    [House Hearing, 115 Congress]
    [From the U.S. Government Publishing Office]

                       OIL AND GAS TECHNOLOGY INNOVATION

    =======================================================================

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON ENERGY

                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                            HOUSE OF REPRESENTATIVES

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                  MAY 3, 2017

                                   __________

                               Serial No. 115-12

                                   __________

     Printed for the use of the Committee on Science, Space, and Technology

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://science.house.gov

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                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                       HON. LAMAR S. SMITH, Texas, Chair
    FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
    DANA ROHRABACHER, California         ZOE LOFGREN, California
    MO BROOKS, Alabama                   DANIEL LIPINSKI, Illinois
    RANDY HULTGREN, Illinois             SUZANNE BONAMICI, Oregon
    BILL POSEY, Florida                  ALAN GRAYSON, Florida
    THOMAS MASSIE, Kentucky              AMI BERA, California
    JIM BRIDENSTINE, Oklahoma            ELIZABETH H. ESTY, Connecticut
    RANDY K. WEBER, Texas                MARC A. VEASEY, Texas
    STEPHEN KNIGHT, California           DONALD S. BEYER, JR., Virginia
    BRIAN BABIN, Texas                   JACKY ROSEN, Nevada
    BARBARA COMSTOCK, Virginia           JERRY MCNERNEY, California
    GARY PALMER, Alabama                 ED PERLMUTTER, Colorado
    BARRY LOUDERMILK, Georgia            PAUL TONKO, New York
    RALPH LEE ABRAHAM, Louisiana         BILL FOSTER, Illinois
    DRAIN LaHOOD, Illinois               MARK TAKANO, California
    DANIEL WEBSTER, Florida              COLLEEN HANABUSA, Hawaii
    JIM BANKS, Indiana                   CHARLIE CRIST, Florida
    ANDY BIGGS, Arizona
    ROGER W. MARSHALL, Kansas
    NEAL P. DUNN, Florida
    CLAY HIGGINS, Louisiana
                                     ------

                             Subcommittee on Energy

                       HON. RANDY K. WEBER, Texas, Chair
    DANA ROHRABACHER, California         MARC A. VEASEY, Texas, Ranking
    FRANK D. LUCAS, Oklahoma                 Member
    MO BROOKS, Alabama                   ZOE LOFGREN, California
    RANDY HULTGREN, Illinois             DANIEL LIPINSKI, Illinois
    THOMAS MASSIE, Kentucky              JACKY ROSEN, Nevada
    JIM BRIDENSTINE, Oklahoma            JERRY MCNERNEY, California
    STEPHEN KNIGHT, California, Vice     PAUL TONKO, New York
        Chair                            JACKY ROSEN, Nevada
    DRAIN LaHOOD, Illinois               BILL FOSTER, Illinois
    DANIEL WEBSTER, Florida              AMI BERA, California
    NEAL P. DUNN, Florida                MARK TAKANO, California
    LAMAR S. SMITH, Texas                EDDIE BERNICE JOHNSON, Texas

                                C O N T E N T S

                                  May 3, 2017

                                                                       Page
    Witness List.....................................................     2

    Hearing Charter..................................................     3

                               Opening Statements

    Statement by Representative Randy K. Weber, Chairman,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................     4
        Written Statement............................................     6

    Statement by Representative Marc A. Veasey, Ranking Member,
      Subcommittee on Energy, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................     8
        Written Statement............................................    10

    Statement by Representative Lamar S. Smith, Chairman, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................    12
        Written Statement............................................    14

    Statement by Representative Eddie Bernice Johnson, Ranking
      Member, Committee on Science, Space, and Technology, U.S. House
      of Representatives.............................................    16
        Written Statement............................................    18

                                   Witnesses:

    Mr. Edward Johnston, Senior Vice President for Research and
      Development, GasTechnology Institute
        Oral Statement...............................................    20
        Written Statement............................................    23

    Dr. Dave Brower, Founder and President, Astro Technology
        Oral Statement...............................................    29
        Written Statement............................................    31

    Mr. Walker Dimmig, Principal, 8 Rivers Capital, LLC
        Oral Statement...............................................    34
        Written Statement............................................    36

    Dr. Ramanan Krishnamoorti, Interim VP/VC for Research and
      Technology Transfer, Univ.of Houston & Univ. of Houston System;
      and Chief Energy Officer University of Houston
        Oral Statement...............................................    44
        Written Statement............................................    46

    Discussion.......................................................    58

                       OIL AND GAS TECHNOLOGY INNOVATION

                                  ----------

                             WEDNESDAY, MAY 3, 2017

                      House of Representatives,
                                 Subcommittee on Energy
                   Committee on Science, Space, and Technology,
                                                       Washington, D.C.

