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Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research and Development Program 2008 Annual Plan

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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 2008 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 2008 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.

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FOR FURTHER INFORMATION CONTACT:

Elena Melchert, U.S. Department of Energy, Office of Oil and Natural Gas, Mail Stop FE-30, 1000 Independence Avenue, SW., Washington, DC 20585 or phone: 202-586-5600 or e-mail to UltraDeepwater@hq.doe.gov.

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SUPPLEMENTARY INFORMATION:

Executive Summary [excerpted from the 2008 Annual Plan p.3 ]

This document is the 2008 Annual Plan for the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Research and Development Program (Program), established pursuant to Subtitle J, Sections 999A through 999H, of the Energy Policy Act of 2005 (EPAct).

The Department of Energy (DOE) contracted with a consortium (Consortium) to administer three program elements, as identified in EPAct, pursuant to an annual plan. The three program elements administered by the Consortium include: ultra-deepwater architecture and technology, unconventional natural gas and other petroleum resources exploration and production technology, and technology challenges of small producers.

A fourth program element identified in EPAct for complementary research is Start Printed Page 50604being performed by the National Energy Technology Laboratory (NETL). NETL is also tasked with primary review and oversight of the Consortium.

In 2006, NETL awarded a contract to the Research Partnership to Secure Energy for America (RPSEA) to function as the Consortium. NETL worked closely with RPSEA in the development of its first Draft Annual Plan (DAP), which framed the Consortium's goals for the first two years of the program. RPSEA gathered extensive input through industry workshops, road mapping sessions, and expert opinion to develop its first DAP, and identified priority areas for the investment of $32 million per year on Consortium awarded research and development (R&D).

Pursuant to Section 999B(e)(2)(A) of EPAct, the Consortium provided its recommendations for the 2008 Annual Plan in the form of a “draft annual plan”. These recommendations were the basis for the Draft 2008 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 2008 Annual Plan.

In order to accommodate a Section 999B(e)(3) requirement to publish all written comments, the Advisory Committee reports are appended to the 2008 Annual Plan. No other written comments were received.

The first solicitations under the Consortium Program were released in mid-October 2007, with proposals received in early December 2007 for a Small Producer Program and an Unconventional Natural Gas and Other Petroleum Resource Program. Additional solicitations were released in November 2007, December 2007, and February 2008.

In the 2008 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. In 2008, the Consortium will solicit 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 fields. The Consortium will also solicit projects that seek to advance technologies in each of these areas as components of an integrated system. Seventeen projects were selected for award from thirteen UDW RFPs. The selected projects are listed in Table 2.5.

The Unconventional Natural Gas and Other Petroleum Resource Program Element is divided into three theme areas that target gas shales, water management for both coalbed methane and gas shales, and tight sands. As in the 2007 Annual Plan, the 2008 Annual Plan focuses on unconventional natural gas rather than “other petroleum resources” (e.g. , shale oil, oil sands, deep gas). This focus on natural gas resources is consistent with a recommendation of the Unconventional Resources Technology Advisory Committee. Unconventional oil resources may become an additional focus of Consortium R&D in the future; however, they are currently being addressed within NETL's R&D portfolio. To date, nineteen projects have been selected for award under the Unconventional Resources Program. The selected projects are listed in Table 2.9.

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 challenges in these three areas on a daily basis. To date, seven projects have been selected for award under the Small Producers Program. The selected projects mentioned above are listed in Table 2.11.

For each of the program elements, a number of “themes” have been developed to help guide the Consortium through the solicitation process. These themes and the prioritization process are described in greater detail in Sections 2.1, 2.2, and 2.3 of the 2008 Annual Plan.

The solicitation process that is being followed to generate the portfolio of R&D projects to address these themes is described in Section 2.4.

Frequent communication between NETL and RPSEA ensures that research being conducted at the NETL remains complementary and supportive of the Consortium-administered program elements, and that duplication of effort is avoided. The technical committee established pursuant to EPAct 2005 Section 999H(d)(4) to further ensure that the R&D efforts remain complementary, conducted its first assessment on June 11, 2008 and determined that the complementary R&D program being carried out by NETL was not duplicative of the consortium-based program and is in fact complementary in nature.

The 2008 Annual Plan focuses primarily upon the release of solicitations and the establishment of R&D projects. The R&D projects selected to date are expected to be awarded beginning in May 2008, with all awards anticipated completed by September 2008. Technology transfer is also a key focus for 2008 as it is an important aspect of successful R&D and will be carried out in a manner such that R&D results are disseminated to the widest possible audience.

Technology transfer for this program is a continually evolving function. Section 999C(d) of EPAct 2005 requires that 2.5% of the amount of each award is to be designated for technology transfer. The funds will target technology transfer at both the project and the program level. Expenditures of these funds will initially be proposed by the awardees.

RPSEA and the awardees will then coordinate to develop an appropriate approach which fulfills both the project and program technology transfer requirements. In the broader context, NETL and RPSEA are continuing to coordinate in the development of a technology transfer plan that provides a systematic approach for development of an integrated technology transfer program with the understanding that this will be a continually evolving function.

Section 999 H (a) of EPAct provides that the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Fund will be funded at $50-million-per-year, with funds generated from Federal lease royalties, rents, and bonuses paid by oil and gas companies. The Consortium receives 75 percent of those funds. After allocations for program management by NETL and R&D administration by RPSEA, the amounts to be invested in Consortium R&D total $32.06 million per year.

Under the Stage/Gate approach, described below in Section 2.5, all projects will be fully funded to the completion of the appropriate decision point identified in each contract, which may include multiple stages. If a decision is made to move to the next stage or decision point or to gather additional data, additional funding will be provided from available funds.

The NETL Strategic Center for Natural Gas and Oil is responsible for primary review and oversight of the Consortium. Complementary R&D is being carried out by NETL's Office of Research and Development. Planning and analysis related to the program, including benefits assessment and technology impacts analysis, is being carried out by Start Printed Page 50605NETL's Office of Systems, Analysis, and Planning.

Section 999F of EPAct contains a general sunset provision for Subtitle J of September 30, 2014.

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Dated: August 7, 2008.

Guido DeHoratiis,

Acting Deputy Assistant Secretary, Office of Oil and Natural Gas, Office of Fossil Energy.

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[FR Doc. E8-19846 Filed 8-26-08; 8:45 am]

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