transfer offered by an improved funding mechanism. The cooperative venture initiative is intended to give the private sector a greater role in establishing federal R&D priorities. It will help ensure that tax dollars are applied to those research efforts that are most relevant to the trends and objectives of the marketplace. It will assist in the transfer of taxpayer-supported technology from the government to industry. And it will provide greater leverage for federal funds by increasing private sector cost-sharing.

The Department will not place tight constraints on the types of cooperative opportunities to be considered. As currently envisioned, however, the proposed program would solicit proposals with the following common characteristics:

DOE will be a minority funding partner with at least two other industrial partners; the federal share will provide a maximum of 49 percent of the total funding for the venture;

Assurance must be available that federal funds will not be displacing private sector funds;

The taxpayer must be able to share in royalties or other profits from the venture, consistent with the government's funding contribution;

O Preference will be given to companies with a proven record of successfully obtaining and managing co-funding from private sources.

We recognize that additional details must be developed before this new initiative can be implemented. Therefore, we intend to work closely with Congress in developing a viable, effective venture pool approach that results in an efficient expenditure of tax dollars.

Further discussion of the FY 1987 Cooperative R&D Ventures Pool initiative can be found on pages 25-26 of this testimony.

CLEAN COAL TECHNOLOGY PROGRAM

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In addition to the funds requested for conducting a basic and applied research program in fossil energy, the Department will also carry out the Congressionally-directed Clean Coal Technology Program, budgeted at $397.6 million for fiscal years 1986 through 1988.

On February 17, 1986 the Department issued a "Program Opportunity Notice" outlining the program's objectives, the evaluation criteria and the information requirements for prospective proposers. In accordance with Public Law 99-190, which made the funds available, the Department will require a minimum of 50 percent sharing of project costs by the private sector. The Department will also require that such cost sharing be on a dollar-for-dollar basis as expended during each phase of the selected projects. Το ensure the broadest spectrum of cost-shared clean coal projects, the applications.

Department will accept proposals in all energy market As required by P.L. 99-190, proposals are due on April 18, 1986, and selection of prospective projects will be made on or before August 1, 1986.

When the Clean Coal Technology Program is complete, the demonstration projects it will have financed are expected to provide sufficient technical, economic, environmental, health and safety, and operational information at sufficient scale to enable the private sector to make rational commercialization decisions.

Additional details on the Clean Coal Technology Program can be found on pages 27-28 of this statement.

The following pages contain a more detailed description of the proposed FY 1987 Fossil Energy budget organized by major activity:

1/

Includes reductions in accordance with P.L. 99-177, the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings)

Coal preparation is directed toward the development of advanced coal cleaning technologies that will reduce the ash and sulfur content of U.S. coals. The resultant product can be formulated into a high quality fuel that could replace oil and/or gas and reduce environmental emissions of suspected acid rain precursors from coal-fired power plants in both new and retrofit applications.

The FY 1987 coal preparation budget proposal of $6,443,000 provides funds to:

o Complete design of pre-proof-of-concept Gravimelt chemical coal cleaning system. ($1,000,000)

0 Continue investigation of advanced concepts for chemically modified coals. ($1,300,000)

0 Continue joint DOE/EPRI advanced coal cleaning development and test program. ($1,000,000)

Continue research to optimize techniques for microbial removal of organic sulfur from coal. ($1,000,000)

O Continue ultrafine coal characterization and process economics. ($500,000)

O Continue in-house research on chemical coal cleaning, and fundamental organic sulfur chemistry. ($500,000)

Continue laboratory scale research on advanced physical cleaning concepts. ($1,143,000)

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Flue gas cleanup addresses the removal of pollution causing contaminants from the stack gases of conventional combustion units to meet environmental standards. Efforts will be focused on fundamental research for processes for the combined removal of NO SO, and particulates, both for utility and industrial applications.

X

The FY 1987 funding request of $7,541,000 would:

O Complete proof-of-concept test and evaluation for low temperature dry hydrate and dolomitic lime slurry in-duct injection for acid rain precursor control technology process candidates. ($3,390,000)

2

Continue research on advanced NO /SO, chemistry and bench scale advanced concept development. ($2,341,000)

O Continue fluidized bed copper oxide proof-of-concept test and evaluation. ($1,810,000)

Gas stream cleanup includes the technology for removal of contaminants from gasifier and combustor process streams prior to utilization in advanced power conversion cycles such as gas turbines and fuel cells. Both hardware and environmental protection are key concerns.

The $3,839,000 in funds requested for FY 1987 would:

O Continue alkali combustion chemistry research. Work will be performed by Midwest Research Institute in Kansas. ($350,000)

O Continue process modification R&D for trace contaminants.

Continue R&D for sulfur removal with selected sorbents.

($75,000) ($788,000)

O Continue process modification R&D for direct-fired turbine.

($1,000,000)

O Complete on-line tests of remaining selected particulate and sulfur removal devices for turbine combined cycle. ($600,000)

O

Continue test and evaluation of soot, particulate control, and trace contaminants.

($100,000)

Continue basic research for physical and chemical cleanup for gasifier PFB and direct coal-fired turbines including instrumentation and control. ($926,000)

Waste management focuses primarily on waste sampling and characterization from coal preparation wastes. The FY 1987 funding request of $324,000 would:

0 Continue sampling and characterization and data acquisition of organic and inorganic compounds present in solid wastes and in their leachates. ($195,000)

o Complete Phase I R&D for extracting energy from coal preparation wastes. ($129,000)

1/

-19.5%

...

-14.2%

Includes reductions in accordance with P.L. 99-177, the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings)

The Advanced Research and Technology Development Program is directed toward the scientific and technical areas that underlie the development of all fossil energy technologies. Included are fundamental studies to

increase understanding of the mechanisms of direct coal combustion, generic studies of materials and components, and investigations of instrumentation concepts in environments associated with advanced coal technologies.

to

AR&TD differs from the Fossil Energy line programs; the latter have an end-item technology development orientation while AR&TD's mission is pursue generic research in support of all Fossil Energy coal line programs.

The $27,224,000 requested for AR&TD would be applied as follows: