98-256: Department of Energy FY1999 Research and Development Budget: Description and Analysis

Richard E. Rowberg

Senior Specialist in Science and Technology
Science, Technology, and Medicine Division

Updated November 23, 1998

CONTENTS

Summary
Overview

Background
DOE Request
Congressional Action Overview

R&D Programs -- Descriptions and Budgets

Energy Resources R&D

Energy Conservation
Fossil Energy R&D and Clean Coal Technology
Nuclear Energy R&D
Solar and Renewable Energy R&D

Science

High Energy Physics
Nuclear Physics
Basic Energy Sciences
Biological and Environmental Research
Fusion Energy Science
Other

National Security and Environmental Management

Stockpile Stewardship
Nonproliferation and Verification R&D
Naval Reactor R&D
Environmental Quality R&D

Budget Issues

Climate Change Technology Initiative
Nuclear Energy
Fusion Energy Science and the International Thermonuclear Experimental Reactor (ITER)
Basic Energy Sciences and the Spallation Neutron Source
Stockpile Stewardship

Concluding Comments
Footnotes

List of Tables

Table 1. Total R&D Funding
Table 2. Energy Resources R&D
Table 3. Science^a
Table 4. National Security and Environmental Management

Summary

For FY1999, the Department of Energy (DOE) requested $7.73 billion for civilian and defense research and development (R&D) funding. This is an increase of $786 million, or 11.3%, over the FY1998 appropriation. For civilian programs, the request was $4.44 billion -- an increase of $525.3 million over FY1998, and for defense programs the request was $3.28 billion -- an increase of $260.7 million.

Large increases were requested for Solar and Renewable Energy, and Conservation R&D to support the Climate Change Technology Initiative (CCTI), a program of tax credits and R&D to help meet greenhouse gas reduction goals agreed to by the Administration at the December 1997 Kyoto conference. An increase of $167.9 million was sought in the Basic Energy Sciences program primarily for construction of the spallation neutron source (SNS), a research facility expected to cost about $1.3 billion when completed in 2005. Finally, DOE requested an additional $321.2 million for the Stockpile Stewardship program to enhance development of computational and scientific capability to maintain the safety, reliability, and performance of the nation's nuclear weapon stockpile.

Several issues emerged as Congress acted on the FY1999 request. These included the large increases being requested by Solar and Renewable Energy and Conservation R&D programs as part of the CCTI, the potential policy implications of the CCTI, the future of the International Thermonuclear Experimental Reactor (ITER) project within the Fusion Energy Sciences program, the future of nuclear energy R&D, the large increase requested for the Stockpile Stewardship program, and the extent of unobligated carryover funds from the prior fiscal year.

For FY1999, the Senate approved $6.65 billion for DOE R&D programs within the Energy and Water Development Appropriations Bill, 1999. The House approved $6.48 billion for those programs. The final bill provides $6.57 billion. In addition, the FY1999 omnibus appropriations bill added $60 million to the solar and renewable energy R&D program. The total for energy and water development programs is $6.63 billion. The comparable DOE request was $6.73 billion. The Senate Appropriations Committee has recommended $889.8 million for DOE programs within the Department of Interior and Related Agencies Appropriation Bill, 1999, while the House approved $906.3 million for those programs. The final bill provides $913.8 million. The comparable DOE request was $1,000.8 million. Action by the Senate on the FY1999 defense authorization bill authorized $3.03 billion for DOE national security programs compared to a request of $3.07 billion. The House-passed version authorized $3.07 million. The final bill authorizes $3.04 billion of those programs.

Overview

Background

The Department of Energy (DOE) was created in 1977 as part of the nation's attempt to deal with the oil price shocks of the 1970s. The Department was formed from a number of agencies with energy-related missions. These agencies included the Energy Research and Development Administration (ERDA, which itself descended from the former Atomic Energy Commission (AEC)), the Federal Power Commission (now the Federal Energy Regulatory Commission), the Federal Energy Administration, and several programs in the Department of Interior. Because of the nuclear weapons and naval reactor programs absorbed from the AEC, the new DOE gained a sizable defense component. The DOE also became home for 22 field laboratories including the nine multipurpose national labs formed under the AEC.

