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President’s FY 2017 Budget Includes $878 Million for Fossil Energy Programs

February 9, 2016 - 2:33pm


President Obama’s Fiscal Year (FY) 2017 Budget includes a programmatic level of $878 million for the Office of Fossil Energy (FE), including the use of $240 million in prior year funds, to advance technologies related to the reliable, efficient, affordable and environmentally sound use of fossil fuels, implement ongoing federal responsibilities at the Naval Petroleum and Oil Shale Reserves, and manage the Strategic Petroleum Reserve, Northeast Gasoline Supply Reserve and Northeast Home Heating Oil Reserve to provide strategic and economic security against disruptions in U.S. petroleum supplies.     

The President’s request includes $600 million for Fossil Energy Research and Development (FER&D), including the use of $240 million in prior year funds from existing Clean Coal Power Initiative (CCPI) projects that have not reached financial close. Of this total, $564 million is targeted to support Mission Innovation, an initiative launched by the U.S. and 19 other countries to accelerate widespread clean energy technology innovation and cost reduction. It is a widely-shared view that innovation is essential for economic growth by providing affordable and reliable energy for everyone, is critical for energy security, enhances U.S. competitiveness, and is the key to a transition to a low carbon energy future.

The FY 2017 Request also includes $257 million for the Strategic Petroleum Reserve, $14.95 million for the Naval Petroleum Reserves, and $6.5 million, as well as use of $4 million in prior year balances, for the Northeast Home Heating Oil Reserve

The FY 2017 Budget will allow FE to fulfill its mission: to provide the nation with the best opportunity to tap the full potential of its abundant energy resources in an environmentally sound and affordable manner and to ensure America’s readiness to respond to short-term energy supply disruptions.  

Following are highlights of the President’s FY 2017 Budget Request for the Office of Fossil Energy.


FER&D leads Federal research, development, and demonstration efforts on advanced carbon capture and storage (CCS) technologies to facilitate achievement of the President’s climate goals. FER&D also develops technological solutions for the prudent and sustainable development of our unconventional oil and gas domestic resources.

The FY 2017 Request reflects a restructuring of the FER&D budget to streamline the structure, align subprograms that support related efforts under the same program, and provide a more comprehensive view of the costs associated with NETL.  Importantly, one of the key motivations for the structural change is to eliminate the categorization by fuel type which is no longer appropriate for this R&D portfolio.  The new budget structure reflects the fact that the CCS and Advanced Power Systems program supports CCS technologies, storage best practices, and innovative power systems integrated with CCS that are applicable to both coal and natural gas generation.

The FY 2017 Budget includes a total of $600 million for FER&D, including the use of $240 million in prior year funds.  This program advances technologies to enable the reliable, efficient, affordable, and environmentally sound use of fossil fuels which are essential to our Nation’s security and economic prosperity. FER&D also manages previously funded major CCS demonstration projects.

CCS and Advanced Power Systems

Research under the CCS and Advanced Power Systems program is focused on reducing carbon emissions by advancing the environmental performance and efficiency of fossil energy systems integrated with CCS technologies.

Carbon Capture

The President’s FY 2017 budget requests $170.3 million for carbon capture R&D.  This R&D 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. Under the budget restructuring, this subprogram also now include advanced combustion technologies that facilitate CCS.

FY 2017 funding will enable selection of one additional large-scale post-combustion capture pilot and will fund a total of three large scale-scale post-combustion pilots.  Funding will also enable continued transformational R&D technology development for pre- and post-combustion capture. The program will also support a Front End Engineering Design (FEED) study and initial construction of a large pilot facility to capture CO2 from a natural gas power system.  The increase in FY 2017 funding will support two additional (four total) FEED studies for advanced combustion systems. 

Carbon Storage

For FY 2017, the President is requesting $90.9 million for carbon storage R&D.  The overall goal of Carbon Storage is to develop and validate technologies to ensure safe and permanent geologic storage of captured CO2 from both coal and natural gas power systems.

The FY 2017 funding Request supports: 1) storage field management projects, including the Regional Carbon Sequestration Partnerships, and other field characterization and injection projects; 2) risk and integration tool development; and 3) advanced storage R&D efforts, as part of the Department’s Subsurface crosscut, to develop laboratory and bench-scale technologies for identifying and obtaining new subsurface signals, ensuring wellbore integrity, and increasing understanding of the stress state and induced seismicity.

Advanced Energy Systems (AES)

The President’s FY 2017 Budget Request includes $47.8 million for the Advanced Energy Systems (AES) program.  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, advanced turbines, supercritical CO2 (sCO2), and solid oxide fuel cells.  The program will be refocused to support the Supercritical Transformational Electric Power (STEP) initiative, which supports the Department of Energy’s Supercritical CO2 crosscut targeted at technology development for supercritical carbon dioxide-based power conversion cycles.

