of domestic oil and natural gas. Coal was recognized as an important domestic source of energy, with emphasis on the development of economically viable technologies achieving specified levels of environmental performance relating to acid rain precursors and greenhouse gas emissions. Thus, in the area of electric power generation, advanced systems characterized by high-efficiency, very low pollutant emissions, and competitive economics became the focus of DOE's coal program. Another recognized need was for R&D to reduce the costs, investment risks, and environmental impacts of producing liquid fuels from coal.

An important initiative of the Clinton administration has been the Climate Change Action Plan. This plan lays out the goals of returning U.S. greenhouse gas emissions to their 1990 levels by the year 2000 and positioning the United States to compete better in the global market (Clinton and Gore, 1993). A main thrust of this initiative is to reduce energy demand throughout the U.S. economy by actions that align market forces with the goal of reducing greenhouse gas emissions. Thus, the Clinton administration has promoted increased use of natural gas (which emits less CO2 per unit of energy than coal or oil), improved energy efficiency, and renewable energy technologies that release no net CO2 to the environment. As discussed below, decreased coal R&D funding has accompanied these new emphases.

THE DOE COAL PROGRAM STRUCTURE AND BUDGET

DOE's coal-related activities currently fall under two main budget categories: FE R&D and the CCT program. The first category also includes R&D programs in petroleum and natural gas, which are not considered in the present report, except when directly relevant to the coal program (e.g., cross-cutting R&D in advanced turbines and fuel cells). The CCT program was initiated in 1986 and is scheduled to run through 2004, with the specific goal of demonstrating the commercial potential of advanced power generation technologies. The CCT program is thus more transient than FE R&D, which has been in existence since the inception of DOE and forms the continuing basis of DOE's coal program.

Fossil Energy Research and Development

Annual funding for FE R&D for FY 1992 through the FY 1995 budget request has remained relatively constant, at something over $400 million. However, the oil and natural gas program budgets have increased at the expense of the coal program (Figure 2-2).1 Fossil fuel prices have declined during the past several years, especially for gas and oil. The low current and projected price of

1  

The fuel cell activity was transferred from the coal program to the natural gas program in FY 1994. However, for comparison purposes, fuel cell funding has been included in the natural gas budget rather than the coal budget illustrated in Figure 2-2.



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