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Transcript of 2003 2007 RD&D Plan Program
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 1
2003 to 2007 RD&D Plan
and
2003 RD&D Program
Approved by the GRI Board of Directors
May 2002
Overview
Proposed 2003 funding for the 2003-2007 Research, Development and Demonstration
(RD&D) Plan is $60.0 million.
Consistent with the April 1998 FERC-approved Settlement, proposed 2005 to 2007 fundingis zero.
The 2003 program contains 19 core projects.Estimated 2003 cofunding for the program is $21.0 million.
The planned program fully conforms with, and adheres to, the provisions of the Settlement
for GRI funding, which provides for a transition to voluntary funding of GRI RD&D afterDecember 2004.
As called for in the Settlement, the core program was reviewed and approved by the CoreProgram Executive Committee (CPEX) of the GRI Board of Directors. The report of thiscommittee has been filed as a part of the GRI Application in Workpaper No. 7,
Core Program Executive Committee Annual Report.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 2
Settlement Agreement
n Approved April 29, 1998 by theFederal Energy Regulatory Commission
n Continued funding of Core projects through 2004
n Transition to voluntary funding of GRIcomplete by December 2004
n Design of RD&D programs to benefit the gasconsuming public
n Oversight and administration by standingcommittee of GRI Board of Directors
On April 29, 1998, the Federal Energy Regulatory Commission (FERC) fully approved aSettlement for Gas Research Institute (GRI) that provides a transition to voluntary funding
for RD&D programs after December 2004. As provided for by the Settlement, GRI issubmitting this RD&D plan for 2003-2007, with specific emphasis on the proposed year2003 RD&D Program. The Settlement’s provisions have guided the creation of, and are
fully adhered to in, this Plan and proposed Program.
GRI, headquartered in Des Plaines, Illinois, manages a cooperative RD&D program for themutual benefit of the natural gas industry and its customers. GRI works with researchorganizations, manufacturers and its member companies to develop gas technologies and totransfer new products and information to the marketplace. Interstate pipeline companies that
are GRI members must receive FERC authority to recover their portion of the costs of GRI’sRD&D programs through their rates.
The Settlement provided for continued funding of both core and non-core RD&D projectsfor a three-year transition period, 1998 to 2000. Non-core RD&D is not provided for in theSettlement beyond 2000. Therefore, only core projects are included in this budget request to
FERC for the years 2003 to 2007. The zero budgets shown in the third, fourth, and fifthyears of this RD&D program, 2005-2007, underscore GRI’s acknowledgement that FERC
RD&D funding ends in 2004.
The Settlement calls for oversight and administration of the core program by a standingcommittee of the GRI Board of Directors. This committee (the Core Program Executive
Committee, CPEX) was formed in 1998; and, in accordance with the Settlement, it iscomprised of four members from the gas consumer interest component, four members from
the gas industry component, and GRI’s President and CEO.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 3
2003 2004 2005 2006 2007
FERC-ApprovedCore Program Funding 60.0 60.0 0.0 0.0 0.0
2003 to 2007 RD&D Program Budget*
Consistent wi th the Sett lement,
pro jected 2005, 2006 and 2007 RD&D prog ram b udg ets are zero
Abi l i ty to fu l ly ob l igate and execute approved prog ram is sub ject
to actua l p ipe l ine col lect ions
* Millions of dollars, including proportional operating expense amounts
2003 will be the sixth year of the Settlement period, which began in 1998.
Beginning with 2001, the Settlement provides only for funding of core programs. Therefore,
the funding for the non-core program area is zero in 2001 and thereafter, and the totalFERC-approved funding for 2001 and thereafter is equal to the core program funding.
The Settlement caps the core program funding at $60 million in 2003, and 2004. Beginning
in 2005, funding will become fully voluntary.
The proposed FERC-approved core program budgets in this Program and Plan align
precisely with the budget caps defined in the Settlement.
