Energy Department issues call for best practices proposals

Goal of five-year program “PUMP” — preferred petroleum upstream management practices — to help U.S. oil producers keep fields operating

Petroleum News Alaska

The U.S. Department of Energy said June 7 it has kicked off a nationwide effort to help slow or halt the decline in U.S. oil production by helping producers identify and quickly apply “best practices” that can keep their oil fields in operation.

The Energy Department, through its National Petroleum Technology Office in Tulsa, Okla., issued a call for proposals, asking for projects that can show where a combination of improved technologies, better data or other actions can overcome constraints holding back an oil field’s production.

The initiative is called PUMP — short for preferred petroleum upstream management practices program. It is one of the Energy Department’s high priority efforts to arrest the decline in domestic oil production, perhaps by 2005. Through the five-year PUMP program the department hopes to help U.S. oil producers boost production by up to 200,000 barrels per day.

Requesting proposals in two areas

• Projects that identify specific regional obstacles to oil production and identify “preferred management practices” that might overcome the problems. These practices could include a combination of drilling or field operations technology, new reservoir management approaches, computer tools or better ways to comply with environmental regulations.

The Energy Department will share the costs of a single controlled field test that demonstrates the effectiveness of the problem-solving practices, and the winning proposers will be required to convey the practices to other producers in the region through existing technology transfer networks.

• Projects that lead to the formation of “best practices” groups or councils in a region. The goal is to establish a self-sustaining system to identify production constraints and solve them through regionally-specific “preferred management practices.” The practices would be available to regional producers in an interactive, up-to-date compilation accessible from the Internet.

Proposals are due on Aug. 9. The Energy Department plans to select three to seven projects, each lasting 24 months or less. Each project would be in the range of $500,000 to $1 million with a minimum requirement of 50 percent private sector cost-sharing.

Aim to keep fields in production

Many U.S. oil fields remain at risk of being taken out of production because of a combination of geologic, regulatory and other factors. Together, these factors make many fields uneconomic even though they may still hold significant quantities of producible oil.

Even if oil prices rise in the future, the department said, much of this oil may not be produced if these fields are abandoned. If the surface infrastructure — pumping units, gathering systems, storage tanks, and other equipment installed and financed over decades — is dismantled, the high cost of restoring it is often prohibitively expensive.

With PUMP, the Energy Department is attempting to identify an integrated set of solutions that can improve a field’s economics and keep endangered reservoirs from being abandoned.

In contrast to other parts of the Energy Department’s longer-range oil research program, PUMP’s emphasis will be on projects that can produce and disseminate results quickly, certainly within the next five years. Proposed technologies must be ready for use in the field. Projects must involve a final product that shows the effectiveness of the approach either through a field demonstration or the operation of a technology transfer network that provides comprehensive documentation of real successes.

The solicitation is available through the Internet from the web site of the National Energy Technology Laboratory (which handles procurement actions for DOE’s fossil energy program) at http://www.netl.doe.gov/business/solicit/.