NATIONAL NEED: ENERGY

[Functional code 270; in millions of dollars)

Recom*:::: Outlays Major missions and programs budget authorit 1977 1978 1979 1980 for 197 actual estimate estimate estimate Energy conservation: Technology development------------- 385 127 244 324 439 Grants, efficiency standards, and technical assistance-------------------- 625 16 208 578 622 Automobile fuel-efficiency tax refunds (proposed legislation).-------------- 500 -------- 150 500 500 Subtotal.----------------------- 1,510 143 60| 1, 402 1,561 Energy supply: Research, development, and demonstrations: Nuclear fission-------------------- 815 836 935 828 815 Commercial nuclear waste--------- 187 67 126 163 184 Fossil---------------------------- 727 452 582 689 1, 110 Renewable resources--------------- 874 434 663 792 925 Environmental-------------------- 324 271 329 327 328 Supporting technology------------- 232 136 170 218 235 Uranium enrichment----------------- 1,399 1,070 1,301 1,383 1,752 Uranium enrichment revenues--------- —1,209 –658 –966 – 1, 209 –1,250 Proposed legislation---------------- -163 -------- -------- —163 –169 Petroleum reserves------------------- 385 107 488 512 284 Petroleum reserve receipts------------ –553 –379 –492 –553 –55/ Power marketing-------------------- 154 1, 150 1,314 1,430 1,723 Other offsetting receipts-------------- –304 –219 –262 –304 –312 Subtotal------------------------ 2,869 3, 266 4, 190 4, 113 5,074 Emergency energy preparedness--------- 4, 255 123 2,273 3,284 2,853 Energy information, policy, and regulation: Regulation: Federal Energy Regulatory Com---- 44 35 35 42 44 Economic Regulatory Administration- 60 50 51 59 60 Nuclear Regulatory Commission----- 331 23| 275 307 320 Energy information------...----------- 63 37 46 61 64 Administrative expenses (DOE)------- 503 3|| 392 458 480 Proposed legislation---------------- ? ---------------- 3 22 Subtotal------------------------ 1,006 664 799 930 990 Deductions for offsetting receipts-------- –95 –23 –26 –95 –95 Total.-------------------------- 9,544 4, 172 7,837 9,634 10, 384 Addendum Off-budget Federal entity: Rural electrification and telephone revolving fund--- --------- 394 6? ----------------

for other substitutes for oil and natural gas. Recommended increases also include the development of advanced propulsion systems for automobiles (for example, turbine engines) and electric and hybrid vehicles, as well as improved technologies for storing energy. The budget recommends that the program for evaluating the energy inventions of individuals and small businesses be continued, along with the program to develop small-scale technologies for energy conservation.

Grants, efficiency standards, and technical assistance.—These programs are designed to encourage energy conservation activities by individuals, businesses, nonprofit institutions, and government entities. Outlays are estimated at $578 million in 1979, as compared to $208 million in 1978. Outlays for energy conservation grants to States are proposed to increase 188% from 1978, in keeping with the national energy plan. Major emphasis will be placed on the funding of energy conservation improvements for schools, hospitals, and the homes of low-income individuals. Grants for State planning of State and local energy conservation activities will continue under these budget proposals. The budget also includes funds for the expansion of the energy extension service to a nationwide program. The service is expected to provide energy information to individuals, farmers, and small businesses. Funding is also proposed for other national energy plan initiatives, such as utility rate reforms and the development of minimum efficiency standards for major home appliances. Legislation to improve State grant programs will be proposed after completion in the spring of a study on the role of State governments in implementing energy policy and programs.

Automobile fuel-efficiency tax refunds.-The national energy plan includes an automobile fuel-efficiency (“gas-guzzler”) tax with all revenues to be refunded as subsidies for the purchase of fuel-efficient vehicles.

Taz expenditures to encourage conservation.—The national energy plan proposes the use of tax expenditures, which had previously been reserved for energy production, to promote conservation of scarce energy resources. The principal tax expenditures proposed are: • tax credits to individuals to encourage the installation of insulation and the use of solar equipment in private residences; and • tax credits to businesses for thermal efficiency, cogeneration, coal conversion, and solar equipment. These tax credits would result in tax expenditures of $0.8 billion for individuals and $0.4 billion for businesses in 1979.

Energy supply.—The programs that support this major mission are designed to encourage development of additional energy resources and use of technologies to increase production from domestic energy resources, especially those that can substitute for increasingly scarce oil and natural gas. Included are substantial outlays for research, development, and demonstration in all areas of energy production, with increased emphasis on the disposal of nuclear waste materials, and the development of renewable or inexhaustible energy technologies. In addition, the Government is directly responsible for the enrichment of uranium to fuel nuclear reactors and the management of the naval petroleum reserves, several power marketing administrations, and the Tennessee Valley Authority. Over time, revenues offset the budget outlays for the uranium enrichment activities and power marketing administrations.

Net outlays for energy supply are expected to be $4.1 billion in 1979, compared to $4.2 billion in 1978 and $3.3 billion in 1977. Outlays for nonnuclear energy supply programs will increase in 1979 by 11% despite the overall reduction in net outlays for energy supply. The net reduction results from substantial increases in receipts planned or proposed to be received from energy supply programs and a reduced emphasis on nuclear fission research and development.

