President Obama’s FY 2015 budget seeks $711.0 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 $475.5 million for Fossil Energy Research and Development, $205.0 million for the Strategic Petroleum Reserve, $1.6 million for the Northeast Home Heating Oil Reserve and $19.95 million for the Naval Petroleum Reserves.
The FY 2015 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 2015 budget requests $475.5 million for a fossil energy research and development (FER&D) portfolio. FE leads Federal research, development, and demonstration efforts on advanced carbon capture and storage (CCS) technologies to facilitate achievement of the President’s climate goals. FE also develops technological solutions for the prudent and sustainable development of our unconventional domestic resources.
In FY 2015, Fossil Energy Research and Development will continue to focus on carbon capture and storage and activities that increase the efficiency and availability of systems integrated with CCS.
CCS Demonstrations. FER&D manages the Clean Coal Power Initiative program along with two American Recovery and Reinvestment Act CCS demonstration programs: FutureGen 2.0 and the Industrial Carbon Capture and Storage program under the CCS Demos program. In FY2015, FER&D will establish a new demonstration program, Natural Gas Carbon Capture and Storage (NG-CCS), to support projects to capture and store carbon emissions from natural gas power systems. The ability to demonstrate advanced technologies at a scale that has been developed within the FER&D or other R&D programs is an important benefit of the demonstration programs.
Carbon Capture & Storage and Power Systems. The CCS and Power Systems program conducts research to reduce carbon emissions by improving the performance and efficiency of fossil energy systems and CCS technologies. The FY 2015 budget request for the program is $277.4 million. It also includes $34.0 million for NETL staff to conduct in-house coal R&D.
Carbon Capture. The President’s FY 2015 budget requests $77.0 million for carbon capture R&D. The Carbon Capture activity is focused on the development of post-combustion and pre-combustion CO2 capture and compression technologies for new and existing fossil fuel-fired power plants and industrial sources. Post-combustion CO2 capture technology R&D is focused on capturing CO2 from flue gas after the fuel has been consumed/combusted. Pre-combustion CO2 capture is applicable to systems that capture and separate the CO2 from mixed gas streams prior to combustion or utilization of the gas.
Carbon Storage. The President’s FY 2015 budget requests $80.1 million for carbon storage R&D. The overall goal of the Carbon Storage Program is 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 assess, monitor and mitigate storage risks for CO2 onshore and offshore storage 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 (AES). The President’s FY 2015 budget requests $51.0 million for advanced energy systems R&D. The AES mission is to increase the availability and efficiency of fossil energy systems integrated with CO2 capture, while maintaining the highest environmental standards at the lowest cost. The program elements focus on gasification, oxy-combustion, advanced turbines, and other energy systems.
Cross-cutting Research. The President’s FY 2015 budget requests $35.3 million for crosscutting research. The Program serves as a bridge between basic and applied research by targeting concepts that offer the potential for transformational breakthroughs and step change benefits in the way energy systems are designed, constructed, and operated. In addition, the Cross-cutting Research Program leads efforts that support University-based energy research including science and engineering education at minority colleges and universities.
Natural Gas Technologies. The mission of the Natural Gas program – with a FY 2015 budget request of $35.0 million – is to support DOE missions in energy, environment and national security. The Natural Gas Technologies program will focus on technologies to reduce the carbon footprint, emissions, and water use in order to enable safe and responsible development of unconventional domestic natural gas resources. The Department of Energy, Department of the Interior, and Environmental Protection Agency developed a focused, collaborative research effort to address high-priority challenges to safe and prudent development of unconventional resources. FER&D research includes advancements in technology, methodology, risk assessment, and mitigation consistent with the multiagency effort. The program will initiate a midstream natural gas infrastructure program focused on advanced cost-effective technologies to detect and mitigate methane emissions from natural gas transmission, distribution, and storage facilities and to communicate results on methane emissions mitigation to stakeholders. In addition, the program intends to conduct lab- and field-based research focused on increasing public understanding of methane dynamics in gas-hydrates bearing areas. These public sector-led efforts will be designed to evaluate the occurrence, nature and behavior of naturally occurring gas hydrates and resulting resource, hazard, and environmental implications.
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 and meets the U.S. obligations under the International Energy Agency (IEA). The most recent drawdown of the SPR was 30 million barrels in FY 2011 as the U.S. obligation under the IEA Libya Collective Action. The remaining 696 million barrels of inventory provided 112 days of net import protection in 2013. The SPR remains configured to address energy vulnerabilities established in the 1970’s/1980’s based on then-existing U.S. supply and demand requirements. The FY 2015 budget request for SPR is $205.0 million which will provide the program with full SPR operational readiness and drawdown capability.
Northeast Home Heating Oil Reserve. The Northeast Home Heating Oil Reserve (NEHHOR) provides a short-term supplement to the Northeast systems’ commercial supply of heating oil in the event of a supply interruption. In FY 2011, the NEHHOR Program completed the sale of all 2 million barrels of its high sulfur heating oil inventory located in commercial storage. In FY 2012 NEHHOR converted to a 1 million barrel configuration of Ultra Low Sulfur Diesel (ULSD) stored in the Northeast terminals, to meet new Northeast states’ emission standards being instituted. The FY 2014 program will continue operation of the 1 million barrel Reserve of ULSD in Groton, CT and Revere, MA. The FY 2015 budget request for NEHHOR is $1.6 million, which will be supplemented by use of prior year balances.
Naval Petroleum and Oil Shale Reserves. The FY 2015 budget requests $19.95 million for the Naval Petroleum and Oil Shale Reserves (NPOSR). The NPOSR program manages a number of legal agreements that were executed as part of the 1998 sale of NPR-1 in California. These agreements direct post-sale work including environmental restoration and remediation, contract closeout, and records disposition. The NPR-1 program continues to work towards closing out the remaining environmental findings, as required by the 2008 agreement between DOE and the California DTSC. DOE also operates NPR-3 and RMOTC, co-located near Casper, Wyoming. NPR-3/RMOTC will implement the approved disposition plan with final disposition of the property estimated to occur December 2015.
Elk Hills School Land Fund. The Elk Hills School Lands Fund, subject to appropriation, 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. In 2011, the Department and the State of California agreed on the final, last payment of $15.6 million. Funding for this payment is requested in the FY 2015 budget.