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

NATIONAL ACADEMY PRESS
Washington, D.C.



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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 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 NATIONAL ACADEMY PRESS Washington, D.C.

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 NATIONAL ACADEMY PRESS 2101 Constitution Avenue, N.W. Washington, DC 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. This report and the study on which it is based were supported by Contract No. DE-AM01-99PO80016, Task Order DE-AT01-00EE10735.A000, from the U.S. Department of Energy. Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the agency that provided support for the project. International Standard Book Number: 0-309-07448-7 Library of Congress Control Number: 2001093513 Available in limited supply from: Board on Energy and Environmental Systems National Research Council 2101 Constitution Avenue, N.W. HA–270 Washington, DC 20418 202–334–3344 Additional copies are available for sale from: National Academy Press 2101 Constitution Avenue, N.W. Box 285 Washington, DC 20055 800–624–6242 or 202–334–3313 (in the Washington metropolitan area) http://www.nap.edu Copyright 2001 by the National Academy of Sciences. All rights reserved. Printed in the United States of America

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 THE NATIONAL ACADEMIES National Academy of Sciences National Academy of Engineering Institute of Medicine National Research Council The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. Upon the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Bruce M.Alberts is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Wm.A.Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, upon its own initiative, to identify issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Bruce M.Alberts and Dr. Wm. A.Wulf are chairman and vice chairman, respectively, of the National Research Council.

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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 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 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 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 Committee Subgroup on Benefits Framework 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 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 1   NAE = Member, National Academy of Engineering

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 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.

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 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, managed 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.

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 Contents     EXECUTIVE SUMMARY   1 1   INTRODUCTION   9     A Brief History of Federal Energy R&D,   9     Origin and Scope of This Study,   10     Organization of This Report,   12     Reference,   12 2   FRAMEWORK FOR THE STUDY   13     Overview,   13     The Setting,   13     The Framework,   14     Conduct of the Study,   18     Assessment of the Methodology,   18     Reference,   19 3   EVALUATION OF THE ENERGY EFFICIENCY PROGRAMS   20     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 4   EVALUATION OF THE FOSSIL ENERGY PROGRAMS   44     Introduction,   44     Selection of the Case Studies,   44     Lessons Learned from the Case Studies,   47     Findings,   57     Recommendations,   61     References,   61 5   OVERALL FINDINGS AND RECOMMENDATIONS   62     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

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000     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   86     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   95     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   162     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

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000     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

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 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 3–2   Expenditures for Energy Efficiency Programs Analyzed by the Committee, 1978 to 2000,   23 3–3   Categories and Case Studies,   24 3–4   Net Realized Benefits Estimated for Selected Technologies Related to Energy Efficiency RD&D Case Studies,   29 3–5   Energy Efficiency Technology Case Studies Slotted in the Matrix Cells That Are Most Relevant Today,   38 4–1   Fossil Energy Budgets for the 22 Programs Analyzed by the Committee,   46 4–2   Fossil Energy Programs’ Cost Sharing, 1978 to 2000,   48 4–3   Net Realized Benefits Estimated for Selected Fossil Energy R&D Programs,   56 4–4   Fossil Energy RD&D Benefits,   57 4–5   Realized Benefits from DOE RD&D Programs,   58 4–6   Fossil Energy Technology Case Studies Slotted in the Matrix Cells That Are Most Relevant Today,   60 E-1   Funding for Advanced Refrigerators-Freezer Compressors,   96 E-2   Benefits Matrix for the Advanced Refrigerator-Freezer Compressors Program,   98 E-3   Funding for the Compact Fluorescent Lamps Program,   100 E-4   Benefits Matrix for the Compact Fluorescent Lamps (CFLs) Program,   100 E-5   Benefits Matrix for the DOE-2 Program,   103 E-6   DOE Funding for the Fluorescent Lamp Electronic Ballast Program,   105 E-7   Benefits Matrix for the Fluorescent Lamp Electronic Ballast for Program,   107 E-8   DOE Funding for the Free-Piston Stirling Engine Heat Pump Program,   108 E-9   Benefits Matrix for the Stirling Engine Heat Pump Program,   110 E-10   Benefits Matrix for the Indoor Air Quality Program,   113

