Fall 2012

Drilling into the data
Michael Barley

Drilling into the data

Oilman says facts are clear that CO2 is a threat

When Matt Telfer ’78 wraps up his talk, Energy Trends of the Future, his point is clear: Carbon dioxide is the villain in the climate-change dramas manifested as storms, droughts and temperature extremes around the world.

That’s particularly sobering, coming from a Texan who makes his living drilling for gas and oil.

Telfer has given this talk 10 times since he was named a 2011–12 Distinguished Lecturer for the American Association of Petroleum Geologists (AAPG). When he returned to Binghamton University to address the Geology Department, his parents listened from the back of the classroom. Telfer, who grew up in Vestal, is an entrepreneur and geologist, a hiker (all 46 Adirondack peaks) and a guitarist. He has a geologist’s love of the outdoors, an oilman’s perspective on drilling and an environmentalist’s alarm about global warming.

“I was always fascinated with finding oil,” he says. “I did a science fair experiment in fifth or sixth grade that showed how oil rises to the top of an anticline [a fold in a rock formation]. I wanted to go into petroleum; I knew there would be a lot of jobs. In high school, I asked a substitute teacher who was a Binghamton geology major what it would take to become a geologist. He said, ‘Go right here to Binghamton because they have one of the best geology programs in the country.’”

Today Telfer is CEO of Border to Border Exploration and BBX Operating, with 40 full-time employees (two are Binghamton alumni), which he founded in Austin, Texas, in 2001, after spending more than 20 years learning the petroleum industry from the underground up.

Petroleum geology is a great field, he says, but it’s a boom-and-bust business. “You’ve got to work really hard when times are good and twice as hard to stay in it when it’s bad.”

In 2010, the Oil and Gas Financial Journal named BBX Operating one of the top 100 private producers in the United States.
Despite Americans’ dependence on fossil fuels, petroleum businesses are subject to pressures from both inside and outside the industry.

“It’s always been influenced by worldwide politics,” Telfer says. “When I got in, we had the Arab oil embargo, when cars could get gas on even or odd days based on their license plates. Now, from an environmental standpoint, you have a lot of resistance to the oil and gas business.”

Resistance is a polite word to describe the flogging that the petroleum industry takes over two issues: climate change and hydrofracturing.

Doing his homework

In 1999, the AAPG issued a policy statement rejecting the likelihood that humans were influencing the climate — a position widely criticized, even by some of its own members.

In 2007, the association acknowledged that humans are churning more carbon dioxide into the atmosphere, but stopped short of linking that to climate change, saying, instead, that climate variations could be natural fluctuations.

“I put some faith in their conclusion,” Telfer says. So when the AAPG asked him to talk about energy trends of the future, he saw an open invitation to explore the topic.

To better understand carbon dioxide and its role in climate change, he asked Bob Demicco and Tim Lowenstein, professors of geological sciences and environmental studies at Binghamton, to coach him. Both have published papers on the topic.

“Carbon dioxide is one of these politically charged issues with lots of misinformation,” Demicco says, and Telfer did his homework.

His conclusion: The AAPG was wrong.

“What the AAPG said was that we might be looking at climate variations that are within the norm, and what I’m seeing is that’s not the case,” Telfer says. “The climate variations we’re seeing are the direct result of carbon-dioxide content.”

In response, the AAPG notes that even though its members are divided on the degree to which carbon dioxide affects global temperature change, the organization welcomes scientific discourse and research on the topic.

“There are a lot of geologists out there who share my concerns,” Telfer says, “but a lot of us don’t have time to dig into the science because we’re running oil companies. I’ve been able to take a pause and consider the volumes of carbon dioxide we put into the atmosphere and what will happen to it. The most significant issue is how long carbon dioxide stays there. If it is just 10 years, it would be reversible; if it’s 1,000 years, then we are going to be affecting the next 30 generations of humans. Every study of the carbon cycle I’ve looked at indicates it’s thousands of years.”

