Energy and Obama’s Budget

President Obama released his $3.7 trillion budget Monday, saying it was one of “tough choices.” His proposals are meant to balance spending on needed programs with cuts aimed at reducing the deficit by more than $1 trillion over the next 10 years. Clean energy, however, comes out a winner, with a boost of funds for research and technology deployment.

Official portrait of United States Secretary o...

U.S. Secretary of Energy Steven Chu. Image via Wikipedia

“The United States faces a choice today: will we lead in innovation and out-compete the rest of the world or will we fall behind? To lead the world in clean energy, we must act now. We can’t afford not to. Through our investments, we are laying the groundwork for the nation’s future prosperity and security,” said U.S. Secretary of Energy Steven Chu.

The proposed $29.5 billion Department of Energy budget, up 4.2 percent over the proposed 2011 budget and 12 percent over the enacted 2010 budget, includes:

  • $3.2 billion for energy efficiency and renewable energy programs.
  • $300 million in credit subsidies supporting and promoting approximately $3-4 billion in renewable energy and energy efficient projects
  • $36 billion in loan guarantee authority to help jump-start the domestic nuclear industry, as well as additional investments in new nuclear technologies like small modular reactors
  • $5.4 billion for the Office of Science to expand basic energy sciences, advanced scientific computing, and biological and environmental sciences
  • $550 million for the Advanced Research Projects Agency-Energy (ARPA-E) to continue support for early-stage clean energy research projects
  • $146 million to support the three existing Energy Innovation Hubs and to establish three new Hubs in the areas of batteries and energy storage, smart grid technologies and systems, and critical materials
  • $100 million to continue supporting 46 Energy Frontier Research Centers
  • A five-year FY 12 to FY 16 request of nearly $65 billion for the National Nuclear Security Administration (NNSA) to modernize the U.S. nuclear weapons enterprise and sustain a nuclear deterrent
  • $2.5 billion to the NNSA Defense Nuclear Nonproliferation program to secure all vulnerable nuclear material around the world

Many of the supported projects reflect clean energy goals outlined by Obama and Energy Secretary Chu, such as cutting the cost of solar electricity to roughly $.06/kilowatt-hour through the SunShot initiative. The administration also seeks to re-invigorate the nuclear industry, promote offshore wind, put more than 1 million electric cars on the road by 2015, continue developing biofuels and biomass, and increase geothermal production.

To help cover the costs of these initiatives, the White House is asking for some cuts, including a $70 million cut (41 percent) in the hydrogen program, a $418 million cut (45 percent) in the fossil energy program, and a cut of $48 million (13 percent) in DOE administrative costs, as well as the shuttering of parts of some national labs. Most contentious, though, is a repeal of $3.6 billion in oil, natural gas, and coal subsidies. Republicans argue that these cuts would hurt industries and impact jobs at a time when the economy is still fragile.

It’s doubtful whether Obama’s energy proposals will pass since the cuts proposed aren’t nearly enough for the GOP. “He’s raising spending everywhere,” said Rep. Paul Ryan (R-Wis.), chairman of the Budget Committee. “This is not an austere budget.”

While they have yet to unveil their fiscal 2012 spending plan, Republicans have proposed a budget for the rest of this fiscal year that seeks to slash funding to the Environmental Protection Agency as well as renewable energy and energy efficiency programs. It is likely they will target more of the same in 2012 and there are clearly looming battles. For instance, Obama’s proposed budget calls for $2 billion in loan guarantees for renewable projects. The Republicans, on the other hand, are currently seeking to end similar guarantees for renewable energy projects, prompting Rhone Resch, the president of the Solar Energy Industries Association, to write a letter to House Speaker John Boehner (R-Ohio), saying, “In its current form H.R. 1 [the resolution providing funding in the absence of a formal appropriations bill] would likely kill all clean energy projects with pending DOE loan guarantee applications, causing the loss of tens of thousands of jobs and many other benefits”

As Evan Lehmann of ClimateWire writes in the New York Times, “The question is, if Republicans see a future with expanded nuclear energy, and Obama does too, but also with more renewables, can the two sides compromise?”

One response to “Energy and Obama’s Budget

  1. See also this article

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