Energy availability in a country is of great importance to its economy and to raising and maintaining its standard of living. In 1994, the United States consumed more than 88 quadrillion Btu (quads) of energy and spent about $500 billion on fuels and electricity. Fortunately, the United States is well endowed with energy sources, notably fossil fuels, and possesses a considerable nuclear power industry. The United States also has significant renewable energy resources and already exploits much of its hydropower resources, which represent 10% of electricity production. Nevertheless, in 1994, the United States imported about 45% of the petroleum products it consumed, equivalent to about 17 quads of energy. This dependence on imported oil puts the country at risk of energy supply disruptions and oil price shocks. Previous oil shocks may have cost the country as much as $4 billion (in 1993 dollars) between 1973 and 1990. Moreover, the production and use of energy from fossil fuels are major sources of environmental damage. The corresponding situation in many parts of the world is more challenging. Developing countries are experiencing rapid growth in population, energy demand, and the environmental degradation that often results from industrial development. The near-term depletion of energy resources in response to this rapid growth runs counter to the concept of ''sustainable development''--development that meets the needs of today without compromising the ability of future generations to meet their own needs. Energy research and development (RD (2) protecting the environment by reducing the adverse environmental impacts associated with energy production, distribution, and use; (3) keeping America secure by reducing vulnerabilities to global energy market shocks; and (4) enhancing American competitiveness in a growing world energy market.