The Department of Energy (DOE) proposed a $10 million cut infunding for natural gas research and development (R&D) as partof a $17.8 billion budget for fiscal year 2000 that it forwarded toCongress earlier this week.

The department seeks $105 million for gas-related R&D, whichis about 9% less than the $115 million that was appropriated byCongress for fiscal 1999. Funding for gas lagged behind coalR&D ($122.4 million) in Fossil Energy R&D’s overall budgetrequest of $375 million for the next fiscal year.

But all was not bad news for gas. Recognizing that oil and gasproducers alike face “pressing problems,” DOE said it combined theR&D activities of petroleum and gas (and their R&D dollars)so that producers could take “maximum advantage” of new technologies – such as advanced seismic technologies, new drillingsystems and more cost-effective environmental compliance options -to boost lagging domestic production.

DOE estimated about $26 million of gas’s R&D funding andmost of petroleum’s $50 million R&D budget for FY 2000 would bespent to develop advanced technologies to locate and producereserves that otherwise would be bypassed or unmarketable. Inaddition, it noted that it was developing an R&D program aimedat converting large potential gas hydrate resources (estimated atup to 200,000 Tcf) into gas reserves.

“Advanced technologies developed in [a] cost-shared program withindustry could…contribute directly to more than a third of theadditional six trillion cubic feet per year of domestic gasproduction likely to be needed by 2010 to meet energy andenvironmental demand,” the DOE budget request projected. Also, itultimately hopes to help reduce environmental compliance costs forproducers by $16 billion by 2010, which would free up more capitalto find and produce oil and gas.

An estimated $42 million will go into prototype testing of a newclass of gas turbines, while $38 million will be spent on reducingthe costs and improving the performance for market-ready fuel cellsystems in the next decade, the department said.

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