Department of Energy: Fossil Energy Programs (Letter Report, 01/30/98,
GAO/RCED-98-63).

Pursuant to a congressional request, GAO reviewed the Department of
Energy's (DOE) Fossil Energy Research and Development (R&D) program and
Clean Coal Technology Demonstration program, focusing on the: (1) R&D
goals and technologies being developed by the Fossil Energy R&D and
Clean Coal Technology Demonstration programs; (2) level of funding
committed to R&D activities within these programs in fiscal years (FY)
1996 through 1998; and (3) companies receiving R&D awards (during these
fiscal years) in which the government contributed more than $1 million.

GAO noted that: (1) DOE's overall R&D goal for its Fossil Energy R&D and
Clean Coal Technology Demonstration programs is to improve the
efficiency and environmental performance of current methods for
producing and using coal, natural gas, and petroleum; (2) for coal, this
improvement translates into R&D efforts by both programs to develop and
demonstrate technologies that efficiently removes potential
environmental pollutants from coal prior to its use; (3) improvement
also means the development of technologies that either generate
electricity from coal more efficiently than current technologies or that
can generate electricity from liquids and gases derived from coal; (4)
for natural gas and petroleum, DOE is focusing its efforts on improving
drilling, storage, transportation, and combustion technologies and
processes associated with locating, extracting, and using the resources;
(5) DOE obligated or plans to obligate about $1.3 billion for R&D
activities sponsored by the two programs during FY 1996 through FY 1998;
(6) the Fossil Energy R&D program provides $856 million, $743 million of
which has been or will be spent on activities in the applied research
and development phases of R&D the remainder will be spent for basic
research; (7) the Clean Coal Technology Demonstration program accounts
for about $417 million of the $1.3 billion in obligations; (8) because
the program concentrates its efforts on technologies that have completed
laboratory and field testing, the program obligated funds exclusively on
technologies in the demonstration phase of R&D (9) in addition, DOE
obligated or plans to obligate about $307 million for the management of
the programs and other non-R&D activities; (10) for the 3 fiscal years
examined, DOE's fossil energy programs made or continued 162 R&D
contracts and other types of assistance in which the government
committed to spend more than $1 million; (11) these procurement awards
involved 112 companies and other nonfederal participants; (12) the
largest of these awards generally went to companies participating in the
Clean Coal Technology Demonstration program; and (13) many of these
awards were for projects that spanned several years and were partly
funded by the companies.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  RCED-98-63
     TITLE:  Department of Energy: Fossil Energy Programs
      DATE:  01/30/98
   SUBJECT:  Budget obligations
             Cost sharing (finance)
             Research and development
             Research program management
             Energy research
             Future budget projections
             Fossil fuels
             Energy industry
IDENTIFIER:  DOE Clean Coal Technology Program
             DOE Fossil Energy Research and Development Program
             
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Cover
================================================================ COVER


Report to the Chairman, Committee on the Budget, House of
Representatives

January 1998

DEPARTMENT OF ENERGY - FOSSIL
ENERGY PROGRAMS

GAO/RCED-98-63

Fossil Energy Programs

(141133)


Abbreviations
=============================================================== ABBREV

  DOE - Department of Energy
  R&D - Research and Development

Letter
=============================================================== LETTER


B-278987

January 30, 1998

The Honorable John R.  Kasich
Chairman, Committee on the Budget
House of Representatives

Dear Mr.  Chairman: 

The Department of Energy's (DOE) fiscal year 1998 appropriations
provide about $362 million for the Fossil Energy Research and
Development (R&D) Program and rescinds about $101 million of the $2.4
billion in appropriations for the related Clean Coal Technology
Demonstration Program.\1 These two programs are managed by DOE's
Office of Fossil Energy to develop and demonstrate advanced
technologies for producing and using fossil fuels through federally
funded projects and cost-shared partnerships with industries.  As
agreed with your office, this report provides information on (1) the
R&D goals and technologies being developed by the Fossil Energy R&D
and Clean Coal Technology Demonstration programs, (2) the level of
funding committed to R&D activities within these programs in fiscal
years 1996 through 1998, and (3) the companies receiving R&D awards
(during these fiscal years) in which the government contributed more
than $1 million.\2

We categorized R&D activities as basic research, applied research,
development, and demonstration.  Appendix I provides the definitions
used in this report for these R&D phases. 


--------------------
\1 Between 1985 and 1992, the Congress passed several appropriation
acts that provided $2.7 billion for the Clean Coal Technology
Demonstration Program that would remain available until the funds
were expended, rescinded, or sequestered.  These funds have been
reduced through recissions and sequestrations, including the fiscal
year 1998 recission, to about $2.3 billion.  DOE officials can
continue to use remaining funds to complete ongoing or new projects. 
During fiscal year 1998, DOE intends to obligate (i.e., commit to
spend) about $220 million. 

\2 Unless stated otherwise, this report discusses funding in terms of
actual and estimated obligations, which are funds that DOE has
committed or will commit to spend during a fiscal year.  DOE
generally commits to spend funds by awarding contracts and
cooperative agreements or agreeing to fund specific activities that
are included under such agreements. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

DOE's overall R&D goal for its Fossil Energy R&D and Clean Coal
Technology Demonstration programs is to improve the efficiency and
environmental performance of current methods for producing and using
coal, natural gas, and petroleum.  For coal, this improvement
translates into R&D efforts by both programs to develop and
demonstrate technologies that efficiently remove potential
environmental pollutants from coal prior to its use.  Improvement
also means the development of technologies that either generate
electricity from coal more efficiently than current technologies or
that can generate electricity from liquids and gases derived from
coal.  For natural gas and petroleum, DOE is focusing its efforts on
improving drilling, storage, transportation, and combustion
technologies and processes associated with locating, extracting, and
using the resources. 

DOE obligated or plans to obligate about $1.3 billion for R&D
activities sponsored by the two programs during fiscal years 1996
through 1998.\3 The Fossil Energy R&D Program provides $856 million,
$743 million of which has been or will be spent on activities in the
applied research and development phases of R&D the remainder will be
spent for basic research.  The Clean Coal Technology Demonstration
Program accounts for about $417 million of the $1.3 billion in
obligations.  Because the program concentrates its efforts on
technologies that have completed laboratory and field testing, the
program obligated funds exclusively on technologies in the
demonstration phase of R&D.  In addition, DOE obligated or plans to
obligate about $307 million for the management of the programs and
other non-R&D activities. 

For the 3 fiscal years examined, DOE's fossil energy programs made or
continued 162 R&D contracts and other types of assistance in which
the government committed to spend more than $1 million.  These
procurement awards involved 112 companies and other nonfederal
participants.  The largest of these awards generally went to
companies participating in the Clean Coal Technology Demonstration
Program.  Many of these awards were for projects that spanned several
years and were partly funded by the companies. 


--------------------
\3 The data provided in this report regarding funds DOE obligated or
plans to obligate for the Fossil Energy R&D and Clean Coal Technology
Demonstration programs are as of December 1997. 


   BACKGROUND
------------------------------------------------------------ Letter :2

The Fossil Energy R&D Program and the Clean Coal Technology
Demonstration Program support the research, development, and
demonstration of a variety of coal, natural gas, and petroleum
technologies.  The Fossil Energy R&D Program, which has been part of
DOE since it was created in the 1970s, supports R&D which DOE expects
to lead to technologies that will be used by electric utilities and
other industries.  If the program is successful in developing
commercially viable technologies, DOE expects that these technologies
will be significantly more efficient and environmentally acceptable
than fossil fuel burning technologies used today.  The program
includes a broad spectrum of basic and applied research and
development, some of which is cofunded by industry. 

The Clean Coal Technology Program, which was authorized in 1984, is a
partnership between government and industry for sharing the costs of
commercial-scale projects that DOE believes can be more efficient
than current coal technologies.  The Congress has appropriated a
total of $2.3 billion for the program, which has been implemented
through a series of competitive solicitations of projects.  Each
project is carried out and funded under a cooperative agreement
between DOE and the project's sponsor.  DOE funds up to 50 percent of
a project's cost, and the project's sponsor and other nonfederal
participants fund the balance. 


   GOALS AND TECHNOLOGIES
   SUPPORTED BY DOE'S FOSSIL
   ENERGY PROGRAMS
------------------------------------------------------------ Letter :3

For program management and budget purposes, DOE has organized its
Fossil Energy R&D Program into five major R&D areas, several of which
are further divided into subprograms.  The general goal of work in
these areas--together with the Clean Coal Technology Demonstration
Program--is to improve the utilization of fossil fuels by improving
facets of the production, delivery, and/or use of coal, natural gas,
and petroleum.  Table 1 summarizes the subprograms' goals and
provides examples of technologies addressed by these major program
areas.  Appendix II presents additional details on goals and
technologies for activities within the subprograms. 



