Oral-History:Ralph Veatch

About Interviewee

Larry W. Lake is chair of the Department of Petroleum and Geosystems Engineering and director of the Enhanced Oil Recovery Research Program at the University of Texas at Austin. He is a specialist in reservoir engineering and geochemistry, specifically focusing on enhanced oil recovery and reservoir characterization. Dr. Lake’s work in quantifying the effects of geochemical interactions and flow variability for resource recovery is now widely applied by industry. His reservoir characterization work includes demonstrating that different geological depositional processes produce flow properties that can be statistically described. He was also among the first to recognize the importance of rock-fluid chemical interactions on enhanced oil recovery, and his work has been crucial in developing more efficient methods for recovering oil and gas from reservoirs.

About the Interview

Larry Lake: An interview conducted by Fritz Kerr for the Society of Petroleum Engineers, September 30, 2013.

Interview SPEOH000111 at the Society of Petroleum Engineers History Archive.

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Interview

INTERVIEWEE: Larry Lake
INTERVIEWER: Fritz Kerr
OTHERS PRESENT: Amy Esdorn, Mark Flick
DATE: September 30, 2013
PLACE: New Orleans, Louisiana

KERR:

Why did you decide to work in the petroleum engineering industry, and how did you get involved?

LAKE:

Actually, I decided to work in the petroleum engineering industry strictly by luck. It was serendipitous. And when I graduated from graduate school, I took a job with Shell. I thought I was going into what I now know to be downstream, but it was actually upstream. I was working for Shell for about three weeks, and I kept looking for distillation columns, and chemical processing units, and things like that, and there were none of it. And gradually, it dawned on me that I didn’t go into the business I think I went into. So, it was purely serendipitous. It was actually a really good thing, too. So, I have no complaints about it whatsoever.

KERR:

Can you elaborate a little about how you got involved? What prompted it? You know, was there a certain instance, if you will, that say, directed you to go upstream versus downstream or anything like that?

LAKE:

I don’t think there was an instance that directed upstream versus downstream, as much as that it was just the proximity to where I was going to graduate school. When I interviewed, I liked the people that was there, and gradually, I understood what the nature of the problems were. I realized that I think we had better problems and better positions than I would have had, had I been in the downstream business. So, it just kind of appealed to me, and it got to me after I started working. Nothing before I started working, but afterwards, I realized I was in a good place.

KERR:

So, maybe you can elaborate, Dr. Lake, on more the decision-making leading into going into engineering that then led to petroleum engineering, etc., etc.? It looks like you’re formulating an answer, so just real quickly, give me a second pause.

LAKE:

How I chose to go into the profession that I’m in now was probably like most kids. I talk to a lot of prospective Freshmen these days, and I see myself again, replicated in those kids. They don’t know very much about what actually we do or even any engineers do, even if they have engineers in their family. They don’t really know what they do, so they make a career choice, on the basis of what they think their strengths are. In my case, I was good at mathematics, and I was kind of interested in chemistry, so the obvious choice was chemical engineering. And that persisted through graduate school. I frankly picked graduate school on the basis of the climate, but after I’d gotten into it, I realized it was the right thing. It has a nice blend of chemistry, a nice blend of physics, and mathematics.

KERR:

Which discipline within the industry did you work, and what drew you to that discipline?

LAKE:

I work as a reservoir engineer. My discipline is reservoir engineering, and it was again, much directed by interest and commonality with background. Reservoir engineering probably has the closest identification with chemical engineering. Well, not probably, I know exactly that it did. And so, I liked that stuff when I was in graduate school, and I was just totally surprised to find that I was doing something similar in…in…on the job, and liked it, as well.

KERR:

Can you discuss your research in Enhanced Oil Recovery?

LAKE:

Yeah, my research is loosely affiliated with something called Enhanced Oil Recovery, which is basically recovering the oil that’s left behind after say, primary and secondary methods. It’s been a long history of that. When I got out of college and went to Shell, there was a huge amount of effort devoted to that. Particularly a technique called surfactant, or chemical, flooding. But over the years, the oil price has gone up and down and the interest in the technology has gone up and down. And so, I’ve kind of gone into a little bit different areas, all still Enhanced Oil Recovery to me. And one of them is something called Reservoir Characterization, which is basically trying to quantify the nature of a reservoir in the ground for the purposes of prediction. All of it has been more or less associated with numerical assimilation and more or less associated with predicting the success of the process. It’s--recently, I’ve moved over into something that’s related to decision analysis or basically uncertainty quantification. In my mind, it’s all enhanced oil recovery, though.

KERR:

What led you to your work, teaching at the University of Texas?

LAKE:

How I got to the University of Texas is kind of an interesting story, well, an interesting story to me. I don’t think there’s ever been a person who has gotten a PhD that has at one time, thought, in a classroom, watched a professor perform, that didn’t think, ‘I could do that well.’ And so, that happened to me several times. I had some very good professors. I’d be happy to talk about them. But I had several others who basically could use a little preparation or something, and so it’s always been in the back of my mind. I think it’s always in the back of anybody’s mind that gets a PhD. It might happen.

Now, many people viewed teaching as kind of a retirement occupation: I’ll get my career in the industry, and then I’ll go basically retire and teach. It’s not that way at all. In fact, my first three years at the University of Texas were far more difficult than any years I ever had at Shell. So, specifically, what happened, was I got in contact with the University of Texas after I had been at Shell for five years. I got an offer, and once I added up the money, the University of Texas offer was within $300 a year of what I was making at Shell. These salaries tend to track up only so far, and later in the career, the salaries are very different. The industry offers are much higher. And so I thought, ‘Well, this is the time; it will never be this close again.’ So I made the move. It was a good move. Hard work, though.

KERR:

That was good. I think you can elaborate a little bit. You said you had some professors that were really influential. Perhaps you could discuss briefly what drew you to them? You said preparation and such, you know, you realized, “oh my gosh, I could do this better than this person.” We’ve all been there, so maybe you could talk about some of the influential people that drew you into the profession.

