RPSEA Wins Multi-year DoE Contract to Fund Research to Develop Domestic Supplies of Natural Gas

FOR IMMEDIATE RELEASE

May 10, 2006

RPSEA Wins Multi-year DoE Contract to Fund Research to Develop Domestic Supplies of Natural Gas

(Washington, DC) – The Research Partnership to Secure Energy for America (RPSEA) today announced it has been selected to administer part of a new ten year, $50 million per year Department of Energy research program to develop new technologies to produce more abundant and affordable domestic energy supplies.

"Developing cutting edge technologies to bring reliable sources of clean-burning, environmentally friendly, domestic natural gas to American consumers is exactly the kind of investment that the United States should be making today, especially in light of sharply rising energy costs," said C. Michael Ming, incoming president of RPSEA. "We need to tap America''s finest minds in academia and industry to address our domestic energy needs. RPSEA is honored to be chosen by the Department to lead this critically important and unique public-private partnership."

RPSEA is a non-profit national consortium with 84 members, including 19 of the nation’s premier research universities, five national laboratories, other major research institutions, large and small energy producers and energy consumers with activities in 21 states. RPSEA was founded in 2002 by five research universities and the Gas Technology Institute, a non-profit research laboratory. To administer the program, RPSEA would manage a research program of $37.5 million per year and, through a competitive process, award research contracts to the nation’s universities, research institutions, national laboratories and industry partners.

The new natural gas and other petroleum supply R&D program, which serves as the basis for the contract , was created by the Energy Policy Act of 2005 and signed into law by President Bush last summer. The statute requires that the research program be managed by a 501c3 non-profit consortium and provides for substantial oversight by the Department of Energy.

The program– funded from royalties that industry pays to produce oil and gas on federal lands – is specifically designed to reduce America''s dependence on foreign energy sources and lower energy costs for consumers. It will also provide substantial benefits to American consumers by enabling the development of natural gas and other petroleum reserves from ultra-deepwater and unconventional onshore provinces in the United States.

According to the National Petroleum Council, the United States has over 55 years of technically recoverable gas reserves in the lower 48 states alone. Much of this resource base, however, requires new advanced technologies to economically produce, as well as to mitigate the environmental impacts of exploration and production. The Department of Energy’s Energy Information Administration has indicated that a rapid technology investment scenario could mean 20 percent lower natural gas prices – this translates into an $18 billion reduction in the nation’s collective energy bill. This new program will help move the US to the rapid technology investment end of the spectrum and help fill a critical and transitional role as the nation moves to a sustainable energy future.

"This program is modeled after other successful public-private partnerships, such as the Clean Coal and Coalbed Methane Programs that resulted in breakthrough technologies to produce cleaner domestic energy supplies," said Daniel Lopez, president of New Mexico Institute of Mining and Technology and chairman of the board of RPSEA. "The members of our consortium are confident that this program will enable the broad sharing of R&D results, and put new technologies to work to address the public’s interest in developing abundant, clean, affordable and secure supplies."

RPSEA has operated as a consortium for over four years, managing a portfolio of research projects that are highly relevant to the new program. RPSEA will focus the experience, expertise and capabilities of its members on meeting the program''s objectives: to maximize the value of domestic natural gas and oil resources through new technologies to increase production, and to do so in less expensive, safer, and more efficient and environmentally benign ways. RPSEA will be led by its president and program manager, C. Michael Ming. RPSEA will receive technical and administrative support from its key team members, the Gas Technology Institute, the New Mexico Institute of Mining and Technology, DeepStar, and Science Applications International Corporation. This highly capable team has substantial experience and expertise in supply research management, as well as in federal contract management.

About RPSEA: The Research Partnership to Secure Energy for America (RPSEA) is a non-profit corporation composed of a consortium of premier U.S. Energy entities. RPSEA’s mission is to provide a stewardship role in ensuring the focused research, development and deployment of safe and environmentally responsible technology that can effectively deliver hydrocarbons from domestic resources to the citizens of the United States. Founded in 2002, we use a collaborative approach with industry, government, non-government organizations, academia, national laboratories, Federally Funded Research Development Centers and independent research groups.