                                         Table 1
                         
                          Goals and Technologies of DOE's Fossil
                            Energy R&D Program and Clean Coal
                             Technology Demonstration Program

Program            Subprograms             Goals                   Technologies
-----------------  ----------------------  ----------------------  ----------------------
Coal               Advanced clean fuel     Develop highly          Chemical cleaning
                   research; advanced      efficient integrated    processes, fluidized
                   clean/efficient power   coal combustion         bed combustion,
                   systems; advanced       technologies.           Fischer-Tropsch
                   research and                                    liquefaction
                   technology development

Gas                Natural gas research;   Improve exploration     Reservoirs modeling,
                   fuel cells              and production          corrosion resistant
                                           technologies, gas       materials, and solid
                                           turbines, and chemical  oxide fuel cell system
                                           fuel cell systems.

Petroleum          Oil technology          Produce economically,   Microbes, thermal, and
                                           hard to reach oil and   other oil extraction
                                           improved refinery       techniques; improved
                                           technologies.           environmental
                                                                   compliance
                                                                   technologies

Cooperative R&D    None                    Improve basic           Variety of
                                           scientific information  collaborative fossil
                                           available on the use    energy R&D activities
                                           of fossil fuels.

Mining             Materials               Develop extended life   Advanced processes for
                                           and better performance  producing metal alloys
                                           for material in
                                           corrosive and high-
                                           temperature
                                           applications.

Clean Coal         Advanced electric       Develop more efficient  Low nitrogen oxide
Technology         power generation        and environmentally     coal emissions
Demonstration      systems,                acceptable coal         systems, coal
                   environmental control   technologies for        gasification or
                   devices, coal           electric utilities and  fluidized bed
                   processing for clean    industry.               combustion systems
                   fuels, and industrial                           integrated into
                   applications                                    electric power plants
-----------------------------------------------------------------------------------------
Source:  Developed by GAO using DOE's data. 


   FISCAL YEARS 1996 THROUGH 1998
   FUNDING FOR DOE'S FOSSIL ENERGY
   R&D AND CLEAN COAL TECHNOLOGY
   DEMONSTRATION PROGRAMS
------------------------------------------------------------ Letter :4

As of December 1997, DOE obligated or planned to obligate about $1.3
billion (or about 75 percent) of its fiscal years 1996 through 1998
funding on R&D activities within the Fossil Energy R&D and Clean Coal
Technology Demonstration programs.  (See table 2.) The remaining
funds were obligated or were to be obligated for environmental
restoration, program management, and other non-R&D activities. 



                                Table 2
                
                  Summary of Fiscal Years 1996 Through
                  1998 Obligations for R&D and Non-R&D
                  Programs Within Two of DOE's Fossil
                            Energy Programs

                         (Dollars in millions)

Activity/program                FY          FY          FY
area                          1996        1997        1998       Total
----------------------  ----------  ----------  ----------  ----------
Research and Development
----------------------------------------------------------------------
Fossil Energy R&D           $296.2      $286.2      $273.7      $856.1
Clean Coal Technology         30.6       182.2       204.1       416.9
 Demonstration
======================================================================
Subtotal                     326.8       468.4       477.8   $ 1,273.0

Non-Research and Development
----------------------------------------------------------------------
Fossil Energy R&D             85.3        85.8        87.6       258.7
Clean Coal Technology         16.0        16.0        15.9        47.9
 Demonstration
======================================================================
Subtotal                     101.3       101.8       103.5       306.6
======================================================================
Total                       $428.1      $570.2      $581.3    $1,579.6
----------------------------------------------------------------------
Source:  Developed by GAO using DOE's data. 


      FISCAL YEARS 1996 THROUGH
      1998 FUNDING FOR R&D
      ACTIVITIES
---------------------------------------------------------- Letter :4.1

As of December 1997, DOE obligated or planned to obligate about $1.3
billion for fiscal years 1996 through 1998 R&D activities sponsored
by the two programs.  About $743 million (or about 87 percent) of the
Fossil Energy R&D Program's funding has been or will be spent on
activities in the applied research and development phases of R&D. 
(See table 3.) Projects in these phases are in the laboratory for
research or small-scale testing and are not ready to be tested under
commercial operating conditions.  About $113 million (or about 13
percent) of the program's funding has been or will be spent on basic
research.  In addition, about $417 million has been or will be spent
by the Clean Coal Technology Demonstration Program on projects to
demonstrate the commercial feasibility of technologies.  Projects in
this phase are closest to the marketplace in terms of eventual
commercialization. 



                                         Table 3
                         
                         Estimated Obligations by Research Phase
                          for R&D Activities Within Two of DOE's
                         Programs, Fiscal Years 1996 Through 1998

                                  (Dollars in millions)

                        Basic       Applied
Program              research      research     Development   Demonstration         Total
---------------  ------------  ------------  --------------  --------------  ------------
Fossil Energy R&D
-----------------------------------------------------------------------------------------
Coal                    $59.9        $167.1          $102.2               0        $329.2
Gas                      25.0         173.0           144.9               0         342.9
Petroleum                 7.7          72.7            70.0               0         150.4
Cooperative R&D           4.4           4.4             8.8               0          17.6
Mining R&D               16.0             0               0               0          16.0
=========================================================================================
Total                  $113.0        $417.2          $325.9               0        $856.1
Clean Coal                  0             0               0          $416.9        $416.9
 Technology
 Demonstration
-----------------------------------------------------------------------------------------
Source:  Developed by GAO using DOE's data. 

Appendixes III and IV have a comprehensive listing of R&D funding by
phase for each Fossil Energy R&D subprogram and activity and for the
Clean Coal Technology Demonstration Program, respectively, for fiscal
years 1996 through 1998. 


      FISCAL YEARS 1996 THROUGH
      1998 FUNDING FOR NON-R&D
      ACTIVITIES
---------------------------------------------------------- Letter :4.2

DOE obligated or plans to obligate an additional $307 million to
manage the programs and other non-R&D activities in fiscal years 1996
through 1998.  Of these funds, about $250 million (or about 81
percent) is or will be obligated for program direction and management
support.  (See table 4.) Program direction and management support
includes funding for salaries and benefits, travel, administrative
services, and other related activities.  Other non-R&D funds will be
used to improve the physical infrastructure at DOE research sites,
clean up environmental damage caused by DOE's activities at its
research sites, and promote coal technology export programs. 

A description of the non-R&D activities funded by the two programs is
included in appendix V. 



                                Table 4
                
                Budget Obligations for Non-R&D Programs
                Within Two Energy Programs, Fiscal Years
                           1996 Through 1998

                         (Dollars in millions)

                                      Budget obligations
                        ----------------------------------------------
Program                    FY 1996     FY 1997     FY 1998       Total
----------------------  ----------  ----------  ----------  ----------
Fossil Energy R&D
----------------------------------------------------------------------
Program direction and        $65.6       $68.7       $66.1      $200.4
 management support
Environmental                 14.4        12.6        13.3        40.3
 restoration
Coal\a                           0           0         3.3         3.3
Fuels Program                  2.4         2.4         2.2         7.0
Plant and capital              2.9         2.1         2.7         7.7
 equipment
======================================================================
Total                       $ 85.3       $85.8       $87.6      $258.7

Clean Coal Technology Demonstration
----------------------------------------------------------------------
Program direction and          $16         $16       $15.9       $47.9
 management support
----------------------------------------------------------------------
\a These funds are used for coal technology export, support of
international activities, and grants to colleges and universities, as
discussed in app.  V. 

Source:  Developed by GAO using DOE's data. 


   COMPANIES RECEIVING FUNDS
   DURING FISCAL YEARS 1996
   THROUGH 1998
------------------------------------------------------------ Letter :5

DOE uses contracts, grants, and cooperative agreements to encourage
industry participation and cost-sharing in R&D activities.  During
fiscal years 1996 and 1997 and fiscal year 1998 through December 16,
1997, 112 companies received 162 awards to conduct R&D activities. 

The Clean Coal Technology Demonstration Program made the largest
award, which was for $219 million.  Other awards made by the program
ranged from $490,000 to $183 million.  (See table 5 for a list of the
program's 10 largest awards.) Many of the active awards are for
projects that span several years and are being partly matched by the
companies.  Because many of the current projects involve the
demonstration of technologies at large electric power plants, the
government's share of the cost of these projects is generally more
expensive than research activities funded by the Fossil Energy R&D
Program. 



