Christine A. Hansen knew she was fighting an uphill battle when she called on several US House and Senate members to explain why federal support still is needed for domestic oil and gas research and development. After all, she had just heard US Energy Sec. Samuel W. Bodman tell the National Petroleum Council on June 21 about future federal energy research for just about everything else. But the Interstate Oil & Gas Compact Commission’s executive director still planned to visit several federal lawmakers and remind them that the drop in domestic production will accelerate without federal support for oil and gas research and development.
IOGCC made this case eloquently in a new publication, “Who will fund America’s energy future?” It said that the answer is not clear, but adds it will encourage “the use of public funds for cutting-edge R&D for domestic oil and gas production that can be deployed by the backbone of the domestic industry-the independent producers.”
The publication pointed out that thousands of incremental advances over the years have increased oil recovery rates from less than 10% to more than 40% in some cases. “As more accessible resources are produced, the need grows for the R&D that taps more elusive reserves,” it said.
‘Discouraging’
When I telephoned Hansen at IOGCC’s Oklahoma City headquarters early last week and asked what she found during her congressional visits, she replied: “It was discouraging. Congress generally understands the need for R&D for the domestic oil and gas industry. It also understands that the public doesn’t recognize this. I’m not sure that anyone on Capitol Hill wants to spend time trying to educate the public about it.”
IOGCC certainly has an interest in getting the message out. Since it is comprised of US states that produce most of the nation’s oil and gas, it recognizes that federal funding for oil and gas R&D benefits not just producers but also universities’ petroleum engineering programs.
Hansen said, “It works through existing programs. The Department of Energy has very carefully leveraged its dollars over the years. The amounts have steadily shrunk, but it has also carefully spent that tax money.”
Shared technology
Federal funding also assures that technologies that emerge aren’t proprietary, she added. “Not only can it be shared, but DOE grants usually require an outreach component. The same can’t be said of other federal programs. That’s why it’s so disheartening that this one isn’t getting more support.”
The House essentially removed oil and gas R&D from its version of the fiscal 2007 federal budget. The Senate Appropriations Committee’s energy and water subcommittee authorized some funding on June 27, including:
- $90 million for carbon sequestration.
- $17 million for methane hydrates research.
- $10 million for oil shale and tar sands.
- $39.8 million for oil shale and naval petroleum reserves.
- $93 million for additional gasoline and ethanol surveys.