Research, development, and demonstrations.—Two major premises with respect to Federal support of energy supply research and development are (1) that its contributions will be realized, almost without exception, only by the midterm (1990–2000) and beyond; and (2) that it should complement and augment, not displace, private sector efforts. The appropriate Federal role in energy research and development is to concentrate on technologies that not only have high potential for energy production or savings to the Nation, but also have such technical risk or lengthy periods of development that the private sector would not normally pursue them on its own or in a timely manner. Federal efforts are less appropriately applied where the technical risk is low, development time is relatively short, or an intimate knowledge of the market is required.

The advanced nuclear fission research and development program has been redirected from its former primary emphasis on early commercial introduction of the plutonium fueled liquid metal fast breeder reactor. The program objective now is development of advanced nuclear systems that minimize the risks of international nuclear weapons proliferation. As part of this effort, the completion of a thorough analysis of the various possible advanced nuclear fuel cycle and breeder reactor options is given high priority. Total outlays in 1979 are estimated at $828 million.

The maintenance of a strong but reduced base technology effort for the liquid metal fast breeder reactor is proposed; cancellation of the demonstration plant at Clinch River, Tenn., an unnecessarily expensive project based on an outmoded technology, is again recommended. The budget includes funds to accelerate investigations of alternative breeder concepts, especially those that do not involve fuels that can be readily used to produce nuclear weapons. Also recommended is a program of intensified research on advanced nonbreeder nuclear technologies. The goal of this effort is to increase the efficiency of nuclear fuel consumption in order to avoid a premature commitment to the commercialization of breeder technologies which carry with them high risks of nuclear weapons proliferation. A strengthened effort to determine domestic and international nuclear fuel resources is proposed to provide a more accurate basis for determining when advanced nuclear technologies will be required. The budget also supports a new research effort in the Department of Energy on means to improve operating safety margins in current generation nuclear reactors. The administration believes that development and demonstration of a safe and environmentally acceptable technology for the permanent disposal of nuclear waste is necessary to ensure that nuclear power can continue to make a contribution to meeting the Nation's energy requirements. The administration, through the commercial nuclear waste management program, is committed to resolving all remaining waste management issues and is currently reviewing the programs of the Department of Energy aimed at disposing of both civilian and defense nuclear wastes. The proposed budget provides the resources necessary to develop and demonstrate by 1985 (the earliest practicable date) an effective means for permanently disposing of nuclear wastes to ensure the continued use of current generation nuclear power plants. Outlays for 1979 are estimated to be $163 million, 29% above 1978. The fossil energy program is designed to enhance our capability to develop the Nation's fossil energy resources: coal, natural gas, and petroleum. One of the major problems with current fossil technologies, mainly coal, is the unacceptable level of pollution. Accordingly, a substantial part of the fossil energy research program is directed at finding and developing technologies that can reduce coal pollution problems. Outlays for the fossil energy program are estimated at $689 million for 1979, an increase of approximately 18% over the 1978 level. The 1979 budget for the fossil energy research program include significant increases for coal conversion (liquefaction and gasification), and coal utilization (fluidized bed combustion, magnetohydrodynamics, advanced turbines, and advanced fossil research). The program includes the initiation of a solvent refined coal demonstration plant in addition to the continuation of previously initiated coal gasification demonstration plants. Efforts are also included to develop enhanced oil and natural gas recovery techniques and to develop oil shale technology. The advanced coal mining technology and coal preparation research and development programs were transferred from the Bureau of Mines to the Department of Energy to permit a more integrated approach to the problems concerning the production and use of coal. The advanced coal mining technology program seeks to improve the efficiency of coal mining operations consistent with health, safety, and environmental standards. The estimated 1979 outlays for the mining program are $67 million, which includes $5 million to initiate a program that will explore alternative surface mining techniques. In addition, in order to ensure that the Government's fossil energy development program is consistent with the Nation's environmental goals, some of the programs previously funded in the Environmental Protection Agency's environmental control technology program are proposed to be funded by the Department of Energy and incorporated into its fossil energy research and development program. In addition, funding is provided to the Environmental Protection Agency for some activities previously funded in the environmental research and development program in the Department of Energy as discussed below. The goal of the inexhaustible and renewable resources programs is to develop and demonstrate clean, safe, and economically viable new technologies in the following areas: solar (including power from wind and ocean sources), geothermal, small hydropower, biomass (use of organic waste products and crops for fuel), and fusion. Outlays for these programs are estimated at $792 million for 1979, an increase of 19% over 1978. This proposed higher level of outlays will be used for increased research in solar photovoltaics (technologies designed to generate electricity directly from the Sun), solar air-conditioning, wind and geothermal energy, and the development of new technologies for small-scale applications using wood to substitute for oil and natural gas. Also, the first major pilot plant project to produce electricity from solar generated steam will be continued and modified to improve its potential for use with conventional electric plants. The rapidly growing market for use of solar energy in homes and commercial buildings will be assisted by national energy plan initiatives such as tax credits, the increased use of solar power in Federal buildings, dissemination of information, and the development of consumer protection criteria for solar buildings technology. Also, additional research and development will continue to develop economical solar air-conditioning technology. The solar heating demon