Truth, Justice, and Engineering Ethics

In the Hellenic days of the mid-century, Superman represented and defended an ideal, which he explained as "Truth, Justice and the American Way." Most engineers are not Superman; we don't have it that easy. 

We engineers (or maybe it is just me) like to think of ourselves as intellectually robust and morally clarified. But then, again, so does most everyone else. I've read that 92% of professors rate themselves "above average." And a similar percentage of drivers consider themselves better than average. Interestingly, the same of percentage of people consider themselves ethical. Even in prison, the convicted residents often harbor faith in the lack of wrongness of their deeds. An engineering program may require Calculus and a 3.0 GPA, but that doesn't mean that its graduates are any less prone to human frailties. 

For petroleum engineers, the quantification of reserves poses the most common and often the most exhausting ethical mudhole. It can pit the interests of self, bosses and company against intellectual honesty and the interest of the public. This year, like the last two, will see more wrestling than most years. Sustained low prices have accumulated actual financial damage, and prospective prices offer less hope of redemption. This year's SEC prices for oil is likely to be roughly 15% lower while gas prices may be only 10% lower, but both are down from an already fallen perch. More practically, futures prices and bank price decks have fallen significantly over the year. Not a catastrophic drop, but the year-end process does represent another turn of the screw

Oddly, the primary asset of an oil and gas company, those for which investors pay and against which banks lend, can be inventoried only indirectly. Reserves are like an accounting process for the balance sheet but with much less precise numbers. Engineers try to figure out how much will come out of existing holes and out of holes we haven't yet made based on arcane science involving volumes, ratios, pressures and the rates of change of each. Uncertainty is tautologically high.

Then, again, that's why our professional society agreed decades ago to differentiate the confidence of estimates using words like "Proved" bearing definitions like "reasonably certain." A single field's future can have scenarios at different levels of reliability ranging up to those most rose-colored forecasts of Possible reserves whose pithy definition tickles me--"less likely than not." It is easy to imagine why counter-parties want most to know the Proved reserves whose figures are most trustworthy. 

The petroleum engineer thus becomes the guardian of the trustworthiness of an organization. Whether in-house or third party, the engineer determines the position of his company in the short term and its reputation in the slightly longer term. 

Reputation, and indeed much business success, rely upon ethical behavior, and the tenets of ethical reserves engineering are common across engineering and even across other professions. As codified by numerous state boards and professional societies, the first and foremost obligation of an engineer is to protect the health, safety and welfare of the public. Fortunately, a reserve report isn't going to poison anyone or explode and burn for days. It is the welfare of the public which is placed at peril by sour or out-of-control reserves engineering. 

Anyone who wants to debate the definition of "public" is likely looking for an expedient avenue not to protect someone else's welfare while protecting their own. In all of the codified systems of professional ethics I've read in numerous professions, I never have found an obligation to protect one's company (or one's self) from its own mistakes. Provisions for confidentiality and against conflicts of interest persist, but there are no provisions to impair honesty or to protect the interests of an employer. The second most prominent tenet of engineering ethics often rests somewhere between oblique and orthogonal to the idea of protecting your company: The work of a professional engineer should be objective and truthful. 

Superman projected his dedication to "Truth, Justice and the American Way" in deep, manful, confident tones while knowing that his steely physique and super strength made him impervious to human assault. It wasn't really much of a sacrifice for a person who can fly and shoot lasers out of his eyes. I, for one, bleed. 

"The American Way" might be translated, as I've seen it, as the "American lifestyle." But that really isn't it. To previous generations, the American way was about hard work, independence, fairness, honesty and, especially for my grandparent's generation, standing up against those forces which would trample what is right. 

Not cavalierly, not self-righteously, but also not timidly. I encourage reservoir engineers this season to perform your work with care, within your area of competence, within the shared reserve definitions and with conviction. Facing the implicit and explicit demands of bosses, executives and clients does not require large deltoids or well-defined abs. It may require courage, and that more than Superman. 

 

NOTE: For more on engineering ethics, you can check out the presentation which I recently gave to the SPE section in Wichita Falls on the Ethics of Brinkmanship. I'll also be delivering another presentation on ethics and year-end reserves to the Fort Worth chapter of SIPES next January 4th. I hope to see you there!