Professional Documents
Culture Documents
C. Michael Ming
Chicago, IL
June 4, 2009
SECURE ENERGY FOR AMERICA
The Energy Policy Act of 2005
And Section 999:
A Industry led Public/Private Partnership for R&D in the Ultra‐
Deepwater in the Gulf of Mexico and in Unconventional Onshore
Natural Gas and Other Petroleum Resources of the United
States.
Copyright Arnfinn
Olsen/Statoil ASA
Secure Energy for America
What is Section 999?
Specifically, the law directs ‐‐
Research, development, demonstration, and commercial
application of technologies for ultra‐deepwater and
unconventional natural gas and other petroleum resource
Maximize the U.S resource value by:
Increasing supply
Reducing the cost
Increasing E&P efficiency
Improving safety and minimizing
environmental impacts
Secure Energy for America
Current Program Structure/Funding
Program Funding From Federal Total Program: $50 M/yr
Oil and Gas Royalties
Department of Energy
$37.5 M $12.5 M
Fossil Energy Office
Program NETL
Consortium
In‐House R&D Program
Unconventional Ultra‐deepwater
$16.25 M $17.5 M
Designed to be 10
Small Producer Program year, $500M
$3.75 M directed
spending.
Secure Energy for America
RPSEA Members Centre for Marine CNG
- Newfoundland, Canada
TIPRO TEES/A&M
Louisiana State
SwRI University
Down-
selection,
moving to
demonstration
--
es
ng
le
al
Ch
Careful selection of
Year Two
key enabling
d
and cross-cutting
an
technologies
Gr
more
numerous or enable the of“low-
Year One awards hanging fruit”
development
towards or technologies
of a suite of that provide
the basic
end of the technologies incremental
research improvements in E&P
spectrum economics, etc.
Produced Water Forum, December 14, 2006
Shale Gas Forum, Unconventional Plays &
New Mexico Institute of Mining and
December 5, 2006 Research Needs for
Technology
University of Oklahoma Appalachian Basin Small
Producers Forum,
February 15, 2007 West
Problem Identification Virginia University &
Forum, November 29, 2006 NRCCE
University of Southern
California
Fracture in Devonian Black Shale of
Alaskan Unconventional
the Appalachian Basin Workshop,
Gas Resource Forum,
January 8‐9, 2008
April7, University of
PTTC Appalachian Region & The
Alaska Fairbanks2008
Appalachian Geological Society
Seafloor Engineering Forum,
March 9, 2007
Texas A&M University & GE Shale Plays, Technology, and
Permian Basin Trends Coalbed & Shale Gas
Symposium, November 29, 2007 Forum, May 21, 2008
Midland College and the SPE University of Alabama
CO2 EOR & Carbon Sequestration Permian Basin Section
Forum, April 23, 2008
CO2 Flooding Conference & Seismic E&P Forum,
Bureau of Economic Geology October 10, 2006
University of Houston
Low Impact O&G Operations in
Environmentally Sensitive Areas More Bytes & More Barrels,
Forum, May 30, 2008 May 20‐21 2008
Texas A&M University SPE Gulf Coast Section
RPSEA UDW Structure
PAC and TACs
Improved Technology
Steve Holditch
Secure Energy for America
Unconventional Onshore Themes
Gas Shales
Rock properties/Formation
Evaluation
Fluid flow and storage
Stimulation
Water management Cost Reduction
Coalbed Methane in All Aspects of
Operations
Produced water management
Tight Sands
Natural fractures
Sweet spots
Formation Evaluation
Wellbore‐reservoir connectivity
Surface footprint
Secure Energy for America
US Gas Resource Estimates Continue to Increase
William Fisher
COGA 2006
Secure Energy for America
Once only geologic correlation markers, gas
shales have redefined the resource base!
