In slump, oil firms turn to labs, data centers for help

Wed Mar 2, 2016 3:52pm EST
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By Ernest Scheyder

GRAND FORKS, N.D. (Reuters) - In a basement lab of a North Dakota research center, Beth Kurz and an assistant are peering through a scanning electron microscope, studying samples from the state's vast Bakken shale oil formation.

Kurz, a hydrogeologist, is part of a team, which looks at using carbon dioxide to coax more oil out of wells that have already been hydraulically fractured, or fracked, in the process of extracting oil from shale rocks.

"No one is sure just yet how this process can work in the Bakken," said Kurz. "We're hoping to crack that riddle."

While energy firms around the world slash spending and cut jobs in response to crashing oil prices, research institutions and companies across North America are not letting up in their efforts to make production more efficient.

In fact, demand for money-saving solutions is greater than ever and research centers, helped by multi-year budgets and grants, are doubling down - hiring more staff, building new laboratories and launching new studies.

The University of North Dakota's Energy and Environmental Research Center (EERC) where Kurz works has hired 20 more researchers and lab assistants over the past year, a 10 percent increase.

"At $100 per barrel oil, you just produce as much as you can, with cost as a secondary concern," said Tom Erickson, the Center's head. "But at $30 oil, you need to innovate, or else you're just losing money."

The center, which has an annual budget of more than $30 million funded by the federal government and industry partners, including Marathon Oil Corp (MRO.N: Quote) and Continental Resources (CLR.N: Quote), also works on alternative fuel and coal technologies, but the CO2 project is among the biggest.   Continued...

A natural gas flare on an oil well pad burns as the sun sets outside Watford City, North Dakota January 21, 2016. Persistent low oil prices have lead to slower business in much of North Dakota's Bakken oil fields.  The collapse of U.S. oil and gas investment could have further to fall and Americans are showing signs they spend less of their windfall from lower gasoline prices than in the past, darkening the outlook for the U.S. economy.   REUTERS/Andrew Cullen - RTX23LBT