        The Subcommittee met, pursuant to call, at 10:06 a.m., in
    Room 2318, Rayburn House Office Building, Hon. Randy Weber
    [Chairman of the Subcommittee] presiding.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman  Weber. The Subcommittee on Energy will come to
    order. Without objection, the Chair is authorized to declare
    recesses of the Subcommittee at any time.
        Welcome to today's hearing entitled ``Oil and Gas
    Technology Innovation.'' I recognize myself for five minutes
    for an opening statement.
        Today, we will have the opportunity to hear about exciting
    new research and developments in oil and gas. Fossil fuels
    continue to be America's dominant energy source and provide
    over 80 percent of the energy around the world. It's no
    surprise that we have a robust industry here at home investing
    in developing the next generation of technologies to help
    produce American fossil fuels more efficiently, more safely,
    and at a lower cost for American consumers.
        Our hearing today will highlight individuals and private
    sector organizations taking a leading role in oil and gas
    technology innovation. Much like our Committee roster, we see a
    lot of our Texas innovators on our panel today.
        As we worked to put together today's hearing, I quickly
    learned we could fill this room with innovators from across
    Texas and the country who are exploring new ways to improve a
    broad range of technologies that can help revolutionize this
    industry. My staff and I have had the opportunity to talk to
    researchers from the University of Texas, Texas A&M, University
    of Houston, Rice University, and the DOE national labs, all of
    whom are conducting research that is driven by industry needs.
        We heard about research in materials science, to develop
    materials resistant to the high temperature and pressure
    environments that occur particularly in offshore drilling. We
    even learned about the unique applications of nanotechnology to
    monitor the subsurface, and basic research in geology and
    computing that allows industry to make better decisions about
    when and where they drill.
        I want to thank Dr. Ramanan Krishnamoorti--am I saying that
    right? Close enough, huh? Okay. You're very kind--from the
    University of Houston for testifying today and representing the
    incredible research going on in my home State. I'm a graduate
    of U of H myself, Doctor, by the way, so thank you for being
    here. I look forward to hearing--the Cougars, yes. I look
    forward to hearing your insight on the nexus between this basic
    and fundamental research and how it applies in the oil and gas
    industry.
        This brings us to the appropriate role for the Department
    of Energy. The Department has contributed valuable research in
    this field for decades. Congress first funded DOE's
    unconventional oil and gas research programs beginning in 1976,
    and collaboration with industry has indeed been a core part of
    DOE's research efforts. Historically, the Department has
    conducted basic and early-stage research, collecting long-term
    data and maintaining expertise to provide industry with the
    tools necessary to achieve technology breakthroughs.
        Industry then led the next step, building on DOE research,
    to commercialize oil and gas technology. Using this
    collaborative approach, DOE research conducted by the national
    labs contributed to the development of key technology for
    hydraulic fracturing and revolutionized the American economy in
    the process.
        Today, DOE continues to make targeted investments in early-
    stage unconventional oil and gas research, while efforts to
    deploy new technology are consistently led by the private
    sector. The Department also contributes funding to larger,
    industry-led projects measuring seismic data and analyzing
    geological formations like the Gas Technology Institute's
    research to maximize the efficiency of hydraulic fracturing in
    the Permian basin, which we're going to hear more about in
    testimony today.
        As we approach the budget season, it is our job as an
    authorizing committee to make sure that we have a clear picture
    of what federal research investments provide the most bang for
    our buck.
        We know that industry has the skills and resources to fund
    technology commercialization, but they often don't have the
    tools to conduct early-stage research and maintain that
    historical data like the DOE national labs can. With that in
    mind, DOE should prioritize the basic and early-stage research
    that provides data and analytical tools to researchers and
    allows the private sector to commercialize groundbreaking
    technology.
        I want to thank our witnesses for testifying today, and I
    look forward to hearing more about your innovative research.
        [The prepared statement of Chairman Weber follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman  Weber. And with that, I will recognize my good
    friend from Texas, Mr. Veasey.
        Mr.  Veasey. Thank you, Mr. Chairman. I would like to thank
    you for holding this hearing and thank you for having the
    witnesses here today. It looks like we have a really--a good
    distinguished panel, glad that there are two Texans leading
    this discussion on energy and oil production technology, and it
    really is amazing how that technology has played such a major
    part in the world changing just in the last two years. It
    really is very, very miraculous.
        And as you know, the State of Texas represents the largest
    share of the U.S. oil and gas industry. And everyone here knows
    that we produce more crude oil and we also produce a lot of
    natural gas. And this industry has been a major economic driver
    for our State for a long time, employing hundreds and thousands
    of Texans. In order to continue this economic success, it is
    necessary for our State to lead the way in making oil and gas
    cleaner and safer for the environment and public health.
        I'm happy to see that everyone on the panel today can speak
    to the crucial importance of the environmental mitigation in
    the extraction production and consumption of oil and gas. I
    look forward to hearing everyone's insights and ideas.
    Because--even though there has been some disagreement, we all
    know for certain that human activity has contributed to the
    warming of the climate, and the scientific community has made
    clear that we all need to take some sort of action on climate
    change.
        And so what does this mean for the oil and gas industry?
    The shale gas boom can take credit for much of the U.S.
    emissions reductions over the last five years. Much of the
    power generation sector has switched to natural gas, and we've
    enjoyed the benefits of this cleaner-burning resource.
        However, this is not a sufficient long-term solution to
    lowering our emissions. Methane, the largest component of
    natural gas, has 84 times the heat-trapping capacity of carbon
    dioxide over a 20-year span. Aging infrastructure, greater
    storage demand, and a growing pipeline network present a number
    of challenges in monitoring and preventing these leaks.
        The most notable leak since the shale gas boom occurred in
    2015 at the Aliso Canyon storage facility in California. The
    leak resulted in the release of 109,000 metric tons of methane
    into the atmosphere. While methane is colorless and odorless,
    we know the impact it can have on the environment and the
    health of our own communities, as evidenced by this incident
    that we saw in California.
        Methane leaks are unique in that the environmental
    incentives align with the profit incentives of the industry,
    but it also can mean a loss of profit for industry. But working
    together, we can provide the incentives and research necessary
    to drastically reduce methane leaks by closely aligning the
    industry's bottom line with our urgent need to protect the
    environment.
        The increased reliance on natural gas also highlights
    another long-term challenge, and that is the deployment of
    carbon capture technologies. The use of this resource still
    pumps out greenhouse gases at an unsustainable rate, and that
    is why we must accelerate the deployment of carbon capture
    technologies not only for coal-fired plants but also for
    natural gas power generation.
        According to the International Energy Agency, carbon
    capture and storage technologies are vital to enabling a robust
    global response in addressing the threat of climate change. The
    necessity is reflected in the Paris climate negotiations, and
    we are not short on innovative concepts.
        I particularly look forward to hearing from Mr. Dimmig on
    NET Power's unique zero-emissions design that they are trying
    to commercialize in Texas in the next few years.
        And before I finish, I would also like to note that during
    today's dialogue, we may hear a few inaccurate or misleading
    statements comparing incentives for fossil fuel versus those
    for various forms of renewable energy and energy efficiency.
    The most obvious inaccuracy in this criticism is the
    presumption that all renewable energy is the same. It's not, as
    if solar, wind, geothermal, and hydropower are not all unique
    forms of energy generation.
        Claiming a lack of parity in research and development
    funding by comparing fossil energy research budget lines to
    budgets for efficiency and all of these renewable sources
    lumped together is not only misleading, it ignores the basic
    fact of how our energy markets work. Fossil energy has enjoyed
    strong government support for the past century, including tax
    incentives, subsidies, research, development funding. In fact
    the current boom in natural gas production can be traced back
    to research on horizontal drilling and hydraulic fracturing
    pioneered by the Department of Energy in the 1970s.
        Moreover, fossil energy commands strong control over the
    electric generation and transportation markets, and yet some of
    my Republican colleagues cry foul when the biggest energy
    companies in the world do not receive the same dollar-for-
    dollar government support as all other energy industries
    combined.
        I strongly support government research and development to
    advance energy efficiency, the wide range of renewable energy
    technologies, and nuclear power. However, this does not mean
    that the Department of Energy can't or shouldn't support a
    robust portfolio of fossil energy research and development as
    well. This area of research requires a strong partnership
    between government and industry focused on mitigating the
    environmental impacts of fossil energy generation.
        The Department of Energy's work in this space is vital to
    our environmental priorities. I hope we have the opportunity
    this Congress to collaborate with our colleagues on the
    majority in examining how we can prioritize and expand the
    Department's R&D in this critical area.
        Mr. Chairman, thank you for your patience. I know I went
    over my time there, and I yield back the balance of my time,
    and again want to thank the panel for being here.
        [The prepared statement of Mr. Veasey follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman  Weber. Thank you, Mr. Veasey.
        I now recognize the Chairman of the Full Committee, Mr.
    Smith.
        Chairman  Smith. Thank you, Mr. Chairman.
        I want to say this is an important subject today, and I
    appreciate you having a hearing on it.
        Today, we will discuss recent breakthroughs in oil and gas
    technology. Innovators continue to build on decades of
    groundbreaking successes in oil and gas production, maintaining
    America's technology leadership. This area of research is
    particularly successful due to continued collaboration between
    industry, universities, and national labs. We also will discuss
    the appropriate balance between the private sector leadership
    and the Department of Energy in applied research and technology
    development.
        The oil and gas industry has a long and successful history
    of maximizing the research conducted by DOE to further
    technological breakthroughs. Before hydraulic fracturing and
    horizontal drilling revolutionized oil and gas production,
    basic and early-stage research funded by the Department
    provided valuable tools and knowledge to industry. In the
    1980s, Sandia National Lab collaborated with industry to
    develop the primary drill bit used in horizontal drilling. And
    Sandia National Lab's basic research in geology led to the
    development of microseismic fracture mapping techniques for
    hydraulic fracturing. Industry partners adapted these
    techniques for commercial use and deployed technology to
    maximize energy production across the country.
        The partnership between DOE and the private sector must
    have the right structure for success. DOE is best suited to
    provide the early-stage research that allows industry the
    opportunity to commercialize and use new technology in the
    field. This approach allows for the most cost-effective and
    efficient technology to be deployed by oil and gas companies.
    We don't need mandates to motivate producers to use the most
    efficient production technology.
        Technology that improves development often reduces the
    footprint and environmental impact of energy development. It
    also lowers costs for consumers. R&D is a great way to improve
    our environment and power our economy. Federally funded
    research in one area also can provide economic benefits and new
    technology where we least expect it.
        One of our witnesses today--David Brower, the founder of
    Astro Technology--spent his career as an engineer working with
    NASA and the Department of Defense. After years of working on
    rocket propulsion and safety, he discovered that he could
    effectively apply many of the sensor technologies used in the
    aerospace industry to improve safety in oil and gas
    development. This is the kind of groundbreaking technology that
    we cannot predict when we fund basic and early-stage research.
        Like many of my colleagues, I share a commitment to the
    long-term use of our nation's most abundant and affordable fuel
    source. DOE's fossil energy research programs can pave the way
    for industry to develop the next generation of technologies.
    But for this partnership to be a success, industry must
    continue to take a leading role.
        I look forward to a discussion about what policies Congress
    and DOE should pursue to encourage more industry-led research
    and development efforts. In Congress, we have the
    responsibility to ensure the efficient and effective use of
    American tax dollars. By investing in early-stage research and
    encouraging strategic partnerships between DOE and industry, we
    will ensure that our vast natural resources will continue to
    provide affordable and efficient fuel for the American economy.
        [The prepared statement of Chairman Smith follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman  Smith. Mr. Chairman, before I close, I want to
    recognize James Danford, who is sitting right behind me, and he
    is our Science Committee Legal Assistant and Speechwriter who
    has helped me at numerous committee hearings and markups over
    the past five years. James' last day on the Committee will be
    next Friday.
        He has been attending Georgetown Law School at night while
    working at the Science Committee full-time and will graduate
    May 21.
        James and his wife Christa, my Executive Assistant, will be
    moving back to Texas for James to take a job at a Houston law
    firm. James and Christa have each been on my staff for almost
    six years. They are expecting their first child in July. So we
    wish them health, happiness, and success.
        And James will you stand up and let us give you some
    applause here?
        Chairman  Weber. So, James and did you meet your wife here
    on the Science Committee?
        Mr.  Danford. No, we've been dating since high school.
        Chairman  Weber. Okay. So it took you a long time. I see
    how you are.
        So thank you, Mr. Chairman. And I now recognize the Ranking
    Member of the Full Committee for a statement. Ms. Johnson?
        Ms.  Johnson. Thank you very much. Let me congratulate
    James and say good wishes for the future. And thank all of our
    witnesses, Mr. Chairman, for being here.
        This is an interesting topic. I think it's interesting to
    note that both the Chairman and Ranking Member of the Full
    Committee and the Subcommittee Chairman and Ranking Member are
    all Texans, and the Secretary of Energy now is also a Texan. So
    you can tell that there is interest in this topic in Texas.
        Certainly, the oil and gas sector is in is one area in
    which we see how advances in science and engineering can
    produce large-scale economic value, and our federal R&D
    agencies have played a historic role in this process. Just over
    a decade ago, we had little idea of the fossil resources that
    would be available to us today.
        However, due to some critical research investments made by
    the Department of Energy over 40 years ago, coupled with rising
    oil prices and in previous decades, the American economy
    underwent the shale gas revolution, bringing natural gas
    resources online and with it a sharp increase in domestic oil
    production.
        The DOE--that program in DOE wrapped up in the early '90s
    when a private company took the research performed by DOE and
    used it to ignite the oil and gas boom we see today. I think my
    colleagues would agree that that is the model of DOE's energy
    technology programs that we all hope to see: federal
    investments shepherding transformative technologies to the
    marketplace even when the endpoint is not clear at the
    beginning of the process.
        That brings us to what should be fundamental questions
    today. Where should the Department of Energy be investing
    limited dollars in this area? If the standard of identifying of
    a government role rests in whether the private industry has the
    capacity to invest in R&D, then I think the answer to the
    question of DOE investments in oil and gas is that the federal
    role should be very limited. After all, it is hard to think of
    a sector that is much more commercial and on average more
    profitable than the oil and gas industry. For this reason, I
    believe the Department should focus its investments on
    environmental mitigation. At present there is little incentive
    for industry to spend major R&D dollars to protect the
    environment.
        If this hearing is intended to highlight the importance of
    oil and gas to the economy, hopefully, I can save us some time.
    I am from Dallas. Oil and gas will play an important role in
    our nation's economy for decades to come. My hope is that our
    outcome of these hearings will be to push the present
    Administration to reconsider its position to drastically reduce
    R&D funding for fossil energy. I would support that endeavor as
    long as it comes along with strong support of DOE's other
    energy technology programs. When it comes to R&D funding,
    Republicans and Democrats should be speaking with one voice.
    Investments in R&D benefit our nation.
        In closing, I would like to challenge the current
    Administration and our colleagues on this Committee to be
    forward-looking in our push to develop the next-generation
    energy economy. Drilling our way to economic growth while
    ignoring the long-term impacts cannot be the answer as we face
    a warming climate and the significant consequences that come
    along with that. Our environment and the health of the public
    is on the line.
        And so I thank you, Mr. Chairman, and I yield back the
    balance of my time.
        [The prepared statement of Ms. Johnson follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Chairman  Weber. I thank the Ranking Member, and I will
    introduce the panel.
        Our first witness today is Mr. Edward Johnston, Senior Vice
    President for Research and Development at the Gas Technology
    Institute. Mr. Johnston received his bachelor's degree in
    mechanical engineering from Mississippi State University and
    his MBA from University of Chicago's Booth School of Business.
        And our next witness today is Mr. David Brower, founder and
    President of Astro Technology. Mr. Brower received both his
    bachelor's degree in material science and mechanical
    engineering and a master's of science degree from the
    University of Utah.
        And then our next witness is Mr. Walker Dimmig, Principal
    at 8 Rivers Capital, LLC. Mr. Dimmig received his bachelor's
    degree in political science from Middlebury College.
        And our last witness is Dr. Ramanan Krishnamoorti, Interim
    Vice President and Interim Vice Chancellor for Research and
    Technology Transfer at the University of Houston and University
    of Houston System--go Cougs--as well as Chief Energy Officer at
    the University of Houston. Dr. Krishnamoorti obtained his
    bachelor's degree in chemical engineering from the Indian
    Institute of Technology Madras and doctoral degree in chemical
    engineering from Princeton University.
        I now recognize you, Mr. Johnston, for five minutes to
    present your testimony.

