Once considered a national investment, federal support for oil and gas research and development has fallen out of political favor. The R&D emphasis now is on alternative and renewable energy sources. Oil and gas programs are zeroed out when US President George W. Bush’s administration prepares budget requests for the Department of Energy.
Oil and gas projects within DOE’s Office of Fossil Energy (OFE) continue because Congress each year has restored much of the funding. That did not happen during 2006 because Congress did not approve a federal budget for the fiscal year ending Sept. 30. It simply passed continuing resolutions through the end of the calendar year.
Soon after the new Congress arrived in January, its leadership decided to pass another continuing resolution for the rest of fiscal 2007 and concentrate on preparing fiscal 2008’s final budget. Oil and gas R&D programs within OFE have been operating at fiscal 2005 funding levels in the meantime.
Passage of the latest continuing resolution did not make federal oil and gas R&D funding more certain. The White House’s Office of Management and Budget demanded a new breakout of DOE’s entire budget for a new report to Congress, OFE Budget Director Chuck Roy told me. He would not disclose how much of the approximately $592 million for OFE would go to oil and gas R&D because DOE’s full budget has not been finally approved.
No shutdowns yet
“There’s definitely uncertainty about continuation of the oil and gas R&D program,” confirmed Guido DeHoratiis, who has charge of it within OFE. Congress’s failure in 2006 to specify amounts for it didn’t help, but minimal funds went into projects so they didn’t have to shut down immediately, he said.
Progress continues to be made despite this uncertainty, DeHoratiis said. He cited research into recovering energy from methane hydrates, microhole and other new drilling technologies, and increasing enhanced recovery’s role in carbon sequestration.
A former DOE official says many policymakers don’t realize that DOE’s participation has a major impact on oil and gas R&D. “The microhole drilling program is a good example. Coiled tubing orders are taking off,” said Tom Williams, a special assistant to the assistant secretary for fossil energy at DOE during the presidency of George H.W. Bush. Williams is now with Noble Corp.
Congressional stirrings
Several US House and Senate members are paying attention. “We have been working diligently to raise the issue with as many of them as we can,” said Lee O. Fuller, vice-president, government relations, at the Independent Petroleum Association of America.
Congress and the administration are hearing how independent producers and universities’ petroleum engineering programs-and not major oil companies-directly benefit from federal oil and gas R&D support.
“We’re making inroads. The question is what will happen once Congress starts pushing the final DOE budget through the final appropriations process,” Fuller said.
