from the Financial Post article By Sarah M. LeeJanuary 19, 2019 11:07:08Oil and gas companies have made it a habit to invest heavily in research and development to find new ways to extract more oil and natural gas, and the process is likely to continue, as the industry continues to expand its footprint.
A growing number of research-and-development companies are investing heavily in their own companies to develop new technologies and methods for extracting and refining natural gas.
These companies include companies such as Schlumberger and Baker Hughes, which recently announced a partnership with the US Geological Survey to research and develop new technology to extract natural gas from shale formations in Wyoming, and a consortium of companies called Energy Resources Development Corp. (ERDC).
According to a recent survey of 1,200 executives at U.S. oil and energy companies, 51 percent of executives believe that new technologies will increase their share of the market, compared to just 23 percent in 2014.
A growing number also say that the costs associated with drilling, transportation, and distribution will increase as the technology advances.
The survey also found that 63 percent of respondents said that natural gas would become the dominant source of electricity in the next 20 years, compared with 24 percent in 2013.
These numbers have caused some companies to take a look at their research and investment strategy.
In response, Schlumbergers, Baker Hughes and ERCs Research & Development, Research & Engineering & Operations, and Research & Science & Technology groups are ramping up their research efforts to find out how to increase their market share.
In addition, companies have hired a number of former researchers and engineers who are working with them to develop technologies that could reduce their costs.
“The question of whether we can increase our share of production will be the question that will drive our future business strategy,” said Jason W. Kline, chief executive of Schlumberges Advanced Research & Design, a company that is developing an energy storage system that could use advanced energy storage technologies to increase its production of natural gas over the long term.
Schlumbergs also has a research and technology collaboration with ERC.
“We think there is a lot of opportunity for us to find ways to improve efficiency and reduce our environmental footprint,” he said.
“If we’re going to develop a new technology, it’s going to have to have a lot to do with cost, and there’s a lot that goes into figuring out what the cost is,” said Steve McQueen, president and CEO of ERC, adding that “cost is going to be the key to that technology being commercially viable.”
According to McQueen and Kline’s estimates, the technology could potentially cut the cost of natural-gas extraction by $1.2 trillion by 2030, if the technology can be applied to a wide range of fields.
“What you’re looking at is a long-term trend,” McQueen said.
Schlumberger has been studying the use of advanced energy technology in the oil and chemical industry since the 1970s.
Since the early 1990s, Schlumers Research & Production, Inc., has invested in technologies that include advanced gas turbines, electric motors, and high-pressure gas turbines that have been used to reduce the cost and emissions of gas production.
It also has been researching energy storage, as well as the application of advanced materials and technologies to the gas industry, which has been growing rapidly.
“This is a critical time in the energy supply chain,” said Bob Huggins, president of Schlumings Energy Resources, which is developing the first natural gas-based fuel cell vehicle.
“In a decade or so, we’re looking to deploy energy-storage technology in gas production and transportation.”
Schlumbgers and EERC are also looking at the development of the new technology for natural gas processing.
“A lot of this research is geared toward finding new ways of getting natural gas out of the ground,” said Huggens.
“There are a lot more things we need to learn about how to do it.
But in general, it is going into a very exciting future.”
McQueen said that he expects to see more companies looking to invest in their research programs in the coming years, as new technologies are developed.
“As the industry expands, we expect the costs of these technologies to decrease, because they can be used to lower costs, improve efficiency, and cut the environmental footprint of these processes,” he added.