Energy R&D

Pursuant to a congressional request, GAO provided information on: (1) domestic crude oil production and consumption; (2) current enhanced oil recovery (EOR) activities and future prospects for increased production; (3) the impact of price changes on the number of stripper wells, which are a major potential EOR resource; and (4) the effects of price changes and the Department of Energy's (DOE) fiscal year 1987 budget on EOR research.

GAO found that: (1) there are currently about 28 billion barrels of producible domestic crude oil; (2) U.S. oil reserves are being depleted rapidly; (3) domestic production is expected to continue to decline; and (4) oil industry sources estimate that another 15 to 30 billion barrels of oil could be produced through the use of EOR techniques. GAO also found that: (1) EOR techniques involve the use of heat, chemicals or gases to thin oil, increase its volume, decrease the pressure holding it in reservoir rock, or help it flow more easily to increase recovery; (2) DOE has proposed to eliminate direct support of EOR research and establish, with universities and the oil industry, joint venture pools for applied research and development; (3) this change would be inconsistent with the traditional DOE emphasis on funding long-term, high-risk research; (4) DOE plans to sell its major EOR research facility in 1988; (5) DOE may not have thoroughly considered the proposed change; and (6) the number of stripper wells decreases as oil prices decrease.