Tài liệu Energy Research at DOE WAS IT WORTH IT? Energy Efficiency and Fossil Energy Research 1978 to 2000 docx

Energy Research at DOE
WAS IT WORTH IT?
Energy Efficiency and Fossil Energy Research
1978 to 2000

Committee on Benefits of DOE R&D on Energy Efficiency and Fossil Energy
Board on Energy and Environmental Systems
Division on Engineering and Physical Sciences
National Research Council

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COMMITTEE ON BENEFITS OF DOE R&D ON ENERGY EFFICIENCY AND FOSSIL ENERGY
ROBERT W. FRI, National Museum of Natural History, Chair
WILLIAM AGNEW, NAE,1 General Motors Research Laboratories (retired)
PETER D. BLAIR, National Academy of Sciences
RALPH CAVANAGH, Natural Resources Defense Council
UMA CHOWDHRY, NAE, DuPont Engineering Technology
LINDA R. COHEN, University of California, Irvine
JAMES CORMAN, Energy Alternative Systems Inc.
DANIEL A. DREYFUS, National Museum of Natural History (retired)
WILLIAM L. FISHER, NAE, University of Texas, Austin
ROBERT HALL, CDG Management, Inc.

GEORGE M. HIDY, Envair/Aerochem
DAVID C. MOWERY, University of California, Berkeley
JAMES DEXTER PEACH, Ellicott City, Maryland
MAXINE L. SAVITZ, NAE, Honeywell
JACK S. SIEGEL, Energy Resources International, Inc.
JAMES L. SWEENEY, Stanford University
JOHN J. WISE, NAE, Mobil Research and Development Company (retired)
JAMES L. WOLF, consultant, Alexandria, Virginia
JAMES WOODS, HP-Woods Research Institute

Committee Subgroup on Energy Efficiency

Committee Subgroup on Benefits Framework

MAXINE L. SAVITZ, Co-chair
JAMES L. WOLF, Co-chair
WILLIAM AGNEW
PETER D. BLAIR
RALPH CAVANAGH
UMA CHOWDHRY
LINDA R. COHEN
DAVID C. MOWERY
JAMES WOODS

JAMES L. SWEENEY, Chair
LINDA R. COHEN
DANIEL A. DREYFUS
ROBERT W. FRI
DAVID C. MOWERY
Liaison from the Board on Energy and Environmental

Systems
WILLIAM FULKERSON, University of Tennessee,
Knoxville

Committee Subgroup on Fossil Energy
JACK S. SIEGEL, Chair
JAMES CORMAN
WILLIAM L. FISHER
ROBERT HALL
GEORGE M. HIDY
JAMES DEXTER PEACH
JOHN J. WISE

1NAE

Project Staff
RICHARD CAMPBELL, Program Officer and Study
Director
JAMES ZUCCHETTO, Board Director
DAVID FEARY, Senior Program Officer, Board on Earth
Sciences and Resources (BESR)
ROGER BEZDEK, consultant
ANA-MARIA IGNAT, Senior Project Assistant

= Member, National Academy of Engineering

iv


BOARD ON ENERGY AND ENVIRONMENTAL SYSTEMS

ROBERT L. HIRSCH, RAND, Chair
RICHARD E. BALZHISER, NAE,1 Electric Power Research Institute (retired)
DAVID BODDE, University of Missouri
PHILIP R. CLARK, NAE, GPU Nuclear Corporation (retired)
WILLIAM L. FISHER, NAE, University of Texas, Austin
CHRISTOPHER FLAVIN, Worldwatch Institute
HAROLD FORSEN, NAE, National Academy of Engineering, Washington, D.C.
WILLIAM FULKERSON, Oak Ridge National Laboratory (retired) and University of Tennessee, Knoxville
MARTHA A. KREBS, California Nanosystems Institute
GERALD L. KULCINSKI, NAE, University of Wisconsin, Madison
EDWARD S. RUBIN, Carnegie Mellon University
ROBERT W. SHAW, JR., Arete Corporation
JACK SIEGEL, Energy Resources International, Inc.
ROBERT SOCOLOW, Princeton University
KATHLEEN C. TAYLOR, NAE, General Motors Corporation
JACK WHITE, Association of State Energy Research and Technology Transfer Institutions (ASERTTI)
JOHN J. WISE, NAE, Mobil Research and Development Company (retired), Princeton, New Jersey
Staff
JAMES ZUCCHETTO, Director
RICHARD CAMPBELL, Program Officer
ALAN CRANE, Program Officer
MARTIN OFFUTT, Program Officer
SUSANNA CLARENDON, Financial Associate
PANOLA GOLSON, Senior Project Assistant
ANA-MARIA IGNAT, Senior Project Assistant
SHANNA LIBERMAN, Project Assistant

1 NAE

= Member, National Academy of Engineering.

v



Acknowledgments

The Committee on Benefits of DOE R&D on Energy Efficiency and Fossil Energy wishes to acknowledge and thank
the staffs of the Office of Energy Efficiency and Renewable
Energy and the Office of Fossil Energy for their exemplary
cooperation during the course of this project. The committee
called on these offices for extensive data, analyses, and presentations, which added significantly to their already heavy
workload.
The committee also wishes to express appreciation to a
number of other individuals and organizations for providing
important background information for its deliberations.
Loretta Beaumont of the U.S. House Appropriations Committee briefed us on the congressional origins of this study.
Members of the committee visited the General Electric Company and Babcock & Wilcox, whose cooperation and openness are greatly appreciated. Other organizations that briefed
the committee at one or more of its public meetings include
the Ford Motor Company, the Gas Research Institute, Wolk
Integrated Services, the Foster Wheeler Development Corporation, International Fuel Cells, Siemens Westinghouse,
the Air Conditioning and Refrigeration Institute, the U.S.
General Accounting Office, Avista Laboratories, the U.S.
Environmental Protection Agency, the Peabody Group,
CONSOL Energy Incorporated, and SIMTECHE. The committee is grateful for the facts and insights that these briefings provided.
Importantly, the committee recognizes the contribution
of Roger Bezdek, whose analytic support and keen advice
were essential to the completion of its work.
Finally, the chair is acutely aware of the extraordinary
efforts of the members of the committee and of the staff of