LAKE:

Well, there’s been, of course, in most people’s life, aside from their parents, it’s usually a teacher somewhere that’s their most influential person. Occasionally, it’s a grandparent or something like that. And it’s a curious phenomenon that’s occasionally remarked upon, but probably not as much as it could be. I, like everybody, have had a number of very influential professors; a number of duds.

I was thinking about this just the other day, and I’m reminded of that book by Robert Fulgham. It was titled, Everything I Need to Know I Learned in Grade School or first grade, I think it was. And it was kind of like that because I reflect back on high school and the three things that I needed to know was how to write (and that was in high school—a very good writing teacher); how to type, believe it or not, was very helpful; and I forget what the third thing was, but it was those two things.

When I went to Arizona State as a professor, there was a very good teacher there. He impressed me so much, not because he was very polished, because he wasn’t at all, but what he was, was fearless. When somebody would ask him a question, he’d give it a shot, and if he didn’t know, he’d say, “I don’t know,” and he didn’t mind being called out like that. It was really good. The professor at Rice that I remember the most is Dr. Harry Deans, who basically was the same sort of thing. I mean, he was very clear in his presentation, but he was fearless. He didn’t mind being shown to be wrong in the middle of class, which was good.

KERR:

What were some of the important technological milestones in your discipline?

LAKE:

Some of the most important technological milestones, and you know, I was not involved in some of them. Some of them I was. But considering where we are right now in 2013, I’d have to say the widespread application of carbon dioxide flooding in West Texas, and that actually was prompted by something which happened many, many years earlier in the 1970s, when Shell and Amoco built a pipeline from Colorado to West Texas to supply CO2 for them. It took a long time catch on, but it’s really caught on in a big way. So, I think that’s definitely a milestone for us now.

Most recently, the biggest milestone, of course, is hydraulic fracturing and shale gas and shale oil technology. I’m only just a little bit involved in that. We are a lot better at understanding what’s in a reservoir than we used to. As I look back in retrospect, it’s incredible to me how naïve we were about the nature of reservoirs. And so, we would do laboratory experiments, which are one dimensional and homogeneous, and somehow, even though we knew in the back of our minds that that was not going to be the way these processes worked in the field, we still thought it was true. So if we’ve got eighty percent recovery in the laboratory experiment, we were expecting eighty percent recovery in the field. It’s just not true. In fact, you should really divide by three to get the right recovery.

So that appreciation, I think is definitely a milestone. It didn’t…it’s not a Damascus Road experience, it didn’t just sort of arrive out of the skies, but it has come to us, and I believe we’ve benefitted hugely from it in our current practice.

KERR:

That was good. Think back, though, a little bit more historically. I mean, you’ve been in this business, what 20, 30, 40--

LAKE:

Forty.

KERR:

-years. Some of the technological milestones you pointed out seem to be a little more recent even though we all know fracturing started when, back in the fifties or even the forties? And some of the technological milestones within your discipline maybe even earlier in your career. Is that something you can touch on real quickly?

LAKE:

Yeah, there were some technological milestones early in the career. The nature of our business is such that it’s not like Thomas Edison, saying that the light bulb turned on, and suddenly we’re going to do things differently. We’re very slow adopters of technology. I think the last time I thought about this seriously, it looked to me, like basically, it takes us about eleven years to take a new invention, and actually make use of it in the field. So, when I first started, we were just in to the point, the so-called “plateau of productivity” of the business of horizontal wells. We were just in to the point of understanding that we didn’t really get all of the oil out of the ground once we did water flooding, and so that made us think about other technology--and I look at what we’re doing right now, and I think it’s true—I think that the productive technologies actually took a long time to come to fruition. I think it’ something we need to work on. A little bit of effort on reducing the time from discovery to application.

KERR:

How did CO2 flooding as a technological milestone change your discipline?

LAKE:

CO2 flooding actually had a lot of changes, some of them not even directly related to CO2 flooding. Of course, the lion’s share of CO2 flooding is being done in West Texas, and when that became very popular, it essentially revitalized that area out there. Also, it made us appreciate some subtleties about operations that maybe we knew before, but it was not in the forefront of our practice. For example, we found out that we can’t on occasion pump producing wells by injecting CO2; that you could put enough pressure from the injectors to actually make the producers flow, and they don’t need to have pumping units.

We found out, and I think that all these things were pretty obvious--we found out that you can recycle CO2, so you didn’t have to buy huge quantities of it because much of it could be recycled once it’s produced. All of that improved the economics. It’s just accumulating experience in fields and understanding the nature of the heterogeneity, and understanding typical performances that we’ve benefitted from tremendously. And I think it’s helped us benefit in other types of Enhanced Oil Recovery.

For example: polymer flooding, which is very different than CO2 flooding. When we compare the performances of a polymer flood with the performance of a CO2 flood, the differences are pretty glaring, and the differences were always present, even in the laboratory experiments, even if we weren’t very qualitative about it. So, the fact that you understand how things work in the laboratory helps you understand how things work in the field. It doesn’t help you predict, particularly, but it does help you understand.

So, the third area that we seem to be benefitting from is in chemistry. It’s been a long time coming, but the surfactant flooding technology has vastly improved, much better surfactants, and I think that in the near term, at least in the enhanced oil recovery business, that’s going to be a major feature, in probably the next ten years or so.

It’s ironic to me because we for years, we viewed enhanced oil recovery as unconventional recovery, and then suddenly, they start drilling horizontal wells, and they fracture the wells, and they call that unconventional recovery, and now we’re conventional recovery. So, maybe that’s the way it should work: it starts laboratory, becomes unconventional, and then the next thing you know, it becomes conventional. And I think if I can hang on a few more years, I’ll see the whole cycle.

KERR:

What were some of the technological challenges that you faced in your career?

LAKE:

Yeah, the technological challenges for me has always been trying to understand what’s between wells; what’s the nature of the reservoir between wells. It’s some things that we worked on, and actually got a patent on one of them was a little device called a mini-permeameter, which allows you to measure permeability on very small pieces of rock, and even you can do it in outcrops. Take it out to the field and quarries and things like that. So, you can make thousands of non-destructive permeability measurements, and all of those measurements taken together leads, of course, to a statistical analysis, which ultimately leads to a better understanding of what’s between the reservoirs.

