Guest editorial The easy oil is gone. Schlumberger described it this way in its 2009 annual report: “As the exploration and production industry strives to meet the energy needs of tomorrow, it is challenged by deeper waters, increasingly complex geo-logical settings, more diverse hydrocarbons, and greater extremes of temperature and pressure.” US President Barack Obama said it like this in a June speech on the tragic Deepwater Horizon accident in the Gulf of Mexico: “…oil companies are drilling a mile beneath the surface of the ocean because we are running out of places to drill on land and in shallow water.” The reality behind these remarks, coupled with current economics, can paint a grim picture. In 2009, technology expenditures in the oil and gas industry were curtailed as world economic conditions worsened, dropping oil prices to under USD 40/bbl. The price has now recovered, remaining between USD 70 and USD 80/bbl, but regulatory uncertainty and other factors have kept the company purse strings closed on all but the most essential expenses. In these times it is important that the oil and gas industry learns a few important lessons. The Deepwater Horizon incident has shed light on how dependent the industry is on technology that will perform in some of the Earth’s most difficult conditions, as well as how critical it is to protect employees, the public, and the environment—regardless of the cost. As we look to the future, our industry faces rising energy demand—specifically an increasing need for transportation energy—and new, more stringent regulations on operations in many parts of the world. This means our industry will continue to move toward reserves that are harder to produce, and that increasing recovery from currently producing fields will have to be a priority to meet future demand. How will we be able to produce more hydrocarbons in remote and complex environments and increase operational safety? The answer is, and has to be, technology. Technology is the only bridge between where we stand now and a future in which we can produce hydrocarbons in ways that are safer, cleaner, and more efficient. But this begs another question. Investments in reserves and production are firmly at the top of most E&P companies’ agendas, with R&D coming in as a much lower priority, if it makes the list at all. Historically, there are numerous examples of how our industry has made incredible advances in technology to meet increasingly difficult E&P challenges—advances that have moved the entire industry forward and resulted in billons of barrels of additional oil produced. Across just about any industry, innovation is more fertile outside the largest companies and organizations. Oil companies themselves are doing less in-house technology development than in the past and, where service companies used to spend a sizable portion of their budgets on targeted R&D many have realized that acquiring intellectual property, technology, and services is an equally interesting and profitable way to increase their footprint.