$43.6 million of the proposed $60 million FERC-approved core program budget is forcontract RD&D obligations. The remainder is devoted to proportional operating expenses,
including a charge for extraordinary expenses incurred from 1998 to 2001.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 4
Mid - 2001 through Mid - 2002
FERC Plan Development andCore Program Implementation Activities
n Jun - Oct Solicit, review, initiate GTI RD&D contracts
n Sep 19 FERC approval of 2002 Application
n Nov CPEX core program updateReview FERC reprogramming request
n Nov - Feb GTI critical review of ongoing RD&DRefine project slate/proposed budgetsBalance revenue forecast/expenditure planUpdate programmatic benefits analysis
n Feb 19 CPEX review of 2003 to 2004 projects/budgets;Proposed shifts in 2002 budget balance (if any)
n Apr – May Prepare Application and Workpapers, includingCPEX annual report
n May 1 - 2 CPEX annual report to Board;
Board decision on 2003 plan and programn Jun 1 FERC filing
From September to November 2001, GRI business units developed preliminary lists of year2003 core projects, including a prioritization of technology needs. The resulting projects
were examined to ensure that each project meets the definition of core projects, and projectswere assigned to the one of the six core program areas listed in the following pages.
From November 2001 to February 2002, GRI developed project-level quantitative project
appraisal information, and GRI’s management team evaluated the preliminary project slate.
This team established the proposed $60 million total funding level for the 2003 core program in accordance with the Settlement-specified cap. The management team alsoestablished a preliminary balance among the six core program areas. Some of the lowest priority technology needs went unfunded as a result of this preliminary evaluation.
In February 2002, the CPEX reviewed and tentatively accepted the preliminary project list, program balance, and budgets. The CPEX was then provided with detailed descriptions of
the core projects; and, in May 2002, it endorsed nineteen core program projects, approvedthe resulting shifts in core program area balance, and unanimously approved the proposed project slate, the $60 million year 2003 core program budget, and the $43.6 million 2003
contract RD&D budget.
In May 2002, based on the recommendation and report of the Core Program ExecutiveCommittee, the GRI Board of Directors also approved the year 2003 core budget of $60million and the $43.6 million 2003 contract RD&D budget, as presented in this Plan andProgram. The full CPEX report to the Board of Directors may be found in
Workpaper No. 7, Core Program Executive Committee Annual Report.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 5
Program Structure
4 PROJECTS
CONSOLIDATED TO 2;
2 PROJECTS RENUMBERED
2Projects
CONCLUDED
16 Projects
Filed/Approved in2002 Program
172002 Projects
19 Projects
Filed in2003 Program
6 CORE
PROGRAM AREAS in 2003
6 CORE
PROGRAM AREAS in 2002
3 ProjectsAdded
After Filing
NEW
NEW
4Projects
The 2002 core program, as filed, contained sixteen projects. Three more projects were addedafter the filing, making a total of nineteen. Fifteen of these nineteen projects will continue
into 2003, although two of them will have new project numbers.
Two of the 2002 projects will be brought to a conclusion with 2002 funding, and 2003funding is not requested for them. Two 2003 projects will consolidate and continue the work
of four of the 2002 projects.
Four new projects are proposed for 2003, bringing the total number of 2003 projects tonineteen.
Some of the continuing and consolidated projects have revised titles in 2003.
The 2003 RD&D program contains six core program areas (listed in slides hereafter) that are
aligned to directly address the major categories of consumer need specified in the SettlementAgreement’s definition of core projects. These program areas are identical in objective andscope to the 2002 core program areas. The non-core 2000 program area (Sector-Specific
RD&D: Gas Supply, Operations, and End Use) is not a part of the 2003 program.
Further details regarding the 2003 program restructuring may be found in Workpaper No. 3
Part H, 2003-2004 Project Structure.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 6
Core Program Areas
The Gas Consumer Is the Primary Beneficiary
n Emerging Resources
n System Reliability
n O&M Costs
n Increased Efficiency
n Environmental Quality
n
Health and Safety
The Settlement defines six areas of consumer need for core RD&D:
“Core RD&D must 1) enhance health and safety; 2) increase gas system reliability or
integrity; 3) enhance environmental quality; 4) lower gas industry operating andmaintenance costs; 5) increase gas supply from emerging resources; or 6) increaseefficiency.”
The six core program areas in this Plan precisely align with the Settlement’s six areas of
consumer need.