                    TESTIMONY OF MR. EDWARD JOHNSTON,

          SENIOR VICE PRESIDENT FOR RESEARCH AND DEVELOPMENT,

                        GAS TECHNOLOGY INSTITUTE

        Mr.  Johnston. Thank you very much, Chairman Weber, Ranking
    Member Veasey, Chairman Smith, and Ranking Member Johnson, and
    the rest of the Members of the Subcommittee.
        On behalf of GTI, I'd like to thank you for the opportunity
    to testify before you today regarding innovation in the
    upstream oil and gas sector. My name is Eddie Johnston. I'm the
    Senior Vice President of Research and Technology Development at
    GTI, and we're an independent, not-for-profit R&D organization.
    Our vision is to turn raw technology into practical energy
    solutions that have meaningful impact for both the economy and
    the environment.
        I'm here to talk about shale research, and while shale
    development seems like an overnight occurrence to most, decades
    of research and cooperative field experiments by GTI and DOE
    underpin the technical complexities of producing this resource.
        Shale rock has very low permeability, so stimulation can be
    very challenging and require significant energy. In shale
    formations, the recovery rate is typically below 20 percent for
    gas and ten percent for oil and sometimes even much lower. This
    is the grand challenge. Field experiments we've conducted
    indicate that as many as 80 percent of fracture treatments did
    not significantly contribute to overall production. Effective,
    yes; efficient, no. This inefficiency has direct environmental
    implications, and by optimizing fracture efficiencies, fewer
    wells will need to be drilled, which leads to fewer trucks,
    less water, reduced emissions, and less community impact.
        To address these issues, GTI launched the Permian project,
    our hydraulic fracturing test site in West Texas. Our goal is
    simple in concept: substantially advance the hydraulic
    fracturing process to optimize well spacing so fewer wells are
    needed. The problem, though, is multifaceted. Subsurface
    completion science continues to be a complex process with many
    variables that affect the locations where fractures propagate,
    their dimensions, and their ability to enhance production.
    Direct and reliable data is still needed about the size, shape,
    and distance that hydraulic fractures actually propagate.
        Optimizing resource recovery techniques requires input from
    the best and brightest from industry, universities, national
    labs, research institutes, and the only way to realistically do
    this is via public-private partnership. So with the assistance
    of a $7.4 million cooperative agreement from the Fossil Energy
    Office, GTI was able to pull together a partner in Laredo
    Petroleum that provided a test site and personnel in the
    Permian, along with $100 million of microseismic and other
    background data.
        A joint industry partnership of Chevron, Conoco Phillips,
    Core Labs, Devon, Discovery Natural Resources, Encana, Energen,
    Halliburton, Shell, and TOTAL that sponsored the additional $16
    million of research work and also provided subject matter
    experts to contribute to the scope and a team of leading
    researchers from the University of Texas, The Bureau of
    Economic Geology, and NETL. And over this 11-well experiment,
    more than 400 fracture stages were monitored, and we continue
    to study the production from these fractures today.
        But the key differentiator of this work is the $6 million
    core well as we captured 600 feet of unique core through
    fracture zones by drilling a one-of-a-kind slant core well.
    More people have actually examined rocks from the moon than
    they have through fractured core. Extracting core of this
    magnitude is an expensive and risky undertaking, but this
    ground truth evidence is critical to understanding fractures
    and improving models and to consider how predictive analytics
    can improve the process. Important data about propagation and
    proppant transport dynamics will lead to the design of optimal
    fracture treatments and ultimately ideal well spacing. Many of
    the findings will likely be transferable to other basins, but
    shale is a heterogeneous resource, so much work is still needed
    to be done.
        We have planned future work in the Permian and signed a
    letter of intent with BHP Billiton for a test site in the
    Delaware basin, part of the Permian that is deeper, at higher
    pressures and temperatures, and different permeability than the
    Laredo site. Interested partners are looking for a commitment
    from DOE that signals continued support for this type of
    important research. This investment will be the catalyst for
    the next phase of learning.
        In conclusion, shale has recalibrated world energy markets,
    helped resurrect our economy, provided U.S. consumers clean,
    affordable energy. Much has been accomplished by the mechanical
    innovations by industry, but the subsurface science work is
    clearly incomplete. Continued field experiments are critical to
    achieve desired recovery rates for more responsible
    development. The involvement of the public funding ensures the
    results are ultimately shared broadly rather than being held by
    a select few. This will allow us to maximize our national
    energy resource and accelerate our path to energy security and
    independence.
        Thank you again for this opportunity to speak today, and
    I'd be happy to answer any questions when it's the correct
    time.
        [The prepared statement of Mr. Johnston follows:]

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        Chairman  Weber. Thank you, Mr. Johnston. Dr. Brower,
    you're recognized for five minutes.

                     TESTIMONY OF DR. DAVE BROWER,

                         FOUNDER AND PRESIDENT,

                            ASTRO TECHNOLOGY

        Dr.  Brower. Mr. Chairman, Members of the Committee, thank
    you for having me here this morning. As mentioned, my name is
    David Brower. I have much experience in science and technology,
    and I've spent my 37-year career working on rocket technology
    for defense and space applications. I've also worked in the
    energy industry for over the past 20 years.
        The combination of aerospace, energy, and government
    experience has allowed me to develop and implement entirely new
    high-technology methods into the energy industry. The primary
    objective of my work has been to identify and prevent potential
    problems before they occur. In doing so, we should be able to
    mitigate environmental contamination from hydrocarbon spillage
    and offshore and land-based operations, for example, to head
    off catastrophic events such as the major oil spill in the Gulf
    of Mexico during summer of 2010 and many less publicized
    smaller spills our candidates also. The innovative methods also
    improve safety and help increase production and operation
    capabilities.
        Since I formed Astro Technology in 1994, I have been a
    committed advocate of strong working relationships between
    government and industry. Currently, we work under a Space Act
    agreement with NASA. The resulting work activity has been
    instrumental in transfer of high-technology methods into the
    energy industry. Twice--in 2004 and 2015--our efforts have been
    highlighted in NASA's annual spinoff report to Congress. This
    highly effective government-to-industry approach has led to
    several deep-water sensor implementations in the Gulf of Mexico
    with several others in progress. I should mention that our
    collaboration has included university support as well.
    Consequently, we've been able to identify and potentially
    prevent structural failure, ensure environmental protection,
    and at the same time improve operations.
        Our venture began with the START treaty as part of the
    counterproliferation of weapons of mass destruction in the
    republics of the former Soviet Union. As a result of that work,
    I was successful in development and application of new advanced
    sensors. In mid- to late 1990s, several oil and gas companies
    approached me about solving problems on a deep-water pipeline
    in the Gulf of Mexico. They needed a sensor that could measure
    pressure on the interior of a subsea pipeline that did not
    require penetrations leading to possible leak paths. After the
    successful task, several more oil and gas projects resulted.
        Twenty years later, significant progress has been made with
    NASA's assistance to advanced technology in oil and gas. Much
    more effort is needed. Astra Technology started a research and
    development project called Clear Gulf approximately a decade
    ago. This effort includes 10 research areas such as
    identification and mitigation of structural integrity that
    could cause significant hydrocarbon spillage.
        Flow assurance monitoring is another research area we're
    addressing to prevent blockage of flowlines from hydrocarbon
    and hydrate formation. Also advanced robotic development will
    fill a significant gap in current large-scale remotely operated
    vehicles. The new robots would work and live subsea. They will
    have dexterous capability and perform finesse work operations
    mimicking human capability. Another exciting research area is
    the repair of older or soon-to-fail structures that are in
    deep-water fields.
        By definition, I believe the role of small business in new
    advanced methods is clearly that of innovation. Large companies
    are highly suited for implementation, and government support,
    encouragement, technology direction, and possible incentives.
        It can be very difficult to achieve implementation of new
    technology methods. A stronger alliance between government and
    industry could solve that problem. I've been very fortunate to
    have a string of successful projects. My journey would've been
    much more difficult without government support.
        My thoughts going forward involve a stronger working
    relationship between small business mainstream oil and gas
    companies, universities, and U.S. Government. My experience
    with oil and gas companies has been very positive. They
    sometimes have fear of trying anything new. However, as we move
    into future endeavors, it becomes increasingly important to
    develop and apply advanced technologies to ensure
    environmentally clean operations, trouble-free work effort, and
    better control of operational processes.
        In conclusion, I recommend the formation of a short-term
    task team that addresses the issues discussed. The team should
    consist of small business entities, DOE, several subject matter
    experts from large oil and gas companies, and universities.
        Thank you again for the invitation and your attention.
        [The prepared statement of Mr. Brower follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman  Weber. Thank you, Mr. Brower.
        Mr. Dimmig, you're up.

