Department of Energy

The Energy Department's (DOE) appropriations for fiscal year 1998 earmarks about $362 million for the Fossil Energy Research and Development Program and rescinds $101 million of the $2.4 billion appropriated for the Clean Coal Technology Demonstration Program. These two programs are run by DOE's Office of Fossil Energy to develop, in partnership with private industry, advanced technologies for producing and using fossil fuels. This report provides information on (1) the research and development goals and technologies being developed by the two programs, (2) the level of funding committed to research and development within these programs in fiscal years 1996 through 1998, and (3) the companies receiving research and development awards (during these fiscal years) to which the government contributed more than $1 million.

GAO noted that: (1) DOE's overall R&D goal for its Fossil Energy R&D and Clean Coal Technology Demonstration programs is to improve the efficiency and environmental performance of current methods for producing and using coal, natural gas, and petroleum; (2) for coal, this improvement translates into R&D efforts by both programs to develop and demonstrate technologies that efficiently removes potential environmental pollutants from coal prior to its use; (3) improvement also means the development of technologies that either generate electricity from coal more efficiently than current technologies or that can generate electricity from liquids and gases derived from coal; (4) for natural gas and petroleum, DOE is focusing its efforts on improving drilling, storage, transportation, and combustion technologies and processes associated with locating, extracting, and using the resources; (5) DOE obligated or plans to obligate about $1.3 billion for R&D activities sponsored by the two programs during FY 1996 through FY 1998; (6) the Fossil Energy R&D program provides $856 million, $743 million of which has been or will be spent on activities in the applied research and development phases of R&D; the remainder will be spent for basic research; (7) the Clean Coal Technology Demonstration program accounts for about $417 million of the $1.3 billion in obligations; (8) because the program concentrates its efforts on technologies that have completed laboratory and field testing, the program obligated funds exclusively on technologies in the demonstration phase of R&D; (9) in addition, DOE obligated or plans to obligate about $307 million for the management of the programs and other non-R&D activities; (10) for the 3 fiscal years examined, DOE's fossil energy programs made or continued 162 R&D contracts and other types of assistance in which the government committed to spend more than $1 million; (11) these procurement awards involved 112 companies and other nonfederal participants; (12) the largest of these awards generally went to companies participating in the Clean Coal Technology Demonstration program; and (13) many of these awards were for projects that spanned several years and were partly funded by the companies.