Although progress has been made, current economic conditions and aftershocks from the “Great Recession of 2008” continue to impede the full recovery of the ACS Petroleum Research Fund. As stated in previous Director’s Messages, year-end Fund values must be greater than $500 million for three consecutive years in order to achieve full financial recovery. At $441 million, the year-end value for 2011 did not achieve this target. However, we continue to work to maximize support of “advanced scientific education and fundamental research in the petroleum field.”
Most notable is the fact that the ACS Board of Directors Standing Committee on Grants and Awards awarded grants to all proposals recommended for funding by the ACS PRF Advisory Board at their 2011 Spring and Fall meetings. For 2011, 184 grants were awarded and funding totaled $16,445,000. This was a significant increase compared to 2010 when only 131 grants were awarded with a total funding amount of $11.4 million. Despite the poor economic conditions there was no discernible reduction in proposal success—ratio of grants awarded to proposals submitted. The proposal success rate was 22% in 2011. We foresee a slightly higher proposal success rate and number of grants to be awarded in 2012.
We should not overlook the fact that $2.1 million was added to the ACS PRF Reserve in 2011 increasing the total Reserve to $20.9 million. On September 22, 2010 the ACS Board of Directors Standing Committee on Pensions & Investments voted unanimously to revise the ACS PRF Reserve Policy to a level that is two to three times the difference in the projected annual distribution (based on 5% of the 3-year rolling average of the year-end Fund value) and the previous year's investment income (i.e., interest and dividends generated by the Fund). As a result, additional funds must be allocated annually to the ACS PRF Reserve until the Reserve's value is between $28 and $42 million.
Accomplishments in 2011 were remarkable considering that this year was financially our worst year based on the distribution formula noted above. Our ability to achieve these accomplishments was a result of measures taken to improve financial efficiency. We severely curtailed discretionary spending. We decreased direct expenses to be about 2/3 of our indirect expenses without any noticeable decrease in services that we provide to our grant recipients and the science and engineering community, in general. The ACS PRF Advisory Board and my staff have developed contingencies should financial markets drop precipitously. These contingencies can become effective immediately upon consensus approval by the ACS PRF Advisory Board or by the ACS Board of Directors Standing Committee on Grants & Awards.
The financial crisis compelled us to re-evaluate all of our grant programs. We decided to focus on our four core research grant programs that are most relevant to our mandate and mission. As a result of these actions, the ACS PRF is stronger and more resilient ensuring that the Fund will continue to have a clear impact on and benefit to the scientific research community and society. The impacts and benefits are exemplified in the progress reports contained in the 56th Annual Report on Research Under Sponsorship of the ACS Petroleum Research Fund. We invite you to read the progress reports and researcher stories available on this site to learn about the impressive research carried out by principal investigators and their students at hundreds of universities and colleges--all supported by the ACS PRF grant programs.
Ronald E. Siatkowski, PhD, FAIC
The American Chemical Society Petroleum Research Fund