Overcoming the regulatory maze

Collaboration Addresses Frontier Risks

American Association of Petroleum Geologists (AAPG)
Chip Groat
Chip Groat

Hydrocarbon exploration and production in challenging frontier areas unquestionably are destined to play an increasingly larger role in the global energy mix.

Yes, there are risks and challenges to venturing into resource frontiers, including the ultra deep water, the Arctic, unconventional oil and gas, and methane hydrates.

Put together the right brainpower and money, however, and the potential to devise solutions to the risks and challenges revs up considerably.

For example: A newly inaugurated major research project dubbed the Research Center for Environmental Protection at Hydrocarbon Energy Frontiers (REEF) is under way to address the complex problems of tapping into oil and gas under increasingly difficult situations.

REEF is a partnership between the Energy Institute at the University of Texas at Austin and the MIT Energy Initiative at MIT – it will be co-located at the two institutions – designed to provide critical policy, science and technology solutions to the production, environmental and safety challenges of developing oil and gas in frontier regions.

In other words, its focus will extend beyond the usual engineering/mechanical upgrades and input often provided by such ventures.

The International Energy Agency predicts a 40 percent increase in global energy demand by 2030. To the chagrin of the anti-fossil fuel crowd, oil and gas will be a critical source of the energy supply for some time, and much of it will come from challenging areas both geologically and geo-politically.

Hence the vital need for a project such as REEF.

Programs and Expertise

REEF research programs and expertise include:

  • Societal context and policy.
  • Frontier hydrocarbon production with minimal environmental impact.
  • Minimizing environmental incidents and consequences.
  • Domain expertise.

The program currently has evolved to the stage where the focus now is to secure the needed funding, which is estimated to tally tens of millions of dollars.

Participants are approaching the industry and other potential sponsors to acquire such a significant amount of financial support, with the idea that the REEF collaboration will include industry input.

To add to the challenging aspect of fundraising, the projects included are under the purview of different parts of a company:

  • Policy/societal: regulatory.
  • Response to incidents: environmental.
  • Engineering design of systems to deal with risky environments.

“The only way to support something like this is to have industry partners who think it’s worth investing that kind of money,” said AAPG Honorary Member Chip Groat, director of UT-Austin’s Center for International Energy and Environmental Policy and REEF steering committee member.

Admittedly, this could raise collective eyebrows in many corners, but there are times when programs are what they are because it’s in the best interests of a successful outcome.

“The idea is this would be an openly collaborative program with industry,” Groat said. “It’s more a plan to work together and use university talents to work with industry and the people they’re working with, which includes regulatory agencies.

“We’re hoping the industry will look on the universities as a value added partner in adding to their capabilities,” he said. “For instance, thinking about what the regulatory picture should look like for the next 20 years, what we need to be thinking about for the next 15 to 20 years in the sense of response to problems that can happen.”

‘Positive Partnering’

Industry and the universities have a long history of working together in the technology area.

But REEF is a whole different proposition.

“The biggest challenge is the policy/regulatory piece,” Groat emphasized. “It’s rare that industry government relations groups and business policy groups have expressed an interest in partnering with universities to think about things like that.

“To me, this is the biggest new piece of what REEF is all about.

“In the frontier hydrocarbon part and some of the environmental planning things, it would be more with, say, engineering groups – more traditional,” he noted. “In the area of societal context and policy where we’re thinking how we get more science into the policy development process and how we get more different kinds of views into formulation of national policy and agency regulations, that’s the area where we’re looking at a broader relationship with industry than in the past, which was mainly technical.”

Groat readily admits that working with industry on such matters as policy has the potential to raise issues of credibility. This is a far more delicate area than hard engineering or science input, where facts are facts and systems are systems.

Indeed, this is a different world, where different parties, politics and motives can come into play.

Even so, Groat is optimistic that donations can be made with arms-length legal provisions to prevent donors from influencing research outcomes.

“It will be tedious to make it work,” he noted. “But if REEF doesn’t get any further than opening dialogue to find out what we can do comfortably for them and us with industry in that area will be a step forward – at least we’ll know.

“It will put some boundaries around what makes sense for industry and the university to do together in that area, as it’s a relatively unexplored relationship,” he noted.

REEF has a strong foundation in that it involves two major, highly respected universities with compatible interests and capabilities along with a history of working with industry, adding their strengths to the projects at hand.

“MIT brings a lot of strength in the policy, societal and economic matters,” Groat said. “In the engineering area, UT has a broad relationship with industry.

“The program will tap experts from both schools in fields ranging from engineering and geosciences to law and public policy,” he emphasized.

“It’s positive partnering.”

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