R&D Priorities Within the Department of Energy
IntroductionThis section will review the twenty-year history of civilian energy research and development (R&D) within the United States Department of Energy (DOE). The focus will be on shifting R&D priorities over DOE's two-decade lifetime, with attention paid to the civilian energy R&D budget as compared to the overall DOE budget. To aid the discussion, DOE history will be divided into four conceptual eras: the oil crisis years (1978-1981), the defense build-up years (1982-1990), the post-Cold War years (1991-1995), and the balanced budget future (1996-2002). 1
The DOE was established in 1977 during the Carter administration, after three years of discussion at the presidential level beginning with Nixon.2 The impetus for a coordinated federal energy policy and R&D effort grew out of the energy crisis of the early 1970s.
Roughly speaking, DOE has spent its money in two areas: defense and energy. Recently, a third priority, defense clean-up, has been added. During the oil crisis years, DOE spent roughly equal amounts on defense and energy. During the defense build-up years, spending on nuclear weapons was about two-thirds of the DOE budget, and energy got the other third. In the post-Cold War years, DOE spent approximately equal amounts on defense, energy, and defense clean-up. Table IV.2.1 gives a flavor of how DOE priorities have shifted over the years, based on the President's budget requests in the years 1980-1995, in five-year increments.3
Energy R&D budgets in the balanced budget future are difficult to predict. On the one hand, the President's projections show a moderately increasing budget, with noninflated (ie., non-constant dollar) seven-year total spending of about $28 billion. On the other hand, the House Budget Committee's seven-year total spending projection is about $19 billion.4
Department of Energy Budget Requests
FY 1980, FY 1985, FY 1990, FY 1995
(in millions of constant 1995 dollars)
|Energy Research and Development (see Box IV.2.1 for description)||7,067||3,357||2,773||3,400|
|General Science (includes SSC, high energy and nuclear physics)||879||1,040||1,365||1,337|
|Regulation and Information||599||159||230||103|
|Direct Energy Production (includes SPR)||291||1,856||1,324||1,091|
|Defense Waste (Environmental Management)||------2||------2||1,337||6,521|
|ES&H and related functions||------2||------2||146||169|
|Nuclear Waste Repository||------||457||864||533|
|Policy, Management, and Misc.||571||305||309||285|
|TOTAL, DOE Budget Requests||15,621||17,859||17,504||18,453|
1 First DOE Budget request as a comprehensive document and not as a combination of requests of predecessor agencies.
2 No figures available. Amounts subsumed in other categories.
3Use of prior year balances and other adjustments.
Source: Department of Energy, FY 1980 Budget to Congress: Budget Highlights (Washington: DOE/CR-004)
Department of Energy, FY 1985 Budget Highlights (Washington: DOE/MA-0062/2); Department of Energy, Fiscal Year 1990 Budget Highlights (Washington: DOE/MA-0357); Department of Energy, FY 1995 Budget Highlights, (Washington: DOE/CR-0019).
As Table IV.2.1 indicates, energy research and development is a significant portion of DOE's energy budget. Energy R&D is a broad-based program, including basic energy sciences and applied energy R&D. The components of energy R&D are summarized in Box IV.2.1.5
Currently, DOE carries out a broad array of civilian energy R&D programs. Section IV.2 only focusses on applied research. (Figures in parenthesis are the Congressional appropriations for FY 1995 in millions of dollars.)
Over the two decades of DOE existence, its total outlays (the money actually given to the department by the Treasury) have remained essentially constant, at about one percent of the total federal budget. Yet within the DOE budget, civilian energy R&D has steadily declined, as shown by Figure IV.2.1.6 In 1978 the energy R&D budget was $9.7 billion (in constant 1995 dollars). By 1995, the energy R&D budget was $2.5 billion, a drop of about 75%.
In addition, the relative allotment for energy R&D within the overall DOE budget has declined. In 1980, the budget request for energy R&D was about 45% of the total DOE budget request; by 1995 the request for energy R&D had dropped to 18% of the DOE budget. As the Yergin Report bluntly stated, "The 'E' may be disappearing from 'DOE.' ... Federal R&D spending on energy is one-half of one percent of America's annual energy bill."7 Furthermore, priorities within DOE energy R&D have waxed and waned dramatically, as shown in Figure IV.2.2.8 It is the dynamics of these priorities that will form the basis of the discussion that follows. Also note that the following will primarily be a discussion of applied energy R&D; in other words, basic energy sciences will generally not be discussed, nor will the high energy and nuclear physics budgets.
By way of comparison to the federal investment, industrial energy R&D has also declined.9 However, industry does spend slightly more than the federal government. For example, in 1993 the total US expenditures for energy R&D (which includes industry, DOE, and all other federal agencies) were about $5.5 billion. Of that, about $3 billion was spent by industry and about $2.4 billion by DOE. The remaining $0.1 billion was spent by all other government agencies combined. Another notable point of reference is that the combined industrial and federal investment in energy R&D amounts to about 1.1 percent of total US energy expenditures, which in 1993 were about $480 billion.
