Remarks by
Robert Card
Under Secretary of Energy
U.S. Department of Energy
to the
National Ocean Industries Association
In
Washington, DC
March 18, 2002

Thank you (Mike Talbert and Tom Fry) for inviting me to be with you today. I would like to make sure that we have a chance for a dialogue so my remarks will be brief.

During this conference, you have heard from many about the importance of our off shore resource and your role in obtaining it. With more than 20% of our oil and gas supply coming from off shore, it is a vital part of our energy picture. The assumptions behind our forecast of a 30 trillion-cubic-foot gas market in 2020, at a hub price of less than $4, depend on your success.

I was first introduced to oil and gas production 20 years ago in the steam-produced deep Alberta tar sands. I became fascinated by the technology, capital and risk required for that operation. As challenging as that work was, it pales in comparison to the miracles that your industry works off shore.

To keep abreast of your issues in the field, Assistant Secretary Mike Smith and I traveled off shore earlier this year. Our hosts said that we would either fly back or row back depending on how the day worked out!! We ended up flying so it must have been OK!

Flying out over the Mississippi we first stopped at the LOOP platforms which, to you all, are nearly on dry land in only 100 feet of water. We then went on to the Hickory production platform in an ankle deep 300 feet of water. Finally we went out to the Mississippi Canyon on a semi-submersible in 3,000 feet of water progressing toward a nearly 30,000 foot drilling depth - awesome cost, risk and technology deployed in exploring for America's future!

You have to respect an industry that, in spite of a "heavy iron" rather than "dot com" image, can evolve so quickly to tackle impossible challenges. Further, it is an industry with an enviable safety and environmental record.

We wondered what DOE could do to help deliver off shore resources to American consumers. With Assistant Secretary Smith now on board, we have asked him to review DOE's research and development funding priorities and strategy with a look both toward our overall oil and gas portfolio, and the possibility of a more focused role in the off shore industry.

Mike has dusted off the November 2000 Offshore Technology Road Map, in which many of your firms participated, and we will be reviewing it for opportunities where DOE can provide unique value. Some of the key items that you said where important over the long term in that report include the following:

• Enhanced instrumentation and computational capability for optimization of deep-water and deep-depth rig systems design and operations

• Enhanced ability to verify, produce and monitor production of offshore resources

• New concepts in drilling system design including riserless systems

• Technologies to optimize onshore product transfer including sub sea processing and even off shore on-site power generation and export

• Deep water environmental management including improved well control technologies

Additionally, we know there are current needs, such as, casing design, your ability to sustain the use of synthetic drilling fluids, and sub salt imaging. If you have additional comments about where you think we should be heading feel free to contact our Offshore Technology Road Map lead, Elena Melchert who is with me here today.

We don't yet know where these issues will rank in our overall funding opportunities but I can assure you they will get a hard look.

Again, thank you for the opportunity to share this time with you and I would be delighted to respond to your questions.