The report was developed based on the assumptions that:

• Energy consumption will continue to grow and in particular, liquid fossil fuels will remain a significant part of the US energy supply for the next quarter century and more.

• Demand for liquid fossil fuels will require the US. to continue to import roughly half of its crude oil supply for the foreseeable future, despite strong growth in renewable biofuels supply.

• Despite expected dramatic improvements in energy efficiency and conservation, emissions of carbon dioxide from fossil fuel consumption will grow over the next quarter century.

Accordingly, an unconventional fossil energy R&D strategy should work to increase the supply of domestic fuels and where possible, to do so in a manner that reduces or mitigates the net volume of carbon dioxide emitted as a result of the production and use of the fuel.

Administration objectives for meeting national goals include catalyzing economic growth, reducing emissions of carbon dioxide that can lead to climate change, and strengthening national security by reducing dependence on foreign energy supplies. Accordingly, an unconventional fossil energy R&D strategy should work to support these objectives.

While all fossil fuels involve the potential for release of CO₂ during exploration, production, processing and use, amongst the choices there are positive and/or negative elements that combine to create an overall general impact. In every case, the production of domestic unconventional oil, gas, and coal resources can be assumed to reduce near term dependence on foreign sources of energy and stimulate near term domestic job growth and the creation of wealth.

—“Unconventional Fossil Energy”

The basic approach of the report thus was to assess the degree to which there are unconventional fossil resources which are significant in terms of magnitude; have positive or neutral carbon management impacts; are not currently the focus of a high level of R&D effort; and could quickly result in positive economic benefits. These could then be identified for a higher priority in terms of new or continued research.

Among the conclusions of the report are:

• The unconventional resource categories which most closely match the above criteria are residual oil and unmineable coal, with similar magnitudes of estimated recoverable energy; relatively low research levels; and positive (in the case of residual oil) and neutral or possibly positive carbon impacts in the case of unmineable coal. In the case of residual oil, there is also relatively strong potential for near term economic impacts. Accordingly, these resources might merit additional focus in terms of R&D, the report concluded.

• Methane from methane hydrate also has the potential to impact carbon management in a positive way, and the enormous potential magnitude of the resource argues for continued significant R&D focus. While the economic impact of hydrate R&D may be farther off than some other unconventional resources, the “enormous” potential for this resource to provide a low carbon fossil energy supply merits continued attention and scientific effort.

• Unconventional gas from shales and tight gas sands follow in terms of their relative position on these criteria. Additional research is still merited for those unique plays where current technologies are not sufficient.

• While oil shale is a difficult challenge from the standpoint of carbon management, the report founds, the “enormous” magnitude of the resource suggests that some level of continued research should be maintained. The best focus for continued research could be in the area of environmental impact assessment and mitigation research, and in efforts that seek to improve our general ability to visualize and model subsurface physical processes. This is particularly relevant given that 80% of the resource is on public land, the report said.

• Tar sands, heavy oil and oil from fractured shales are less of a priority based primarily on both their relative resource size and carbon management impact, the authors determined. However, targeted research that helps to accelerate the development of oil from fractured shales in key emerging plays could be important on a regional basis.

In preparing the report, DOE drew from a large number of public reports, studies, white papers, workshop/conference summaries, reports by expert advisory committees and other publications, as well as from information gleaned for its work with academia and industry on cost-shared R&D.

Interested parties are encouraged to review the report and provide written comments within the next 30 days.

Resources

• Unconventional Fossil Energy: Domestic Resource Opportunities and Technology Applications (April 2010 draft)