[Congressional Record Volume 147, Number 91 (Wednesday, June 27, 2001)]
[Extensions of Remarks]
[Pages E1231-E1232]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 DEPARTMENT OF THE INTERIOR AND RELATED AGENCIES APPROPRIATIONS ACT OF 
                                  2002

                                 ______
                                 

                               speech of

                            HON. WES WATKINS

                              of oklahoma

                    in the house of representatives

                        Thursday, June 21, 2001

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 2217) making 
     appropriations for the Department of the Interior and related 
     agencies for the fiscal year ending September 30, 2002, and 
     for other purposes:

  Mr. WATKINS. Mr. Speaker, I rise today in support of H.R. 2217, the 
Interior Appropriations Act for Fiscal Year 2002. Among the components 
of that act is funding for the Department of Energy's Office of Fossil 
Energy and its program of oil and natural gas research and development. 
Few among us understand what an important role oil and natural gas 
research and development plays in our nation's ability to produce 
critical quantities of those resources for our domestic consumption.
  I would like to introduce into the Record today one of the 
recommendations contained in a report of the Interstate Oil and Gas 
Compact Commission (IOGCC) entitled A Dependent Nation: How Federal Oil 
and Natural Gas Policy is Eroding America's Economic Independence. This 
report contains the IOGCC governors' own set of recommendations for a 
national oil and natural gas policy. It is my hope that this 
information will help explain why federally funded oil and natural gas 
research and development is so vitally important to this country.

Recommendation 2: Promote the Expansion of Research To Recover Domestic 
                         Oil and Gas Resources

       This far-reaching recommendation encompasses a number of 
     initiatives designed to ensure the nation's reserves are 
     fully developed. First, to make informed decisions regarding 
     the nation's energy future, the public must have definitive 
     information on the actual domestic petroleum resource.
       For example, there are vast known reserves of oil in the 
     United States. The IOGCC estimates that 351 billion barrels 
     will remain in the ground after conventional recovery 
     technologies have been applied.
       In addition, there are oil and natural gas reserves located 
     on private and public lands and offshore that have not been 
     analyzed or catalogued. Some of these reserves may exist in 
     environmentally sensitive areas or in difficult-to-access 
     locations that would require extraordinary exploration and 
     production measures or advanced research to develop. 
     Therefore, in addition to identifying the entire oil and gas 
     resource base of the country, research should include 
     estimates of the time required to bring these resources into 
     production.
       Defining these resources is only a first step. As an 
     advocate-for oil and natural gas research, the IOGCC also 
     strongly supports programs that create technology to improve 
     recovery rates and lower finding and production costs. Such 
     research and development (R&D) is an investment in the 
     country's future and its energy security. Technological 
     advance might be the most important factor in ensuring 
     America's nonrenewable resources are fully developed.
       As noted by the Task Force on Strategic Energy Research and 
     Development, ``There is growing evidence of a brewing `R&D 
     crisis' in the United States--the result of cutbacks and 
     refocusing in private-sector R&D and reductions in federal 
     R&D. Support for research and development is indeed being 
     simultaneously reduced in the private and public sectors. R&D 
     cannot be turned on and off like a water tap. The acquisition 
     of new knowledge and the embodiment of new knowledge in new 
     products and services for the economy is a cumulative process 
     that requires continuous effort to sustain. The accumulation 
     of cutbacks in public and private R&D could be setting the 
     stage for a major shortfall and setbacks in R&D in the United 
     States--characterized by the lack of consistent attention to 
     longer-term needs and problems, a shrinking population of 
     scientists and engineers available to perform high-quality 
     R&D, and a loss of incentives and opportunities for new 
     generations of technologists.''
       A 1997 report commissioned by the IOGCC confirmed the 
     declining trend in oil and gas research and development. 
     ``When private R&D is compared to federal expenditures, the 
     outlook is more bleak. Private spending is substantiated . . 
     . but federal spending remains disproportionately small 
     compared to the relative importance of oil and gas to U.S. 
     energy requirements.''
       Enrollment in petroleum-related majors at America's 
     colleges and universities has shrunk as well. At the 
     University of Texas at Austin, home of one of the largest 
     petroleum engineering programs in the nation, undergraduate 
     enrollment in the Department of Petroleum and Geosystems 
     Engineering has plummeted more than 80 percent from a high of 
     1,200 in 1982 to 222 in 1999. About 1,300 students currently 
     are enrolled in undergraduate petroleum engineering programs 
     in the U.S., down sharply from more than 11,000 in 1983.
       A 1997 study published by the IOGCC expressed alarm at the 
     loss of experienced and entry-level technical personnel, 
     noting ``there is a 5- to 7-year gap between decisions to 
     increase exploration budgets and resulting new oil 
     production, even when experienced technical staff are 
     available. However, few have considered the long-term effects 
     of the 1986 petroleum jobs massacre (in which 500,000 jobs 
     were lost) and how the events of 10 years ago will influence 
     future energy policy and supplies . . . Any crisis in oil 
     supply causing increases in domestic activity will be 
     constrained by lack of qualified staff.''
       The federal government could fulfill a vital leadership 
     role in reversing the trend. The country's network of 
     national laboratories, for example, seems ideally suited for 
     the mission of energy research.
       In addition, the lOGCC supports a reallocation of U.S. 
     Department of Energy resources to provide additional research 
     and development funding for oil and natural gas. The DOE's 
     budget request totals $18.9 billion for fiscal year 2001. For 
     fossil energy research and development, DOE is requesting 
     $376 million, less than 2 percent of the budget. About $160 
     million is requested for oil and natural gas research. This 
     represents slightly more
       The DOE's Office of Fossil Energy highlights the importance 
     of R&D. ``Looking forward, the domestic oil and gas industry 
     will be challenged to continue extending the frontiers of 
     technology. Ongoing advances in E&P productivity are 
     essential if producers are to keep pace with steadily growing 
     demand for oil and gas, both in the United States and world 
     wide.''
       The NPC notes ``producers are turning to the service 
     sectors to develop new technology for specific applications. 
     Industry consortia have been formed to address critical 
     technology challenges such as deep water development. While 
     many of these changes improve the efficiency with which 
     research and development dollars are spent, concerns have 
     been widely expressed that basic and long-term research are 
     not being adequately addressed.''
       Meanwhile, solar and renewables technologies, which provide 
     less than 10 percent of U.S. energy, would receive more than 
     $457 million. The 28 percent increase in funding ($99 
     million) for 2001 represents more than the total request for 
     oil and natural gas research.