                                         Table 5
                         
                          Projects and Companies Associated With
                          the Most Costly Demonstration Projects

                                  (Dollars in millions)

                                     Typical non-            Government
Principal          Description of    DOE                          share    Industry share
participant\a      project           team member\b             of costs          of costs
-----------------  ----------------  ----------------  ----------------  ----------------
Wabash River Coal  Wabash River      PSI Energy,Inc.,            $219.1            $219.1
Gasification       Coal              Destec Energy,
Repowering         Gasification      Inc.
Project Joint      Repowering
Venture            Project

Clean Energy       Clean Energy      Fuel Cell                   $183.3            $657.8
Partners, L.P.     Demonstration     Engineering
                   Project           Corp., Electric
                   (fuel cell)       Power Research
                                     Institute

Tampa Electric     Tampa Electric    Texaco                      $171.0            $172.5
Company            Integrated        Development
                   Gasification      Corp., General
                   Combined Cycle    Electric Company
                   Project

Sierra Pacific     Pinion Pine       Foster Wheeler                $168            $167.9
Power Company      Integrated        USA Corp.,The M.
                   Gasification      W. Kellogg
                   Combined Cycle    Company
                   Power Project

CPICOR Management  Clean Power From  Geneva Steel                $149.5            $916.3
Company, L.L.C.    Integrated Coal/  Company, Air
                   Ore Reduction     Products and
                   (CPICOR)          Chemicals, Inc.

Alaska Industrial  Healy Clean Coal  Golden Valley               $117.3            $124.8
Development and    Project           Electric Assn.,
Export Authority                     TRW, Inc.

City of Lakeland,  McIntosh Unit 4B  Foster Wheeler              $109.2            $109.5
Fla.               Topped            Energy Corp.,
                   Pressurized       Westinghouse
                   Bubbling          Electric Corp.
                   Fluidized-Bed
                   Combustion
                   Demonstration
                   Project

City of Lakeland,  McIntosh Unit 4A  Foster Wheeler               $93.3             $93.3
Fla.               Bubbling          Energy Corp.,
                   Fluidized-Bed     Westinghouse
                   Combustion        Electric Corp.
                   Demonstration
                   Project

Air Products       Liquid Phase      Air Products and             $92.7            $121.0
Liquid Phase       Methanol          Chemicals Inc.,
Conversion         Demonstration     Eastman Chemical
Company, L.P.                        Company

York County        Advanced          Foster Wheeler               $74.7            $304.9
Energy Partners,   Circulating       Energy Corp.
L.P.               Fluidized-Bed
                   Demonstration
                   Project
-----------------------------------------------------------------------------------------
\a Companies receiving awards from DOE may represent or lead teams of
multiple contractors.  In these cases, the lead company may divide
the government's share of costs among team members. 

\b All partners have not been listed. 

Source:  Developed by GAO using DOE's data. 

Within the Fossil Energy R&D Program, DOE's 10 largest awards for R&D
activities ranged from $29 million to $128 million.\4 (See table 6.)
Six of these companies received multiple awards.  Westinghouse
Electric Corporation received four awards; the total government share
of these awards was $296.4 million.  Each company provided some
matching funds. 



                                Table 6
                
                 Projects and Companies Associated With
                  the Most Costly R&D Projects Active
                 During Fiscal Years 1996 Through 1998

                         (Dollars in millions)

                                    Governme  Indust
                                          nt      ry
                            Number     share   share  Description of
                                of        of      of  largest
Company\a                   awards     costs   costs  award
--------------------------  ------  --------  ------  ----------------
Westinghouse Electric            4    $296.4  $340.2  Utility advanced
 Corp.                                                 turbine systems
Foster Wheeler Development       1    $127.9   $71.6  Coal-fired high-
 Corp.                                                 performance
                                                       power systems
General Electric Co.             2    $121.1  $263.7  Utility advanced
                                                       turbine systems
Energy Research Corp.            1    $101.7   $39.7  Molten carbonate
                                                       fuel cells
United Technologies Corp.        2     $91.6   $49.4  Coal-fired high-
                                                       performance
                                                       power systems
M-C Power Corp.                  2     $87.7   $46.2  Molten carbonate
                                                       fuel cells
Air Products & Chemicals         3     $58.1   $62.9  Fuels and
                                                       chemicals from
                                                       synthetic gas
Riley Stoker Corp.\b             1     $44.3   $12.1  Low-emission
                                                       boiler systems
Combustion Engineering           2     $31.3   $28.4  Low-emission
                                                       boiler systems
Fuel Cell Engineering            1     $28.8   $24.8  Molten carbonate
 Company                                               fuel cells
----------------------------------------------------------------------
\a Companies receiving awards from DOE may represent or lead teams of
multiple contractors.  In these cases, the lead company may divide
the government's share of costs among team members. 

\b Riley Stoker Corp., now called DB Riley, Inc., was competing with
Combustion Engineering and Babcock and Wilcox Co.  for the design and
development of a low- emission boiler system.  During September 1998,
DOE selected DB Riley, Inc., over the other companies to continue the
development of the technology. 

Source:  Developed by GAO using DOE's data. 

Appendix VI provides additional detail on both programs' awards that
will cost the government more than $1 million over the life of the
project. 


--------------------
\4 DOE also contracts for management of the National Institute for
Petroleum Research in Bartlesville, Oklahoma, and the Pittsburgh
Energy Technology Center.  These contracts are valued at about $215
million and $97 million, respectively. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :6

We provided copies of a draft of this report to DOE for review and
comment.  We discussed the draft with DOE officials, including the
Principal Deputy Assistant Secretary for Fossil Energy, who stated
that the report effectively summarized the programs' goals, funding,
and participants.  DOE provided us with technical corrections and
clarifications that we incorporated where appropriate. 


   SCOPE AND METHODOLOGY
------------------------------------------------------------ Letter :7

To identify the programs' goals and technologies, we interviewed
officials in DOE's Office of Fossil Energy and reviewed documents
such as the fiscal year 1998 budget request for the programs and the
October 1997 update on the Clean Coal Technology Demonstration
Program that discussed the program's goals and activities.  To
determine the programs' funding by R&D phrases and to identify the
companies receiving these funds, we obtained detailed funding data
for fiscal years 1996 through 1998 from DOE that identified the
government's cost and total value of contracts active during this
period and the companies receiving these procurement awards.  We also
interviewed DOE officials in the Office of Fossil Energy who compiled
this funding information to discuss the assumptions that the
officials used to prepare the information and its general
reasonableness.  However, we did not independently verify or validate
the data provided to us. 


---------------------------------------------------------- Letter :7.1

As arranged with your office, unless you publicly announce its
contents earlier, we plan no further distribution of this report
until 15 days after the date of this report.  At that time, we will
send copies to the Secretary of Energy and make copies available to
others on request. 

Please call me at (202) 512-3841 if you or your staff have any
questions about this report.  Major contributors to this report
include Robin Nazzaro and Robert Lilly. 

Sincerely yours,

Susan Kladiva
Associate Director
Energy, Resources, and Science Issues


DEFINITIONS OF RESEARCH AND
DEVELOPMENT PHASES
=========================================================== Appendix I

Basic Research:  Systematic study directed toward greater knowledge
or understanding of the fundamental aspects of phenomena and of
observable facts without specific applications towards processes or
products in mind. 

Applied Research:  Systematic study to gain the knowledge or
understanding necessary to determine the means by which a recognized
and specific need may be met. 

Development:  Systematic application of knowledge toward the
production of useful materials, devices, and systems or methods,
including the design, development, and improvement of prototypes and
new processes to meet specific requirements. 

Demonstration:  Demonstration of advanced technologies to promote
marketplace entry. 

Source:  Department of Energy (DOE). 


DOE'S FOSSIL ENERGY RESEARCH AND
DEVELOPMENT PROGRAM'S R&D GOALS
AND TECHNOLOGIES BY BUDGET
CATEGORY
========================================================== Appendix II

The following presents brief descriptions of the goals and
technologies associated with DOE's Fossil Energy Research and
Development (R&D) Program's R&D-related activities. 


   ADVANCED CLEAN FUELS RESEARCH
-------------------------------------------------------- Appendix II:1

The overall goal of the Advanced Clean Fuels Research Subprogram
within the Coal R&D Program is to develop technologies for producing
clean coal and economically competitive coal-derived liquids.  Table
II.1 provides the specific goals and technologies by budget category. 



                                        Table II.1
                         
                          Goals and Technologies Associated With
                         the Activities Within the Advanced Clean
                                Fuels Research Subprogram

                                                           New technological processes
Budget category            Goals                           or planned areas of work
-------------------------  ------------------------------  ------------------------------
Coal preparation           Develop advanced technologies   Biological, electrical, and
                           that remove minerals, sulfur,   chemical processes for
                           and potentially toxic material  separating impurities from
                           from coal before its use.       coal and preparing the cleaned
                                                           coal for final use.

Direct liquefaction        Develop commercially viable     Processes that mix coal with
                           processes for converting coal   water, oil, and/or petroleum-
                           into a liquid that can be used  based wastes to generate a
                           as a transportation or boiler   liquid fuel.
                           fuel.

Indirect liquefaction      Develop commercially viable     Processes that convert coal
                           processes for converting coal   under high temperatures and/
                           into a liquid that can be used  or pressures into a gas, which
                           as a transportation or boiler   is then converted to a liquid
                           fuel.                           fuel.