Now, recently, we’ve worked on something called a capacitance resistance model. I don’t know exactly if this is going to take off or not, but it basically involves analyzing rate data from producers and injectors, and trying to infer the nature of the reservoir between those wells; on the correlation between the fluctuations of the two. So, it’s promising, and I think that will look forward. In a lot of what I do, reservoir characterization is a huge challenge, a huge challenge to see that the technology works. And then it turns into an even bigger challenge to see how that technology can turn into money, or turn into oil and tank. I think that’s where we are right now.

KERR:

Within that same question about technological challenges that you faced in your career, what challenges or problems in Enhanced Oil Recovery does you research attempt to address?

LAKE:

Yeah, the challenge that my research attempts to address is the one of being able to predict what will happen when you take it to the field. And that, of course, involves a substantial amount of reservoir characterization. In recent times, I think basically, I’m trying to understand the field data that comes through. I think there’s a lot to be learned from that. Companies tend to do field tests and field projects, and they study their own data. So, I’ve been trying to actually synthesize it across several fields and several processes. I think that will be broadly beneficial for everybody. Maybe not specifically for one field, but I’ve gotten a pretty good idea of how these process will work in the field as opposed to how they should work, and that’s been pretty revealing to me.

KERR:

What do you consider the most important contributions you have made in your career and why?

LAKE:

Well, my most important contribution—the nature of our business is such that there are not individual contributions very much anymore. I would definitely have to say that the mini-permeameter that I referred to earlier was a contribution. Myself, and a colleague, and several graduate students worked on that. But I think, significantly, the most important contributions that I’ve made have been the books, the textbooks that I have written. I’ve written four books: one on geochemistry; one on primary oil recovery; one on geo-statistics; but the one, the salient one, the most significant one is a book I wrote in 1989 on enhanced oil recovery. I had no idea that it was going to be so influential. It took a long time for it to become influential, but it is there now, so I think that would have to be considered the significant achievement of my career, is the textbooks.

KERR:

You have written “the” book on Enhanced Oil Recovery. What led you to write the book, and discuss the impact your book has had on the industry.

LAKE:

So, the books that I wrote have all been for one audience. In fact, it’s surprising that they kind of get broader circulation, since I have one audience in mind. And basically, the audience is our graduate classes at the University of Texas.

So, Enhanced Oil Recovery was for a graduate class, which means there’s a lot of general material, but there’s a lot of highly specific mathematical procedures. And how it gets more broadly circulated is a little bit of a mystery, but it’s also a little bit of a history there. The book was originally written for Prentice Hall, and—more than twenty years ago—and it was just about the time the oil price collapsed for the first time, and everybody lost interest in enhanced oil recovery, and Prentice Hall basically said that we’re not going to publish it anymore. And so I said, “Well, if you’re not going to publish it, can you give me the publication rights?” Which they did, and the book was just kind of there for our graduate students for years.

And then, when the oil price restored itself in the late 2000s or 2010 or so, it got real popular. So, it’s kind of like writing something that people ignore for years, and suddenly gets popular again, and that’s what’s happening. Now, I have to say that I kind of publicized it a little bit by teaching the class I taught yesterday, the Enhanced Oil Recovery Class. I’ve done that for thirty years or so. Probably a hundred times over the years, and in the class yesterday, we actually made available copies for the class to buy, and they bought some. It was pretty cool. Pretty cool. So, it’s all for our graduate classes. I’m not writing a book for broad circulation or things like that.

KERR:

Discuss the impact your book has had on the industry.

LAKE:

I believe the impact my book has had—this is going to sound a little contradictory from what I said before—was, it does have a lot of math in it. And so, going into companies that have a lot of technology, and have a lot of technologists, and have research, they have a source there where the equations somehow were solved by computer programs are actually there.

One place I went, this was in Venezuela, and I was teaching a class, and one of the guys looked up, and he says, “Well, at last I know the equations we’re solving!” So, I think that’s part of the reason for it being. The other thing is—excuse me—the other thing is, when I wrote the book, I knew that the oil price was heading down, and I knew that enhanced oil recovery was going to be in trouble. And so, I deliberately started putting more broad things into it. So, the first half of the book is really a reservoir engineering book. Tried to have the same level of detail as I had before, but basically tried to have a more broad appeal. I’m still a little surprised that it has a broad appeal, because it still is an enhanced oil recovery book, but it’s broader than the title suggests.

KERR:

Discuss the invention of your mini-permeameter

LAKE:

Well, the need for the mini-permeameter actually came from some observations about enhanced oil recovery. And even though we were fairly primitive in technology several years ago with EOR, it was still obvious that we could get almost a hundred percent recovery when we did laboratory experiments. And then after we had done a few tests, we realized we were getting ten percent recovery, for example, and that’s a huge difference. You know, that’s the difference between a successful or an economic project and an uneconomic project. And so, as I began looking at it, many of these things, we kind of knew were there, but we never had the impetus to go after it. It was apparent that permeability was an important quantity in the success of these projects, and it was apparent that it changed a lot in the field. Changed, basically, three orders of magnitude, a fairly good volume in a reservoir. So, it became apparent that we needed to study permeability. It also became apparent that a few samples weren’t going to do it. You had to have thousands of samples to make broad based observations and conclusions about it, and it would be nice to actually be able to take these samples from an outcrop, a piece of rock on the surface.

Now, in principle, you could go to this outcrop, and you could core these little two-inch cores out of the outcrop. Many of the outcrops turned out to be on federal lands, national parklands. They were unwilling to let us drill thousands of little holes in their outcrop. Plus the fact that it became apparent that almost all but the most athletic University of Texas students could not carry that much rock back to the laboratory. So, we need to make the measurement right there, on the spot. I actually saw something that was a little bit like this in a laboratory in Dallas at Arco. And I watched it, and I said, you know, there’s two things that we need to make this work. One is, we need to make it portable, so that somebody can carry it on their back, right? And the other thing we need to do is mathematical analysis so that when we take the measurements, we actually get something that’s consistent with the other measurements, too.

