Solar Lobby's Request: Needed Increase: $130 million $ 23.5 million $106.5 million SOLAR LOBBY'S ASSUMPTIONS ABOUT SOLAR IN FEDERAL BUILDINGS... • In an era of budget-cutting, most federal departments and agencies are loathe to increase their building budgets to pay for solar equipment and thus need outside support from DOE. • Federal rhetoric on its commitment to solar energy development does not speak as convincingly as federal example. • By guaranteeing the purchase of solar products, the government would introduce a measure of stability into a market now too much in flux. • By increasing production volume, a sensible federal solar-procurement effort would reduce unit costs of solar equipment. • The federal experience would provide producers and users of solar equipment with invaluable data on systems operations and maintenance requirements. REORGANIZING DOE * Any discussion of wind, photovoltaic, and biomass programs eventually hits upon the issue of DOE's structural capacity to manage the solar program. That structure is inadequate. Besides creating jurisdictional problems for Congress, the tripartite division of offices concerned with renewable energy into basic research, technology development, and commercialization components makes conducting a coherent solar program well-nigh impossible. Another source of confusion is the status of the "Resource Managers" within the directorate of Conservation and Solar Applications. One resource manager oversees commercialization of “small wind," another the commercialization of "wood combustion." With neither staff nor money, these "Resource Managers" are themselves without resources. At the same time, some resources are without full-fledged managers. C&SA's Federal Photovoltaic Utilization Program, for example, has no "resource manager." Another status was conferred upon its administrator-presumably because DOE believes that photovoltaics are not ready for commercialization. Yet, FPUP's administrator does have funds to disburse (and, arguably, some photovoltaics are ready). One major managerial problem cuts across programs the way management itself should but doesn't. Many conservation programs now cover direct solar applications, but the felt lack of interprogram coordination reduces the impact of these programs. To be sure, the logic of bringing both the solar and conservation components of the federal buildings program under the same management is impeccable. So is that of unifying supervision of the solar demonstration program, the solar and conservation retrofit program, and the federal energy-management program-or, for that matter, the schools and hospitals program, the building energy performance standards section, and the residential conservation service program. But logic and reality part ways in DOE's organization chart. A third example of program mismanagement can be found in the biomass program, where internal problems abide in the face of perceptible improvements. One problem is discontinuity. The program directorship changed hands four times during 1978, and many of the 20 program staff positions have been upgraded within DOE, leaving critical vacancies. As a result, a professional staff of only three or four people administers a program that could con tribute the equivalent of 3.5 million barrels of oil per day by the century's end. Another problem is a lack of perspective and knowledge. For example, DOE and its predecessor agencies have misguidedly treated biomass as a minor, long-term supply option. Until 1977, in fact, program documents contained gross underestimates of biomass' energy potential. Staffing policies represent a fourth organizational failing. All who work with and within the DOE solar program concur that it is understaffed. Only three full-time professionals now administer the $110-million (FY-79 Budget Authority) photovoltaic-development program within Energy Technology; the $60-million wind-resources program is run by two professional staff; and one person takes responsibility for the three-year, $98-million Federal Photovoltaic Utilization Program. The causes of the personnel shortage seem only slightly less obvious than the effects. First, many staff slots allocated to individual programs have been reassigned to the senior DOE management. For example, only seven of the 19 administrative positions apportioned to the biomass program during FY-79 remained in the program once in-house promotions took place. Second, DOE moves unconscionably slowly to fill openings: an average of nine months elapses from the time the hiring process begins until the new employee reports to work. Finally, conservation programs and renewable resources programs are assigned too few Energy Executive Service (EES) personnel. Conservation and solar activities (in both Conservation and Solar Applications and Energy Technology) have been accorded about 25 employment slots. In contrast, 115 EES employees work in the remaining Energy Technology programs-predominantly fossil and nuclear energy. Energy Technology activities other than solar programs command over 2.5 times the proposed funding