Additional quotes from RPSEA Members

Colorado School of Mines/Colorado Energy Research Institute, Dr. Dag Nummedal, Director

"Increased domestic gas production, associated with ever-greater environmental sensitivity, is an essential component of national energy security. Through the award of this contract to manage the National gas R&D program to the RPSEA Partnership, DOE has demonstrated a farsighted vision by entrusting leadership of such a program to the nation''s leading energy universities and corporations."

Louisiana State University, Dr. Harold Silverman, Interim Vice Chancellor for Research and Graduate Studies

"LSU has traditionally had strong research partnerships with independent oil and gas producers, so we are naturally interested in making contributions to energy-related research both to promote enhanced energy capabilities, but also in securing solutions to environmental health and stability."

Massachusetts Institute of Technology, Dr. Ernest Moniz, Co-Director, Laboratory for Energy and the Environment

"This program will help us develop technologies to enhance natural gas supply and offers both basic and applied novel research opportunities. The program will provide important benefits to the country -- enhanced energy security, increased supply, and opportunities to expand the nation''s knowledge base. MIT faculty and students from several disciplines are looking forward to developing science and technology to find and produce ultra-deepwater offshore as well as unconventional onshore resources."

Mississippi State University, Dr. Colin Scanes, Vice President, Research and Graduate Studies

"We are delighted that RPSEA has been awarded this major contract. The research will contribute to America being much more energy independent. It would enable us to develop advanced technologies to produce offshore energy resources in the Gulf and to minimize damage to the nation''s energy infrastructure in the event of hurricanes and other natural disasters."

Stanford University, Dr. Roland Horne, Professor and Chairman, Department of Petroleum Engineering

"Government support of R&D in oil and gas is often mistakenly excoriated as "corporate welfare" for an oil industry that the public feels is already making plenty of money. However practically none of the government supported R&D money goes to major oil companies -- the majority goes to universities and the national labs. The universities return significant public benefit by using the research dollars to develop technologies that are available to the public -- not hidden away as proprietary advantages as they would be inside an oil company. In addition, support for graduate student research in universities increases the number of students who can join the program. More petroleum engineers, and more petroleum technology, means more petroleum – helping to constrain the oil and gas prices from going even higher."

Stanford University, Dr. Pamela Matson, Dean, School of Earth Sciences

"This kind of public-private partnership is essential as we develop approaches to transition to clean energy sources that provide for the needs of people but also protect the planet''s life support systems. "

Texas A&M University, Dr. G. Kemble Bennett, Vice Chancellor and Dean, Texas A&M Engineering

"As one of the original founders of RPSEA, we are delighted that this critical energy research will be moving forward. This will enable the next generation of engineering professionals to develop and implement valuable new technologies needed to boost our energy supply."

Texas A&M University, Dr. Steve Holditch, Petroleum Engineering Department Head, Texas A&M Engineering

"As one of the original founders of RPSEA, we are delighted that this critical energy research will be moving forward. Unconventional gas and ultra-deepwater frontiers represent areas of vast resource potential and this program will enable the next generation of engineering professionals to develop and implement the valuable new technologies needed to unlock these supplies."

University of Houston, Dr. Art Weglein, Hugh Roy and Lillie Cranz, Cullen Distinguished Professor of Physics, Director, Mission-Oriented Seismic Research Program

The ultra-deep water petroleum and on-shore unconventional gas energy bill is designed to support and accelerate R&D efforts that will address the pressing challenges of finding and producing hydrocarbons in currently inaccessible, or difficult to justify based solely on a risk reward profit and mercantile perspective. The latter mandate is the absolutely appropriate guide for petroleum companies in managing their capital and investments, and they will reasonably rearrange their portfolios and move away from areas of unbearable technical risk towards areas elsewhere in the world where there are often great geopolitical risks and hazards, but where technical challenges are less daunting. On the other hand, the government of the United States has the responsibility to serve the best interests of our nation, and that interest requires a significant domestic resource base and an overall diversity of petroleum sources. To weigh in as stakeholders in the energy arena, it is in our countries core interest to overcome those technical obstacles that obstruct and impede the domestic and diversity of petroleum sources objectives. This bill recognizes that the petroleum industry is best able to define the pressing challenges, and the management of the program assigned by the DOE to RPSEA has that essential component to assure that relevant issues are addressed, and that those capable of addressing the highest priority problems receive the support. This activity represents a partnership of industry, government and academic stakeholders committed to R&D that can have a positive impact on our national energy and security objectives.

