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Ohio Utica Shale

GE to spend $110 million on drilling research lab in Oklahoma

By Bob Downing Published: April 4, 2013

From Bloomberg News:

General Electric Co. (GE) will spend $110 million on a research lab in Oklahoma City to study ways to improve extraction of hard-to-reach oil and gas deposits, including hydraulic fracturing and horizontal drilling.

The facility will hire as many as 125 engineers and scientists in the coming months and will eventually expand its research to more conventional drilling techniques, Chief Technology Officer Mark Little said in a telephone interview.

Oil and gas is GE’s fastest-growing segment, with revenue up 57 percent to $15.2 billion since 2009, and Chief Executive Officer Jeffrey Immelt is betting that other divisions can profit as drillers tap more shale formations. The center will join labs from Shanghai to Rio de Janeiro and be the only one focused on a single GE business, Little said.

“This is a robust, dynamic industry that’s growing and ripe for technology infusion, and we think we can add a lot to it,” Little said. GE is announcing the project today in Oklahoma City.

In addition to fracking, GE researchers also will investigate how to meet oil and gas wells’ electricity needs, reduce the environmental impact of unconventional drilling and help manage water usage in petroleum exploration, Little said.

Fracking is a drilling technique that forces millions of gallons of water, sand and chemicals deep underground into rock formations trapping oil and gas. It’s unleashing previously inaccessible reserves, contributing to a surge in U.S. fossil-fuel output, while spurring attacks from environmentalists as a threat to drinking-water wells and reservoirs.

Energy Acquisitions

GE’s oil and gas business’s growth was jump started by $11 billion of acquisitions during a six-month period ended in 2011. The Fairfield, Connecticut-based company may consider additional purchases in the industry “over the next couple of years,”Chief Financial Officer Keith Sherin said at a February meeting with analysts and investors.

GE’s bets on natural gas aren’t limited to supplying equipment and services to energy firms. It’s developing locomotives that can run on liquefied natural gas instead of diesel fuel and helping leasing customers add compressed natural gas-powered vehicles to corporate fleets.

Oklahoma offered incentives, including participation in a program that provides quarterly payments of as much as 5 percent of new employees’ salaries, to secure the GE research facility, Governor Mary Fallin said in a telephone interview.

“Having one of the most important companies in the world invest and create a new global research center in our state is going to be a tremendous boost to the great resources we already have in our state in the oil and gas sector,” said Fallin, a Republican.

GE is still scouting for a location for the lab, and hasn’t disclosed an opening date.

Chesapeake Energy Corp. (CHK), the second-largest U.S. natural gas explorer, and Devon Energy Corp. (DVN) are both based in Oklahoma City. GE said it has more than 550 employees in the area working on electric submersible pumps for oil and gas drilling. Its global research operation is based in Niskayuna, New York.

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

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Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

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Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

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National Geographic's The Great Shale Rush.

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No Frack Ohio, a Columbus-based grass-roots group.

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Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.