the Board on Energy and Environmental Systems of the National Research Council (NRC). Every member of the committee contributed to the analysis of the case studies that
form the foundation of this report and to the deliberations on
the report itself. The staff, led by Richard Campbell, man-

aged a very complicated and voluminous process in accordance with the highest standards of the NRC. What the committee was able to accomplish of the ambitious agenda set
by Congress is entirely due to the efforts of these persons.
This report has been reviewed by individuals chosen for
their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research
Council Report Review Committee. The purpose of this independent review is to provide candid and critical comments
that will assist the institution in making its published report
as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft
manuscript remain confidential to protect the integrity of the
deliberative process. We wish to thank the following individuals for their review of this report: Joel Darmstadter, Resources for the Future; Clark W. Gellings, Electric Power
Research Institute; Robert L. Hirsch, RAND; John Holdren,
John F. Kennedy School of Government, Harvard University; James J. Markowsky, American Electric Power Service
Corporation (retired); John McTague, Ford Motor Company
(retired); Glen R. Schleede, consultant; Frank J. Schuh, Drilling Technology, Inc.; and Lawrence Spielvogel, Lawrence
Spielvogel, Inc.
Although the reviewers listed above have provided many
constructive comments and suggestions, they were not asked
to endorse the conclusions or recommendations nor did they
see the final draft of the report before its release. The review
of this report was overseen by Harold Forsen of the National
Academy of Engineering. Appointed by the National Research Council, he was responsible for making certain that
an independent examination of this report was carried out in
accordance with institutional procedures and that all review
comments were carefully considered. Responsibility for the
final content of this report rests entirely with the authoring
committee and the institution.

vii



Contents

EXECUTIVE SUMMARY

1

1

INTRODUCTION
A Brief History of Federal Energy R&D, 9
Origin and Scope of This Study, 10
Organization of This Report, 12
Reference, 12

9

2

FRAMEWORK FOR THE STUDY
Overview, 13
The Setting, 13
The Framework, 14
Conduct of the Study, 18
Assessment of the Methodology, 18
Reference, 19

13

3

EVALUATION OF THE ENERGY EFFICIENCY PROGRAMS
Introduction, 20
Selection of the Case Studies, 22
Buildings: Lessons Learned from the Case Studies, 27
Industry: Lessons Learned from the Case Studies, 30
Transportation: Lessons Learned from the Case Studies, 32
Findings and Judgments, 36
Recommendations, 41
References, 42

20

4

EVALUATION OF THE FOSSIL ENERGY PROGRAMS
Introduction, 44
Selection of the Case Studies, 44
Lessons Learned from the Case Studies, 47
Findings, 57
Recommendations, 61
References, 61

44

5

OVERALL FINDINGS AND RECOMMENDATIONS
Benefits of DOE’s RD&D in Fossil Energy and Energy Efficiency, 63
DOE’s Approach to Evaluating Its RD&D Programs, 65
Portfolio Management, 66
Reference, 69

62

ix


x

CONTENTS

APPENDIXES
A

BIOGRAPHICAL SKETCHES OF COMMITTEE MEMBERS

73

B

PRESENTATIONS AND COMMITTEE ACTIVITIES

77

C

BIBLIOGRAPHY RELEVANT TO DOE R&D POLICY, CONGRESSIONAL
MANDATES, R&D RESULTS, AND EVALUATIONS

79

D

MEASURING THE BENEFITS AND COSTS OF THE DEPARTMENT OF
ENERGY’S ENERGY EFFICIENCY AND FOSSIL ENERGY
R&D PROGRAMS
Summary of the General Framework, 86
Discussion of the Rows, 88
Discussion of the Columns, 92
Interpretation and Appropriate Use of the Framework, 93

E

CASE STUDIES FOR THE ENERGY EFFICIENCY PROGRAM
Advanced Refrigeration, 95
Compact Fluorescent Lamps, 99
DOE-2 Energy Analysis Program, 100
Electronic Ballasts, 104
Free-piston Stirling Engine Heat Pump (Gas-Fired), 106
Indoor Air Quality, Infiltration, and Ventilation, 109
Low-emission (Low-e) Windows, 114
Lost Foam Technology, 118
Advanced Turbine Systems Program, 121
Black Liquor Gasification, 127
Industries of the Future Program, 132
Oxygen-fueled Glass Furnace, 135

Advanced Batteries for Electric Vehicles, 140
Catalytic Conversion of Exhaust Emissions, 143
Partnership for a New Generation of Vehicles, 145
Stirling Automotive Engine Program, 151
PEM Fuel Cell Power Systems for Transportation, 154
References, 158
Bibliography, 161

F

CASE STUDIES FOR THE FOSSIL ENERGY PROGRAM
Coal Preparation, 162
Direct Coal Liquefaction, 164
Fluidized-bed Combustion, 166
Gas-to-Liquids Technology, 169
Improved Indirect Liquefaction, 172
Integrated Gasification Combined Cycle, 174
Emission Control Technologies, 177
Mercury and Air Toxics, 180
Waste Management/Utilization Technologies, 183
Advanced Turbine Systems, 185
Stationary Fuel Cell Program, 187
Magnetohydrodynamics, 190
Coal-bed Methane, 193
Drilling, Completion, and Stimulation Program, 193
Downstream Fundamentals Research Program, 198
Eastern Gas Shales Program, 200

86

95

162


xi

CONTENTS

Enhanced Oil Recovery, 202
Field Demonstration Program, 205
Oil Shale, 207
Seismic Technology, 208
Western Gas Sands Program, 211
References, 213
Bibliography, 214
G

GLOSSARY

215

H

ACRONYMS AND ABBREVIATIONS

222

Tables and Figures

TABLES
ES-1 Energy Efficiency Technology Case Studies Slotted in the Matrix Cells That Are Most
Relevant Today, 4
ES-2 Fossil Energy Technology Case Studies Slotted in the Matrix Cells That Are Most Relevant Today, 5
2-1

The Most Important Fossil Energy and Energy Efficiency Technological Innovations Since
1978, 13