                    TESTIMONY OF MR. WALKER DIMMIG,

                    PRINCIPAL, 8 RIVERS CAPITAL, LLC

        Mr.  Dimmig. Thank you, Chairman Weber, Ranking Member
    Veasey, and Members of the Committee. I appreciate the
    opportunity to discuss energy technology innovation with you
    today.
        Eight Rivers is a technology commercialization firm focused
    on developing breakthrough industrial innovations. Today, I
    will be sharing perspective gained from developing one such
    innovation on the natural gas utilization side known as the
    Allam cycle, which is a new direct-fired supercritical CO2
    power cycle for use with natural gas or coal. It projects to
    compete on the cost of electricity basis with existing best-in-
    class power plants today. Importantly, the technology does this
    while producing virtually no air emissions. Water and high-
    pressure, high-purity CO2 are the only byproducts of
    the cycle.
        Because the cycle can inherently produce pipeline-ready
    CO2, it presents an opportunity to transform the
    enhanced oil recovery industry by providing a supply of
    affordable CO2, which would enable over 100 billion
    barrels of domestic oil to be accessed even in low-oil-price
    environments. In order to produce this oil, billions of tons of
    power sector CO2 would be sequestered. In short, the
    Allam cycle has the potential to be a major win for the
    electricity sector, the oil and gas industry, the environment,
    and consumers.
        Today, NET Power, a company owned by 8 Rivers, the power
    company Exelon, and the engineering firm CB&I is building a 50-
    megawatt thermal pilot-scale natural gas demonstration plant
    down in La Porte, Texas, with over $140 million in private
    investment into it. The plant is within months of entering into
    operation, and it is designed to provide the information
    required to then build the first 300-megawatt commercial-scale
    natural gas plant.
        Eight Rivers' experience in commercializing this technology
    and others supports the view that federal government support
    has an important role in energy technology development from R&D
    through to deployment. The R&D process is long, expensive, and
    highly uncertain. Without government participation at this
    stage, it would be difficult for 8 Rivers to execute on its
    model for commercializing important energy innovations.
        Examples of federally funded R&D are present all throughout
    the Allam cycle. Most commonly, 8 Rivers has been able to take
    proven R&D that was originally pursued for other purposes such
    as materials for supercritical coal boilers or heat exchanger
    learnings from a solar program and apply that technology in the
    Allam cycle.
        In addition, the DOE has a new supercritical CO2
    crosscutting initiative, and we're hopeful this program will
    lead to opportunities to further advance the Allam cycle in
    important ways. But our experience is also that public-partner
    private partnerships remain critical all the way through to
    deployment of first-of-a-kind commercial plants. The Allam
    cycle is currently entering this challenging period.
        A first-of-a-kind commercial facility needs to operate
    successfully in the market against fully mature technologies,
    and yet it has to do so with costs that are significantly
    higher than even the second facility of its kind. Reasons for
    this can include inefficient supply chains, designs that have
    not yet been fully optimized, large first-time engineering
    costs, increased contingency fees, and even less competitive
    warranties.
        Programs that partner with the private sector through
    grants to assist in building first-of-a-kind projects can be
    essential. One such program is the Clean Coal Power Initiative.
    Importantly, a similar program for natural gas projects such as
    the one IN that Power is now pursuing, does not exist. Cost
    challenges do not completely dissipate by the second plant.
    They reduce over time. Ongoing assistance for these projects
    through mechanisms such as a reformed 45Q tax credit for CCS
    can be critical to ensuring these technologies are able to
    reach their full potential and are not just developed into
    niche applications.
        Finally, we believe federal R&D programs should be very
    goal-oriented across the technology portfolio, and, rather than
    being too technology-prescriptive, programs should have the
    flexibility to pivot with industry to achieve those goals. For
    example, 8 Rivers began by developing the Allam cycle for coal,
    but it became quickly apparent that the coal development
    pathway must first proceed through natural gas. This was the
    lowest-cost, least-risky, and most impactful approach.
        Similarly, federal programs could benefit from being
    structured to work with both coal and natural gas utilization
    technologies as this flexibility could help technologies move
    forward for one fuel in a way that also represents a major
    advance for the other fuel and achieves broader program goals.
        Thank you for the opportunity to testify today, and I
    welcome any questions you have.
        [The prepared statement of Mr. Dimmig follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman  Weber. Thank you, Mr. Dimmig.
        Dr. Krishnamoorti, you're up.

                TESTIMONY OF DR. RAMANAN KRISHNAMOORTI,

                       INTERIM VP/VC FOR RESEARCH

                        AND TECHNOLOGY TRANSFER,

               UNIV.OF HOUSTON & UNIV. OF HOUSTON SYSTEM;

             AND CHIEF ENERGY OFFICER UNIVERSITY OF HOUSTON

        Dr.  Krishnamoorti. Thank you so much, Chairman. Thank you
    for asking me today to talk about the critical partnership
    between academia, industry, and national labs that are helping
    move the oil and gas industry forward.
        My name is Ramanan Krishnamoorti. I'm the Interim Vice
    President, Vice Chancellor for research and technology transfer
    at the University of Houston, but I'm also the Chief Energy
    Officer.
        Guided by a distinguished panel of the--of our Energy
    Advisory Board comprising top executives from the energy
    industry, we at the--at UH are committed to becoming the energy
    university.
        At the University of Houston, located in the energy capital
    of the world, we strongly believe that fundamental advances in
    science and engineering, when appropriately coupled with
    industry-based pull, can help transform the capital-intensive
    oil and gas industry. Just as hydraulic fracturing and
    horizontal drilling have transformed the availability of shale
    oil and gas, UH is working with industry and national
    laboratories and other academic institutions to create the next
    transformative technologies to advance conventional and
    unconventional, as well as terrestrial and offshore oil and
    gas.
        We are focused on dramatically increasing the amount of
    hydrocarbon resources that can be recovered, while minimizing
    the impact on the environment and therefore ensuring the
    continued supply of affordable energy solutions. Such a focus
    requires commitment to all aspects of the oil and gas industry,
    including regulation, business policy and management, public
    policy, human factors, and naturally, fundamental and applied
    science, engineering, and technology.
        In my written testimony I've provided a detailed report on
    the impact of the University of Houston in providing innovative
    strategies to lower costs and develop safer methods to find and
    produce oil and gas. These innovative solutions include
    responses to immediate challenges and strategic long-term
    disruptive technologies. The key issues are summarized as--I'm
    going to have four points here.
        First, technology innovations require a strong connection
    between industry pull for targeted applications and the
    academic push for fundamental and applied advances in science,
    engineering, and technology. Some notable examples of industry
    collaboration-driven advances are the significant speeding up
    of seismic interpretation through advanced computing, the
    development of smart cements, developing enhanced oil recovery
    formulations for high-temperature and high-salinity reservoirs,
    and sensing and preventing microbial corrosion of pipelines.
    For these innovations to continue, the business of oil and gas
    will require the embrace of human factor-centric design,
    standardization, and system integration.
        The second point is disruptive technologies advances in oil
    and gas are likely to come from fundamental advances in various
    fields, including nanotechnology, life sciences, data
    analytics, and cognitive computing. But given the capital
    expenses and long runways between fundamental research, applied
    development, deployment, and commercialization, those advances
    would require continued engagement by federal and state
    agencies for fundamental breakthroughs and possibly by
    incubation through engaged national laboratories as
    technologies are developed. Specifically, engaging NASA Johnson
    Space Center with the University of Houston and the Subsea
    Systems Institute for the adoption and deployment of automated
    underwater vehicles and risk modeling for deep-water missions
    are examples of best-in-class engagement.
        My third point, the oil and gas industry is challenged with
    so-called crew change as experienced geophysicists,
    geoscientists, engineers, and others retire, taking with them
    an enormous amount of expertise over the next ten years.
    Academia plays a critical role in partnering with industry in
    the continued enhancement of the workforce for this industry
    and the continued engagement of subject matter experts to
    advance technological solution.
        Finally, it is important to emphasize the cyclical nature
    of the industry with boom and bust cycles all too common.
    Combined with the long runways for the development of resources
    such as those in the ultradeep water and those found in high-
    temperature, high-pressure reservoirs, the continued
    development of technology innovations remains critical and
    requires sustained public investment.
        Mr. Chairman, at the University of Houston we are proud of
    the interactions we've forged with the industry and the
    demonstrated value of these partnerships. I thank you for the
    opportunity to provide testimony today and look forward to
    answering your questions. Thank you.
        [The prepared statement of Mr. Krishnamoorti follows:]

