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President Requests $650.8 Million for Fossil Energy Programs

February 13, 2012 - 12:00pm

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Washington, DC - President Obama’s FY 2013 budget seeks $650.8 million for the Office of Fossil Energy (FE) to support improved energy security and rapid development of climate-oriented technology. The request includes $420.6 million for Fossil Energy Research and Development, $195.6 million for the Strategic Petroleum Reserve, $10.1 million for the Northeast Home Heating Oil Reserve (and includes a $6 million rescission of prior year funds), $14.9 million for the Naval Petroleum Reserves and $15.6 million for the Elk Hills School Land Fund.

The FY 2013 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 2013 budget requests $420.6 million for a fossil energy research and development (R&D) portfolio. This program is designed to ensure we can continue to use the nation’s abundant fossil resources through the development of clean energy technologies, with a specific focus on dramatic reductions of global carbon emissions at acceptable cost. Fossil Energy R&D will also address concerns associated with the environmental, health, and safety risks of shale gas development.

Advancing Toward a Low-Carbon Future

In FY 2013 and through the Recovery Act, the Coal program continues aggressive funding for carbon capture and storage (CCS) activities, including large-scale demonstration of injection and storage in geologic formations or beneficial utilization of carbon dioxide (CO2) through the Regional Carbon Sequestration Partnerships and large-scale demonstration of carbon capture technologies through the Clean Coal Power Initiative, FutureGen 2.0, and Industrial CCS activities.

CCS Demonstrations. The CCS Demonstrations program, including the Clean Coal Power Initiative, FutureGen 2.0, and Industrial CCS Demonstrations, enables and accelerates the deployment of advanced carbon capture storage, and utilization technologies to ensure clean, reliable, and affordable electricity for the United States. The 2013 budget request does not provide any demonstration funds because these projects are already strongly supported in large part through the 2009 American Recovery and Reinvestment Act. Carbon Capture & Storage and Power Systems. The FY 2013 budget request for the Carbon Capture & Storage and Power Systems program is $275.9 million. This program supports research to significantly reduce coal power plant emissions, including CO2, and substantially improve efficiency to reduce carbon emissions, leading to a viable near-zero atmospheric emissions coal energy system, and supporting carbon capture, utilization and storage. It also includes $35 million for NETL staff to conduct in-house coal R&D.

Carbon Capture. The President’s budget requests $60.4 million for carbon capture R&D. This sub-program is focused on the development of post-combustion and pre-combustion CO2 capture technology for new and existing power plants as well as industrial sources.

Carbon Storage. The FY 2013 budget requests $95.5 million for carbon storage and utilization R&D. The activities conducted under this sub-program will be used to benefit the existing and future fleet of fossil fuel power generating facilities by reducing the cost-of-electricity impacts and providing protocols for carbon capture, storage and utilization demonstrations whose principal objective is to capture, transport, store, and monitor the CO2 injected in geologic formations.

Advanced Energy Systems. The President’s budget requests $55.2 million for advanced energy systems R&D. This sub-program focuses on reducing the cost of gasification and enabling affordable CO2 capture, while increasing plant availability and efficiency, and maintaining the highest environmental standards.

Cross-cutting Research. The FY 2013 budget requests $29.8 million for cross-cutting research. This sub-program serves as a crosscutting bridge between basic and applied research by fostering the development and deployment of innovative systems for improving efficiency and environmental performance through the research and development of instrumentation, sensors, and controls targeted at enhancing the availability of advanced power systems while reducing costs of Advanced CCS and Power Systems.

Oil and Natural Gas Technologies. The Oil and Natural Gas Technologies R&D program ensures the prudent development of our domestic oil and natural gas resources. Funding for this program will support the coordinated effort by DOE, the Environmental Protection Agency and the U.S. Geological Survey to conduct research to understand and reduce the environmental, health and safety risks of natural gas and oil production through hydraulic fracturing. The program is also studying hydrates in the Arctic via a controlled in situ depressurization and CO2 injection, and evaluating natural gas hydrates in the Arctic as a potential fossil energy source for the nation. The FY 2013 budget requests $17.0 million for this program area.

PETROLEUM RESERVES

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

Strategic Petroleum Reserve. The Strategic Petroleum Reserve (SPR) provides strategic and economic security against foreign and domestic disruptions in oil supplies via an emergency stockpile of crude oil. The program fulfills U.S. obligations under the International Energy Program. The Department of Energy is requesting $195.6 million in FY 2013.

The FY 2013 budget request provides for the management, operations, and security of the four SPR storage facilities, the relocation of the degasification plant to the West Hackberry site to maintain crude oil stocks at safe vapor pressure levels, cavern casing inspections and remediation as required to comply with state regulations and to assure storage integrity. The FY 2013 budget request also proposes to permanently cancel $291 million of SPR Petroleum Account receipts available from the International Energy Agency mandated Drawdown of 2011. The total sales receipts from the Drawdown were deposited into the SPR Petroleum Account and the FY 2012 enacted budget included a $500 million rescission from these receipts.

Northeast Home Heating Oil Reserve. The Northeast Home Heating Oil Reserve provides a short-term supplement to the private home heating oil supplies in the Northeast in the event of a supply interruption. In FY 2011, the Reserve completed the sale of all the high sulfur heating oil in commercial storage and awarded new contracts for commercial storage leases for 1 million barrels of ultra-low sulfur diesel (ULSD). The FY 2012 budget cancelled the net sale receipts in excess of the cost to purchase 1 million barrels of ULSD and other related costs.  The FY 2013 budget request of $10.1 million continues operation of the Reserve, including the extension of the lease of commercial storage space and includes a rescission of $6 million in prior year funds.

Naval Petroleum and Oil Shale Reserves. The FY 2013 budget requests $14.9 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 and those projects wholly funded by EERE’s Geothermal Technology Program. 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.

Elk Hills School Lands Fund. The Elk Hills School Lands Fund provides a source of compensation for the California State Teachers’ Retirement System as a result of a settlement with the State of California with respect to its longstanding claim to title of two sections of land within NPR-1. The FY 2013 budget request provides $15.6 million for the final payment to California under this settlement.

 

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