The University of Oklahoma, Dean S. Oliver, Director and Eberly Chair Professor Mewbourne School of Petroleum and Geological Engineering

The supply of professionals for the energy industry is critically dependent on the ability of Universities to involve students in research that is relevant to US energy needs. The Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Consortium administered by RPSEA will benefit students and universities by providing the opportunities and funding that is needed to further their education.

University of South Carolina, Dr. Robert Thunell, Director, Marine Science Program and Carolina Distinguished Professor Department of Geological Sciences

"The selection of RPSEA to oversee the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Consortium will provide exciting research opportunities in the area of energy exploration for faculty and students at the University of South Carolina."

University of South Carolina, Dr. Art Cohen, Professor of Geological Sciences, Department of Geological Sciences

"This program provides a significant new step in our country''s attempt to wean itself from conventional fuels and reduce our dependence on foreign energy sources. It will channel more funding toward innovative and environmentally sound production and utilization of cleaner burning alternatives, such as unconventional natural gases."

University of Southern California, Iraj Ershagi, Director, Petroleum Engineering Program

"Just as we were about to lose our competitive position as a leading technology based nation for the oil and gas industry, a legacy has been set to save the economic position of our country. Samuel W. Bodman, Secretary of Energy, has offered RPSEA a very exciting challenge: train the manpower, develop and apply technologies for difficult and unconventional assets and inspire the thousands of operators without research capabilities to partially solve the shortfalls of domestic U.S. oil and gas production. I am confident the RPSEA Consortium with the integrated support of an incredible number of domain knowledge institutions and their intellectual capital can successfully lead and chart a successful and meaningful path to address the challenge. Congratulations to those with vision for our country and those patriots who supported the initiative."

University of Texas, Dr. Mukul Sharma, Professor, Department of Petroleum and Geosystems Engineering

This research support will go a long way in improving our ability to efficiently produce domestic oil and gas resources, reducing our dependence on foreign oil and educating the next generation of engineers and scientists that will help secure America''s technological edge in oil and gas exploration and production.

Fleischaker Companies, David Fleischaker, President

"While Rome is burning, not all are fiddling. Today the DOE made a wise investment in our energy future by awarding to RPSEA, a consortium of industry, university, state and federal government entities, a $500 million/10year research contract that will enhance our ability to develop energy resources from the most challenging environments, the deep off shore and unconventional reservoirs. While conservation and initiatives to develop renewable alternatives are essential to securing America''s energy future -developing America''s hydrocarbon resources must be part of the solution for our country that today relies on oil and natural gas for 62 percent of our total energy supply."

Gas Technology Institute, David Carroll, Acting President

"GTI''s mission is to serve the natural gas industry and its consumers through the development of new technologies. This program -- and RPSEA as its manager -- will be critically important for meeting US natural gas demand in the coming years. Illinois, home to GTI, is the nation''s fifth largest gas consumer. This R&D program and the technologies that will result have the potential to dramatically increase domestic gas supplies and lower gas prices to consumers. We are excited about the possibilities it holds for Illinois and the nation."

Houston Advanced Research Center, Todd Mitchell, President and CEO

"I am very excited that HARC will be participating as a member of RPSEA in this important new natural gas supply program. The program is another tool to help ensure that the vast reserves of technically recoverable natural gas in the U.S. are produced utilizing the safest and most environmentally sensitive technology that is available. This new program will help to increase domestic energy supplies and lower costs to consumers in a manner that is consistent with HARC’s mission to move knowledge to action to

improve human well-being and protect the environment."