So, we did that over a period of years. A student, David Goggin, worked on the theoretical analysis of it. Very elegant piece of work. Other students worked to compress it, so that we used SCUBA tanks, for example, or something like that, and flow meters, so you could take this thing, and put it in a backpack, and take it out to the outcrop. You wouldn’t use it—it wouldn’t measure things—while it was in the backpack, but you could take it out, and set it there, and make the measurements. So, you would carry it back to the car with you a thousand or ten thousand measurements. I have to tell you, it’s world-class boring to do it, but at least you’re not carrying a ton of rocks back to the car. And so, that helped a lot.

We confirmed the variability of it, the permeability. We confirmed the consistency of its measurement with other techniques. We confirmed that there was a correspondence between the geologic descriptors, the things that geologists measure, and the things that engineers measure: the rock type. We confirmed the usefulness of statistical procedures in measuring continuity. We determined a difference between sort of a random fluctuation of permeability and a correlated fluctuation of permeability. All of these things were very useful and very insightful. I—what I’m about to say, I’m not sure is absolutely true, but of course, geologists have studied outcrops for centuries. I think what we did was the first engineering outcrop study.

We studied outcrops in the Algerita Escarpment in West Texas; basically just sent students out there with the mini-permeameter. We studied a lot, an outcrop in northern Arizona, called the Page Sandstone, very close to Glen Canyon Dam. For those of you that’s been there, you can see this outcrop at about angle 89 in the visitor’s center at Glen Canyon Dam. And then the last thing that we did was, we had all these grand and glorious conclusions for that specific outcrop, and so we began to wonder if other outcrops had the same sort of conclusions as that one did. And the last time that we did it, we took another student, Mark Chandler, and his summer job was just to tuck the mini-permeameter in the back of his car, drive all over the American West, and whenever he saw from the road an outcrop that looked right, and he get to it without being shot, he would just go over there and make some measurements to see if they were the same as at Page. And they were. And it was very influential and informative.

I think the very last thing that we did on it, we commercialized it and had a company make it in Tulsa, was we began to look at the so-called effect of anisotropy on permeability. We had used these little tips that were circular to measure the permeability beneath it. We started mashing the tip down so that it had an ellipsoidal shape, and then, when you measure permeability on the same piece of rock and turned the tip, if there was anisotropy—and there was—you would see it in the measurement. So that turned out to be pretty good. Now, there have been a lot of other people who have used the idea since then, but I like to think that we were the first ones that did it.

[Audio break]

Oh, well, the outcrop studies, of course, were like glorified camping trips, without the camp. So, the Page Sandstone outcrop—I had a colleague in Geology who helped us. This was Gary Kocurek, and he identified the location. And their idea of a geologic field trip was basically, you throw a bedroll down on the ground and you know, out in the open, you just sort of sleep. And I said, “This isn’t going to work. First of all, it’s in a national park, and second of all, there’s a very nice hotel, you know, four miles away.” And so, we went out there to do it. It was in a national park, and so we could only do it in the winter. This was January in northern Arizona. It’s fine, the weather was really, really good. This was the most luxurious outcrop study that he had ever participated in. As time went along, I stopped going on studies. I would just send students, and sometimes, there were some pretty serious disagreements about what to measure, and, you know, the relevance of the measure, and I wasn’t there to adjudicate it. So, I would hear back these stories about how one student wanted to throw another one off the outcrop or something like this because of differences in agreement. I was horrified at first, but then I thought, ‘Yeah, you know, this is evidence that they’re really into it.’ You know, if they feel passionate about it that they’re about to come to blows, OK. That’s the sort of thing you want from a graduate student. Everything worked out in the end, though.

KERR:

How has your research in reservoir characterization affected the way the industry approaches recovering oil and gas from the reservoirs?

LAKE:

Yeah, I think the reservoir characterization research affected the way people approach oil and gas by making our ideas about reservoirs more sophisticated. Now, you understand, I was part of this effort, but there were a lot of other people that had contributions, and many of them much more significant than mine. But, we have stopped trying to imagine that when we do numerical simulation of reservoirs that the reservoirs are homogeneous. So, we’ve been putting in various types of heterogeneity, and the disparity between laboratory recovery say is ninety percent, and field recovery is say, ten percent. That disparity still exists, but it’s not like it was. It’s now maybe the difference between say, forty percent and ten percent. There’s still some work to be done. But, I think, overall, we got the idea across that heterogeneity was important, heterogeneity should be part of your simulation study, and although it’s difficult at times, we should have a broad based team to work and understand these things. So, it comes back to the issue of predictability. I’m not terribly enamored with the notion of predictability. What I am enamored with is the notion of understanding. So, I’m perfectly happy with the technique that tells you what should happen in a general way, as opposed to a technique that precisely predicts the answer. It’s an interesting question, philosophically, as to whether understanding leads to predictability, leads to good practices. I’m not sure I can actually make the case, but it certainly is a lot better than imagining you could lead to good practices without those other things.

KERR:

What do you consider the most significant changes that occurred in the industry over the course of your career?

Well, the most significant changes over the course of my career of course were precipitated by events. For me, the biggest event was the 1973, I think it was ’73 Arab oil embargo. When all of a sudden, we didn’t have plentiful gasoline, there were gasoline lines, and that was the year I started working for Shell. We all went back on Daylight Savings Time in the middle of winter, and I remember going out for my morning coffee break when it was still pitch dark outside, so the realization came home, and I can say in a lot of this it was knowledge, but the realization came home was that we were no longer self-sufficient with respect to producing oil.

