Back when oil was around $100 a barrel, scientists at LSU were preparing to study the Tuscaloosa Marine Shale, a large rock formation in the middle of the state that holds billions of barrels of crude. As International Business Times reports, oil and gas companies were eager to work with LSU to explore the shale’s geological nature and potential prospects for drilling.
Now, however, “That interest is just gone,” says David Dismukes, executive director of LSU’s Center for Energy Studies in Baton Rouge. “The outlook over the next 12 to 24 months for getting new projects in the private sector are slim to none.”
Battered by lower oil prices, the U.S. oil and gas industry is curtailing funding for research as part of a broader effort to slash costs and protect bottom lines. At academic institutions in America’s energy-rich states, the money for innovation and exploration is shrinking, according to the heads of several prominent energy schools.
Higher oil prices in recent years helped to pad the budgets of oil and gas companies and fill state treasuries with millions of dollars in tax revenue. At public universities, petroleum engineering departments and other energy research projects saw a surge in donations and grant funding for exploring shale formations, developing more efficient technologies and studying environmental impacts tied to hydraulic fracturing, or fracking.
But oil prices have tumbled by roughly two-thirds since June 2014 on fears that global oil supplies far outweigh demand for crude. The price plunge has eroded oil company earnings and drained the coffers of energy-dependent states. That leaves less on the table for scientific studies and research of petroleum and natural gas.
“This is a very volatile industry whose interests are driven by what they can afford,” says Mike Stice, dean of the Mewbourne College of Earth and Energy at the University of Oklahoma and a member of SandRidge Energy’s board of directors.
