Recovery Field Demonstrations 14 FY98-$6.05 million FY99 - $7.80 million For much of this decade, 32 DOE-industry cosponsored field tests have shown that state-of-theart technologies applied in oil fields threatened by imminent abandonment can prolong the economic life of the field. Several of the field tests, however, have shown that even larger quantities of additional oil could be produced by applying lessons learned in the initial tests and in the supporting research program. Based on documented production and reservoir modeling, we estimate that the transfer of technologies demonstrated in the 32 projects will provide an additional 500 million barrels of domestic production. The Petroleum Technology Transfer Council now has a significant effort underway to transfer the technologies and techniques applied in these projects to producers across the country facing similar production problems. In FY 1999 funding is requested for a limited set of follow-on, highly-targeted field tests in each of the three geologic classes of the original program (fluvial dominated deltaic, shallow shelf carbonates, and slope basin clastic reservoirs). A competitive solicitation is being planned for FY 1998 with projects expected to start in early FY 1999. By revisiting these high-priority reservoir groups, using newer technologies or working in untested basins, we hope to build on the lessons learned in the prior program and capitalize on the joint investment already made by government and industry. Including the 4th Dimension in Seismic Mapping One of the most important advances in exploration and production technology has been the development of 3dimensional seismic imaging which uses today's computer technology to convert large quantities of data into a depiction of the height, width and depth of an oil reservoir. Now, a DOE-industry cosponsored field test has shown how time can be included in the geologic portrait, in effect adding a 4th dimension to seismic imaging. The result is an entirely new way to examine an oil reservoir. In some Gulf of Mexico reservoirs, 4-dimensional seismic imaging is showing that reservoirs are actually being replenished over relatively short periods of geologic time. In 1997, the use of this new tool accounted for nearly $500 million in oil service company revenues. Effective Environmental FY98-$6.36 million FY99 - $10.82 million The environmental research activities focus on technologies and practices that reduce the threat to the environment and decrease the cost of effective environmental protection and regulatory compliance. Four activities make up this program: risk assessment, regulatory streamlining, technology development, and program planning and analysis. In FY 1999, this program will be expanded to include downstream (i.e., refining) environmental activities previously conducted in the Emerging Processing Technology Applications program. This environmental work includes: (1) generating independent, high-quality scientific data to 15 streamline and improve federal, state and local regulations governing oil production and processing; (2) working with industry, states and the Environmental Protection Agency (EPA) to conduct research that will assist EPA in making scientifically-sound decisions on air emissions, including the release of particulate matter (i.e., PM 2.5) from oil field operations and processing facilities; (3) serving as a neutral third party between federal and state regulators and industry to develop scientific information on environmental and health risks of pollutants emitted by the oil industry; (4) identifying pollutants present in fuels and developing improved technologies for preventing their formation, and (5) in response to recommendations of the President's Committee of Advisors on Science and Technology, perform research on fuels that have fewer emissions affecting global climate change. Also in this budget category, studies will be carried out to assess and mitigate environmental risks posed by oil exploration and production, including the use of injection wells to dispose of produced water and oil field wastes. Emerging Processing FY98-$5.52 million FY99 - $0 million Technology Applications The majority of this activity will be combined with the Effective Environmental Protection program above. The process thermodynamic/chemistry portion of this category has been discontinued because of uncertainty about its value to the Nation and the appropriate Federal role in this effort. Other Fossil Energy Research and Supporting Activities In addition to its primary research and development activities, the Office of Fossil Energy Cooperative Research and FY98-$5.84 million FY99-$5.84 million This category provides the federal funding share of jointly sponsored research at the Western Research Institute (Laramie, WY) and the University of North Dakota Energy and Environmental Research Center (Grand Forks, ND). DOE funds must be matched by non-federal partners. Advanced Metallurgical FY98-$4.97 million FY99-$5.0 million Transferred to DOE in FY 1996, this program at the Albany (OR) Research Center addresses the life cycle of materials production and processes to their disposal and recycling. A key part of the FY 1999 program will be targeted at new material R&D for the Vision 21 Energyplex concept. 