In addition, the New Technology Demonstration Program, established in 1990, works to reduce Federal sector energy costs and improve overall energy efficiency, introducing new energyefficient technologies to the Federal sector more quickly, thereby narrowing the gap between private-sector and Federal deployment rates of new technologies; by creating jobs in the manufacturing sector by spurring the use of new, energy-efficient, and environmentally beneficial technologies manufactured in the United States; and by helping Federal agencies implement pollution prevention strategies and reduce operations and maintenance costs. Because it takes over a year before results of New Technology Demonstrations are available and shared with Federal energy managers, FEMP launched a publication called Federal Technology Alerts. Federal Technology Alerts complement technology demonstrations, inform Federal energy and facility managers of technologies in the private and Federal sectors currently in use, and provide quick and cost-effective data for procurement decisions. Alerts typically include a description of the candidate technology; the results of its screening tests; a description of its performance, applications and field experience to date; a list of potential suppliers; and important contact information.

Question: Do you consider the commercialization of energy technologies to be an objective of the DOE's Federal Energy Management Program? Why?

Answer: No, and yes. The primary answer is no, as the FEMP mission is focussed on achieving energy efficiency in Federal facilities, and this translates into making sound investments in reliable, efficient technologies proven to save energy and money. In other words, technologies emerging from research and development, and as yet untested or proven in commercial application, are probably not good candidates for widespread use in Federal facilities. However, FEMP does see a limited commercialization role when a new technology has been proven in private sector commercial application, although perhaps at low volume, but has not been widely adopted in the Federal sector. FEMP tries to overcome information and unwarranted risk aversion barriers that might be preventing Federal acceptance of these technologies. This limited role may include cost-shared demonstration at a Federal site, inclusion in the Federal supply schedule, information dissemination in a Federal Technology Alert, inclusion of generic information in training courses, etc. As the single largest energy consumer, saver, and purchaser of energy consuming equipment in the Nation, Federal volume purchases of new, proven, highly efficient products and equipment can help drive down unit costs, create manufacturing and service employment, benefit the private consumer with lower prices, and allow American firms to be more cost competitive in world markets.

Both the Energy Policy Act of 1992 and Executive Order 12902 provide direction to FEMP to address the market impact of its purchases. A report responding to Section 165 is complete and is being circulated for review.

Question: Section 548 of the National Energy Conservation Policy Act requires each agency to furnish the Secretary of Energy with a description of the activities being carried out by each agency to reduce energy costs and energy consumption. Is the DOE receiving these annual reports?

Answer: Yes, all Federal agencies are required to report under Section 548 of the National

Energy Conservation Policy Act and submit information to the Department of Energy on an annual basis. The Office of Federal Energy Management Programs under the Assistant Secretary for Energy Efficiency and Renewable Energy within the Department of Energy has the responsibility for collecting information from Federal agencies on their efforts to reduce energy consumption within their facilities, vehicle fleets and operations. Information, both descriptive and quantitative from the previous fiscal year, is received from the agencies on an annual basis. It is aggregated at the agency level with no site specific detail, except as it might be included in anecdotal reports. This information serves as the basis for the Annual Report to Congress on Federal Government Energy Management and Conservation Programs. This report is prepared by the Office of Federal Energy Management Programs and contains an overview of the Federal energy management activities as a whole, energy management in buildings and facilities, energy intensive operations in Federal facilities, and energy management in vehicles and equipment. Also included in the report are brief descriptions of individual agency activities, on an aggregate basis, in energy management and conservation areas for that fiscal year. Progress is tracked against a 1985 baseline and information in the report is shown from that date to the latest reporting year. The information is provided in the report in various graphs, tables and charts as well as narrative descriptions. As specific agencies face downsized staff capabilities, they are delaying submittal and some are warning us that they may not have the capability for all their sites to report on their progress in the future.

TUESDAY, APRIL 16, 1996.

