Energy Bill and Funding Recapped

The first session of the 110th Congress finished in December with few results. Partisan squabbling and the distraction of a presidential election cycle seemed to bring the legislative process to a halt.

Voters took note and registered their displeasure by handing Congress approval ratings even lower than the president’s. That got their attention.

So as lawmakers returned to Washington, D.C., after the Thanksgiving holiday – with oil prices at record levels and 11 of 12 appropriations bills unfinished – they decided to work on energy and appropriations, hoping to achieve something before Christmas.

And in fact, they did.

Energy Independence And Security Act of 2007

Congress has a habit of choosing titles for bills that promise more than any piece of legislation could ever deliver, such as the Energy Independence and Security Act of 2007. The odds are slim that this law will deliver either energy independence or energy security.

Even so, it does contain several provisions that could move the nation toward those goals.

Energy efficiency measures are a major part of the bill. It requires significant improvements in vehicle fuel economy by increasing the Corporate Average Fuel Economy to at least 35 miles per gallon between 2011 and 2020.

Electric appliances and light bulbs must use less energy. The bill requires increased energy efficiency in industry and buildings, including federal buildings, and encourages broad scale energy efficiency improvements in federal government operations.

In addition to increased efficiency standards, this bill mandates large increases in renewable biofuel production, ramping up to 36 billion gallons by 2022.

Initially, much of this fuel will be derived from corn (i.e., maize). There are, however, provisions to boost biofuel production from non-corn sources and generate biomass-based diesel by 2022.

There are several accelerated development programs for renewable energy sources in the bill, including geothermal energy. The bill directs the Department of Energy (DOE) to conduct geothermal R&D on a broad array of geothermal systems, including the recovery of geothermal energy in oil and gas fields, and from geo-pressured resources.

The bill further directs the U.S. Geological Survey to conduct a national assessment of geothermal resources.

Carbon capture and sequestration (CCS) also received strong support. The bill directs DOE to conduct R&D and large-scale demonstration projects. It includes provisions for the National Academies to conduct a work force study for CCS and directs the USGS to conduct a national assessment of carbon storage capacity.

The final bill does not include major tax revisions included in the House version – but it does revise the Internal Revenue Code to extend the amortization term from five to seven years for geological and geophysical expenditures incurred by certain major integrated oil companies as defined in the code.

Fiscal Year 2008 Appropriations

One thing Congress has to do annually is pass appropriations for federal spending in the coming fiscal year. The federal fiscal year runs from October 1 to September 30. Thus, ideally, Congress finishes its appropriations process by September 30.

Reality rarely matches the ideal.

This year the first of 12 appropriations bills was signed into law in mid-November. The others were rolled into a massive “omnibus” bill and signed into law by the president the day after Christmas.

The omnibus bill contained support for several programs of interest to AAPG members. For example:

  • The DOE’s petroleum-oil technologies program received $5 million. The administration had sought to terminate this program.
  • The natural gas technologies program received $20 million, much of that to fund methane hydrates research. The administration had sought to terminate this program, too.
  • The ultra-deepwater and unconventional onshore natural gas and other petroleum research and development program created by the Energy Policy Act of 2005 continues at a level of $50 million. These funds are not appropriated, but rather come directly from the U.S. Treasury.
  • Carbon sequestration received a strong boost with funding at $120 million.
  • The USGS received full funding for its mineral resources programs. Among other things, this program conducts the world petroleum assessments widely used in the industry.

The program faced significant cuts in the president’s budget, but both the House and Senate affirmed strong support for the work of the USGS mineral resources program.

  • DOE’s geothermal technologies program faced elimination in the president’s budget, but Congress provided funding at $20 million.

Having just finished FY2008 appropriations, it is hard to believe that the appropriations season for FY2009 is already under way – it began Feb. 4, with the president’s budget release.

Here we go again.

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Washington Watch

Washington Watch - David Curtiss

David Curtiss served as the Director of AAPG’s Geoscience and Energy Office in Washington, D.C. from 2008-11.

Policy Watch

Policy Watch is a monthly column of the EXPLORER written by the director of AAPG's  Geoscience and Energy Office in Washington, D.C. *The first article appeared in February 2006 under the name "Washington Watch" and the column name was changed to "Policy Watch" in January 2013 to broaden the subject matter to a more global view.

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AAPG Prepares Response to SEC Request

The AAPG Executive Committee has approved a response to the Security Exchange Commission’s Concept Release on possible revision to the disclosure requirement relating to oil and gas reserves.

The disclosure rule, first released in 1978, has drawn concern that the current requirements do not reflect the technological and investment realities of today’s market place.

The approved response was composed by an ad hoc committee chaired by past AAPG president Peter R. Rose that included Ken Mallon, Rusty Riese, John Ritter, Dan Tearpock, Creties Jenkins and Don Juckett.

All the committee members were involved in a June 2007 International Multidisciplinary Conference on Oil and Gas Reserves and Resources held in Washington, D.C., sponsored by AAPG and the Society of Petroleum Engineers with support of the World Petroleum Council, the Society of Petroleum Evaluation Engineers and the United Nations Economic Commission for Europe.

The SEC had requested specific comments to 15 questions.

“Based on public input, we expect that the SEC will develop a formal rule proposal, outlining the provisions of a new rule,” said GEO-DC director David Curtiss.

This final rule will be available for public comment and will be voted on by the Commission. If approved it will become part of SEC’s formal rules.

For the AAPG comments see the GEO-DC area of the AAPG Web site.