One of the first SPE conferences I went to, there was a palpable sense of gloom in the air, that basically, we were declining in oil production, we were importing more than half of the oil, and what to do about it. That led to a discovery of—well, a rediscovery, a re-importance of enhanced oil recovery, the idea that you get more out the old fields. At the same time, though, in doing these studies, oftentimes we realized that there was more than we thought to begin with, and so, the so-called reserve growth came on. About that time, there was maturation of horizontal well technology, and over the years, we realized that that actually would improve the ultimate [unintelligible] as well.

So, the significant event was the Arab oil embargo and subsequent things, and that made us think more about getting more oil out, made us think more about how much was there, and made us think more about exploring, and then everything else kind of fell in that direction. It was, you know, in ’73, there was a sense of crisis about that. And now, we almost find ourselves laughing at the notion of peak oil, but in ’73, it was very real. It was, “we have to do something, and we have to do something now.” Now, it’s not going to be very fast. It’s eleven years to embrace technology, so we’ve got to gear up something, so it comes to fruition in enough time to be significant, but at least enough time, also, to develop it well.

KERR:

Others. Let’s think of a couple of others. Significant technological changes that occurred in the industry over the course of your career.

LAKE:

Well, other technological changes, or other events that occurred in the course of my career. It seems like so much of what we have been working on and our emphasis has been tied to fluctuations in the oil price. So, after the Arab oil embargo, there was, in the early 80s, of course, a collapse of oil price, and that changed our attitude about many things, if not what we were working on. For example, and I still think we’re digging ourselves out of this, as well: all of the major companies, and many of the not-so-major companies had research laboratories, highly sophisticated research laboratories—people, wonderful scientists that did great work. A lot of it was centered around enhanced oil recovery, and when the price collapsed, the enhanced oil recovery virtually disappeared in many places. As did the research laboratories. So, in the oil industry now, there’s only one or two really research laboratories that are called such. So, that collapse in oil price was highly significant.

It was also highly significant to our student enrollment. We went from a thousand, over a thousand students in I think it was the Fall of 1982 down to about a hundred twenty-five students a few years later. So, it was a huge, huge change. Most recently, with the oil price restoring itself, it seems like the situation is actually, it’s kind of like going through the past history and multiplying it by minus one. It seems like everything that was going down before is now coming up again. So, our student enrollments are there, there’s more emphasis on technology, enhanced oil recovery has gotten a new lease on life. So, it’s frustrating for technologies to see how things you think are interesting problems can come and go, but at the end of the day, it’s the way it should work. I mean, it’s basically an industry that’s in it to make money. They’ll use technology when they think it will make money, and they will de-emphasize it when they see there’s no future.

Well, the ups and downs of any technology in our business, of course are tied to price, and that’s a pretty first order consideration about tie. But it also is tied to the degree of options. So, for example, a company has a lot of opportunity for enhanced oil recovery, maybe ten or fifteen percent on their money, but they have an option also to go overseas, and make fifty or seventy percent on their money, or they have an option to try a new exploration plays, and things like that. So, it makes more sense that you would go to the one that had more rate of return. The EOR world these days, has devolved over into a technology that is largely practiced by smaller companies, and not practiced by major companies. It’s one of the ironies of this business is that the Shell and Exxon, and Chevrons of the world spent literally billions of dollars developing EOR, and when the oil price went down, they gave it up. And now, it’s the midsize companies, who are not so midsize anymore, who are benefitting from that technology. Funny, isn’t it? The very companies that spent money to develop it, other companies are benefitting from it.

KERR:

Not unusual.

LAKE:

You know, I think you’re right, actually. In a business that has big fluctuations in the commodity prices, I bet that’s a pretty common pattern. I don’t know of any other business that has such fluctuations in commodity prices, but I suspect there are.

KERR:

So, companies do all this exploration research, they find the oil and gas, they spend years developing it, and then they abandon it when they think they have gotten the economic value out of it. And then some companies spend more money, then, doing further enhanced oil recovery, while others say, “we’re abandoning it,” and other companies will come in—is this what you are suggesting? Other companies will come in and exploit, if you will, the research and development and the effort put forth, and then they’re gone to another project and then another company comes in and does further enhanced oil recovery? LAKE:

Yes, that’s the natural sequence of things. The natural sequence of things—the observed sequence of things that I have seen is it’s almost like moving down the food chain. So, you have a nice, good reservoir here that produces a huge amount of oil, and gradually, it doesn’t produce, and your company, your large company, which could afford to develop it, now is looking to sell it. It’s not like they’re losing money on it, it’s just that there are other opportunities available. So, they will sell it to a somewhat smaller company that has a smaller overhead, different technology, and they’ll take the price again, take that same path again. So, it will move down from majors to midsize to independents to small companies, and at the very end of it, they’re abandoned. Now, relatively few number of reservoirs are absolutely abandoned, but they do move down this chain.

One of the reasons that they’re able to do this, (and this is an SPE plug) is because we have such a strong tradition of publication in technology dissemination, and the SPE’s almost a hundred percent responsible for it. So you can see what the big company was doing in the field that you are thinking and you can see how much of that you can use, and things like that. So, the technology—there’s a lot of secret technology and things—but the big picture items seem to wind up in the public literature—the SPE literature, and that gives the smaller companies confidence that they can do it, and that facilitates the movement down the food chain.

KERR:

What do you consider to be some of the greatest challenges facing the industry, going into the future?

LAKE:

Well, I think our biggest challenges still remain getting as much oil out of the reservoir as possible. The standard world-wide statistic is that we get one barrel out of every three in reservoirs, but recently, there’s been some pretty serious deviations away from that. For example, the big reservoir in the North Sea, the Stratfjord field will probably have sixty percent recovery by the time it’s abandoned. And there’s several examples: the Pruddhoe Bay reservoir will be in excess of fifty percent. So, the major challenge is to make sure that whatever is happening in those fields get translated over to other fields.