Methodology for DiscussionThe following will be a discussion of energy R&D priorities in each of the three conceptual eras defined above. In addition, speculation will be made about what to expect in the future balanced budget era. For ease of discussion, the civilian energy R&D budget will be divided into six categories comprising DOE's applied energy R&D (see Table IV.2.2)10: clean coal, energy efficiency, fossil fuels (oil, gas, and other coal), nuclear fission, nuclear fusion, and renewable energy (biofuels, geothermal, hydroelectric, hydrogen, solar, and wind). Dollar amounts are in constant 1996 dollars. In making comparisons among the energy R&D categories within each era, the average of the funds appropriated during the given time-frame will be used. For example, the oil crisis years took place over a four-year period. The total four-year funding for renewables was $5,158 million out of a total R&D budget of $25,195 million. The four-year average was $1,290 million per year out of an average R&D budget of $6,299 million. Therefore, during the oil crisis years, renewables received, on average, 20% of the energy R&D funding.
The Oil Crisis Years (1978-1981)DOE was founded in response to the oil crisis of the mid-1970s. Its founding mission was not only related to the civilian energy supply; the Atomic Energy Commission and its nuclear weapons responsibilities were also folded into the DOE. As a result, the DOE budget was divided roughly in two, with half going to defense and half going to energy.
Out of a yearly average funding of $6,301 million (see Table IV.2.2), energy R&D during the oil crisis years was dominated by nuclear fission (34% of the four-year average energy R&D budget), fossil fuels (24%), and renewable energy (20%). Much of the effort in these three areas was in large projects (see Figure IV.2.2). Fission R&D funding was dominated by the fast breeder reactor which consumed about 75% of the fission budget over this four-year period. Within the coal portion of the fossil fuels budget, magnetohydrodynamics and coal liquefaction projects were dominant. Significant renewable energy R&D funds were spent on large-scale solar demonstration projects.
FY 1978-81, FY 1982-90, FY 1991-95
(in millions of constant 1996 dollars)
|Oil Crisis Years||Defense Build-up Years||Post-Cold War Years|
|FY 1978-81||4-year avg.|| ||FY 1982-90||9-year avg.||% *||FY 1991-95||5-year avg||%|
|Energy efficiency **||2,382||596||9||1,785||198||8||1,713||343||16|
|Nuclear fission ***||8,649||2,162||34||8,825||981||38||1,760||352||16|
|* Does not add up to 100% because of rounding. |
** Also called "energy conservation".
*** Also called "civilian nuclear".
The Defense Build-up Years (1982-1990)During the defense build-up years, energy R&D declined dramatically relative to the total DOE budget as a result of the acceleration of the arms race and large-scale shifting of funds into DOE defense programs. During the 1980s, DOE spent roughly twice as much on defense as it did on energy. R&D programs across-the-board were cut and many large demonstration and commercialization programs were scaled back or eliminated (see Table IV.2.2 and Figure IV.2.2). The nine-year average energy R&D budget was $2,554 million as compared to the average of $6,301 during the oil crisis years.
Within energy R&D, overall funding was cut and priorities shifted. During the defense build-up years, spending on nuclear fission was 38% of the energy R&D budget, but funding declined from a yearly average of $2,162 million during the oil crisis years to $981 million. Fusion energy research saw its share almost double, from 11% during the energy crisis years to 21%, however its average funding dropped from $716 million to $545 million. R&D on renewable energy and fossil fuels were scaled back significantly, in real and relative terms. Renewables' relative share dropped to 10% while its average budget was cut to $253 million from its high of $1,290 million during the oil crisis years. Similarly, fossil fuels' relative share dropped to 16% of the energy R&D budget.
Much of the decline in R&D during the defense build-up years can be attributed to the elimination or phase-out of many of the large projects that characterized the oil crisis years. For example the breeder reactor program was cut, as were the large-scale solar demonstration projects. Within fossil fuels, the magnetohydrodynamics and coal liquefaction programs were scaled back significantly. The one major project that did emerge was clean coal technology demonstrations.
The Post-Cold War Years (1991-1995)The post-Cold War years were characterized by the end of the Cold War and the subsequent freeing up of nuclear weapons funds. However, these funds did not go to energy R&D; they were shifted in large part to major new environmental restoration and defense waste management programs designed to clean up the mess left by 50 years of nuclear stockpiling. As Table IV.2.1 shows, the post-Cold War years thus saw comparable Presidential priorities placed on defense, defense waste management and cleanup, and energy. The average amount spent on energy R&D stayed about the same as it was in the previous era, but there were notable shifts in emphasis.
