House subcommittee examines focus of federal energy R&D support

Federal support of early-stage energy research and development in the 1980s and ‘90s led to technologies responsible for today’s US oil and gas renaissance, witnesses reminded a US House Science, Space, and Technology subcommittee. Alternative energy technologies deserve similar early-stage support now, Democrats on the Energy and Environment Subcommittee argued.

“I’m struck by the fairly dismissive arguments that alternative energy is unreliable and uncertain, and that fossil energy is a slam dunk,” said Brad Miller (D-NC), the subcommittee’s ranking minority member. Emerging technologies do not have fossil fuels’ “incumbent economic power” and consequently deserve early-stage federal funding support, he added.

But subcommittee chairman Andy Harris (R-Md.) said the Obama administration seems to condemn certain potential energy resources without considering ways to improve their extraction.

“This was clearly illustrated in May when [the US Department of Energy’s] assistant secretary for fossil energy testified to the subcommittee that oil shale was a component of the administration’s all-of-the-above energy strategy,” Harris said. “Yet when pressed, he acknowledged DOE was not spending any funding on oil shale R&D, and could not identify anything the administration was doing to actively advance oil shale.”

He said the Obama administration is similarly inconsistent toward shale gas production, which it has applauded, since the US Environmental Protection Agency and 13 other federal agencies and offices are trying to find new ways to regulate hydraulic fracturing.

Challenges remain

Despite initial breakthroughs, further unconventional oil and gas R&D is needed, witnesses told the subcommittee. “Unconventional resources are much larger in volume than are our conventional resource stores,” said Anthony Cugini, director of DOE’s National Energy Technology Laboratory. “These resources, however, generally exist in more geologically complex settings or in more remote or environmentally sensitive areas, and require more intensive production methods.”

He said DOE is carrying out research to quantify and understand shale oil and gas’s environmental and safety risks of shale gas and shale oil development, as well as improving the understanding of emerging and developing shale plays, lowering the cost and increasing the efficiency of technologies for treating fracing flowback water, and optimizing shale gas resource recovery. The efforts are funded through the ultradeepwater and unconventional gas and other petroleum resources program under the 2005 Energy Policy Act, Cugini said.

He noted that oil shale was a major public and private research topic in the 1980s, but interest declined as less expensive oil sources became available. “With regard to methane hydrates, the DOE has successfully finished a pilot production well,” Cugini said. “Because of this effort and past DOE efforts, hydrates have moved from a scientific curiosity in 2000 to a known resource today.”

Daniel Hill, interim head of Texas A&M University’s Petroleum Engineering Department, said shale production technology advances were significantly helped by modest DOE funding which supported research primarily at universities, small businesses, and the national laboratories.

“We know where the resources can be found, but we still need technical improvements to be able to produce much of the resource at prices that are beneficial to the public,” he told the subcommittee. “However, it will not be easy, and it will require two things—further developments in technology, and the trained engineers and geoscientists needed for continued growth.”

Educating engineers

DOE funding for oil and gas research potentially could make its greatest contribution by training more engineers and scientists at universities, according to Hill. “The demand for engineers in this field is huge—the [chief operating officer] of a major service company recently told me that his company alone hired 15,000 new employees in the US in 2011,” he said. “That is a lot of jobs, and many of them need to be highly trained engineers and scientists.

David Martineau, president of the Texas Independent Producers & Royalty Owners Association, said before the US realizes its full shale energy resource potential, it will need to understand subsurface property variations to avoid drilling marginal wells and increase recovery rates, scientifically characterize risks and inform stakeholders, and minimize unconventional operations' surface impacts.

“Recognizing the importance of oil and gas, and investing federal money in its development, should not be a thing of the past,” he maintained. “In fact, never in history has it been more crucial to continue improving and enhancing our ability to recover domestic oil and natural gas. Domestic energy independence can be achieved, and federal research money can play a part.”

Michael C. Hagood, program development director for Energy and Environment Science and Technology at the Idaho National Laboratory, said US oil shale resources also could begin to be produced in the next several years and last for most—if not all—of this century. The US Energy Information Administration estimated in 2009 that the soonest a commercial oil shale project could be initiated would be 2017 for one with a surface retort and 2023 for one using an underground, in-situ process, he indicated.

“[R&D] has already played a strategic role in the successful development of unconventional fossil energy resources, such as the Canadian oil sands and US shale gas and tight oil,” Hagood said. “All of these R&D programs took many years to bring new products to market. A summary profile of oil shale technology and R&D can be found in various DOE reports. Research emanating from Canadian oil sands development is also a valuable and relevant source of information, even though focused on a different type of hydrocarbon resource.”

Contact Nick Snow at nicks@pennwell.com.

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