This idea is not totally new to me, but I think the industry should adopt a reservoir bill of rights, which is to say we will abandon no reservoir until we’ve gotten sixty percent of the oil out. Of course, that’s not a very economic statement, but I think that’s the sense we should be going. That’s very high level, that’s very vague, but in the sense it encompasses everything, every bit of technology that the industry is involved in, from horizontal wells to reservoir characterization to enhanced oil recovery to seismic processing. A friend of mine a couple of years ago, as we were discussing these topics, he said, “I would like for you to name me one technological advance in the last twenty years that was not caused by computers,” and that’s kind of hard to do. So, we’re not in the computing business; we don’t sell software, for the most part, we don’t sell computers. But it’s a very powerful, enabling technology, and almost every technology that we’ve been successful with has had to the core of its incremental change forward, or sometimes a quantum leap change forward has at the core of it the computing technology. I don’t know that this is entirely true, but we certainly have got to be in the top half or the top quarter of computing usage of all the industries in the US, but we don’t sell computers. It’s an enabling technology for us.

KERR:

What do you consider some of the biggest challenges facing the petroleum engineering industry as a whole, going into the future?

LAKE:

I think our biggest challenges going into the future deal with the fact that just as there is this food chain idea I had before with reservoirs going down the food chain—I shouldn’t call it a food chain. That sounds pretty pejorative, doesn’t it? Is that we’re also moving into more difficult reservoirs. And so that challenge is to make the technology modify for those more difficult reservoirs, and at the same time, make sure we do it safely.

Safety is going to be a real challenge in deep water reservoirs, as we’ve already seen. So, whatever the technology is, it has to be effective, it has to be safe, and it has to be environmentally benign as much as possible. There is a challenge there, with respect to the last comment. Despite all of the years that we have been producing oil and despite all of the successes we’ve had, you know the oil business could reasonably be considered the world’s second oldest profession, right. We still don’t seem to be able to convince people that we do things safely, and I don’t see any way to do it because the public in the US and around the world actually take safe operations for granted, and it’s only when something bad happens that we seem to be excoriated by the public. So, something that would help us a huge amount is some sort of a broad understanding of the risks, the trade-offs, the risks, and a clear statement—a clear delineation between the benefits and the risks of all our technologies. That’s pretty high level, too. But I think that would be amazing if the American public could embrace these technologies very quickly, very readily, and without so much controversy.

KERR:

That’s very interesting perspective in that we do take it for granted.

LAKE:

We do take it for granted!

KERR:

Um, look. Nobody wants loss of life. Nobody wants injuries and such, but the magnitude of the petroleum engineering profession is remarkably safe, considering how, you know, look, you hate seeing, you know, the eleven gentlemen who lost their lives in the Macondo incident a couple of years ago. That’s horrible, but, you know, in the whole scheme of things, that’s not that significant, considering how massive and significant the petroleum engineering profession is.

LAKE:

I would bet if you took a poll of the public, and referred to the Macondo incident, I bet you most people would not remember eleven people lost their lives, but they would remember this gushing oil spill that was for two months going on. I try to bring that home when it comes up in class, somebody says, “What are we going to do to avoid that?” and I say, “Yeah, we’ve got to avoid that because eleven people lost their lives. Ok? Let’s don’t forget that, OK? That’s the reason we avoid it. Those people aren’t coming back. The algae are coming back. The biosphere is coming back.” A friend of mine, and environmentalist at the University of Texas said, “The main lesson to be learned from that is if you’re going to have a spill, spill it in warm water.” So the bugs will eat the oil.

KERR:

What are some of your favorite memories about working in the petroleum engineering industry?

LAKE:

Well, I have several favorite memories about working in the petroleum industry. Some of them were from working at Shell, not at the University of Texas. I’ve been in either academia or research my whole career, so I can’t claim to be an expert in field operations, but one of them was at Shell. That was the most academically lively group I have ever been around in my life—intellectually lively—and we were doing research. We were trying to come up with chemicals to put into the ground, and we just discussed and discussed and futzed and futzed and changed and things like that, and so we finally agreed on this chemical that needed to be injected into a reservoir, and we told the field folks. And then overnight, somebody realized that we had overlooked an aspect of it, and it had to be done again, and so we spent three days doing it again. And says, “Oh my gosh! They’ve already shipped the chemical!” We went down to the docks, and said, “We have to ship another batch,” and the guy at the dock said, “We have the first batch here, because we never send it out when you first tell us because we know you are going to change it.” So, that was kind of fun.

When I first came to the University of Texas, I got involved into a uranium leaching project. You know, we produced uranium in the United States by injecting a fluid, and it leaches out the uranium, and we capture the fluid and take the uranium out of it. And I was doing this with a colleague, named Bob Schechter at the University of Texas, and we had a—he had a great idea for a new leaching solution. So, we talked the Bureau of Mines into supporting a field test. Now, this is a great thing. I think even to this day that our students in petroleum should learn how to do this because the reservoir was only a hundred and seventy-five feet deep, and that means you could drill the well, you could complete the well, and you could put it on production in one eight hour day. So we could take students down there, could see the whole process, and go back that night, and it would be really good.

But we drilled these three real shallow wells, and they were real close to each other, about oh, maybe twenty feet or so, and then we started injecting this solution. And me being a good reservoir engineer say, “Well, I should—maybe we should write down the pressures on these wells so that we learn something about the formation.” So, I’m sitting in front of this well, you know, about five feet away from me, and I’ve got my pencil there, and a notebook, and there’s a big gauge on this well. And I start injecting, and the pressure comes up, and all of a sudden, the pressure goes, “Shoo!” straight down. And I said, “Well, that’s strange. That’s not supposed to happen.” And shortly thereafter the most amazing geyser came out of that well (chuckles). It was twenty-five or so feet in the air and that’s when I first realized how serious this business of channeling can be in a reservoir. Because the wells were so close to each other and the formation was so unconsolidated that when we injected, we just opened up a path between the two. And you know, I sat there with that stuff raining down on me, and my silly little notepad there (laughs). That turned out to be a pretty interesting discovery because we...we uh. Of course, that was an accidental discovery, but we tried it deliberately, later, and the same thing happened. And we found out that it’s very difficult to leach those shallow fields like that. I think it was only a hundred twenty-five feet deep; that the best uranium production was actually coming from things that were a little bit deeper than that: a hundred seventy-five, two hundred feet. So, it was interesting, and we discovered something that was occurring in the commercial process; although they didn’t know it. They were getting very poor recoveries, and it’s because the fluid was going every which way because of these channels. That was an interesting day when that happened. It was good.