DEPARTMENT OF ENERGY

FOSSIL ENERGY

WITNESSES

PATRICIA FRY GODLEY, ASSISTANT SECRETARY FOR FOSSIL ENERGY, DEPARTMENT OF ENERGY

ROBERT S. KRIPOWICZ, PRINCIPAL DEPUTY ASSISTANT SECRETARY FOR FOSSIL ENERGY

GEORGE RUDINS, DEPUTY ASSISTANT SECRETARY FOR COAL TECHNOLOGY

MARVIN SINGER, DEPUTY ASSISTANT SECRETARY FOR ADVANCED RESEARCH AND SPECIAL TECHNOLOGIES

SANDRA L. WAISLEY, ACTING DEPUTY ASSISTANT SECRETARY FOR GAS AND PETROLEUM TECHNOLOGIES

CAPTAIN ERNEST HUNTER, DEPUTY ASSISTANT SECRETARY FOR NAVAL PETROLEUM AND OIL SHALE RESERVES

RICHARD FURGIA, DEPUTY ASSISTANT SECRETARY FOR STRATEGIC PETROLEUM RESERVES

CHARLES ROY, FINANCIAL SYSTEMS OFFICER

Mr. REGULA [presiding]. I call the committee to order, and today we have the Fossil Energy R&D program.

Ms. Godley, I am happy to welcome you. Your statement will be made part of the record, and you can summarize as you choose.

OPENING REMARKS

Ms. GODLEY. Thank you, Mr. Chairman, and it is a great pleasure for me to be before you again. The budget we are presenting to you today satisfies the commitment that we made to the President and that we made to this committee last year.

Mr. REGULA. Let me just say that I thought you did a pretty good job in giving us a responsible budget that recognizes the constraints.

Ms. GODLEY. Thank you. It's a commitment that we share, I think, with this committee as well as with the Administration, to certainly take our share of the pain that is required to reduce our Federal budget deficit; and to reinvent government by privatizing Elk Hills and offering that commercial oil for sale in the private sector, and to privatize the National Institute for Petroleum and Energy Research. The budget meets the national goals that we have discussed on several occasions, which we both share, allowing this country to continue using its true energy strengths.

On the easel that I have brought with us today at the end of the table, Mr. Chairman, we've enlarged the chart that's on the first page of our written testimony. I've blown this up to poster size be

cause it's important. I think that we don't lose sight of the three major messages that it conveys.

First, fossil fuels dominate today's energy portfolio in this country. Eighty-five percent of our energy consumption comes from coal, oil and natural gas. Our economy, quite simply, would not be the strongest in the world if it weren't for these fuels.

Second, energy demand in this country is going to continue to grow. Our Energy Information Administration predicts that overall energy consumption will increase 19 percent over the next two decades. By 2015, the pie on the top right will be 19 percent larger than its counterpart on the left.

Third, and perhaps most important, the contribution of fossil fuels to our energy mix will not decline when this increase occurs. In fact, the role of these fuels in our economy will continue to grow. The EIA projects that by the year 2015, 88 percent of our energy will come from fossil fuels.

In two key sectors of our energy economy, electric power generation and transportation, fossil fuels will remain dominant. In the power industry alone, EIA forecasts a 30 percent growth in electricity generation and the fossil energy share of that energy sector will grow at even a faster rate. That growth is largely dictated by the likely phase out of nuclear power plants whose licenses expire during that time period. In the transportation sector, we are a nation that is today almost wholly dependent on fossil fuels. Over the next 20 years, that fact will remain virtually unchanged.

So the task in front of us today and in front of the Nation, as we look to its future economic growth, is to determine how we're going to accommodate the growing contribution of fossil fuels that will occur while protecting our environment and minimizing the security threat to the U.S. that comes from relying on some supplies of these fuels that are beyond our control.

Advanced technology is essential. It is a requirement in our ability to meet these goals. There is a clear and necessary Federal role in achieving the national objectives of affordable, secure energy and a safe environment. The importance of the Federal role is not declining.

As I've described in more detail, in my opening statement-the electric power industry is confronted with uncertainties, the magnitude of which that industry sector has never before experienced. As a result, it's becoming ultra-cautious, cutting back on its costs and looking for every competitive edge that avoids undue speculation.

This is a situation that creates severe disincentives for private sector R&D. As you know, membership in the Electric Power Research Institute is dropping. R&D investments across the board in the private sector are declining. Anything that doesn't have a di

rect

Mr. REGULA. Is this the threat of deregulation that's contributing to the problems that you're outlining?

Ms. GODLEY. Yes, deregulation and the increased competition that's being foreseen in that industry. Companies are as wanting to cut their risks and be able to face competition more strongly, cutting back, of course, first and foremost in the area of R&D.