Hidden Treasure Discovered: U.S. Department of Energy's Offshore Initiative

Abstract

Abstract The paper is based on a variety of input sources such as: the National Energy Policy, public hearings held by the Department of Energy, legislation such as H.R. 4, public input, and previous analyses such as the Offshore Technology Roadmap for the Ultra Deepwater Gulf of Mexico. Also included are various types of interaction and discussion between the Department of Energy and other Federal agencies, state agencies, local government, foreign governments, and non-government organizations, such as trade associations, industry associations, universities, and National Laboratories. The information contained in this paper will be of interest to persons and groups interested in full development of the Outer Continental Shelf, specifically, independent producers, oil industry investors, the petroleum industry research community, trade and industry associations, energy consumers, energy regulators, and environmental focus groups. The information presented will focus on Department of Energy efforts to policy and technology development that will result in an increase in production of oil and gas from this important region. This effort will coincide with the Department of Energy's implementation of the National Energy Policy and the need to addressed the whole of the OCS as a priority target for policy and technology development for the purpose of increasing domestic production of oil and gas. The course of action to be pursued by the Department of Energy will be described in detail enabling OTC 2002 participants to identify opportunities for working with the Department of Energy related to this unprecedented initiative. This paper will make the following contributions to the offshore industry: Relevant and timely information fostering a national dialogue on offshore production; Identification of the key policy goals and objectives to be pursued by the Department of Energy; Identification of the key technology goals and objectives to be pursued by the Department of Energy. Introduction U.S. energy demand is projected to rise to 127 quadrillion BTUs by 2020, even with significantly improved energy efficiency. However, domestic production is expected to rise to only 86 quadrillion BTUs by 2020. The shortfall between projected energy supply and demand in 2020 is nearly 50 percent. That shortfall can be made up in only three ways: import more energy; improve energy efficiency even more than expected; and increase domestic energy supply. The challenge for our nation is to use technology to maintain and enhance the diversity of our supplies, thus providing a reliable and affordable source of energy for Americans. These goals can and must be accomplished while maintaining our commitment to environmental protection.i U.S. oil production is expected to decline over the next two decades. Over the same period, demand for natural gas will most likely continue to outpace domestic production. As a result, the United States will rely increasingly on imports of both natural gas and oil from Canada, and imports of oil and liquefied natural gas from producers across the globe.ii