Petroleum Researchers Press On : Companies Shift Burden to U.S. Lab as Oil Prices Slump

Scientists at the National Institute for Petroleum and Energy Research are as busy as ever despite--or perhaps because of--a continuing slump in worldwide crude oil prices.

Many major oil companies that have resorted to research cutbacks as oil prices have sunk to 2-year lows now turn to the Bartlesville lab for the latest breakthroughs, said Paul Stapp, senior scientist at NIPER.

“We’re here as sort of a surge tank, so to speak,” Stapp said.

Still the government’s top petroleum research facility 70 years after it was created to help forge new oil and gas technology, the lab this month observes 5 years in its latest incarnation as NIPER.

The 17-acre installation in northwest Bartlesville is owned by the Department of Energy, but since October, 1983, it has been operated by the IIT Research Institute. The nonprofit organization, based in Chicago, grew from the Illinois Institute of Technology.

The public-private partnership, originally due to expire at the end of September, has been extended for an additional year to ensure that adequate research continues in the hard-hit industry, said Allen Wampler, assistant secretary for fossil energy with the DOE.

Companies Curtail Research

The DOE is providing $5 million of NIPER’s $13 million in expected revenue this year. That support is down from $9 million in 1983. During the same time, private investment in research activities at the lab has increased from 16% of the budget to 52%, officials said.

“Many private companies have been forced to curtail or eliminate their petroleum research programs given the economic situation in today’s oil patch,” Wampler said.

“Under these circumstances, the federal government’s research program can help maintain the nation’s progress in developing advanced petroleum recovery techniques,” he said.

Much of the expertise in the federal petroleum research program resides in Bartlesville with the 225 scientists, engineers and support staff at NIPER.

“We’re pretty much on the forefront of petroleum research technology,” said James Deterding, director of NIPER.

He said the Bartlesville laboratory has research programs under way “all the way from exploration to utilization of fuels, and all the steps in between.”

Stapp, for 20 years a researcher for Phillips Petroleum Co., said research at the NIPER laboratory falls generally within the categories of enhanced oil recovery and fuels research.

Clients include the nation’s largest oil companies, government entities such as the Navy and Air Force, state governments and foreign governments including Italy, China and Canada.

Enhanced recovery, or tertiary recovery, involves various methods used to coax stubborn crude from proven reserves.

For decades, oilmen have flushed water through formations when production declined in an effort to pump out as much of the remaining oil as possible. In some formations, as much as 70% of the oil defies primary production efforts.

Expensive Methods

High-pressure steam, carbon dioxide, chemical slugs and underground combustion also are used to prolong the life of wells, but those are expensive methods.

At NIPER, scientists are experimenting with microbes that readily multiply within a declining formation and force oil to producing wells.

It is a low-cost option that holds promise for keeping alive thousands of stripper wells, those that produce less than 10 barrels of oil a day.

An experimental application of microbes, fed on molasses injected into a Nowata County well, has boosted production about 12%, Stapp said.

“This is our goal, to make this available to independent operators . . . to keep some of the stripper wells going that would otherwise be shut in,” he said.

More than 19,000 stripper wells were plugged and abandoned in 1987, according to the National Stripper Well Assn. Of 460,427 stripper wells operating in the United States last year, one-fifth were in Oklahoma.

Keeping the stripper wells pumping is vital to a national goal of keeping U.S. dependence on foreign oil as low as possible, analysts say. However, as reservoirs are depleted and prices remain low, the stripper wells are increasingly marginal to operate.

Only by making enhanced oil recovery both effective and economical will the United States be able to take advantage of its oil reserves, Stapp said.

“The reserves in the United States are about 28 billion barrels,” he said. “We’ve produced something on the order of 120 billion barrels. We know that there are 300 billion barrels of oil still down there in the continental United States.

“Here’s 10 times the proven reserves, but we simply can’t produce them economically,” he said. “So this is the reason that enhanced oil recovery research . . . is so important, because it would lessen our dependence on imported oil.”

OPEC Actions Feared

The level of enhanced oil recovery has suffered from the crude oil price collapse of 1986, the Tulsa-based Oil and Gas Journal found in a survey conducted earlier this year. The number of enhanced recovery projects in the United States more than doubled from 1980 to 1986, but slid from 512 in 1986 to 366 by early 1988, the Journal said. Production stood at 637,000 barrels a day from tertiary recovery projects.

Major oil companies “have basically cut down their enhanced oil recovery research simply because it’s not cost effective under present prices,” Stapp said.

“The feeling at DOE headquarters is also such that if the federal government doesn’t fund this research, the time is coming, and we all know it’s coming--the OPEC nations are not known for their stability and they’re not known for their benevolence. They will undoubtedly run the prices up again.”

Disagreements among the 13 members of the Organization of Petroleum Exporting Countries have depressed oil prices in recent weeks, but the possibility of a quick turnaround always exists, analysts caution.

If oil prices increase, techniques that now are expensive experiments could quickly offer a return on investment that would make them popular in the oil patch.

“There is always that timing problem with respect to research,” Deterding said. “Invariably you see research being cut as one of the first activities, when that should be the very time you emphasize it.”