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Budget authority for CP activities since FY 1980 is summarized in a table which I would like to insert for the record.

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Question: Your request includes $100,000 for competition, a new line item in the budget justification material. Please explain the purpose and need for this item.

Answer: The Office of Competition provides analysis on competition for the Department as required by the DOE Organization Act and by the Supreme Court's requirement that antitrust principles be made a part of the consideration of the public interest. The Office consists of a small group of antitrust lawyers and industrial organization economists who focus their attention on the competitive impact of DOE's actions and policies on the energy industries.

In the past, with a professional staff of about ten, the Office undertook a wide variety of tasks. Today, with only four professionals the focus is more on deregulation activities, and some necessary and worthwhile projects can only be accomplished through the use of contractor support. The $100,000 requested for FY 1985 will provide such support, fund data processing services, pay for transcripts of regulatory proceedings, etc. Prior year unobligated funds are being used to fund such expenses in FY 1984, but new authority will be essential for FY 1985.

Merger

Question: Your FY 1984 budget request was based on the assumption that reorganization or merger would occur. Is any portion of the FY 85 budget based on a similar assumption?

Answer: The FY 1985 budget is not based on any assumptions regarding reorganization or merger.

International Affairs

Question: Provide the committee with additional justification for the $1 million increase from FY 1984 allocated to International Policy Studies.

Answer: This Administration feels that limiting the proliferation of nuclear weapons is vitally important, and that the Nuclear Nonproliferation Treaty is the basis of the world's nonproliferation commitments. In 1985, parties to the treaty will

hold a major review conference at which one of the primary topics, along with nuclear disarmament, will be the identification of just how the nuclear powers are working to assist the developing world to benefit from nuclear energy, particularly non-power applications in medicine, agriculture and the like. This assistance was promised under Article IV of the Treaty and some countries have openly stated that the developed nations have not kept the promises they made in urging that all nations sign the Treaty.

In order for the United States to demonstrate its commitment to the obligations it assumed when it signed the Treaty, and to try to convince other nations to become parties, we intend to demonstrate the wide variety of programs and projects we have supported in the past and to identify new low-cost initiatives that may be suitable as incentives for new countries to accept the Treaty, and for present countries to continue to remain parties to the Treaty. The request for additonal FY 85 policy study funds is for the purpose of identifying and cataloging our past efforts, and for identifying and developing new initiatives that the U.S. may be able to present at the Review Conference.

In the area of International Energy Market Analysis additional contracting funds are required to support more frequent and indepth analyses and evaluations of key aspects of international energy markets.

Such analyses are essential to assisting the Office of International Energy Policy Analysis and Integration in monitoring critical trends in international energy markets and assessing their impacts on the U.S. energy market.

Key areas meriting contractual support are:

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changes in oil inventory behavior, minimum operating levels and their potential impact during oil supply disruptions;

the development of downstream (refineries and petrochemical plants) processing capabilities in the producing countries and their impact on refinery economics and import patterns of oil consuming countries;

worldwide natural gas development prospects, alternatives
to Soviet gas imports, and future LNG trade patterns;

energy consumption trends in both the industrialized and developing countries to determine the impacts of structural change on future energy demand;

changes in international oil contractual arrangements, including the increased use of short-term contract arrangements, and their impact on international energy security;

U.S. energy trade prospects in coal, gas and uranium enrichment and impediments to expanded U.S. exports.

These studies will provide critical analytical input into ongoing evaluations of the structure of energy markets and their implications for energy security.

SUBCOMMITTEE RECESS Senator JOHNSTON. The committee will recess until March 6 at 2 p.m. in this room for review of solar and renewal of programs of DOE.

[Whereupon, at 11:55 p.m. Thursday, March 1, the subcommittee was recessed to reconvene at 2 p.m. on March 6.)

ENERGY AND WATER DEVELOPMENT
APPROPRIATIONS FOR FISCAL YEAR 1985

TUESDAY, MARCH 6, 1984

U.S. SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, DC. The subcommittee met at 2:05 p.m. in room SD-192, Dirksen Senate Office Building, Hon. Mark O. Hatfield (chairman) presiding.

Present: Senator Hatfield.

DEPARTMENT OF ENERGY

SOLAR AND RENEWABLE ENERGY PROGRAMS STATEMENTS OF: WILLIAM PATRICK COLLINS, UNDER SECRETARY AND ACTING AS

SISTANT SECRETARY FOR CONSERVATION AND RENEWABLE

ENERGY DONNA R. FITZPATRICK, PRINCIPAL DEPUTY ASSISTANT SECRETARY

FOR CONSERVATION AND RENEWABLE ENERGY DR. ROBERT L. SAN MARTIN, DEPUTY ASSISTANT SECRETARY FOR RENEWABLE ENERGY

OPENING REMARKS Chairman HATFIELD. The hearing will come to order. This afternoon we continue our examination of fiscal year 1985 budget request for the Department of Energy. The purpose of this hearing is to receive testimony on the budget request for solar and other renewable programs and certain environmental and safety activities. On behalf of the subcommittee, I welcome William Patrick Collins, Under Secretary and Acting Assistant Secretary for Conservation and Renewable Energy, and Jan W. Mares, Assistant Secretary for Policy, Safety, and Environment.

PREPARED STATEMENT AND BIOGRAPHICAL SKETCH Mr. Collins, your entire statement will be placed in the record, and if you wish to proceed to highlight or to summarize, I will be very happy to hear from you at this time. (The statement and biographical sketch follow:)

STATEMENT OF WILLIAM PATRICK COLLINS

Mr. Chairman and Members of the Subcommittee, I appreciate this opportunity

· to appear before you today and provide information on the ry 1985 budget

request concerning the Department's Renewable Energy, Electric Energy Systems

and Energy Storage programs. The budget for these programs was developed in

concert with the Fourth National Energy Policy Plan (NEPP-IV), published in

October 1983, and fully supports the goals and strategies set forth in that

document.

I will summarize those parts of the plan which are relevant to the

subject of today's hearing and discuss related highlights of the FY 1985 budget

request.

NATIONAL ENERGY POLICIES AND STRATEGIES

The goal of national energy policy 18 to foster an adequate supply of

energy at reasonable costs. An adequate supply requires a flexible energy

system that avoids undue dependence on any single source of supply, foreign or

domestic, and thereby contributes to our national security and economic

stability.

The strategies for achieving this goal include:

Minimizing federal control and involvement in energy markets while maintaining public health, safety and environmental quality, and

Promoting a balanced and mixed energy resource system.

Renewable energy resources can play an important role in reaching a

balanced and mixed energy supply system. Renewables offer supply diversity, nodularity of system sizes, and flexibility in meeting a variety of end use demand. Collectively, their modularity and flexibility in direct thermal applications, bulk electricity supply, or in meeting requirements for liquid and gaseous fuels, makes them highly attractive alternatives for private sector development and deployment. As technological advances improve renewable

technology viability, there will be increased diversity within the nation's

future energy supply infrastructure and an increase in competition within the

energy marketplace.

The federal strategy for renewable energy R&D 18 to

concentrate on scientific and engineering research which will lead to a better

understanding of: the characteristics of renewable energy resources; the

mechanisms for converting these resources to more useful energy forms; and the

materials to ensure that the systems can achieve the necessary reliability

and efficiency.

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