Two months ago a roaring stock market and a bit of mid-east tension had given a boost to oil prices and I commented, in this column, that it might be a good time to dust off an old prospect. At the time my column was published in early January, who among us would have predicted that within 60 days a strange new virus would cause a 3.6 trillion dollar stock market meltdown, fears of a protracted global slowdown in economic activity, and an associated 25% drop in the price of oil. Certainly not me.
The headlines of the last couple of weeks got me thinking about how unexpected events impact our lives and our business. In the early 1990s, when my geoscience career was still in its toddler stage, I was fortunate enough to attend a five day risk and uncertainty course taught by Pete Rose, who is well known in the business for his pioneering work and teaching in the area of risk analysis. One of the first things we learned in the course, and a core concept, is that when you pose a scientific question, the uncertainty, or the range of possible outcomes, is often much greater than you initially think. We’re all experienced people in the company I work for, well aware of the concepts of risk and uncertainty, and when we’re evaluating an oil and gas business opportunity we ask each other this question: if this prospect turns out to be a failure, what causes the failure? Despite considerable experience, a range of opinions, and efforts to be cognizant of the full range of possibilities, we still end up, on occasion, saying to each other: well, I didn’t think this project was a slam dunk, but I never thought that THAT would go wrong.
There are a whole host of possible reasons why we may not do our absolute best when it comes to assessing a full range of possible scientific outcomes. Some are systematic—earth systems can be complex and chaotic, there may be a lack of data, or the data may be of poor quality. Here, we should at least recognize that all of these characteristics should push us in one direction, toward greater uncertainty. Some are related to the human condition—we may lack imagination, be self-interested, or feel pressure from peers or supervisors.
As an oil and gas geoscientist, the primary reason to be honest about uncertainty is to make better business decisions. A research scientist should want to add knowledge and understanding that can withstand skepticism, scrutiny, and time.
In a month’s time, when I next write this letter, let’s hope the impact of the coronavirus is understood and under control. Let’s also hope that the next unexpected outcome, in life, in business, in science, is something we have at least imagined. If we’ve imagined it there’s a chance we’ve also prepared for it.
Best regards,
Trevor Casper
