Watching Government Defending R&D

With Patrick Crow from Washington, D.C. [email protected] The movement in Congress to stem "corporate welfare" has the Energy Department on the defensive to protect its oil and gas research programs (see editorial, p. 19). Patricia Fry Godley, assistant secretary for fossil energy, recently told a congressional committee DOE is proposing $346 million for oil, gas, and coal R&D programs in fiscal 1998, down from $364 million. She said the advanced gas turbine program has been called corporate

March 31, 1997

3 min read

The movement in Congress to stem "corporate welfare" has the Energy Department on the defensive to protect its oil and gas research programs (see editorial, p. 19).

Patricia Fry Godley, assistant secretary for fossil energy, recently told a congressional committee DOE is proposing $346 million for oil, gas, and coal R&D programs in fiscal 1998, down from $364 million.

She said the advanced gas turbine program has been called corporate welfare, but DOE wants improvements beyond what private companies would make.

"We have set a target of 9 ppm or less for nitrogen oxide emissions with power generating efficiencies of 60% or more (13-15% higher than today's best technology)." She said such ultra-clean turbines could be sited in environmentally constrained areas of the Northeast and southern California.

Godley said DOE has made "remarkable" progress in converting gas and coal to high-grade liquid fuels and chemicals.

"Recent technology advancements in natural gas-to-liquids conversion technology offer prospects for producing transportation-grade fuels at costs of $18-20/bbl."

She said that research may thus make it possible to produce Prudhoe Bay oil field gas reserves and export the resulting liquids through the existing Trans-Alaska Pipeline System.

Gas drilling

Godley said DOE wants to help the gas industry reduce drilling costs 13%, lower operating costs 20%, and produce from currently uneconomic formations. The goal is to boost gas output by 3.7 tcf/year in 2010.

"We plan to extend the highly successful 'secondary gas recovery' project into the Appalachian basin. This project, which applies new technologies and methods to locate gas bypassed in older fields, already has revealed the potential for nearly 4 tcf of additional reserves in Southwest Texas with an economic value that could approach $1.4 billion."

DOE will continue work on slimhole and underbalanced drilling and reservoir stimulation technologies "such as carbon dioxide sand fracturing, which has been shown in an Appalachian basin test to produce two to five times more gas than other methods."

It also is testing jet-assisted drilling technologies applicable to deeper, harder formations and steerable air percussion drilling systems for horizontal wells.

Oil projects

Godley said, "The days of 'Big Oil' dominating the U.S. industry are fast fading, and our R&D program reflects the growing importance of the smaller producer."

She said half of the 32 current reservoir class research projects will be under way or completed by next year, and DOE would focus on demonstrations in reservoir groups with the largest potential.

It will increase funding for a program to develop single-well seismic imaging technology. "Our target is the 60% of Gulf of Mexico hydrocarbon resources that are in subsalt or salt flank reservoirs."

DOE is developing geologic data software to help small producers find productive zones in unexplored basins.

"We estimate these new exploration tools could save operators $25 million/year in dry hole costs while expanding production in such areas as the Black Mesa Basin of Arizona and in the Midcontinent."