Secure Energy for America
The Technology Challenges of Small
Producers
Focus Area – Advancing Technology for Mature Fields
Target – Existing/Mature Oil & Gas Accumulations
Maximize the value of small producers’ existing asset base
Leverage existing infrastructure
Return to production of older assets
Minimal additional surface impact
Minimize and reduce the existing
environmental impact
Lower cost and maximize production
Secure Energy for America
Increasing Lag Between Discovery and
Development
Proven Reserves Add Value
MMS Report 2009 – 016: Deepwater Gulf of Mexico 2009. (continuing trend from 2008‐013 report)
Secure Energy for America
GOM Ultra-deepwater Activity
Secure Energy for America
Ultra Deepwater Needs
Secure Energy for America
2007 & 2008 UDW Selection Process
June, 2007
70 Project Ideas
$175 MM
Secure Energy for America
2008 UDW projects
Early Reservoir Appraisal, Utilizing a Low Cost Well Testing System - Phase 1 $880,000
DW 2501
Secure Energy for America
2009 UDW Funding
RPSEA YR3 Funding Allocation (2009) Funding Distribution ($k)
Need #3 Significantly extend subsea tieback distances / surface host elimination 3,625
8 Subsea Power -
9 Subsea Processing, Pressure Boosting, Instrumentation and Controls 2,000 3,000 2,500
Need #4 Dry trees / Direct well intervention and risers in 10,000' wd. -
10 Riser Systems -
12 Long Term Research and Development and Graduate Student Program 1,000 2,000 1,500
Secure Energy for America
UDW Program status
Universities / 5 5 8 3
National Labs
Nonprofit 4 4 1 1
Corporation
For Profit 8 7 16 5
Corporation
Total 32 17 16 25 9 out of 0
16
Secure Energy for America
2010 UDW Plan Strategy
Secure Energy for America
Award Composition ‐ 2007 Program
Ultra
Small Producer On Shore Deepwater Total
Universities 6 13 5 24
For Profits 0 1 8 9
Non‐Profits 0 1 4 5
National Labs 1 2 0 3
State Agencies 0 2 0 2
Total Selected 7 19 17 43
Secure Energy for America
Award Value – 2007 Program
Secure Energy for America
2008 Awards
Universities 4 5 9
For Profits 2 1 3
Non‐Profits 2 2
National Labs 1 1
State Agencies
Total Selected 6 9 15
Secure Energy for America
RPSEA Program Status by Year
2007
41 of 43 selections awarded and under contract and in research
1 selection certified and contracted and ready to commence
1 selection finalizing contract details
2008
9 Unconventional Natural Gas selections in negotiations
6 Small Producer selections in negotiations
3 UDW selections in negotiations
6 UDW selections under review
2009
Solicitations targeted for late summer 2009
2010 Annual Plan development ongoing with a target DOE approval date by 12/31/09
Secure Energy for America
Administrative Process Improvements
– Two‐step proposal process
– Fixed hourly rate option
– Supplemental subcontract negotiation support
– Updated property management provision
“You miss 100% of the shots
you don’t take.”
Wayne Gretzky
mming@rpsea.org
www.rpsea.org
Secure Energy for America
2009 UDW Initiatives
Secure Energy for America
2009 Anticipated Initiatives, cont’d
Secure Energy for America
New Two‐Phase Proposal Process
• RPSEA has implementing a Two‐Phase proposal process
• Phase 1 – Technical proposal with a cost summary
• Phase 2 – Detailed cost and other supporting documentation for
those proposals selected to negotiate toward award
• This Two‐Phase approach alleviates unnecessary effort for
proposals not selected to negotiate toward award.
New Two‐Phase Proposal Process
(continued)
• Phase 1 – Request for Technical Proposal
• Submit technical response and summary cost information
• RPSEA review teams evaluate and score proposals
• Review teams recommend selection to RPSEA President
• RPSEA President recommends selections to DOE
• DOE approves selections
New Two‐Phase Proposal Process
(continued)
• Phase 2
• Selected organizations prepare final documentation to support
negotiations toward award.
• Detailed cost proposal
• Other government required forms (next slide)
• Negotiate final subcontract
Phase 2 Documentation
Fixed Hourly Rates
• Cost reimbursable subcontracting requires that cost be
invoiced as actual cost incurred
• For labor, that means each individual’s actual wages plus their
actual indirect costs (fringe, OH, G&A)
• The project begins with a provisional indirect rate
• Costs are tracked for the duration of the project and the final
actual indirect costs are reconciled
• In lieu of this approach, for companies that do not have prior
federal cost reimbursable subcontracting experience, RPSEA
may offer the option of establishing a predetermined fixed
hourly rate not subject to final reconciliation
• A fixed hourly rate would be established for each individual
performing work on the project
Supplemental Subcontract Negotiators
• Subcontract negotiations are labor intensive and surge shortly
after project selection
• RPSEA has contracted with a federal procurement consulting
firm to provide surge resources
• Established a working relationship during negotiations of the
2007 program awards
• Anticipate significant improvements in timeliness of 2008
subcontract negotiations
Updated Property Management Clause
• RPSEA negotiated with DOE to allow implementation of a new,
improved Government Property Management Clause
• Previous clause required subcontractors to have a government
approved property management system
• New clause allows subcontractors to utilize consensus standard
property management systems
A Small Organization, A Large Network
RPSEA Board of Directors
and Executive Committee
Strategic Advisory
Committee (SAC) Small Producer
President Regional Advisory
(Program Manager) Group (RAG)
Program Advisory Committee (PAC) Program Advisory Committee (PAC)
Offshore Onshore
Technical Advisory Committees (TAC) Technical Advisory Committees (TAC)
Offshore Onshore
Well over 1,000 experts have participated in this process!