3-1

Summary of the Budget for DOE’s Energy Efficiency R&D Programs, FY 1978 to
FY 2000, 21
Expenditures for Energy Efficiency Programs Analyzed by the Committee, 1978 to
2000, 23
Categories and Case Studies, 24
Net Realized Benefits Estimated for Selected Technologies Related to Energy Efficiency
RD&D Case Studies, 29
Energy Efficiency Technology Case Studies Slotted in the Matrix Cells That Are
Most Relevant Today, 38

3-2
3-3
3-4
3-5

4-1
4-2

4-3
4-4
4-5
4-6

Fossil Energy Budgets for the 22 Programs Analyzed by the Committee, 46
Fossil Energy Programs’ Cost Sharing, 1978 to 2000, 48
Net Realized Benefits Estimated for Selected Fossil Energy R&D Programs, 56
Fossil Energy RD&D Benefits, 57
Realized Benefits from DOE RD&D Programs, 58
Fossil Energy Technology Case Studies Slotted in the Matrix Cells That Are Most
Relevant Today, 60

E-1
E-2
E-3
E-4
E-5
E-6
E-7
E-8
E-9
E-10

Funding for Advanced Refrigerators-Freezer Compressors, 96
Benefits Matrix for the Advanced Refrigerator-Freezer Compressors Program, 98
Funding for the Compact Fluorescent Lamps Program, 100
Benefits Matrix for the Compact Fluorescent Lamps (CFLs) Program, 100
Benefits Matrix for the DOE-2 Program, 103
DOE Funding for the Fluorescent Lamp Electronic Ballast Program, 105

Benefits Matrix for the Fluorescent Lamp Electronic Ballast for Program, 107
DOE Funding for the Free-Piston Stirling Engine Heat Pump Program, 108
Benefits Matrix for the Stirling Engine Heat Pump Program, 110
Benefits Matrix for the Indoor Air Quality Program, 113
xiii


xiv

TABLES AND FIGURES

E-11
E-12
E-13
E-14
E-15
E-16
E-17
E-18
E-19
E-20
E-21
E-22
E-23
E-24
E-25
E-26
E-27
E-28
E-29

E-30
E-31
E-32
E-33
E-34
E-35
E-36
E-37
E-38
F-1
F-2
F-3
F-4
F-5
F-6
F-7
F-8
F-9
F-10
F-11
F-12
F-13
F-14
F-15
F-16
F-17
F-18
F-19
F-20
F-21

Benefits Matrix for the Low-emission (Low-e) Windows Program, 116
Funding for the Lost Foam Program, 119
Benefits Matrix for the Advanced Lost Foam Technologies Program, 120
Selected Outage Costs, 122
Funding for the Advanced Turbine Systems Program (Energy Efficiency Component), 124
Benefits Matrix for the Advanced Turbine Systems Program (Energy Efficiency
Component), 126
Predicted Environmental Emissions from the MTCI/StoneChem Steam Reformer
and from a Tomlinson Recovery Boiler, 128
Funding for the Black Liquor Gasification Program, 129
Benefits Matrix for the Black Liquor Gasification Program, 131
Total Funding in IOF/Forest by Program Area, 133
Changes in IOF Priorities: Share of OIT/Forest Budget by Program Area, 134
Participation in IOF/Forest Program Then and Now, 135
Changes in Participation by Share of Budget, 135
Benefits Matrix for the IOF/Forest Program, 136
General Funding for the Oxy-fueled Glass Furnace Program, 137
Funding for the Oxy-fueled Glass Furnace Program by Technology to FY 2000, 138
Oxy-fuel Penetration and Characteristics by Glass Industry Segment, 138
Benefits Matrix for the Oxy-Fueled Glass Furnace Program, 139
DOE Funding for Advanced Battery R&D, 141
Benefits Matrix for the Advanced Batteries (for Electric Vehicles) Program, 142
DOE Funding for the Catalytic Conversion Program, 144
Benefits Matrix for the Catalytic Conversion Program, 145
Benefits Matrix for the PNGV Program, 148
MTI Stirling Engine Development Project Budgets, 152
General Motors STM Stirling Engine Development Project Budgets, 152
Benefits Matrix for the Stirling Automotive Engine Program, 153
Funding for Transportation PEM Fuel Cell Power Systems, 154

Benefits Matrix for the Transportation PEM Fuel Cell Power System Program, 157
Benefits Matrix for the Coal Preparation Program, 164
DOE Appropriations and Industry Cost Sharing for Direct Liquefaction, 165
Benefits Matrix for the Direct Liquefaction Program, 166
Benefits Matrix for the Fluidized-bed Combustion (FBC) Program, 168
DOE Investments in the Gas-to-Liquids Program, FY 1978 to FY 2000, 170
DOE Investments in the Gas-to-Liquids Program, 1999, 170
Benefits Matrix for the Gas-to-Liquids Program, 171
Benefits Matrix for the Improved Indirect Liquefaction Program, 173
Benefits Matrix for the Integrated Gasification Combined-Cycle (IGCC) Program, 176
Benefits Matrix for the Improvement of the Flue Gas Desulfurization (FGD)
Program, 180
Benefits Matrix for the NOx Control Program, 181
Benefits Matrix for the Mercury and Air Toxics Program, 182
Benefits Matrix for the Waste Management/Utilization Technologies Program, 184
Funding for the Advanced Turbine Systems Program (Fossil Energy Component), 185
Benefits Matrix for the Advanced Turbine System (ATS) Program (Fossil Energy Component), 187
Funding for the DOE Fuel Cell Program, FY 1978 to FY 2000, 188
Benefits Matrix for the Stationary Fuel Cells Program, 189
DOE Funding for the Magnetohydrodynamics Program, 191
Benefits Matrix for the Magnetohydrodynamics (MHD) Program, 192
Funding for the Coal-bed Methane Program, 193
Benefits Matrix for the Coal-bed Methane Program, 194