Within energy R&D, funds were spread out more evenly among the six programs, and clean coal and energy efficiency programs became higher priorities. Funds for clean coal averaged 20% of the total for energy R&D, as compared to 6% during the previous era. Similarly, funds for energy efficiency went from 8% to 16%. Fossil fuels rose to 22%. The only significant drop was in fission R&D, which dropped to 16% of the R&D budget; this drop translates to a budget cut from an average of $981 million during the defense build-up years, to a yearly average of $352 million during the post-Cold War Years.
The Balanced Budget Future (1996-2002)Projections for the future of energy R&D depend on whose numbers one uses. Both political parties have stated a commitment to balance the federal budget by the year 2002. With respect to energy R&D (including BES), the President projects an average budget authority of $3.960 billion per year (in 1996 dollars), with a total authority of $27.717 billion through 2002. 4,11 The House Budget Committee's comparable projection is $2.659 billion per year, with a total of $18.615 billion. More instructive than the disparity between these bottom line numbers are the two sides' differing priorities within the energy R&D budget. The President holds the energy supply budgets essentially flat, as does the Budget Committee with seven year totals of $20.12 billion and $16.267 billion, respectively. The significant difference between the two parties is in the energy supply R&D budgets for fossil fuels and energy efficiency. The President proposes to more than double fossil fuels R&D from $0.42 billion in 1996 to $0.99 billion in 2002, with an average yearly spending of $0.5 billion. The Budget Committee proposes to eliminate fossil fuels R&D by 2000. With respect to energy efficiency, the President's proposal is to spend an average of $0.58 billion per year, while the Budget Committee plans to cut spending from $0.53 billion to $0.11 billion by 2002, spending a yearly average of $0.22 billion.
Not considered in any of these proposals are efforts among some in Congress to eliminate the DOE altogether and transfer its responsibilities to other agencies. It is completely unclear how this would effect energy R&D.
SummaryThere are two stories behind the DOE civilian energy R&D budget. The first is that since 1978, energy R&D has declined by over 75% and its share of the DOE budget has gone from around 45% to 18%, while the DOE budget itself has remained more or less constant at about 1% of the federal budget. The second story is that there have been dramatic shifts of funds among the different programs within energy R&D. Both stories reflect competition for funds among programs designed to fulfil DOE's broad and complicated mission that ranges from building nuclear weapons, to cleaning up defense nuclear waste, to funding basic research on photovoltaics.
Allocation of funds within DOE reflects national priorities. This is seen most clearly by examining the DOE budget within three eras discussed and then looking to the future. In the first era DOE spent heavily on R&D designed to give the US more energy security and independence in response to the oil crisis of the 70s. In the second era there was an acceleration of the arms race against the Soviet Union. Consequently, funds were shifted from energy R&D to weapons development and construction. The third, most recent era, was characterized by the end of the Cold War and the resulting drop in weapons spending. Unfortunately for advocates of energy R&D, these available monies were shifted to programs created to clean up and restore areas contaminated by nuclear waste from the defense program.
Future funding for DOE programs is uncertain. There those who want to eliminate the Department altogether and transfer its essential functions to other agencies. Regardless, all federal agencies are faced with the bipartisan effort to balance the budget by 2002. This will exacerbate the competition among DOE programs and place the declining civilian energy R&D program on even more precarious ground.
- The dates given for each era are simply constructs to aid the discussion.
- For a detailed history of the DOE, see http://www.doe.gov/html/doe/about/history/doehist.html
- See http://www.doe.gov/html/doe/about/history/doehist5.html#ZZ11, Appendix 5. The data in Table IV.2.1 have been adjusted to reflect constant dollars. Note that Table IV.2.1 summarizes the President's budget request for the year noted. Congressional appropriations (ie. "funding," as seen in other places in this section) can and do differ each year. This table is for illustrative purposes only.
- These estimates are based on an analysis released on 5/21/96 by the Minority staff of the House Science Committee. The data and analysis can be found at gopher://gopher.house.gov:70/0F-2%3A268598115%3ABUDRES97.TXT
- Yergin Report: Energy R&D: Shaping Our Nation's Future in a Competitive World, DOE, June 1995, p. 20. The report can also be found at http://apollo.osti.gov/html/doe/whatsnew/yergin/ytfcont.html
- Yergin Report, p. 2, Figure 1. Also, http://apollo.osti.gov/html/doe/whatsnew/yergin/ytffig1.gif
- Yergin Report, p. ix.
- Yergin Report, p. 24, Figure 9. Also, http://apollo.osti.gov/html/doe/whatsnew/yergin/ytffig9.gif
- Yergin Report, pp. 6-7 and Fig. 3 therein. For Figure 3, http://apollo.osti.gov/html/doe/whatsnew/yergin/ytffig3.gif
- Data taken from Congressional Research Service, Issue Brief 95085, updated 4-12-96.
- The dollar amounts used in discussions of projected future budgets are not adjusted for any estimated inflation.