KERR:

It seems to me that some of your fondest memories might be around some of the colleagues and friendships that you made. Anybody come to mind that you would like to share a fond memory about?

LAKE:

Well, the real rewards of teaching lie in keeping contact with the students. I’ve been very fortunate in having some very, very strong and very--kind is the only way to put it—people that I’ve worked with over the years. The folks at Shell, George Hirasaki, Dick Nelson, those guys. My colleague then, and colleague now, Gary Pope. My colleague at Shell, also since retired, Bob Schechter, but you,I guess, at least in my case I try to make an effort to keep track, keep in touch with students.

We’re going to have an alumni reception tonight, and I’m really looking forward to it. And I try to remember their names, I usually fail. I usually can remember their faces—that, that works. So maybe an average, teaching, an average of two hundred students a year over thirty-five years, that’s you know, several thousand students. And these are undergraduates. You know, they’re in school for an education; they’re in school to play around; they’re in school to go to football games. They’re in school, basically, to mature, and the education is kind of an added benefit. And so, it’s just really great to see how successful some of them have been. Some, you would never guess they would be successful, but they’ve been successful, and it’s just--many attribute that success to my class! It’s like, that’s just totally wrong! (chuckles).

You have so many influences on your life, you can’t point back to one class and to one professor, but they do. And some of them even established a scholarship in my name at the University of Texas, they’ve given money, and things like that, so it’s been extremely, extremely rewarding. An aspect that we discuss all the time that doesn’t seem to make it much into the public consciousness: most of our undergraduates are from the university—uh, from the United States. Most of them are from the Houston area, actually. But graduate school is a different matter. Most of our graduate students come from outside the US. I think eighty or ninety percent of them are, and you know, at first, I was kind of along on this thought that, well, you know, they’re going to take jobs that Americans will take. I’ve totally changed my mind on that. I’ve crossed the Rubicon on this. The benefit that the United States accrues from bringing in these folks, who, for the most part, stay here (for the most part, stay here), far outweighs any sort of negative consequence of it. And so, it’s good to keep track of those folks, too. Now, they tend to go into more technologically intense areas than the undergraduates do. The undergraduates tend to go into business-related areas and by companies and operating companies. The graduate students tend to be technologists. But they’ve all been great. They’ve all been of great benefit to the US, in my opinion. And it’s the one thing that makes teaching worthwhile.

I think if you got into teaching, and you quit after ten years or so, you wouldn’t see this, but if you stick with it for thirty-five years, you begin to realize that this is a huge thing, a huge benefit. I cannot go to any part of the world now, that I don’t have an ex-student, and they all want to go out to dinner, they all want to complain how hard my class was (I say, “Aw, give me a break.”) And they all pretend that they were C students, even though they were B--they were A students. So, it’s just wonderful. It’s great.

KERR:

What has made working in the petroleum engineering industry so meaningful for you?

LAKE:

Well, working in this industry was meaningful--of course, I’m an academician. So much of the meaning accrues from having all these students that have come through over the years, and I think we talked about that largely before. That’s, by far, the biggest personal meaning to me. But, from a technological point of view, a friend of mine once said, “I love working in this business.” He says, “All our problems are impossible.” And it’s really true. These are significant challenges that if solved, they will make a big impact, but we really don’t have any direct observation of reservoirs. Everything is indirect, and the problem is very difficult. We’re dealing with natural phenomena, and so it’s like you never quite feel like you’re finished with a problem, but you might be finished enough to make it go forward. So, that’s probably true of other engineering disciplines, but with me, it seems like when you solve something, other things crop up which are as equally as interesting.

I guess, basically what I’m saying is, is that they’re very interesting problems. The people that I went to graduate school with that wound up in the downstream business do not have nearly as interesting problems as we deal with. A PhD student I had many years ago, he was a post-doc from physics, and he came across, and he was in my office after three months of just reading, and he said, “You know, I was in physics for two-and-a-half years before I found a significant problem to work on.” He said, “Here, when I walk outside the office, I stumble over them.” He says, “Every problem, every direction, is a problem.” He says, “Nothing seems to be completely closed in like it was in physics.” And I said, “Yeah, that’s kind of the way it is. You just find issues every which way, and when you settle on an issue, you find an issue associated with that, and an issue associated with that. And the next thing you know, you're really working on something highly interesting.”

Well, the students are still part of much of what makes the work fulfilling. I’ve had, of course, children of former students, I’ve had grandchildren of former students in class, two and three generations of people that are in the oil business. We had a lot of students whose family were in the oil business; a lot of students whose family were significant in the oil business. Next year, I’ll have a former student who will be president of the SPE, and that’s very significant. I’ve had former students who’ve been very successful in business. They’ve been very generous.

In fact, that’s one point that needs to be made in these filmings somewhere. During a period of my career, I was chairman of the department, so I had some exposure to other departments at the University of Texas. Now those other departments are biomedical, chemical, mechanical, aerospace, and electrical engineering. There was always a little bit of a ruffled feeling about the fact that we had so much money in the department. Other departments, especially electrical, didn’t have it. All that basically translated into the fact was the oil industry was extremely generous to education. It’s almost totally ironic because many of the people who were significant in the early years of the oil industry were not particularly well educated. But somehow, they latched onto the fact that this was the way forward. And so, they’ve been very generous, the private foundations, not just to us. Other departments around the world have been very generous in their support. So, scholarships, fellowships, endowments, direct research support, everything. Many times, there’s no obvious benefit that they’re going to gain from giving the money. It’s just that we think education is important and should be supported. So, that needs to be part of this effort: is the fact that the oil industry has been extremely supportive. By far, in my experience, by far more than any other industry in America. They’ve been very supportive.

KERR:

That’s great. Now, we don’t mind dropping names, if you’d…You have to be as proud as a peacock, you might say, with respect to this former student of yours that’s going to be the SPE president next year. Do you want to elaborate on that? On anything, I mean obviously, you had an influence on him.