Further, core RD&D must qualify per the following concepts:
“1. Benefits must flow predominately to gas consumers:
a) Core RD&D program funding should benefit gas consumers as a group and in a
reasonable period of time.
2. The following are general definitions of RD&D taken from 18 CFR Chapter 1,
Part 201, Subchapter F, Definition 32B:
a) RD&D includes, but is not limited to: costs incidental to the design, developmentor implementation of an experimental facility, a plant process, a product, a formula,
an invention, a system or similar items, and the improvement of already existingitems of a like nature.
b) Research does not include expenditures for efficiency surveys; studies ofmanagement, management techniques and organization, consumer surveys,advertising, promotions or items of a like nature.”
All projects contained in this Plan meet all aspects of the Definition of Core Projects.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 7
Program Area Objectives
n Increased Gas Supply
from Emerging Resources
n Improved Gas SystemReliability and Integrity
n Lowered Operating andMaintenance Costs
n Extend the economically
producible natural gassupply resource base.
§ Extend the serviceability andlife of the national naturalgas transmission anddistribution network.
n Reduce the costs of naturalgas delivery.
Increased Gas Supply from Emerging Resources
Emerging resources in carbonate formations, deeper and tighter geological formations,
pressure compartments, thin formations, and shales and additional recovery from depletedreservoirs are yet to be exploited. RD&D to identify the extent of these resources, delineatereservoir geology, and develop concepts for cost-effective resource recovery would provide
substantial consumer benefits. Low-cost gas cleanup processes would enable the use ofemerging resources whose low-quality natural gas is currently uneconomical to produce.
Cost-effective methods to prevent solid hydrates from forming in gas lines are needed to
forestall gas supply interruptions.
Improved Gas System Reliability and Integrity
Technologies are needed to ensure piping system integrity by protecting from third-partyincidents, mitigating or preventing corrosion, and identifying and evaluating damaged pipe.
Gas measurement research is needed to enable ultrasonic flow metering and energy contentmeasurement. Gas storage operators must improve storage well delivery capacity, which is
critical to meeting peak gas demands. New retrofit technologies for pipeline compressorengines would enable cost-effective upgrades to improve compressor station reliability,deliverability, and pollutant emissions. Additional RD&D is needed to support the current
regulatory trend toward risk-based management of pipeline integrity, which may offer
higher reliability at lower cost.Lowered Operating and Maintenance Costs
Continuing RD&D on no-dig technologies and other innovative construction methods and
on advanced plastic pipe materials and repair methods could obtain even more value fromthese technologies for gas distribution cost reduction. Integrated data collection andcommunication protocols and robotic devices to automate distribution system operations
could reduce costs, improve customer service, and ensure against unforeseen serviceinterruptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 8
Program Area Objectives, continued
n Increased Efficiency
of Use
n Enhanced EnvironmentalQuality
n Improve on current levels
of energy use efficiency toreduce consumer costs andconserve natural gas.
n Reduce emissions or by-products associated withnatural gas production,transmission, distribution, oruse that have potential todegrade air, water, or landuse environmental quality.
Increased Efficiency of Use
Planned RD&D will focus on new materials, thermodynamic cycles, and systems that
improve gas-use efficiency. Planned RD&D includes next-generation integration ofdistributed power generation systems, desiccant systems, and advanced solid oxide fuelcells. An important aspect of this RD&D is the development of evaluation methods that will
enable consumers to make sound energy-choice decisions. Continued RD&D on residential
and commercial appliances is expected to lead to significant increases in the efficiency andusefulness of these appliances. Planned RD&D on industrial gas equipment will lead tosubstantial improvements in efficiency and cost.
Enhanced Environmental Quality
Planned RD&D will address a number of critical environmental issues that broadly affectthe gas industry and gas consumers. Current issues of importance are methane emissions (as
related to global climate change), ozone transport, fine particulate matter, partially oxidizedorganic compound emissions, water produced during natural gas production, methods forrisk-based assessment and remediation of contaminated land use sites, low-emission natural
gas combustion equipment, use of natural gas to reduce emissions from coal combustion,
and gas appliances that emit less NOx.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 9
Program Area Objectives, continued
n Enhanced Health
and Safety
n Improve the ability to meet
the natural gas-relatedhealth and safety needs ofthe gas consuming publicand the gas industryworkforce.