Crosscutting Research and Analysis

The President’s FY 2017 Budget requests $59.35 million for Crosscutting Research and Analysis.  This program fosters the development of innovative systems for improving availability, efficiency, and environmental performance of advanced energy systems with CCS. It also leads efforts that support university-based fossil energy research including science and engineering education at minority colleges and universities. Crosscutting Research and Analysis will also support the Mickey Leland Energy Fellowship Program, which aims to increase in the number of women and under-represented minorities entering the scientific and engineering career fields within the U.S. workforce. FY 2017 funding will support the development of new materials, catalysts, water-efficient systems and technologies for power plants, and desalinization technologies for water produced through CCS.  It will also support immersive, interactive visualization technology and data communication optimization methods to improve the design and operation of advanced power systems with CCS.  

Fuel Supply Impact Mitigation

The President’s FY 2017 request includes $26.5 million for the Fuel Supply Impact Mitigation program, which is the new proposed name for the Natural Gas Technologies program, in line with the FER&D-wide elimination of categorization by fuel type which is no longer appropriate for this R&D portfolio.   

This Request includes funding for three subprograms under the Fuel Supply Impact Mitigation program, including the Environmentally Prudent Development subprogram.  This subprogram will continue to conduct research in water quality, water availability, air quality, induced seismicity, and mitigating the impact of development of domestic unconventional oil and gas in collaboration with the Environmental Protection Agency and the Department of the Interior. The FY 2017 Request also includes funding the Emissions Mitigation and Quantification subprogram, which combines the former Emissions Mitigation from Midstream Infrastructure and the Emissions Quantification from Natural Gas Infrastructure subprograms.  The subprogram will conduct research on reducing methane emissions from natural gas infrastructure and will also support emissions quantification research focused on updating and improving component-level emission factors across the natural gas value chain for EPA’s Greenhouse Gas Reporting Program and the Greenhouse Gas Inventory. The 2017 Request also supports the Gas Hydrates subprogram.  This subprogram will conduct investigations to confirm the nature and regional context of gas hydrate deposits in the Gulf of Mexico in coordination with the U.S. Geological Survey.

Program Direction

The FY 2017 Request includes $61 million for Program Direction which provides the funding for all headquarters personnel and operational expenses in Fossil Energy R&D. It also includes functions such as legal, finance, procurement, information technology and human resources that are necessary for the performance of NETL activities. Also included in this funding is the Import/Export Authorization program, which will continue regulatory reviews and oversight of the transmission of natural gas across U.S. borders.

National Energy Technology Laboratory (NETL)

NETL supports the Office of Fossil Energy’s Research and Development efforts. The President’s Budget includes $68 million for the new NETL Infrastructure program, which supports the upkeep of a lab footprint valued at $600 million in three geographic locations -- Morgantown, WV; Pittsburgh, PA; and Albany, OR.  The Request also includes $76 million for the new NETL Research and Operations program, which is comprised of the following subprograms:  1) Research and Development; 2) Site Operations; 3) Program Oversight and (4) Feasibility of Recovering Rare Earth Elements.  


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) 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, 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.  At the same time, the Northeast Gasoline Supply Reserve’s (NGSR) 1 million barrel inventory of gasoline continues to be maintained at leased commercial storage terminals along the East Coast to help mitigate the impacts of sudden and unexpected supply disruptions. 

The FY 2017 Request of $257 million will provide for SPR operational readiness and drawdown capability.  The program will continue the degasification of crude oil inventory to ensure its availability and conduct wellbore testing and cavern remediation.  Major changes from FY 2016 include: full funding for Protective Force positions at all sites; additional preventive/corrective maintenance related to corrosion; and the addition of a custody transfer flow metering skid. 

Naval Petroleum and Oil Shale Reserves 

The FY 2017 Requests includes $14.95 million for the Naval Petroleum and Oil Shale Reserves.  Following the 1998 sale of the government's interests in Naval Petroleum Reserve 1 (NPR-1) in Elk Hills, CA, environmental cleanup/remediation activities under the Corrective Action Consent Agreement with the State of California Department of Toxic Substances Control began.  In FY 2017, NPR-1 will continue these assessments and remediation activities.

The account also funds activities at the Naval Petroleum Reserve 3 (NPR-3) in Wyoming (the Teapot Dome field located 35 miles north of Casper, WY), a stripper well oil field.  On January 30, 2015, the Department finalized the sale of the Teapot Dome Oilfield for $45.2 million.  NPR-3/ Rocky Mountain Oilfield Testing Center has completed Phase III of the disposition plan with activities including closure of contracts, preparation of field IT and equipment for disposal, records management processing, and disposal of personal property.  FY 2017 activity includes closure and monitoring activities for the onsite landfill.

Northeast Home Heating Oil Reserve 

The Northeast Home Heating Oil Reserve (NEHHOR) FY 2017 Request of $6.5 million, as well as use of $4 million in prior year balances, supports the continued maintenance of a 1 million-barrel inventory of ultra-low sulfur distillate in commercial storage terminals in the Northeastern U.S.  The Reserve serves as a short-term supplement to commercial supplies of heating oil in the event of an emergency supply disruption in that region of the country. New commercial storage contracts have been awarded and are expected to go in effect on April 1, 2016.  The program will continue to focus its oversight and management on quality analysis of the Reserve as well as information technology support for the sales system.