Hall's Deepwater Drilling Research Program Approved
One of the major provisions contained in H.R. 6, "The Energy Policy Act of 2003" adopted by the House today, is the Ultra-Deepwater and Unconventional Onshore Natural Gas Research and Development Program authored by House Science Committee Ranking Democratic Member Ralph Hall (D-Texas).
This provision establishes a new 10-year, $2 billion program that is characterized by a unique partnership between government and industry to develop the technologies to meet the nation's mid-term natural gas demand. The ultra-deep waters of the Gulf of Mexico and many areas in the Southwest and West contain potentially prolific but challenging gas resources that can yield extraordinary volumes of gas quickly.
Another unique feature is that the program will pay for itself. The increased production as a result of this R&D will mean significant increases in royalties to the Treasury.
The ultra-deepwater portion of the program will address a major inadequacy in the way Federal energy research is conducted, particularly in the applied R&D area. Too often, government research programs are limited by size and scope, uncertainty of budgets, and barriers to the creation of public/private partnerships. By contrast, this program requires substantial contributions by industry, and with only a 10-year life it will require "ruthless execution" to bring projects to completion before termination.
The program is expected to be managed through a consortium of academia, industry and research institutions selected through a competitive solicitation managed by the Department of Energy. Since expertise on ultra-deepwater exploration and production resides outside the Federal government, industry and academic knowledge is critical to the success of the program.
The Unconventional Onshore R&D portion of the program will be managed by DOE but it is expected that DOE will use large research consortia to achieve high-level production and royalty revenue goals.
"In reality it is more like a production program than an R&D program. It has the potential to develop the technologies that will go a long way toward filling the projected gap in natural gas production and consumption that will exist between now and 2015. Furthermore, very substantial quantities of oil are expected to be produced, too. All of this adds up to a diminished dependence on foreign sources of oil and gas for a few important years," said Hall. "I hope that we use these years to make some substantial breakthroughs in the development of renewable energy resources and energy efficiency measures that will permanently reduce our dependence on foreign oil and gas."
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