        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

       Chairman  Weber. Thank you, Doctor.
        I now recognize myself for five minutes. This will be a
    question for all of you, which I would like to keep short if we
    can, your answer. We're going to try to get back to some more
    questions. In your opinion, what is the appropriate role of
    government in oil and gas research and development? Let me
    explain. Are we better off focusing limited federal funds on
    applied energy research or the demonstration and
    commercialization of energy technologies? Mr. Johnston?
        Mr.  Johnston. So I would start by saying the leverage of
    the funds of the project that we have I think are a very
    appropriate way to utilize that fund. So we're actually taking
    first principles and marrying them with industry, so trying to
    get to the fundamental issue that's causing the inefficiencies
    in hydraulic fracturing but also bringing partners along with
    that. I think that is a very appropriate role for these types
    of funds in these private-public partnerships.
        Chairman  Weber. Okay. Thank you. Mr. Brower?
        Dr.  Brower. I think one of the fundamental issues about
    research in general in the oil and gas industry starts really
    with the definition of what research and development really is
    because when I made the transition from aerospace into the oil
    world, research is defined much differently in both those
    environments. Research in aerospace oftentimes can start with a
    blank piece of paper and just thoughts as they start to
    generate. In oil and gas, research typically begins with
    something that's already somewhat downstream.
        I think if I were looking at where some of the funding
    could be utilized very effectively, it would be to have a
    hybrid of both those two methods, whereas you're thinking of
    new innovative methods that could solve some of the problems in
    oil and gas and combine that with things that are a little bit
    more mature.
        Chairman  Weber. All right. Thank you. I appreciate it. Mr.
    Dimmig?
        Mr.  Dimmig. I think it's in our experience not an either/
    or scenario. I think--we wouldn't have technologies to deploy
    if we don't have a robust R&D base. And we've benefited from
    R&D all throughout the Department of Energy, even R&D that
    wasn't intended for fossil fuels. So we have to start there.
        At the same time I think we have to recognize that certain
    technologies that we think are very promising and the market
    thinks are very promising are very capital-intensive, very
    difficult to get into the market in--with that first
    deployment. And so if we don't follow through with the most
    promising of those technologies, we might leave them behind.
        Chairman  Weber. Okay. Got you.
        Doctor?
        Dr.  Krishnamoorti. I agree with my panelists. It's not an
    either/or. I think we learn some of our best lessons when we go
    to deploy them. When we go to deploy technologies we come back
    and say do we have to do research or fundamental basic research
    that gets applied? And I think we've got to have a complete
    stream of this, but to the boom and bust cycles that are so
    common in the industry are today. Industry funding alone cannot
    move this industry forward.
        Chairman  Weber. Got you. And you're--actually my next
    question, in your testimony you discussed how oil and gas
    production is testing the limits of current understanding of
    engineering principles and presenting new problems along the
    way. For example, you wrote to that, ``As we access more high-
    temperature, high-pressure reservoirs with ultradeep water
    exploration production, the material challenges have become
    more significant''. You go on to write that your colleague is
    conducting materials research to develop new polymers to solve
    this challenge. Engineering is a practical field. Do you think
    these practical problems are actually leading to basic science
    research? And before you answer that, you said in your
    prepared--in your remarks earlier you wanted U of H to be the
    energy universe, so we want to make sure that happens. Do you
    think that these practical problems are leading to basic
    research?
        Dr.  Krishnamoorti. Absolutely in that basic research in
    materials design and materials development, processing, and
    deployment is where these practical problems are leading to a
    significant change. And these are not going to just impact the
    oil and gas industry. It's going to have a much broader
    application, for instance, in the aerospace industry. You know,
    the--we've had challenges in the deep water with the hydrogen
    embrittlement of bolts. This has got parallels to the aerospace
    industry, and what we've learned from either of those fields
    has led to really understanding and improving the technology in
    the field.
        Chairman  Weber. Thank you.
        Mr. Johnston, I'm going to jump back to you. Can you give
    us an update on the research at GTI's hydraulic fracturing test
    site? What are some open problems that the scientists and
    engineers are trying to understand?
        Mr.  Johnston. What they're really trying to figure out now
    is actually where the proppant goes through the--so we--in this
    project we actually physically, chemically, and radioactively
    trace the proppant so that we have a better understanding of
    what happens within the transport mechanism. So today, it's
    really more of analyzing the production, inferring information
    about the physical evidence that we have, and validating and
    building new models that really help understand, you know, the
    process.
        Sometimes you induce as many questions as you answer with
    projects like this, and I think that's why, you know, continued
    research in this field is very important.
        Chairman  Weber. Well, that's true about a lot of research
    in----
        Mr.  Johnston. It is.
        Chairman  Weber. Yes.
        Mr.  Johnston. It is.
        Chairman  Weber. All right. My time has expired. I'll now
    recognize Mr. Veasey.
        Mr.  Veasey. Thank you, Mr. Chairman. And this question is
    for Mr. Dimmig.
        Mr. Dimmig, the IEA, among many other widely respected
    analysts and institutions, has concluded that developing and
    deploying carbon capture technologies in the power generation
    sector, notably including such technologies for natural gas-
    fired power plants, will be critical to achieving the goals of
    the Paris agreement. I wanted to ask you, because NET Power is
    developing a unique design for a natural gas power plan, which
    would completely eliminate the smokestack, how do you see
    designs like yours fitting into the long-term emissions
    reduction strategy of the United States and other countries
    that are participating in the Paris agreement?
        Mr.  Dimmig. We think it's critical. We've looked at all of
    the sort of major studies out there, and I would agree they all
    tend to conclude that without CCS, we're not going to get to
    the various climate goals we've set. So at 8 Rivers we view
    finding a fossil fuel solution to carbon emissions as a
    critical requirement mostly because we also see that fossil
    fuels aren't going anywhere. We have abundant oil and gas here
    in the United States. We'll be using that for some time to
    come.
        There's abundant oil and gas around the world. Coal is
    being utilized in the developing world quite abundantly, so we
    know these fuels are going to be used and we know in order to
    meet these goals, we're--then we're going to have to deal with
    carbon emissions from that. Our main goal is to try to make
    that sort of an economically relevant choice to make--give
    people the option to build a plant using low-cost abundant
    fossil fuels and do so in a way that limits or eliminates
    carbon emissions and not make it an environmental or an
    economic choice and make both options palatable in the same
    facility.
        Mr.  Veasey. As developing countries try to improve their
    way of life, how do you see these technologies playing into all
    of this for those places around the world?
        Mr.  Dimmig. You know, I think the developed world sort of
    built its economies on the back of abundant low-cost fossil
    fuel. Those fields are also abundant in the developing world,
    and if we want--you know, those folks are going to want to
    bring the same quality of life and type of lifestyle we have in
    the developed world to their world. And so fossil fuels are
    going to be utilized to do that. We have an opportunity to do
    that differently. We have an opportunity to do that by building
    from the start even cleaner infrastructure to utilize those
    fossil--those low-cost abundant fossil fuels.
        Mr.  Veasey. One of the key challenges that have plagued
    carbon capture projects is scalability. I know your pilot scale
    project is 1/10 the size of the eventual powerplant that NET
    Power would like to commercialize. What are some of the
    challenges that NET Power faces in scaling the technology?
        Mr.  Dimmig. Sure. So we started by designing a commercial-
    scale plant rather than focusing on sort of taking R&D and
    scaling it just to whatever we felt like the next most cost-
    effective size was. We said what does the best commercial
    product look like and then we scaled that as small as we could
    to build a demonstration plant without trying to fundamentally
    alter that design, fundamentally alter the equipment in the
    plant. So every piece of equipment in that plant is being
    supplied by a supplier that can also supply the same piece at a
    larger size. So we're very confident about the all the
    equipment in that facility.
        The key piece then to scale would be the turbine. That
    turbine does not exist yet at a larger scale, but we're
    benefiting from the fact that that turbine could only be made
    so small due to the pressures of the system so it's actually
    operating at less than its full capacity and that will--that
    turbine will actually--in the demonstration plant, it'll
    actually then scale up to a commercial plant more of a 4X
    scale-up than a 10X. So we really reduce the scaling as much as
    possible and eliminated sort of technology changes from small
    scale to commercial scale.
        Mr.  Veasey. Interesting. And in your opinion--because we
    always have this debate on this Committee is what role do you
    see government playing in helping with the scaling up of the
    technologies like the one you're testing?
        Mr.  Dimmig. Yes, as I mentioned in my written testimony at
    length and then a little bit of my oral testimony that there--
    as you scale up, there are new risks even if you have the same
    piece of equipment and you're just making it larger. There's a
    new turbine in the middle of a plant like this. It's got to
    operate against very, very mature technologies such as, say,
    natural gas combined cycle plant that's been in the market
    operating and becoming efficient for 40 years. So it's a very
    challenging hurdle to overcome. And so when we take that step,
    you have to figure out how to make that plant--that first plant
    more cost-effective against what's in the market today.
        Mr.  Veasey. Mr. Chairman, I yield back. Thank you. Thank
    you, Mr. Dimmig.
        Chairman  Weber. I now recognize Mr. Dunn for five minutes.
        Mr.  Dunn. Thank you, Mr. Chairman.
        This is a fascinating subject. I could quiz you guys all
    afternoon, but let me jump right in here and start with Mr.
    Johnston. So the shale revolution, talk about the first, I
    would like to get a sense of how that actually impacts the
    average American family and if you could also tell us--sort of
    give us a time horizon how long can we count on our shale
    revolution to take care of us?
        Mr.  Johnston. Well, we refer to it as the shale evolution
    because there was decades of investment and field experiments
