From the President | January 2022

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Within the Houston Geological Society the members deal with a split time frame.  We all would like to join all the annual musings about the year just past and the one that we have crossed into. With the HGS fiscal year running from July through the following June, the practice of breathing a sigh of relief to have survived something and proclaiming it’s now “in the books” holds little relevance. Aside from all this, I would indeed like to wish all Members a Happy New Year!

The time frame of our future as it pertains to the Board is nominally six months, as we try to give a good accounting to the membership of our tour of duty. The real issue, though, is what HGS will look like far beyond next June, in the face of changing practices and preferences in professional society, industry and political trends, and unrelenting technological advances.

As we celebrate our 100th anniversary next year, the festivities at HGS will certainly include historical look-backs throughout the year at the changing “look” of HGS over the past century. Charles and Linda Sternbach and others have been working and planning for quite some time to make 2023 a year to remember at Houston Geological Society. As well, you can bet the leadership of HGS during that year will be looking at the HGS-of-the-past for clues to its future.

A major focus of the board as we envisage the future HGS is its financial health.  Financial concerns exist not just at HGS but all geological, other scientific, and even O&G industry societies. The existential threat to HGS is not as dire as it is to other non-profit organizations because we are fortunate to have built an investment portfolio whose annual growth has given us breathing room during the rough years.

There is a reason for suspecting that this not a case of surviving a couple rough years though. There has been a trend for at least a half dozen years now of declining membership and specifically the participation in the large scientific annual conventions. This is a trend that predates the current pandemic effect, and it seems to be unrelated to boom and bust phases in our industry. HGS has met with considerable success in hosting its small local conferences, as evidenced by its Mudrocks and Geomechanics Conventions. But revenues from our local conferences paled by comparison with large cash infusions we received every three or four years from AAPG and GCAGS (those years that Houston hosted those annual conventions). The fund transfers amounted to $300,000-500,000. These infusions have now completely disappeared, as these conventions are losing money every year and there is nothing to “trickle down” to HGS.  I have briefly mentioned these trends in previous Prez letters as probably cultural-related, and plan to offer full Bulletin articles in the next several months on this topic.

The HGS board has approved an operational budget that sets the goal of a loss of $101 thousand on revenues of $213 thousand and expenses of $314 thousand. Though this is expected to be largely offset by gains in our (conservatively-managed) investment portfolio, we cannot expect that gains in future years will be as lucrative as the last several. A further explanation of how the HGS evolved from net profits to net losses over the past seven years is beyond the scope of a single monthly letter, but suffice it to say that the board recognizes that incurring annual losses is no way to run a business, and is working hard at cutting costs and finding ways to increase revenue.

There seems to be general assumption that membership dues collected somehow cover expenses. I doubt that has ever been the case at HGS. Currently the dues we collect are in the $45,000 range (on revenue of approx $210 thousand). To raise the member annual dues of $30 to a breakeven point would mean tripling them to the $100 level, an option we will not, and from a policy standpoint, cannot consider. The board has voted to increase dues 20% to the $36 level starting next year. It remains at the lowest price of all similar organizations at about a dime-a-day.

In other news:
Save the date-Feb 7 HGS Scholarship Night: New Hires-Future Hires; Passing the Baton. Scholarship Night is an HGS tradition over many years of introducing our scholarship winners and offering great speakers. Our speakers this year consist of an inspiring five member panel who all have entered the oil and gas industry in the last 0 – 5 years. They will share their experiences in getting and keeping a job, insights, stories, and advice, while also fielding audience questions. Come also to meet and encourage the student scholarship winners and help support the HGS Foundation and Calvert Memorial Fund. This is a popular event, so register early. We look forward to seeing you there!

Mike Erpenbeck
President, HGS