Enhanced Health and Safety
Planned RD&D will provide broadly dispersed benefits of increased health and safety for
gas consumers. Ongoing needs for RD&D in health and safety include indoor air quality,evaluation of the adequacy of carbon monoxide alarms, adequate venting of appliances,accurate gas leak detection devices, rapid location of buried gas piping, and detection of
buried utilities during gas system construction and repair operations. RD&D is also needed
to ensure widespread transfer on new GRI technologies related to gas pipeline safety and toestablish an accessible source of information on these technologies.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 10
Proposed 2003 and Planned 2004FERC-Approved RD&D Contract Obligations
2003 2004
7.81 7.81
8.60 8.60
7.65 6.15
9.27 8.77
7.27 7.27
3.00 3.00
43.60 41.60* Mill ions of Dollars
Increased Gas Supply from Emerging Resources
Improved Gas System Reliability and Integrity
Lowered Operating and Maintenance Costs
Increased Efficiency of Use
Enhanced Environmental Quality
Enhanced Health and Safety
FERC-Approved RD&D Contract Obligations*
Proposed 2003 and planned 2004 FERC-approved RD&D contract obligations are shown forthe six core program areas. Total contract obligations requested are $43.6 million in 2003.
No contract RD&D funding will be requested for 2005-2007.
All proposed budgets are exclusive of proportional operating expenses.
At $9.27 million in 2003, the Increased Efficiency of Use program area receives the largest
part of the total 2003 budget. This program area has grown in size compared to 2002
because of increased emphasis on improvements in industrial gas utilization equipment andon distributed power generation, including both conventional systems and fuel cells. Thesetechnologies represent substantial opportunities for enhanced use of natural gas byconsumers.
The smallest part of the 2003 budget is devoted to the Enhanced Health and Safety programarea, which is maintained at a dollar level nearly the same as its funding ($3.7 million) in the
2002 program. Each program area, except the Enhanced Health and Safety area, receives2003 funding in the range of about $7 to $9 million.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 11
2003 Program Area Balance
6.9%
16.7%
21.3%
17.5%
19.7%
17.9%EmergingResources
Reliability andIntegrity
O&M Costs
IncreasedEfficiency
EnvironmentalQuality
Health andSafety
In its budget selection process, GRI allocates proposed funding between program areas inorder to: a) respond to gas consumer and member company needs; and b) maximize benefit-
to-cost ratios. As part of meeting this diverse set of needs, GRI considers the balance amongvarious parts of the program. Program balance refers to the strategic allocation of fundsacross program area objectives, gas industry sectors, and time frame (e.g., longer-term basic
research contrasted to nearer-term applied RD&D).
The above chart is a companion to the preceding table, which summarized the proposedFERC-approved funding. The above chart describes the proposed budget percentages of thetotal core program.
Five of the six program areas receive 2003 budget shares in the range of approximately 17 to
21%. At 21.3%, the Increased End Use Efficiency program area receives the largest fractionof the total 2003 budget. As described on the previous page, this program area may provide
substantial opportunities for improved energy services to gas consumers.
The smallest share of the 2003 budget, 6.9%, is allocated to the Enhanced Health and Safety program area. This represents a slight increase in that program area’s share compared to the
2002 program (6%).
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 12
Projected 2003 – 2004 Cofunding*
2003 2004
3.8 2.8
4.1 3.2
3.7 2.2
4.5 3.2
3.5 2.6
1.4 1.2
21.0 15.2* Mill ions of Dollars
Increased Gas Supply from
Emerging Resources
Improved Gas System Reliabilityand Integrity
Lowered Operating andMaintenance Costs
Increased Efficiency of Use
Enhanced Environmental Quality
Enhanced Health and Safety
Total Cofunding
GRI has always sought to maximize support of gas-related RD&D by state and federalgovernments as well as by industrial sources. Cofunding involves direct support from other
parties for projects that are integral elements of the GRI Plan and in which GRI plays asubstantial management role. Such support offsets gas consumer funding. All of the RD&D paid for by this cofunding is RD&D that will benefit gas consumers.
