February 15, 2006

            “I am pleased to see that this budget highlights alternative fuel technologies such as solar, biomass, nuclear, hydrogen, and clean coal,” Hall stated.  However, Hall said that he was “distressed” to see oil and gas research programs zeroed out in the budget along with a proposal to eliminate the Ultra-deepwater and Unconventional Onshore Natural Gas Research and Development Program. 

Hall authored and introduced the Ultra-deepwater provision in 2001, and since that time, the provision has passed the House three times, once in the Senate, and was included in the Energy Policy Act signed by the President last year.  The Energy Information Administration has indicated that the Ultra-deep program will more than pay for itself in the form of increased royalties to the Treasury.

“This program is a win-win for America,” Hall stated following the hearing.  “Not only do we get technologies that tap into American reserves and help wean us off foreign energy, but we also get a program that pays for itself and more.”

“If we want to become more energy independent from foreign sources, we will need to continue to support innovation in the oil and gas area as well as alternative energy research and development,” Hall stated.  “In fact, I am considering introducing legislation that directs some royalties from oil and gas production on Federal lands into a fund at the Department of Energy to promote alternative energy R&D.”

EIA concluded that the Ultra-deep program will tap 1900 trillion cubic feet of technically recoverable reserves in North America – enough to meet over 85 years of demand – and with savings to consumers of an estimated $2.2 billion in 2015.  Proposals to conduct the Ultra-deep research already have been received by the Department of Energy from a number of interested parties.    

Hall also noted that independent producers drill 90 percent of the nation’s wells and produce 85 percent of the nation’s natural gas.  “These producers do not have in-house R&D capabilities, and therefore rely on universities and the Department of Energy to fund innovative technologies and train qualified engineers.  Why oil and gas research has been eliminated from DoE’s energy portfolio is truly perplexing to me,” Hall said.

Hall plans to meet with Secretary Bodman to discuss these issues further.  “I’m pleased that the Secretary indicated that he was open to such a meeting,” Hall said.