-2 the minimal necessary to develop and utilize future natural gas resources to their fullest potential. DOE FUNDING FOR GAS AND GEOSCIENCES RESEARCH Natural gas is a vital source of energy for the United States economy. that gas accounted for 24 percent of the primary energy consumed in the United States. Indeed, over the past 25 years, natural gas has accounted for between 24 and 33 States. percent of all of the primary energy consumed in the United Natural gas is used throughout all sectors of the economy. In 1985, gas constituted 51 percent of all end use energy consumed in the residential sector of the economy, 43 percent of all end use energy consumed in the commercial sector and 38 percent of all end use energy consumed in the industrial sector. In addition, natural gas accounts for 12 percent of all fossil energy consumed in electricity generation. Natural gas has positive attributes which will allow it to continue to be a critical source of energy in the future. First, gas supplies are plentiful. The Potential Gas Committee, the industry group that evaluates future gas resources, has estimated that with forseeable technology and economics, the United States has approximately 981 Trillion Cubic Feet (Tcf) or about 57 years of gas supplies from conventional sources. However, many experts contend that the total amount of gas existing in conventional and -3 unconventional geological formations that is currently unrecoverable exceeds 100,000 Tcf. Thus, major breakthroughs in gas recovery technology enabling the recovery of one or two percent of the total gas resource base would result in doubling or tripling our 57 year recoverable gas supply. Second, natural gas is the cleanest of all fossil fuels. Gas combustion emits virtually no sulfur dioxide or particulate matter, and far fewer nitrogen oxides, nonmethane hydrocarbons and carbon monoxide than either coal or oil. Moreover, natural gas combustion does not have disposal problems such as fly ash from coal or spent nuclear fuel. Increasingly, natural gas is becoming recognized as a fuel that can be used without creating substantial environmental hazards. Third, more and more commercial and industrial users are recognizing the benefits of using natural gas. Emerging gas utilization technologies such as commercial gas cooling systems, combined cycle gas turbines, select use of gas, fuel cells and advanced cogeneration systems offer greater fuel efficiencies that will allow commercial and industrial energy users to reduce energy costs. Although natural gas will be, in the forseeable future, a primary source of energy for the United States economy, the DOE invests relatively few of its research dollars to ensure that gas reserves will meet future gas demand. Research in the geoscientific fields of geology, geophysics and geochemistry is necessary to increase our basic -4 understanding of the formation and recovery of unconventional gas resources. Increased understanding of unconventional gas resources is required to achieve the technological advances that will expand the recoverable gas resource base. Indeed, production from conventional sources of gas located in the Lower-48 States is expected to decline by the year 2000. Thus, increased production from unconventional sources will be necessary to compensate for declining conventional production. With federal assistance, the gas industry can achieve these technological advances and ultimately improve U.S. energy supply security more quickly and for substantially less money than the DOE nuclear fusion program. Even though billions of dollars have been spent on nuclear fusion research, fusion as a source of energy may not be feasible technologically until well into the 21st century. In stark contrast, we know that, with a federal commitment of several million dollars, we can achieve technological breakthroughs in gas supply research that will expand significantly the recoverable gas resource base and improve our nation's future supply security. First, the immensity of the total gas resource base (both recoverable and unrecoverable) is well-known and well-documented. Second, recovery of much of the gas located in currently unrecoverable sources of gas is technically possible, but economically infeasible. For example, high production costs prevent the recovery of much of the gas located in tight -5 3 geological formations such as Devonian Shales and tight sands. Research breakthroughs in the techniques for recovering tight formations gas could lower production costs and increase the amount of gas that may be recovered. DOE To achieve the results in gas supply that we envision, DOE must fund more basic research in the geosciences. currently funds a small geosciences research program within the $450 million Basic Energy Sciences (BES) program. We request that Congress direct DOE to spend, from the $441 million that DOE requests for the BES program in FY 1987, $35 million for basic geosciences research. A well-funded federal geosciences program is strongly supported by the Interstate Oil Compact Commission (IOCC), via an IOCC resolution adopted last December (attached as Exhibit A). These funds would be used not only to conduct long term, high risk geosciences research, but also to train young men and women in the geosciences field. Advances in end use utilization of natural gas have already increased the efficiency of gas appliances and processes. Further technological advances in gas utilization will enable a single piece of equipment to provide multiple energy services with significant cost savings and efficiency gains. Further research on electrochemical processes and thermodynamics could radically change the manner in which gas is transformed into usable energy. Increased gas use can also provide solutions to resulting from sulfur oxide emissions; and (3) potential shortfalls in electricity generating capacity. The development of new, highly-efficient gas utilization technologies can solve these problems by reducing our dependence on imported oil, reducing sulfur oxide emissions and assisting electric utilities in meeting electricity demand. SPECIFIC FUNDING RECOMMENDATIONS UNCONVENTIONAL NATURAL GAS: $14 Million Large amounts of gas have been identified in tight geological formations such as Devonian shales and tight sands. Devonian shales and tight sands are estimated to contain more than 1,800 Tcf and 900 Tcf of gas, respectively. Tight formations gas is produced using unconventional recovery techniques. A.G.A. estimates that favorable economic conditions and substantial investment in tight formations R&D programs could result in "incremental" production of up to 6.0 Tcf of gas annually by the year 2010, while a lesser technology program would result in an annual production rate of 1.0 Tcf by that year. To increase production from unconventional gas resources, more research must be conducted to develop advanced stimulation techniques to fracture tight rock |