    that went into this where, you know, most people do see it as
    an overnight occurrence. The average American family today is
    getting approximately $1,400 back into their pockets through
    lower utility bills on the electric and gas side together
    because there's been such a shift in power generation from coal
    to natural gas and lower gas bills as well.
        If you look at--just take the Permian basin, for example,
    you know, it's just one basin but it is now the world's--
    considered by many the world's largest super basin of
    hydrocarbons. And with estimates of 160 billion barrels of oil
    and looking to double and beyond and you'll see kind of similar
    growth----
        Mr.  Dunn. Well, what technology barriers do you see to
    continuing to efficiently extract all that potential?
        Mr.  Johnston. Yes, it's really more fundamental learning
    than I think it is the technology itself. It's really about
    being able to understand and predict where you actually make
    the fractures because, as I pointed out, so many of these are
    not actually producing toward the overall production of the
    well. So it's about having a better understanding of how the
    fractures propagate. There could be some fundamental things and
    materials in the proppant itself and having more intelligence
    with the proppants. But it's really about predictive analytics
    at this point.
        Mr.  Dunn. Thank you. So I want to turn my attention to Mr.
    Brower. I loved your bio. Sometime I want to get you to come
    back and tell us how you make a spaceship on the moon--out of
    the moon. That's a great, great background there. But I'm going
    to ask you a different question, though, today. What--you have
    a relatively small company and a very exciting company. What
    impact are you going to be making on the shale revolution?
        Dr.  Brower. Well, hopefully bigger than most of us think.
    You know, the--it's the ideas I think that are generated that
    have the impact and not the size of the company. You know, I
    think back to some of the early pioneers in technology such as
    Thomas Edison, you know, just a very small group of people that
    were able to come up with some great innovations. And, you
    know, he met with a lot of opposition, too, when he was
    developing the lightbulb. Most people were really opposed to it
    because they thought, you know, we already have kerosene lamps;
    why do we need an electric light bulb?
        You know, and so I think that we come up with those kind of
    barriers whenever you--whenever we innovate something new.
    There's resistance to anything new in a certain level, some of
    it a lot of resistance and some of it much more gentle. But I
    think that the concepts are what really make the difference
    rather than the size of the company.
        Mr.  Dunn. And I was actually very fascinated by all the
    areas you're--you've fringed into professionally in your life.
        Mr. Dimmig, I'm going to ask you because you have such a
    great testimony, more written than oral here. If you can direct
    us may be offline to more information on the Allman cycle
    that's more than we can dive into in the remaining minute we
    have here, but I'm just going to ask you if you could have
    somebody send us on the Committee more information on how that
    energy cycle actually works, just a simple request.
        Mr.  Dimmig. I'd be happy to do that. Thank you.
        Mr.  Dunn. Thank you very much. And then, Dr.
    Krishnamoorti, so we're talking about an insufficient supply of
    engineers and scientists. What's the University of Houston
    doing about that?
        Dr.  Krishnamoorti. Well, we started a petroleum
    engineering program seven years ago. We now have 1,000 students
    in that program. We've created the nation's only subsea
    engineering program, and today, we are graduating about 50
    graduate students annually in that program. We've created a
    program that is focused on upstream data analytics that is
    looking at how do you bring all the advances we've done in
    high-performance computing and data analytics to the upstream
    world.
        Mr.  Dunn. So I'm not going to trip you up with that
    question. That's--good job. Thank you very much, Mr. Chairman.
    I yield back.
        Chairman  Weber. Thank you, sir.
        The Chair now recognizes the gentleman from California, Mr.
    Takano, for five minutes.
        Mr.  Takano. I thank the Chairman.
        My question--my first question is for Mr. Johnston. Mr.
    Johnston, data released by the Occupational Safety and Health
    Administration, OSHA, shows that the rate of severe injuries
    across various--well, it shows the rate of severe injuries
    across various U.S. industries. The upstream oil and gas
    industry was once again one of the more dangerous places to
    work according to these--this report. It tends to have a low
    injury rate but a very high fatality rate. What is the industry
    doing to improve safety for oil and gas industry workers? Is
    there anything on the technology and research front that
    industry is funding or could fund to bring the fatality rate
    down?
        Mr.  Johnston. Thanks for your question. I grew up as a
    roughneck on an offshore drilling rig, so this is something
    kind of personal to me.
        Mr.  Takano. Yes.
        Mr.  Johnston. So, you know, it is a hazardous occupation.
    I would have to say that safety, it starts with culture and
    engineering controls, administrative controls, and things of
    that nature. From the time that I worked offshore in the '80s
    to what I saw on the--our hydraulic fracturing test site is a
    huge transformation and attention to safety and culture and so
    on. I was very impressed with what our host site Laredo was
    doing. I'm also our executive sponsor of our corporate EH&S
    team. So I think it really starts with having that commitment
    to a safety management system.
        As far as specific technology, GTI is not developing any
    technology in the upstream oil and gas sector that's safety-
    related. We do more in the downstream segment of that business
    with the distribution companies and public safety in that
    regard. I'm sure, though, that the industry is--has a keen
    awareness on that.
        Mr.  Takano. I'm not--you know, I'm not from Texas. I
    don't--I'm not around it.
        Mr.  Johnston. Yes.
        Mr.  Takano. I'm just wondering is--are refineries
    considered upstream or downstream?
        Mr.  Johnston. Downstream, yes.
        Mr.  Takano. Yes. I mean, I--we do have refineries in
    California----
        Mr.  Johnston. Yes.
        Mr.  Takano. --and I know that we've had some serious
    incidents and accidents in those types of environments. And I'm
    just wondering if there's any way in which there can be an
    improvement in technology there or more intensive research.
        Mr.  Johnston. Certainly. There's a great book called
    Failure to Learn that is a historical recount of the Texas City
    Refinery explosion and the deaths that occurred. Every one of
    my directors has read it. I bought them all copies of it
    because I think that's one of the key pieces of that. But
    there's certainly monitoring technology and advanced controls
    and things that are continuing to accelerate down the
    technology path.
        Mr.  Takano. Well, thank you.
        Mr. Dimmig, I'm going to try and get this question in. Some
    of my colleagues across the aisle often complain that the
    Department of Energy is, quote, ``picking winners and losers,''
    end quote, and interfering with the free market by, quote,
    ``crowding out private investment,'' end quote. I would be
    interested in your perspective given NET Power's experience in
    utilizing technologies developed by government, as well as in
    securing private sector investment. Should the Department
    support all research proposals in areas equally or should it
    prioritize investments based on where we can get the most value
    for taxpayer dollars?
        Mr.  Dimmig. I think it should--there should be a priority
    on value. And I think at the end of the day if we believe that
    these technologies--there's a great public interest in having
    them available to us and that the R&D was worth it and we want
    to sort of get them into the market. Ultimately, there will be
    winners and losers selected and I think it--the key is to have
    market pull because the market is very good at picking winners
    and losers. And so getting market--the market to really drive
    those decisions but have the DOE and the federal government as
    a partner I think is a smart way to sort of blend the benefits
    of both.
        Mr.  Takano. Dr. Krishnamoorti, I see you nodding your
    head. Do you agree with that?
        Dr.  Krishnamoorti. Absolutely. The idea of having an
    industry pull is critical in determining what types of
    solutions we put together. It cannot be done in isolation of
    industry pull.
        Mr.  Takano. Well, has the Department picked a lot of
    important winners in the past few decades such as--well, hasn't
    it really picked some important winners and losers in the past
    few decades such as breakthrough hydraulic fracturing
    techniques? Is this a bad thing?
        Mr.  Dimmig. No, I don't think that is a bad thing. And
    again, it's--there's industry involvement, industry pull that
    really helped drive that technology into the market, but
    clearly, the Department of Energy and the federal government
    had an important role in getting that technology to market and
    then out the door.
        Mr.  Takano. Before I yield back, I'll just note for the
    record that Dr. Krishnamoorti was also nodding his head.
        Chairman  Weber. Did the gentleman yield back?
        Mr.  Takano. I did.
        Chairman  Weber. Okay. And did you say that the other side
    was complaining? You know, we're husbands. It's in our job
    description. I'm just saying.
        The gentleman from New York is recognized for five minutes.
        Mr.  Tonko. Thank you, Mr. Chair. The energy challenges
    facing the United States today are real and growing. The only
    way to meet these challenges is by investing in research and
    development. Having an R&D portfolio that covers the spectrum
    from advances in basic sciences to cutting-edge technology
    development, testing and deployment greatly augments the
    critical work being done by our private sector in our nation's
    colleges and universities. Sustained support of these advances
    produces significant economic dividends for the United States,
    lowering costs and improving performance of widely used energy
    technologies.
        President Trump's fiscal year 2018 budget proposal would
    deal a critical blow to the United States cutting-edge
    innovation and research in the energy field. It would carve
    away at critical programs, including the Department of Energy's
    Office of Energy Efficiency and Renewable Energy, DOE's Office
    of Science, and even the visionary energy advancements being
    achieved through ARPA-E, the Advanced Research Projects Agency
    for Energy, with a proven record of moving the horizon of
    energy research forward.
        At a time when we should be adding to our investments in
    our nation's future, these cuts would put American research and
    innovation far behind that of other nations. Many members claim
    to support an all-of-the-above strategy for energy production.
    I believe we also need an all-of-the-above energy research
    strategy to complement it.
        I recognize the value of federal fossil fuel research when
    it helps us to achieve greenhouse gas emission reductions,
    improve efficiency, and protect Americans' public health and
    safety. That is why I have authorized bipartisan legislation--
    I've introduced bipartisan legislation to authorize a gas
    turbine efficiency R&D program. Without DOE's support, we will
    lose our nation's advanced manufacturing edge to countries that
    are investing in advanced turbine research.
        Instead, with appropriate investments in turbine efficiency
