaughton writes to the President of the Society of Petroleum Engineers, Behrooz Fattahi to advocate freer access to the SPE’s publications, suggesting an alternative way of ‘accounting’ for societal revenues and questions growing commerciality in the SPE’s output.

Dear Sir,

In your Conversation column, ‘The Matter of Money*’ in the February 2010 issue of the Journal of Petroleum Technology, you report that in your travels, one question that you are always asked is, ‘Why [the SPE’s] services and products are not free.’ You report that one audience member accused the SPE of ‘not being serious about technology dissemination’ because of its paid-for publications policy.

I think that you do well to report on such interrogations, which echo my own March 2008 editorial where I called for open publication by the learned societies. Back then I noted that the ‘preponderance of information on the web is unscientific chit chat .. a medieval world of charms, half-truths and snake oil.’ While the chit chat is free, the science often is not, and the whole body of publically available knowledge is skewed away from peer-reviewed, authoritative content towards self-publicists, commercial interests and the ‘crazies.’

Just to show that ‘free’ need not equate with ‘loss-making’ I note that, from this month, Popular Mechanics has opened up access to its back issues. The UK’s illustrious Royal Society likewise offers free access to its Journals after a year or two of paid-for use. And, modestly, our own Oil IT Journal, an entirely ‘commercial’ publication, has been doing free (for all of our content over a year old) for the last 15 years and we are still going strong.

Oil IT Journal operates of course at a rather different scale from the SPE. Our ‘commercial’ activity has a turnover of roughly one hundredth of that of the ‘not for profit’ SPE. ‘Commercial’ in this context by the way means making a living from writing, rather than from advertising.

But to get back to your editorial. If I can briefly summarize your argument. You argue against free Journal access from a cost accounting stand point. Publishing all this stuff costs a lot and is a loss-making activity that is subsidized by the SPE’s conferences and tradeshows—the Annual Technical Conference and Exhibition, Offshore Technology, Intelligent Energy and the like.

But there is more to accounting than cost and a balance sheet is about more than cash flow. The figure in your editorial shows membership as a downward-trending ‘cost center’ that is losing the society a couple of million dollars per year. But this analysis fails to account for the true value of the membership to the SPE.

To appreciate what is missing in the analysis, imagine for a moment that the SPE spun off its profitable conference activity as a separate business. This would leave the membership and publishing activities as a large loss-making rump. Could the rump survive once deprived of subsidy from the tradeshows?

We are in the realm of speculation here, but my contention is that the ‘loss-making’ bit may actually do better than the ‘profitable’ conferencing business. Why? The answer is simple. With a 92,000-strong membership and a popular website this should be a rather successful concern. Membership fees represent a few million dollars after all—a a nice amount of ‘seed capital’ for a new venture! And sponsors would very keen to engage the membership bringing in more revenue streams..

Now lets turn to the other half, the conference organization. I wonder how long it would last and how its finances might develop. I suspect that, cut off from its membership, the Conferences section would wither away. It would also face stiff competition from other tradeshows.

How do we ‘account’ for this? You take the whole, split into ‘moneymaking’ and ‘loss-making’ parts and, a few years down the road, ‘moneymaking’ is struggling while ‘loss-making’ is doing fine. This is where the cash flow analysis falls short, failing to take account of the goodwill that the membership brings to the table. The real ‘hidden’ asset of any learned society is the goodwill, both in an accounting sense and figuratively, of its membership

The strong positive cash flow from commercial sponsors, the millions of dollars of booth space, advertizing, product placement and so forth is part chimera, part dangerous distraction as it takes attention away from the needs of the membership and towards commercial sponsors. This is, I feel, reflected in the growing amount of non peer-reviewed content that the SPE puts out—often provided by the aforementioned commercial entities.

The arguments for and against free access are presented in depth in a position paper from the Royal Society**. This is actually a defense of the role of a ‘commercial’ publisher as used by the Royal Society on the grounds that managing the publishing cycle and peer-reviews costs money.

While the SPE’s ‘heavyweight’ specialist publications do receive attention from the reviewer, much of the content in the JPT is unrefereed, as are papers presented at the tradeshows. This again leads to creeping commercialism, fueled by the focus on cash-flow. The current presentation guidelines in regard of commercialism are in need of a major refresh as they stifle honest discussion of technically significant products and software while letting through many a ‘commercial presentation’ as long as it is suitably drafted and delivered by a suitable ‘sponsor.’

The SPE’s finances all derive from the goodwill provided by its membership. I think that the requests made by members around the world and myself, should be reconsidered in the light of this. After all if Popular Mechanics can do it, if the Royal Society does it, why not the SPE too? Practically speaking I suggest that all SPE publications should be free to members from the date of publication. Public free access could click in after a year of exclusivity to members, which would ensure that pretty well everyone paid their dues. It would also add a significant body of knowledge to what is available on the world wide web, redressing the balance in favor of public science.

Yours truly,

Neil McNaughton (SPE).

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