Interstate Oil and Gas Compact Commission, Christine Hansen, Executive Director

"The nation''s natural gas producing states are delighted that RPSEA has been selected to administer this vitally important research. RPSEA is broad based and inclusive, with a proven track record of natural gas research. The nation''s natural gas consumers will be the beneficiaries of this needed research. The IOGCC has recently published resource analysis in two areas – the Appalachian and Illinois Basins, and the offshore -- which discuss the tremendous resources available in those areas and urge research spending to produce these resources. This research program is in perfect alignment with those recommendations and serves the long-term energy security of the nation."

Natural Carbon, LLC, John Barratt, President

"Under RPSEA’s administration, this important DOE program will act as a catalyst for the introduction of new technologies into the Ultra-Deepwater and Unconventional Natural Gas arenas."

Providence Technologies, James C. Manatt, Jr., President and CEO

"Providence Technologies is extremely pleased to contribute and participate. RPSEA is an unheralded cooperation between majors, independents, national & research labs and U.S. research universities at a critical time, regarding world competition and demand for fossil energy. RPSEA is to fossil energy, what the Manhattan Project was to World War II...a gathering of the world’s best and brightest to help our nation prevail over our strategic vulnerabilities. It is a far-sighted legislative funding by our Congress and Administration to do something right for America."

Science Applications International Corporation, John W. Hindman, Communications & Outreach Manager "This award demonstrates the vision of this Administration to structure an energy program that is implemented through true partnership with a broad spectrum of the American private sector and academic energy research community. It has striking parallels to the intent of the President’s American Competitiveness Initiative (ACI). While the ACI seeks to strengthen our national science and technology (S&T) leadership and competitiveness, this program will strengthen American energy S&T leadership, particularly in the ultra-deepwater and unconventional natural gas arenas. Moreover, it provides our Nation with opportunities to develop domestic energy resources at a time when such self-reliance is at a premium."

Schlumberger, Dr. Brian Clark, Schlumberger Fellow

"The subtitle J funds can strengthen research in our universities, help solve the key problems defined by industry, and encourage closer relations between industry and academia. Using these resources for high impact research will not only create knowledge, but can produce the next generation of skilled employees our industry urgently needs."

Simmons & Company International, Matthew Simmons, President and CEO

"It is critical that American Natural Gas finds a realistic way to reverse the decline in our usable natural gas or eliminate the use of scarce natural gas as a feedstock for electricity. The entire long-term health of our economy depends on finding a way to reverse the peaking and decline of our most precious energy source. By directing this new R&D program in a highly professional manner, it is the best steps taken in decades to try and either solve this crisis or at least mitigate the impact of less natural gas than our country needed."

Strata Resources, Mark Murphy, President

"This is an unprecedented opportunity for small producers to collaborate with our nation’s premier universities, scientists and other members of industry in the development of new technologies to increase domestic natural gas and oil supply. I commend Congress and the Bush Administration in developing this energy R&D program that will organize those who identify, develop and deploy these new technologies. This program will contribute to our nation’s energy security by providing new tools to increase domestic energy production and stop our growing dependence on foreign energy supplies."

Technology International, Inc., Robert Radtke, President

"Technology International, Inc., a drilling engineering consulting firm located in Kingwood, TX, recognizes the significance of the E&P projects already supported by the Research Partnership to Secure Energy for America (RPSEA), and the potential benefits to the petroleum industry through the administration of the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Consortium as coordinated through DOE''s National Energy Technology Laboratory. Innovation in the petroleum E&P has been created by both small and large companies, academia, national laboratories,

and technical transfer from other industries. Implementation of these new technologies required the combined efforts of many organizations. We expect this new consortium to further the spirit of cooperation needed to increase our energy supply at a lower cost."

Texas Independent Producers and Royalty Owners Association, Adam Haynes, Executive Vice President "The Texas Independent Producers and Royalty Owners Association Recognizes the potential benefits to the petroleum industry from the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Program. This program is a significant opportunity for Texas independent producers to collaborate with other members of the oil & gas industry in the development and increased production of domestic natural gas supply, which will benefit local, state and national economies."

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