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• Notes • Abstract • Introduction • The value of research • Production as a metric for research value • Oil • Natural gas • Meeting future U.S. energy demands • Production • Imports • Energy research • Summary • References |
The United States is facing a very real energy problem. For the past century, the people of the United States have enjoyed, and actually come to expect, very inexpensive fossil energy. This cheap energy is the direct result of a century of technological advancements developed by the private energy industry, with limited Federal support. Inexpensive fossil energy has allowed the United States to become the most technologically advanced, wealthiest nation on Earth. During this time of cheap energy, the general public has come to believe that Federal support of energy research is a form of "corporate welfare." This idea is absurd. In fact, just the opposite is true: the United States has been on "energy research welfare" provided by the private sector for nearly a century. The major oil companies, who have been serving up the energy research "soup," have all but closed the soup lines. The private energy sector has nearly eliminated the once-great private research and development laboratories, and R&D expenditures are half of what they were a decade ago (Figure 27 below). This is in part because of increased collaboration (Figure 10) and in part because there are fewer companies than there were 10 years ago. John Rockefeller must be smiling (Figure 28 below)! GRI, now called GTI, is no longer passing through funds for natural gas E&P research, and the Department of Energy is funding limited gas research externally and internally at the National Energy Technology Laboratory (NETL), but not at levels necessary to support future reserve replacement and reserve growth needs.
Figure 28: History of the Standard Oil companies.
The mega-merger frenzy has resulted in several market realities. There has been a significant reduction in earth scientists and petroleum engineers over the past decade, resulting in very "lean" technical staff within each company. Graduate students in universities have recognized this shrinking job market and are now choosing other disciplines. Finally, there has been an extreme divergence in "economic class" between the super-majors and everyone else, which is unhealthy for the long-term survival of the industry. The American people must make a decision regarding fossil energy: Either invest in energy research with Federal funding, including DOE and NSF, results of which would support the independent producers in the country so that growing natural gas demand can be meet with U.S. supply, or do not invest, and become dependent upon foreign sources of natural gas, just as we have with oil. In addition to Federal investment in fossil energy research, the private sector also has a choice: proact or react. I recommend a proactive position and the establishment of a Private Energy Research Foundation (PERF), modified after the Brazilian and French approaches to funding energy research. Key elements of PERF:
Key benefits of PERF:
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