DOE Industry Analysis: Oil & Gas Opportunity
The Department of Energy (DOE) has reported $250 Billion of Benefits from DOE’s Core Oil & Natural Gas R&D. U.S. Department of Energy oil and gas research programs have supported and catalyzed America’s petroleum technology leadership for decades. Some of the most important exploration and production technology advances of the past century had their roots in research conducted under DOE/NETL or predecessor organizations, including: waterflooding (1920s), mud-pulse telemetry (1970s), and polycrystalline diamond compact (PDC) drill bits (1980s).

Why US Oil & Gas Corporation Will Succeed
The National Research Council (NRC) found that: “DOE’s program appears to have met its objectives of expanding the oil and gas resource base and increasing domestic production of oil and gas in response to mandates from Congress or the Administration … by utilizing DOE expertise and emphasizing high-risk projects. Also, DOE supports smaller companies and independent oil and gas producers, which make up a significant portion of the production capacity in the United States and which have limited resources to undertake R&D programs.”

Opportunity
Recent results from DOE’s National Energy Modeling System have indicated that the Office of Fossil Energy’s core Oil and Natural Gas R&D Program will benefit the Nation by $250 Billion of cumulative benefits through the year 2025. This program is implemented by the National Energy Technology Center’s Strategic Center for Natural Gas and Oil (SCNGO). SCNGO’s core R&D program includes reservoir remediation, well bore cleanup, surface optimization, improved CO2 supply, low-cost injectors (conformance control), cost effective, hi-res imaging for real, time monitoring, and environmental solutions.

Areas of Growth in Oil & Gas: A Trend of New Technology
Department of Energy Oil & Gas Research Program A Trend of Success Stories: Underdeveloped Resources Brought On Line Coalbed natural gas commercialization - DOE’s early R&D in coalbed natural gas (CBNG) provided a critical knowledge base upon which private industry developed the Black Warrior Basin of Alabama and the San Juan Basin of New Mexico and Colorado. A $30 million research program supported by DOE during 1978-82 served as a foundation for the Gas Research Institute (now the Gas Technology Institute) to continue to work with industry on CBNG technology commercialization. Tax incentives in combination with DOE and GRI technology provided the impetus to transform CBNG from a coalmine hazard to a resource that now supplies nearly 10% of domestic natural gas.

Tight Gas - From 1981 to 1988, in the Piceance basin of western Colorado, DOE drilled and evaluated the geology and performance of tight gas sandstones in three closely spaced wells. The comprehensive test data derived from these experiments provided critical insights into the stimulation techniques necessary to improve production rates from low permeability sandstones, and remains a primary source of information on tight sand reservoir heterogeneity, rock properties, and modes of natural fracturing. The site was a catalyst for the development of advanced technologies such as cross-well tomography and microseismic monitoring. A more recent project in New Mexico’s San Juan basin revealed that tailoring infill well drilling to trends in reservoir heterogeneity can boost a field’s ultimate production by more than 40%; a resource addition of more than 7 Tcf in the San Juan Basin alone.

Alaska tundra access – Access to Federal and state lands in Alaska is critical for increasing America’s domestic oil production. As much as 50 billion barrels of oil is estimated to be in-place in the environmentally sensitive North Slope. To find and produce that oil without damaging the fragile tundra, the industry has only the winter work season to carry out seismic exploration, to build ice roads for exploratory drilling, to carry out construction activity, or to perform maintenance on remote infrastructure. The length of this season has shortened over the past 30 years, dropping from over 200 days in 1970 to about 100 days in 2003, imposing a limit on activity and prompting DOE’s involvement. DOE is working with partners to provide tools that will lead to a longer work season while maintaining, and occasionally enhancing, current levels of environmental protection. For the last couple of years, Alaska’s Department of Natural Resources has safely opened portions of the North Slope as much as two weeks earlier than it did in prior years, based on the results of the DOE sponsored Tundra Travel Model. Similarly, DOE is developing Lake Recharge models that will be used to estimate the maximum quantity of fresh water that might be available for ice-road construction without adverse environmental impact. Increased water withdrawal limits, combined with better use of ice-chips, should lead to faster road building, in turn leaving more time for well drilling before the spring thaw forces companies to retreat back across the ice roads before they become too soft for use. DOE’s emphasis on safely increasing the winter work season could allow companies to complete exploration wells within one season rather than two, thereby increasing the flow of domestic oil from Alaska.