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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000
early 1980s, entailed the push for energy security, development of alternative fuel supplies, and a focus on energy efficiency, with near-term commercial demonstration emphasized. The second phase, from the early 1980s to the mid-1980s, was characterized by the easing of the energy crisis as oil prices stabilized, and the CPS R&D programs shifted their attention to compliance with Clean Air Act Amendments. Environmental issues have come to dominate the third and current phase, providing the main impetus for CPS programs from the mid-1980s to the present.
DOE’s oil and gas research, like its CPS research, has changed substantially since 1978. The history of the oil program can be divided into two periods: from 1978 to 1988 and from 1989 to the present. In the earlier period, the focus was on long-term, high-risk R&D, mostly for enhanced oil recovery from existing wells. In more recent years, the program has stressed near- and mid-term results, emphasizing technological solutions to improving production. At first, the natural gas program focused on production from unconventional natural gas resources, such as gas shales, tight sands, and coal-bed methane or gas hydrates. In recent years, the focus has shifted to the development of tools for finding natural gas, with a downstream program emphasis on gas-to-liquids technology.
In response to the congressional charge, the National Research Council formed the Committee on Benefits of DOE R&D on Energy Efficiency and Fossil Energy (see Appendix A for committee members’ biographical information). The statement of task for this study describes the issues included in the committee’s review of DOE’s fossil energy and energy efficiency programs:
The NRC committee appointed to conduct this study will conduct a retrospective examination of the costs and benefits of federal research and development since 1978 for advanced technologies in the Department of Energy’s program areas of fossil energy and energy efficiency. The committee will develop a comprehensive framework that, at a minimum, reflects the goals and public purposes of federal R&D (but which may be broader in scope), and using this framework will assess the benefits of federal energy R&D and will identify improvements that have occurred because of federal funding in (1) fossil energy technologies with regard to performance aspects such as efficiency of conversion into electricity, lower emissions to the environment and cost reduction; and (2) energy efficiency technologies with regard to more efficient use of energy, reductions in emissions and cost impacts in the industrial, transportation, commercial and residential sectors.
In conducting this study, the committee will critically review written reports and hear presentations at its meetings related to the benefits and costs of federal R&D in the areas of fossil and energy end-use efficiency technologies, as noted above. The committee will:
utilize the applicable literature on R&D strategies and the role of R&D in technological and economic development, develop a comprehensive framework for defining the range of benefits and costs, from quantitative to nonquantitative, of federal R&D and use this comprehensive framework as a basis for conducting its analysis. In developing this framework, consideration should be given to direct benefits related to program goals and other indirect benefits (for example, unexpected products or improvements in scientific understanding), as well as aspects of valuing these benefits (for example, optimum risk profiles, options values, timing of benefits);
assess the benefits of R&D (in the areas of fossil energy and energy efficiency) in light of the framework developed and available information about these programs. In undertaking this analysis, the committee will review the historical context over the applicable time period (1978 to the present) and related policy, legislative, and strategy goals and purposes of the R&D; review studies that have been undertaken by DOE on the costs and benefits of its R&D efforts; review studies and/or evaluations by the private sector, consulting companies, public interest groups, academic researchers, and others on the costs and benefits of energy technology R&D investments;
based on its framework, analysis, and observations, suggest strategies to inform future R&D choices.
The committee will use consultants as needed to conduct analysis based on guidance from the committee. The committee will write a final report that addresses its statement of work outlined above and documents its conclusions and observations on the benefits and costs of federal energy R&D in energy efficiency and fossil energy technologies, including a list of significant accomplishments and intellectual contributions identified.
To devise an approach to conducting the study, the committee carefully reviewed the statement of task and the background that led to its formulation. Three elements of the assignment appeared to be particularly important and were therefore instrumental in guiding the study design:
The study should focus on outcomes. The task statement requires a retrospective examination of improvements that have already occurred. The committee therefore analyzed actual costs and actual benefits realized to date as its starting point for evaluating energy research.
Developing a methodology is a central element of the task. The statement of task not only requires this, but it also speaks to the need for a methodology that can be applied to future research proposals. Accordingly, the committee gave great weight to developing an approach to characterizing outcomes that would be useful to future analysts.
The main purpose of evaluating the benefits and costs of more than 25 years of energy research is prospective, not retrospective. In other words, the value of the analysis lies in the lessons that can be learned from past experience and in validating the analytic methodology developed by the committee. Because it could not evaluate in detail all of the re-