E7-15998. Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research and Development Program 2007 Annual Plan

AGENCY:

Office of Fossil Energy, Department of Energy (DOE).

ACTION:

Notice of Report Availability.

SUMMARY:

The Office of Fossil Energy announces the availability of the 2007 Annual Plan for the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research and Development Program on the DOE Web site at http://management.energy.gov/​FOIA/​1480.htm or in print form (see “CONTACT” below). The 2007 Annual Plan is in compliance with the Energy Policy Act of 2005, Subtitle J, Section 999B(e)(3), which requires the publication of this plan and all written comments in the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Bill Hochheiser or Elena Melchert, U.S. Department of Energy, Office of Oil and Natural Gas, Mail Stop FE-30, 1000 Independence Ave., SW., Washington, DC 20585 or phone: [phone] or e-mail to [e-mail].

SUPPLEMENTARY INFORMATION:

Executive Summary [excerpted from the 2007 Annual Plan p.4]

This document is the 2007 Annual Plan (Plan) for the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research and Development Program (Program) established pursuant to Subtitle J, Section 999, of the Energy Policy Act of 2005 (EPAct).

EPAct required the Department of Energy to competitively select and award a contract to a consortium which in turn is to administer three elements of the Program pursuant to an annual plan. A fourth program element of complementary research will be performed by the National Energy Technology Laboratory (NETL). NETL is also tasked with primary review and oversight of the Consortium.

As required by Section 999B(e)(2)(A), the Consortium provided its recommendations for the 2007 Annual Plan in the form of a “draft annual plan” (DAP). These recommendations were the basis for the 2007 Annual Plan which was presented to the Ultra-Deepwater Advisory Committee (UDAC) and the Unconventional Resources Technology Advisory Committee (URTAC) for review and comments. These comments were considered in the final development of the 2007 Annual Plan. In order to accommodate the Section 999 requirement to publish all written comments, the Consortium's DAP and the Advisory Committee reports are appended to the 2007 Annual Plan. No other written comments were received.

As directed in Section 999, NETL solicited proposals, and in late 2006, competitively selected The Research Partnership to Secure Energy for America (RPSEA) as the Consortium. NETL worked closely with RPSEA in the development of its DAP, which frames their goals for the first two years of the program. RPSEA gathered extensive input through industry workshops, roadmapping sessions, and expert opinion to develop its first DAP, and identified the areas of highest priority for the investment of $50 million per year.

EPAct identifies three program elements to be administered by the Consortium: Ultra-deepwater architecture and technology, unconventional natural gas and other petroleum resources exploration and production technology, and technology challenges of small producers.

In the 2007 Annual Plan, the Ultra-Deepwater Program Element is divided into theme areas based on four generic field types that represent the most challenging field development scenarios facing deepwater operators. The Consortium will solicit research and development (R&D) projects that seek to develop technologies that will facilitate development of these field types. Additionally, there are eight crosscutting challenges that represent the areas where new technologies are needed to advance the pace of ultra-deepwater development for all field types. The Consortium will also solicit projects that seek to advance technologies in each of these areas as components of an integrated system.

The Unconventional Natural Gas and Other Petroleum Resources Program Element is divided into three theme areas that target gas shales, water management for both coalbed methane and gas shales, and tight sands. The 2007 Annual Plan focuses on unconventional natural gas rather than “other petroleum resources” (e.g., shale oil, oil sands, deep gas) where R&D to help convert resources into reserves is needed.

The Small Producers Program Element targets advancing technologies for mature fields, which primarily covers the technology challenges of managing water production, improving recovery, and reducing costs. Mature fields are the domain of small producers, and they face these three challenges on a daily basis.

For each of these program elements, a number of “sub-themes” have been developed to help guide the Consortium through their solicitation process. These sub-themes and the prioritization process are provided in greater detail in Sections 2.1, 2.2 and 2.3 of the 2007 Annual Plan. The solicitation process that will be followed to generate the portfolio of R&D projects to address these themes is described in Section 2.4.

The NETL Complementary R&D Program Element has four principal areas of focus or “Centers”:

• Drilling Under Extreme Conditions.
• Environmental Impacts of Oil and Natural Gas Development.
• Enhanced and Unconventional Oil Recovery.
• Resource Assessment.

A fifth area of activity will identify and quantify the benefits that are expected to accrue as a result of the annual $50 million funding level provided under Section 999H(a) of EPAct, and perform analyses in support of program planning.

Examples where the NETL R&D Program Element will complement the R&D administered by the Consortium include:

• Within both the Environmental Impacts of Oil and Gas Development and the Enhanced and Unconventional Oil Recovery Centers, there is a significant focus on oil shale and oil sands, resource areas that are not part of the program administered by the Consortium.
• The Center for Drilling Under Extreme Conditions will carry out fundamental research related to the performance of tools and equipment under extremely high pressures and temperatures, work that is related to development of the deep gas resource, which is not a target of the consortium program. Also, this work can support particular elements of the Ultra-Deepwater program.
• The Center for Resource Assessment will develop data and analytical products that will complement both the programs for small producers and the development of unconventional gas resources. These products, similar to those produced by DOE in the past and very popular within the industry, are not a focus area for the Consortium.

Continual communication between NETL and RPSEA will ensure that all program elements remain complementary and supportive, and that duplication of effort is avoided. Technology transfer for the entire program will be a continually evolving function. Because there are not yet any active projects, the focus of the 2007 Annual Plan is to release solicitations and establish R&D projects. Technology transfer will be an integral part of the NETL Complementary program. It will also be part of each Consortium-administered award, as Section 999C(d) of EPAct mandates that each award recipient use 2.5% of their award for technology transfer. RPSEA and NETL have been working together to develop a technology transfer plan that provides a systematic approach for development of an integrated technology transfer program.

Section 999H(a) of EPAct provided that the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Fund will be funded at $50-million-per-year for 10 years, with funds generated from Federal lease royalties, rents, and bonuses paid by oil and gas companies. After allocations for program management by NETL and R&D administration by RPSEA, the amounts to be invested in R&D total $44.56 million ($32.06 million per year for Consortium R&D and $12.5 million per year for Complementary R&D).

The NETL Strategic Center for Natural Gas and Oil is responsible for overall program management. Complementary R&D will be carried out by NETL's Office of Research and Development. Planning and analysis related to the program, including benefits assessment and technology impacts analysis related to program direction, will be carried out by NETL's Office of Systems, Analysis, and Planning.

Dated: August 1, 2007.

James A. Slutz,

Deputy Assistant Secretary, Office Oil and Natural Gas.