Photo: US Department of Energy

President Dumps Clean Energy in Proposed Budget

, senior energy analyst | February 13, 2018, 10:24 am EST
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Today, the president released his budget proposal for the upcoming fiscal year (FY 2019) and as expected, it seeks to eviscerate research and development (R&D) in clean energy technology. The proposal would slash funding in the applied energy technology offices within the Department of Energy (DOE), now housed within the Office of Energy. As my colleague points out, the proposal is “not scaling back, it’s eviscerating the work,” and is another example of this administration’s attacks on clean energy. As the Nation needs to continue to develop and deploy clean energy technologies to solve the threats posed by climate change, hopefully Congress will do what it did last year: yawn, ignore the current administration’s ideologically driven proposal, and do what is best for the Nation.

The Budget Process

The President’s budget request usually happens in February each year, as the Congressional appropriations process begins for the upcoming fiscal year in October. This request follows a massive budget deal signed into law by the president last week. In addition to lifting the debt ceiling, the deal raises domestic and military spending levels by $300 billion in total through September 2019. And it keeps the government open for another six weeks while lawmakers work out a longer-term spending bill that will fund the government through the end of FY 2018, which runs to the end of September.

Republicans seemed eager to raise spending as well as the debt ceiling, even though the party fought tooth and nail against the Obama administration on these issues. Still, Congress rejected the president’s proposed budget cuts last year, giving a bit of hope that Congress will ignore his current proposal as well.

The Hit List

  • ARPA-E, funded at $261 million in FY 2017, would receive no funding in FY 2019. According to the White House, the agency “will wind down operations in FY 2018 with the expectation that it will shut down in FY 2019, with remaining monitoring and contract closeout activities transferred elsewhere within DOE.” Given wide bipartisan support, this seems unrealistic.
  • Energy Efficiency and Renewable Energy (EERE) is slated for drastic cuts—from $2.1 billion in FY 2017 down to just $696 million in FY 2019. This represents a two-thirds cut in funding for clean energy R&D, not much better than the 72 percent cut reported earlier.
  • The Office of Electricity Delivery and Reliability (OE) would be split into two offices focusing on grid reliability (Electricity Delivery) and cybersecurity. Together, the two offices would receive $157 million in FY 2019, which is still a 31 percent cut from OE’s enacted FY 2017 level. Worse, energy storage R&D faces a sharp 74 percent cut ($8 million in FY 2019 compared to $31 million enacted in FY 2017).
  • Other important programs within Electricity Delivery are also facing steep cuts: transmission reliability and resiliency ($44 million to $13 million) and resilient distribution systems ($54 million to $10 million). These cuts seem particularly harsh given all the recent impacts on the electricity system due to severe weather.
  • The budget also completely axes the Low Income Home Energy Assistance Program (LIHEAP) block grants managed by the Department of Health and Human Services (HHS). Last year, LIHEAP released about $3.03 billion in block grants for states and tribes to help low-income households pay heating and cooling bills. The president’s budget proposes $0—meaning states and tribes would be left to figure out how to make up the shortfall.
  • The president also proposes eliminating the successful Title 17 Innovative Technology Loan Guarantee Program. The loans have helped companies commercialize energy technology, and the program has turned a profit for taxpayers, raising more than $1.79 billion in interest payments since its inception in 2005. The program could even be used to support energy infrastructure projects.

Reflecting the Administration’s Ideology

This president’s budget request reflects a prioritization of basic research and early stage R&D over later stage R&D—but it’s misguided to slash all funding that is deemed “applied research” and assume that the private sector will pick up the slack. As I’ve written previously, DOE’s new organizational structure separates basic research from applied science. The short summary from DOE notes that the Office of Science is slated to receive $5.4 billion in funding in FY 2019—the same as FY 2017 enacted—while the Office of Energy faces a cut of $1.9 billion—roughly a 43 percent cut compared to the $2.5 billion enacted in FY 2017:

“The FY 2019 Request provides $2.5B for energy and related programs, $1.9B below FY 2017 Enacted, and continues the Administration’s prioritization of the early-stage R&D that takes place at the National Laboratories.”

What the number crunchers at the White House don’t seem to recognize is that the National Labs work on both basic science and applied science, as well as both early stage and later stage R&D. All parts of the innovation ecosystem are needed in order to bring new technologies to commercialization.

What’s Next

Congress will continue its work on funding the government for the rest of FY 2018, which ends at the end of September. Once that work is complete, it will move toward deciding on spending levels for FY 2019. We’ll be pushing for Congress to use the power of the purse string to invest in clean energy technology and innovation and ignore the White House’s proposed budget.

 

Update 2/13/18, 12:11 pm: An additional bullet point was added, mentioning the elimination of the Title 17 Innovative Technology Loan Guarantee Program.

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