TABLES AND FIGURES

F-22
F-23
F-24

F-25
F-26
F-27
F-28
F-29
F-30
F-31
F-32
F-33
F-34

Total Funding for the Drilling, Completion, and Stimulation Program, FY 1978 to
FY 1999, 195
ADCS Gas Project Organizational Chart, 196
Benefits Matrix for the Drilling, Completion, and Stimulation Program, 198
Summary of Environmental Benefits of Drilling Technology Advances, 199
Funding for the Downstream Fundamentals Program, 199
Benefits Matrix for the Downstream Fundamentals Program, 200
Benefits Matrix for the Eastern Gas Shales Program (EGSP), 202
Benefits Matrix for the Improved Enhanced Oil Recovery Program, 204
Benefits Matrix for the Field Demonstration Program, 206
Funding for the Oil Shale Program, 207
Benefits Matrix for the Oil Shale Program, 209
Benefits Matrix for the Seismic Technology Program, 210
Benefits Matrix for the Western Gas Sands Program (WGSP), 212

FIGURES
ES-1 Matrix for assessing benefits and costs, 3
ES-2 Derivation of columns for the benefits matrix, 3
2-1

2-2

Matrix for assessing benefits and costs, 14
Derivation of columns for the benefits matrix, 16

3-1
3-2
3-3

Distribution of DOE’s budget by sector for its energy efficiency R&D programs, 22
Consumption of energy in residential and commercial buildings in 1999 by application, 25
Percentage of primary energy used in the manufacturing sector by major
industrial category, 1999, 26
Percentage of fuel consumption for transportation by service, 1999, 26
Electricity consumed by refrigerators, 1947 to 2001, 28

3-4
3-5
4-1
4-2
4-3
4-4
4-5
4-6
4-7

Funding for DOE’s Office of Fossil Energy, FY 1978 to FY 2000, 45
Overall budget, FY 1978 to FY 2000 ($10,528 million), 47
Budget for coal and gas conversion technologies, FY 1978 to FY 2000 ($6149 million), 48
Adjusted budget for coal and gas conversion technologies, FY 1978 to FY 2000 ($2956

million), 49
Budget for DOE’s fossil energy environmental programs, FY 1978 to FY 2000
($410 million), 51
Reported budgets for electricity production, FY 1978 to FY 2000 ($2502 million), 52
Reported budgets for oil and gas production research, FY 1978 to FY 2000 ($1468
million), 54

D-1
D-2

Matrix for assessing benefits and costs, 86
Derivation of columns for the benefits matrix, 87

E-1
E-2

Electricity consumed by refrigerators, 1947 to 2001, 97
Distribution of OAAT PNGV funds by technology, 147

xv



Executive Summary

BACKGROUND

From the time of the first Organization of Arab Petroleum Exporting Countries oil embargo nearly 30 years ago,
the United States has looked to new technology for solutions
to its energy problems. Indeed, the first government reports

to recommend an energy research and development (R&D)
agenda appeared within weeks of that 1973 event. In 1975,
President Ford created the Energy Research and Development Administration (ERDA), consolidating under one umbrella existing R&D energy programs from several agencies. In late 1977, ERDA became part of the new Department
of Energy (DOE). And today, energy R&D remains a major
element of DOE’s mission.
From 1978 through 1999, the federal government expended $91.5 billion (2000 dollars) on energy R&D, mostly
through DOE programs. This direct federal investment constituted about a third of the nation’s total energy R&D expenditure, the balance having been spent by the private sector. Of course, government policies—from cost sharing to
environmental regulation to tax incentives—influenced the
priorities of a significant fraction of the private investment.
On balance, the government has been the largest single
source and stimulus of energy R&D funding for more than
20 years.
In legislation appropriating funds for DOE’s fiscal year
(FY) 2000 energy R&D budget, the House Interior Appropriations Subcommittee directed an evaluation of the benefits that have accrued to the nation from the R&D conducted
since 1978 in DOE’s energy efficiency and fossil energy programs. In response to the congressional charge, the National
Research Council formed the Committee on Benefits of DOE
R&D on Energy Efficiency and Fossil Energy (the committee).
From its inception, DOE’s energy R&D program has been
the subject of many outside evaluations. The present evaluation asks whether the benefits of the program have justified
the considerable expenditure of public funds since DOE’s
formation in 1977, and, unlike earlier evaluations, it takes a
comprehensive look at the actual outcomes of DOE’s research over two decades.

A Historical Perspective
From 1978, debate about how best to spend the public’s
money has surrounded DOE’s research program. Perhaps the
most important change in the debate has been the evolving
understanding of the larger goals of energy policy and hence
of R&D objectives. Reducing dependence on energy imports
(especially oil) persisted as a central tenet of energy policy

into the 1980s. During that period, government R&D policy
stressed development of alternative liquid fuels. By the early
1980s, more faith was placed in market forces to resolve
energy supply and demand imbalances and in the development of technologies to enlarge the former and constrain the
latter. In consequence, federal research goals shifted and
began to stress long-term, precompetitive R&D. After 1992,
technology priorities moved in the direction of renewable
energy sources and energy efficiency. And the role of federal funding, having swung between support of expensive
demonstration projects and limited funding of basic research,
settled into a preference for cost sharing in the form of public-private partnerships.
This brief recounting of the shifting forces that shaped
energy R&D over the last 25 years conveys a sense of the
twists and turns of both program goals and management philosophy that DOE’s research managers have had to follow
since 1978. Without an appreciation of these shifts, evaluating the successes and failures of DOE’s research program
would be a very frustrating and puzzling enterprise.
Energy Efficiency and Fossil Energy Research at DOE
The two program areas—energy efficiency and fossil energy—that lie within the scope of this study have expended
about $22.3 billion in federal funds since 1978, or about 26
percent of the total DOE expenditure on energy R&D of
approximately $85 billion (2000 dollars). Their funding histories reflect the changes in goals and philosophies that have
characterized energy research at DOE.
1


2

Energy Efficiency Programs
Energy-efficient technologies can reduce the life-cycle
costs of energy-consuming goods and services paid by consumers and industry, reduce pollutant emissions, reduce the
risk of oil supply interruptions, and help to stabilize the electricity system and make it more reliable. DOE’s energy efficiency research, development, and demonstration (RD&D)

programs have helped to improve the energy efficiency of
buildings technology and industrial and transportation technologies. The transportation sector has always received the
largest share of the budget (42 percent in 2000 and, cumulatively, 43 percent between 1978 and 2000). In the early years
of the program (for example, in FY 1978), buildings received
40 percent of the funds and industry, 18 percent. In FY 2000,
there was less of a difference, with buildings receiving 25
percent of the funds and industry, 32 percent. Over the entire
program, industry and buildings each received about 28 percent of the funds.

