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AGI Fiscal Year 2007 Testimony to House Appropriations Subcommittee on Energy and Water and Related Agencies

Written Testimony Submitted by
Linda Rowan, Director of Government Affairs
American Geological Institute
to the U.S. House of Representatives
Subcommittee on Energy and Water and Related Agencies Appropriations
March 16, 2006

To the Chairman and Members of the Subcommittee:

Thank you for this opportunity to provide the American Geological Institute's perspective on fiscal year (FY) 2007 appropriations for geoscience programs within the Subcommittee's jurisdiction. The President's budget requests significant cuts in the Department of Energy (DOE) research programs related to energy resources. In particular, the President's request would eliminate the Office of Fossil Energy's oil and natural gas technology research programs and the Office of Energy Efficiency and Renewable Energy's geothermal technology research program. Given the interest of the Administration and Congress to reduce the nation's foreign oil dependence and reduce gasoline prices, it seems like an inopportune time to eliminate programs that could help with these objectives. We hope that Congress will restore funding for these programs. AGI applauds the requested 14% increase for the largest supporter of physical science research in the U.S., DOE's Office of Science, and encourages the Subcommittee's full support for this increase. We also support the President's Advanced Energy Initiative which includes increased funding for clean energy research. The request focuses spending on solar, biomass/biofuels, hydrogen fuel, FutureGen and nuclear power, however, other clean energy alternatives, such as geothermal, could be included in appropriations while remaining consistent with national needs and objectives.

AGI is a nonprofit federation of 44 geoscientific and professional associations that represent more than 100,000 geologists, geophysicists, and other earth scientists. The institute serves as a voice for shared interests in our profession, plays a major role in strengthening geoscience education, and strives to increase public awareness of the vital role that the geosciences play in society's use of resources and interaction with the environment.

DOE Fossil Energy Research and Development

AGI urges you to take a critical look at the Department of Energy's Fossil Energy Research and Development (R&D), Natural Gas Technology R&D and Oil Technology R&D accounts as you prepare to craft the FY 2007 Energy and Water and Related Agencies Appropriations bill. Over the past five years, Members of Congress have strongly emphasized the need for a responsible, comprehensive energy policy for the country. The growing global competition for fossil fuels has led to a repeated and concerted request by Congress to ensure the nation's energy independence. The President's proposal that these programs be eliminated is short sighted and will not allow us to achieve energy independence.

The research dollars spent by these programs go largely to universities, state geological surveys and research consortia to address critical issues like enhanced recovery from known fields and unconventional sources that are the future of our natural gas supply. This money does not go into corporate coffers, but it helps American businesses remain competitive by giving them a technological edge over foreign companies. All major advances in oil and gas production can be tied to research and technology. AGI strongly encourages the conferees to restore these funds and bring these programs back to at least FY 2003 levels.

Today's domestic industry has independent producers at its core. With fewer and fewer major producing companies and their concentration on adding more expensive reserves from outside of the contiguous U.S., it is the smaller independent producers developing new technologies concentrated on our domestic resources. However, without federal contributions to basic research that drives innovation, small producers cannot develop new technologies as fast, or as well, as they do today. The program has produced many key successes among the typical short-term (one to five years) projects usually chosen by the DOE. And even failed projects have proven beneficial, because they've often resulted in redirection of effort toward more practical exploration and production (E&P) solutions. Ideally, DOE and private sector participants share the programs R&D funding on a 50-50 basis, with the government contributing actual dollars and the company contributing dollars or "in kind" products and services. To justify the use of public funds, new technology developed from such projects is made available to the industry.

In 2003, at the request of the Interior Appropriations Subcommittee, the National Academies released a report entitled Energy Research at DOE: Was It Worth It? Energy Efficiency and Fossil Energy Research 1978 to 2000. This report found that Fossil Energy R&D was beneficial because the industry snapped up the new technologies created by the R&D program, developed other technologies that were waiting for market forces to bring about conditions favorable to commercializing them and otherwise made new discoveries. In real dollars from 1986 - 2000 the government invested $4.5 billion into Fossil Energy R&D. During that time, realized economic benefits totaled $7.4 billion. This program is not only paying for itself, it has brought in $2.9 billion in revenue. Why not continue to fund oil and gas R&D so we can attain the energy independence we need for stable and continued economic growth?

The federal investment in energy R&D is particularly important when it comes to longer-range research with diversified benefits. In today's competitive markets, the private sector focuses dwindling research dollars on shorter-term results in highly applied areas such as technical services. In this context, DOE's support of fossil energy research, where the focus is truly on research, is very significant in magnitude and impact compared to that done in the private sector, where the focus is mainly on development. Without more emphasis on research, we risk losing our technological edge in this global and increasingly more expensive commodity.

As we pursue the goal of reducing America's dependence on unstable and expensive foreign sources of oil, we must continue to increase recovery efficiency in the development of existing domestic oilfields, conserving the remaining in-place resources. Since the 1980's, 80 percent of new oil reserves in this country have come from additional discoveries in old fields, largely based on re-examination of previously collected geoscience data. These data will become even more important in the future with development of new recovery technologies.

The research funded by DOE leads to new technologies that improve the efficiency and productivity of the domestic energy industry. Continued research on fossil energy is critical to America's future and should be a key component of any national energy strategy. The societal benefits of fossil energy R&D extend to such areas as economic and national security, job creation, capital investment, and reduction of the trade deficit. The nation will remain dependent on petroleum as its principal transportation fuel for the foreseeable future and natural gas is growing in importance. It is critical that domestic production not be allowed to prematurely decline at a time when tremendous advances are being made in improving the technology with which these resources are extracted. The recent spike in oil and natural gas prices is a reminder of the need to retain a vibrant domestic industry in the face of uncertain sources overseas. Technological advances are necessary to maintaining our resource base and ensuring this country's future energy security.

DOE Office of Science

The DOE Office of Science is the single largest supporter of basic research in the physical sciences in the United States, providing more than 40 percent of total funding for this vital area of national importance. The Office of Science manages fundamental research programs in basic energy sciences, biological and environmental sciences, and computational science and, under the President's budget request, would be grow by 14% from about $3.6 billion last year to $4.1 billion. AGI asks that you support this much needed increase.

Within the Office of Science, the Basic Energy Sciences (BES) program supports fundamental research in focused areas of the natural sciences in order to expand the scientific foundations for new and improved energy technologies and for understanding and mitigating the environmental impacts of energy use. BES also discovers knowledge and develops tools to strengthen national security.

The Basic Energy Sciences (BES) would remain the largest program in the office with an increase of 25% from $1.134 billion in FY 2006 to $1.420 billion in FY 2007 in the President's request. Within the BES, Chemical Sciences, Geosciences and Biosciences would receive a $47.9 million increase over their FY 2006 budget. About half of this increase would go toward the President's Hydrogen Initiative ($6 million increase) and basic research related to energy technologies ($22.4 million increase) and the other half would go toward nanoscale science research ($22.2 million increase). Other programs would be reduced by $3.2 million to make up the difference between these increases and the overall budget. AGI strongly supports the requested increases for these programs.

Thank you for the opportunity to present this testimony to the subcommittee. If you would like any additional information for the record, please contact me at 703-379-2480, ext. 228 voice, 703-379-7563 fax,, or 4220 King Street, Alexandria VA 22302-1502.

Please send any comments or requests for information to AGI Government Affairs Program.

Posted: March 21, 2006


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