Many of my friends and colleagues in the research and education communities have asked me how the ACS Petroleum Research Fund is doing in the current economic climate. The answer in short is not as well as we would like. In 2008 we were able to provide over $23 million in funding to the community based on our goals of advanced scientific education, support for the careers of scientists and advancing energy related research. In 2009 the Fund will provide $14.7 million, significantly less than in recent years. This economic change has come as a severe shock to everyone, as has the whole economic downturn across the board.

A significant proportion of nonprofit organizations have been forced to take drastic actions as a result of the new economic realities and the ACS Petroleum Research Fund will have to be among those. There are other challenges that are part of the picture for us as we consider what steps to take:

• We are currently structured in such a way that an economic crisis such as this leads to severe disruption of our program planning. If there are any steps we can take to mitigate such a disruption, we need to take them. We need to be able to ensure level and consistent funding to the community.
• We have spent considerable time and energy developing a program strategy which was designed to enhance our impact in the research areas and on the community segments that we care about. The execution of this strategy has been slowed by the economic crisis.

Regardless of the policy changes implied by the above challenges, we are facing a decrease in funding availability for the next several years whether the market recovers or not. The PRF Trust Transfer Agreement requires the distribution of the fund to be based on a 3-year rolling average of the market value of the Fund on the last business day of the 3 years prior to the one considered. The distribution may be up to 5% of that average provided that the market value does not fall below $400 million. The market value at the end of 2008 was $389 million and for 2009 the Fund is restricted to the income only amount of about $14 million. In order to cover the administrative costs and grants for 2009, drawing from the Funds reserve will be necessary. However, the reserve is not sufficient to bring grants back to the $20+ million levels of the past few years. Even if the Fund recovers to levels above $400 million, the 3-year rolling average requirement will average in the $389 figure for the next 2 years, and the year end figures that emerge for 2009 and beyond. We do not believe those year-end figures will be comparable to the $600 million that we ended with in 2007.

We have thought long and hard about how to avoid disruptions in funding and to secure the Fund for the financial sustainability that will allow us to continue our important work. The severe decline in the equity markets in 2008 represents the second time in this decade that we are facing such a fund disruption. It is important that we learn from these events and emerge from each difficult period stronger and more prepared for the inevitable, rapid changes in the economic climate. Only in this manner will we be able to successfully achieve our vision to aid in significantly increasing the world’s energy options through the support of innovative fundamental research, advanced scientific education and the careers of scientists.

Recently I attended the ACS National Meeting in Salt Lake City, UT. Many of us were discussing the impact of the economy on the meeting. There were fewer papers, fewer familiar faces due to travel restrictions, cost cutting, layoffs, etc. One of my colleagues told a story about a friend she had not seen in a while who had personal difficulties that prevented her from attending the ACS meetings. In trying to be supportive, my colleague asked about her friend’s family, her career and the impacts of the economy on her personally. The response she got was cordial to the inquiries but then she said “…but wait, let me tell you about my research.” At this point her entire demeanor changed and she became animated and excited.

While the economy clearly effects what we do and how we feel, for some of us, for many of us, our research successes and failures are more important in terms of what supports and sustains our spirits. Do we have sleepless nights? Absolutely, but we would much rather toss and turn while trying to solve the next research problem than how to survive until the next paycheck. We are a community that thrives on problem solving and we should never forget that. The world is currently faced with enormous problems, particularly those in energy supply, energy storage, energy efficiency and the associated climate impacts that come with our energy choices.

The world needs our capability now more than at any other time in history. For those of us in this community, the work is energizing and fun at the same time that it is of critical importance to our survival. There is a strong parallel that exists in our educational institutions (which is not to say that they too are not excited about their research). Many faculty members can get just as excited telling you about an unbelievable student in their research group. You can tell that teaching and mentoring are as important to many of our colleagues as is research success and the combination of the two can make people happy.

It is clearly in our vision to support faculty in such a way that can result in happy, successful researchers and mentors. There is very little that is more energizing to us than to hear about clearly impactful research success or the work which has inspired a student to shift their career goals toward the sciences. When we see these things happening, we know we are on the right path.

Chris Hollinsed, Ph.D.
Director 2008