New Paradigms in Industry: Corporate Donations of Geophysical Data
I would like to discuss some recent donations from private industry of geophysical data that had been completely proprietary and now are in the public domain. Three energy companies recently donated large collections of rock samples to The University of Texas at Austin. I am a geologist at the Bureau of Economic Geology, which is a research division of The University of Texas. As a geologist, I find these donations of unique rock collections to be very exciting.
These data had been held completely proprietary from the time they were collected, but they are now in the public domain. I will stress in my presentation that these donations were made possible by the accompanying financial gifts that have been given along with the data, and also by government grants that have made it possible for The University of Texas to accept these data.
Before I tell you more about these donations, I would like to tell you a bit about what these data are and why we consider them so important. Geologists need rocks. They are the key for conducting academic research in geology, and they are also important in developing natural resources. Many of these rocks are very expensive to acquire and would be very difficult to replace. Obviously, this is not true about all rocks. A geologist can go out with a rock hammer and collect samples from an outcrop; these samples are not expensive to acquire and would be easy to replace. But rocks collected from the earth’s surface only sample the thin skin of the earth. Geologists need three-dimensional data. The rock samples in the industry donations were taken in wells that were drilled two or three kilometers, or even deeper, into the earth. These are very expensive to obtain and would be very difficult to duplicate.
There is an important constraint that makes geologic data perhaps a little different than other data we have been discussing in this symposium. We are not talking about digital data; these are actual physical collections— rocks that are heavy and take up a lot of room. It takes strong people to get them out of storage and to lay them out for the researchers. These are real constraints to the ability of The University of Texas to accept a data collection. It is not simply a matter of acquiring computer data disks.
When oil companies drill wells, they can be very expensive; for example, a shallow well onshore in the United States can cost several hundred thousand dollars. Deeper wells and wells drilled offshore can cost more than a million dollars to drill. Many companies will use special drill bits to cut rock samples (cores) as a well is being drilled. In the United States, these cores are owned by the company that acquires them. They are able to keep the cores completely proprietary and use them for their own purposes. For the last 50 years, most large oil companies
in the United States had their own private core collections that they would use internally within that company. In most cases, these cores were not made available to anyone outside the company.
Currently, in the oil industry, many of the research labs and private core facilities are closing. The companies are finding that they have several choices of what to do with their core collections. They can keep them, but there is an expense involved in doing this. It is expensive to maintain a facility or rent warehouse space to store rock. Another choice is to discard the cores. This may be the least expensive choice, but it is not without cost. Core collections represent a large volume of material, and discarding the rocks would involve some expense. Or they can choose to donate the data, and several companies have recently done this. As a matter of fact, I am not aware of an instance of any large oil company that has closed a repository and thrown away the rocks. Oil company executives realize that this is valuable material that would be a shame to throw away. So they are exploring the options and developing business models for donating it instead.
The decision to donate material to a public facility must make business sense to the company considering the donation. Although cost avoidance, such as staff salaries for maintaining the collection, rental of warehouse space, and other operational costs, is a big factor in the decision to transfer data from the private to the public domain, it is rarely the only reason. These decisions are usually based on several issues that include cost savings, as well as other factors such as continuing access to the data without the overhead, preservation of the data in case there is a return to it for unforeseen reasons (oil and gas data might someday be used to explore for water, for example), goodwill with the community (data may be used for education and outreach), future disposal costs, and, when endowments to fund the facility are included, tax incentives.
The first of these donations was made in 1994 by Shell Oil Company to The University of Texas at Austin. They developed a model that allowed the university to accept this donation. Shell had a huge amount of rock material to donate, and with no additional resources, the university would not have been able to accept it. However, in addition to giving the rock material, Shell also donated the Midland, Texas warehouse where they had stored the cores, so the university would have a place to keep the rocks. The other important factor was Shell’s donation of $1.3 million toward an endowment; the money in the endowment could be used by The University of Texas to operate the facility and make the data available to anyone who wanted to use them. Thus, we have an example of a physical collection that had always been proprietary, which has now entered the public domain. It can be used by academic researchers, and it can even be used by geologists from other oil companies now.
