The United States is largely a free-market country in which consumers and producers, not governmental officials,make most of the economic decisions.Yet actions by the federal government affect many of those decisions. Energy is no exception. One important contribution is through funding research and development.Congress appropriates money to be funneled by the Department of Energy into a variety of projects.The department was created in 1977, largely in response to the oil embargo of 1973. Its major goal was to encourage energy independence by fostering new technologies that would stretch domestic fuels. In recent years its emphasis has been on promoting alternative fuels such as hydrogen fuel cells, wind energy, and solar power, as well as energy efficiency.

The federal government funds about a third of the nation's research and development in energy (the...