The above estimates for cofunding are aggregate amounts from government and industry
sources, including cash, in-kind contributions, and avoided costs such as waiver of fees.The estimated amount of 2003 cofunding, $21 million, is less than the cofunding estimatefor 2002, which was $27 million. GRI expects to experience this decline, in part, because ofthe conversion of what would, in the past, have been cofunding into voluntary funding in the
future. Nevertheless, the estimated 2003 cofunding is a significant amount and reflectscontinued GRI success in attracting financial support for its RD&D efforts.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 13
$Millions
Planned 2003 Basic Researchand Longer-Term RD&D Budget
Basic research and effortsdirected towards providinglonger-term technologysolutions account for about $3.6 Million, or 8.3%,of the total $43.6 Million 2003RD&D contract obligationsbudget
Applied
Basic + 3.6
40.0
GRI maintains a continuing commitment to basic research as part of this proposed RD&D program. Basic research accounts for $3.6 million, 8.3% of the proposed 2003 core RD&D
program.
Basic research topics addressed in the 2003 Program include:
• Hydrates Control.
•Advanced Drilling and Logging Concepts.
• Fluid Dynamics Related to Gas Flow Measurement.
• Microbially Induced Corrosion.
• Advanced Fuel Cells.
These topics are discussed more fully within the body of the project descriptions in Exhibit 2of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 14
Increased Gas Supply fromEmerging Resources
Extend theeconomicallyproduciblenatural gassupply resourcebase
2003 Contract Budgets and Projects ($K)
4,000 RD&D for Future OnshoreUnconventional ResourceDevelopment
1,560 Advanced UnconventionalGas Exploration andProduction Technologies
1,100 Natural Gas Processing andFlow Assurance
1,150 Innovative Gas Well Drillingand Completion Technologies
2003$7.81 MM
Developments in this program area will only be funded through Stage Four of the RD&CProcess – Technology Development.
Selected expected Emerging Resources RD&D products include:
• Re-examination of the potential contribution of unconventional gas to future supplies
and resultant plans for resource and technology development.
•Software for predicting high-porosity and high-permeability zones in basin-centeredgas accumulations.
• Software for detecting fractures and permeability enhancements in deep gasreservoirs.
• Advanced membranes for separating nitrogen from natural gas.
• Advanced processes to remove hydrogen sulfide and carbon dioxide from sub-quality
natural gas.
• Characterization of the rates at which flow-blocking hydrates form and decompose in
pipelines.
• Determination of the technical feasibility of advanced drilling and well completiontechnologies.
• Field evaluation of the most promising drilling and well completion technologies at
GTI’s Catoosa test facility.
The projects and expected products in this program area are more fully described in
Exhibit 2 of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 15
Improved Gas System Reliability and Integrity
Extend theserviceabilityand life ofthe nationalnatural gastransmissionand distributionnetwork
2003 Contract Budgets and Projects ($K)
7,350 Pipeline System Reliability,Integrity and Operations
750 Microbially-Induced Corrosionin Gas Pipelines
500 Underground StorageTechnologies for ImprovedGas System Deliverability2003
$8.60 MM
Selected expected Gas System Reliability and Integrity RD&D products include:
• Advanced in-line inspection sensors that have improved sensitivity and can reach a
greater portion of the pipeline system.
• Technical information that supports risk-based management of pipeline integrity.
• Cathodic protection system design guidelines for various soil conditions.
• New techniques for locating and evaluating pipeline coating imperfections and
microbially induced corrosion.
• Environmentally benign techniques to inhibit microbially induced corrosion.
• Data to support improvements in gas measurement standards and field practices forcurrent and new meter technologies.
• Technologies to expand the efficient operating range of existing compressorequipment to meet the demands of a 30 Tcf annual market.
• Methods for finding abandoned gas storage wells.
•Expert systems and guidelines for diagnosing the causes of storage well damage andrepairing the damage.
• Guidelines for avoiding flow interruptions caused by the formation of natural gas
hydrates in storage wells.
The projects and expected products in this program area are more fully described inExhibit 2 of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 16
Lowered Operating and Maintenance Costs
Reduce the costs ofnatural gas delivery 2003 Contract Budgets and Projects ($K)
7,650 Distribution Pipe
Construction, Maintenance
and Operations
2003$7.65 MM
Selected expected Lowered Operating and Maintenance Costs RD&D products include:
• Surface-locatable plastic piping materials.