So what does an oilman think should be done about climate change? First, Telfer says, “Accept that it’s real and likely to get worse. Second, take a hard look at where and how money is being spent to find solutions, because we are squandering time and resources.”

Renewable energy sources such as wind, sun and hydropower should be developed, but are not going to make a significant impact on carbon-dioxide production anytime soon. “The overriding factor is that the world needs 500 quadrillion BTUs of energy each year, 60 percent of which is supplied by coal, oil and natural gas.” So far, Telfer says, citing U.S. Energy Information Agency statistics, the use of renewables in the United States has reduced annual worldwide carbon dioxide emissions by just 1 percent.

“We’re investing billions of dollars into renewables, as a country, and in the meantime, here comes China. They’re going to double their carbon-dioxide output in 25 years,” he adds, using International Energy Agency projections.

So far, we don’t have an economically competitive carbon-free energy source or a flexible infrastructure to take advantage of alternative sources of energy, he explains. “If we don’t have a solution that creates economically competitive green energy, and our energy costs more than in other countries, we put our economy at a competitive disadvantage. That means further job losses on top of the 5 million manufacturing jobs the United States has already lost.”

Telfer believes that North America has the natural resources and the scientific and technical abilities to become energy independent in a mere 30 years. “The stronger we make our economy, the faster we solve energy issues,” he says.

Untapped resource

One of the resources that would contribute much to energy independence — with less carbon dioxide per BTU of energy output than coal or oil — is the abundant supply of natural gas in the United States, much of it trapped in the Marcellus Shale formation underneath parts of West Virginia, Ohio, Pennsylvania and New York (including Binghamton University).

The only way to get it is through the combination of horizontal drilling and hydrofracturing, or “fracking,” in which highly pressurized fluid is injected into the shale, creating channels through which the gas can be extracted.

Fracking is an issue as volatile as the gas it releases; some see it as a poison unleashed on the environment, others see it as an economic lifeline. New York has not yet allowed fracking, pending environmental reviews. Pennsylvania has more than 4,000 wells.

“My opinion is that fracking is the least environmentally problematic way of producing energy ever created. You can actually break open rocks that were so tight that they couldn’t produce before,” says Telfer, who is drilling in the ecologically sensitive Big Thicket area in Texas. BBX drills horizontally, but seldom uses hydrofracturing because of naturally occurring fractures in the rock.

When he looked into drilling, almost literally, in his parents’ backyard, competition from bigger companies and an inhospitable atmosphere made him reconsider.

“There are so many different ways to permit wells and drill wells and do so environmentally safely, that to see this kind of resistance in upstate New York is very difficult for me, and I’ve really stayed out of the whole thing.”

Train students to think

Telfer knows that his presentation has given listeners a chance to reconsider the magnitude of the problems we face in reconciling our energy demands with the impacts of carbon dioxide. He also knows that his education and connections at Binghamton allowed him to review the science and make an informed decision. To ensure those skills continue to be taught, Telfer will be funding a geology position at Binghamton for three years.

“The faculty needs to educate the students in terms of what’s good science, what’s bad science, and how do you distinguish the difference between the two,” he says.

“It comes back to the Harpur motto, ‘From breadth through depth to perspective.’ You have to understand the big picture: the political spectrum, the business spectrum, the financial and environmental aspects, how do we measure pollution, what are the effects of pollution? You need to have this broad knowledge to be an informed citizen and to see solutions. And you have to be an informed citizen of the world, too, because if we’re saying that China is going to be the source of the biggest increase of carbon dioxide in the next 25 years, then how do you affect it at a worldwide level?”

To help Binghamton students answer these questions, the University plans to use Telfer’s donation to hire a sedimentary basin geologist.

“Energy comes out of sedimentary rocks, so whether students are going to be in the energy extraction business or cleaning up, they need to know this fundamental information,” Demicco says.

“Matt understands that our department needs to put out scholars, not, as he calls them, ‘geodroids or clones’ who will walk into a big company and just do their bidding. Matt has succeeded in large part because he was trained to think. He values that above all other things.”