Fossil Energy Programs
Research in the Office of Fossil Energy has historically
focused on two programs: the Office of Coal and Power Systems and the Office of Natural Gas and Petroleum Technology. Very large budgets from 1978 through 1981 were provided in response to the energy crises of the 1970s and early
1980s. During that period, over 73 percent of the money was
provided for technologies to produce liquid and gas fuel options from U.S. energy resources—coal and oil shale.
Over the 1978 to 2000 study period, 58 percent of the
expenditures were for RD&D in coal utilization and conversion. Of this, approximately one-half was spent on direct
liquefaction and gasification for building and operating
large, commercial-scale demonstration plants between 1978
and 1981. In 1978, the coal conversion and utilization portion of the budget represented 68 percent of the total fossil
energy expenditures, but since then, as funding for direct
liquefaction and gasification declined, it has represented a
considerably lower percentage. In 2000, it represented only
30 percent of the overall fossil energy budget for the technology programs analyzed.
The share of Office of Fossil Energy funds devoted to
environmental characterization and control was 4 percent of
the total over the study period, partly because the Environmental Protection Agency (EPA) maintained a large program
in this area prior to 1985. The share of funds for the electricity production programs averaged 24 percent over the study
period, and the share of funds for the oil and gas programs
averaged 14 percent, one-third of which was for shale oil
R&D in the early period.

EVALUATION FRAMEWORK AND CASE STUDIES
In theory, evaluating the benefits and costs of DOE’s research program should be relatively straightforward. It

ENERGY RESEARCH AT DOE: WAS IT WORTH IT?

would require adding up the total benefits and costs of research conducted since 1978, determining what proportion
of each is attributable to DOE funding, and calculating the
difference between the DOE contributions and the cost of
achieving them. In practice, methodological challenges
abound. Of these, the most fundamental is how to define and
systematically capture the diverse benefits that result from
publicly funded research within a dynamic environment of
marketplace activity, technological advancement, and societal change. See Chapter 2 and Appendix D for further details on the framework for doing this.
Evaluation Framework
Justification for public sector research rests on the observation that public benefits exist that the private sector cannot
capture. In such cases, the private costs of developing and
marketing a technology may exceed the benefits that the private sector can capture. The committee developed a comprehensive framework based on this general philosophy that
would define the range of benefits and costs, both quantitative and qualitative, that should be considered in evaluating
the programs. Depending on the outcomes of the R&D undertaken, the principal benefit of a program, for example,
may be the knowledge gained and not necessarily realized
economic benefits. The matrix shown in Figure ES-1 and
discussed below provides an accounting framework for the
consistent, comprehensive assessment of the benefits and
costs of the fossil energy and energy efficiency R&D programs. The matrix can be completed for each discrete program, project, or initiative that has a definable technological
objective and outcome. The framework is intended to summarize all net benefits to the United States, to focus attention
on the main types of benefits associated with the DOE mission, and to differentiate benefits based on the degree of certainty that they will one day be realized. It has been designed
to capture two dimensions of publicly funded R&D: (1) DOE
research is expected to produce public benefits that the private economy cannot reap and (2) some benefits may be
realized even when a technology does not enter the marketplace immediately or to a significant degree.

The classes of benefits (corresponding to the rows of the
matrix) are intended to capture types of public benefits appropriate to the objectives of DOE R&D programs. Based
on these stated objectives, the committee adopted the three
generic classes of benefits (and related costs) for the energy
R&D programs—economic, environmental, and security
benefits:
• Economic net benefits are based on changes in the total
market value of goods and services that can be produced in
the U.S. economy under normal conditions, where “normal”
refers to conditions absent energy disruptions or other energy shocks and the changes are made possible by technological advances stemming from R&D.


3

EXECUTIVE SUMMARY

Realized Benefits
and Costs

Options Benefits
and Costs

Knowledge Benefits
and Costs

Economic benefits
and costs
Environmental benefits
and costs
Security benefits

and costs
FIGURE ES-1 Matrix for assessing benefits and costs.

• Environmental net benefits are based on changes in the
quality of the environment that have occurred or may occur
as a result of a new technology RD&D program.
• Security net benefits are based on changes in the probability or severity of abnormal energy-related events that
would adversely impact the overall economy, public health
and safety, or the environment.
The three columns in the matrix are the first step toward a
more explicit definition of the benefits to be included. They
reflect different degrees of uncertainty about whether a given
benefit will be obtained. Two fundamental sources of uncertainty are particularly important—technological uncertainties and uncertainties about economic and policy conditions
(Figure ES-2). Rather than attempting to fully characterize
the uncertainty of benefits, the committee used these two
distinctions—the state of technology development and the
favorability of economic and policy conditions—to define
the columns of the matrix (Figure ES-1). The first column,
“realized benefits and costs,” is reserved for benefits that are
almost certain—that is, those for which the technology is developed and for which the economic and policy conditions are

Technology
Development Technology
Economic/
Developed
Policy Conditions

favorable for commercialization of the technology. The second column, which includes less certain benefits, is called “options benefits and costs.” These consist of benefits that might
be derived from technologies that are fully developed but for
which economic and policy conditions are not likely to be,

but might become, favorable for commercialization. All
other benefits, to the extent they exist, are called “knowledge benefits and costs.” The framework recognizes that the
technologies being evaluated may be in different stages of
the RD&D cycle, and by its nature, it represents a snapshot
in time, with a focus on outcomes of the work performed.
To arrive at entries for the cells of the matrix, a logical
and consistent set of rules for measuring the results of the
individual initiatives is also necessary. These rules define
more exactly the meanings of the rows and columns, and
they provide a calculus for measuring the values to be entered in each of the cells.
Case Studies
To assess the benefits of the energy efficiency and fossil
energy programs within this evaluation framework, the com-

Technology Development
in Progress

Technology
Development Failed

Will be favorable for
commercialization

Realized benefits

Knowledge benefits

Knowledge benefits

Might become favorable

for commercialization

Options benefits

Knowledge benefits

Knowledge benefits

Knowledge benefits

Knowledge benefits

Will not become favorable Knowledge benefits
for commercialization
FIGURE ES-2 Derivation of columns for the benefits matrix.