• Methods for installing or repairing mains and services through keyhole excavations.
• High-productivity trenchless construction tools, robotic equipment, and techniques
for leak repair.
• High-pressure structural liners, quick-curing structural resins, and other advanced
technologies for rehabilitating gas piping.
• High-productivity site excavation and restoration tools, materials, and techniques,
including enhanced materials for backfill and one-step pavement restoration.
• Permanent-burial in-place sensors, transponders, and other automation technologies
for distribution system functions, such as monitoring cathodic protection systemeffectiveness and customer-interface systems and controls.
• Specific regional programs for technology transfer, new technology implementation,
and information dissemination.
The projects and expected products in this program area are more fully described inExhibit 2 of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 17
Increased Efficiency of Use
Improve oncurrent levelsof energy useefficiency toreduce consumercosts andconservenatural gas
2003 Contract Budgets and Projects ($K)
7,400 Advanced Fuel Cell and
Distributed GenerationTechnologies
1,120 Technologies for EfficiencyImprovements in Industrial
Burners, Combustors andFurnaces
750 Higher EfficiencyResidential and CommercialAppliances
2003$9.27 MM
Developments in this program area will only be funded through RD&C Stage Four of theRD&C process – Technology Development.
Selected expected Increased Efficiency of Use RD&D products include:
• User-friendly software to evaluate the applicability and economics of distributed
energy systems.
•Unique distributed energy test facilities that will test several prototype integratedsystems for building cooling, heating, and power and be available for continued
RD&D and testing of advanced equipment concepts.
• Inexpensive structural components for PEM fuel cells and membranes that allow
high-temperature operation and improved performance.
• Designs and prototypes of SOFC power systems that can be manufactured at low
cost and penetrate niche markets.
• Regional programs for technology transfer, product implementation, and information
dissemination.
•
Advances in industrial combustion controls, air delivery systems, flexible burners,and heat recovery concepts.
• A low-cost modulating residential gas furnace and a high-performance commercial
steam generator.
The projects and expected products in this program area are more fully described inExhibit 2 of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 18
Enhanced Environmental Quality
Reduce emissionsor by-products
associated withnatural gas
production,transmission,distribution, or use
that have potentialto degrade air, water,
or land useenvironmentalquality
2003 Contract Budgets and Projects ($K)
2,460 Gas Plant Site Remediation andEnvironmental Management
1,500 Air Emissions from Natural GasProduction, Transmission andUtilization
1,120 Clean Technologies forResidential and CommercialBuilding and AppliancePerformance
1,190 Produced Water ManagementRD&D
1,000 Low Emission Power and Heat
Generation
2003$7.27 MM
Selected expected Enhanced Environmental Quality RD&D products include:
• Laboratory and field screening tools, decision models for gas companies, and
processes for remediating gas plant sites, based on environmentally acceptableendpoint methods.
• Instruments for measuring emissions of fine particles and partially oxidized organiccompounds from gas combustion equipment.
• Retrofit technology to decrease emissions of partially oxidized organic compounds
from compressor station engines.
• Natural gas cofiring technologies to reduce organic emissions from solid-fuel-fired
stoker boilers and industrial process heating equipment.
• Assessment of emissions from the development of Rocky Mountain natural gas
resources and technologies to reduce these emissions.
• Prototypes of an advanced commercial convection oven, a quick-start gas-fired
humidifier, and closed-loop-control combustion equipment with superiorenvironmental performance and efficiency.
• A tool for down-hole separation of gas and produced water and down-holereinjection of the water and guidelines for evaluating the tool’s applicability.
• Advanced combined cycles using coal and natural gas for environmentallysatisfactory large-scale generation of electric power.
The projects and expected products in this program area are more fully described inExhibit 2 of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 19
Enhanced Health and Safety
Improve the abilityto meet the naturalgas-related health
and safety needs ofthe gas consuming
public and the gasindustry workforce
2003 Contract Budgets and Projects ($K)
1,300 Venting and ApplianceCodes and Standards
1,000 Gas Leak Detection/Pipe Location Technologies
700 Pipeline Safety Information2003$3.00 MM
Selected expected Enhanced Health and Safety RD&D products include:
• Venting tables in the National Fuel Gas Code for high-efficiency gas appliances and
codes to support the introduction of advanced commercial food service equipment.