    research, we can be saving and creating American jobs while
    we're working to reduce emissions. Simply put, an all-of-the-
    above approach cannot be limited to oil and gas technology. We
    must support research targeting renewables, storage, grid
    modernization, and all other viable options to secure our
    nation's energy independence and our global leadership in
    energy innovation.
        Advanced Research Projects Agency for Energy, or ARPA-E,
    modeled on the Defense Department's DARPA program, invests in
    high-potential, high-impact technologies that are too risky for
    the private sector at this time. ARPA-E is advancing America's
    competitiveness around the world. It has fostered cooperative
    projects with academic, federal, and private sector
    researchers, pushing forward cutting-edge ideas with an eye
    toward the marketplace.
        So, Mr. Johnston, as far--as it has been widely reported,
    we understand that ARPA-E is now subject to a no-contract
    action order which prevents the program from taking any action
    to distribute and manage fiscal year 2016 or prior year funds,
    as directed by law. It has also been reported to Committee
    staff that, as part of this order, requests for routine no-cost
    extensions of contracts, which are critical tools for effective
    program management, are not even being considered by the
    agency.
        GTI is currently leading or participating in several active
    and announced ARPA-E projects. So to the best of your
    knowledge, how has this no-contract action impacted the work
    you do or what you need to move forward in terms of research?
        Mr.  Johnston. Thank you for the question. We had received
    notification of an award through the refuel program back in the
    fall, and that particular project has not been contracted yet,
    so it's been delayed. We go through a period of negotiation
    with Contracting Officer and the Program Director, and it's--
    you know, it's clearly in DOE's court now before that contract
    is initiated.
        Mr.  Tonko. Is such an order unusual in your experience?
        Mr.  Johnston. It's not unusual to have delays when there
    is an administration change. This one seems to have gone on,
    you know, a little bit longer than typical.
        Mr.  Tonko. And in regard to the new contract action----
        Mr.  Johnston. I'm not sure of the no-contract action. I
    just kind of look at our internal process and see that, you
    know, an award was made and it's--you know, it's 8 months into,
    you know, the notification and we still don't have a contract.
        Mr.  Tonko. Beyond ARPA-E, have you encountered similar
    issues in working with or receiving funding from other DOE
    programs within the last few months?
        Mr.  Johnston. Have we received others?
        Mr.  Tonko. Yes.
        Mr.  Johnston. Yes.
        Mr.  Tonko. And such as?
        Mr.  Johnston. In the Fossil Energy Office we have a
    supercritical CO2 Brayton cycle project that's a
    large project with other partners through the Fossil Energy and
    NETL.
        Mr.  Tonko. So what impact will that have?
        Mr.  Johnston. Of getting that project? Well, we just
    kicked the project off and so, you know, our teams are now
    fully engaged in delivering that project, and it's a team of
    different research institutes and other researchers.
        Mr.  Tonko. Thank you. I'll yield back, Mr. Chair.
        Chairman  Weber. Thank you, sir.
        The gentleman from California is recognized.
        Mr.  McNerney. Well, I thank the Chair. I thank the
    witnesses. I'm going to be confining my questions to shale oil.
    In California we're very concerned about groundwater. We have a
    limited amount of it. We have a limited amount of rain. What
    are the best ways to minimize contamination of groundwater in
    the shale process, Mr. Johnston?
        Mr.  Johnston. So as far as groundwater, I think it's all
    about surface retention. There's, you know--the actual
    hydraulic fracturing happens so far between--you know, below
    the groundwater table----
        Mr.  McNerney. Right. Yes.
        Mr.  Johnston. --that there's really, you know,
    infinitesimally small risk that could ever happen unless you
    had a surface casing issue. But really, you're probably much
    more limited to surface type of contamination to groundwater.
        Mr.  McNerney. Surface----
        Mr.  Johnston. Spills or something of that----
        Mr.  McNerney. Okay. I'm not quite sure I'm convinced, but
    I've heard that before so I will go with that for now. What
    about--what's the best way to minimize leakage of methane into
    the atmosphere from the fracking process? Or are you the right
    person to ask that question?
        Mr.  Johnston. I'm certainly--I've been around--I was on my
    first frack job in 1985, so I've been around it for a little
    bit. So fracturing from the--or methane emissions from the
    hydraulic fracturing process are typically lower than they are
    from actually conventional gas production. As with anything,
    you know, I think operators want to keep as much of the product
    as they can.
        Mr.  McNerney. Right.
        Mr.  Johnston. The real significant points of the process
    that have more--are more apt to leak methane would be through
    the flow back process. And you can have green completions where
    you actually capture the methane through that process, in the
    gas processing process as well. So--and sometimes in storage--
    --
        Mr.  McNerney. So would regulations be the way to encourage
    companies to use that technology?
        Mr.  Johnston. What I see that's been very effective today
    is when policymakers, environmental NGOs, and industry can come
    together and have a discussion and develop, you know, policy
    around that. I look at Colorado, for example. They have what I
    would consider to be a great case study of how you address
    methane reductions and a methane target within a state. And
    then, you know, there's technology--Senator Tanaka--or
    Congressman Tanaka mentioned ARPA-E.
        Mr.  McNerney. Right.
        Mr.  Johnston. There's a lot of new technology actually
    coming out of the ARPA-E monitoring--monitor program that will
    be there for the commercial sector to bring into account so a
    lot more monitoring of more remote sites on the horizon.
        Mr.  McNerney. Mr. Dimmig, do you agree that
    environmentalists, industry, and policymakers come together to
    find solutions?
        Mr.  Dimmig. I do. I do. We work quite extensively with
    NGOs to try to educate them about what we're doing and learn
    from them about where their concerns are and figure out how we
    can address those. Methane emissions is one of those areas. And
    from our conversations and where we see things with monitoring,
    many of these emissions issues are very easily addressed. But
    we have that conversation on the--very regularly with NGOs and
    policymakers.
        Mr.  McNerney. Okay. Good to hear. Mr. Johnston, again,
    concerning wastewater, there's a significant and growing
    concern about the wastewater injection back underground causing
    earthquakes and other sorts of problems. Would it be feasible
    to require fracking operations to clean up the wastewater so
    that it can be usable if not potable?
        Mr.  Johnston. I think it's--in some instances it's more of
    a market question because they can dispose of this water so
    inexpensively, and specifically in the--and what you've seen in
    Oklahoma and some of the other areas. It's actually not from
    shale where a lot of this water is being produced. It's from
    the Mississippi lime formation and that's what--and that--a lot
    of that deep-water injection has caused some of the induced
    seismicity in the Arbuckle formation there. They seem to be
    able to manage that pretty well as a reduce the amount.
        You know, we're constantly looking for technology and
    innovations that make that decision very easy for operators to
    recycle as much of the water and to clean it up as--and reuse.
    So that's a big priority for GTI.
        Mr.  McNerney. Okay. All right. Mr. Chairman, I'll go ahead
    and yield back and let you terminate the hearing if you wish.
        Chairman  Weber. Actually, we're--I think we're going to do
    a second round of questions if you have more, Jerry, so hang in
    there.
        Gosh, where do I start? Well, let me do it this way. Mr.
    Johnston, I'll start with you. What policies could Congress and
    DOE implement to encourage more industry-led development--
    research and development efforts? Are there existing--in other
    words, what policies could we implement, more industry-led
    research. You talked about being a roughneck basically back in
    '85. Is that what you said? Okay. So you've watched this
    industry develop. So how do we get industry more involved?
        Mr.  Johnston. Well, one of the reasons I wanted to
    highlight the project that we have today is just that. I mean,
    how--I mean, that's tremendous leverage. It's working on a big
    problem, and it takes lots of different stakeholders to come
    together and solve the problem. So I think if you set out more
    grand challenges that can really have an impact for consumers,
    for industry, for the government to be able to point to that
    impact that they're making, I think that's the way to do it.
        That's one thing I really like about, you know, even the
    ARPA-E model is they put big stakes in the ground and you have
    to innovate to those, so not be prescriptive but put big
    opportunities out there and let innovators and in the industry
    come together to try to solve those.
        Chairman  Weber. Okay. Mr. Dimmig, I want to come to you
    offline afterwards. I'm very interested--you know, I own an air
    conditioning company, furnaces. We're about 80 percent
    efficient, so natural gas, about 20 percent of the heat and
    energy goes out the roof through the vent, and I'm curious
    about how exactly you all intend to get them to zero emissions.
        But I want to come to the doctor here. When you talk about
    those kinds of measuring--or maybe it's Mr. Brower, I'm not
    sure or both of you--measuring--being able to measure abilities
    of pipelines subsea. You talked about ROVs, unmanned ROVs,
    subsea, acting like human capabilities--I think it was you--
    where you can measure that pressure differential or pressure
    change. My question is would--could that be applied downhole
    when that drilling is happening onsite? When you've got a
    wildcat or a rig going, are you able to measure pressure on
    those kinds of downhole or is that just out of the question?
        Dr.  Krishnamoorti. Measuring anything downhole while
    drilling is extremely difficult. The head of the bit is a real
    challenge. But there are technology solutions that are coming
    through right now that are likely to transform that. One is
    through smart fluids, putting fluids that can actually measure
    ahead of the bit has become a way to control fluid loss. The
    other is looking at acoustic signals that are able to look
    beyond the drill noise and be able to actually tell what's
    going on in the head of the bit. And those are coming along. In
    perhaps 3 to five years those technologies will be mature.
        Chairman  Weber. Okay. Well, if you can shorten that, we
    can get you more money. I'm just saying.
        Mr. Brower, would you agree with that?
        Dr.  Brower. Yes, I agree with shortening it, too.
        Chairman  Weber. I figured you'd like that.
        Dr.  Brower. Yes, the faster the better. Downhole
    measurements like differential pressure in downhole is like the
    Holy Grail of measurements in that arena. It's very difficult
    to get. Right after the Macondo incident, I was asked by BP to
    participate on one of their steering group, and that was one of
    the items that we addressed.
        There--that there is ways and there are ways to do downhole
    monitoring. As the doctor said, it's extremely difficult. We
    have certain monitoring methods that we use and are continuing