4

ENERGY RESEARCH AT DOE: WAS IT WORTH IT?

mittee prepared a series of case studies on technologies and
programs selected by the committee for examination. It
should be noted that there were large differences in project
scale, size, complexity, and time horizon between the energy
efficiency and fossil energy programs. In particular, the fossil energy program tends to be characterized by relatively
large, long-term projects. As a result, the committee was able
to select a manageable number of case studies—22—that
covered almost all of the research expenditures in the DOE
fossil energy program since 1978. In contrast, the energy

efficiency program, especially in the buildings and industry
programs, is composed of a large number of relatively small
projects. The committee determined that it was not possible
to analyze enough cases to capture a large fraction of DOE’s
research expenditures in these areas. Therefore, the committee selected 17 case studies that, in its expert opinion, were
sufficiently representative to permit the testing of the analytical framework and to draw reliable conclusions about the
success or failure of the overall program. The criteria
for selecting this representative group are explained in
Chapter 3.
Perhaps the most difficult analytic problem is assigning
to DOE a proportion of the overall benefit of an R&D program that properly reflects DOE’s contribution to it. In most
of the case studies, DOE, industry, and sometimes other federal and nonfederal governmental research organizations
contributed to the outcome of the research program. The
committee found no reliable way to quantify the DOE con-

TABLE ES-1

tribution in most cases, and doing so remains a methodological challenge for the future. For the purposes of this study, it
simply attempted to specify in its case study analyses the
specific role that DOE played—the outcome that would not
have happened had DOE not acted. Based on this assessment, the committee used conservative judgment to characterize the DOE contribution for purposes of developing findings and recommendations. No conclusions about the
benefits of unevaluated current energy efficiency or fossil
energy programs can be drawn from this study.
In Tables ES-1 and ES-2, each of the 39 case studies the
committee examined is slotted into the benefits matrix. If a
technology has more than one kind of benefit, the primary
benefit is indicated by boldface type.

Energy Efficiency
Although the issues, problems, and solutions for energy

efficiency may be different for each of the three end-use
sectors (buildings, industry, and transportation), lessons
learned from one sector are often applicable to all the sectors. To study the energy efficiency program comprehensively, the committee selected case studies to illustrate the
main components of the program, important examples of
RD&D activities, and the range of benefits and costs that the
program has yielded (see Selection of the Case Studies in
Chapter 3). The 17 case studies represent $1.6 billion, or
about 20 percent, of the total $7.3 billion energy efficiency

Energy Efficiency Technology Case Studies Slotted in the Matrix Cells That Are Most Relevant Today

Type of Benefit

Realized Benefits

Options Benefits

Knowledge Benefits

Economic benefits
(net life-cycle energy
cost reductions)

Low-e glass
Electronic ballasts
Advanced refrigerators
Advanced turbine systems
Oxygen-fueled glass furnace
Lost foam casting
DOE-2 (applied to design)

Forest products

Forest products
Compact fluorescents

DOE-2 (applied to standards)
Compact fluorescents
Black liquor gasification
Forest products
Oxy-glass technology (applied to other areas)
Lost foam
Free-piston Stirling heat pump (failure)

Environmental
benefits

Indoor air quality, infiltration,
and ventilation
Electronic ballasts
Advanced refrigerators
Low-e glass
Oxy-glass

PNGV
DOE-2
Indoor air quality (IAQI&V)
Forest products

Catalytic converters for diesels
PEM fuel cell for transportation and

distributed generation
Black liquor gasification
Advanced batteries for electric vehicles
Indoor air quality (sick buildings)
Stirling engine for automobiles (failure)

Security benefits

Advanced turbine systems

PNGV
DOE-2 (peak load analysis)

Advanced batteries for electric vehicles
PEM fuel cells for transportation and
distributed generation

NOTE: PEM, proton exchange membrane; PNGV, Partnership for a New Generation of Vehicles. The table does not indicate possible future position as a
result of completing R&D. No significance should be attached to the ordering of the entries in the cells. When more than one type of benefit is relevant for a
technology, the primary benefit is shown in bold.


5

EXECUTIVE SUMMARY

TABLE ES-2 Fossil Energy Technology Case Studies Slotted in the Matrix Cells That Are Most Relevant Today
Type of Benefit

Realized Benefits

Options Benefits

Knowledge Benefits

Economic benefits

Drilling/completion/stimulation
Atmospheric fluidized-bed combustion
Western gas sands
Eastern gas shales
Improved enhanced oil recovery
Field demonstration programs
Seismic technology
Coal-bed methane
Waste management and utilization

Improved indirect liquefaction
Improved direct liquefaction
Drilling/completion/stimulation
Atmospheric fluidized-bed combustion
Advanced turbine system
Fuel cells
Western gas sands
Eastern gas shales
Improved enhanced oil recovery
Shale oil
Flue gas desulfurization
IGCC
Coal preparation

Mercury and air toxics

Improved indirect liquefaction
Drilling/completion/stimulation
Improved direct liquefaction
Pressurized fluidized-bed combustion
Advanced turbine system
Fuel cells
Gas to liquids
Magnetohydrodynamics
Western gas sands
Eastern gas shales
Improved enhanced oil recovery
Field demonstration
Seismic technology
Flue gas desulfurization
Coal-bed methane
Downstream fundamentals
IGCC
Coal preparation
Waste management
Mercury and air toxics

Environmental benefits

Drilling/completion/stimulation
Atmospheric fluidized-bed combustion
Western gas sands
Eastern gas shales
Improved enhanced oil recovery

Field demonstration programs
Seismic technologies
NOx control
Coal-bed methane

Improved indirect liquefaction
Drilling/completion/stimulation
Pressurized fluidized-bed combustion
Advanced turbine systems
Fuel cells
Eastern gas shales
Field demonstration programs
Shale oil
Flue gas desulfurization
NOx control
IGCC

Improved indirect liquefaction
Drilling/completion/stimulation
Fluidized-bed combustion
Advanced turbine systems
Improved enhanced oil recovery
Shale oil
Field demonstration
Seismic technology
Flue gas desulfurization
IGCC
NOx control
Waste management
Mercury and air toxics

Security benefits

Drilling/completion/stimulation
Improved enhanced oil recovery
Field demonstration programs
Seismic technologies

Improved indirect liquefaction
Drilling/completion/stimulation
Improved direct liquefaction
Field demonstration programs
Shale oil

Drilling/completion/stimulation
Fuel cells

NOTE: When more than one type of benefit is relevant for a technology, the primary benefit is shown in boldface type. NOx, oxides of nitrogen; IGCC,
integrated gasification combined cycle.

