GE will increase energy spending to aid drilling boom, Immelt says

Mon Feb 24, 2014 4:56pm EST
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By Ernest Scheyder

(Reuters) - General Electric Co (GE.N: Quote) plans to intensify research focusing on complex energy projects such as waterless fracking and gas turbine efficiency by earmarking an additional $10 billion through 2020 for its "ecoimagination" budget.

The commitment, which represents roughly two years' research spending for the manufacturing giant, comes as General Electric responds to new opportunities created by the U.S. energy boom.

"The reserves are here. The potential is here," Chief Executive Jeff Immelt said on Monday, describing how new drilling technologies have unlocked vast oil and gas reserves.

Energy companies need help reaching fossil fuels but also bringing them to markets and GE can offer that know-how, the executive said.

"There's just technical intensity that is going into these industries," he said at a Bloomberg energy event in Washington.

Hydraulic fracturing, or fracking, has revolutionized energy development but the technique requires huge volumes of water to rattle oil and gas from deep underground.

The method is controversial as landowners and communities raise concerns about the safety of drinking water in energy patches and GE is trying to develop drill techniques that use gas rather than water, executives said.

Energy is the fastest growth area for GE as the global manufacturer works to become a dominant supplier of equipment and services to oil, natural gas and alternative power companies.   Continued...

Jeff Immelt, Chairman and CEO of General Electric appears at a news conference announcing the Head Health Initiative along with the National Football League (NFL), in New York March 11, 2013. REUTERS/Mike Segar