Balanced Approach and Improved R&D Management Needed to Achieve Energy Efficiency Objectives

GAO discussed the Department of Energy's (DOE) energy conservation research and development (R&D) programs and the administration's National Energy Strategy (NES). GAO noted that: (1) NES was directed at increasing government R&D funding for long-term energy-efficient technologies, but did not address the possibility that energy prices may remain relatively low in the future; (2) the current low market prices for energy, particularly fossil fuels, did not fully reflect all of the production and consumption costs; (3) DOE projections of energy efficiency improvements were uncertain because of the limited information available and the questionable reliability of the information in DOE models; and (4) the conservation R&D budget request of $274 million in fiscal year (FY) 1992 was a 28-percent increase over FY 1991 but was still below the $296 million received in FY 1980. GAO believes that: (1) energy prices will directly affect NES proposals because relatively low prices generate less urgency to identify and implement efficient alternatives and higher prices encourage the development and use of more efficient technologies; and (2) the effective use of the limited R&D funding will depend on strong planning and management.