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ENERGY

Clean Energy a Winner in Obama's Budget

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Obama: Endorsing clean energy research.(Kevork Djansezian/Getty Images)

Even as President Obama offers Congress a budget that would cut into dozens of government programs and trim $1.1 trillion from the federal deficit over the next decade, he will request robust increases in clean-energy spending.

In total, he will ask for about $8 billion in spending on clean-energy programs across all federal agencies.

 

That should set up a clash with congressional Republicans, who say they want clean-energy and environmental-regulation programs on the chopping block.

The president’s budget request increases total DOE spending by 11.8 percent over the level appropriated for FY 2010, to a total of $29.5 billion. Of it, $11.8 billion would be budgeted to the nuclear weapons and nonproliferation missions of the department, another $6.3 billion would be devoted to environmental cleanup and radioactive waste management, $5.9 billion would go to basic science and the Advanced Research Projects Agency–Energy (ARPA-E), $291 million would go to support innovative and advanced energy technology credit programs, and $4.8 billion would go to energy supply and energy efficiency programs.

“To lead in the global clean energy economy, we must mobilize America’s innovation machine in order to bring technologies from the laboratory to the marketplace,” reads the Energy Department’s budget request. “The Department of Energy is on the front lines of this effort. To succeed, the Department will pursue game-changing breakthroughs, invest in innovative technologies, and demonstrate commercially viable solutions.”

 

Senate Energy and Natural Resources Chairman Jeff Bingaman, D-N.M., applauded the president’s request.

“This budget request is the third consecutive time that the president has demonstrated his commitment to energy security, U.S. technological competitiveness and nuclear weapons security imperatives, despite the tough fiscal environment we find ourselves in,” Bingaman said.  “It merits vigorous support from anyone who cares deeply about securing our nation’s energy future, boosting our economic growth and competitiveness in the world and combating nuclear weapons proliferation.”

To help pay for the new energy spending, Obama proposes rolling back $46.2 billion in tax breaks for the oil and gas industry over the next 10 years.

In both the spending and the rollbacks, the White House should face fierce pushback from House Republicans, who deem existing clean-energy expenditures unnecessary subsidies, while defending tax breaks for the fossil-fuel industry as essential for maintaining low-cost traditional sources.

 

In the administration’s favor as it makes its request is that historically, government spending on clean energy has been relatively paltry. The exception is 2009's economic stimulus law, which pumped a one-time shot of about $30 billion in spending for the industry through the economy.

Obama has always made clear that he viewed the stimulus as a down payment on a long-term future of increased government investment in clean energy -- on the campaign trail, he proposed clean energy expenditures of $15 billion annually.

By comparison, his request to increase the budget for DOE’s Office of Energy Efficiency and Renewable Energy from $2.2 billion to $3.2 billion doesn’t seem as dramatic. Still, it’s about a 45 percent increase for an office that has traditionally been little more than an afterthought in the Energy Department’s budget, which is largely devoted to maintaining the nation’s arsenal of nuclear weapons.

That continues to be the case. Overall, about $18 billion of Obama’s Energy Department request would go toward atomic defense programs, up from $16.5 billion in fiscal 2010.

Among the clean-energy spending programs for which Obama will expend significant political capital is the little-known Advanced Research Projects Agency-Energy, which researches cutting-edge clean-energy technologies. It was created by Congress in 2007 but has never received funding from an annual spending bill, even in a Democratic-controlled Congress. It received $400 million from the economic stimulus, but that is set to dry up this year, effectively shuttering the office. Obama has requested $650 million to keep the office running -- and indicated that he is willing to fight hard to keep the spending in place.

“ARPA-E is a top priority for the administration. ARPA-E’s objective is to tap into the risk-taking American ethos and to identify and support the pioneers of the future,”  reads the Energy Department’s budget request.

The request includes a $450 million increase in funding for basic energy science research, including the creating of  three new public-private “Energy Innovation Hubs” to focus on batteries, critical materials and smart grid technologies.

It includes big boosts in funding for solar energy, which would jump 88 percent from $243 million to $457 million and wind energy, which would jump 61 percent from $79 million to $126 million.

But Republicans on Friday gave a clear indication of their spending priorities, with the introduction of a bill to slash about $60 billion from current spending levels over the rest of the fiscal year. If their plan succeeds, clean energy and environmental regulations will be among the biggest losers.

The Republican continuing resolution would cut about $1.6 billion from the Energy Department’s clean-technology research programs, most from the same efficiency and renewable office that Obama wants to ramp up. It would also slash about $3 billion from the Environmental Protection Agency and cut $107 million in climate-change-related programs across the government.

In addition, the Republican bill would block spending on the EPA’s ability to regulate the greenhouse-gas emissions that cause climate change.

Bingaman was sharply critical of Republican plans.

“We are about to debate two very different visions of our energy and economic security future in Congress,” Bingaman said. “The President’s vision is to combine cuts and efficiencies in existing Federal programs with investments in other areas, like energy, that are key to our future.  The other proposal is simply to pick an arbitrary past spending level and to terminate any investments that happen to be above that level.  The President’s approach reflects what having a national energy policy really means.  It is about making thoughtful and forward-leaning choices, and I strongly support it.”

Over the weekend, Democrats and Republicans began firing shots at the others’ proposals.

Of the House Republicans’ resolution, Rep. Edward Markey, D-Mass., said, “We know that smart cuts need to be made, but House Republicans are acting like a bull in a china shop, hitting poor and middle class families with reckless cuts, while wrecking the Interior Department and the EPA so their buddies in the coal, oil and gas industries can make off with the spoils.”

Of the president’s budget request, House Speaker John Boehner, R-Ohio, said it “spends too much, borrows too much, and taxes too much,” in an interview Sunday on NBC's "Meet the Press."

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