Advanced research and      Improve the information         Applied research into the
environmental              available on and explore new    characterization of coal-
technologies               approaches that could reduce    derived liquids and the use of
                           the costs of coal-derived       advanced catalysts for coal
                           liquids.                        liquefaction.
-----------------------------------------------------------------------------------------
Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  39-44. 



   ADVANCED CLEAN/EFFICIENT POWER
   SYSTEMS
-------------------------------------------------------- Appendix II:2

The overall goal of the Advanced Clean/Efficient Power Systems
Subprogram within the Coal R&D Program is to develop coal and natural
gas-fired power plants that produce electricity more cheaply and with
less environmental emissions than current power plants.  Table II.2
provides the specific goals and technologies by budget category. 



                                        Table II.2
                         
                          Goals and Technologies Associated With
                            the Activities Within the Advanced
                         Clean/Efficient Power Systems Subprogram

                                                           New technological processes
Budget category            Goals                           or planned areas of work
-------------------------  ------------------------------  ------------------------------
Advanced pulverized coal-  Improve current systems that    Power plants called low
fired power plants         burn pulverized coal to         emission boiler systems.
                           achieve efficiencies greater
                           than or equal to 42% and
                           emissions less than one-sixth
                           of the New Source Performance
                           Standards (NSPS).

Indirect fired cycle       Develop more efficient          High performance power plant
                           combustion and heat transfer    systems that use high-
                           systems to achieve              temperature air furnaces
                           efficiencies greater than 45%   integrating coal combustion
                           and emissions less than one-    and emission control
                           tenth of NSPS.                  requirements and combining gas
                                                           turbines in the overall power
                                                           plant.

High-efficiency            Foster the commercialization    Transport and fluid-bed
integrated gasification    of gasification-based           gasifiers, sulfur sorbents;
combined cycle             processes that convert fossil   processes to remove
                           resources to electricity and    particulates, nitrogen oxides,
                           to steam, fuels, chemicals, or  and toxic pollutants from gas
                           hydrogen.                       streams; and concepts for cost
                                                           effective carbon dioxide
                                                           recovery.

High-efficiency            Improve the efficiency of       Processes to remove sulfur and
pressurized fluidized bed  existing fluidized-bed          other impurities from the hot
                           combustors that burn a mixture  gases without lowering the
                           of coal particles and           temperature of the gases.
                           limestone under atmospheric
                           pressure by combining a
                           gasifier and gas turbine with
                           pressurized equipment.

Advanced research and      Develop insights into advanced  More efficient and cost
environmental              coal gasification processes,    effective technologies to
technologies               the control of power plant      reduce carbon dioxide, sulfur
                           emissions, and the disposal of  dioxides, and other emissions
                           power                           from power plants.
                           plant wastes.
-----------------------------------------------------------------------------------------
Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  45-55. 



   ADVANCED RESEARCH AND
   TECHNOLOGY DEVELOPMENT
-------------------------------------------------------- Appendix II:3

The overall goal of the Advanced Research and Technology Development
Subprogram within the Coal R&D Program is to understand the
fundamental scientific principles that govern coal combustion and
environmental control processes and to support industry's efforts to
expand coal exports.  Table II.3 provides the specific goals and
technologies by budget category. 



                                        Table II.3
                         
                          Goals and Technologies Associated With
                            the Activities Within the Advanced
                           Research and Technology Development
                                        Subprogram

                                                           New technological processes
Budget category            Goals                           or planned areas of work
-------------------------  ------------------------------  ------------------------------
Coal utilization science   Improve the knowledge           Mathematical models to predict
                           available on the mechanisms     the performance of advance
                           involved in advanced coal       combustion systems; research
                           combustion and the control of   into advanced nitrogen oxide
                           contaminants.                   control and cleaning of high-
                                                           temperature filters.

Technology crosscut        Develop better analyses of      Mathematical analyses to
                           emissions from power plants,    predict emissions from
                           identify innovative             advanced electric systems,
                           technologies for using coal,    studies to support multiyear
                           and promote international       planning, research into the
                           cooperation and sharing of      potential for biotechnologies
                           information on coal             to be used to convert coal to
                           technologies and exports.       other fuels, and maintaining
                                                           relationships with
                                                           international organizations.

University coal research   Support competitively awarded   Research on a variety of
                           research grants to understand   chemical and engineering
                           the science underlying coal     issues.
                           combustion.

Materials and components   Develop materials that          High temperature ceramics and
                           withstand the high              filters, metal alloys, and
                           temperatures and corrosive      components of fuel cells.
                           gases generated by advanced
                           coal based power systems.
-----------------------------------------------------------------------------------------
Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  56-64. 



   NATURAL GAS RESEARCH
-------------------------------------------------------- Appendix II:4

The overall goal of the Natural Gas Research Subprogram within the
Gas Program is to ensure a long-term supply and the utilization of
natural gas at reasonable prices by increasing the amount of gas that
can be recovered, stored, delivered, and utilized in a clean,
efficient manner.  Table II.4 provides the specific goals and
technologies by budget category. 



                                        Table II.4
                         
                          Goals and Technologies Associated With
                          the Activities Within the Natural Gas
                                   Research Subprogram

                                                           New technological processes
Budget category            Goals                           or planned areas of work
-------------------------  ------------------------------  ------------------------------
Exploration and            Develop advanced technologies   Develop advanced drilling,
production                 for efficiently exploring and   completion, and stimulation
                           recovering gas from different   systems. Develop reservoir
                           types of fields.                data systems and imaging and
                                                           modeling techniques. Assess
                                                           the resource and develop
                                                           techniques to produce gas from
                                                           hydrates.

Delivery and storage       Improve the effectiveness and   Inventory measurement systems,
                           reduce the cost of current      techniques to identify and
                           storage and delivery            prevent damage to wells used
                           facilities and develop          by underground storage
                           additional capacity to meet     facilities, and improved
                           periods of high demand.         technologies for storing gas
                                                           in salt formations.

Processing                 Develop technologies to         Processes to minimize the
                           prepare for pipeline            corrosion of materials and to
                           transportation and/or use of    extract heat more efficiently
                           gas that is low in quality or   through cooling combustion
                           found in remote locations.      gases.

Turbines                   Develop ultra-high-efficient    Utilization of advanced high-
                           natural gas turbines for        temperature materials and
                           electric power plants with the  cooling technology, and
                           lowest emissions.               advanced low-emission
                                                           combustion systems.

Environmental              Develop credible and            Risk assessments, new
                           scientific information and      technology, impact analysis,
                           advanced technologies to        and workshops to assess and
                           address high-priority           remediate wastes and emissions
                           environmental issues.           from gas equipment and
                                                           facilities.
-----------------------------------------------------------------------------------------
Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  65-74. 



   FUEL CELLS
-------------------------------------------------------- Appendix II:5

The overall goal of the Fuel Cells Subprogram within the Gas Program
is to develop power plant technology for use in electric utility,
on-site cogeneration, distributed generation, industrial, and
commercial sectors that will be capable of ultra-high efficiencies
and no harmful emissions.  Table II.5 provides the specific goals and
technologies by budget category. 



                                        Table II.5
                         
                          Goals and Technologies Associated With
                           the Activities Within the Fuel Cells
                                        Subprogram

                                                           New technological processes
Budget category            Goals                           or planned areas of work
-------------------------  ------------------------------  ------------------------------
Advanced research          Identify processes and/or       Electrochemical processes and
                           materials that will improve     catalysts used for chemical
                           the efficiency and reduce the   conversions and improved
                           cost of fuel cell components.   ceramic materials and internal
                                                           connections.

Molten carbonate fuel      Develop and demonstrate market  Integration of components for
cells and solid oxide      entry fuel cell stationary      proof-of-concept testing;
fuel cells (Formerly       power plant products; validate  customer tests of subscale
molten carbonate systems   the economic and environmental  integrated systems; and
& advanced concepts)       benefits of molten carbonate    eventual commercial
                           and solid oxide technologies;   demonstration of full-scale
                           promote the development of      systems.
                           70%-efficient fuel cell power
                           plant designs.
-----------------------------------------------------------------------------------------
Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  75-78. 



   OIL TECHNOLOGY
-------------------------------------------------------- Appendix II:6

The overall goal of the Oil Technology Subprogram within the
Petroleum Program is to enhance the efficiency and environmental
quality of domestic oil exploration, recovery, and processing.  Table
II.6 provides the specific goals and technologies by budget category. 



                                        Table II.6
                         
                          Goals and Technologies Associated With
                         the Activities Within the Oil Technology
                                        Subprogram

                                                           New technological processes
Budget category            Goals                           or planned areas of work
-------------------------  ------------------------------  ------------------------------
Exploration and            Develop technologies to locate  Imaging and diagnostic tools,
production supporting      and recover more oil from       techniques, and computer
research                   domestic reservoirs.            models to better locate oil
                                                           and reservoir flow paths that
                                                           control its production.
                                                           Advanced extraction techniques
                                                           using gas, heat, chemicals, or
                                                           microbes to recover otherwise
                                                           unproducible oil.