16 Environmental Restoration FY98-$12.94 million FY99 - $11.0 million Funding will be used to ensure protection of workers, the public and the environment at DOEFossil Energy facilities and to conduct environmental protection and cleanup activities at several locations where former Fossil Energy R&D projects were conducted. Fuels Programs FY98-$2.17 million FY99-$2.17 million This budget supports regulatory functions still required of DOE to review natural gas imports and exports, exports of electricity and the construction and operations of electric transmission lines which cross U.S. international borders, along with other regulatory responsibilities. Program Direction &· FY98 - $66.76 million FY99 - $67.03 million This category provides funding for salaries, benefits and overhead expenses for management of the Fossil Energy program at Headquarters, the Federal Energy Technology Center (Morgantown, WV and Pittsburgh, PA), and the National Petroleum Technology Office (Tulsa, OK). FY98-$2.53 million Plant and Capital Equipment Clean Coal Technology Program A Commitment to a New Era for Coal From five competitive solicitations, the Clean Coal Technology Program has produced some of the most advanced technological concepts available anywhere in the world to use coal cleanly and efficiently. By the end of 1997, the program was made up of 39 projects, 32 of which either had completed their test runs or were in operation. The federal government is investing more than $2.1 billion in this initiative, a commitment to clean air and affordable energy that is unmatched by any nation of the world. Moreover, U.S. industry and states have more than matched the federal commitment, providing nearly $3.8 billion or 66% of the total costs of the program. For FY 1999, DOE is proposing that $40 million of funding previously appropriated be deferred until FY 2000 and beyond. This funding is not necessary in FY 1999 to maintain the Federal commitment to ongoing projects but will be necessary to complete the Government's obligations in future years and to administer proper oversight of the remaining projects. Currently, of the 39 projects in the program: 17 16 projects are complete with many of the technologies demonstrated now continuing in use in fully private sector funded, commercial operations; 15 projects are in operation generating valuable test data on the technical, economic and environmental performance of the advanced coal systems; 1 project - the Piñion Pine Coal Gasification Combined Cycle Project -- is in the final stages of construction and will start operations early in calendar 1998; and 7 projects are in design. By the end of FY 1999, 28 of the 39 projects are expected to be completed, and five more will be in operation. Beyond FY 1999, only two projects are expected to have outstanding obligation commitments. The Investment Continues to Pay Off The pre-commercial projects in the Clean Coal Technology Program continue to produce technologies that are being accepted by the energy industry. Commercial sales of low-NOx burners developed by Babcock & Wilcox and Foster Wheeler in the Clean Coal program continue to be made with installations on well over one-quarter of the coal-fired capacity in the United States. EER's gas reburning systems for NOx control have been sold to TVA and Baltimore Gas & Electric. The Pure Air Advanced Flue Gas Desulfurization System has been chosen to provide 1,600 megawatts of sulfur dioxide scrubbing capacity. The Airpol project has led to commercial sales in Ohio, Sweden and Taiwan. U.S. Steel Corp. has purchased a commercial replicate system based on the Blast Furnace Granulated Coal Injection project. All of these technologies are the products of the DOE Clean Coal Technology Program. Conclusion 21st Century Opportunities We fully expect fossil fuels to continue to make vital contributions to U.S. and global prosperity and a better quality of life. With advanced technology and a sustained commitment to partnerships with our research and engineering community, we can continue to use, and benefit from, fossil fuels. Our vision of the 21st century is one in which the United States retains its leadership in the development, use, and export of environmentally beneficial fossil energy technologies. By 2010, we believe we can establish the technological foundation for the “ultimate” energy-producing facility, one capable of power generating efficiencies approaching 60% or more and combined heat and power 18 efficiencies that could top 80% -- in essence, extracting virtually every useable energy unit from a hydrocarbon molecule.: We believe it will be technologically possible to develop a fossil fuel energy facility that has almost no impact on its surrounding environment, releasing virtually no smog- and acid-rain causing pollutants and adding no additional carbon dioxide to the world's greenhouse gases. We believe it is technologically possible to reverse the decline in domestic production of crude oil by the year 2005. We believe it is possible to add potentially huge new supplies of natural gas to our proven reserves, and by doing so, increase the contribution of this clean fossil fuel in our energy mix without large price impacts on consumers. We believe it is possible, with "breakthrough" research, to develop ways to ensure environmental protection, potentially slowing or reversing the buildup of global greenhouse gases through costeffective carbon management and sequestration technologies. In short, we believe there are technological opportunities that can resolve the conflict between energy production and environmental protection. But realizing those opportunities and taking maximum advantage of them will require a sustained commitment to government-industryacademic partnerships. These partnerships are the innovative strength of this Nation, and they will be the source of 21st century energy and environmental solutions. Our FY 1999 budget preserves the federal government's commitment to continue making investments in our future through these partnerships. Thank you for the opportunity to present our budget proposal. |