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 E-11   Benefits Matrix for the Low-emission (Low-e) Windows Program,   116 E-12   Funding for the Lost Foam Program,   119 E-13   Benefits Matrix for the Advanced Lost Foam Technologies Program,   120 E-14   Selected Outage Costs,   122 E-15   Funding for the Advanced Turbine Systems Program (Energy Efficiency Component),   124 E-16   Benefits Matrix for the Advanced Turbine Systems Program (Energy Efficiency Component),   126 E-17   Predicted Environmental Emissions from the MTCI/StoneChem Steam Reformer and from a Tomlinson Recovery Boiler,   128 E-18   Funding for the Black Liquor Gasification Program,   129 E-19   Benefits Matrix for the Black Liquor Gasification Program,   131 E-20   Total Funding in IOF/Forest by Program Area,   133 E-21   Changes in IOF Priorities: Share of OIT/Forest Budget by Program Area,   134 E-22   Participation in IOF/Forest Program Then and Now,   135 E-23   Changes in Participation by Share of Budget,   135 E-24   Benefits Matrix for the IOF/Forest Program,   136 E-25   General Funding for the Oxy-fueled Glass Furnace Program,   137 E-26   Funding for the Oxy-fueled Glass Furnace Program by Technology to FY 2000,   138 E-27   Oxy-fuel Penetration and Characteristics by Glass Industry Segment,   138 E-28   Benefits Matrix for the Oxy-Fueled Glass Furnace Program,   139 E-29   DOE Funding for Advanced Battery R&D,   141 E-30   Benefits Matrix for the Advanced Batteries (for Electric Vehicles) Program,   142 E-31   DOE Funding for the Catalytic Conversion Program,   144 E-32   Benefits Matrix for the Catalytic Conversion Program,   145 E-33   Benefits Matrix for the PNGV Program,   148 E-34   MTI Stirling Engine Development Project Budgets,   152 E-35   General Motors STM Stirling Engine Development Project Budgets,   152 E-36   Benefits Matrix for the Stirling Automotive Engine Program,   153 E-37   Funding for Transportation PEM Fuel Cell Power Systems,   154 E-38   Benefits Matrix for the Transportation PEM Fuel Cell Power System Program,   157 F-1   Benefits Matrix for the Coal Preparation Program,   164 F-2   DOE Appropriations and Industry Cost Sharing for Direct Liquefaction,   165 F-3   Benefits Matrix for the Direct Liquefaction Program,   166 F-4   Benefits Matrix for the Fluidized-bed Combustion (FBC) Program,   168 F-5   DOE Investments in the Gas-to-Liquids Program, FY 1978 to FY 2000,   170 F-6   DOE Investments in the Gas-to-Liquids Program, 1999,   170 F-7   Benefits Matrix for the Gas-to-Liquids Program,   171 F-8   Benefits Matrix for the Improved Indirect Liquefaction Program,   173 F-9   Benefits Matrix for the Integrated Gasification Combined-Cycle (IGCC) Program,   176 F-10   Benefits Matrix for the Improvement of the Flue Gas Desulfurization (FGD) Program,   180 F-11   Benefits Matrix for the NOx Control Program,   181 F-12   Benefits Matrix for the Mercury and Air Toxics Program,   182 F-13   Benefits Matrix for the Waste Management/Utilization Technologies Program,   184 F-14   Funding for the Advanced Turbine Systems Program (Fossil Energy Component),   185 F-15   Benefits Matrix for the Advanced Turbine System (ATS) Program (Fossil Energy Component),   187 F-16   Funding for the DOE Fuel Cell Program, FY 1978 to FY 2000,   188 F-17   Benefits Matrix for the Stationary Fuel Cells Program,   189 F-18   DOE Funding for the Magnetohydrodynamics Program,   191 F-19   Benefits Matrix for the Magnetohydrodynamics (MHD) Program,   192 F-20   Funding for the Coal-bed Methane Program,   193 F-21   Benefits Matrix for the Coal-bed Methane Program,   194

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Energy Research at DOE was it Worth it?: Energy Efficiency and Fossil Energy Research 1978 to 2000 F-22   Total Funding for the Drilling, Completion, and Stimulation Program, FY 1978 to FY 1999,   195 F-23   ADCS Gas Project Organizational Chart,   196 F-24   Benefits Matrix for the Drilling, Completion, and Stimulation Program,   198 F-25   Summary of Environmental Benefits of Drilling Technology Advances,   199 F-26   Funding for the Downstream Fundamentals Program,   199 F-27   Benefits Matrix for the Downstream Fundamentals Program,   200 F-28   Benefits Matrix for the Eastern Gas Shales Program (EGSP),   202 F-29   Benefits Matrix for the Improved Enhanced Oil Recovery Program,   204 F-30   Benefits Matrix for the Field Demonstration Program,   206 F-31   Funding for the Oil Shale Program,   207 F-32   Benefits Matrix for the Oil Shale Program,   209 F-33   Benefits Matrix for the Seismic Technology Program,   210 F-34   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   Matrix for assessing benefits and costs,   14 2–2   Derivation of columns for the benefits matrix,   16 3–1   Distribution of DOE’s budget by sector for its energy efficiency R&D programs,   22 3–2   Consumption of energy in residential and commercial buildings in 1999 by application,   25 3–3   Percentage of primary energy used in the manufacturing sector by major industrial category, 1999,   26 3–4   Percentage of fuel consumption for transportation by service, 1999,   26 3–5   Electricity consumed by refrigerators, 1947 to 2001,   28 4–1   Funding for DOE’s Office of Fossil Energy, FY 1978 to FY 2000,   45 4–2   Overall budget, FY 1978 to FY 2000 ($10,528 million),   47 4–3   Budget for coal and gas conversion technologies, FY 1978 to FY 2000 ($6149 million),   48 4–4   Adjusted budget for coal and gas conversion technologies, FY 1978 to FY 2000 ($2956 million),   49 4–5   Budget for DOE’s fossil energy environmental programs, FY 1978 to FY 2000 ($410 million),   51 4–6   Reported budgets for electricity production, FY 1978 to FY 2000 ($2502 million),   52 4–7   Reported budgets for oil and gas production research, FY 1978 to FY 2000 ($1468 million),   54 D-1   Matrix for assessing benefits and costs,   86 D-2   Derivation of columns for the benefits matrix,   87 E-1   Electricity consumed by refrigerators, 1947 to 2001,   97 E-2   Distribution of OAAT PNGV funds by technology,   147

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