The National Benefits/Costs Of Enhanced Oil Recovery Research
Authors: Korn Donald H. , Rothermel Terry W. , Mansvelt-Beck Frederik , Guerin-Calvert Margaret , Perry Charles W. 
Published: December 2007

Abstract
The Department of Energy (DOE) enhanced oil recovery (EOR) program has been studied from the stand-point of national benefits and costs. DOE's expenditures on research, development, and demonstration (RD and D) of technology constitute a set of public costs, for which there are expected returns in the form of public benefits. public benefits. Six types of benefits associated with an EOR research program were identified, viz:National Savings from an EOR Option,Avoiding the Cost of Re-Entry of Oil Fields,Balance of Payments Value,Value as Part of an Emergency Stockpile,Insurance and Portfolio Values,General Societal Benefits.
Types A, B, and C are more readily quantified in dollar terms. The other types of benefits are not easily quantified, but are important considerations.
The emphasis in the analysis was placed on the quantification of the dollar benefits, i.e., the savings to be realized by the Nation as a result of the probability of having some cheaper supplementary oil probability of having some cheaper supplementary oil available from accelerated EOR research than would be otherwise available under uncertain alternative futures. Benefits and costs were studied in terms of present value, for various scenarios of oil prices and present value, for various scenarios of oil prices and discount rates.
The indications from this analysis are that the benefits of national investment in EOR research generally outweigh the costs; and, in terms of the quantifiable benefits and costs, that benefit/cost ratios exceed unity.

Introduction
This paper reports on recent work we performed to revise and update the benefit/cost analysis performed by Arthur D. Little, Inc., in 1976. It develops performed by Arthur D. Little, Inc., in 1976. It develops a reconciliation of the recent Lewin and Associates and NPC studies to obtain estimates of EOR production versus price, and computes new benefit/cost ratios at various discount rates; it also briefly examines the new issues of environmental costs, oil and gas accounting, and the federal RD and D budget for EOR.

TYPES OF BENEFITS
We have identified six types of benefits associated with an EOR research program, viz:National Savings from an EOR Option (Type A)The range of possible economics for EOR technology overlaps a part of that for OCS (Outer Continental Shelf) oil, which is the available domestic competitive alternative for industry investment. This leads to probabilistic savings to the nation as a result of having some cheaper supplementary oil available from enhanced recovery RD and D than would be otherwise available under uncertain alternative futures.Avoiding the Cost of Re-Entry of Oil Fields (Type B)The savings resulting from applying enhanced recovery methods to stripper wells which would otherwise be closed and require more expensive re-entry costs at a later time.Balance of Payments Value (Type C)An alternative view of the benefits of enhanced recovery being equal to the full balance of payments value/barrel of recovered reserves, payments value/barrel of recovered reserves, recovered at an earlier time; or, conservatively, the benefit in terms of the interest on the balance of payments savings over the period assumed.Value as Part of an Emergency Stockpile (Type D)The possible benefits tied to the coincident needs of developing enhanced recovery technologies and creating an emergency stockpile of oil which might be tapped in a crisis.