that all solar and conservation programs do but almost five times as many EES personnel. Clearly, talent will be laid waste and initiatives will stall in such a set-up. Senior officials at DOE and in the White House have said as much. But how can DOE's organization be improved? One idea given voice when DOE was formed, and worth reconsidering now, is to establish two undersecretarial positions. One undersecretary would administer programs related to fossil fuel technologies, nuclear technologies, and defense programs. The other would shoulder responsibility for programs of energy conservation, renewable energy resources development, and environmental assessment. Alternative proposals for reorganization amendments have been drafted by the Solar Lobby and like-minded groups: the overriding point here is that DOE's organizational structure must be refashioned. Attaching a reorganization amendment to the FY-80 budget authorization could stir up some consternation in DOE and perhaps even provoke jurisdictional disputes between Congressional committees. These risks must be borne, however, since the only reorganization DOE appears able to manage will be that forced upon it by Congress. 32-33 APPENDIX J ENERGY FOR RURAL AMERICA BACKGROUND In the spring of 1978, President Carter asked two senior White House aides, his Assistant for Intergovernmental Affairs and his Assistant for Domestic Policy, to organize a special, Administration-wide effort to deal with the problems of small town and rural America. The President's directive has resulted in a series of White House Rural Development Initiatives undertaken to address pressing problems and to coordinate and improve the delivery of federal programs in the areas of rural health, transportation, communications, housing, water and sewer, energy, credit, and economic development. A number of important results have already been achieved. For example: In October 1978, the Vice President announced an agreement among HEW, FmHA, and DOL to construct 300 rural primary health care clinics over the next three years and to train up to 1000 people to serve as support staff in these clinics; In December 1978, the President announced an agreement among EPA, EDA, HUD, FmHA, and CSA to coordinate and improve the delivery of over $2.5 billion in water and sewer assistance annually to small towns and rural areas; also announced was a joint program between DOL and EPA to provide either entry level or upgrade training for 1750 economically disadvantaged rural Americans to operate rural water and wastewater treatment facilities; In January 1979, measures were announced to enable isolated rural residents to gain greater access to essential services through modern communications technology; included were FCC regulatory changes, the targetting of REA and other loan programs to extend commercial TV to rural residents, and nearly $20 million in grants to support demonstrations of innovative ways to deliver public services to rural areas through improved communications technology; and In January 1979, a $7.5 million set-aside was announced to build six demonstration rural elderly congregate housing projects, with social services provided on-site; since that announcement the program has been expanded to cover 10 sites and to make routine the consideration of social service needs when such facilities are planned. As work progresses in the other areas, extensive consultation is being undertaken with state and local elected officials, members of Congress, rural interest groups, and others to formulate a comprehensive national small town and rural development policy in order to provide a context for continuing problem solving efforts, additional administrative reform, and possibly new legislation. The President announced his intention to undertake this policy review in his 1979 State of the Union Message, and is expected to announce his small town and rural development policy by mid-summer 1979. THE PRESIDENT'S ENERGY POLICY In his energy speech to the nation on April 5, 1979, the President reaffirmed the three basic goals of his energy policy: to increase domestic energy production, to encourage greater energy conservation, and to stimulate the use of our vast technological resources to develop alternative energy sources so that we can reduce our dependence on imported oil. In addition to his announcement of a phased program for decontrolling domestic oil prices, a plan to establish an Energy Security Fund through a windfall profits tax, and additional conservation measures to achieve the goal of a five percent reduction in energy consumption, President Carter placed an increased emphasis on alternative energy sources, including gasohol, wood, smallscale hydroelectric, and solar energy. This increased emphasis on alternative energy sources has special significance for rural America, as reflected in the rural energy initiatives described below-the first in what will be a continuing series of such efforts. RURAL ENERGY INITIATIVES Included in these first steps to provide a more dependable and affordable supply of energy for