Geoscientist Online

Geoscientist Online 7 February 2011

In 1965 the first North Sea gas and in 1975 the first North Sea oil came ashore to the UK. Between 1970 and 2009, 3400 million tonnes of oil worth £675 billion and 26 million GWh gas worth £2270 billion have been produced (Figure 1) . That is 3 trillion pounds of value, with total tax revenues about half of this .

Figure 1. UK production of oil and gas since 1970 (www.decc.gov.uk/en/content/cms/statistics/source/oil/oil.aspx) and total tax revenues (Abdo, 2000).

None of this wealth would have been discovered without the scientific skills of the geologist. Observation, experiment and interpretation based on rigorous scientific principles enabled North Sea oil and gas to be located – in a challenging environment where next to nothing is exposed on land.

Until the late 1970s, research and teaching about petroleum systems in British universities was comparatively limited. The geologists with the skills needed to develop the nascent petroleum industry included several who studied to PhD level with funding from the Natural Environment Research Council (NERC). Many pioneers did not learn from research into petroleum systems, but their complete contrast – high temperature experimental work, sophisticated structural mapping and petrological work on metamorphic and igneous rocks. Basic NERC-funded research provided leading individuals with the intellectual agility and transferable skills that enabled North Sea oil to be exploited. As the industry evolved, increasing postgraduate research and training (often with industry funding) built a growing cohort with specialist skills, and informed both postgraduate and undergraduate training.

Petroleum is just one component of the wealth created by UK geological science, worth about £38 billion annually (Table 1). Geologists also underpin production of coal, aggregates, industrial minerals and metals . Additional ‘environmental’ products generated by geologists include groundwater and landfill, both generating substantial income through sales of a product – water or space . The total annual value of wealth created by geology is about £48 billion.

Table 1. Contribution of geology to the UK economy by sector (2007 statistics).

In Table 1, the estimated value of consultancy services is based on the ratio of consultancy company turnover and number of staff (about £75,000/person), assuming about 5,000 consultant geologists in the UK. The value of academic geology can also be estimated from turnover. A typical UK geology department generates about £250,000 per member of academic staff, reflecting student-related income as well as research grants and contracts. There are about 600 academic staff in geology in UK universities, giving a value for the academic geology sector of about £150 million, to which the British Geological Survey’s annual budget of £55.8 million can be added.

Figure2. Summary of geology’s contribution to the UK economy.

Figure 2 shows that geology is very much a product-dominated discipline, and that comes as no surprise. But how does it compare with other manufacturing sectors? According to statistics available on the BIS website, geological products are roughly equivalent in value to the combined output of the UK’s aerospace, pharmaceuticals and motor industries. Geological products form the largest single component (12%) of the UK’s non-service GDP, which has a total value of about £380 billion (or 27% of total GDP).

The approach taken here simply looks at the contribution of geology to the UK economy. It excludes the substantial contribution that UK geologists make world-wide, and of course geology is a global discipline in which individuals work internationally. The London Stock Exchange is a prime location for trade in the shares of the major multinational mining and petroleum companies, and these financial dealings contribute greatly to the UK’s service sector. The capital values of the mining and oil/gas sectors on the London Stock Exchange are of the order of £25 billion and £7.5 billion respectively . Geology is big business.

So, what of the future? The lessons of the past are that a sound science training provided by a geology degree, supported by blue sky research designed to stimulate the best minds, has provided the UK with abundant wealth during the last 40 years, has kept the lights on and kept us as citizens both warm and moving. If we cast our minds forwards from 2010 to 2050, when many now entering the current university system will be at the peak of their careers, what will those we are educating as geologists need to do?

In 2050, we can forget about domestic petroleum resources as a dominant energy source. Maybe coal will take over. Food production depends on mined fertilizers, and we know that already world production of potash has to double to keep up with current global food demand – in 2050, increased mined fertilizer production will be absolutely critical for food security. What about deep geothermal energy? The first steps in this industry are being taken within the UK, and demand for secure clean energy will see this sector grow. Geological disposal of radioactive waste will be necessary by 2050, simply because we will have too much to store securely, even if we do not build any more nuclear power plants. If carbon capture and storage is to play a significant role in the transition to a low-carbon economy, geological disposal of carbon dioxide will, by 2050, be an industry comparable in size to present-day production of oil. We will continue to need mined aggregates and mineral raw materials, ranging from the strategic high value minerals needed to make the successor to the iPhone, to sands and gravels for the construction of our urban infrastructure.

To deal with such challenges, the geologist of 2050 will need knowledge that is not being taught in UK universities now, or being funded by the research councils. In these circumstances, the value of a sound science education in geology, supported by the intellectual stimulus of basic research carried out by academic staff, post grads and post docs, is as great now as it was at the start of the petroleum era which it demonstrably served.

And what is the bottom line? Our society depends on the wealth and materials created by a geology degree more than any other single industrial sector-focused university discipline. The UK economy needs geological science.

Acknowledgements

This essay has used statistics from various government sources (Office of National Statistics, Department for Energy and Climate Change, Department for Business, Innovation and Skills, Department for Environment, Food and Rural Affairs, and the Scottish Government) as well as other published sources. I am grateful to the following for their assistance: Rick Brassington, Brent Cheshire, Bob Holdsworth, Nigel Robinson and Colin Scrutton, but I alone take responsibility for any errors or faulty assumptions in this analysis, which as far as possible is based on very conservative estimates.

Footnotes and references

1. Calculated using production statistics for energy minerals from www.decc.gov.uk/en/content/cms/statistics/source/source.aspx, and price information (expressed as 2005 prices) from the UK Minerals Yearbook 2009, British Geological Survey.
2. Abdo, H. (2000) The taxation of UK oil and gas production: Why the windfalls got away. Energy Policy 38, 5625-5635.
3. United Kingdom Minerals Yearbook, 2009, from www.bgs.ac.uk.
4. Groundwater production based on “Underground, under threat. The state of groundwater in England and Wales”; Environment Agency; Landfill gate fees estimated from Couth, R.J., Davies, J. N. and Howe, A. (2003) Proceedings Sardinia 2003, Ninth International Waste Management and Landfill Symposium.
5. www.lse.co.uk