Recovery field             Increase recovery from groups   Advanced and underutilized
demonstrations             of known reservoirs with large  techniques for reservoir
                           volumes of remaining oil.       characterization, modeling,
                           Through demonstrations,         drilling, and extraction.
                           transfer successful
                           technologies to other oil
                           operators.

Exploration and            Provide government and          Improved environmental
production environmental   industry with information and   compliance technologies;
research                   science to address              working with states and the
                           environmental concerns of oil   federal government to
                           and gas exploration and         streamline regulations; and
                           production.                     the development of scientific
                                                           and technical information for
                                                           risk-based regulation.

Processing research and    Increase the relative volume    Cost-effective and
downstream operations      of high-quality transportation  environmentally acceptable
                           fuel that can be derived from   heavy oil and residuum
                           heavy crude oils found in       upgrading processing
                           Alaska and California.          technologies. Provide
                                                           scientific information for
                                                           improved regulation.
-----------------------------------------------------------------------------------------
Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  79-91. 


   COOPERATIVE RESEARCH AND
   DEVELOPMENT
-------------------------------------------------------- Appendix II:7

The goal of the Cooperative R&D Program is to provide technical
support to other programs in the Fossil Energy R&D Program.  New
technological processes or planned areas of work include support for
research projects at (1) the University of North Dakota Energy and
Environmental Research Center which provides scientific data on coal
combustion to all R&D programs and (2) the Western Research Institute
(WRI), which is the western center for oil and gas research.  WRI
provides information to the oil and gas programs on recovery and
environmental issues. 

There are no budget categories under this program. 

Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4, (Feb. 
1997), pp.  98-99. 


   MATERIALS
-------------------------------------------------------- Appendix II:8

The goal of the Materials Subprogram within the Mining R&D Program is
to develop effective processes to produce advanced materials needed
in the next generation of fossil fuel-fired power systems, solve
environmental emissions problems related to fossil energy systems,
determine the factors that limit the service life of materials and
increase the cost of power generation in fossil fuel-fired power
systems.  New technological processes or planned areas of work
include advanced casting technologies for high-temperature materials,
sequestration of carbon dioxide through fixation as a carbonate
mineral, advanced refractories technologies, and a database of
information and a model to predict the erosion behavior of materials
at elevated temperatures. 

Source:  DOE's FY 1998 Congressional Budget Request, Vol.  4 (Feb. 
1997), pp.  105-110. 


FOSSIL ENERGY R&D FUNDING BY
PHASES OF R&D, FISCAL YEARS 1996
THROUGH 1998
========================================================= Appendix III



                                       Table III.1
                         
                          Coal Program Funding, Fiscal Year 1996

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Advanced Clean Fuels Research
-----------------------------------------------------------------------------------------
Coal preparation               $323            $2,351            $1,936                 0
Direct                          383             2,797             2,304                 0
 liquefaction
Indirect                        401             2,922             2,406                 0
 liquefaction
Advanced research               245             1,778             1,464                 0
 and
 environmental
 technologies
=========================================================================================
Subtotal                     $1,352            $9,848            $8,110                 0

Advanced Clean/Efficient Power Systems
-----------------------------------------------------------------------------------------
Advanced                       $740            $5,395            $4,443                 0
 pulverized coal-
 fired
 power plants
Indirect fired                  838             6,105             5,028                 0
 cycle
High-efficiency               1,011            11,009             9,566                 0
 integrated
 gasification
 combined cycle
High-efficiency               1,336             9,736             8,018                 0
 pressurized
 fluidized bed
Advanced Research               984             7,172             5,906                 0
 and
 environmental
 technologies
Kalina cycle                      0             1,957                 0                 0
=========================================================================================
Subtotal                     $4,909           $41,374           $32,961                 0

Advanced Research and Technology Development
-----------------------------------------------------------------------------------------
Coal utilization             $3,120                 0                 0                 0
 science
Technology                    3,716            $2,586                 0                 0
 crosscut
University coal               4,865                 0                 0                 0
 research
Materials and                 4,750             2,035                 0                 0
 components
=========================================================================================
Subtotal                    $16,451            $4,621                 0                 0
=========================================================================================
Total, Coal                 $22,712           $55,843           $41,071                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.2
                         
                          Gas Program Funding, Fiscal Year 1996

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Natural Gas Research
-----------------------------------------------------------------------------------------
Exploration and              $1,112            $7,091            $5,702                 0
 production
Delivery and                     85               536               430                 0
 storage
Turbines                      1,878            22,345            11,635                 0
Utilization                     377             2,402             1,929                 0
Environmental and               233             1,489             1,197                 0
 regulatory
=========================================================================================
Subtotal                     $3,685           $33,863           $20,893                 0

Fuel Cells
-----------------------------------------------------------------------------------------
Advanced research              $103              $657              $529                 0
Molten carbonate              1,472            21,945            13,729                 0
 systems
Advanced concepts             2,047             6,529             5,249                 0
=========================================================================================
Subtotal                     $3,622           $29,131           $19,507                 0
=========================================================================================
Total, Gas                   $7,307           $62,994           $40,400                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.3
                         
                          Petroleum Program Funding, Fiscal Year
                                           1996

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Oil Technology
-----------------------------------------------------------------------------------------
Production                   $1,156           $17,226           $14,746                 0
 supporting
 research
Recovery field                  542             5,637             4,661                 0
 demonstrations
Exploration and                 270             2,801             2,317                 0
 production
 environmental
 research
Processing                      279             2,582             2,718                 0
 research and
 downstream
 operations
=========================================================================================
Total, Petroleum             $2,247           $28,246           $24,442                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.4
                         
                          Other Fossil R&D Funding, Fiscal Year
                                           1996

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Cooperative
 Research and                $1,538            $1,538            $3,076                 0
 Development
Mining R&D                    4,998                 0                 0                 0
=========================================================================================
Total                        $6,536            $1,538            $3,076                 0
=========================================================================================
Total, Fossil               $38,802          $148,621          $108,989                 0
 Energy R&D
-----------------------------------------------------------------------------------------


                                       Table III.5
                         
                          Coal Program Funding, Fiscal Year 1997

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Advanced Clean Fuels
-----------------------------------------------------------------------------------------
Coal preparation               $340            $3,651            $1,108                $0
Direct                          423             3,755               879                 0
 liquefaction
Indirect                        475             2,047             1,730                 0
 liquefaction
Advanced research                65             1,184               497                 0
 and
 environmental
 technologies
=========================================================================================
Subtotal                     $1,303           $10,637            $4,214                 0

Advanced Clean/Efficient Power Systems
-----------------------------------------------------------------------------------------
Advanced                       $570            $4,845            $4,585                 0
 pulverized coal-
 fired power
 plant
Indirect fired                  600             6,103             3,802                 0
 cycle
High-efficiency               1,350            11,475             9,675                 0
 integrated
 gasification
 combined cycle
High-efficiency               1,071             9,103             7,676                 0
 pressurized
 fluidized bed
Advanced research               565             5,801             3,048                 0
 and
 environmental
 technologies
Kalina cycle                      0                 0                 0                 0
=========================================================================================
Subtotal                     $4,156           $37,327           $28,786                 0
Advanced Research
 and Technology
 Development
Coal utilization             $3,154                 0                 0                 0
 science
Technology                    2,795            $2,463                 0                 0
 crosscut
University coal               3,941                 0                 0                 0
 research
Materials and                 3,140             1,930                 0                 0
 components
=========================================================================================
Subtotal                    $13,030            $4,393                 0                 0
=========================================================================================
Total, Coal                 $18,489           $52,357           $33,000                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.6
                         
                          Gas Program Funding, Fiscal Year 1997

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Natural Gas Research
-----------------------------------------------------------------------------------------
Exploration and              $1,374            $7,264            $5,485                 0
 production
Delivery and                    100               543               357                 0
 storage
Turbines                      3,750            28,606            16,244                 0
Utilization                     672             2,350             3,319                 0
Environmental and               210             1,568             1,372                 0
 regulatory
=========================================================================================
Subtotal                     $6,106           $40,331           $26,777                 0

Fuel cells
-----------------------------------------------------------------------------------------
Advanced research              $130              $592              $496                 0
Molten carbonate              2,547            19,557            15,295                 0
 systems
Advanced concepts             1,585             6,280             4,635                 0
=========================================================================================
Subtotal                     $4,262           $26,429           $20,426                 0
=========================================================================================
Total, Gas                  $10,368           $66,760           $47,203                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.7
                         
                          Petroleum Program Funding, Fiscal Year
                                           1997

