DOE PLANS TO HALT IN SPR PURCHASES

The U.S. Department of Energy proposes to halt purchases of crude oil for the Strategic Petroleum Reserve as part of its fiscal 1995 budget request.

The SPR held 587.1 million bbl of crude at the end of December 1993 and will hold 591.6 million bbl by Oct. 1. DOE proposes to stop all SPR oil purchases and shift to other programs the $107 million it has available to buy oil.

The DOE budget proposal is part of the Clinton administration's $1.52 trillion budget proposal.

DOE is asking for $18.4 billion for the fiscal year that begins Oct. 1, down $506 million from what Congress appropriated for fiscal 1994. About $11.5 billion of DOE's budget will go for nuclear weapons and defense programs.

In research and development, coal programs were cut to $128 million from $167 million, while gas R&D jumped to $153 million from $96 million and oil programs to $107 million from $75 million.

The clean coal technology program plunged to $37 million from $225 million, while energy efficiency and renewable energy programs jumped to $1.359 billion from $1.019 billion.

DOE plans to step up its program to identify and maintain production from geologic classes of U.S. reservoirs in danger of being prematurely abandoned. The program now has 24 projects totaling $200 million, of which 56% is from the private sector.

DOE will target two reservoir classes in fiscal 1995 and begin work on a composite reservoir class that combines two more of the remaining reservoir types.

NATURAL GAS R&D

In natural gas research and development, DOE will continue to expand a secondary recovery program, moving from South Texas fields to Mid Continent sandstone formations.

DOE said, "We will continue our joint effort with industry and other federal and state agencies to compile 'gas atlases' that will give us additional certainty as to the location, characteristics, and volumes of U.S. gas resources and reserves. We will begin a new drilling, completion, and simulation program to help producers lower operating costs.

"We also will continue work in fracture technology and diagnostics and in upgrading low quality natural gas. Through the use of advanced resource and extraction technologies, we estimate that by 2010 the domestic natural gas supply will be increased by 4 tcf over the 1991 level of 19 tcf."

DOE renewed its request that Congress allow it to lease, sell, or farm out the Elk Hills, Calif., Naval Petroleum Reserve to private operators. It plans to award leases on gas acreage in Naval Oil Shale Reserve No. 3 in western Colorado to prevent drainage.

DOE is complying with a congressional edict for alternative fueled vehicles in the federal fleet. Spending will increase to $58 million in fiscal 1995 from $36 million at present and the number of vehicles to 27,000 from 12,000.

The American Gas Association praised the increase in gas R&D, noting there has been an imbalance. It said gas supplies about 25% of America's energy needs but gets only 7% of federal energy R&D dollars, while nuclear energy provides about 7% and gets 28% of the funding and coal supplies 25% and gets 38%.

INTERIOR, EPA

The Interior Department's budget would drop $85 million to $7.5 billion.

Most of the money will go to the Bureau of Indian Affairs and National Park Service, with the Minerals Management Service getting 3%, Bureau of Land Management 15%, and U.S. Geological Survey 8%.

MMS is allotted $201.2 million, up $2.72 million from the fiscal 1994 appropriation. The Outer Continental Shelf lands program is down slightly at $90.8 million, while the royalty management function is up $4 million at $70 million, with most of the increase going to improve audits of producer/purchaser contract settlements.

The Environmental Protection Agency's budget request is a record $7.2 billion, up $500 million from 1994. About 13% of the increase is earmarked for operating programs.

The agency said a major priority is to implement the administration's climate change action plan to reduce greenhouse gases through voluntary energy efficiency programs.

EPA plans to place more stress on preventing pollution, redirect resources to areas of the great environmental risk, use less contractors, and reorganize its enforcement office.