President Requests $638.0 Million for Fossil Energy Programs

obamaWashington, D.C. – President Obama’s FY 2014 budget seeks $638.0 million for the Office of Fossil Energy (FE) to advance technologies related to the reliable, efficient, affordable and environmentally sound use of fossil fuels as well as manage the Strategic Petroleum Reserve and Northeast Home Heating Oil Reserve to provide strategic and economic security against disruptions in U.S. oil supplies. The request includes $420.6 million for Fossil Energy Research and Development, $189.4 million for the Strategic Petroleum Reserve, $8.0 million for the Northeast Home Heating Oil Reserve and $20.0 million for the Naval Petroleum Reserves.


The FY 2014 budget request will allow FE to fulfill its mission: to provide the nation with the best opportunity to tap the full potential of its abundant fossil energy resources in an environmentally sound and affordable manner and to ensure America’s readiness to respond to short-term energy supply disruptions.

Fossil Energy Research and Development

The President’s FY 2014 budget requests $420.6 million for a fossil energy research and development (R&D) portfolio. Fossil Energy research and development efforts are fully aligned with the DOE Strategic Plan to enable prudent development of our natural resources, accelerate energy innovation through precompetitive R&D, leverage domestic and international partnerships and help to sustain a world-leading technical workforce.

Advancing Toward a Low-Carbon Future

The mission of the Fossil Energy Coal Program is to support secure, affordable and environmentally acceptable near-zero emissions fossil energy technologies.  This will be accomplished via research, development and demonstration to improve the performance of advanced CCS technologies.  Commercial availability of CCS technologies will provide an option to use fossil fuel resources to provide energy and meet the President’s climate goals.

CCS Demonstrations. The CCS Demonstration program, including the Clean Coal Power Initiative, FutureGen 2.0 and Industrial CCS Demonstrations, enables and accelerates the deployment of advanced carbon capture and storage technologies. Successful completion of the existing projects will help in meeting the President’s broad national energy goal for reducing greenhouse gas emissions by 17 percent by 2020 and 83 percent by 2050, from a 2005 baseline.  The 2014 budget does not request any demonstration funds because these projects are already fully funded by prior year appropriations and in large part through the 2009 American Recovery and Reinvestment Act.

Carbon Capture & Storage and Power Systems. The CCS and Power Systems program conducts research to reduce carbon emissions, leading to a viable near-zero atmospheric emissions coal energy system and supporting CCS.  The FY 2014 budget request for the Carbon Capture & Storage and Power Systems program is $276.6 million. It also includes $35.0 million for NETL staff to conduct in-house coal R&D.

Carbon Capture. The President’s FY 2014 budget requests $112.0 million for carbon capture R&D. This sub-program is focused on the development of post-combustion and pre-combustion CO2 capture and compression technologies for new and existing power plants. CCS technologies will need to be broadly applied to meet long-term climate change goals; therefore, $25.0 million is allocated to fund (through a competitive inducement prize or other appropriate funding mechanism) a solicitation to demonstrate the first commercial natural gas combined cycle plant to capture and store 75 percent or more of the CO2 emissions.

Carbon Storage. The President’s FY 2014 budget requests $61.1 million for carbon storage R&D. The activities conducted under this sub-program will be used to develop and validate technologies to ensure safe and permanent geologic storage of captured CO2.  Development and validation of these technologies is critical to ensure industry and regulatory agencies have the capability to monitor and account for CO2 and ensure the viability of carbon storage as an effective technology solution that can be implemented on a large-scale to mitigate carbon emissions.

Advanced Energy Systems. The President’s FY 2014 budget requests $48.0 million for advanced energy systems R&D. This sub-program’s mission is to increase the availability and efficiency of fossil energy systems integrated with CO2 capture, while maintaining the highest environmental standards. The program elements focus on gasification, oxy-combustion, advanced turbines and other energy systems.

Cross-cutting Research. The President’s FY 2014 budget requests $20.5 million for crosscutting research. The Cross-cutting Research activity serves as a bridge between basic and applied research by fostering the development of innovative systems for improving availability, efficiency, and environmental performance of fossil energy systems with carbon capture and storage.  This crosscutting effort is implemented through the research and development of sensors, controls, and advanced materials.  This program area also develops computation, simulation, and modeling tools focused on optimizing plant design and shortening developmental timelines.  In addition, the Cross-cutting Research program area supports science and engineering education in minority colleges and universities.

