A couple of weeks ago, Neil Poxon, CEO of the Industry Technology Facilitator, arranged for me to receive a copy of a University of Aberdeen report regarding the effectiveness and future possibilities for the organisation.
The study was carried out by Professor Alex Kemp and colleague Jana Schultz at the department of economics and, in many respects, is fairly predictable.
The ITF has had its ups and downs, but doesn’t any outfit. I’ve followed its progress quite closely since being created during the late-1990s downturn and been puzzled as to why so little that could be regarded as tangibly commercial has emerged.
Yet the work of ITF has held a certain fascination and I have, from time to time, mused to myself as to whether chopping the Centre for Maritime & Petroleum Technology (CMPT) and replacing it was such a good idea. As I recall, the CMPT had a much bigger purse.
Judging from the Kemp/Schulz findings, I was right to be cautious regarding at least early outputs from ITF, and I rather think that at least some of its subscribing companies wondered, too.
A few years ago, there was a change at the top and, I have to confess, it was a change that, if I’m being honest, I misread. I suppose it was several months before I twigged that implementing a new style of leadership was probably necessary, even if the ITF’s “Blue Book” was packed with projects, many of which Energy summarised.
ITF began to buzz following the change. It was communicating more. It seemed to be gaining in strength and becoming more relevant to the real offshore world. It’s interesting to see that Kemp and Schultz picked up the changes in their study.
They say: “In recent years, there has been a marked change in strategy and management style, which has resulted in a major increase in field trials and comparable work.
“It is arguable that this is required if the original objectives specified in 1999 are to be fulfilled. A substantial positive effect on production is most likely to be achieved when the fruits of research lead to substantial field trials/development work.”
It is suggested that the next stage is incorporating commercialisation plans into contracts – building bridges into the real world.
And that is very, very important if ITF is to live up to the expectations of its membership that, frankly, still remains too small given the scale of the North Sea R&D challenge. I’m quite sure that is a source of frustration for Poxon and his team.
Projects facilitated by ITF have erred on small; none have made a massive impact, as Kemp/Schultz note.
“It is clear that funding of projects at around their current levels is not going to produce a major impact in terms of enhanced investment and production in the UKCS and/or increased global activity emanating from the oil&gas cluster based in the UK,” they warn.
“Further R&D work is financed on an individual basis by oil companies and contractors in the private sector and by the UK Government via other routes, of which the Technology Strategy Board (TSB) is a main example.
“It is arguable that further valuable, relevant R&D work could be facilitated by changes affecting both the private and public contributions to the effort.”
That is deeply worrying if one harks back a few issues of Energy to when Dick Winchester picked apart the Wicks report which said UK energy R&D is starved.
Kemp/Schultz make an interesting suggestion: shunt at least some of the responsibility for oil&gas-related R&D (presumably money, too) from the TSB across to the ITF and strengthen its team.
They correctly argue that the specialist knowledge that it possesses could be put to more productive use than is the case at present.
“The implication is that the capacity of the ITF would have to be enlarged, but the benefit would be more productive use of the funds reflecting ITF’s specialised knowledge. Thus ITF would become involved not only with near-term issues but medium-term ones as well. Its constitution would have to be modified to reflect its changed role. Government membership of the ITF would become more important.”
Should be a no-brainer, surely?
Well, yes, and there again, no. My suspicious mind warns me that the companies that currently subscribe to ITF might decide to put in less money thinking they can cash in on the dosh transferred from the TSB.
Heaven knows, there is little enough money going into energy R&D of any kind in the UK and Kemp/Schultz highlight this via an International Energy Agency chart that tells a frighteningly graphic story. It suggests that, excluding fission and fusion-related R&D, a pathetic £15million or so was spent across the ENTIRE energy sector in Britain in 2002, and barely more in 2004.
There has, since then, been a sharp uplift, but to levels far below the money spent annually in the 1980s. Most of this uplift is renewables-related; very little is oil&gas. That is shocking given the huge importance of the North Sea to the UK and its supply chain as an exporter.
Carry on the way we are and we will neither realise the full potential of the UKCS nor command the global market share that 40 years ofNorth Sea experience suggests we ought. It beggars belief.
And if we can’t hack it with oil&gas, we sure as hell won’t succeed in renewables.