See Also: Bulletin Article

Transfer zones in rift basins are classified into convergent, divergent, and synthetic, based on the relative dip directions of adjacent faults within the transfer zone. Experimental models were constructed to determine the geometry, evolution, and fault patterns associated with each of these transfer zones. In addition, basement faults with initially approaching, laterally offset, and overlapping geometries were modeled. The models consisted of two layers, with stiff clay representing basement and soft clay representing the sedimentary cover. Laser scanning and three-dimensional surface modeling were used to determine the map geometry to compare the models with examples of natural structures. The experimental models showed many similarities with conceptual models but also showed more details and a few significant differences. Typically, divergent transfer zones are narrower than convergent transfer zones, for the same initial spacing between basement faults. The differences between the different initial fault configurations (approaching, laterally offset, or overlapping) are the degree of interaction of the secondary faults, the amount of overlap between the fault zones, and in some cases, the width of the transfer zone. The main faults propagate laterally and upward and curve in the direction of dip of the faults, so that the faults curve toward each other in convergent transfer zones, away from each other in divergent transfer zones, and in the same direction in synthetic transfer zones. A primary difference with schematic models is the significant component of extensional fault propagation folding (drape folding), accompanied by secondary faulting within the sedimentary cover, especially in the early stages of fault propagation. Therefore, all three types of transfer zones are characterized by significant folding and related variations in the shapes of structures. The transfer zones are marked by a progressive change in relief from the footwall to the hanging wall, resulting in a saddle-shaped geometry. The hanging walls of the faults are marked by a gentle flexure or rollover into the fault, with the amount of flexure increasing with fault throw away from the fault tip. The geometries and fault patterns of the experimental structures match some of the observations in natural structures and also provide predictive analogs for interpretation of surface and subsurface structures and the delineation of structural traps in rift basins.
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Sequence stratigraphy and coal cycles based on accommodation trends were investigated in the coal-bearing Lower Cretaceous Mannville Group in the Lloydminster heavy oil field, eastern Alberta. The study area is in a low accommodation setting on the cratonic margin of the Western Canada sedimentary basin. Geophysical log correlation of coal seams, shoreface facies, and the identification of incised valleys has produced a sequence-stratigraphic framework for petrographic data from 3 cored and 115 geophysical-logged wells. Maceral analysis, telovitrinite reflectance, and fluorescence measurements were taken from a total of 206 samples. Three terrestrial depositional environments were interpreted from the petrographic data: ombrotrophic mire coal, limnotelmatic mire coal, and carbonaceous shale horizons. Accommodation-based coal (wetting- and drying-upward) cycles represent trends in depositional environment shifts, and these cycles were used to investigate the development and preservation of the coal seams across the study area.

The low-accommodation strata are characterized by a high-frequency occurrence of significant surfaces, coal seam splitting, paleosol, and incised-valley development. Three sequence boundary unconformities are identified in only 20 m (66 ft) of strata. Coal cycle correlations illustrate that each coal seam in this study area was not produced by a single peat-accumulation episode but as an amalgamation of a series of depositional events. Complex relations between the Cummings and Lloydminster coal seams are caused by the lateral fragmentation of strata resulting from the removal of sediment by subaerial erosion or periods of nondeposition. Syndepositional faulting of the underlying basement rock changed local accommodation space and increased the complexity of the coal cycle development.

This study represents a low-accommodation example from a spectrum of stratigraphic studies that have been used to establish a terrestrial sequence-stratigraphic model. The frequency of changes in coal seam quality is an important control on methane distribution within coalbed methane reservoirs and resource calculations in coal mining. A depositional model based on the coal cycle correlations, as shown by this study, can provide coal quality prediction for coalbed methane exploration, reservoir completions, and coal mining.

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Thirty-seven mudstone samples were collected from the uppermost Lower Mudstone Member of the Potrerillos Formation in El Gordo minibasin within La Popa Basin, Mexico. The unit is exposed in a circular pattern at the earth's surface and is intersected by El Gordo diapir in the northeast part of the minibasin. Vitrinite reflectance (Ro) results show that samples along the eastern side of the minibasin (i.e., south of the diapir) are mostly thermally immature to low maturity (Ro ranges from 0.53% to 0.64%). Vitrinite values along the southern, western, and northwestern part of the minibasin range between 0.67% and 0.85%. Values of Ro immediately northwest of the diapir are the highest, reaching a maximum of 1.44%. The results are consistent with two different possibilities: (1) that the diapir plunges to the northwest, or (2) that a focused high-temperature heat flow existed along just the northwest margin of the diapir. If the plunging diapir interpretation is correct, then the thermally immature area south of the diapir was in a subsalt position, and the high-maturity area northwest of the diapir was in a suprasalt position prior to Tertiary uplift and erosion. If a presumed salt source at depth to the northwest of El Gordo also fed El Papalote diapir, which is located just to the north of El Gordo diapir, then the tabular halokinetic sequences that are found only along the east side of El Papalote may be subsalt features. However, if the diapir is subvertical and the high-maturity values northwest of the diapir are caused by prolonged, high-temperature fluid flow along just the northwestern margin of the diapir, then both of these scenarios are in disagreement with previously published numerical models. This disagreement arises because the models predict that thermal anomalies will extend outward from a diapir a distance roughly 1.5 times the radius of the diapir, but the results reported here show that the anomalous values on one side of the diapir are about two times the radius, whereas they are as much as five times the radius on the other side of the diapir. The results indicate that strata adjacent to salt margins may experience significantly different heat histories adjacent to different margins of diapirs that result in strikingly different diagenetic histories, even at the same depth.
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See Also: CD DVD

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See Also: Online e Symposium

This presentation will focus on the seismic stratigraphic and seismic geomorphologic expression of deep-water deposits, including both reservoir and non-reservoir facies.

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