Natural Gas Technologies. The mission of the Natural Gas program – with a FY 2014 budget request of $17.0 million – is to support DOE missions in energy, environment and national security. The Natural Gas Technologies program was reprioritized to launch a collaborative research and development initiative together with the Environmental Protection Agency and the Department of the Interior’s U.S. Geological Survey to understand and minimize the potential environmental, health and safety impacts of natural gas development through hydraulic fracturing (fracking), consistent with the recommendations of the Secretary of Energy Advisory Board’s August 2011 “Shale Gas Production Subcommittee Ninety-Day Report.”

The primary goals of this multiagency research effort are to provide timely science and tools that support sound policy, to allow for informed unconventional oil and gas resource development decisions, and to advance technologies that will maximize the benefits of these domestic energy resources to the nation.  Each of the three agencies has a unique set of core capabilities relevant to this scientific challenge. Interagency collaboration ensures that each agency is focused on those tasks that are most relevant to its skill sets, and that the agencies are effectively working together on tasks that require collaboration.

The program also intends to conduct lab- and/or field-based research  focused on increasing public understanding of methane dynamics in gas-hydrate bearing areas. These public sector-led efforts will be designed to evaluate the occurrence, nature and behavior of naturally occurring gas hydrates and the resulting resource, hazard, and environmental implications.

Petroleum Reserves

FE’s Office of Petroleum Reserves manages programs that provide the United States with strategic and economic protection against disruptions in oil supplies.

Strategic Petroleum Reserve. The Strategic Petroleum Reserve (SPR) protects the U.S. from disruptions in critical petroleum supplies. The program fulfills U.S. obligations under the International Energy Program, which avails the U.S. of International Energy Agency assistance through its coordinated energy emergency response plans, and provides a deterrent against energy supply disruptions. The Program provides for the management, maintenance, security and operational readiness of the SPR’s oil storage and distribution facilities.

The FY 2014 request is $189.4 million, a 2 percent decrease from the FY 2012 current request due to fewer security positions, efficiencies realized in power contract renewals, and completion of the new Bayou Choctaw Cavern 102 development. These decreases were offset by increases in cavern remediation activities, technical support services, and updates to intra-site communication services. This request provides continuation of the base program for SPR operations, as well as the Casing Inspection and Remediation Program and degasification of crude oil.

Northeast Home Heating Oil Reserve. The Northeast Home Heating Oil Reserve (NEHHOR) provides a short-term supplement to commercial home heating oil supplies in the Northeast in the event of a supply interruption. The NEHHOR program funds Commercial Storage Leases, Information Technology Support, Quality Control and Analyses. It is a valuable component of America’s energy readiness effort, separate from the Strategic Petroleum Reserve. In FY 2011, NEHHOR completed the sale of all 2 million barrels of its high sulfur heating oil in commercial storage in order to make the transition to a 1 million barrel reserve of Ultra Low Sulfur Diesel.  The FY 2014 budget request of $8.0 million continues operation of the Reserve.

Naval Petroleum and Oil Shale Reserves. The FY 2014 budget requests $20.0 million for the Naval Petroleum and Oil Shale Reserves (NPOSR).The NPOSR program will continue to work towards closing out legal responsibilities of environmental remediation at Naval Petroleum Reserves No. 1 (Elk Hills, Calif.) and disposition activities at Naval Petroleum Reserves No. 3 (Casper, Wyo.).  NPR-3 will begin implementing the disposition plan, with final disposition estimated to occur in FY 2015. NPR-3 will be utilized for production and testing operations in order to retain asset value during preparation to transfer to potential new ownership.  Production facilities will remain operational as long as economic.   The program will continue Rocky Mountain Oilfield Testing Center (RMOTC) testing for 100 percent funds-in projects.  Environmental remediation of NPR-3 facilities will continue to facilitate the sale/disposition of the property in a manner consistent with an approved property sale/disposition plan.