    to further develop that are used in the deep-water area that we
    are now starting to put into downhole operations. And so I
    think in the next little--you know, in the next few years that
    it will be very doable to get those differential pressure
    measurements----
        Chairman  Weber. Recently, I heard GE's plant--they would
    build blowout preventers that are megatons and they use
    redundancy in putting those on the floor of the ocean, for
    example. So it's a very interesting thing that we can monitor
    that.
        But, Doctor, I want to come back to you. Mr. McNerney from
    California had some questions about the water issue. Would you
    like to further expand on that? Do you want some more time?
        Dr.  Krishnamoorti. Sure. So there are some very
    interesting technologies that are in place that are allowing
    for the use of geothermal energy to clean up the water. These
    are being done through nanotechnology. There is a startup
    company from the University of Houston----
        Chairman  Weber. Geothermal onsite?
        Dr.  Krishnamoorti. Onsite. So they're able to bring--not
    use fossil energy but use geothermal energy to clean up water.
    This is a nanotechnology company called Wave. They have got--
    they've developed these materials that can pull out most of the
    contaminants that are there and make the water as good as
    potable water. And that's the kind of thing--even though you
    can clean it up, the idea is to reuse and recycle that water so
    that it can be used for re-fracking or for other fracturing
    operations.
        Those--I think that's an opportunity where the challenge
    has been there. These are technologies that have been developed
    for other applications such as in the developing world where
    clean potable water has been a challenge, and those are being
    brought to bear on the oil and gas industry.
        Chairman  Weber. Thank you, Doctor. I'm going to yield my
    time and go to Mr. Veasey.
        Mr.  Veasey. Yes, thank you, Mr. Chairman. My question is,
    again, for Mr. Dimmig. I know that NET Power intends to use the
    captured carbon dioxide for EOR. If carbon capture technologies
    are expanded widely across the market, will the capacity for
    additional CO2 EOR meet the influx of carbon dioxide
    that will be available or would the there be a market
    saturation?
        Mr.  Dimmig. In most of the analyses we've seen are that
    there's a huge opportunity for CO2-based enhanced
    oil recovery, and that opportunity can absorb the carbon
    emissions from really gigawatts of power plants. So there's a
    study by Advanced Resources International that argues there are
    100--about 100 billion barrels of next-generation CO2
    EOR barrels recoverable, economically recoverable, and I think
    those--to recover that oil would require 33 billion tons of
    carbon dioxide, which is approximately I think--it was 260 or
    280 gigawatts of natural gas plants over a 35-year life.
        Mr.  Veasey. Well, thank you very much.
        Mr. Johnston, to many, the idea of using carbon captured
    dioxide to extract additional greenhouse gas emitting
    resources--in this case oil--seems to run counter to the
    purpose of capturing carbon dioxide in the first place. Can you
    explain why CO2 EOR--how that benefits the climate?
        Mr.  Johnston. Well, currently, you know, most--a lot of
    the EOR operations come from natural--naturally occurring so
    it's mined basically. It's drilled for to produce the
    CO2. And if you take anthropogenic CO2
    from power plants or other industry and you reuse that in an
    EOR application, you're actually sinking that and it becomes a
    miscible fluid. It helps, you know, bring up that tertiary
    produced oil that you can't extract today.
        So I think IEA did a study where they're looking at if all
    the potential EOR applications that are technically recovery
    were done, there would be like a 63 percent carbon reduction
    from using manmade CO2 for enhanced oil recovery.
        Mr.  Veasey. Amazing. So in that same context can you
    explain what a carbon advantage barrel of oil actually means?
        Mr.  Johnston. I would have to infer that it's something on
    that, you know, guideline. I'm not really dialed into that. But
    it--I think it has to do with using the manmade CO2
    to bring that oil to bear to the market.
        Mr.  Veasey. Okay. Do you have an estimate of how much
    private industry invests in R&D into new technologies annually
    compared with the Department of Energy's Office of Fossil
    Energy?
        Mr.  Johnston. Are you talking about across the value
    chain----
        Mr.  Veasey. Yes.
        Mr.  Johnston. --of oil and gas? I mean it's orders of
    magnitude more than what DOE would put in. I mean, because the
    Fossil Energy Office has put 600--roughly $600 million a year.
    I think, you know, there--it'd be orders of magnitude more by
    industry, you know, across--are you just talking about the
    United States? Even it's at least an order of magnitude,
    probably higher.
        Mr.  Veasey. Okay. That would be interesting to have--to
    see those numbers. Would the government best fulfill its
    obligation to the public by pursuing more efficient extraction
    methods and technologies or by pursuing more effective
    environmental protections?
        Mr.  Johnston. Could you repeat that? I'm sorry.
        Mr.  Veasey. Yes, absolutely. Would the government best
    fulfill its obligations to the public by pursuing more
    efficient extraction methods and technologies or by pursuing a
    more effective environmental protection policy?
        Mr.  Johnston. Yes, you know, those things are so closely
    coupled, and I don't think people realize that or a lot of
    people, so--and as I pointed out in my testimony, the more
    you're driving that efficiency, the more you're reducing the
    environmental impacts and the community impacts on top of that,
    which is very important to people. So I think they are much
    more tightly linked and it's not an either/or, and I think
    that's the conversation we should be having more.
        Mr.  Veasey. Mr. Dimmig, do you--it looked like you
    wanted--did you want to comment on that? Okay. All right. No,
    thank you, Mr. Chairman. I yield back my time. Thank you.
        Chairman  Weber. He wasn't going to touch that with a 10-
    foot drill stem.
        Mr. McNerney?
        Mr.  McNerney. Well, I thank the Chairman again.
        You know, shale revolution really has changed our country's
    energy outlook. In 2007 we were talking about running out of
    oil and prices and all, and now we have oil. We're talking
    about exporting natural gas. But shale has a bad rap. I mean,
    it does. If you look at the State of Maryland, didn't they just
    pass a law that would forbid fracking? I mean, states, even
    Oklahoma, there's a lot of concern out there about shale.
        So what can we do? Is it more government regulation? Is it
    just improving technology? I mean, I'm at a little bit of a
    loss here. How do we change that image of fracking as a nasty,
    polluting, earthquake-causing business?
        Mr.  Dimmig. Sure, Professor.
        Dr.  Krishnamoorti. So I direct you to my testimony. There
    is a report that the Academy of Medicine, Engineering, Science,
    and Technology at the State of Texas is creating is led by one
    of our UH faculty members Christine Economides. She's a
    National Academy of Engineers member. They have looked at all
    of the different aspects of shale gas, and this is the
    technology, the water, the infrastructure, and there are best
    practices in place that can be put in play that will ensure
    that this can be done safely, can be done economically, and can
    be done in a way that actually minimizes environmental and
    infrastructure damage. And I think those are the best practices
    that have been established. It's been about 10, 12 years of the
    industry working really hard to do it rights.
        And I think even though there has been a lot of publicity
    about the ills of shale gas and the unconventional resources, I
    think that this is a resource that, if managed right and if
    done right, can be an incredible resource for all of us.
        Mr.  McNerney. Well, I mean, you talk about best practices,
    okay, but it just takes one or two bad players to give the
    whole industry a bad rap. And, I mean, is it going to take
    additional government regulation or enforcement? I mean, how
    are we going to make sure that the industry follows those best
    practices?
        Dr.  Krishnamoorti. So the challenge is how distributed the
    resources and how many operations that are continuously being
    developed or drilled and production. And so to try and do this
    by just simply regulatory oversight is a mistake. This has to
    be a partnership with the industry and with best practices
    being put in place and where the effectiveness is monitored by
    the industry. It cannot be monitored by regulatory agencies.
        Mr.  McNerney. I don't quite buy that. I mean, that's like
    saying you're going to have the financial industry regulate
    itself. No, that doesn't work.
        Mr. Johnston, did you want to chime in here?
        Mr.  Johnston. I do think that having un-polarized
    conversations would be a good start. And I don't know who is
    the facilitator----
        Chairman  Weber. Yes, we'll get right on that here in
    Congress.
        Mr.  Johnston. Yes, exactly. I wasn't going to bring that
    up. But anyway--but, I mean, that would be a huge start, just
    to bring the NGOs, industry, and policymakers together to
    really--because we have an unprecedented opportunity. You know,
    you talk about in our country going to--being an exporter of
    hydrocarbons and, you know, ten years ago we were talking about
    building LNG import terminals and, you know----
        Mr.  McNerney. Now we want to know how to make them export
    terminals.
        Mr.  Johnston. Yes.
        Mr.  McNerney. But, I mean, the thing is even if the United
    States--all the players in the United States are good, you
    know, angels and they don't ever--they follow best practices,
    then we're--there's other countries in other parts of the world
    that are going to take up this technology and they're going to
    be bad players. So, I mean, we still have a huge challenge in
    terms of our leadership and in terms of our example on how we
    do this.
        Mr.  Johnston. Yes. Fracking is not a good, you know, name,
    right, anywhere you look, and it's painted with a broad brush--
    --
        Mr.  McNerney. Yes.
        Mr.  Johnston. --whether it's actually the culprit or not.
    And I don't know how you redirect that conversation, but, you
    know, it's been around since 1947. It's not--it's--and, you
    know, I don't know how you change the conversation, but that's
    really what needs to happen.
        Mr.  McNerney. I mean, as a tree hugger, I want to see more
    renewables and maybe more nuclear, but we can't just turn off.
    And so we're going to have to rely on fracking, and we want it
    to be as clean and as safe as possible.
        Mr.  Johnston. Well, there's ways to--you know, there are
    best practices and I think there are commonsensical ways to
    address the issues that are out there. Like I said, I pointed
    to Colorado in the case of methane emissions. That's a great
    case study and then how you take that from there.
        Mr.  McNerney. All right. Thank you, Mr. Chair. I'm going
    to yield back to you.
        Chairman  Weber. Okay. Well, now that we have fixed all
    those problems, I want to thank the witnesses for their
    valuable testimony and the Members for their questions. Jerry,
    thank you for your difficult questions, too. I mean, that's a
    lot of frank discussion. I appreciate that.
        The record will remain open for two weeks for additional
    comments and written questions from the members. This hearing
    is adjourned.
        [Whereupon, at 11:37 a.m., the Subcommittee was adjourned.]

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