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EMD-79-24 1 (1979-02-09)

handle is hein.gao/gaobaaypu0001 and id is 1 raw text is: ! oVg 76 UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 40 NOMv ANO MINAL.S FEBRUARY 9, 1979 DIVISION B-178205 The Honorable James R. Schlesinger III I/III UI11IIII11II The Secretary of Energy 108576 Dear Mr. Secretary: While reviewing certain aspects of the Department of Energy's enhanced oil recovery field test program, we noted a contract proposal which is being seriously considered for award by the Department. In our view, there are significant questions on the merits of the proposal as well as the quali- fications of the proposer, the Frank D. Smith Corp .LL-*1A'ra We also noted that the president of the Smith Corpora- tion, Mr. Frank D. Smith, is the president of the Guyan OiJ1W(Ioo'4 Corporionj which is receiving Department funds to perform An enhanced oil recovery project. This project is now at the point where final testing can start but the test is being delayed because project funds have been spent and because of environmental concerns. In our view there are significant questions on the merits of the Department providing additional funds to expand this project. BACKGROUND An estimated 446 billion barrels of prude oil have been discovered in the United States. A major problem in producing this oil, however, is the inefficiency of its recovery from the pore space of the rock reservoirs in which it is found. As a result, a projected 299 billion barrels of the total 446 billion discovered is not recoverable based on current techniques and economic conditions. Currently, oil recovery efficiency ranges from over 70 percent in a few fields to less than 5 percent in others. During the last two decades, waterflooding, hydraulic fracturing, acidizing, and other enhanced oil recovery methods have increased economic recovery efficiency in existing U.S. fields by about .3 percent per year. EMD-79-24 (30613)

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