[[Page E1232]]

       Reality dictates that additional funding for oil and 
     natural gas research and development is unlikely. However, 
     the IOGCC supports a drastic shift in how available tax 
     dollars are spent. In the early years of the DOE, large and 
     expensive demonstration projects dominated R&D spending. 
     ``That early emphasis on demonstration projects, reflecting 
     the turmoil of the late 1970s, was, in retrospect, 
     misplaced.''
       Despite billions of dollars spent on renewable energy R&D 
     during the period of 1990-1999, there has been little impact 
     by renewables on the nation's total energy consumption 
     pattern (Figure 6). In fact, in 1999, renewables supplied a 
     nearly identical percentage of the nation's total energy 
     consumption as in 1990.
       According to Hodel and Deitz, ``however important 
     alternative sources eventually may be, our best estimate is 
     that we will continue to meet our energy needs with oil and 
     gas for at least the remainder of this and the next 
     generation of Americans, and very possibly several succeeding 
     ones as well. Without some kind of energy breakthrough or 
     aggressive government mandates, oil and gas appear certain to 
     be our predominant fuels for the next 40 to 100 years.''
       A broad range of parties assembled by the National 
     Petroleum Council to assess the future of the oil and gas 
     industry expressed ``. . . surprisingly broad agreement . . . 
     '' on the outlook for the next 25 years, including, ``The 
     United States and the world will still be using large amounts 
     of oil and gas in 2020, not significantly different from the 
     more than 60 percent share of world energy consumption these 
     fuels represent today.''
       The case for redirecting R&D dollars to where they would 
     prove more effective is especially important as government 
     considers budget freezes and cutbacks. Past successes, 
     including three-dimensional seismic, polycrystalline diamond 
     drill bits and horizontal drilling, which have helped lower 
     costs and improve recovery, should be built upon.
       To ensure that these limited resources are spent wisely, 
     the IOGCC recommends the budgets for energy research and 
     development be considered by the same congressional 
     subcommittees. Current congressional structure requires 
     fossil fuel and renewables research budgets to be evaluated 
     in separate budget bills handled by separate subcommittees of 
     the House and Senate Appropriations Committees. As a result, 
     side-by-side comparisons of expenditures and impacts are 
     difficult, and there is a lack of flexibility in allocating 
     finite resources.
       The NPC notes ``in the past three decades, the petroleum 
     business has transformed itself into a high-technology 
     industry ... Looking forward, the domestic oil and gas 
     industry will be challenged to continue extending the 
     frontiers of technology. Ongoing advances in E&P productivity 
     are essential if producers are to keep pace with steadily 
     growing demand for oil and gas, both in the United States and 
     world wide. Continuing innovation will also be needed to 
     sustain the industry's leadership in the intensely 
     competitive international arena, and to retain high-paying 
     oil and gas industry jobs at home.''

     

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