The DOE covers a wide range of activities. It is responsible for the nation's nuclear weapons capability. It has the five federal power marketing administrations, some energy regulatory and information functions, civilian nuclear waste responsibilities, and the strategic and naval petroleum reserves. Over the last decade, DOE has developed a major environmental component to clean up its weapons production and related facilities. Finally, DOE has a large research and development (R&D) component in both civilian and defense areas.

This report focuses on the R&D programs. It divides the programs into four categories: energy resources R&D, science, national security R&D, and environmental quality R&D. Those categories, which approximate the way DOE has divided up its programs, are set up to keep similar research activities together.⁽¹⁾ R&D funding is concentrated in the first three. The report gives a description of the programs within each category including their research objectives and the activities where significant budget changes were requested for FY1999. It then describes the request, and congressional appropriation and authorization action. There follows a discussion of issues about the FY1999 request that are emerging during congressional consideration of the budget.

DOE Request

Table 1 shows the FY1998 appropriations, the FY1999 budget request, and the FY1999 congressional appropriations. All amounts in this and subsequent tables are for budget authority and are in current dollars.⁽²⁾

Table 1. Total R&D Funding
(millions of dollars)

^aThe House, Senate, and final version of the FY1999 appropriations bill contained general reductions for Science. These amounts have not been incorporated in this table pending final DOE action on how they will be distributed among the various programs. The reductions are given in table 3.

For all R&D programs for FY1999, DOE requested an 11.3% increase over the FY1998 appropriation.⁽³⁾ For civilian R&D, the request was $4,493.4 million compared to $3,918.1 million for FY1998, a 13.4% increase. For the defense R&D programs, DOE requested $3,283.4 million compared to $3,022.7 million for FY1998, an increase of 8.6%. The total DOE budget request for FY1999 was $18,034.6 million compared to $16,560.6 million appropriated for FY1998, an increase 8.9%. For FY1999, R&D constituted 43% of the DOE request.

The increase requested for DOE R&D funding was one of the largest, in percentage terms, for any of the federal R&D funding agencies. It was also considerably greater than increases requested by DOE in the last few years. In its budget justification for FY1999, DOE cited as an important reason for the increase a report by the President's Committee of Advisors on Science and Technology (PCAST),which recommended substantial increases in energy resources R&D funding to meet the challenges of growing oil import dependence, increasing greenhouse gas emissions, and maintaining affordable, reliable energy supplies.⁽⁴⁾ The report noted that current energy resources R&D funding was particularly inadequate for providing the energy technologies needed to meet, cost-effectively, the potential global warming dangers of increased emissions of carbon dioxide.⁽⁵⁾ In addition to recommending increased R&D funding, the study recommended better coordination between the basic research activities of the Basic Energy Sciences program and the applied energy R&D programs, and more effective efforts to make energy resources R&D results commercially available. Finally the study urged that energy resources R&D be given greater "prominence" within the Department of Energy.⁽⁶⁾

DOE also noted that a significant portion of the increase it requested for R&D funds for FY1999 was part of the Climate Change Technology Initiative (CCTI), aimed at developing technologies to reduce emissions of carbon dioxide from energy use. At the same time, DOE argued that such reduction was only one of the potential benefits from increased energy resources R&D as stated in the PCAST study.

For the Science programs, DOE justified its request increase on the importance of science for economic growth, particularly as the global economy becomes more and more competitive. Finally, for the National Security R&D programs, DOE cited the Comprehensive Test Ban Treaty as providing additional incentive to develop the capabilities to maintain the safety and reliability of the nation's nuclear weapon stockpile in the absence of nuclear testing.

