President Bush’s FY2008 budget seeks a 33% increase for the Office of Fossil Energy over last year’s request to support improved energy security and rapid development of climate-oriented technology.  It totals $863 million and completes a promise to invest $2 billion in coal technologies three years early.

One of the President’s largest Fossil Energy budgets, the new proposal emphasizes early initiation of an expansion of the Strategic Petroleum Reserve; accelerating the development of technologies to manage and virtually eliminate emissions of the greenhouse gas carbon dioxide from fossil fuel use in power generation and other industrial activity; and moving forward with the design and early work on the FutureGen project to combine in one plant the production of electric power and hydrogen fuel from coal with near-zero atmospheric emissions.  

Fossil Energy’s programs support the President’s top initiatives for energy security, clean air, climate change and coal research. Fossil Energy also supports the Department of Energy’s strategic goal of protecting national and economic security by promoting a diverse supply and delivery of reliable, affordable, and environmentally-sound energy.

Specifically, FY 2008 Fossil Energy programs are to:

• Manage and perform energy-related research that reduces market barriers to the reliable, efficient, and environmentally sound use of fossil fuels for power generation and conversion to other fuels such as hydrogen
• Partner with industry and others to advance clean and efficient fossil energy technologies toward commercialization
• Double the current capacity of the Strategic Petroleum Reserve to 1.5 billion barrels by 2027 – an insurance policy in the event of a severe supply disruption.

The goal of the President’s Coal Research Initiative is to research, develop and demonstrate technologies that will improve the competitiveness and utility of domestic coal in future energy markets. Coal represents more than 90% of US fossil energy reserves, and the Administration strongly supports it as an important component of a balanced national energy portfolio. As a candidate in 2000, the President pledged to invest $2 billion over 10 years in developing technologies for its expanded, environmentally responsible use. The current request fulfills the promise.  

Because of its importance, the President’s FY 2008 Budget requests $426 million for the Clean Coal Technology Program distributed over the program’s various components to get the maximum benefit in the most cost-effective way. 

Clean Coal is a major component of the National Energy Policy. It is seen as essential to meeting the rising demand for clean, reliable and affordable electricity for the foreseeable future. Clean coal R&D is a co-operative, cost-shared program between the government and industry to rapidly demonstrate emerging technologies in coal-based power generation to help accelerate their commercialization.

The Clean Coal Power Initiative’s proposed budget of $73 million will fund the continuation of projects selected in two prior, competitive solicitations for promising technologies. A third round is planned in FY 2008.

Within the President’s Coal Research Initiative, the FutureGen project will receive a two-fold funding increase in the FY 2008 budget from FY 2007 — six times the amount from FY 2006. FutureGen will establish the capability and feasibility of co-producing electricity and hydrogen from coal and includes carbon sequestration as a key component of the project. The project is now in the site selection phase and will employ a public/private partnership to demonstrate technology ultimately leading to near-zero atmospheric emission plants (including carbon) that are fuel-flexible and capable of multi-product output and electrical efficiencies of over 60%.

Fossil Energy’s most far-reaching and visionary clean coal project has a proposed FY 2008 Budget of $108 million. Those funds will be used to support detailed plant design and procurement, as well as ongoing permitting, preliminary design and site characterization work.

The project will help retain the strategic value of coal. The clean coal R&D effort will focus research efforts on all the key ingredients necessary for FutureGen – carbon sequestration, membrane technologies for oxygen and hydrogen separation, advanced turbines, fuel cells, coal-to-hydrogen conversion gasifier related technologies, and other technologies. 

Some Clean Coal Power Initiative activities complement FutureGen and will decrease the costs of Integrated Gasification Combined Cycle systems and other technologies for near-zero atmospheric emission plants.

The Fuels and Power Systems proposed FY08 Budget is $245 million and covers R&D for several technologies important to FutureGen. One of those critical technology areas – and a core Fossil Energy program receiving heavy emphasis – is carbon sequestration.  It is one of the key ingredients of the Fuel and Power Systems program and receives an increase in budget dollars to $79 million in FY 2008. The FY08 request will allow continued R&D into CO2 capture and storage, as well as measurement, monitoring and verification technologies and processes. The program will focus primarily on developing capture and separation technologies that dramatically lower the costs and energy requirements for reducing carbon dioxide emissions from fossil based (especially coal) energy plants.