The amount of money that was provided by Shell was very generous, but it was not enough to completely endow the facility. The University of Texas received a bridging grant from the Department of Energy (DOE) to operate the facility for five years. This was very important, and enabled the donation to proceed. With this government grant to pay operating expenses, the university could reserve the money that Shell had donated. Additional money was raised to increase the endowment, and now the amount of money in the endowment covers the operating expenses of this facility.
A few years after Shell made this donation, another energy company, Altura, also wanted to donate their cores. The Altura cores were also stored in Midland. It did not make sense to have two different warehouse facilities in different parts of Midland, so Altura donated money to build another warehouse adjacent to the former Shell warehouse. This way the cores could physically be in the same place, and the same staff would be able to curate both collections. This was another important model, a little different than Shell’s donation, which allowed the Altura donation to happen.
In August 2002, British Petroleum (BP) made a large donation of cores and cuttings from oil and gas exploration wells. They also donated the warehouse in Houston where they had stored this material, along with a research building and 12 acres of land. Again, following the Shell model, they made a $1.5 million donation toward an endowment. This monetary donation makes a very important contribution toward an endowment to run the facility. The university will be attempting over the next several years to build up that endowment so it is enough to operate the facility. DOE has provided another critically important grant for the initial operating expenses of this facility.
One exciting aspect of the BP donation is the office and lab facility that they gave along with the warehouse. The building includes modern core examination rooms with roller tables and excellent lighting for viewing cores.
There are also lab rooms that can be used for various analyses. Finally, there are other facilities, including conference and lecture rooms.
In addition to giving the rock material, all three of these companies have provided data to go along with it. These rocks would be worthless if we did not have any information about them, such as where they came from. So a key part of each donation is the information that comes with it. The companies have provided the name of the well, the geographic location where the well was drilled, and the depth of the cored interval. That information is key for researchers to figure out what the samples are and whether they would be useful for a particular research project. In most cases the companies have also provided a unique well number, which allows a researcher to get information from some of the commercial databases. For example, if a researcher knew that there was a core available from a particular well, she could then purchase a geophysical log from that well from a commercial database that owns the rights to the geophysical data. The information that has been supplied in addition to the rock is key to its use in the academic community. All these data are now available on the Internet, so anyone anywhere can search the holdings and decide if there is material that they would like to use.
Why, you may wonder, would a company donate proprietary geologic data to a university? The answer is that the company had completed its use of the core for exploratory purposes and therefore felt the best use of the material would be to donate it to an academic research facility. As Lord John Browne of Madingley, BP Chairman and CEO, stated in announcing the BP donation, “these are valuable books, but we’ve read them.” At the time these cores were taken, they were acquired for a specific purpose. The company may have been operating a field and needed rock information about that field to produce it more efficiently. Or the company may have been exploring a particular geographic part of the country and needed background information about what the reservoirs in general are like in that area, and these cores provided key information. Most of these companies no longer are exploring in the United States, and in many cases they have sold their fields to smaller companies. From their point of view, they have obtained the information they needed. However, they realize that the cores retain tremendous research value, and so they are willing to make these data publicly available.
As a result, these proprietary geologic data are entering the public domain, and they form important material for current areas of research, such as stratigraphy, sedimentology, and diagenesis, as well as areas of research that we have not even considered yet. This material is now preserved, so someday in the future, when somebody realizes how to use it in paleoclimatology research, for example, or some other field that we currently do not know how we can use the information, it has been preserved and future scientists can use it. If there is a new analytical technique that is developed in the future, the material will still be there, and new uses can be made of these rock samples. Of course, it is also a very important source of material for student theses and dissertations, and it is still of value in oil and gas exploration and production. Even though there are different companies operating in the United States now, usually smaller companies, these data are still of importance to companies producing from mature oil fields.
In conclusion, these companies have developed a business model for donating proprietary rock data to the academic community. These donations allow valuable, irreplaceable physical collections to enter the public domain. These donations were made possible by the accompanying donations of the physical space in which to store the rocks, and financial resources toward the cost of curating the cores and making them available to others. Finally, government grants have made a very important contribution to enabling The University of Texas to accept these donations by providing critical funds for the initial operating expenses while an endowment builds.