scribe highly leveraged investments, whereas "petroleum financing" describes the smaller component of borrowed money generally employed in that industry. Utility financing has been used throughout the present report for consistency with DOE's approach (see Glossary for further details), although the committee notes that there is no general consensus on the most appropriate financing basis for estimating equivalent crude costs.

A number of technologies are relevant to both advanced power and advanced fuel systems. Four corresponding "cross-cutting" technology programs are described in the RD&D Program Plan: coal preparation, alternative fuels utilization, flue gas cleanup, and waste management (DOE, 1993b). Progress in these areas can improve the efficiency, environmental performance, or life-cycle costs of many of the advanced power and fuel systems under development. Specific objectives are defined for each of the cross-cutting technology programs.

DOE's planning objectives for advanced power and fuels systems are evaluated later by the committee in the context of its own strategic planning framework (see Chapter 10). The study's conclusions and recommendations on DOE program goals and priorities stem from that evaluation.

SUMMARY

Federal funding for coal R&D has fluctuated substantially over the past two decades, particularly in response to the energy supply uncertainties of the 1970s. The DOE coal R&D budget increased rapidly in the late 1970s, reaching a peak of over $1 billion per year in FY 1981 (current dollars), but declined sharply in the early 1980s, especially funding for coal liquefaction R&D. The FY 1994 FE coal R&D budget was less than $200 million per year (current dollars), representing a decrease of approximately 50 percent in real terms over the past 10 years. Over the past three years, the oil and natural gas components of the FE R&D program have grown at the expense of the coal component. The increase in natural gas funding is largely in response to the availability and environmental acceptability of low-cost natural gas, although the possibility of using coal-derived gas is recognized.

Since 1986, the CCT program, which is budgeted separately from the coal R&D program, has been appropriated $2.75 billion in federal funding for the demonstration of advanced coal technologies, with emphasis on clean, efficient power generation systems. The CCT program represents a marked departure from traditional DOE FE R&D programs in that industry partners must contribute at least 50 percent of the demonstration cost. In addition, there is a strong emphasis on technology commercialization.

DOE's strategic planning for coal focuses on the need to exploit coal as a secure, low-cost domestic energy resource and to increase the environmental acceptability of coal use. DOE has defined corresponding quantitative goals for the advanced power and fuel systems programs. Partnership with industry is



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