LAKE:

The former student is Helge Halderson. He was a Norwegian student that came over, gosh, back in the early eighties or so. Very sharp, very photogenic, very articulate. Of course, I’m totally responsible for all his success (chuckles). And so, and I do think I was a little bit responsible for it. You know, a little bit when he was in school, but a lot from just being supportive; being able to talk, and to give advice, and also to take advice from the guy.

Another one is Shahid Ullah, who is a Bangladeshi that came over more or less as a migrant, and he’s now high up in Afren; I don’t know exactly his title. But, he’s been extremely generous over the years. All these folks have been generous because they’ve been successful, and they’ve been successful, in part, because of their education at the University of Texas. So it’s a very good thing.

Well, the other people that come to mind was a couple in Midland, Richard and Lois Folger, who were both in my class. She was a good student, and he was—he was a student, and I think I helped get them together (chuckles); they were not married at the time, and I think she helped him get through the class. Now, he’s a very successful businessman in Midland, and a very generous supporter. Not just to us, but to other universities that his kids have gone to, so that’s been good.

Another family is the Sparks family in Midland. Three generations of University of Texas petroleum engineering graduates, and they ‘ve been very generous and very supportive. One of the Sparks brothers is, I think, a city councilman in Midland right now. So, he’s gone into politics a little bit. So, there’s been quite a few over the years, and those are the ones that just come to mind very quickly.

KERR:

How has being an SPE member affected your work and your career?

LAKE:

Oh, the SPE has had almost an inestimable effect on the career. I was encouraged to join shortly after I was--I joined Shell. One of my earliest memories was of a technical review meeting in which Georgeann Bilich, who is still with the SPE there, was presiding over, she works with the SPE, and she was there. And we were talking about papers, and she was like, you know, ten months pregnant (chuckles), and I said, “this is something.” She is very good at what she does, and she knew all the answers to the questions, but now I’ve, her daughter is now in graduate school, she was briefly in my class over the years, and so, there are some personal relationships with SPE folks that are important over the years.

But, the opportunities to kind of be associated with the technical papers (and I joined the technical review committee, just, frankly, to force me to read these technical papers, which I’ve done). And I’ve learned how to do technical papers, I’ve learned how to do presentations, and I’ve learned the technology associated with it. And then I had the opportunity to teach classes for the SPE, which I’ve done for several years now, and that’s been a two-way street. In fact, sometimes, I learned so much from the students in the class that I wonder if I should actually charge them for the class. I still do (chuckles). I still charge them. So, and then these meetings are really great.

The networking possibilities are just totally good, and I do get to go to a few papers out in the conferences. The older that you get, it seems like the less papers you actually go to. And of course, you get to the point in your life when you think, “Oh, everything’s been done before” or “that paper is nothing new.” But sometimes, it is; sometimes it is, and it takes a little time for it to come to fruition, probably four or five years when something new actually appears in the paper. They are, by far, the most—the best technical society that I’ve ever been associated with, and I’ll name names here: The American Institute of Chemical Engineers is much bigger than the SPE but they are not as well organized; the AGU is bigger than the SPE, but the SPE has a, you know, a “no podium, no paper” policy. Everything that is presented here is in a pre-print. They branch out into different areas like insurance and technology transfer and distinguished lectures, which I have been, a couple of times.

But the most significant thing they did (and this pretty much started when I was on the board many years ago) is they decided they were going to be an international organization. Other people put the word international in their title, but they put the word in and they also did it. So, they established offices in, I think, Kuala Lumpur, in London, offices in Houston. So, as far as I can tell, they are the most truly international professional organization that I know of. They were certainly the first one to be international. They just decided to do it (decided to do it). I think the SPE’s focus has been unwavering over the years. They are technology transfer, and all aspects of it. Sometimes they’re pushing brand new technologies; sometimes they’re pushing education as the needs evolve, and they respond to the needs. Sometimes they’re pushing diversity; sometimes they’re pushing registration. They’re always pushing these things. Sometimes, they’re pushing it harder than others. So, they have programs designed to get women into engineering, for example; programs designed to make students better leaders; student paper contests, which have turned out to be a huge thing at the University of Texas; they have a Petrobowl contest, which ten years ago, I’d never heard of it, and now our students spend, gosh, an enormous amount of time preparing for, and occasionally, they actually win. All of these things are supported by the SPE. They have a very professional, very active staff, and they know exactly what they’re doing and how to go about it, and you know, they do actually take advice. So, if you have an idea about something, it may not happen right away, but it’ll come in. So, I’m impressed, I’m totally impressed with that organization.

The SPE is a main repository of the technical transfer, of what they do. Now, the way they work it is you write an abstract for a meeting. If it’s accepted, then you have to write a preprint for the meeting, and then you give it. And then, if it’s sufficiently good enough, and they do review these things, they publish it in a journal. But the preprints are probably the strength of the whole process. Now, it doesn’t help an academician very much because they’re not considered refereed, but they change—they change topics, they change topics all the time. They’re pretty good, even if they’re not at publishable quantity, and they keep them on file. I mean, you can go back thirty or forty years and find an SPE preprint about a topic however obscure. It’s easy, easy to reference. And so, they just do a super, super job of it. The other societies often they will say well, we won’t let you give a presentation unless there’s a preprint, but they don’t enforce it. So, most of the time, they don’t have preprints. SPE enforces it. They try to--SPE tries to look at your visuals before you give them to improve the quality of the presentation. I think they make a conscious effort to try to make sure there’s a diversity of the audience, so it’s not just folks from the US associated with it. And all of these things show up in these conferences. I mean, you see people from all over the world here. You see technologists, people selling their products—vendors. So, they attacked the oil industry—attacked is probably a poor word—but they address the oil industry on a very broad basis, but it all comes back to technology transfer. And the time that I was on the board, yes, we had you know, budget reports, and things like that, profit and loss reports, but it was not the major focus of the board of directors meeting.