Secure Energy for America
RPSEA Unconventional Gas
Program Components & Approach
Resource
Assessment
Drilling
Exploration Impact By
Technologies Integrated Basin Geologic Basin
Technology and
Analysis Dissemination Unconventional
Stimulation & Resource
Completion
Reservoir
Description &
e.g., CBM
Engineering
Environmental &
Water
Management
39
Technically Recoverable
Unconventional Gas (Tcf )
By Geologic Basin
70
60
CBM 65 Tcf
50 Gas Shales 69 Tcf
Tight Gas Sands 159 Tcf
40
Total 293 Tcf
30
20
10
0
r n r a X IL n s r n r n o r ia
c hia iv e orth nce Jua wde ton k om la /T M I- li sto exa a rrio i dco e nve Ra to dark iv e forn
la R a o g r k il T W R
e
pa ree n / Ft. W /P ic S a
n P
s hin A Ar W S. N .M D
A na i nd Ca li
Ap a W
G ian i nta n /W
r m U o
Pe r eg
O
40
NPC 2003
CBM 10% Gas Shales 45% Tight Sands 45%
Stimulation and Completion $.08M (Penn St.) $.09M - Carter -Cutters $1.05M (TEES) Gel
Microwave CBM $.69M (U.Houston) Damage
$.95M UT-Refrac $.22M (Tulsa) Frac
Damage
Water Management $1.56M (CSM) Intergrated
Treatment Framework
Environmental
Drilling $0.0
Environmental $2.2
Environm entally Friendly
* Drilling (HARC) * $2.2 *
Reservoir Description & Hi Res. Imag. (LBNL) $1.1 Tight Gas Exp. S ystem $5.1
Gas Isotope (Caltech) $1.2 (LBNL) $1.7
Management Marcellus Nat. Frac./Stress S trat. Controls on Perm.
(BE G) $1.0 (CSM) $0.1
Reservoir Engineering Decision Model (TEES) $.31 Wam sutter (Tulsa) $.44 $5.3
Coupled Analysis (LBNL) Forecasting (Utah) $1.1
$2.9 Condensate (Stanford) $.52
Resource Assessment $1.6
Alabama Shales (AL GS) $.5 Rockies Gas Comp. (CS M)
Manning Shales (UT GS ) $.43 $.67
Gas Projects
CSM - Coal Bugs
UT – Refracturing
TEES – Fracturing Gels
LBNL – High Resolution Imaging
PSU – Microwave Coals
Utah - Paleo Shales
Carter – Saws
Tulsa – Wamsutter
Tulsa – Novel Fracturing Fluids
CSM – Gas Quality
Stanford – Condensate
U of Utah – TGS
CSM – Produced Wtr.
CSM – Piceance TGS
CSM – Strat Control
BEG – Marcellus
Natural Fractures
GE – Frac Water
Reuse
– Crucial for Program Relevancy
• Anadarko • Devon Energy
• Chevron • Unconventional Gas Resources
Canada
• Pioneer Natural Gas • Whiting Petroleum
• Williams E&P • CNX Gas
• ConocoPhillips • Trendwell
• ExxonMobil • Diversified Operating Corp
• Noble Energy
• Newfield Exploration
• Jones Energy
• Encana • Aurora Oil & Gas
• BP
• Bill Barrett Corp.
• Schlumberger
• Pinnacle Gas Resources • Halliburton
• Coleman Oil & Gas • Pinnacle Technologies
• Ciris Energy • BJ Services
• Carbo Ceramics
44