Congressional Action Overview

The Senate appropriated $6,650.0 million for programs within the Energy and Water Development Appropriations Bill (S. 2138, S.Rept. 105-206) for FY1999, 1.1% below the request but 9.2% above the FY1998 level. For the House, the comparable appropriation was $6,467.5 million, 3.8% below the request but 6.2% above the FY1998 level (H.R. 4060, H.Rept. 105-581). The House and Senate each noted its strong support for basic research in supporting most of DOE's request for Science programs. Most of the increase requested for the National Security program requests was also met, although the House and Senate each expressed some concern about the Stockpile Stewardship program as described below. In the final appropriations act (P.L. 105-245/H.Rept. 105-749), Congress is providing $6,571.4 million. The bill provides slightly more for Science than either House or Senate bill, and approximately splits the difference between the two bills for the National Security programs. In addition, $60 million was added to the solar and renewable energy R&D program in the FY1999 Omnibus Consolidated and Emergency Supplemental Appropriations for FY1999 (P.L. 105-277/H.Rept. 105-625). The total for all programs within the energy and water development jurisdiction for FY1999 is $6,631.4 million, 1.4% below the request but 8.9% above FY1998.

For those DOE programs within the Department of Interior and Related Agencies Appropriations Bill, 1999, Energy Conservation and Fossil Energy R&D, the Senate Appropriations Committee recommended a total of $889.8 million, 11.1% below the request but 8.6% above the FY1998 level (S. 2237/S.Rept. 105-227). The House approved a total of $906.3 million for these programs, 9.2% below the request but 10.9% above the FY1998 level. Both the House and Senate expressed concern about the relationship between DOE's request and the Kyoto agreement to reduce greenhouse gas emissions. The Senate directed DOE to submit a plan including measurable goals on how it intends to implement the Administration's proposal, made prior to Kyoto, to reduce greenhouse gas emissions. The House directed that no funds in its recommendation for the two programs are to be used to implement the Kyoto agreement. The final appropriations bill for Interior and Related Agencies is contained in the FY1999 omnibus appropriations act. It provides $$913.8 million for the two programs, 8.7% below the request but 11.6% above FY1998.

The final appropriations action for DOE provides $7.54 billion for all R&D activities, 2.3% below the request and 9.2% above the FY1998 level. For all of DOE, the final action provides $17.84 billion, 1.0% below the request but 7.8% above the FY1998 level. The conferees also directed DOE to change the name of the Office of Energy Research, where the DOE science programs are located, to the Office of Science.

A thread that ran through most of the appropriations actions was concern about the high level of unobligated carryover obligations. The four reports accompanying the appropriations recommendations from the Committees all noted the question of carryover balances. In addition, in making the recommendations, varying of amounts of carryover balances were assigned to supply a portion of the appropriation. On the House side, approximately $208 million of the DOE R&D funds is to come from carry over balances. Of that, about $49 million is assigned to Energy Resource programs, $145 million to Defense programs (all to Stockpile Stewardship), $7.6 million to Science, and $6 million to Environmental R&D. The Senate directed that about $187 million of the R&D funds come from carry over balances. Of that, about $110 is assigned to Energy Resource programs, $39.6 million to Science programs, and $34 million to Defense programs.⁽⁷⁾ In the final appropriations bills, however, Congress reduced these amounts to $105.6 million, which is closer to historic levels.

In the version of the FY1999 defense authorization bills passed by the House (H.R. 3616; H.Rept. 105-532). DOE was authorized to spend $3.07 billion for defense-related R&D, while the Senate version (S. 2057/S. 2060; S.Rept. 105-189)authorized $3.03 billion for those programs. Concern was also expressed about the DOE Stockpile Stewardship program in both bills as described below. The House bill would have required DOE to use about $160 million of carryover balances while the Senate would have required about $68 million of such funds to be used.

The final version of the bill, the Strom Thurmond National Defense Authorization Act for FY1999 (P.L. 105-261/H.Rept. 105-763), authorized $3.04 billion including about $85.4 million of prior year carryover balances, all for the Stockpile Stewardship program.