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Oil Technology
-----------------------------------------------------------------------------------------
Exploration and              $1,650           $17,464           $10,409                 0
 production
 supporting
 research
Recovery field                  412             3,511             1,973                 0
 demonstrations
Exploration and                 490             2,033             2,913                 0
 production
 environmental
 research
Processing
 research and                   524             2,994             1,903                 0
 downstream
 operations
=========================================================================================
Total, Petroleum             $3,076           $26,002           $17,198                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.8
                         
                         Other Fossil Energy R&D Funding, Fiscal
                                        Year 1997

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Cooperative
 Research and                $1,391            $1,391            $2,784                 0
 Development
Mining R&D                    5,953                 0                 0                 0
=========================================================================================
Total                        $7,344            $1,391            $2,784                 0
=========================================================================================
Total, Fossil               $37,886          $146,510          $100,185                 0
 Energy R&D
-----------------------------------------------------------------------------------------


                                       Table III.9
                         
                          Coal Program Funding, Fiscal Year 1998

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Advanced Clean Fuels Research
-----------------------------------------------------------------------------------------
Coal preparation               $417            $3,312            $1,251                 0
Direct                          579             3,927             1,092                 0
 liquefaction
Indirect                        481             2,287             1,762                 0
 liquefaction
Advanced research                45             1,028               418                 0
 and
 environmental
 technologies
=========================================================================================
Subtotal                     $1,522           $10,554            $4,523                 0

Advanced Clean/Efficient Power Systems
-----------------------------------------------------------------------------------------
Advanced                       $328           $10,676            $2,678                 0
 pulverized coal-
 fired
 power plant
Indirect fired                  656             2,497             4,198                 0
 cycle
High-efficiency               2,458            12,147             7,617                 0
 integrated
 gasification
 combined cycle
High-efficiency               1,072            11,154             5,887                 0
 pressurized
 fluidized bed
Advanced research               584             8,566             3,186                 0
 and
 environmental
 technologies
Kalina cycle                      0               391                 0                 0
=========================================================================================
Subtotal                     $5,098           $45,431           $23,566                 0

Advanced Research and Technology Development
-----------------------------------------------------------------------------------------
Coal utilization             $3,073                 0                 0                 0
 science
Technology                    2,312              $960                 0                 0
 crosscut
University coal               3,132                 0                 0                 0
 research
Materials and                 3,527             1,979                 0                 0
 components
=========================================================================================
Subtotal                    $12,044            $2,939                 0                 0
=========================================================================================
Total, Coal                 $18,664           $58,924           $28,089                $0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.10
                         
                          Gas Program Funding, Fiscal Year 1998

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Natural Gas Research
-----------------------------------------------------------------------------------------
Exploration and
 production                  $1,489            $6,492            $5,984                 0
Delivery and                     99               519               388                 0
 storage
Turbines                      3,152            23,473            16,889                 0
Utilization                     481             3,439             2,875                 0
Environmental and               462               611             2,001                 0
 regulatory
=========================================================================================
Subtotal                     $5,683           $34,534           $28,137                 0

Fuel Cells
-----------------------------------------------------------------------------------------
Advanced research              $133              $617              $560                 0
Molten carbonate                  0                 0                 0                 0
 systems
Advanced concepts                 0                 0                 0                 0
Fuel cell systems             1,467             8,079            28,563                 0
=========================================================================================
Subtotal                     $1,600            $8,696           $29,123                 0
=========================================================================================
Total, Gas                   $7,283           $43,230           $57,260                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.11
                         
                          Petroleum Program Funding, Fiscal Year
                                           1998

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Oil Technology
-----------------------------------------------------------------------------------------
Exploration and                $946           $10,810           $19,155                 0
 production
 supporting
 research
Recovery field                  484             3,115             3,320                 0
 demonstrations
Exploration and                 513             2,484             2,988                 0
 production
 environmental
 research
Processing
 research and                   474             2,082             2,944                 0
 downstream
 operations
=========================================================================================
Total, Petroleum             $2,417           $18,491           $28,407                 0
 Program
-----------------------------------------------------------------------------------------


                                       Table III.12
                         
                          Other Fossil R&D Funding, Fiscal Year
                                           1998

                                  (Dollars in thousands)

Subprogram/                   Basic           Applied
budget category            research          research       Development     Demonstration
-----------------  ----------------  ----------------  ----------------  ----------------
Cooperative
 Research and                $1,459            $1,463            $2,918                 0
 Development
Mining R&D                    4,965                 0                 0                 0
=========================================================================================
Total                        $6,424            $1,463            $2,918                 0
=========================================================================================
Total, Fossil               $34,788          $122,108          $116,674                 0
 Energy R&D
-----------------------------------------------------------------------------------------

CLEAN COAL TECHNOLOGY
DEMONSTRATION PROGRAM FUNDING, BY
PHASES OF R&D, FISCAL YEARS 1996
THROUGH 1998
========================================================== Appendix IV



                               Table IV.1
                
                  Clean Coal Technology Demonstration
                   Program Funding, Fiscal Year 1996

                         (Dollars in thousands)

Subprogram/budget            Basic     Applied  Developmen  Demonstrat
category                  research    research           t         ion
----------------------  ----------  ----------  ----------  ----------
Clean Coal Technology
----------------------------------------------------------------------
Advanced electric
 power                           0           0           0     $12,641
 generation
Clean fuel                       0           0           0           0
Environmental control
 devices                         0           0           0      16,721
Industrial                       0           0           0       1,195
 applications
======================================================================
Total                            0           0           0     $30,557
----------------------------------------------------------------------


                               Table IV.2
                
                  Clean Coal Technology Demonstration
                   Program Funding, Fiscal Year 1997

                         (Dollars in thousands)

Subprogram/budget            Basic     Applied  Developmen  Demonstrat
category                  research    research           t         ion
----------------------  ----------  ----------  ----------  ----------
Clean Coal Technology
----------------------------------------------------------------------
Advanced electric
 power
 generation                      0           0           0    $103,168
Clean fuel                       0           0           0      67,138
Environmental control            0           0           0       2,500
 devices
Industrial                       0           0           0       9,403
 applications
======================================================================
Total                            0           0           0    $182,209
----------------------------------------------------------------------


                               Table IV.3
                
                  Clean Coal Technology Demonstration
                   Program Funding, Fiscal Year 1998

Subprogram/budget            Basic     Applied  Developmen  Demonstrat
category                  research    research           t         ion
----------------------  ----------  ----------  ----------  ----------
Clean Coal Technology
----------------------------------------------------------------------
Advanced electric                0           0           0    $194,562
 power generation
Clean fuel                       0           0           0       9,510
Environmental control            0           0           0           0
 devices
Industrial                       0           0           0           0
 applications
======================================================================
Total                            0           0           0    $204,072
----------------------------------------------------------------------

DESCRIPTION OF NON-R&D FOSSIL
ENERGY PROGRAMS
=========================================================== Appendix V

Non-R&D programs pay for salaries and benefits, travel, the working
capital fund for administrative services, and other non-R&D
activities, including the following. 

Environmental Restoration:  Activities designed to protect workers
and the public from exposure to hazardous conditions and material
through the cleanup of R&D sites, site revegetation, and
assessments/site investigations of inactive projects. 

Coal Technology Export:  Coal and technology export programs and
promotion initiatives, trade mission assistance and other activities
to promote the export of clean coal technologies, and the
coordination of all fossil energy international crosscutting
activities.\1

International Program Support:  Analysis, studies, and technical
evaluations of ongoing and planned bilateral and multilateral
activities and support for international initiatives that leverage
fossil energy resources.  International involvements are limited to
those selected areas where it has been determined that the United
States will benefit at least to the extent it gives on a quid pro quo
basis. 

Historically Black Colleges and Universities, Education and Training: 
Training to accelerate workforce diversity in fossil fuel related
technologies. 

Plant and Capital Equipment:  General plant projects at the Federal
Energy Technology Center sites and the Bartlesville Project Office,
including repairs, improvements, alterations, and additions. 

Fuels Program:  Processing of electricity export applications,
participation in proceedings of the Federal Energy Regulatory
Commission, and processing of natural gas import/export applications. 


--------------------
\1 Coal technology export; international program support; and
education and training activities at historically black colleges and
universities are funded under DOE's coal R&D program. 


