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CONTENTS

Bauer, Donald L., Acting Assistant Secretary, Fossil Energy, Department of

Energy.

Bazjanac, Vladimir, energy consultant...

Bingaman, Hon. Jeff, a U.S. Senator from the State of New Mexico...
Domenici, Hon. Pete V., a U.S. Senator from the State of New Mexico....

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Holland, Dr. J. Read, director, School of Mines and Energy Development,
University of Alabama.....

Larsen, Dr. John W., on behalf of the American Chemical Society.
Lawrence, George H., president, American Gas Association..

Lawrence, Dr. L.R., Jr., vice president, technology development, Mechanical
Technology, Inc.....

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Domenici, Hon. Pete V., a U.S. Senator from the State of New Mexico.......
Heilman, Col. James H., Deputy Director, Headquarters USAF Directorate of
Space, Deputy Chief of Staff Plans and Operations, accompanied by Col.
Roger McClain, Chief, Defense and Surveillance Division, Directorate of
Space Systems and Command Control Communications Deputy Chief of
Staff Research Development and Acquisition; and Mr. Stephen Hathaway,
Headquarters USAF Engineering and Services Center, Tyndall AFB, FL.......

Hess, Col. George, USAF, Director, Survivability, Lethality & Key Technol-

ogies, Strategic Defense Initiative Organization.

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Chernock, Warren P., vice president, advanced nuclear systems, nuclear
power systems, Combustion Engineering, Inc.........

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Dean, Dr. Richard A., senior vice president, GA Technologies, Inc.
Domenici, Hon. Pete V., a U.S. Senator from the State of New Mexico..
McDonald, John, division director, Atomics International Segment of Rocket-
dyne Division, Rockwell International...

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DEPARTMENT OF ENERGY RESEARCH AND DEVELOPMENT PROGRAMS-FISCAL YEAR 1987

(Conservation and Renewable Energy and Fossil Energy)

MONDAY, MARCH 17, 1986

U.S. SENATE,

SUBCOMMITTEE ON ENERGY RESEARCH AND DEVELOPMENT,
COMMITTEE ON ENERGY AND NATURAL RESOURCES,

Washington, DC. The subcommittee met, pursuant to notice, at 2:10 p.m., in room SD-366, Dirksen Senate Office Building, Hon. Pete V. Domenici, presiding.

Present: Senators Domenici, Hecht, Evans, and Ford.

Also present: Marilyn Meigs, professional staff member; Benjamin S. Cooper, professional staff member for the minority; and James T. Bruce, counsel for the minority.

Senator DOMENICI. The subcommittee will come to order. Thank you for being here, Senator, and we will try to expedite the hearing.

OPENING STATEMENT OF HON. PETE V. DOMENICI, A U.S.
SENATOR FROM THE STATE OF NEW MEXICO

Senator DOMENICI. Although the Department of Energy budget is nearly unchanged, $12.1 billion in fiscal year 1987 compared to $11.97 in fiscal year 1986, about a 1-percent increase over 1986, it seems that the programs supporting fossil fuel, solar and renewable energy and conservation are taking a substantial reduction, anywhere from 47 to 58 percent.

Many believe that the priority of the proposed budget is shortsighted and does not reflect the priorities that Congress desires or that are good for the country. I understand we are under severe fiscal restraint, and clearly the office will try to have some balance in the energy programs.

The R&D policy is one that should be within the limits of our foresight and should insure some stability in reducing dependence on foreign energy sources and should not be oscillating as much as the world oil prices which are out of our control. Cost effective R&D is essential. Ultimately it has the chance to provide us with adequate technologies, hopefully when we need them.

Today our purpose is to take testimony in the hope that Congress and the administration, as we move through the year, can come up

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with some changes in priorities that were in the President's budget so we will have a more balanced R&D program.

[A prepared statement submitted for the record by Senator Bingaman follows:]

STATEMENT BY SENATOR JEFF BINGAMAN

Department of Energy Fiscal Year 1987 Budget,

Conservation, Renewable and Fossil Energy Programs
March 17, 1986

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I thank Senator Domenici and Senator Ford for holding this hearing to review the proposed budget for Conservation, Renewable, and Fossil Energy programs within the Department of Energy. The Administration has been trying for almost six years to decimate the worthwhile federal energy research and development initiatives in these areas. I have opposed this short-sighted policy in the past and will do so more vigorously now and in the future.

It seems to me to be another example of the

Administration's misplaced priorities. The magnitude of the cuts in the President's proposed budget are particularly unwise as we face a very uncertain energy future. The recent rapid decline in oil prices will inevitably mean greater dependence on imported crude oil and petroleum products and the displacement of domestic supplies. We see the continuing reduction in capital expenditures by the major oil companies in exploration and development activities and the permanent loss of low volume stripper wells by many of our own independents. Further, the volatility of the Middle East

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