R&D Programs -- Descriptions and Budgets

Energy Resources R&D

Energy Resources R&D includes the Conservation, Fossil Energy, Clean Coal Technology, Nuclear Energy, Solar and Renewable Energy, and Fusion Energy Sciences programs. The budget information of these five programs is given in Table 2. These programs are the principal DOE R&D efforts devoted to the development of new energy supply and demand technologies.

Table 2. Energy Resources R&D
(millions of dollars)

^aRescission from prior year appropriations; not counted in total.
^bIn addition to these funds, $44.3 million was appropriated in the Basic Energy Sciences program for basic research related to solar and renewable energy resources. For FY1999, DOE requested $47.9 million for these activities, which was approved by both the Senate and House. Those funds are included in the Basic Energy Sciences program amounts in Table 3 below. Counting those amounts, $346.3 million was appropriated for all solar and renewable energy research for FY1998. For FY1999, $437.2 million was requested for that same research while $415.3 million was provided by the Senate and $351.4 by the House. Because the BES portion -- $47.9 million -- also appears in the BES line under the Science account, the bills subtract that portion in coming up with the Energy Supply total.
^cThe Fy1999 omnibus appropriations bill added $60 million to this program.
^dThe Senate directed that about $109.7 million of these funds be from prior year carryover balances.
^eThe House directed that about $42.3 million of these funds be from prior year carryover balances.
^fThe Conferees directed that about $37.6 million of these funds be from prior year carryover balances.

Energy Conservation. The Energy Conservation (EC) R&D program is divided into three sectors -- buildings, industry and transportation.⁽⁸⁾ The principal focus of energy conservation research is to develop technologies that reduce the energy requirements of equipment and facilities within those sectors while maintaining or improving services, and enhancing environmental quality. The buildings sector focuses on the building as an integrated system, exploring ways to make the building envelope, equipment, and appliances more efficient. The transportation sector directs its R&D at improving efficiency of the current generation of engines, developing new engine technology, and alternative transportation fuels. This sector also takes the lead in the Partnership for a New Generation of Vehicles (PNGV) initiative.⁽⁹⁾ This initiative is a joint effort between the federal government and the nation's three largest automakers to develop an automobile for the next century that will be substantially more efficient without sacrificing features or invoking a price penalty. The industry sector funds R&D on improvements in basic manufacturing processes whose goal is increased productivity and energy efficiency. It also focuses on technology to reduce or re-cycle process waste streams, and on advanced, on-site energy generating technology. Finally, this program has responsibility for application of energy efficiency and renewable energy technologies to public sector facilities.

For FY1999, DOE has asked for a 35.2% increase for this program, the largest for any program within the agency. Each of the three sectors would receive sizable increases: industry, 22.3%, transportation, 27.3%, and buildings, 55.2%. For FY1999, the Conservation program forms a major component of the Climate Change Technology Initiative (CCTI). An important focus of the R&D is to be carbon emission reduction through development of technologies that would operate at higher energy efficiencies and/or use alternative fuels. Areas that would receive significant increases for FY1999 include advanced combustion turbines for industry, commercial and residential building systems, equipment, and materials, automobile and heavy vehicle engine technology (PNGV project), and manufacturing processes in selected industries. The program has set out quantitative goals for efficiency improvements, energy cost savings, and emissions reductions for the year 2010.

The House approved $543.1 million for conservation R&D for FY1999. An amendment adopted by the full House added $45 million to the amount recommended by the House Appropriations Committee to the DOE conservation account, including $34 million to conservation R&D. Of the total approved, $43 million would result from transfer of advanced turbine R&D from the Fossil Energy program. Adjusting for that transfer, the FY1999 total is 12.4% below the request but 18.4% above the FY1998 level. Under the House bill, the building technology subprogram would receive the largest reduction from its request, 32%, followed by transportation, 21%, and industry, 10% (adjusting for the turbine R&D transfer). The House directed DOE not to solicit any new starts in the Industries of the future activity resulting in a recommended reduction of $19 million from the request. Other large reductions included $17 million in the Advanced heavy vehicle technologies activity and $15.5 million in the Building equipment and materials activity. The House provided DOE with a list of directives including requirements to "streamline and consolidate" its buildings research program by FY2000, spend no funds to implement Kyoto accords, improve research coordination with States and industry, and improve management of uncosted balances.