• Identification of codes that could retard the acceptance of distributed power
generation.
• Technology options for meeting new DOE minimum-efficiency requirements forresidential water heaters.
• Recommendations to assure that HUD manufactured-housing standards are
consistent with the use of gas technologies.
• Designs for operator-safe food-service equipment.
• Electromechanical proximity devices or fiber-optic sensors to forestall third-partyimpact damage.
• Low-cost sensors to image subsurface structures before digging and obstacle
detection devices for guided boring tools.
• Advanced technologies to pinpoint gas leaks.
• A pipeline safety information center and Web site.
The projects and expected products in this program area are more fully described in
Exhibit 2 of the GRI Application: 2003 Core Program and Project Descriptions.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 20
2003 RD&D Project Appraisal
n Projects analyzed to determine whether potential futurebenefits likely outweigh gas ratepayer RD&D costs
n Present value analysis approach
n Reference 2001 Edition of Baseline Projection
n Factors taken into account include:
n RD&D uncertainty
n Commercialization timing, market potential and share
n Comparison to “next best” available technology
n Demand-induced price increases
n Benefits accruing to “free riders”
n Time value of money
n Analysis of “benefit-rich” projects did not necessarilyincorporate all technologies
Al l prop osed 2003 RD&D projects pro vide net pos it ive gas ratepayer benefi ts
All projects proposed for the program are examined to ensure that they satisfy theSettlement’s core project definition and fit the core program area objectives and bases. In
addition, GRI uses a decision process to rank proposed projects. This process, reviewed andaccepted by the Core Program Executive Committee, yields a project ranking by combiningGRI’s Project Appraisal Methodology (PAM) with judgmental inputs.
PAM Input
• Used at GRI since 1980; reviewed by Government Accounting Office, FERC, and National Research Council.
• Benefits of core projects are quantified in terms of gas consumer savings.
• Allows disparate RD&D options to be ranked.
• The PAM model has been simplified over time.
• For a complete discussion of the 2003 appraisal results, appraisal methodology, andanalytical assumptions, see Workpaper No. 4, Results of Appraisal of GRI
2003-2007 RD&D.
Program Balance Judgmental Input• By sector – Exploration and Production, Pipeline, Distribution Utility, and
Crosscutting.
• By time frame – near-, mid-, or long-term.
• By core program criterion.
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GRI Application Exhibit 1
2003 RD&D Plan Exhibit 1 Page 21
2003 Core Program Statistics Recapn 6 Core Program Areasn $60 Million total FERC-Funding
n
$43.6 million RD&D contract obligationsn $10 Million Administrative & General expense budget
n Reduced by $2 Million compared to 2002 Plann $6.4 Million charge due to 1998-2001 extraordinary expenses
n $21 million projected cofundingn 19 projects in 2003
n Net increase of 3 projects compared to 2002n Five of six 2003 program area shares range from 17 to 21% of
available RD&D contract obligationsn Health and Safety program area share is 7%
n Basic/longer-term research accounts for about 8%of the 2003 program
n All projects provide net positive benefits to gas ratepayersn Program approved by the GRI Board of Directors in May 2002
References
This document describes the proposed 2003-2007 RD&D Plan and 2003 RD&D Program. It
can be accessed on GRI’s Web site at http://www.gri.org/pub/aboutgri/2003plan/index.html
Three other documents available on the Web site provide more detailed informationregarding the Plan and Program:
•
Exhibit 2 of the GRI Application, 2003 Core Program and Project Descriptions,covers:
Definition of core projects,
Program area objectives,
Basis of core program areas,
Project descriptions by core program area, and
Project index.
• Workpaper No. 1, Program Planning, Implementation, and Review, covers:
Analytical activity summary,GRI’s unique RD&C process, and
Board and Core Program Executive Committee rosters.
• Workpaper No. 2, Accomplishments of GRI RD&D in Calendar Year 2001, describes
50 accomplishments, categorized by the six core and one non-core program areas.