R&D expenditures over the 22-year period. Included are both
successes and failed or terminated projects. As noted above,
the selection process did not involve a statistical sampling of
all the projects; instead, it attempted to choose a representative sample of energy efficiency projects.

Fossil Energy
The committee compiled case studies for 22 of the fossil
energy RD&D programs funded between 1978 and 2000.
These case studies account for nearly $11 billion (73 percent) of the $15 billion appropriated to the Office of Fossil
Energy for RD&D during the period.

CONCLUSIONS AND RECOMMENDATIONS
The committee found that DOE’s RD&D programs in
fossil energy and energy efficiency have yielded significant
benefits (economic, environmental, and national security-related), important technological options for potential application in a different (but possible) economic, political, and/or
environmental setting, and important additions to the stock
of engineering and scientific knowledge in a number of
fields.
The committee also found that DOE has not employed a
consistent methodology for estimating and evaluating the
benefits from its RD&D programs in these (and, presum-


6
ably, in other) areas. Importantly, DOE’s evaluations tend to
focus on economic benefits from the deployment of technologies, rather than taking into account the broader array of
benefits (realized and otherwise) flowing from these investments of public funds.
Finally, the committee found that how DOE’s research
programs were organized and managed made a real difference to the benefits that were produced by the research.
Benefit-Cost Assessment
The committee found that DOE investments in RD&D
programs in both the fossil energy and energy efficiency programs during the past 22 years produced economic benefits,
options for the future, and knowledge benefits. Although the
committee was not always able to separate the DOE contribution from that of others, the net realized economic benefits in the energy efficiency and fossil energy programs
were judged by the committee to be in excess of the DOE
investment.
In the programs reviewed by the committee in the energy
efficiency area, most of the realized economic benefits to
date are attributable to three relatively modest projects in the
building sector carried out in the late 1970s and 1980s and

continuing into the 1990s. The committee estimated that the
total net realized economic benefits associated with the energy efficiency programs that it reviewed were approximately $30 billion (valued in 1999 dollars), substantially
exceeding the roughly $7 billion (1999 dollars) in total energy efficiency RD&D investment over the 22-year life of
the programs.
The committee estimated that the realized economic benefits associated with the fossil energy programs that it reviewed amounted to nearly $11 billion (1999 dollars) over
the same 22-year period, some of which it attributed to costs
avoided by demonstrating that more stringent environmental
regulation is unnecessary for waste management and for addressing airborne toxic emissions.
The realized economic benefits of fossil energy programs
instituted from 1986 to 2000, $7.4 billion, exceeded the estimated $4.5 billion cost of the programs during that period.
However, the realized economic benefits associated with the
fossil energy programs from 1978 to 1986, estimated as $3.4
billion in 1999 dollars, were less than the costs of this period’s
fossil energy programs ($6.0 billion in 1999 dollars).
In addition to realized benefits, a number of technologies
have been developed that provide options for the future if
economic or environmental concerns justify their use. For
example, the advanced turbine system (ATS) and the integrated gasification combined-cycle (IGCC) system are technologically ready options awaiting changes in the energy
marketplace. The energy efficiency programs in RD&D also
produced option benefits, with Partnership for a New Generation of Vehicles (PNGV) and forest products (Industries
of the Future) being important examples.

ENERGY RESEARCH AT DOE: WAS IT WORTH IT?

Substantial reductions in pollution evidently resulted
from technologies developed in these programs. Although it
is difficult to assign a monetary value to environmental benefits, the committee estimates that both RD&D programs
yielded environmental benefits valued conservatively at $60
billion to $90 billion.
National security has been enhanced by a number of the

programs. For example, a number of fossil energy programs
(enhanced oil production and seismic technologies) increased oil production and reserve additions in the United
States and thereby reduced U.S. dependence on imported
oil. Although fuel economy regulation has provided significant national security benefits by reducing the country’s dependence on petroleum in transportation, DOE’s research
programs have proven disappointing in this regard. The options benefit of PNGV, although not yet realized, is in the oil
security area.
All the technologies funded by the DOE add to our stock
of knowledge in varying degrees.
In addition to its analysis of the individual classes of benefits embodied in the conceptual framework, the committee
reached the following summary conclusions:
• By an order of magnitude, the largest apparent benefits
were realized as (1) avoided energy costs in the buildings
sector in energy efficiency and (2) avoided environmental
costs from the NOx reductions achieved by a single program
in fossil energy. This result is not surprising given the balanced research portfolio, which also includes its share of
failures and modest successes.
• These large realized benefits accrued in areas where
public funding would be expected to have considerable leverage. For one thing, the buildings sector is fragmented,
and the prevailing incentive structure is not conducive to
technological innovation. For another, the NOx reduction
achieved in fossil energy is an environmental benefit that
private markets cannot easily capture.
• The importance of standards pulling technological innovation in buildings and transportation cannot be exaggerated. Often, DOE energy efficiency research has been used
to provide a proper basis for standards.
• Important but smaller realized benefits were achieved
in fossil energy’s oil and gas program and energy efficiency’s industry programs. Here, the committee concluded that DOE participation indeed took advantage of the
private sector activity to realize additional public benefits.
In these cases, however, a clearly defined DOE role is crucial to ensuring that public funding is likely to produce appropriate benefits.
• Forced government introduction of new technologies
has not been a successful strategy. Recent programs in both

energy efficiency and fossil energy have recognized the importance of industry collaboration and of responding to
likely economic or policy conditions to create credible benefits.