The Senate Appropriations Committee has recommended $513.4 million for conservation R&D for FY1999. This amount is 16.8% below the request but 12.4% above the FY1998 level. The recommendation would reduce the building technology subprogram 22.4%, the industry subprogram by 14.1%, and the transportation subprogram 12.8% below the request. Large recommended reductions from the request included $23.1 million in the Advanced automotive technologies activity, $20.5 million in the Industries of the future activity, and $9.4 million in the Buildings systems designs activity. The Committee expressed its continued disappointment in the DOE justification for the conservation budget request. It stated that the justification did not provide a clear explanation for budget increases and decreases from the previous year. The Committee acknowledged DOE's actions to stop taxing programs for crosscutting projects and noted that it provided sufficient funds in the Policy and Management subprogram for these activities. It also directed DOE to adhere to normal reprogramming guidelines.

The final appropriations for conservation R&D appearing in the omnibus bill provides $529.7 million for FY1999, 14.2% below the request but 16.0% above FY1998. The conferees added funds to all three subprograms over the amounts approved by the House and recommended by the Senate. They also returned the $43 million for turbine research to fossil energy R&D that had been transferred by House action. The largest increase adopted in the final bill is $34 million, which the conferees did distribute to any of the subprograms. The conferees also noted that the funds provided were for programs justified independently of the findings of the Kyoto protocol, and that no funds were to be used for actions solely dictated by that protocol prior to its ratification.

Footnotes

1. ^(back) The major difference between these categories and those used by DOE is that DOE does not include the Energy Conservation, Fossil Energy, and Clean Coal Technology programs within its energy supply category, all of which are included in the energy resources R&D category in this report. DOE makes that distinction because those three programs fall within the jurisdiction of the Interior and Related Agencies Subcommittee of the Appropriations Committees, while all other DOE R&D programs fall within the jurisdiction of the Energy and Water Development Subcommittee. DOE also includes the Environment, Safety, and Health program in its energy supply category while this report includes it in the environmental quality category. In addition, R&D funding amounts given in the report for the FY1999 request are those given in the DOE budget request for R&D with the exception of nuclear energy, which is described in the text. Finally, the R&D funding amounts given for previous years are the congressional appropriations as printed in the conference reports. For a detailed tracking of congressional action on the FY1998 request, see CRS Report 97-233.

2. ^(back) Some of the FY1998 appropriations have been adjusted to reflect changes DOE has made in the content of those programs at the direction of Congress. As a result, the numbers for FY1998 appropriations in this report may not agree in all cases with those reported in the last update of CRS Report 97-233.

3. ^(back) U.S. Department of Energy, Office of the Chief Financial Officer, Department of Energy: FY1999 Congressional Budget Request, DOE/CR-0051 (Washington: February 1998).

4. ^(back) Executive Office of the President, President's Committee of Advisors on Science and Technology, Report to the President on Federal Energy Research and Development for the Challenges of the Twenty-First Century, (Washington: November, 1997).

5. ^(back) U.S. Library of Congress, Congressional Research Service, Global Climate Change, by John Justus and Wayne Morrissey, CRS Issue Brief 89005 (Washington: continually updated).

6. ^(back) Report to the President on Federal Energy Research and Development for the Challenges of the Twenty-First Century, ES-2.

7. ^(back) The assignments to the various programs given here assume that the carryover balances provided for each account in the House and Senate bills are distributed proportionately to the R&D programs within those accounts.

8. ^(back) U.S. Library of Congress, Congressional Research Service, Energy Efficiency: A New National Outlook?, by Fred Sissine, CRS Issue Brief 95085, (Washington: continually updated).

9. ^(back) U.S. Library of Congress, Congressional Research Service, The Partnership for a New Generation of Vehicles, by Fred Sissine, CRS Report 96-191 SPR, (Washington: February 28, 1996).

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