2. GRI Research into Unconventional Gas Resources

The Gas Research Institute, founded in 1976 by the regulated gas industry and funded by a surcharge on interstate gas sales (as approved by the Federal Energy Regulatory Commission), had as its purpose the management and financing of a natural gas-related R&D program.

GRI's budget grew from about $40 million in 1978 to about $75 million in 1981 and increased to an average of about $120 million per year through the 1980s (see Figure 2).

Figure 2: Funding of DOE Oil and Gas R&D Relative to GTI Funding 1978-2005. (Click to enlarge)

In the 1990s GRI funding increased even further, averaging about $200 million per year.

During this peak time, the amount of GRI funding focused on natural gas supply (exploration and production, including unconventional gas resources) was on the order of $30-35 million per year; about 15% of the total GRI budget.

The original DOE R&D program had the benefit of a considerable amount of industry technical input. In the early years, the DOE and GRI R&D programs were generally complementary, with the DOE program focused more on fundamental science and the GRI program focused on application and technology transfer.

Both organizations funded outside technical experts and industry partners to perform R&D and to help commercialize resulting products.

In 1994, the Gas Research Institute terminated its “resource-based” focus on unconventional gas and shifted it's priorities to a generic technology-based R&D program, in much the same manner as had DOE had one year earlier.

In 1998 GRI's funding mechanism radically changed, leading to a phase out of the mandatory surcharge and a shift towards voluntary funding by industry and government.

As a result, GRI funding of natural gas E&P R&D dropped steadily over the 1998-2005 time period. In 2000 GRI merged with the Institute of Gas Technology to form the Gas Technology Institute (GTI).

By 2005, GTI had evolved into an organization totally funded by voluntary investments from client organizations, including the Department of Energy and other public entities. GTI's natural gas E&P technology development at this point in time was minimal.

It is important to recognize that there was a significant degree of cooperation and coordination between the DOE and GRI research programs during much of their coexistence.

That relationship effectively ended in 1998 when GRI's funding mechanism changed and the organization began to submit competitive proposals in response to DOE R&D solicitations.

Prior to that point, DOE representatives participated on guidance committees related to GRI natural gas E&P research and the two organizations conducted semiannual meetings to discuss high level planning direction and to make certain that research was coordinated and not duplicative.

During the 1980's, research on tight gas sands at the DOE's Multiwell Experiment (MWX) site in Colorado was transitioned to GRI-managed experiments using the same facility (M-Site).

DOE worked closely with GRI to manage this transition in such a manner that research could be continued to the maximum benefit of the industry and ultimately, the gas consumer.

Similarly, DOE's early funding of coalbed methane R&D provided a chance for the technologies being developed to show enough promise that further funding by GRI would be seen as practical by GRI's industry advisory groups.

Subsequently, DOE funding shrank while GRI's went up significantly. DOE was viewed as the “initiator” and GRI (industry) as the “commercializer.”

Both roles were important to the ultimate success that resulted as evidenced by the current important contribution of unconventional gas from both of these sources to the nation's gas supply.

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