American Oil and Gas Reporter - July 2019 - 96

ConventionCoverage: California Independent Petroleum Association

DOE Helps Push Oil Field Technology
OLYMPIC VALLEY, CA.-In addition
to adopting policies more favorable for
oil and gas development, the Department
of Energy under President Donald Trump
is focused on advancing technology,
said Shawn Bennett, deputy assistant
secretary within DOE's Office of Oil
and Natural Gas.
Bennett updated the California Independent Petroleum Association during its
annual meeting general session on June
8 in Olympic Valley. In other general
session presentations:
· A panel consisting of CIPA Air
Resources Consultant Jon Costantino;
Mike Taylor, president of Emission Advisors Inc.; and Bill Pham, co-founder
and chief executive officer of Cenergy
Power, demonstrated how operators could
take advantage of carbon reduction credits
through California's Low Carbon Fuel
Standard (LCFS) program.
· CIPA CEO Rock Zierman engaged
Continental Resources founder and CEO
Harold Hamm in a one-on-one discussion
that ranged from Hamm's introduction
into the oil business as a teenager in the
Sooner Trend boom in Northwest Oklahoma to Hamm's relationship with President Trump.
While the Trump DOE believes
smarter policies and regulations help
spur resource development, there also
is a need for technology solutions, Bennett
suggested to CIPA. "Our focus is on
early-stage research and development
that industry can't fund," he said, adding
that the agency was doing so in cooperation with industry, academia and its
national laboratories.
"We recognized that maybe there
wasn't a lot of conversation between industry and DOE the previous eight years,"
Bennett allowed. "We wanted to make
sure we didn't work in a vacuum. Without
your input, the questions we have may
have no relevancy."
He said DOE hoped to help operators
increase unconventional resource recovery
rates through new applications of machine
learning and data analytics to process and
interpret complex data streams in real
time so as to enhance early decision making. Because every basin's geology differs,
he said DOE was taking a basin-specific
approach so that all states, regardless of
their resource base, could benefit.
"Developing and creating these big96 THE AMERICAN OIL & GAS REPORTER

data machine-learning tools coupled with
high-performance computing has the potential to usher in a paradigm shift in energy production and development systems," Bennett posed. "We welcome your
input and thoughts on these ideas."
In the area of enhanced oil recovery,
Bennett mentioned, DOE has $50 million
available to fund projects that prove EOR
techniques in offshore wells. The agency
also has commissioned a study by the
National Petroleum Council to define a
pathway to integrate carbon capture, utilization and storage at scale into energy
and industrial marketplaces.
"This study, which was requested by
Secretary Rick Perry, is exploring R&D,
and regulatory and public policy options
that can catalyze CCUS deployment,"
he said.
DOE also has a number of projects to
address produced water management,
Bennett continued. "They run the gamut
from basic assessment science to water
treatment technology and enhanced water
disposal options," he outlined.
He said DOE had announced $5 million in federal funding for projects to
accelerate commercialization of treatment
technologies aimed at transforming the
energy sector's produced water from a
waste to a resource as part of the White
House's Water Security Grand Challenge,
which aims to advance transformational
technology and innovation to meet the

The U.S. Department of Energy is applying big-data machine-learning tools
to help operators improve recovery rates
from unconventional resources, Assistant Secretary for Oil and Natural Gas
Shawn Bennett advises the California
Independent Petroleum Association.

global need for safe, secure and affordable water.
Moving further away from the wellhead, Bennett said, DOE is applying big
data and machine learning tools to enhance
the reliability of the nation's pipeline infrastructure and lay the groundwork for
future pipelines. It also has made $24
million available to enhance the cybersecurity of natural gas infrastructure. And
in the area of natural gas storage, Bennett
said, DOE is focusing R&D on methane
leak detection.
Low-Carbon Fuel Credits
Costantino, who is principal at Tradesman
Advisors Inc. in Auburn, Ca., noted that
the LCFS program, which is part of California's goal of reducing the carbon intensity
of transportation fuels by at least 20% by
2030, rewarded producers who invested in
renewable energy projects for existing operations. Those projects may include solar
steam generation, photovoltaics, biomethane,
or carbon capture and storage.
"There are CIPA members pursuing
all of these," Costantino remarked, adding
that in addition to the potential for lower
energy costs, LCFS awarded credits that
had real monetary value.
Further, he said, producers participating
in LCFS programs "tells the story of how
this industry is following along with California's green goals. That is something
we need to highlight."
Pham outlined an example solar generation project for a crude oil production
operation. To qualify for the LCFS credit,
he emphasized, solar power must be produced and consumed on site or be provided
directly to production facilities by a thirdparty generator, rather than coming through
a utility-owned transmission or distribution
network. Criteria for a carbon dioxide
offset, he said, are:
· Reducing carbon intensity at least
0.10 grams of CO2 equivalent per megajoule of power; or
· Reducing CO2 emissions by at least
5,000 metric tons.
Pham presented the example of a 1.3megawatt direct current project with upfront capital costs of $2 million. The federal investment tax credit covers 30% of
that cost, and Pham calculated the net
value of the purchased electricity offset
and LCFS credit at about 9.5 cents a
kilowatt-hour each, which he said amount-

American Oil and Gas Reporter - July 2019

Table of Contents for the Digital Edition of American Oil and Gas Reporter - July 2019