rural America are: An interagency agreement to coordinate the technical assistance and engineering resources of DOE, the Bureau of Reclamation, and the Corps of Engineers with over $300 million in fiscal year 1979-1981 grant, loan, and loan guarantee resources from FmHA, EDA, REA, HUD, and CSA for the purpose of encouraging and stimulating the construction of up to 100 small-scale hydroelectric projects by 1981, and up to 300 projects by 1985; An agreement among DOE, EDA, and CSA to provide technical and financial assistance for the construction of up to 100 small-scale plants by the end of fiscal year 1981 to produce alcohol as a transportation fuel (gasohol); A Presidential directive to OSHA, EPA, and the Bureau of Alcohol, Tobacco, and Firearms (BATF) to coordinate and clarify application, licensing, and other regualtory requirements and procedures, and to thereby dramatically simplify associated reporting requirements as they apply to producers of alcohol as a transportation fuel; A $700,000 grant from DOE to the American Public Gas Association to initiate the first phase of a project to test the technical and commercial feasibility of utilizing natural gas from coal or shale in six demonstration communities (the total grant-subject to successful completion of the first phase-is $3.8 million); if the pilot projects demonstrate that dependable gas supplies can be produced for residential, commercial, and industrial uses from these "unconventional" sources at competitive prices, FmHA, REA, EDA, and other agencies will provide grant, loan, and loan guarantee assistance to eligible applicants to develop this abundant resource for local community and economic development; Allocation of $1.25 million in DOE and EDA grant funds to as many as 20 rural Economic Development Districts to develop integrated economic development/ energy plans, and to give special attention to the potential of utilizing alternative energy sources (e.g., hydropower, natural gas from coal, wood-fired power generation) and energy conservation to stimulate development and create jobs; and A set-aside of 1,000 slots from DOL's CETA program for each of the next two fiscal years (1980 and 1981) and establishment of special training programs to place economically disadvantaged rural youths in jobs created by the construction of small-scale hydroelectric, gasohol, and unconventional gas production facilities. Besides seeking to stimulate the development of alternative energy resources, these initiative reflect the strategy, implicit in the President's April 5 energy speech, to encourage a decentralized and dispersed approach to energy development-to enable individual communities, industrial parks, farmers, farmer cooperatives, and other small-scale users to develop local energy resources for local utilization. This approach, which focuses on local initiative and which is designed to test the viability of alternative technologies, is expected to help many rural communities achieve dependable and affordable energy supplies and, in the aggregate, to play a significant role in reducing oil imports. In addition, special measures are being taken to assure adequate supplies of natural gas, diesel fuel, and gasoline to farmers and rural Americans who have a special dependence on these energy sources for their livelihood. These measures include: Under the Natural Gas Policy Act of 1978, final determination by the Secretary of Agriculture that 100 percent of current requirements of natural gas for full food and fiber production will be protected from curtailments (e.g., natural gas as a feedstock and fuel in the manufacture of fertilizer, or as power for irrigation pumping and crop drying); Under DOE's Economic Regulatory Administration (ERA) 4 percent of middle distillate fuels (including diesel fuels) planned for delivery into a state must be set aside for redistribution by participating states to meet energy and hardship needs; suppliers have been requested to give first priority to agricultural requirements for diesel fuel, with remaining supplies to be prorated to other customers; if necessary, Presidential action will be taken under standby authority in the Emergency Petroleum Allocation Regulations to ensure adequate diesel supplies for essential agricultural users; and Re-allocation by the Economic Regulatory Administration of gasoline supplies among major suppliers to ensure that the needs of agriculture and farm markets continue to be given the highest user priority, and establishment of relatively larger percentages of gasoline supplies in the State Ration Reserve for those predominately rural states where residents are highly dependent on the automobile residents are highly dependent on the automobile and must drive longer distances than their urban counterparts. For the purpose of placing these initiatives in a broader perspective and indicating the potential, near-term significance of the increased emphasis on "unconventional" technologies, a brief discussion of small hydro, unconventional gas, gasohol, wood, and solar agricultural and industrial process heat follows. |