COMPANIES RECEIVING FOSSIL ENERGY
R&D AND CLEAN COAL TECHNOLOGY
DEMONSTRATION AWARDS OVER $1
MILLION
========================================================== Appendix VI

                                  (Dollars in millions)

                   Description of          Government          Industry             Total
Awardee\a          award                        share             share             share
-----------------  ----------------  ----------------  ----------------  ----------------
Westinghouse Electric Corp.
-----------------------------------------------------------------------------------------
                   Utility advanced            $119.1            $146.9              $266
                    turbines
                   High-                         92.3              77.8             170.1
                    temperature
                    solid oxide
                    fuel cell
                   Solid oxide fuel              82.9             115.5             198.4
                    cell
                   Filter                         2.1                 0               2.1
                    assessment
=========================================================================================
Subtotal                                       $296.4            $340.2            $636.6
Wabash River Coal  Integrated                   219.1             219.1             438.2
 Gasification       gasification
 Repowering         demonstration
 Project Joint
 Venture

City of Lakeland, Fla.
-----------------------------------------------------------------------------------------
                   McIntosh Unit 4B            $109.2            $109.5            $218.7
                    demonstration
                   McIntosh Unit 4A              93.3              93.3             186.6
                    demonstration
=========================================================================================
Subtotal                                       $202.5            $202.8            $405.3
Clean Energy       Combined fuel                183.3             657.8             841.1
 Partners, L.P.     cell and
                    gasification
Tampa Electric     Integrated gas                 171             172.5             343.5
 Co.                combined cycle
Sierra Pacific     Integrated gas                 168             167.9             335.9
 Power Co.          combined cycle

Air Products and Chemicals
-----------------------------------------------------------------------------------------
                   Liquid methanol              $92.7              $121            $213.7
                    process
                   Synthetic gas                 28.6               7.1              35.7
                    products
                   ITM syngas                    25.6              54.8              80.4
                    technology
                   Slurry bubble                  3.9                 1               4.9
                    reactor
=========================================================================================
Subtotal                                       $150.8            $183.9            $334.7
CPICOR Management  Advanced iron-               149.5             916.3            1065.8
 Co., L.L.C.        making process
Foster Wheeler     High-                        127.9              71.6             199.5
 Development        performance
 Corp.              system

General Electric Co.
-----------------------------------------------------------------------------------------
                   Utility advanced              $120            $263.7            $383.7
                    turbines
                   Advanced sorbent               1.1                 0               1.1
                    development
=========================================================================================
Subtotal                                       $121.1            $263.7            $384.8
Alaska Industrial  Advanced                     117.3             124.8             242.1
 Development and    combustor
 Export Authority
Energy Research    Molten carbonate             101.7              39.7             141.4
 Corp.              fuel cell

United Technologies Corp.
-----------------------------------------------------------------------------------------
                   High-                        $89.4             $47.4            $136.8
                    performance
                    system
                   Humid air                      2.2               1.9               4.1
                    turbine
=========================================================================================
Subtotal                                        $91.6             $49.3            $140.9

M-C Power Corp.
-----------------------------------------------------------------------------------------
                   Molten carbonate               $71             $33.4            $104.4
                    fuel cell
                   Molten carbonate              16.7              12.8              29.5
                    fuel cell
=========================================================================================
Subtotal                                        $87.7             $46.2            $133.9

New York State Electric and Gas Corp.
-----------------------------------------------------------------------------------------
                   Milliken                     $72.2            $198.3            $270.5
                    demonstration
                   Micronized coal                2.7               6.4               9.1
                    reburning
=========================================================================================
Subtotal                                        $74.9            $204.7            $279.6
York County        Atmospheric                   74.7             304.9             379.6
 Energy Partners    circulating
                    fluidized bed
The Ohio Power     Tidd pressurized                67             122.9             189.9
 Co.                fluidized-bed
                    combustion
                    demonstration
Pure Air on the    Advanced flue                 63.9              87.8             151.7
 Lake, L.P.         gas
                    desulfurization

Babcock & Wilcox Co.
-----------------------------------------------------------------------------------------
                   Low-emission                 $14.8              $3.6             $18.4
                    boiler systems
                   Emission control               5.3               6.5              11.8
                    development
                   Low-emission                   7.6              11.8              19.4
                    boiler system
                    demonstration
                   Coal reburning                 6.3               7.3              13.6
                    for nitrogen
                    oxide control
                   Flue gas cleanup               6.1               7.2              13.3
                    demonstration
                   Low nitrogen                   5.4               5.8              11.2
                    oxide cell
                    burner retrofit
                   Multiple                       2.6               1.2               3.8
                    pollutant
                    removals
=========================================================================================
Subtotal                                        $48.1             $43.4             $91.5
ENCOAL Corp.       Coal                          45.3              45.4              90.7
                    gasification
                    demonstration
NOXCO Corp.        Sulfur dioxide/               42.8              43.3              86.1
                    nitrogen oxide
                    removal
                    demonstration
Riley Stoker       Low-emission                  44.3              12.1              56.4
 Corp.              boiler systems
Rosebud SynCoal    Coal cleaning                 43.1              62.6             105.7
 Partnership        and conversion

Southern Company Services
-----------------------------------------------------------------------------------------
                   CT-121 flue gas              $21.1               $22             $43.1
                    desulfurization
                   Selective                      9.4              13.8              23.2
                    catalytic
                    reduction
                    techniques
                   Advanced wall-                 6.6               9.3              15.9
                    fired
                    combustion
                   Advanced                       4.4               4.8               9.2
                    tangentially
                    fired
                    combustion
=========================================================================================
Subtotal                                        $41.5             $49.9             $91.4
Custom Coals       Advanced coal-                  38              49.4              87.4
 International      cleaning
                    facilities

Combustion Engineering
-----------------------------------------------------------------------------------------
                   Low-emission                 $32.2             $24.1             $56.3
                    boiler systems
                   Air toxics                     1.6               0.8               2.4
                    control
=========================================================================================
Subtotal                                        $33.8             $24.9             $58.7
Bethlehem Steel    ranulated coal               1.8 1            62.5 1              94.3
 Corp. G            in 3 blast
                    furnace

Energy & Environmental Research
-----------------------------------------------------------------------------------------
                   Gas reburning                $18.7             $18.9             $37.6
                    and sorbent
                    injection
                   Gas reburning                  8.9               8.9              17.8
                    and wall-fired
                    burners
                   Toxic emissions                2.1                 0               2.1
                   High-efficiency                1.6               0.7               2.3
                    nitrogen oxide
                    control
=========================================================================================
Subtotal                                        $31.3             $28.5             $59.8
Fuel Cell          Molten carbonate              28.8              24.8              53.6
 Engineering Co.    fuel cell

Hydrocarbon Technologies
-----------------------------------------------------------------------------------------
                   Proof-of-                    $21.9              $5.2             $27.1
                    concept
                    facility
                   Multistage                     3.9               0.4               4.3
                    liquefaction
                   Bench-scale                    2.7               0.2               2.9
                    coprocessing
=========================================================================================
Subtotal                                        $28.5              $5.8             $34.3

North Dakota University
-----------------------------------------------------------------------------------------
                   Low-rank coal                $12.7             $14.1             $26.8
                    (II)
                   Low-rank coal                 11.7                 0              11.7
                    (I)
                   Hybrid                         1.3               0.3               1.6
                    particulates
                    collector
                   Trace element                  1.3                 0               1.3
                    emissions
=========================================================================================
Subtotal                                          $27             $14.4             $41.4

Arthur D. Little Inc.
-----------------------------------------------------------------------------------------
                   Coal diesel                  $23.8             $23.8             $47.6
                    combined cycle
                   Catalytic sulfur               1.5               0.3               1.8
                    dioxide
                    reduction
=========================================================================================
Subtotal                                        $25.3             $24.1             $49.4

Western Research Inst.
-----------------------------------------------------------------------------------------
                   Joint projects                13.1              18.3              31.4
                   Base research                  7.5                 0               7.5
                    program
=========================================================================================
Subtotal                                        $20.6             $18.3             $38.9
Clemson            Advanced gas                  19.6               1.6              21.2
 University         turbines
ThermoChem, Inc.   Steam                         18.7              18.6              37.3
                    gasification of
                    coal
Tristate           Nucla fluidized               17.1              29.4              46.5
 Generation and     bed
 Transmission       demonstration
 Assn.

