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Date: July 17, 2001
Contacts: Jennifer Wenger, Media Relations Associate
Cory Arberg, Media Relations Assistant
(202) 334-2138; e-mail <news@nas.edu>

For Immediate Release

Energy Efficiency and Fossil Energy Technologies
Prove Wise Investment for Department of Energy

WASHINGTON -- In a comprehensive review of federal R&D efforts to advance energy-efficient and fossil-fuel technologies, a committee of the National Academies' National Research Council found these programs have yielded significant economic, environmental, and national security benefits.

Looking back as far as 1978, the report examines 17 R&D programs in energy efficiency and 22 programs in fossil energy funded by the U.S. Department of Energy (DOE). These programs yielded economic returns of an estimated $40 billion from an investment of $13 billion.

Three energy-efficiency programs, costing approximately $11 million, produced nearly three-quarters of this benefit. Most significant were advances made in compressors for refrigerators and freezers, energy-efficient fluorescent-lighting components called electronic ballasts, and low-emission, or heat-resistant, window glass. Standards and regulations incorporating efficiencies attainable by these new technologies ensured that the technologies would be adopted nationwide, thus dramatically compounding their impact.

"Government funding can stimulate R&D benefits in areas where there is little incentive to improve existing technologies," said Robert Fri, director, National Museum of Natural History, Washington, D.C., and chair of the committee who wrote the report. "We discovered that a few key programs have delivered benefits many times over the total amount invested. Also, some technologies are poised to have a significant impact once the economic climate is right, while other R&D efforts have added to our stock of engineering and science knowledge in several fields."

The committee's study emphasized that DOE research has produced large public benefits that cannot easily be reduced to dollar terms. Large environmental gains were identified chiefly in the fossil energy arena, where two technologies – atmospheric fluidized bed combustion, a cleaner, more thorough method for burning coal, and nitrogen oxides control to reduce emissions -- decreased nitrogen oxides in the atmosphere by more than 26 million tons and sulfur dioxide by 2 million tons. The resulting environmental savings translated to more than $60 billion in damage and mitigation costs that were avoided. In addition, three programs -- the Partnership for a New Generation of Vehicles, integrated gasification combined cycle, and advanced turbine systems -- have created important options that could produce large benefits if economic or policy incentives support their commercialization.

Among program areas that have not lived up to expectations are ones in which DOE attempted to introduce new technology that lacked the incentives necessary for adoption in the private sector. These include fuel cells for home and industry uses and the now defunct magnetohydrodynamic electricity production technology. For certain fuel-cell technologies, DOE has not identified clear technological goals, has funded a variety of disparate programs, and has not partnered with industry to help make products marketable. Magnetohydrodynamic electricity production, a technology that was identified as a potentially efficient method for generating electricity from domestic coal, continued to be funded long after the technology was found to be too costly and complex for widespread use.

The report was requested by Congress to identify general improvements that can be attributed to federal funding in these areas, including more efficient generation of electricity, lower environmental emissions, and reduced energy cost. The committee developed a comprehensive framework by which the DOE could evaluate the success of its programs.

Using this framework, the committee evaluated each program for its possible public benefits, both quantitative and qualitative. These included economic benefits, measured in dollars and energy saved; environmental gains, measured in tons of pollutants reduced; and national security benefits, measured in amount of fuel and energy saved.

Even research that did not result in immediately useful technologies may reap benefits to the public, the committee said. For example, economic conditions could change, paving the way for a new, more affordable technology, or knowledge gained from failed attempts may prove useful for developing future technologies.

The committee also recommended steps to improve the management and evaluation of DOE's research program. Future DOE programs should include objectives that support economic, environmental, and national security goals. Also, clear performance targets and milestones should be defined at a program's start to help DOE determine whether to proceed with a program or to abandon it before too much money has been spent.

The committee found that market incentives, such as new standards and regulations, can sometimes be useful for helping programs achieve success by increasing the likelihood that a technology will be adopted. Finally, DOE should continue cost-sharing efforts with industry, so that the most promising programs -- with the greatest potential for success in the marketplace -- are funded.

The National Research Council is the principal operating agency of the National Academy of Sciences and the National Academy of Engineering. It is a private, nonprofit institution that provides science and technology advice under a congressional charter.

Read the full text of Energy Research at DOE: Was It Worth It? for free on the Web, as well as more than 1,800 other publications from the National Academies. Printed copies are available for purchase from the National Academy Press Web site or by calling (202) 334-3313 or 1-800-624-6242. Reporters may obtain a copy from the Office of News and Public Information (contacts listed above).

NATIONAL RESEARCH COUNCIL
Division on Engineering and Physical Sciences
Board on Energy and Environmental Systems

Committee on Benefits of DOE R&D in Energy Efficiency and Fossil Energy

Robert W. Fri (chair)
Director
National Museum of Natural History
Smithsonian Institution
Washington, D.C.

William Agnew¹
Director
Programs and Plans
General Motors Research Laboratories (retired)
Washington, Mich.

Peter Blair²
Executive Director
Sigma Xi
Research Triangle Park, N.C.

Ralph Cavanagh
Co-Director
Energy Program
Natural Resources Defense Council
San Francisco

Uma Chowdhry ¹
Director
DuPont Engineering Technology Co.
Wilmington, Del.

Linda Cohen
Chair and Professor
Department of Economics
University of California
Irvine

James Corman
Principal
Energy Alternative Systems
Schenectady, N.Y.

Daniel Dreyfus
Associate Director for Operations
National Museum of Natural History (retired)
Smithsonian Institution
Washington, D.C.

William L. Fisher¹
Leonidas Barrow Chair in Mineral Resources
Department of Geological Sciences
University of Texas
Austin

Robert Hall
President
CDG Management Inc.
Winfield, Ill.

George M. Hidy
Private Consultant
Envair/Aerochem
Placitas, N.M.

David C. Mowery
Milton W. Terreill Professor
Walter A. Haas School of Business
University of California
Berkeley

James Dexter Peach
Assistant Comptroller General
U.S. General Accounting Office (retired)
Ellicott City, Md.

Maxine L. Savitz ¹
General Manager
Technology/ Partnerships
Honeywell
Torrance, Calif.

Jack S. Siegel
President
Technology and Markets Group
Energy Resources International Inc.
Washington, D.C.

James L. Sweeney
Professor of Management Science and Engineering
Stanford University, and
Senior Fellow
Stanford Institute for Economic Policy Research
Stanford, Calif.

John J. Wise¹
Vice President of Research
Mobile Research and Development Corp. (retired)
Princeton, N.J.

James L. Wolf
Independent Consultant
Alexandria, Va.

James Woods
Founding Director
HP-Woods Research Institute
Herndon, Va.

RESEARCH COUNCIL STAFF

Richard Campbell
Study Director

¹ Member, National Academy of Engineering
² Active committee member through January 2001