Government has legitimate role in oil, gas R&D, House panel told

May 15, 2017
A continued government role in oil and gas research and development drew bipartisan support at a May 3 hearing of the US House Science, Space, and Technology subcommittee.

A continued government role in oil and gas research and development drew bipartisan support at a May 3 hearing of the US House Science, Space, and Technology subcommittee. But Democrats and Republicans disagreed about the scope and direction of US Department of Energy programs that they were defending.

Members generally agreed with witnesses at the hearing that well-funded, early-stage government energy R&D programs can help produce energy technology breakthroughs, even when they are not apparent at the outset.

"DOE is best suited to provide the early stage research that allows industry the opportunity to commercialize and use new technology in the field," said Committee Chairman Lamar Smith (R-Tex.). "This approach allows for the most cost-effective and efficient technology to be deployed by oil and gas companies."

Subcommittee Chairman Randy Weber (R-Tex.) suggested, "As we approach budget season, it's our job as an authorizing committee to make sure we have a clear picture of what federal research investments provide the most bang for our buck."

Weber said, "We know that industry has the skills and resources to fund technology commercialization. But they often don't have the tools to conduct early-stage research and maintain historical data like the DOE national labs can."

Study environmental impacts

Marc Veasey (D-Tex.), the subcommittee's ranking minority member, said, "This area of research requires a strong partnership between government and industry to begin mitigating the environmental impacts of fossil-energy generation. DOE's work in this space is vital to our environmental priorities."

Eddie Bernice Johnson (D-Tex.), the full committee's ranking minority member, also called for a strong DOE energy R&D emphasis on mitigating environmental consequences. "My hope is that the outcome of these hearings will be to push the present administration to reconsider its position to drastically reduce R&D funding for fossil energy."

Witnesses also expressed their support for continued robust basic energy R&D at DOE. Edward Johnston, senior vice-president for research and technology development at the Gas Technology Institute, said vast tight shale gas resources, extensive pipeline systems, private ownership of rights, a robust service sector, entrepreneurial independent producers, access to capital, and policies which encouraged development made the US the global leader in unconventional gas development and production.

"But the work is not finished. Continued research and field tests will be required to achieve desired recovery rates for responsible development, supported by a robust DOE research portfolio," Johnston said.

R&D focuses and roles

New research should focus on preventing problems before they occur, including spills and other environmental contamination; improving safety; and increasing production and operation capabilities, said David Brower, founder and president of Houston-based Astro Technology. Small businesses can provide innovation, larger companies can handle implementation, and government can support the effort with incentives where appropriate, he said.

"It can be very difficult to implement new methods. A stronger government-industry alliance can help solve that problem," Brower said.

DOE support will continue to be critical beyond early research in 8 Rivers Capital LLC's development of its Allam Cycle and NET Power generation technologies, said Walker Dimming, a principal in the Durham, NC, technology development and commercialization firm. "First commercial-scale projects suffer from a number of challenges that are unique," he said. "Because they are not yet mature technologies with full customer order-books, they will not receive the benefit of a supply chain that has maximized its efficiencies and become fully competitive."

Ongoing assistance for carbon capture and storage projects, such as reforming the federal 45Q tax credit, will be essential to assure that clean power technologies are widely deployed, and not just developed in niche applications, Dimming said. "This will maximize their ability to transform the power sector with lower-cost electricity and dramatically increase production and utilization of critical domestic oil resources, all while permanently storing power-sector carbon dioxide underground," he said.

Technology innovations require a strong connection between an oil and gas industry pull for very targeted applications and the academic community's push for fundamental and applied advances in science, engineering and technology, said University of Houston Chief Energy Officer Ramanan Krishnamoorti.

"Disruptive technological advances in oil and gas are likely to come from fundamental advances in fields including nanotechnology, life sciences, data analytics and cognitive computing," Krishnamoorti said. "But given the capital expenses and long runway between fundamental research, applied development, and commercialization, those advances will require continued engagement by federal and state agencies and possibly incubation through engaged national laboratories."

About the Author

Nick Snow

NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.