The energy challenge over the next several decades and beyond is to meet ever-growing demand with affordable, reliable supply, while ensuring environmental protection and quality. Recent years have witnessed historically high energy prices, a consequence of which has been a slate of new investments in alternative energy, frontier hydrocarbons and advanced end-use technologies that portend greater diversity of supply and environmentally friendly energy use in the future. This report summarizes these emerging technology investments by the U.S. oil and gas industry, other private industries, and the Federal government over the 2000-2005 time period. The emerging technologies identified in this report serve a stated aim of U.S. energy policy by either:
- Prominently increasing North American energy supplies, thereby increasing energy security (technologies include frontier hydrocarbon technologies such as gasification, including hydrogen production; gas-to-liquids; tar sands, oil sands, and other heavy crude extractive and processing technologies);
- Providing additional nonhydrocarbon supply options (ethanol1, biodiesel, wind and solar);
- Moving towards globalizing a regionally limited natural-gas market to reduce risks associated with supply and price (LNG); or
- Reducing emissions of greenhouse gases (new emission-free supplies such as nuclear, wind, solar; more efficient end-use technologies such as hydrogen fuel cells and advanced technology vehicles; reduced emissions from hydrocarbon usage such as coal gasification, cogeneration and deployment of CO2 capture and sequestration technologies and strategies).
This report documents the results of a database compilation of significant investments made in the listed technologies during the period 2000-2005. The database was compiled from a review of over 250 company annual reports, federal budget documents, and other public sources.2 No claim is made to have captured 100% of investments in each technology, but the authors believe that further refinements to the database would change the relative distributions only at the margin.
In addition, this report does not attempt to document or assess so-called “disruptive” energy technologies that have the potential for significantly altering energy production, distribution and use in the U.S. and worldwide. Disruptive technologies include nanotechnology and advanced materials that can be used for superconducting “smart grids” to vastly improve electricity transmission; for reducing weight while maintaining or increasing vehicle safety; or for reducing friction and improving energy efficiency for both air and ground modes of transportation.
Oil and Gas Industry Investment in Emerging Energy Technologies
To help meet projected U.S. energy demand growth of 34% in the next two decades, U.S. oil and gas companies invested $98 billion from 2000 through 2005 on emerging energy technologies in the North American market3 (Figure ES-1). This expenditure is 73% of the estimated total of $135 billion spent by U.S. companies and the Federal government. Of the industry investments, $86 billion (or 88% of the $98 billion total) were directed toward frontier hydrocarbons. The ability of major oil companies to upgrade inferior grades of oil (tar and oil sands, heavy oil) into refinery feedstock, and to turn waste and residue hydrocarbons (gasification including hydrogen production) into high-value products, is a natural extension of the industry’s expertise.
Yet, U.S. oil and gas industry investments go beyond frontier hydrocarbons. In addition, the industry invested $11 billion (or 11% of the $98 billion total) for advanced end-use technologies, mostly for efficiency improvements through combined heat and power (cogeneration) and for advanced-technology vehicles using fuel-cell technology. Significantly, this $11 billion investment in end-use technologies represents 35% of the estimated total amount ($31 billion) spent by U.S. companies and the Federal government in this area.