American Geological Institute

Government Affairs Program


Senate Hearing on Department of Energy Fossil Energy and Energy Efficiency Programs Budget Request

Hearing of the Interior and Related Agencies Subcommittee
of the Senate Committee on Appropriations

March 13, 1997

Witness List:
Frederico Pena, Secretary of Energy
Robert Kripowicz, Principal Deputy Assistant Secretary for Fossil Energy
Joseph Romm, Acting Principal Deputy Assistant Secretary for Energy Efficiency and Renewable Energy

Testimony:

In his first appearance as Secretary of Energy, Frederico Pena testified in support of the President's budget request for FY1998 for DOE programs within the jurisdiction of the Interior Appropriations subcommittee. The bulk of DOE's funding comes from the Energy and Water Subcommittee. Pena testified that investments in energy research and production will help the United States lessen its dependence on foreign energy sources, which are expected to comprise 60% of our energy consumption within the next 15 years. Energy research is a "smart investment" and "essential" to avoid future risk and must be expanded, even in this political climate of reduction. He noted that the Department of Energy (DOE) has adopted a new strategy for funding the construction of new facilities, accounting for a $3 billion increase in the FY 1998 budget. Starting this year, funding for an entire project is to be given up front instead of on a yearly basis.

Secretary Pena presented four key priorities of the Department of Energy that dictate spending levels:
1. Enhancing our energy security by improving the energy efficiency of our economy and by developing clean and affordable energy supplies.
2. Ensuring a safe and reliable nuclear weapons stockpile and reducing the global nuclear danger.
3. Cleaning up former nuclear weapons sites and finding a more effective and timely path forward for disposing of nuclear waste
4. Leveraging science and technology to advance fundamental knowledge and our country's economic competitiveness with a stronger partnership with the private sector.

In response to a plethora of questions on coal issues from Senator Byrd (D-WV), Pena replied that the clean coal partnership has been very successful, labeled by Congress's own General Accounting Office as the "model of public-private partnerships". Pena also allayed Sen. Byrd's concerns that a disproportionate share of funds, approximately $1.05 billion, were going to efficiency and renewable energy research and development. In contrast, fossil energy programs are budgeted to receive $350 million, even though they account for 85% of energy use. Pena explained that since much of the research is focused on expanding efficiency of fossil energy sources, it is included in the efficiency and renewable energy budget.

Senator Domenici, disturbed by the President's recent refusal to alter the CPI index to offset spending, expressed his belief that flat funding was the only solution to balance the budget. Flat funding would significantly reduce the programs proposed in the President's budget and advocated by Secretary Pena.

Sen. Domenici also questioned the status of the sale of the Elk Hills petroleum reserve and oil from the Strategic Petroleum Reserve. The sale of Elk Hills is scheduled to be completed by the deadline of February 1998. The reserve should be maintained at 563 million barrels to prevent foreign supply disruptions from creating oil shortages and price fluctuations. Although the President's budget calls for the sale of oil from this reserve in 2002, Pena stated that he is interested in exploring other options to prevent this sale and will not sell from the reserve before then.

Pena supports deregulating the energy market, believing it will reduce costs and improve efficiency. However, research and development that is too expensive or risky will be lost in a lower cost market, and DOE needs to ensure this essential research will continue. This type of research has shown massive payoffs, saving taxpayers approximately $28 billion from programs such as the development of fluorescent lighting and refrigeration technology. The development of a car of the future that travels 80 miles per gallon is being developed in a cooperative program between industry and the government known as Partnership for a New Generation of Vehicles (or more familiarly the Clean Car Initiative).


Please send any comments or requests for information to the AGI Government Affairs Program at govt@agiweb.org.

Contributed by Kasey Shewey, AGI Government Affairs.

Last updated March 17, 1997

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