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resource industry tests. Because synthetic fuels are deficient in hydrogen as compared to petroleum, and the manufacture and addition of hydrogen adds substantial costs to the finished fuels, experimentation will be expanded in FY 1982 to determine the fuel tolerance of various engine combustion chamber configurations.

INDUSTRIAL ENERGY CONSERVATION PROGRAM

There is clear evidence that the Nation's industrial sector is conserving energy. To present one example, the U.S. steel industry consumed 47 million Btu's per ton of finished steel in 1950. In 1973, the comparable figure was 35 million Btu's per ton--a 25 percent improvement in spite of the era's inexpensive energy. With the sharply rising energy prices of the 1970's, energy conservation by industry has accelerated. Between 1972 and 1976, improvements in composite industrial energy efficiency averaged 9.7 percent. Present industrial energy consumption is at almost the same level as in 1972, despite a 20 percent increase in real industry output. Decontrol of oil prices as a result of the President's January 28th announcement and increasing natural gas prices permitted under the Natural Gas Policy Act of 1978 will increase further the rate at which the industrial sector improves its energy efficiency. Conservation investment tax credits for such devices as recuperators and preheaters will also stimulate industrial conservation improvements. Accelerated depreciation allowances and the removal of unnecessary regulatory burdens, proposed as part of the President's economic recovery

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package, will improve industry's capital formation for high priority conservation investments, including development and demonstration projects.

Under these conditions, it is no longer necessary to have a Federal program of research, development, and demonstration on industrial energy conservation. Consequently, the FY 1982 request is limited to about $1 million for Program Direction funds to provide the personnel required to oversee the closeout of existing multi-year projects. Longer term, generic research on conservation that the private sector is unwilling to undertake will continue in the Energy Conversion and Utilization Technology Program in the Multi-Sector area.

ENERGY CONVERSION AND UTILIZATION TECHNOLOGY PROGRAM

The objectives of the Energy Conversion and Utilization Technology Program are to establish the technical feasibility of advanced concepts and to expand the technological base from which improved energy systems are developed. Therefore, the program supports long-term, high risk research and development that is generally not supported by the private sector.

We are requesting $12.0 million for materials research, chemical processes technology, new concepts and other areas such as the development of advanced instrumentation and analysis methods for combustion processes, and development of improved components and computer-aided design techniques for heat exchangers used for recovery and use of waste heat. This research can be

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utilized by the private sector to develop technologies in a variety of end use applications.

ENERGY RELATED INVENTIONS PROGRAM

The Energy-Related Inventions Program provides direct support to investors by evaluating their inventions and providing technical and financial assistance for innovative concepts which will contribute to energy conservation or production.

Inven

This program pays particular attention to those inventions submitted by individual investors and small companies. tions are evaluated by the National Bureau of Standards. (NBS) The Department considers for support those inventions recommended to them by NBS. The decision of the type and amount of support, if any, is based on the inventor's proposal, a review of it by an appropriate DOE technical program, and the NBS recommendation.

The FY 1982 budget request for funding to continue this

program is $5.4 million.

SCHOOLS AND HOSPITALS GRANT PROGRAM

The Institutional Conservation Program is designed to address the needs of local governments and local public and non-profit institutions. Under the National Energy Conservation Policy Act, Title III, Parts 1 and 2, DOE provides both technical and financial assistance to public and non-profit schools and

hospitals.

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The budget requests $100 million for FY 1982. With this DOE intends to award $92 million in grants to schools and hospitals to provide funds for technical assistance analyses

and energy conservation measures in an estimated 8,400 buildings. The energy saved as a result of these grants is estimated to be 4.1 million barrels of oil equivalent annually. The additional $8 million being requested will be used for contractor support for auditing and monitoring grants, program evaluation, management information system support, technical review of grant applications, and for the survey, evaluation and dissemination of effective energy conservation methodologies and energy management practices in institutional buildings. These activities will be disproportionately greater in FY 1982 because they will not only cover grants awarded in FY 1982, but also grants awarded at the end of FY 1981.

WEATHERIZATION ASSISTANCE FOR LOW-INCOME PERSONS

In FY 1982, the Energy Department's weatherization assistance program will be incorporated into the Department of Housing and Urban Development's proposed community development support assistance program. Low-income home weatherization activities will thus continue, but more in accord with local needs and priorities. Currently, about one-third of community development block grant funds, or about $1 billion annually, is targeted by recipient communities to some form of rehabiliCombining the Department's weatherization program with

tation.

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HUD's community development block grant is one example of
Administration efforts to shift resources and decision-making
authority to State and local governments through block grants
and program simplification wherever possible. The existing
Department of Energy program has been plagued by increasing
costs and quality control problems. As currently structured,
the Department of Energy program would take 50-100 years to
reach all the potentially eligible low-income households in
the Nation. By shifting administrative responsibility entirely
to the local level, communities will be able to devise
weatherization efforts most appropriate to their needs and
circumstances and achieve greater levels of efficiency and
productivity.

ENERGY STORAGE RESEARCH & DEVELOPMENT

The program goal is to conduct long-term research and development on advanced storage technologies and more fundamental research to provide a technology base from which new concepts will be

developed.

There are two program areas in the storage program. For the Electrochemical Storage area the request is $26.3 million and for the Physical and Chemical Storage we are requesting $12.3 million. The program direction request is $0.5 million.

The emphasis in FY 1982 will be to concentrate on long-term research and development since nearer term storage technologies will be developed by the private sector as the market evolves.