President’s Column – December 2008

Title: What About the Future?

Author: Steve Goolsby

Publication: The Outcrop, December 2008, p. 12, 27

Have you ever looked up from the sticky floor of a backwoods bar through hazy, unfocused eyes and wondered what the future holds for you? Well, I haven’t. Nonetheless, I often do wonder what the future holds for me. As I write my last 2008 president’s column for the Outcrop, I can’t help but ponder the future of the RMAG. We definitely have some challenges to overcome within our organization, and our approach to solving those challenges could very well be critical in whether or not the society survives into the future.

The biggest challenge we have in the immediate future is the financial solvency of the organization. No, I don’t mean that this year has been a financial disaster for the organization. Although the final financial accounting for RMAG is still a month away as I write this, our budget numbers looked excellent at the last monthly review during our October Board of Director’s meeting. RMAG works on a November-to-November financial reporting year, so we won’t know the final accounting until after December 1st. But things have been going so well that I have quit loosing sleep over whether or not we are going to meet this year’s budget.

Future budgets are another matter, however. Finances continue to be a major challenge to our society because of the size of our budget. This year’s budget for both income
and expenses was $832,000.00 (unlike the government, we work on a balanced budget). That’s a big chunk of change. The major reason for the huge budget is that the RMAG provides a large number of expensive services to our members and to our “sister” societies. When we organize a symposium, every expense associated with that symposium has to be accounted for in our budget. Many of those expenses are pass­through expenses, and are not really deficits to RMAG’s finances. For example, when we co-sponsor a symposium with another society, RMAG often collects all of the fees and pays all of the expenses for the symposium, then proportions the resulting net income with the other sponsoring society. Even though we know that the other society is paying their portion of the expenses and generating their portion of the income, RMAG has to include all of the costs for the entire symposium in our annual budget. If we want to continue to supply the level of services to our members that they have come to expect from the organization, then we are going to have to continue to expect large annual budgets for the society.

Big budgets are not a problem in good years. But when the oil and gas industry turns down in lean years, large budgets become very tricky to deal with. Many of our expenses are incurred months out, and they can’t be canceled easily even in the face of dwindling income. You can’t very well plan for a symposium that may draw more than five hundred people without committing to a room and services months before the date of the event.

High oil and gas prices have sheltered most of our industry from the financial crisis the world now faces, and the loss of business credit due to the mortgage industry melt­down has not impacted the jobs of most of our members so far. Now that oil and gas prices are falling, some signs of a slow-down in the industry are beginning to appear. For example, one major Rocky Mountain refiner has recently announced that they are putting their refinery expansion plans on hold. If prices continue to fall or even stay at their current relatively low levels, we will begin to see some oil and gas companies cancelling their exploration and development programs to reduce their costs. But the easiest way for most of them to reduce costs is to lay off professional staff. Hopefully, oil and gas prices will stabilize at levels that will continue to support our industry. However, the words “stabilize” and “oil prices” seem to be oxymoronic in today’s market. Predicting what will happen and how it will affect the RMAG continues to be the largest challenge for the Board of Directors.

Staffing is another large challenge the organization has. We are just too big an organization and we provide too many services to try to keep the society going without full and part-­time salaried employees. Luckily, the RMAG staff is excellent at keeping our costs down and at monitoring our budget. I believe that the RMAG survived the last financial downturn and is in good financial condition today in no small part because Sandi Pellisser watches our expenses and income on a weekly basis. In addition, Josh Robbins and many of our past staff have generated many good ideas to minimize the expenses and maximize the income for the society. Despite these contributions, there are still challenges in how large to make the staff and in whether the RMAG needs to employee additional staff in other disciplines.

There are many other challenges ahead for the RMAG besides those associated with the budget and with staffing. Some of our membership is going to gray hair, and the average age of our membership continues to increase. How can we encourage additional younger geoscientists to join our society? How can the society best deal with the revolution occurring in the electronic communications industry and incorporate those changes into our services? What services do we need to add or cut? When can we go back to having beer with our luncheon talks? These, and many other important challenges, will keep future Board of Directors scratching their heads for many years to come.

Personally, I’m optimistic that RMAG will meet these challenges and continue to prosper into the future. The reason for this is that we have a staff and many excellent volunteers who can help us meet those challenges. As my last word before I get up off of this sticky floor, I’d like to extend my deepest appreciation to those volunteers and to the staff for making my year as president an enjoyable and worthwhile experience. Thank you all.