Technology developments within the carbon sequestration program are expected to contribute substantially to the President’s goal of reducing greenhouse gas intensity by 18% by 2012. The national network of regional partnerships will continue its important work in FY 2008. This Secretarial partnership initiative has brought together the federal government, state agencies, universities and private industry to determine which options for capturing and storing greenhouse gases are most practicable for specific areas of the country. 

The international, ministerial-level Carbon Sequestration Leadership Forum will continue to gather data, exchange information and participate in joint projects to advance carbon sequestration technology.

The Integrated Gasification Combined Cycle (IGCC) program will continue to concentrate efforts on gas stream purification to meet quality requirements for use with fuel cells and conversion processes, on impurity tolerant hydrogen separation, on elevating process efficiency, and on reducing the costs and energy requirements for oxygen production through development of advanced technologies such as membranes.

The Advanced Turbines program is centered on creating a turbine-technology base that will permit the design of near-zero atmospheric emission IGCC plants and a class of FutureGen-descended plants with carbon capture and sequestration. This research emphasizes technology for high-efficiency hydrogen and syngas turbines and builds on prior successes in the Natural Gas-based Advanced Turbine Systems Program. 

The Carbon Sequestration program is developing a portfolio of technologies with great potential to reduce greenhouse gas emissions.  Primary concentration is on dramatically lowering the cost and energy requirements of pre- and post-combustion carbon dioxide capture.  The goal is to have by 2012 a technology portfolio enabling safe, cost-effective and long-term carbon mitigation, management and storage which will lead to substantial market penetration after 2012.  The program is expected to contribute significantly to the President’s goal of developing technologies to substantially reduce greenhouse gas emissions in the long term and to fill a critical need in efforts ultimately to stabilize U.S. greenhouse gas emissions.

The Fuels program conducts the research necessary to promote the transition to a hydrogen economy.  Research targets cost reduction and increased efficiency of hydrogen production from coal feedstocks as part of the President’s Hydrogen Fuel Initiative and in support of the FutureGen project.

Advanced Research projects seek a greater understanding of the physical, chemical, biological, and thermodynamic barriers that limit the use of coal and other fossil fuels.  The program funds two categories of activity. The first includes applied research programs to develop the technology base needed for the development of super-clean, very high efficiency coal-based power and coal-based fuel systems. The second is a set of crosscutting studies and assessment activities in environmental, technical and economic analyses, coal technology export, and integrated program support. 

Objectives of Fuel Cells activity are to provide the technology-based development of low-cost, scalable, and fuel flexible fuel cell systems that can operate in central coal-based power systems and have applications in other electric utility (both central and distributed), industrial, and commercial/residential markets (Not included in the President’s Coal Research Initiative).

Petroleum – Oil Technology and Natural Gas Technologies research and development programs will be terminated in FY 2008, consistent with the FY 2007 Budget request. The Oil and Gas group will manage the Ultra-Deep and Unconventional Natural Gas Research Program mandated by the Energy Policy Act of 2005. However, the Administration will propose legislation to terminate this program, which is funded from federal oil and gas lease revenues.

The President is requesting $354 million for operating the nation’s Strategic Petroleum Reserves and to increase the capacity of the reserves to 1.5 billion barrels by 2027. Created to insure against supply disruptions that could harm our economy, the FY 2008 Strategic Petroleum Reserve budget proposes $163 million for facilities development and adds $168 million to begin expansion of the Reserve to 1.5 billion barrels. The process begins immediately with filling to the current capacity of 727 million barrels, and would increase the expansion capacity further at existing and new sites in FY 2008.

For the Naval Petroleum and Oil Shale Reserves, the FY 2008 budget request is $17 million. The mission of the Naval Petroleum and Oil Shale Reserve is to complete environmental remediation activities and to determine the equity finalization of Naval Petroleum Reserve (NPR) 1. It also serves to operate NPR-3 until its economic limit is reached, while maintaining the Rocky Mountain Oil Field Test Center as a field demonstration facility.