Public Service Co. of Colorado
-----------------------------------------------------------------------------------------
                   Integrated                   $13.7             $13.7             $27.4
                    emission
                    control
                   Mercury control                2.2               0.5               2.7
=========================================================================================
Subtotal                                        $15.9             $14.2             $30.1
ABB Environmental  SNOX flue gas                 15.7              15.7              31.4
 Systems            cleaning
Amax R & D Inc.    Advanced fine                 13.6               1.7              15.3
                    coal cleaning

Radian Corp.
-----------------------------------------------------------------------------------------
                   Control of                    $2.5                $1              $3.5
                    hazardous air
                    pollutants
                   Clear liquor                   2.4                 1               3.4
                    scrubbing
                   Toxic emissions                1.7                 0               1.7
=========================================================================================
Subtotal                                        $13.2              $4.0             $17.2

Bechtel National Inc.
-----------------------------------------------------------------------------------------
                   Flue gas                      $5.2              $5.2             $10.4
                    desulfurization
                   Refining coal                  4.9                 0               4.9
                    liquids
                   Fischer-Tropsch                2.9               0.1                 3
                    technology
=========================================================================================
Subtotal                                          $13              $5.3             $18.3
ABB Combustion     Coal evaluation               10.9              10.8              21.7
 Engineering Inc.   software
LIFAC-North        Sorbent                       10.6              10.8              21.4
 America            injection
                    desulfurization
Consortium for     Coal                           9.9               8.5              18.4
 Fossil Fuels       liquefaction
Hague              Ceramic heater                 9.8               2.4              12.2
 International      for turbines

Kentucky Research Foundation
-----------------------------------------------------------------------------------------
                   Coal                          $6.6                $0              $6.6
                    liquefaction
                    studies
                   Iron Fischer-                  3.2                 0               3.2
                    Tropsch
                    catalyst
=========================================================================================
Subtotal                                         $9.8                $0              $9.8
University of      MHD facilities                 9.4                 0               9.4
 Tenn.              completion

Phillips Petroleum Co.
-----------------------------------------------------------------------------------------
                   Carbon dioxide                $6.9             $14.3             $21.2
                    flood of oil
                    reservoir
                   Sorbent                        1.1                 0               1.1
                    development
=========================================================================================
Subtotal                                            8              14.3              22.3
Strata Production  Advanced oil                   7.8              10.5              18.3
 Co.                recovery
Donlee             Cofiring of coal               7.6               0.5               8.1
 Technologies       and wastes
 Inc.
Union Pacific      Green River                    7.3               4.4              11.7
 Resources          Basin

Dow Corning Corp.
-----------------------------------------------------------------------------------------
                   Methyl chloride               $5.6               $10             $15.6
                    from methane
                    (II)
                   Methyl chloride                1.4               1.4               2.8
                    from methane
                    (I)
=========================================================================================
Subtotal                                           $7             $11.4             $18.4
University of      Fluid                          6.9               5.9              12.8
 Oklahoma           characterization
                    facility
ICF Resources      Systems analysis                 6                 0                 6
 Inc.               model
Passamaquoddy      Cement kiln flue                 6              11.8              17.8
 Tribe              gas recovery

Advanced Resources International
-----------------------------------------------------------------------------------------
                   Gas detection                 $3.5              $0.5                $4
                   Fracture                       1.9                 0               1.9
                    stimulation
=========================================================================================
Subtotal                                         $5.4              $0.5              $5.9
Parker and         Carbon dioxide                 5.2               8.0              13.2
 Parsley            gravity
 Development        drainage

Stanford University
-----------------------------------------------------------------------------------------
                   Heavy oil                     $2.1                $0              $2.1
                    recovery
                   Horizontal                     2.1                 0               2.1
                    drilling
                   Gas injection                    1               0.3               1.3
                    performance
=========================================================================================
Subtotal                                         $5.2              $0.3              $5.5

Research Triangle Institute
-----------------------------------------------------------------------------------------
                   Hot gas                       $2.6                $0              $2.6
                    desulfurization
                    (bench-scale)
                   Acrylates and                  1.3               0.4               1.7
                    methacrylates
                   Hot gas                        1.2                 0               1.2
                    desulfurization
                    concepts
=========================================================================================
Subtotal                                         $5.1              $0.4              $5.5
CER Corp.          Field fracturing               4.8               4.7               9.5
                    project

S. Powell Construction Co.
-----------------------------------------------------------------------------------------
                   Facility                      $3.7                $0              $3.7
                    construction
                   Construction of                  1                 0                 1
                    syngas
                    generator
=========================================================================================
Subtotal                                         $4.7                $0              $4.7

Battelle Memorial Institute
-----------------------------------------------------------------------------------------
                   Toxics from coal              $3.1              $0.1              $3.2
                   Characterization               1.4                 0               1.4
                    of air toxics
=========================================================================================
Subtotal                                         $4.5              $0.1              $4.6
BPF Inc.           Development of                 4.3                 0               4.3
                    norm

Maurer Engineering Inc.
-----------------------------------------------------------------------------------------
                   Tubing drilling                 $3              $1.9              $4.9
                    system
                   Underbalanced                    1               0.2               1.2
                    drilling
                    products
=========================================================================================
Subtotal           $                              4 $               2.1              $6.1
Atlantic           Oil recovery                   4.0               3.9               7.9
 Richfield Co.      techniques
ABB Power          Turbine research               3.6               0.9               4.5
 Generation
Physical Sciences  Toxics from coal               3.4               0.9               4.3
 Inc.

Electric Power Research Institute
-----------------------------------------------------------------------------------------
                   High sulfur test                $2              $8.5             $10.5
                    facility
                   Utility biomass                1.4                 4               5.4
                    cofiring
=========================================================================================
Subtotal                                         $3.4             $12.5             $15.9
Coleman Research   Gas detection                  3.3                 0               3.3
 Corp.
Energy &           Gas information                3.2                 0               3.2
 Environmental      system
 Analysis

Virginia Polytech Institute
-----------------------------------------------------------------------------------------
                   Hazardous air                 $1.6              $0.4                $2
                    pollutant
                    precursors
                    removal
                   Testing of coal                1.3               0.4               1.7
                    separator
=========================================================================================
Subtotal                                         $2.9              $0.8              $3.7
Gas Technology     International                  2.7                 0               2.7
 Information        center for gas
 Institute
Roy Weston Inc.    Toxic emissions                2.7               0.1               2.8

Carnegie-Mellon University
-----------------------------------------------------------------------------------------
                   Coal                          $1.4                $0              $1.4
                    gasification
                    systems
                   Environmental                  1.3                 0               1.3
                    control model
=========================================================================================
Subtotal                                         $2.7                $0              $2.7
The M. W. Kellogg  Hot gas                        2.5                 0               2.5
 Co.                desulfurization
                    facility
AirPol, Inc.       Gas suspension                 2.3               5.4               7.7
                    absorption
Novatek            Mud drilling                   2.3                 1               3.3
                    system
Southern Research  Hot gas cleanup                2.2                 0               2.2
 Institute
University of      Increased heavy                2.2               3.6               5.8
 Utah               oil recovery
Southern Illinois  Desulfurization                2.1               1.1               3.2
 University         products
Pacific Operators  Class III oil                    2               2.2               4.2
 Offshore           recovery
Smith              Steerable air                    2               1.1               3.1
 International      percussion
Hughes Eastern     Using microflora               1.9                 2               3.9
 Corp.              near oil
                    formation
James Bunger &     Shale oil                      1.9                 0               1.9
 Associates         enhancement
CQ Inc.            Hazardous air                  1.8               0.7               2.5
                    pollutant
                    removal
Consolidated Coal  Coal                           2.5                 0               2.5
 Co.                liquefaction
Tulane University  US/China                       1.8                 0               1.8
                    technology
                    center
Advanced           Sampling and                   1.7                 0               1.7
 Technology         analyzing
 Systems            methods
Gas Technology     Evaluation of                  1.7               3.2               4.9
 Institute          contractors
Department of      U.S. Geological                1.7                 0               1.7
 Interior           Survey studies
ADA Technologies   Mercury vapor                  1.6               0.3               1.9
 Inc.               removal
Flowdril Corp.     Slim-hole high                 1.6               2.4                 4
                    pressure pump
LSR Technologies   Particulate air                1.6               0.7               2.3
                    toxic control
Sperry-Sun         Underbalanced                  1.6               0.7               2.3
 Drilling           drilling
Tempress           Hydraulic pulse                1.6               0.9               2.5
 Technologies       drilling
University of      Improved oil                   1.6               1.6               3.2
 Kansas             recovery
American           National data                  1.5               0.4               1.9
 Geological         system
 Institute
Interstate Oil     State                          1.5               0.4               1.9
 Compact            regulations
Mitre Corp.        Research                       1.5                 0               1.5
                    guidance
                    studies
Petroleum          CO2/sand                       1.5                 0               1.5
 Consulting         fracturing
West Virginia      Ash disposal in                1.5               0.6               2.1
 University         mines
 Research
Advanced Fuel      Fossil fuel                    1.4                 0               1.4
 Research           conversion
State of Oklahoma  Data management                1.4                 0               1.4
                    system
Conoco Coal        Coal                           1.3               0.3               1.6
 Development        liquefaction
                    concept
Dravolime Co.      Dry FGD by-                    1.3                 3               4.3
                    products
Pennsylvania       Coal sample bank               1.3                 0               1.3
 State University   and database
Texas Railroad     Data management                1.2                 0               1.2
 Commission         systems
University of      Riverton dome                  1.2               1.7               2.9
 Wyoming            demonstration
Fisher-            Coal reactors                  1.1                 0               1.1
 Klosterman, Inc.
Michigan           Dundee                         1.1               1.6               2.7
 Technologies       foundation oil
                    recovery
Little Bear Lab    Removal of                       1               0.3               1.3
 Inc.               hazardous air
                    pollutant
                    precursors
Underground        Implement data                   1                 0                 1
 Injection Co.      system
-----------------------------------------------------------------------------------------
\a Companies receiving awards from DOE may represent or lead teams of
multiple contractors.  In these cases, the lead company may divide
the government's share of costs among team members. 


*** End of document. ***