7

EXECUTIVE SUMMARY

Program Evaluation
The committee found that managers of both the energy
efficiency and the fossil energy RD&D programs did not
utilize a consistent methodology or framework for estimating and evaluating the benefits of the numerous projects
within their programs. In addition to a tendency to assign
too much weight to realized economic benefits, especially
avoided costs and unshared costs, the inconsistent approach adopted by DOE policy makers to evaluation of
their programs often was associated with an overstatement
of economic benefits.
The benefits matrix adopted for this study is a robust
framework for evaluating program outcomes. Its application imposes a rigor on the evaluation process that clarifies
the benefits achieved and the relationship among them.
Recommendation. DOE should adopt an analytic framework similar to that used by this committee as a uniform
methodology for assessing the costs and benefits of its
R&D programs. DOE should also use an analytic framework of this sort in reporting to Congress on its programs
and goals under the terms of the Government Performance
and Results Act.
Recommendation. To implement this recommended analytic approach, DOE should consider taking the following
steps:
1. Adopt and improve guidelines for benefits characterization and valuation. Convene a workshop of DOE analysts, decision makers, and committee members to discuss
the problems encountered in the application of the committee’s guidelines and to consider how to begin the improvement process.
2. Adopt consistent assumptions to be used across programs.

3. Adopt procedures to enhance the transparency of the
process.
4. Provide for external peer review of the application of
the analytic framework to help ensure that it is applied
consistently for all programs.
5. Seek to include the views of all stakeholders in public reviews of its R&D programs.
DOE programs may be effective in very diverse ways,
and better data on the nature of program results will aid
policy makers in assessing the appropriateness of program
structures. It is essential to report specifically the concrete
results achieved by DOE’s participation in such programs
relative to the efforts of other investors. Application of this
framework requires data that often are difficult to obtain
within DOE. Public costs may be quite modest compared
with the benefits if they catalyze private investments in innovation.

Recommendation. DOE should consistently record historical budget and cost-sharing data for all RD&D projects. Industry incurs significant costs to commercialize technology
developed in DOE programs, and—especially in the assessment of economic benefits—these costs should be documented where possible.
Portfolio Management
The committee’s review of the fossil energy and energy
efficiency programs underscores the significant changes in
energy policy during the nearly three decades of the programs’ existence. There have been changes in technological
possibilities; expectations about energy supply, prices, and
security; DOE programmatic goals; the national and international political environment; and the feasibility and accomplishments of various technological approaches and R&D
performers. A balanced R&D portfolio is particularly important since individual R&D projects may well fail to
achieve their goals. Rather than viewing the failure of individual R&D projects as symptoms of overall program failure, DOE and congressional policy makers should recognize
that project failures generate considerable knowledge and
that a well-designed R&D program will inevitably include
such failures. An R&D program with no failures in individual research projects is pursuing an overly conservative
portfolio.

Recommendation. DOE’s R&D portfolio in energy efficiency and fossil energy should focus first on DOE (national)
public good goals, and it should have (1) a mix of exploratory, applied, development, and demonstration research and
related activities, (2) different time horizons for the deployment of any resulting technologies, (3) an array of different
technologies for any programmatic goals, and (4) a mix of
economic, environmental, and security objectives. In addition, it is important to effectively integrate the results of exploratory research projects with applied RD&D activities
within individual programs.
Recommendation. DOE should develop clear performance
targets and milestones, including the establishment of intermediate performance targets and milestones, at the inception
of demonstration and development programs (in cooperation with industry collaborators, where appropriate) and
employ these targets and milestones as go/no-go criteria
within individual projects and programs.
The committee’s review of DOE RD&D programs suggests that programs seeking to support the development of
technologies for rapid deployment are more likely to be successful when the technological goals of these programs are
consistent with the economic incentives of users to adopt
such technologies. For the programs in which these goals are
central, the case studies illustrate a number of instances in


8
which the adoption of the results of DOE RD&D programs
and the associated realization of economic benefits were
aided by regulatory, tax, or other policies that significantly
improved the attractiveness of these technologies to prospective users.
Conversely, the case studies include a number of instances in which the attainment by DOE RD&D programs of
their technical goals (and the production of option or knowledge benefits) did not produce substantial economic benefits, because incentives for users to adopt these technologies were lacking. Such technologies may provide significant
option and knowledge benefits, and they represent appropriate targets for DOE RD&D programs.
Recommendation. Where its RD&D programs seek to develop technologies for near-term deployment, DOE should
consider combining support for RD&D with the development of appropriate market incentives for the adoption of
these technologies based on an understanding of market conditions and consumer needs.
The committee’s case studies highlight the importance of

flexibility in the RD&D program structure, especially the
need for periodic reevaluation of program goals against
change in the regulatory or policy environment, the projected
energy prices and availability, and the performance or availability of alternative technologies, among other factors.
Recommendation. DOE should expand its reliance on independent, regular, external reviews of RD&D in energy efficiency and fossil energy program goals and structure, enlisting the participation of technical experts who are not
otherwise involved as contractors or R&D performers in
these programs.

ENERGY RESEARCH AT DOE: WAS IT WORTH IT?

The committee found that cost sharing between DOE and
industrial collaborators frequently improved the performance
of RD&D programs and enhanced the level of economic and
other benefits associated with such programs.
Recommendation. DOE should maintain its current policies encouraging industry cost sharing in RD&D programs.
In general, industry’s share of program costs should increase
as a project moves from early-stage or exploratory R&D
through development to demonstration. Policy makers
should ensure that an emphasis on collaboration with industry in the formulation of R&D priorities and R&D performance does not result in an overemphasis on near-term technical objectives within the DOE R&D portfolio or in neglect
of public good objectives.
The committee’s case studies suggest that an appropriate
role for DOE in RD&D programs varies, depending on
whether a given program is focused on exploratory research,
development, or demonstration, as well as the structure of
the industry (including the amount of industry-funded R&D
or the presence of well-established industrial R&D consortia) within which a given technology will be deployed. The
committee found that DOE RD&D programs in fossil energy and energy efficiency have developed greater flexibility and sensitivity to the needs of the relevant industrial sectors over the past 15 years. The committee applauds this
trend and urges that DOE policy makers continue to explore
creative and adaptive solutions to the requirements of collaborative RD&D in very diverse industrial sectors.
Recommendation. DOE should strive to build flexibility

into the structure of its RD&D programs.